Document:

exhibit10-12.htm

    INTELLECTUAL
PROPERTY SECURITY AGREEMENT

     

    INTELLECTUAL
PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as
of April 22, 2008, by and among Motivnation, Inc., a Nevada corporation (“Parent”) and
TrixMotive Inc., a Nevada corporation (the “Subsidiary”)
(hereinafter the Parent and the Subsidiary shall collectively be referred to as
the “Company”)
and the secured parties signatory hereto and their respective endorsees,
transferees and assigns (collectively, the “Secured
Party”).

     

    W I T N E
S S E T H :

     

    WHEREAS,
pursuant to a Securities Purchase Agreement, dated the date hereof, between
Parent and the Secured Party (the “Purchase Agreement”),
Parent has agreed to issue to the Secured Party and the Secured Party has agreed
to purchase from Parent certain of Parent’s 8% Callable Secured Convertible
Notes, due three years from the date of issue (the “Notes”), which are
convertible into shares of Company’s Common Stock, par value $.001 per share
(the “Common
Stock”).  In connection therewith, Parent shall issue the
Secured Party certain Common Stock purchase warrants (the “Warrants”);
and

     

    WHEREAS,
the Parent and the Subsidiary have been, and are now, engaged in Our target
clients fall into two categories: the individual custom automotive enthusiast or
collectors of the “one of a kind” custom motorcycle and auto creations, and
those of local fabricators, custom shops, and Original Equipment Manufacturers.
Our primary market is the latter of two listed and these customers buy
materials, supplies, and finished parts for their work in serving the growing
market of custom or modified automobile creations. In addition to distributing
several lines of materials and equipment, we plan to provide training through
independent dealers and our own distribution infrastructure to our primary
market clientele.

     

    Our
manufacturing operations consist of in-house production of components and parts,
assembly and finishing of components, painting, conversion and assembly of
motorcycles and automobiles, and quality control, which includes performance
testing of finished products under running conditions. The custom design,
fabrication, finish and paint processes are moved into and out of each aspect of
the manufacturing process.

     

    We offer
various products and services depending on which client we are catering to for
every project. For our individual retail clients we offer products and services
including restoration work, finish and paint for automobiles as well as
signature paint and design applied to non automotive personal property. For our
independent dealers we offer products and services directly to the dealers which
include custom and signature finish and design work on a dealer’s own
restoration or manufactured work. We also offer consultative work in the
preparation of signature paints blends, techniques, and design advice related to
the dealer’s own project. For our original equipment manufacturers we offer
services and products that include signature design and fabrication for
manufactured parts and accessories, which are a party of a “designer” or
“signature” series of products or design themes. These products and services are
also sold direct to the original equipment manufacturers and the subsidiary is
the primary sources of revenues and expenses.  Corporate expenses are
mainly the costs related to being a public entity. From time to time there are
transfer of funds back and forth between corporate and the subsidiary ;
and

    WHEREAS,
[the Subsidiary constitutes
all of the subsidiaries of the Parent and] it is in the best interest of
the Subsidiary as subsidiaries of the Parent and the indirect beneficiaries of
the Purchase Agreement and Notes, that the Secured Party enter into the Purchase
Agreement and purchase the Notes to the Company; and

     

    WHEREAS,
in order to induce the Secured Party to purchase the Notes, Company has agreed
to execute and deliver to the Secured Party this Agreement for the benefit of
the Secured Party and to grant to it a first priority security interest in
certain Intellectual Property (defined below) of Company to secure the prompt
payment, performance and discharge in full of all of Company’s obligations under
the Notes and exercise and discharge in full of Company’s obligations under the
Warrants; and

     

    WHEREAS,
in light of the foregoing, the Company expects to derive substantial benefit
from the Purchase Agreement and sale of the Notes and the transactions
contemplated thereby and, in furtherance thereof, has agreed to execute and
deliver this Agreement.

     

     

    
      
         

      

      
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    NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

     

    1. Defined
Terms.  Unless otherwise defined herein, terms which are
defined in the Purchase Agreement and used herein are so used as so defined; and
the following terms shall have the following meanings:

     

    “Software Intellectual
Property”  shall mean:

     

    (a) all
software programs (including all source code, object code and all related
applications and data files), whether now owned, upgraded, enhanced, licensed or
leased or hereafter acquired by the Company, above;

     

    (b) all
computers and electronic data processing hardware and firmware associated
therewith;

     

    (c) all
documentation (including flow charts, logic diagrams, manuals, guides and
specifications) with respect to such software, hardware and firmware described
in the preceding clauses (a) and (b); and

     

    (d) all
rights with respect to all of the foregoing, including, without limitation, any
and all upgrades, modifications, copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and
substitutions, replacements, additions, or model conversions of any of the
foregoing.

