Document:

Unassociated Document

    EMPLOYMENT
AGREEMENT

     

    THIS EMPLOYMENT AGREEMENT (the
      “Agreement”) is made and entered into as of November 2, 2005 and shall be
      effective as of August 8, 2005 (the “Effective Date”) by and between
SurgiCount Medical, Inc.
      (the
“Company”),a
      California corporation and wholly owned subsidiary of Patient Safety Technologies,
      Inc. (“Parent”), a Delaware
      corporation, both with offices located at 100 Wilshire Boulevard, Suite 1750,
      Santa Monica, California, 90401, and James Schafer,an
      individual with an address
      35864 Carlton Road, Wildomar, California, 92595 (“Individual”). This Agreement
      replaces and supercedes that certain Employment Agreement entered into as of
      July 22, 2005 by and between Parent and Individual, in its entirety.

    WHEREAS, the Company is in the
      business of patient safety products and content; and

    WHEREAS, Individual has had
      experience in the operations of businesses doing purchasing, materials and
      supply chain management; and 

    WHEREAS, the Company desires to
      retain the services of Individual; and 

    WHEREAS, Individual is willing
      to be
      employed by the Company. 

    NOW, THEREFORE, in consideration
      of
      the mutual covenants contained herein, the parties agree as follows: 

    1. Employment.
      Individual is hereby employed and engaged to
      serve the Company as the Chief Operating Officer of the Company, or such
      additional titles as the Company shall specify from time to time, and Individual
      does hereby accept, and Individual hereby agrees to such engagement and
      employment.

    2. Duties.
      Individual shall be responsible for the
      overall operations of the Company. In addition, Individual’s duties shall be
      such duties and responsibilities as the Company shall specify from time to
      time,
      and shall entail those duties customarily performed by the Chief Operating
      Officer of a company with a sales volume and number of employees commensurate
      with those of the Company. Individual shall have such authority, discretion,
      power and responsibility, as are customary or appropriate to this position.
      Individual shall diligently and faithfully execute and perform such duties
      and
      responsibilities, subject to the general supervision and control of the
      Company’s Chief Executive Officer. Individual shall be responsible and report
      only to the Company’s Chief Executive Officer. The Company’s Chief Executive
      Officer, in its sole and absolute discretion, shall determine Individual’s
      duties and responsibilities and may assign or reassign Individual to such duties
      and responsibilities as it deems in the Company's best interest. Individual
      shall devote his full-time attention, energy, and skill during normal business
      hours to the business and affairs of the Company and shall not, during the
      Employment Term, as that term is defined below, be actively engaged in any
      other
      business activity, except with the prior written consent of the Company’s board
      of directors.

    Nothing in this Agreement shall
      preclude Individual from devoting reasonable periods required for: 

    
    

    	
          	(a)	
            serving as a director
              or
              member of a committee of any organization or corporation involving
              no
              conflict of interest with the interests of the Company;
              

          

    
    

    	
          	(b)	
            serving as a consultant
              in
              his area of expertise (in areas other than in connection with the business
              of the Company), to government, industrial, and academic panels where
              it

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    does not conflict with the interests
      of the Company; and 

    
    

    	
          	(c)	
            managing his personal
              investments or engaging in any other non-competing business; provided
              that
              such activities do not materially interfere with the regular performance
              of his duties and responsibilities under this Agreement as determined
              by
              the Company. 

          

    3. Best Efforts of
      Individual. During his
      employment hereunder, Individual shall, subject to the direction and supervision
      of the Company’s Chief Executive Officer, devote his full business time, best
      efforts, business judgment, skill, and knowledge to the advancement of the
      Company's interests and to the discharge of his duties and responsibilities
      hereunder. Notwithstanding the foregoing, nothing herein shall be construed
      as
      preventing Individual from investing his assets in any business. 

    4. Employment
      Term. Unless terminated
      pursuant to Section 12 of this Agreement, the term of this Agreement shall
      commence as of the Effective Date of this Agreement and shall continue for
      a
      term of twenty-four (24) months (the “Initial Term”), and shall be automatically
      renewed for successive one (1) year terms (the “Renewal Term”) unless a party
      hereto delivers to the other party written notice of such party's intention
      not
      to renew at least thirty (30) days prior to the end of the Initial Term or
      the
      applicable Renewal Term, as the case may be.(the terms “Initial Term” and
“Renewal Term” will collectively hereinafter be referred to as the “Employment
      Term”).

    
      	5. 
                  	Compensation
              of
              Individual.
	 
	 	(a) 
                  	Base Compensation.
              As compensation
              for
              the services provided by Individual under this Agreement, the Company
              shall pay Individual an annual salary of One Hundred Thousand Dollars
              ($100,000) during the Employment Term. The compensation of Individual
              under this Section shall be paid in accordance with the Company's usual
              payroll procedures.
	 
	 	(b) 
                  	Bonus.
              In addition
              to the
              above base compensation, Individual shall be eligible to receive an
              annual
              bonus determined by the Chief Executive Officer and detailed herein:
              Individual will be granted Fifty Thousand Dollars ($50,000) annually
              in
              restricted stock of Parent, to be vested (i) on the Effective Date
              for
              first annual payment (August 8, 2005) and (ii) on the anniversary of
              the
              Effective
	 

    

    Date of the second year (August
      8,
      2006) Should employment terminate under Section 12(b) prior to the first
      anniversary of the Effective Date, Individual will still be entitled to receive
      bonus for the second year.

    
      	
              (c) 
                    

            	Stock and Stock
              Options.
              Individual
              shall
              also be eligible to receive shares of Parent’s authorized stock and
              options to purchase shares of Parent’s authorized stock from time to time
              as determined by the Chief Executive Officer and detailed herein:
              Individual will be granted One Hundred Twenty- Five Thousand (125,000)
              stock options, vesting quarterly over four (4) years at a strike price
              of
              Five Dollars ($5.00).
	 

    

    6. Benefits. Individual
      shall also be entitled to
      participate in any and all Company benefit plans, from time to time, in effect
      for employees of the Company. Such participation shall be subject to the terms
      of the applicable plan documents and generally applicable Company policies.
      Individual shall also receive an automobile allowance of Six Thousand Dollars
      ($6,000) per year (given that Individual adheres to Company policy on auto
      allowance) and use of a Company cellular telephone, paid for by Company.

    7. Vacation, Sick Leave and
      Holidays. Individual shall be
      entitled to three (3) weeks of paid vacation, with such vacation to be scheduled
      and taken in accordance with the Company's standard vacation policies. In
      addition, Individual shall be entitled to such sick leave and holidays at full
      pay in accordance with the
      Company's policies established and in effect from time to time.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8. Business
      Expenses. The Company shall
      promptly reimburse Individual for all reasonable out-of-pocket business expenses
      incurred in performing Individual’s duties and responsibilities hereunder in
      accordance with the Company's policies, provided Individual promptly furnishes
      to the Company adequate records of each such business expense. Individual shall
      receive a Relocation/Moving Expense of Eight Thousand ($8,000). 