     

    “Copyrights” shall
mean (a) all copyrights, registrations and applications for registration, issued or filed,
including any reissues, extensions or renewals thereof, by or with the United
States Copyright Office or any similar office or agency of the United States,
any state thereof, or any other country or political subdivision thereof, or
otherwise, including, all rights in and to the material constituting the subject
matter thereof, including, without limitation, any referred to in Schedule B hereto,
and (b) any rights in any material which is copyrightable or which is protected
by common law, United States copyright laws or similar laws or any law of any
State, including, without limitation, any thereof referred to in Schedule B
hereto.

     

    “Copyright License”
shall mean any agreement, written or oral, providing for a grant by the Company
of any right in any Copyright, including, without limitation, any thereof
referred to in Schedule B
hereto.

     

    “Intellectual
Property” shall means, collectively, the Software Intellectual Property,
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and Trade Secrets.

     

    “Obligations” means
all of the Company’s obligations under this Agreement and the Notes, in each
case, whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later decreased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from the Secured
Party as a preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time to
time.

     

    “Patents” shall mean
(a) all letters patent of the United States or any other country or any
political subdivision thereof, and all reissues and extensions thereof,
including, without limitation, any thereof referred to in Schedule B hereto,
and (b) all applications for letters patent of the United States and all
divisions, continuations and continuations-in-part thereof or any other country
or any political subdivision, including, without limitation, any thereof
referred to in Schedule B
hereto.

     

    “Patent License” shall
mean all agreements, whether written or oral, providing for the grant by the
Company of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof referred to in Schedule B
hereto.

     

    “Security Agreement”
shall mean the Security Agreement, dated the date hereof between Company and the
Secured Party.

     

    “Trademarks” shall
mean (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any thereof
referred to in Schedule B hereto,
and (b) all reissues, extensions or renewals thereof.

     

    “Trademark License”
shall mean any agreement, written or oral, providing for the grant by the
Company of any right to use any Trademark, including, without limitation, any
thereof referred to in Schedule B
hereto.

     

    “Trade Secrets” shall
mean common law and statutory trade secrets and all other confidential or
proprietary or useful information and all know-how obtained by or used in or
contemplated at any time for use in the business of the Company (all of the
foregoing being collectively called a “Trade Secret”),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule B hereto,
and including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

     

     

    
      
         

      

      
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    2. Grant of Security
Interest.  In accordance with Section 3(m) of the Security
Agreement, to secure the complete and timely payment, performance and discharge
in full, as the case may be, of all of the Obligations, the Company hereby,
unconditionally and irrevocably, pledges, grants and hypothecates to the Secured
Party, a continuing security interest in, a continuing first lien upon, an
unqualified right to possession and disposition of and a right of set-off
against, in each case to the fullest extent permitted by law, all of the
Company’s right, title and interest of whatsoever kind and nature in and to the
Intellectual Property (the “Security
Interest”).

     

    3. Representations and
Warranties.  The Company hereby represents and warrants, and
covenants and agrees with, the Secured Party as follows:

     

    (a) The
Company has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations thereunder.  The
execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the
Company.  This Agreement constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditor’s rights
generally.

     

    (b) The
Company represents and warrants that it has no place of business or offices
where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places where the
Intellectual Property is stored or located, except as set forth on Schedule A attached
hereto;

     

    (c) The
Company is the sole owner of the Intellectual Property (except for non-exclusive
licenses granted by the Company in the ordinary course of business), free and
clear of any liens, security interests, encumbrances, rights or claims, and is
fully authorized to grant the Security Interest in and to pledge the
Intellectual Property.  There is not on file in any governmental or
regulatory authority, agency or recording office an effective financing
statement, security agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the Secured Party
pursuant to this Agreement) covering or affecting any of the Intellectual
Property.  So long as this Agreement shall be in effect, the Company
shall not execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document or instrument
(except to the extent filed or recorded in favor of the Secured Party pursuant
to the terms of this Agreement), except for a financing statement covering
assets acquired by the Company after the date hereof, provided that the value of
the Intellectual Property covered by this Agreement along with the Collateral
(as defined in the Security Agreement) is equal to at least 150% of the
Obligations.

     

    (d) The
Company shall at all times maintain its books of account and records relating to
the Intellectual Property at its principal place of business and its
Intellectual Property at the locations set forth on Schedule A attached
hereto and may not relocate such books of account and records unless it delivers
to the Secured Party at least 30 days prior to such relocation (i) written
notice of such relocation and the new location thereof (which must be within the
United States) and (ii) evidence that the necessary documents have been
filed and recorded and other steps have been taken to perfect the Security
Interest to create in favor of the Secured Party valid, perfected and continuing
first priority liens in the Intellectual Property to the extent they can be
perfected through such filings.

     

    (e) This
Agreement creates in favor of the Secured Party a valid security interest in the
Intellectual Property securing the payment and performance of the Obligations
and, upon making the filings required hereunder, a perfected first priority
security interest in such Intellectual Property to the extent that it can be
perfected through such filings.

     

    (f)  Upon
request of the Secured Party, the Company shall execute and deliver any and all
agreements, instruments, documents, and papers as the Secured Party may request
to evidence the Secured Party’s security interest in the Intellectual Property
and the goodwill and general intangibles of the Company relating thereto or
represented thereby, and the Company hereby appoints the Secured Party its
attorney-in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power being coupled with an interest is irrevocable until the Obligations have
been fully satisfied and are paid in full.

     

    (g) The
execution, delivery and performance of this Agreement does not conflict with or
cause a breach or default, or an event that with or without the passage of time
or notice, shall constitute a breach or default, under any agreement to which
the Company is a party or by which the Company is bound.  No consent
(including, without limitation, from stock holders or creditors of the Company)
is required for the Company to enter into and perform its obligations
hereunder.

     

    (h) The
Company shall at all times maintain the liens and Security Interest provided for
hereunder as valid and perfected first priority liens and security interests in
the Intellectual Property to the extent they can be perfected by filing in favor
of the Secured Party until this Agreement and the Security Interest hereunder
shall terminate pursuant to Section 11.  The Company hereby agrees to
defend the same against any and all persons.  The Company shall
safeguard and protect all Intellectual Property for the account of the Secured
Party.  Without limiting the generality of the foregoing, the Company
shall pay all fees, taxes and other amounts necessary to maintain the
Intellectual Property and the Security Interest hereunder, and the Company shall
obtain and furnish to the Secured Party from time to time, upon demand, such
releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

     

     

    
      
         

      

      
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    (i) The
Company will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted by the Company in the ordinary course of
business), sell or otherwise dispose of any of the Intellectual Property without
the prior written consent of the Secured Party.

     

    (j) The
Company shall, within ten (10) days of obtaining knowledge thereof, advise the
Secured Party promptly, in sufficient detail, of any substantial change in the
Intellectual Property, and of the occurrence of any event which would have a
material adverse effect on the value of the Intellectual Property or on the
Secured Party’s security interest therein.

     

    (k) The
Company shall permit the Secured Party and its representatives and agents to
inspect the Intellectual Property at any time, and to make copies of records
pertaining to the Intellectual Property as may be requested by the Secured Party
from time to time.

     

    (l) The
Company will take all steps reasonably necessary to diligently pursue and seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Intellectual Property.

     

    (m) The
Company shall promptly notify the Secured Party in sufficient detail upon
becoming aware of any  attachment, garnishment, execution or other
legal process levied against any Intellectual Property and of any other
information received by the Company that may materially affect the value of the
Intellectual Property, the Security Interest or the rights and remedies of the
Secured Party hereunder.

     

    (n) All
information heretofore, herein or hereafter supplied to the Secured Party by or
on behalf of the Company with respect to the Intellectual Property is accurate
and complete in all material respects as of the date furnished.

     

    (o) Schedule A attached
hereto contains a list of all of the subsidiaries of Company.

     

    (p) Schedule B attached
hereto includes all Licenses, and all Patents and Patent Licenses, if any, owned
by the Company in its own name as of the date hereof.  Schedule B hereto
includes all Trademarks and Trademark Licenses, if any, owned by the Company in
its own name as of the date hereof.  Schedule B hereto
includes all Copyrights and Copyright Licenses, if any, owned by the Company in
its own name as of the date hereof.  Schedule B hereto
includes all Trade Secrets and Trade Secret Licenses, if any, owned by the
Company as of the date hereof.  To the best of the Company’s
knowledge, each License, Patent, Trademark, Copyright and Trade Secret is valid,
subsisting, unexpired, enforceable and has not been abandoned.  Except
as set forth in Schedule B, none of
such Licenses, Patents, Trademarks, Copyrights and Trade Secrets is the subject
of any licensing or franchise agreement.  To the best of the Company’s
knowledge, no holding, decision or judgment has been rendered by any
Governmental Body which would limit, cancel or question the validity of any
License, Patent, Trademark, Copyright and Trade Secrets .  No action
or proceeding is pending (i) seeking to limit, cancel or question the validity
of any License, Patent, Trademark, Copyright or Trade Secret, or (ii) which, if
adversely determined, would have a material adverse effect on the value of any
License, Patent, Trademark, Copyright or Trade Secret.  The Company
has used and will continue to use for the duration of this Agreement, proper
statutory notice in connection with its use of the Patents, Trademarks and
Copyrights and consistent standards of quality in products leased or sold under
the Patents, Trademarks and Copyrights.

     

     

    
      
         

      

      
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    (q) With
respect to any Intellectual Property:

     

    
      	
              (i)  

            	
              such
      Intellectual Property is subsisting and has not been adjudged invalid or
      unenforceable, in whole or in part;

            

    

     

    
      	
              (ii)  

            	
              such
      Intellectual Property is valid and
enforceable;

            

    

     

    
      	
              (iii)  

            	
              the
      Company has made all necessary filings and recordations to protect its
      interest in such Intellectual Property, including, without limitation,
      recordations of all of its interests in the Patents, Patent Licenses,
      Trademarks and Trademark Licenses in the United States Patent and
      Trademark Office and in corresponding offices throughout the world and its
      claims to the Copyrights and Copyright Licenses in the United States
      Copyright Office and in corresponding offices throughout the
      world;

            

    

     

    
      	
              (iv)  

            	
              other
      than as set forth in Schedule B, the
      Company is the exclusive owner of the entire and unencumbered right, title
      and interest in and to such Intellectual Property and no claim has been
      made that the use of such Intellectual Property infringes on the asserted
      rights of any third party; and

            

    

     

    
      	
              (v)  

            	
              the
      Company has performed and will continue to perform all acts and has paid
      all required fees and taxes to maintain each and every item of
      Intellectual Property in full force and effect throughout the world, as
      applicable.