    9. Location of Individual's
      Activities. Individual’s
      principal place of business in the performance of his duties and obligations
      under this Agreement shall be at a place to be determined by the Chief Executive
      Officer. Notwithstanding the preceding sentence, Individual will engage in
      such
      travel and spend such time in other places as may be necessary or appropriate
      in
      furtherance of his duties hereunder. 

    10.
      Confidentiality. Individual
      recognizes that the Company has and will have business affairs, products, future
      plans, trade secrets, customer lists, and other vital information (collectively
      "Confidential Information") that are valuable assets of the Company. Individual
      agrees that he shall not at any time or in any manner, either directly or
      indirectly, divulge, disclose, or communicate in any manner any Confidential
      Information to any third party without the prior written consent of the
      Company’s board of directors. Individual will protect the Confidential
      Information and treat it as strictly confidential. 

    11. Non-Competition.
Individual
      acknowledges that
      he has gained, and will gain extensive knowledge in the business conducted
      by
      the Company and has had, and will have, extensive contacts with customers of
      the
      Company. Accordingly, Individual agrees that he shall not compete directly
      or
      indirectly with the Company, either during the Employment Term or during the
      one
      (1) year period immediately after the termination of Individual’s employment
      under Section 12 and shall not, during such period, make public statements
      in
      derogation of the Company. For the purposes of this Section 11, competing
      directly or indirectly with the Company shall mean engaging, directly or
      indirectly, as principle owner, officer, partner, consultant, advisor, or
      otherwise, either alone or in association with others, in the operation of
      any
      entity engaged in a business similar to that of the Company’s.

    12. Termination. Notwithstanding
      any other provisions hereof to
      the contrary, Individual’s employment hereunder shall terminate under the
      following circumstances: 

    
      	
              (a) 
                    

            	
              Voluntary
                Termination by Individual.
                Individual
                shall
                have the right to voluntarily terminate this Agreement and his employment
                hereunder at any time during the Employment Term.

            
	 
	
              (b) 
                    

            	Voluntary Termination
              by
              the Company. The
              Company shall have the right to voluntarily terminate this Agreement
              and
              Individual’s employment hereunder at any time after the Employment
              Term.
	 
	
              (c) 
                    

            	
              Termination
                for
                Cause.
                The Company
                shall have
                the right to terminate this Agreement and Individual’s employment
                hereunder at any time for cause. As used in this Agreement, "cause"
                shall
                mean refusal by Individual to implement or adhere to lawful policies
                or
                directives of the Company’s board of directors, breach of this Agreement,
                Individual’s conviction of a felony, other conduct of a criminal nature
                that may have a material adverse impact on the Company's reputation,
                breach of fiduciary duty or the criminal misappropriation by Individual
                of
                funds from or resources of the Company. Cause shall not be deemed
                to exist
                unless the Company shall have first given Individual a written notice
                thereof specifying in reasonable detail the facts and circumstances
                alleged to constitute "cause" and thirty (30) days after such notice
                such
                conduct has, or such circumstances have, as the case may be, not
                entirely
                ceased and not been entirely remedied.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (d) 
                    

            	Termination Upon
              Death
              or for Disability. This Agreement
              and Individual’s employment hereunder, shall
              automatically terminate upon Individual’s death or upon written notice to
              Individual and certification of Individual’s disability by a qualified
              physician or a panel of qualified physicians if Individual becomes
              disabled beyond a period of twelve (12) months and is unable to perform
              the duties contain in this Agreement.
	 
	
              (e) 
                    

            	Effect of Termination.
              In the event
              that
              this Agreement and Individual’s employment is voluntarily terminated by
              Individual pursuant to Section 12(a), or in the event the Company
              voluntarily terminates this Agreement pursuant to Section 12(b) or
              for
              cause pursuant to Section 12(c), all obligations of the Company and
              all
              duties, responsibilities and obligations of Individual under this
              Agreement shall cease, except for those obligations set forth in Sections
              10, 11 and 17 hereof. Upon such termination pursuant to Section 12(a),
              all
              unvested stock options and restricted stock will be forfeited. Upon
              such
              termination pursuant to Section 12(b), the Company shall (i) pay
              Individual a cash lump sum equal to (x) all accrued base salary through
              the date of termination plus all accrued vacation pay and bonuses,
              if any,
              plus (y) as severance compensation, an amount equal to twelve (12)
              months
              of Individual’s base salary, however if Individual is within the final
              twelve (12) months of the remaining Employment Term of this Agreement,
              then Individual will receive whatever base salary is remaining on the
              Employment Term. In the event of a merger, consolidation, sale, or
              change
              of control, the Company's rights hereunder shall be assigned to the
              surviving or resulting company, which company shall then honor this
              Agreement with Individual.
	 

    

    13. Resignation as Officer.
      In the event that
      Individual’s employment with the Company is terminated for any reason
      whatsoever, Individual agrees to immediately resign as an Officer and/or
      Director of the Company, if applicable, and any related entities. For the
      purposes of this Section 13, the term the "Company" shall be deemed to include
      subsidiaries, parents, and affiliates of the Company.

    14. Governing Law, Jurisdiction
      and Venue. This Agreement
      shall be governed by and construed in accordance with the laws of the State
      of
      California without giving effect to any applicable conflicts of law provisions.
      

    15. Business Opportunities.
      During the Employment
      Term
      Individual agrees to bring to the attention of the Company’s Chief Executive
      Officer and board of directors all written business proposals that come to
      Individual’s attention and all business or investment opportunities of whatever
      nature that are created or devised by Individual and that relate to areas in
      which the Company conducts business and might reasonably be expected to be
      of
      interest to the Company or any of its subsidiaries. 

    16. Employee’s Representations and
      Warranties. Individual hereby
      represents and warrants that he is not under any contractual obligation to
      any
      other company, entity or individual that would prohibit or impede Individual
      from performing his duties and responsibilities under this Agreement and that
      he
      is free to enter into and perform the duties and responsibilities required
      by
      this Agreement. Individual hereby agrees to indemnify and hold the Company
      and
      its officers, directors, employees, shareholders and agents harmless in
      connection with the representations and warranties made by Individual in this
      Section 16. 