            

    

     

    (r) Except
with respect to any Trademark or Copyright that the Company  shall
reasonably determine is of negligible economic value to the Company, the Company
shall:

     

    (i) maintain
each Trademark and Copyright in full force free from any claim of abandonment
for non-use, maintain as in the past the quality of products and services
offered under such Trademark or Copyright;  employ such Trademark or
Copyright with the appropriate notice of registration; not adopt or use any mark
which is confusingly similar or a colorable imitation of such Trademark or
Copyright unless the Secured Party shall obtain a perfected security interest in
such mark pursuant to this Agreement; and not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
Trademark or Copyright may become invalidated;

     

    (ii) not,
except with respect to any Patent that it shall reasonably determine is of
negligible economic value to it, do any act, or omit to do any act, whereby any
Patent may become abandoned or dedicated; and

     

    (iii) notify
the Secured Party immediately if it knows, or has reason to know, that any
application or registration relating to any Patent, Trademark or Copyright may
become abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
United States Copyright Office or any court or tribunal in any country)
regarding its ownership of any Patent, Trademark or Copyright or its right to
register the same or to keep and maintain the same.

     

    (s) Whenever
the Company, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office,
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof or acquire rights to any new
Patent, Trademark or Copyright whether or not registered, report such filing to
the Secured Party within five business days after the last day of the fiscal
quarter in which such filing occurs.

     

    (t) The
Company shall take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Patents, Trademarks and Copyrights, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.

     

    (u) In the
event that any Patent, Trademark or Copyright included in the Intellectual
Property is infringed, misappropriated or diluted by a third party, promptly
notify the Secured Party after it learns thereof and shall, unless it shall
reasonably determine that such Patent, Trademark or Copyright is of negligible
economic value to it, which determination it shall promptly report to the
Secured Party, promptly sue for infringement, misappropriation or dilution, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such other actions as
it shall reasonably deem appropriate under the circumstances to protect such
Patent, Trademark or Copyright.  If the Company lacks the financial
resources to comply with this Section 3(t), the Company shall so notify the
Secured Party and shall cooperate fully with any enforcement action undertaken
by the Secured Party on behalf of the Company.

     

     

    
      
         

      

      
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    4. Defaults.  The
following events shall be “Events of
Default”:

     

    (a) The
occurrence of an Event of Default (as defined in the Notes) under the
Notes;

     

    (b) Any
representation or warranty of the Company in this Agreement or in the Security
Agreement shall prove to have been incorrect in any material respect when
made;

     

    (c) The
failure by the Company to observe or perform any of its obligations hereunder or
in the Security Agreement for ten (10) days after receipt by the Company of
notice of such failure from the Secured Party; and

     

    (d) Any
breach of, or default under, the Warrants.

     

    5. Duty To Hold In
Trust.  Upon the occurrence of any Event of Default and at any
time thereafter, the Company shall, upon receipt by it of any revenue, income or
other sums subject to the Security Interest, whether payable pursuant to the
Notes or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Party and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligations.

     

    6. Rights and Remedies Upon
Default.  Upon occurrence of any Event of Default and at any
time thereafter, the Secured Party shall have the right to exercise all of the
remedies conferred hereunder and under the Notes, and the Secured Party shall
have all the rights and remedies of a secured party under the UCC and/or any
other applicable law (including the Uniform Commercial Code of any jurisdiction
in which any Intellectual Property is then located).  Without
limitation, the Secured Party shall have the following rights and
powers:

     

    (a) The
Secured Party shall have the right to take possession of the Intellectual
Property and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Intellectual Property, or any part thereof, is or
may be placed and remove the same, and the Company shall assemble the
Intellectual Property and make it available to the Secured Party at places which
the Secured Party shall reasonably select, whether at the Company’s premises or
elsewhere, and make available to the Secured Party, without rent, all of the
Company’s respective premises and facilities for the purpose of the Secured
Party taking possession of, removing or putting the Intellectual Property in
saleable or disposable form.