    
      	17. 
                  	Indemnification.
	 
	 	(a) 
                  	The Company agrees that
              if
              Individual is made a party, or is threatened to be made a party, to
              any
              action, suit or proceeding, whether civil, criminal, administrative
              or
              investigative (a
	 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	"Proceeding"), by reason
              of
              the fact that he is or was a director, officer or employee of the Company
              or is or was serving at the request of the Company as a director, officer,
              member, employee or agent of another corporation, partnership, joint
              venture, trust or other enterprise, including service with respect
              to
              employee benefit plans, whether or not the basis of such Proceeding
              is
              Individual’s alleged action in an official capacity while serving as a
              director, officer, member, employee or agent, Individual shall be
              indemnified and held harmless by the Company to the fullest extent
              permitted or authorized by the Company's certificate of incorporation
              or
              bylaws or, if greater, by the laws of the State of California, against
              all
              cost, expense, liability and loss (including, without limitation,
              attorney's fees, judgments, fines, ERISA excise taxes or penalties
              and
              amounts paid or to be paid in settlement) reasonably incurred or suffered
              by Individual in connection therewith, and such indemnification shall
              continue as to Individual even if he has ceased to be a director, member,
              employee or agent of the Company or other entity and shall inure to
              the
              benefit of Individual’s heirs, executors and administrators. The Company
              shall advance to Individual to the extent permitted by law all reasonable
              costs and expenses incurred by him in connection with a Proceeding
              within
              20 days after receipt by the Company of a written request, with
              appropriate documentation, for such advance. Such request shall include
              an
              undertaking by Individual to repay the amount of such advance if it
              shall
              ultimately be determined that he is not entitled to be indemnified
              against
              such costs and expenses.
	 
	(b) 
                  	Neither the failure of
              the
              Company (including its board of directors, independent legal counsel
              or
              stockholders) to have made a determination prior to the commencement
              of
              any proceeding concerning payment of amounts claimed by Individual
              that
              indemnification of Individual is proper because he has met the applicable
              standard of conduct, nor a determination by the Company (including
              its
              board of directors, independent legal counsel or stockholders) that
              Individual has not met such applicable standard of conduct, shall create
              a
              presumption that Individual has not met the applicable standard of
              conduct.
	 
	(c) 
                  	The Company agrees to
              continue
              and maintain directors' and officers' liability insurance policy covering
              Individual to the extent the Company provides such coverage for its
              other
              executive officers.
	 
	(d) 
                  	Promptly after receipt
              by
              Individual of notice of any claim or the commencement of any action
              or
              proceeding with respect to which Individual is entitled to indemnity
              hereunder, Individual shall notify the Company in writing of such claim
              or
              the commencement of such action or proceeding, and the Company shall
              (i)
              assume the defense of such action or proceeding, (ii) employ counsel
              reasonably satisfactory to Individual, and (iii) pay the reasonable
              fees
              and expenses of such counsel. Notwithstanding the preceding sentence,
              Individual shall be entitled to employ counsel separate from counsel
              for
              the Company and from any other party in such action if Individual
              reasonably determines that a conflict of interest exists which makes
              representation by counsel chosen by the Company not advisable. In such
              event, the reasonable fees and disbursements of such separate counsel
              for
              Individual shall be paid by the Company to the extent permitted by
              law.
	 
	(e) 
                  	After the termination
              of this
              Agreement and upon the request of Individual, the Company agrees to
              reimburse Individual for all reasonable travel, legal and other
              out-of-pocket expenses related to assisting the Company to prepare
              for or
              defend against any action, suit, proceeding or claim brought or threatened
              to be brought against the Company or to prepare for or institute any
              action, suit, proceeding or claim to be brought or threatened to be
              brought against a third party arising out of or based upon the
              transactions contemplated herein and in providing evidence, producing
              documents or otherwise participating in any such action, suit, proceeding
              or claim. In the event Individual is required to appear after termination
              of this Agreement at a judicial or regulatory hearing in connection
              with
              Individual's employment hereunder, or Individual's role in
              connection
	 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    therewith, the Company agrees
      to pay
      Individual a sum, to be mutually agreed upon by Individual and the Company,
      per
      diem for each day of his appearance and each day of preparation therefor.

    18. Notices. All
      demands, notices, and other communications
      to be given hereunder, if any, shall be in writing and shall be sufficient
      for
      all purposes if personally delivered, sent by facsimile or sent by United States
      mail to the address below or such other address or addresses as such party
      may
      hereafter designate in writing to the other party as herein provided.

    
      	Company
              or
              Parent:  	  	100
              Wilshire Blvd., Suite 1750  	  	Individual: 
	  	James
              Schafer  
	  	  	Santa
              Monica, CA 90401  	  	  	  	35864
              Carlton Road  
	  	  	Fax:
              (310) 752-1486  	  	  	  	Wildomar,
              CA 92595  
	  	  	Phone:
              (310) 752-1416  	  	  	  	Phone:
              (951) 609-2566  
	  	  	  	  	  	  	Cell:
              (619) 864-4220  
	  	  	  	  	  	  	Schafer001@msn.com 

    

    19. Entire
      Agreement. This Agreement
      contains the entire agreement of the parties and there are no other promises
      or
      conditions in any other agreement, whether oral or written. This Agreement
      supersedes any prior written or oral agreements between the parties. This
      Agreement may be modified or amended, if the amendment is made in writing and
      is
      signed by both parties. This Agreement is for the unique personal services
      of
      Individual and is not assignable or delegable, in whole or in part, by
      Individual. This Agreement may be assigned or delegated, in whole or in part,
      by
      the Company and, in such case, shall be assumed by and become binding upon
      the
      person, firm, company, corporation or business organization or entity to which
      this Agreement is assigned. The headings contained in this Agreement are for
      reference only and shall not in any way affect the meaning or interpretation
      of
      this Agreement. If any provision of this Agreement shall be held to be invalid
      or unenforceable for any reason, the remaining provisions shall continue to
      be
      valid and enforceable. The failure of either party to enforce any provision
      of
      this Agreement shall not be construed as a waiver or limitation of that party's
      right to subsequently enforce and compel strict compliance with every provision
      of this Agreement. This Agreement may be executed in two or more counterparts,
      each of which shall be deemed an original, but all of which together shall
      constitute one and the same instrument and, in pleading or proving any provision
      of this Agreement, it shall not be necessary to produce more than one of such
      counterparts. 

    IN WITNESS WHEREOF, the parties
      have
      executed this Agreement as of the day and year first above written. 

    
      	Company: 
	  	Individual: 

	SurgiCount
              Medical, Inc.  	  	  
	  
	  
	By: 
	  	  	  	  
	
            	
            	
              

            	
            	
              

            
	Name: 
	  	Milton
              C.
              Ault, III  	  	James
              Schafer  
	Title: 
	  	Chairman
              and CEO  	  	  
	  
	Parent: 
	  	  	  	  
	Patient
              Safety Technologies, Inc.  	  	  
	  
	  
	By: 
	  	  	  	  
	
            	
            	
              

            	
            	
            
	Name: 
	  	Milton
              C.
              Ault, III  	  	  
	Title: 
	  	Chairman
              and CEOWARRANT

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES  ACT") OR ANY STATE
SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,  TRANSFERRED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT
WITH RESPECT  THERETO UNDER THE SECURITIES  ACT OR A WRITTEN  OPINION OF COUNSEL
REASONABLY  SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM  REGISTRATION FOR
SUCH SALE, OFFER, TRANSFER OR OTHER ASSIGNMENT IS AVAILABLE UNDER THE SECURITIES
ACT AND SUCH STATE LAWS. THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN  ACCOUNT  SECURED BY SUCH  SECURITIES IN A MANNER THAT COMPLIES WITH
THE SECURITIES ACT.

                             INFOSEARCH MEDIA, INC.

                                     Date of Original Issuance: November 7, 2005

      InfoSearch  Media,  Inc., a Delaware  corporation (the "Company"),  hereby
certifies that, for value received, [Name of Investor] or its registered assigns
(the  "Holder"),  is  entitled  to  purchase  from the  Company up to a total of
_____________  shares of Common  Stock (as  defined  below)  (such  shares,  the
"Warrant Shares").  This warrant  ("Warrant") may be exercised from time to time
and at any time in whole or in part prior to the Expiration  Date and is subject
to the terms and conditions set forth below.

      1.  Definitions.  As used in this Warrant,  the following terms shall have
the respective definitions set forth in this Section. Capitalized terms that are
used and not defined in this Warrant that are defined in the Purchase  Agreement
(as  defined  below)  shall  have the  respective  definitions  set forth in the
Purchase Agreement.

            (a)  "Additional  Shares of Common Stock" means all shares of Common
Stock issued (or deemed to be issued) by the Company  after the Date of Original
Issuance, other than shares of Common Stock issued (or deemed to be issued):

                  (i) to employees,  consultants or directors  pursuant to stock
option, stock grant, stock purchase or similar plans or arrangements approved by
the Company's Board of Directors;

                  (ii) as a dividend or other  distribution  in connection  with
which an adjustment to the Exercise Price is made;

                  (iii)  in a  merger,  consolidation,  acquisition  or  similar
business combination that is approved by the Company's Board of Directors;

<PAGE>

                  (iv) in exchange for  technology or other  non-cash  assets as
approved by the Company's Board of Directors;

                  (v) pursuant to any rights or  agreements  outstanding  on the
Date of Original Issuance;

                  (vi) to Persons with which the Company has business or banking
relationships, provided that such issuance is approved by the Company's Board of
Directors and is not primarily for capital raising purposes; or

                  (vii) if the Holder  agrees in writing  that such shares shall
not constitute Additional Shares of Common Stock.

            (b) "Commission" means the Securities and Exchange Commission.

            (c)  "Convertible  Securities"  has the meaning set forth in Section
9(d)(i).

            (d) "Date of Exercise" means the date on which the Holder shall have
delivered  to Company:  (i) the Exercise  Notice (with the Warrant  Exercise Log
attached to it),  appropriately  completed and duly signed and (ii) the Exercise
Price  for the  number  of  Warrant  Shares  so  indicated  by the  Holder to be
purchased.

            (e)   "Effectiveness   Date"  has  the  meaning  set  forth  in  the
Registration Rights Agreement.

            (f)  "Expiration  Date"  means  the 5th  anniversary  of the Date of
Original Issuance.

            (g) "Exercise Notice" means the notice attached hereto as Exhibit A.

            (h)  "Exercise   Price"  means  $0.88,   subject  to  adjustment  in
accordance with Section 9 hereof.

            (i) "Fully  Diluted  Outstanding  Common  Stock" has the meaning set
forth in Section 9(d)(i).

            (j)  "Fundamental  Transaction" has the meaning set forth in Section
9(b).

            (k) "New Warrant" means a new Warrant,  in substantially the form of
this Warrant, issued upon any registration or transfer of this Warrant.

            (l) "Options" has the meaning set forth in Section 9(d)(i).

            (m) "Purchase  Agreement"  means the Securities  Purchase  Agreement
dated as of the date of this  Warrant  to which  the  Company  and the  original
Holder are parties.

                                       2
<PAGE>

            (n) "Registration  Rights Agreement" means that certain Registration
Rights  Agreement  entered  into as of the date hereof by and among the Company,
the Holder and the other parties thereto.

            (o)  "Registration  Statement"  has the  meaning  set  forth  in the
Registration Rights Agreement.

            (p) "Warrant  Exercise Log " means the Warrant Exercise Log attached
to the Exercise Notice.

            (q) "Warrant  Register"  means the records to be  maintained  by the
Company for the purpose of tracking the registered holder of the Warrant.

      2. Registration of Warrant. The Company shall register this Warrant in the
Warrant Register, in the name of the record Holder hereof from time to time. The
Holder  agrees that it may not transfer  this Warrant as to more than the number
of Warrant Shares then outstanding as shown on the most updated Warrant Exercise
Log, and any purported transfer in excess of such number of Warrant Shares shall
have no effect.  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.

      3.  Registration of Transfers.  The Company shall register the transfer of
any portion of this  Warrant in the Warrant  Register,  upon  surrender  of this
Warrant,  with the Form of Assignment attached hereto duly completed and signed,
and a legal opinion as contemplated by the legend on page 1 of this Warrant,  to
the Company at its  address  specified  herein.  Upon any such  registration  or
transfer,  a New Warrant,  evidencing the portion of this Warrant so transferred
shall be issued to the  transferee  and a New Warrant  evidencing  the remaining
portion of this Additional  Warrant not so transferred,  if any, shall be issued
to the transferring  Holder. The acceptance of the New Warrant by the transferee
thereof shall be deemed the  acceptance by such  transferee of all of the rights
and obligations of a holder of an Additional Warrant.

      4. Exercise and Duration of Warrant.  This Warrant shall be exercisable by
the  registered  Holder  at any time and from  time to time on or after the date
hereof to and including 6:30 p.m. New York City time on the Expiration  Date. At
6:30 p.m.,  New York City time,  on the  Expiration  Date,  the  portion of this
Warrant not  exercised  prior  thereto shall be and become void and of no value.
The  Company  may not call or redeem any  portion of this  Warrant  without  the
consent of the Holder.

      5. Delivery of Warrant Shares.

            (a) To acquire  Warrant Shares under this Warrant,  the Holder shall
not be required to physically surrender this Warrant unless the aggregate number
of Warrant  Shares then  represented  by this Warrant is being  exercised.  Upon
delivery of a written notice,  in the form of the Exercise Notice to the Company
(together  with the Warrant  Exercise  Log  attached  thereto at its address for
notice set forth herein and upon payment of the Exercise Price multiplied by the
number of Warrant  Shares  that the Holder  intends to purchase  hereunder,  the
Company shall  promptly (but in no event later than three (3) Trading Days after
the  Date  of  Exercise)  issue  and  deliver  to  the  Holder,   a  certificate

                                       3
<PAGE>

representing  the number of  Warrant  Shares to which  such  exercise  pertains,
which,  unless otherwise  required by the Purchase  Agreement,  shall be free of
restrictive  legends.  The  Company  shall,  upon  request  of  the  Holder  and
subsequent to the date on which a registration  statement covering the resale of
the Warrant Shares has been declared  effective by the Commission,  use its best
efforts to deliver  the  Warrant  Shares  hereunder  electronically  through the
Depository  Trust  Corporation  or  another  established   clearing  corporation
performing similar functions, if available;  provided that, the Company may, but
will not be required to change its transfer agent if its current  transfer agent
cannot  deliver  Warrant  Shares  electronically  through the  Depository  Trust
Corporation.