     

    (b) The
Secured Party shall have the right to operate the business of the Company using
the Intellectual Property and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Intellectual Property,
at public or private sale or otherwise, either with or without special
conditions or stipulations, for cash or on credit or for future delivery, in
such parcel or parcels and at such time or times and at such place or places,
and upon such terms and conditions as the Secured Party may deem commercially
reasonable, all without (except as shall be required by applicable statute and
cannot be waived) advertisement or demand upon or notice to the Company or right
of redemption of the Company, which are hereby expressly waived.  Upon
each such sale, lease, assignment or other transfer of Intellectual Property,
the Secured Party may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Intellectual Property being sold, free
from and discharged of all trusts, claims, right of redemption and equities of
the Company, which are hereby waived and released.

     

    7. Applications of
Proceeds.  The proceeds of any such sale, lease or other
disposition of the Intellectual Property hereunder shall be applied first, to
the expenses of retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Intellectual Property, to the
reasonable attorneys’ fees and expenses incurred by the Secured Party in
enforcing its rights hereunder and in connection with collecting, storing and
disposing of the Intellectual Property, and then to satisfaction of the
Obligations, and to the payment of any other amounts required by applicable law,
after which the Secured Party shall pay to the Company any surplus
proceeds.  If, upon the sale, license or other disposition of the
Intellectual Property, the proceeds thereof are insufficient to pay all amounts
to which the Secured Party is legally entitled, the Company will be liable for
the deficiency, together with interest thereon, at the rate of 15% per annum
(the “Default
Rate”), and the reasonable fees of any attorneys employed by the Secured
Party to collect such deficiency.  To the extent permitted by
applicable law, the Company waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal, retention or sale of the
Intellectual Property, unless due to the gross negligence or willful misconduct
of the Secured Party.

     

     

    
      
         

      

      
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    8. Costs and
Expenses.                                           The
Company agrees to pay all out-of-pocket fees, costs and expenses incurred in
connection with any filing required hereunder, including without limitation, any
financing statements, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party.  The Company shall also pay
all other claims and charges which in the reasonable opinion of the Secured
Party might prejudice, imperil or otherwise affect the Intellectual Property or
the Security Interest therein.  The Company will also, upon demand,
pay to the Secured Party the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the enforcement
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Intellectual Property, or
(iii) the exercise or enforcement of any of the rights of the Secured Party
under the Notes. Until so paid, any fees payable hereunder shall be added to the
principal amount of the Notes and shall bear interest at the Default
Rate.

     

    9. Responsibility for
Intellectual Property.  The Company assumes all liabilities and
responsibility in connection with all Intellectual Property, and the obligations
of the Company hereunder or under the Notes and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Intellectual Property or its unavailability for any
reason.

     

    10. Security Interest
Absolute.  All rights of the Secured Party and all Obligations
of the Company hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the Notes, the
Warrants or any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Notes, the Warrants  or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Intellectual Property, or any release or amendment or waiver of or
consent to departure from any other Intellectual Property for, or any guaranty,
or any other security, for all or any of the Obligations; (d) any action by the
Secured Party to obtain, adjust, settle and cancel in its sole discretion any
insurance claims or matters made or arising in connection with the Intellectual
Property; or (e) any other circumstance which might otherwise constitute any
legal or equitable defense available to the Company, or a discharge of all or
any part of the Security Interest granted hereby.  Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy.  The Company expressly waives presentment, protest, notice
of protest, demand, notice of nonpayment and demand for performance. In the
event that at any time any transfer of any Intellectual Property or any payment
received by the Secured Party hereunder shall be deemed by final order of a
court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or
shall be deemed to be otherwise due to any party other than the Secured Party,
then, in any such event, the Company’s obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof.  The Company waives all right to require the
Secured Party to proceed against any other person or to apply any Intellectual
Property which the Secured Party may hold at any time, or to marshal assets, or
to pursue any other remedy.  The Company waives any defense arising by
reason of the application of the statute of limitations to any obligation
secured hereby.

     

    11. Term of
Agreement.  This Agreement and the Security Interest shall
terminate on the date on which all payments under the Notes have been made in
full and all other Obligations have been paid or discharged.  Upon
such termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

     

    12. Power of Attorney; Further
Assurances.

     

    (a) The
Company authorizes the Secured Party, and does hereby make, constitute and
appoint it, and its respective officers, agents, successors or assigns with full
power of substitution, as the Company’s true and lawful attorney-in-fact, with
power, in its own name or in the name of the Company, to, after the occurrence
and during the continuance of an Event of Default, (i) endorse any notes,
checks, drafts, money orders, or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in respect of
the Intellectual Property that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and
other documents relating to the Intellectual Property; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or
placed on or threatened against the Intellectual Property; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Intellectual Property; and (v) generally, to do, at the option of the
Secured Party, and at the Company’s expense, at any time, or from time to time,
all acts and things which the Secured Party deems necessary to protect, preserve
and realize upon the Intellectual Property and the Security Interest granted
therein in order to effect the intent of this Agreement, the Notes and the
Warrants, all as fully and effectually as the Company might or could do; and the
Company hereby ratifies all that said attorney shall lawfully do or cause to be
done by virtue hereof.  This power of attorney is coupled with an
interest and shall be irrevocable for the term of this Agreement and thereafter
as long as any of the Obligations shall be outstanding.