            (b) If by the third (3rd)  Trading Day after a Date of Exercise  the
Company  fails to deliver the  required  number of Warrant  Shares in the manner
required  pursuant  to  Section  5(a),  then the  Holder  will have the right to
rescind such exercise.

            (c) If by the third (3rd)  Trading Day after a Date of Exercise  the
Company  fails to deliver the  required  number of Warrant  Shares in the manner
required pursuant to Section 5(a), and if after such third  (3rd)Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases in a bona fide
arm's length transaction for fair market value (in an open market transaction or
otherwise)  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 (1) pay in cash to the Holder the
amount by which (x) the  Holder's  total  purchase  price  (including  brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Warrant Shares that the Company
was required to deliver to the Holder in  connection  with the exercise at issue
by (B) the  Exercise  Price and (2)  reinstate  the  portion of the  Warrant and
equivalent number of Warrant Shares for which such exercise was not honored. The
Holder shall provide the Company  written notice  indicating the amounts payable
to the Holder in respect of the Buy-In.

            (d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same,  any waiver or consent
with respect to any provision  hereof,  the recovery of any judgment against any
Person  or  any  action  to  enforce  the  same,  or any  setoff,  counterclaim,
recoupment,  limitation or  termination,  or any breach or alleged breach by the
Holder or any other Person of any  obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person,  and irrespective of
any other  circumstance  which  might  otherwise  limit such  obligation  of the
Company to the Holder in connection with the issuance of Warrant Shares. 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 Warrant Shares upon exercise
of the Warrant as required pursuant to the terms hereof.

      6. Charges,  Taxes and Expenses.  Issuance and delivery of Warrant  Shares
upon exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax,  withholding tax,  transfer agent fee or other incidental
tax or expense in respect of the  issuance  of such  certificates,  all of which
taxes and expenses  shall be paid by the Company;  provided,  however,  that the

                                       4
<PAGE>

Company  shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
in a name other than that of the Holder. The Holder shall be responsible for all
other tax liability that may arise as a result of holding or  transferring  this
Warrant or Warrant Shares upon exercise hereof.

      7. Replacement of Warrant . If this Warrant is mutilated,  lost, stolen or
destroyed,  the  Company  shall  issue or cause to be  issued  in  exchange  and
substitution for and upon  cancellation  hereof,  or in lieu of and substitution
for this  Warrant , a  Warrant,  but only upon  receipt of  evidence  reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable  indemnity  (which shall not include a surety  bond),  if  requested.
Applicants  for a Warrant under such  circumstances  shall also comply with such
other  reasonable  regulations  and  procedures  and pay such  other  reasonable
third-party  costs as the Company may prescribe.  If a Warrant is requested as a
result of a  mutilation  of this  Warrant,  then the Holder  shall  deliver such
mutilated  Warrant to the  Company as a  condition  precedent  to the  Company's
obligation to issue the Warrant.

      8.  Reservation of Warrant Shares.  The Company  covenants that it will at
all times reserve and keep  available out of the aggregate of its authorized but
unissued  and  otherwise  unreserved  Common  Stock,  solely for the  purpose of
enabling  it to issue  Warrant  Shares upon  exercise of this  Warrant as herein
provided,  the number of Warrant Shares which are then issuable and  deliverable
upon the exercise of this entire  Warrant,  free from  preemptive  rights or any
other  contingent  purchase rights of persons other than the Holder (taking into
account the  adjustments and  restrictions of Section 9). The Company  covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and non-assessable.

      9. Certain  Adjustments.  The Exercise  Price and number of Warrant Shares
issuable upon  exercise of this Warrant are subject to  adjustment  from time to
time as set forth in this Section 9.

            (a) Stock  Dividends and Splits.  If the Company,  at any time while
this Warrant is  outstanding,  (i) pays a stock  dividend on its Common Stock or
otherwise  makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides  outstanding shares of Common Stock into
a larger number of shares, or (iii) combines  outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common  Stock  outstanding  immediately  before  such  event and of which the
denominator   shall  be  the  number  of  shares  of  Common  Stock  outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph  shall  become  effective  immediately  after the record  date for the
determination of stockholders entitled to receive such dividend or distribution,
and any  adjustment  pursuant  to clause (ii) or (iii) of this  paragraph  shall
become  effective  immediately  after the effective date of such  subdivision or
combination.  If any event requiring an adjustment  under this paragraph  occurs
during the period  that an  Exercise  Price is  calculated  hereunder,  then the
calculation  of such Exercise Price shall be adjusted  appropriately  to reflect
such event.

                                       5
<PAGE>

            (b) Fundamental Transactions.  If, at any time while this Warrant is
outstanding,  (1) the Company effects any merger or consolidation of the Company
with  or into  another  Person,  (2)  the  Company  effects  any  sale of all or
substantially all of its assets in one or a series of related transactions,  (3)
any tender offer or exchange offer (whether by the Company or another Person) is
completed  pursuant to which  holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (4) the Company
effects  any  reclassification  of the  Common  Stock  or any  compulsory  share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged  for  other  securities,  cash  or  property  (in  any  such  case,  a
"Fundamental  Transaction"),  then the Holder shall have the right to either (A)
purchase  and receive  upon the basis and upon the terms and  conditions  herein
specified and in lieu of the Warrant  Shares  immediately  theretofore  issuable
upon  exercise  of the  Warrant,  such  shares  of stock,  securities  or assets
(including  cash) as would have been  issuable or payable  with respect to or in
exchange for a number of Warrant  Shares  equal to the number of Warrant  Shares
immediately  theretofore  issuable  upon  exercise  of  the  Warrant,  had  such
Fundamental  Transaction  not taken place or (B) require the  repurchase of this
Warrant for a purchase price, payable in cash within five (5) Trading Days after
such request,  equal to the Black  Scholes  value of the  remaining  unexercised
portion of this Warrant on the date of such request.  The terms of any agreement
pursuant to which a  Fundamental  Transaction  is effected  shall  include terms
requiring any such  successor or surviving  entity and Holder to comply with the
provisions of this Section. In connection with any Fundamental Transaction,  the
Company shall have the right to require Holder to sell this Warrant on the terms
provided in clause (B) hereof.

            (c) Number of Warrant Shares.  Simultaneously with any adjustment to
the Exercise  Price  pursuant to paragraph  (a) or (b)(A) of this  Section,  the
number of Warrant  Shares that may be  purchased  upon  exercise of this Warrant
shall be increased or decreased  proportionately,  so that after such adjustment
the  aggregate  Exercise  Price  payable  hereunder  for the adjusted  number of
Warrant  Shares  shall be the same as the  aggregate  Exercise  Price in  effect
immediately prior to such adjustment.

            (d) Adjustments to Exercise Price for Certain Dilutive Issuances.