     

    (b) On a
continuing basis, the Company will make, execute, acknowledge, deliver, file and
record, as the case may be, in the proper filing and recording places in any
jurisdiction, including, without limitation, the jurisdictions indicated on
Schedule C,
attached hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested by the
Secured Party, to perfect the Security Interest granted hereunder and otherwise
to carry out the intent and purposes of this Agreement, or for assuring and
confirming to the Secured Party the grant or perfection of a security interest
in all the Intellectual Property.

     

    (c) The
Company hereby irrevocably appoints the Secured Party as the Company’s
attorney-in-fact, with full authority in the place and stead of the Company and
in the name of the Company, from time to time in the Secured Party’s discretion,
to take any action and to execute any instrument which the Secured Party may
deem necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property without the signature of the Company where permitted by
law.

     

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    13. Notices.  All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses:

     

    
      	
              If
      to the Company:

            	
              Motivnation,
      Inc.

            

    

    18101 Von
Karman Avenue, Suite 330

    Irvine,
CA 92612

     

    Attention:
Chief Executive Officer

     

    Telephone:  (888)
258-6458

     

    Facsimile:   (888)
258-6456

     

    TrixMotive
Inc

    13659
Excelsior Drive

    Santa Fe
Springs, CA 90670

    Attention:
Chief Operating Officer

    Telephone:
562-802-5887

    Facsimile:
562-802-5878

     

    

    
      	
              With
      copies to:

            	
              Naccarato
      & Associates

            

    

    18301 Von
Karman Avenue, Suite 430

    Irvine,
CA 92612

    Attention:  Owen
M. Naccarato, Esq.

    Telephone:  (949)
851-9261

    Facsimile:   (949)
851-9262

     

    

     

    
      	
              If
      to the Secured Party:

            	
              New
      Millennium Capital Partners II, LLC

            

    

     

    
      	
               
      

            	
              1044
      Northern Boulevard

            

    

     

    
      	
               
      

            	
              Suite
      302

            

    

     

    
      	
               
      

            	
              Roslyn,
      New York 11576

            

    

     

    
      	
               
      

            	
              Attention:  Corey
      Ribotsky

            

    

     

    
      	
               
      

            	
              Facsimile:  516-739-7115

            

    

     

    

     

    
      	
              With
      copies to:

            	
              Ballard
      Spahr Andrews & Ingersoll, LLP

            

    

     

    
      	
               
      

            	
              1735
      Market Street

            

    

     

    
      	
               
      

            	
              51st
      Floor

            

    

     

    
      	
               
      

            	
              Philadelphia,
      Pennsylvania  19103

            

    

     

    
      	
               
      

            	
              Attention:  Gerald
      J. Guarcini, Esq.

            

    

     

    
      	
               
      

            	
              Telephone:  215-865-8625

            

    

     

    
      	
               
      

            	
              Facsimile:   215-864-8999

            

    

     

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    14. Other
Security.  To the extent that the Obligations are now or
hereafter secured by property other than the Intellectual Property or by the
guarantee, endorsement or property of any other person, firm, corporation or
other entity, then the Secured Party shall have the right, in its sole
discretion, to pursue, relinquish, subordinate, modify or take any other action
with respect thereto, without in any way modifying or affecting any of the
Secured Party’s rights and remedies hereunder.

     

    15. Miscellaneous.

     

    (a) No course
of dealing between the Company and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Party, any
right, power or privilege hereunder or under the Notes shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

     

    (b) All of
the rights and remedies of the Secured Party with respect to the Intellectual
Property, whether established hereby or by the Notes or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.

     

    (c) This
Agreement and the Security Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and is intended to supersede
all prior negotiations, understandings and agreements with respect
thereto.  Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the parties
hereto.

     

    (d) In the
event that any provision of this Agreement is held to be invalid, prohibited or
unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable.  If, notwithstanding the foregoing, any provision of
this Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.

     

    (e) No waiver
of any breach or default or any right under this Agreement shall be considered
valid unless in writing and signed by the party giving such waiver, and no such
waiver shall be deemed a waiver of any subsequent breach or default or right,
whether of the same or similar nature or otherwise.

     

    (f) This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.

     

    (g) Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

     

    (h) This
Agreement shall be construed in accordance with the laws of the State of New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Intellectual Property which are
governed by a jurisdiction other than the State of New York in which case such
law shall govern.  Each of the parties hereto irrevocably submit to
the exclusive jurisdiction of any New York State or United States Federal court
sitting in Manhattan county over any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal court.  The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  The parties hereto further waive any
objection to venue in the State of New York and any objection to an action or
proceeding in the State of New York on the basis of forum non
conveniens.

     

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    (i) EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY
WAIVES ITS RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATION.  THIS
WAIVER IS IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.  IN THE EVENT OF A LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

     

    (j) This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

     

    

     

    

     

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.

     

    COMPANY

    

    MOTIVNATION,
INC.

    

    

    By:
________________________________

    George
Lefevre

    Chief
Executive Officer

    

    

    TRIXMOTIVE
INC

    

    

    By:________________________________

    Name:_____________________________

    Its:________________________________

    

    

    

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              SECURED
      PARTY:

            

    

    

    

    
      	
               
      

            	
              NEW
      MILLENNIUM CAPITAL PARTNERS II, LLC

            

    

    
      	
               
      

            	
              By:  First
      Street Manager II, LLC

            

    

     

    By:  _____________________________________

     

    Corey S. Ribotsky

     

    Manager

     

    

    
      
         

      

      
        -12-exhibit10-13.htm

    

     

    

     

    

     

    THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGIS­TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  EXCEPT
AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF
APRIL 22, 2008, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRA­TION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM,
SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

     

    Right to
Purchase 10,000,000 Shares of Common Stock, par value $.001 per
share

     

    STOCK
PURCHASE WARRANT

     

    THIS CERTIFIES THAT, for value
received, New Millennium Capital Partners II, LLC or its registered assigns, is
entitled to purchase from Motivnation, Inc., a Nevada
corporation (the “Company”), at any time or from time to time during the period
specified in Paragraph 2 hereof, 10,000,000 fully paid and nonassessable
shares of the Company’s Common Stock, par value $.001 per share (the “Common
Stock”), at an exercise price per share equal to $.002 (the “Exercise
Price”).  The term “Warrant Shares,” as used herein, refers to the
shares of Common Stock purchasable hereunder.  The Warrant Shares and
the Exercise Price are subject to adjustment as provided in Paragraph 4
hereof.  The term “Warrants” means this Warrant and the other warrants
issued pursuant to that certain Securities Purchase Agreement, dated April 22,
2008, by and among the Company and the Buyers listed on the execution page
thereof (the “Securities
Purchase Agreement”).

     

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

     

    1. Manner of Exercise; Issuance
of Certificates; Payment for Shares.

     

    
      	
              Subject
      to the provisions hereof, this Warrant may be exercised by the holder
      hereof, in whole or in part, by the surrender of this Warrant, together
      with a completed exercise agreement in the form attached hereto (the
      “Exercise Agreement”), to the Company during normal business hours on any
      business day at the Company’s principal executive offices (or such other
      office or agency of the Company as it may designate by notice to the
      holder hereof), and upon (i) payment to the Company in cash, by certified
      or offi­cial bank check or by wire transfer for the account of the
      Company of the Exercise Price for the Warrant Shares specified in the
      Exercise Agreement or (ii) if the resale of the Warrant Shares by the
      holder is not then registered pursuant to an effective registration
      statement under the Securities Act of 1933, as amended (the “Securities
      Act”), delivery to the Company of a written notice of an election to
      effect a “Cashless Exercise” (as defined in Section 11(c) below) for the
      Warrant Shares specified in the Exercise Agreement.  The Warrant
      Shares so purchased shall be deemed to be issued to the holder hereof or
      such holder’s designee, as the record owner of such shares, as of the
      close of business on the date on which this Warrant shall have been
      surrendered, the completed Exercise Agreement shall have been
      deliv­ered, and payment shall have been made for such shares as set
      forth above.  Certifi­cates for the Warrant Shares so
      purchased, representing the aggregate number of shares specified in the
      Exercise Agreement, shall be delivered to the holder hereof within a
      reasonable time, not exceeding five (5) business days, after this Warrant
      shall have been so exercised.  The certificates so delivered
      shall be in such denominations as may be requested by the holder hereof
      and shall be registered in the name of such holder or such other name as
      shall be designated by such holder.  If this Warrant shall have
      been exercised only in part, then, unless this Warrant has expired, the
      Company shall, at its expense, at the time of delivery of such
      certificates, deliver to the holder a new Warrant representing the number
      of shares with respect to which this Warrant shall not then have been
      exercised.  In addition to all other available remedies at law
      or in equity, if the Company fails to deliver certificates for the Warrant
      Shares within five (5) business days after this Warrant is exercised, then
      the Company shall pay to the holder in cash a penalty (the “Penalty”)
      equal to 2% of the number of Warrant Shares that the holder is entitled to
      multiplied by the Market Price (as hereinafter defined) for each day that
      the Company fails to deliver certificates for the Warrant
      Shares.  For example, if the holder is entitled to 100,000
      Warrant Shares and the Market Price is $2.00, then the Company shall pay
      to the holder $4,000 for each day that the Company fails to deliver
      certificates for the Warrant Shares.  The Penalty shall be paid
      to the holder by the fifth day of the month following the month in which
      it has accrued.

            

    

     

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

     

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    2. Period of
Exercise.

     

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

            

    

     

    3. Certain Agreements of the
Company.

     

    
      	
                The
      Company hereby covenants and agrees as
follows:

            

    

     

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

     

    (b) Reservation
of Shares.  During the
Exercise Period, the Company shall at all times have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a suf­ficient
number of shares of Common Stock to provide for the exercise of this
Warrant.