                  (i)  Adjustments  for Issuance of Additional  Shares of Common
Stock. If the Company,  at any time after the Date of Original  Issuance,  shall
issue any  Additional  Shares of Common Stock at a price per share less than the
Exercise Price, or without consideration,  then the applicable Exercise Price in
effect  immediately  prior to such issuance shall  automatically  be adjusted to
that  price  (rounded  to  the  nearest  cent)  determined  by  multiplying  the
applicable  Exercise  Price then in effect by a fraction,  (i) the  numerator of
which  shall be equal to the sum of (A) the  number of  shares  of Common  Stock
outstanding  or deemed  outstanding  pursuant to  paragraph  (d)(ii)  below (the
"Fully Diluted  Outstanding Common Stock")  immediately prior to the issuance of
such  Additional  Shares of Common Stock plus (B) the number of shares of Common
Stock (rounded to the nearest whole share) which the aggregate consideration for
the total  number of such  Additional  Shares  of Common  Stock so issued  would
purchase at a price per share  equal to the  applicable  Exercise  Price then in
effect, and (ii) the denominator of which shall be equal to the number of shares
of Fully  Diluted  Common  Stock  plus the number of such  Additional  Shares of
Common Stock.  Simultaneously with any adjustment in the Exercise Price pursuant
to this  paragraph  (d), the number of Warrant Shares that may be purchased upon

                                       6
<PAGE>

exercise of this Warrant  shall be increased  or decreased  proportionately,  so
that after such  adjustment the aggregate  Exercise Price payable  hereunder for
the  adjusted  number  of  Warrant  Shares  shall be the  same as the  aggregate
Exercise Price in effect immediately prior to such adjustment. The provisions of
this paragraph (d) shall not apply under any of the  circumstances  for which an
adjustment  is provided in  paragraphs  (a) or (b) above.  No  adjustment of the
applicable  Exercise  Price  shall  be made  under  this  paragraph(d)  upon the
issuance of any Additional  Shares of Common Stock which are issued  pursuant to
any rights,  options or warrants  (other than as excluded by the  definition  of
Additional  Shares of Common  Stock) to  subscribe  for,  purchase or  otherwise
acquire either Common Stock or  Convertible  Securities (as such term is defined
below)  (collectively,  "Options") or securities  (other than as excluded by the
definition of Additional Shares of Common Stock) convertible, either directly or
indirectly, into or exchangeable for Common Stock ("Convertible Securities"), if
upon the issuance of such Options or  Convertible  Securities (x) any adjustment
shall have been made pursuant to paragraph  (ii) of the definition of Additional
Shares  of Common  Stock or (y) no  adjustment  was  required  pursuant  to this
paragraph (d)(i).  No adjustment of the applicable  Exercise Price shall be made
under this paragraph  (d)(i) in an amount less than $.01 per share, but any such
lesser  adjustment  shall be carried  forward  and shall be made at the time and
together with the next  subsequent  adjustment,  if any, which together with any
adjustments so carried forward shall amount to $.01 per share or more;  provided
that upon any  adjustment of the  applicable  Exercise  Price as a result of any
dividend or  distribution  payable in Common Stock or Convertible  Securities or
the reclassification,  subdivision or combination of Common Stock into a greater
or smaller  number of shares,  the  foregoing  figure of $.01 per share (or such
figure as last  adjusted)  shall be adjusted (to the nearest  one-half  cent) in
proportion to the adjustment in the applicable Exercise Price.

                  (ii)  Deemed  Issuances  of Common  Stock.  In the case of the
issuance (whether before, on or after the Date of Original  Issuance) of Options
or Convertible Securities, the following provisions shall apply for all purposes
of this paragraph (d):

                        (A) The  aggregate  maximum  number of shares of  Common
Stock deliverable upon exercise  (assuming the satisfaction of any conditions to
exercisability,  including without limitation,  the passage of time, but without
taking into account potential  anti-dilution  adjustments) of such Options shall
be deemed to have been  issued at the time such  Options  were  issued and for a
consideration  equal to the consideration  (determined in the manner provided in
paragraph  (d)(iii) below), if any, received by the Company upon the issuance of
such Options (without taking into account potential  anti-dilution  adjustments)
plus the minimum  exercise  price  provided in such Options for the Common Stock
covered thereby.

                        (B) The  aggregate  maximum  number  of shares of Common
Stock   deliverable  upon  conversion  of  or  in  exchange  for  (assuming  the
satisfaction of any conditions to exercisability,  including without limitation,
the passage of time,  but without  taking into account  potential  anti-dilution
adjustments)  any such  Convertible  Securities  or upon the exercise of Options
therefor and subsequent  conversion or exchange  thereof shall be deemed to have
been issued at the time such Convertible  Securities were issued or such Options
were issued and for a consideration equal to the consideration, if any, received
by the Company for any such Convertible Securities or related Options (excluding

                                       7
<PAGE>

any cash received on account of accrued interest or accrued dividends), plus the
minimum additional consideration, if any, to be received by the Company (without
taking into account potential anti-dilution  adjustments) upon the conversion or
exchange of such  Convertible  Securities or the exercise of any related Options
(the  consideration  in each case to be  determined  in the manner  provided  in
paragraph (d)(iii) below).

                        (C) In the event of any change in the  number  of shares
of Common Stock deliverable or in the consideration  payable to the Company upon
exercise  of  such  Options  or  upon  conversion  of or in  exchange  for  such
Convertible Securities,  including,  but not limited to, a change resulting from
the anti-dilution  provisions thereof,  the Exercise Price, to the extent in any
way affected by or computed using such Options or Convertible Securities,  shall
be recomputed to reflect such change,  but no further  adjustment  shall be made
for the actual  issuance of Common  Stock or any  payment of such  consideration
upon the  exercise  of any such  Options or the  conversion  or exchange of such
Convertible Securities.

                        (D) Upon the expiration of such Options, the termination
of any such  rights to convert or  exchange  or the  expiration  of any  Options
related to such Convertible Securities,  the Exercise Price shall, to the extent
in any way affected by or computed using such Options or Convertible  Securities
or Options related to such Convertible Securities,  be recomputed to reflect the
issuance  of only  the  number  of  shares  of  Common  Stock  (and  Convertible
Securities  which  remain in effect)  actually  issued upon the exercise of such
Options, upon the conversion or exchange of such Convertible  Securities or upon
the exercise of the Options related to such Convertible Securities.

                        (E) The number of shares of Common Stock  deemed  issued
and the consideration deemed paid therefor pursuant to paragraphs (d)(ii)(A) and
(d)(ii)(B)  above  shall  be  appropriately  adjusted  to  reflect  any  change,
termination  or  expiration  of the  type  described  in  paragraphs  (d)(ii)(C)
and(d)(ii)(D) above.