     

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

     

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

     

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

     

    4. Antidilution
Provisions.

     

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

     

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

     

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

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (l) Certain
Definitions.

     

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

     

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

     

    (iii) “Common
Stock,” for
purposes of this Paragraph 4, includes the Common Stock, par value $.001 per
share, and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only shares of Common Stock,
par value $.001 per share, in respect of which this Warrant is exercisable, or
shares resulting from any subdivision or combination of such Common Stock, or in
the case of any reorganization, reclassification, consolidation, merger, or sale
of the character referred to in Paragraph 4(e) hereof, the stock or other
securities or property provided for in such Paragraph.

     

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    5. Issue
Tax.

     

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

            

    

     

    6. No Rights or Liabilities as
a Shareholder.

     

    
      	
                This
      Warrant shall not entitle the holder hereof to any voting rights or other
      rights as a shareholder of the Company.  No provision of this
      Warrant, in the absence of affirmative action by the holder hereof to
      purchase Warrant Shares, and no mere enumeration herein of the rights or
      privileges of the holder hereof, shall give rise to any liability of such
      holder for the Exercise Price or as a shareholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

            

    

     

    7. Transfer, Exchange, and
Replacement of Warrant.

     

    (a) Restriction
on Transfer.  This Warrant and
the rights granted to the holder hereof are transferable, in whole or in part,
upon surrender of this Warrant, together with a properly executed assignment in
the form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, pro­vided, however, that any transfer or
assignment shall be subject to the conditions set forth in Paragraph 7(f) hereof
and to the applicable provisions of the Securities Purchase
Agreement.  Until due presentment for registration of transfer on the
books of the Company, the Company may treat the registered holder hereof as the
owner and holder hereof for all purposes, and the Company shall not be affected
by any notice to the con­trary.

     

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

     

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

     

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

     

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

     

    (f) Exercise
or Transfer Without Registration.  If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the “Securities Act”) and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an “accredited investor”
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.  The first holder of this Warrant, by taking and
holding the same, represents to the Company that such holder is acquiring this
Warrant for investment and not with a view to the distribution
thereof.

     

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    8. [Intentionally
Omitted]

     

    

     

    9. Notices.

     

    
      	
                All
      notices, requests, and other communications required or permitted to be
      given or delivered hereunder to the holder of this Warrant shall be in
      writing, and shall be personally delivered, or shall be sent by certified
      or registered mail or by recognized overnight mail courier, postage
      prepaid and addressed, to such holder at the address shown for such holder
      on the books of the Company, or at such other address as shall have been
      furnished to the Company by notice from such holder.  All
      notices, requests, and other communications required or permitted to be
      given or delivered hereunder to the Company shall be in writing, and shall
      be personally delivered, or shall be sent by certified or registered mail
      or by recognized overnight mail courier, postage prepaid and addressed, to
      the office of the Company at 18101 Von Karman Avenue, Suite 330, Irvine,
      CA 92612, Attention: Chief Executive Officer, or at such other address as
      shall have been furnished to the holder of this Warrant by notice from the
      Company.  Any such notice, request, or other communication may
      be sent by facsimile, but shall in such case be subsequently confirmed by
      a writing personally delivered or sent by certified or registered mail or
      by recognized overnight mail courier as provided above.  All
      notices, requests, and other communications shall be deemed to have been
      given either at the time of the receipt thereof by the person entitled to
      re­ceive such notice at the address of such person for purposes of
      this Paragraph 9, or, if mailed by registered or certified mail or with a
      recognized overnight mail courier upon deposit with the United States Post
      Office or such overnight mail courier, if postage is prepaid and the
      mailing is properly addressed, as the case may
  be.

            

    

     

    10. Governing
Law.

     

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

            

    

     

    11. Miscellaneous.

     

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

     

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

     

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

     

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

     

    

     

    

     

    

     

    

     

    

     

    

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

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

     

    MOTIVNATION,
INC.

    

    

    

    By:
_______________________________

     George
Lefevre

     Chief
Executive Officer

    

     

    Dated as
of April 22, 2008

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    FORM
OF EXERCISE AGREEMENT

     

    

     

    Dated:  ________ __,
200_

     

    

     

    To:           ______________________

     

    

     

    

     

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

     

    

     

    Name:                      ______________________________

    

    

    Signature:

    Address:____________________________

    _____________________________

    

    

    
      	
               
      

            	
              Note:

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

            

    

    

     

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

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    FORM
OF ASSIGNMENT

     

    

     

    

     

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

    

     

    Name of
Assignee                                                                Address                                                                No of
Shares

     

    

     

    

     

    

     

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

     

    

     

    Dated:                      ________
__, 200_

     

    

     

    In the
presence
of:                                                                                    ______________________________

     

    Name:______________________________

    

     

    Signature:_________________________

    Title of
Signing Officer or Agent (if any):

    ______________________________

    Address:                      ______________________________

    ______________________________

    

    

    
      	
               
      

            	
              Note:

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

            

    

    
      
         

      

      
        -10-

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