                  (iv)  Determination  of  Consideration.  For  purposes of this
paragraph  (d) the  consideration  received by the  Company  for any  Additional
Shares of Common  Stock  issued (or deemed to be issued)  shall be  computed  as
follows:

                        (A) Cash and Property. Such consideration shall:

                              (1) insofar as it consists of cash, be computed at
                        the aggregate amount of cash received by the Company;

                              (2) insofar as it consists of  securities  and the
                        value  of  such   securities  is  not   determinable  by
                        reference to a separate agreement, (A) if the securities
                        are then  traded  on a  Trading  Market,  then the value
                        shall be  computed  based on the  average of the closing
                        prices of the securities on such Trading Market over the
                        thirty  (30)-day period ending on the date of receipt by
                        the Company,  (B) if the securities are actively  traded
                        over-the-counter, then the value shall be computed based
                        on the average of the closing bid prices over the thirty
                        (30) day ending on the date of  receipt by the  Company,
                        and (C) if there is no active  public  market,  then the
                        value shall be computed  based on the fair market  value
                        thereof  on the  date  of  receipt  by the  Company,  as
                        determined in good faith by the Board of Directors;

                                       8
<PAGE>

                              (3) insofar as it consists of property  other than
                        cash and  securities,  be  computed  at the fair  market
                        value  thereof  at  the  time  of  such   issuance,   as
                        determined in good faith by the Board of Directors; and

                              (4) if  Additional  Shares  of  Common  Stock  are
                        issued  (or  deemed to be  issued)  together  with other
                        shares or  securities or other assets of the Company for
                        consideration  which cover both,  by the  proportion  of
                        such consideration so received,  computed as provided in
                        the immediately  preceding  paragraphs (1), (2) and (3),
                        as  determined  in good faith by the Board of Directors;
                        and

                        (B)    Options   and    Convertible    Securities.   The
consideration  received  by the Company for  Additional  Shares of Common  Stock
deemed to have been issued pursuant to this paragraph (d) relating to Option and
Convertible  Securities,  shall  be the sum of (x)  the  total  amount,  if any,
received or  receivable  by the Company as  consideration  for the issue of such
Options or  Convertible  Securities,  plus (y) the minimum  aggregate  amount of
additional  consideration  (as set forth in the  instruments  relating  thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration)  payable to the Company upon the exercise of such Options or
the  conversion or exchange of such  Convertible  Securities,  or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities.

                  (v) No Increase in Exercise Price.  Notwithstanding  any other
provisions of this paragraph (d),  except to the limited extent  provided for in
paragraphs  (d)(ii)(D) and (d)(ii)(E) above, no adjustment of the Exercise Price
pursuant to this  paragraph (d) shall have the effect of increasing the Exercise
Price above the Exercise Price in effect immediately prior to such adjustment.

            (e)  Calculations.  All  calculations  under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share,  as applicable.  The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company,  and the  disposition
of any such shares shall be considered an issue or sale of Common Stock.

            (f) Notice of  Adjustments.  Upon the occurrence of each  adjustment
pursuant to this  Section 9, the Company at its expense  will  promptly  compute
such  adjustment  in  accordance  with the terms of this  Warrant  and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable  upon  exercise  of  this  Warrant  (as  applicable),   describing  the
transactions  giving  rise to such  adjustments  and showing in detail the facts
upon which such  adjustment  is based.  Upon written  request,  the Company will
promptly  deliver  a copy of each  such  certificate  to the  Holder  and to the
Company's transfer agent.

                                       9
<PAGE>

            (g)  Notice of  Corporate  Events.  If the  Company  (i)  declares a
dividend or any other  distribution  of cash,  securities  or other  property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or  solicits  stockholder  approval  for any  Fundamental  Transaction  or (iii)
authorizes the voluntary  dissolution,  liquidation or winding up of the affairs
of the Company (but only to the extent such  disclosure  would not result in the
dissemination  of material,  non-public  information  to the  Holder),  then the
Company  shall  deliver  to the  Holder a copy of the press  release  or similar
public  notice  utilized  by the  Company  describing  the  material  terms  and
conditions of such transaction,  at least twenty (20) calendar days prior to the
applicable  record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such  transaction,  and
the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to exercise this Warrant prior to such
time so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not
affect the  validity of the  corporate  action  required to be described in such
notice.  Notwithstanding the foregoing,  the delivery of the notice described in
this  Section  9(g) is not  intended to and shall not bestow upon the Holder any
voting rights whatsoever.

      10. Payment of Exercise Price.  The Holder shall pay the Exercise Price in
one of the following manners:

            (a) Cash  Exercise.  The Holder may  deliver  immediately  available
funds; or

            (b)  Cashless  Exercise.  The Holder  may  notify the  Company in an
Exercise Notice of its election to utilize cashless exercise, in which event the
Company  shall issue to the Holder the number of Warrant  Shares  determined  as
follows:

                                 X = Y [(A-B)/A]

      where:

      X = the number of Warrant Shares to be issued to the Holder;

      Y = the number of Warrant  Shares  with  respect to which this  Warrant is
being exercised;

      A = the  average  of the  closing  prices  for the five (5)  Trading  Days
immediately prior to (but not including) the Date of Exercise; and

      B = the Exercise Price.

   For purposes of Rule 144, it is intended,  understood and  acknowledged  that
   the Warrant Shares issued in a cashless exercise  transaction shall be deemed
   to have been acquired by the Holder,  and the holding  period for the Warrant
   Shares  shall be  deemed to have  commenced,  on the date  this  Warrant  was
   originally issued.

      11.  Limitation  on  Exercise.  Notwithstanding  anything to the  contrary
contained  herein,  the number of Warrant  Shares  that may be  acquired  by the
Holder upon any exercise of this Warrant (or otherwise in respect  hereof) shall

                                       10
<PAGE>

be limited to the extent  necessary to insure that,  following such exercise (or
other  issuance),  the total number of shares of Common Stock then  beneficially
owned by such Holder and its Affiliates  and any other Persons whose  beneficial
ownership of Common Stock would be aggregated  with the Holder's for purposes of
Section  13(d) of the Exchange Act, does not exceed 4.99% of the total number of
issued and  outstanding  shares of Common Stock  (including for such purpose the
shares  of  Common  Stock  issuable  upon  such  exercise).  For such  purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange  Act  and  the  rules  and  regulations  promulgated  thereunder.  This
provision shall not restrict the number of shares of Common Stock which a Holder
may receive or  beneficially  own in order to determine the amount of securities
or  other  consideration  that  such  Holder  may  receive  in  the  event  of a
Fundamental  Transaction as contemplated  in Section 9(b) of this Warrant.  This
restriction  may be waived by the Holder upon  sixty-one (61) days prior written
notice to the Company.

      12. No Fractional  Shares.  No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant and in lieu thereof,  any
fractional shares shall be rounded down to the nearest whole.

      13.  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 number
specified in this Section  prior to 6:30 p.m.  (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission,  if such notice or
communication  is delivered via facsimile at the facsimile  number  specified in
this  Section on a day that is not a Trading  Day or later  than 6:30 p.m.  (New
York City time) on any Trading  Day, (c) the Trading Day  following  the date of
mailing, if sent by U.S. 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:    InfoSearch Media, Inc.
                            4086 Del Ray Avenue
                            Marina Del Ray, California 90292
                            Attn: Chief Financial Officer
                            Facsimile No.: (310) 919-3072

      With a copy to        McGuireWoods LLP
      (which shall not      1345 Avenue of the Americas
      constitute notice):   Seventh Floor
                            New York, New York 10105
                            Attn: Louis W. Zehil
                            Facsimile No.: (212) 548-2175

      If to an Investor:    To the address set forth under such Investor's name
                            on the signature pages to the Purchase Agreement;

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

                                       11
<PAGE>

      14.  Warrant  Agent.  The Company  shall serve as Warrant agent under this
Warrant.  Upon 30 days'  notice to the  Holder,  the  Company  may appoint a new
Warrant agent.  Any corporation  into which the Company or any new Warrant agent
may be merged or any corporation  resulting from any  consolidation to which the
Company or any new Warrant  agent shall be a party or any  corporation  to which
the  Company  or  any  new  Warrant  agent  transfers  substantially  all of its
corporate trust or shareholders  services  business shall be a successor Warrant
agent under this Warrant  without any further act.  Any such  successor  Warrant
agent shall  promptly  cause  notice of its  succession  as Warrant  agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

      15. Miscellaneous.

            (a) This Warrant shall be binding on and inure to the benefit of the
parties  hereto and their  respective  successors  and  assigns.  Subject to the
preceding  sentence,  nothing in this Warrant  shall be construed to give to any
Person  other than the  Company  and the Holder  any legal or  equitable  right,
remedy or cause of action  under  this.  This  Warrant  may be  amended  only in
writing signed by the Company and the Holder and their successors and assigns.

            (b) All questions concerning the construction, validity, enforcement
and  interpretation  of this  Warrant  shall be  governed by and  construed  and
enforced in accordance with the internal laws of New York, without regard to the
principles  of  conflicts  of law  thereof.  Each party  agrees that all Actions
concerning the interpretations,  enforcement and defense of this Warrant and the
transactions herein contemplated  (whether brought against a party hereto or its
respective  Affiliates,  employees or agents) shall be commenced  exclusively in
the state and federal courts sitting in New York (the "Applicable Courts"). Each
party hereto hereby  irrevocably  submits to the exclusive  jurisdiction  of the
Applicable Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction  contemplated  hereby or discussed herein,  and
hereby  irrevocably  waives,  and agrees not to assert in any Action,  any claim
that it is not personally  subject to the jurisdiction of any Applicable  Court,
or that such Action has been  commenced  in an improper or  inconvenient  forum.
Each party hereto  hereby  irrevocably  waives  personal  service of process and
consents to process  being  served in any such Action by mailing a copy  thereof
via  registered  or  certified  mail or  overnight  delivery  (with  evidence of
delivery)  to such party at the  address in effect for  notices to it under this
Warrant  and agrees  that such  service  shall  constitute  good and  sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve  process in any manner  permitted by law.
Each party hereto hereby irrevocably  waives, to the fullest extent permitted by
applicable  law,  any and all  right to trial  by jury in any  legal  proceeding
arising  out of or  relating to this  Warrant or the  transactions  contemplated
hereby.  If either party shall  commence a Action to enforce any  provisions  of
this Warrant , then the  prevailing  party in such Action shall be reimbursed by
the other party for its  attorney's  fees and other costs and expenses  incurred
with the investigation, preparation and prosecution of such Action.

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

                                       12
<PAGE>

            (d) In case any one or more of the  provisions of this Warrant shall
be invalid or unenforceable in any respect,  the validity and  enforceability of
the  remaining  terms and  provisions  of this  Warrant  shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially  reasonable
substitute  therefor,  and upon so agreeing,  shall  incorporate such substitute
provision in this Warrant.

            (e) Subject to the provisions of Section 9 hereof, prior to exercise
of this  Warrant,  the holder  hereof  shall not, by reason of by being a holder
hereof,  be entitled to any rights of a stockholder  with respect to the Warrant
Shares,  including  (without  limitation) the right to vote such Warrant Shares,
receive dividends or other distributions thereon,  exercise preemptive rights or
be notified of  stockholder  meetings,  and such holder shall not be entitled to
any notice or other  communication  concerning  the  business  or affairs of the
Company.

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                       13
<PAGE>

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

                             INFOSEARCH MEDIA, INC.

                             By: /s/ Frank Knuettel, II
                                 ------------------------------
                                 Name: Frank Knuettel, II
                                 Title: Chief Financial Officer

<PAGE>

                                                                       Exhibit A

                                 EXERCISE NOTICE
                             INFOSEARCH MEDIA, INC.
                   WARRANT ORIGINALLY ISSUED NOVEMBER 7, 2005
                             WARRANT NO. __________

      The undersigned hereby irrevocably elects to purchase _____________ shares
of Common Stock pursuant to the above referenced Warrant, and, if such Holder is
not utilizing the cashless exercise  provision set forth in Section 10(b) of the
Warrant,  encloses herewith $________ in cash,  certified or official bank check
or  checks or other  immediately  available  funds,  which  sum  represents  the
aggregate Exercise Price for the number of Warrant Shares to which this Exercise
Notice  relates,  together with any applicable  taxes payable by the undersigned
pursuant to the Warrant.

      By its delivery of this Exercise  Notice,  the undersigned  represents and
warrants to the Company that in giving effect to the exercise  evidenced  hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock  (determined in accordance  with Section 13(d) of the Securities  Exchange
Act of 1934)  permitted  to be owned under  Section 11 of this  Warrant to which
this notice relates.

      The undersigned requests that certificates for the Warrant Shares issuable
upon this exercise be issued in the name of ___________________________________.

                                           PLEASE INSERT SOCIAL SECURITY OR
                                           TAX IDENTIFICATION NUMBER____________

                         (Please print name and address)

<PAGE>

                              Warrant Exercise Log

<TABLE>
<CAPTION>
------------------- --------------------------------------- -------------------------------- -----------------------------
Date                Number of Warrant Shares  Available to  Number   of   Warrant    Shares  Number  of  Warrant   Shares
                    be Exercised                            Exercised                        Remaining to be Exercised
------------------- --------------------------------------- -------------------------------- -----------------------------
<S>                 <C>                                     <C>                              <C>

------------------- --------------------------------------- -------------------------------- -----------------------------
</TABLE>

<PAGE>

                             INFOSEARCH MEDIA, INC.
                   WARRANT ORIGINALLY ISSUED NOVEMBER 7, 2005
                                 WARRANT NO. [ ]

                               FORM OF ASSIGNMENT

         [To be completed and signed only upon transfer of Warrant ]

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto  ________________________________  the  right  represented  by  the  within
Warrant  to  purchase  ____________  shares of Common  Stock to which the within
Warrant relates and appoints ________________ attorney to transfer said right on
the books of the Company with full power of substitution in the premises.

Dated:   _______________, ____

                                         ---------------------------------------
                                         (Signature must conform in all respects
                                         to  name of holder  as specified on the
                                         face of the Warrant )

                                         ---------------------------------------
                                         Address of Transferee

                                         ---------------------------------------

                                         ---------------------------------------

In the presence of:

--------------------------

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