Document:

Form of First Amendment to Forbearance Agreement

 Exhibit 10.2 
 FIRST AMENDMENT TO FORBEARANCE AGREEMENT 
 FIRST AMENDMENT TO FORBEARANCE AGREEMENT, dated as of December 31, 2009 (the “Amendment”), with respect to the Term Loan and Security Agreement dated as of November 19, 2008 by and among CAPITAL GROWTH SYSTEMS,
INC., d/b/a Global Capacity, a Florida corporation (“Parent”), GLOBAL CAPACITY GROUP, INC., a Texas corporation (“GCG”), CENTREPATH, INC., a Delaware corporation (“Centrepath”), 20/20 TECHNOLOGIES,
INC., a Delaware corporation (“20/20 Inc.”), 20/20 TECHNOLOGIES I, LLC, a Delaware limited liability company (“20/20 LLC”), NEXVU TECHNOLOGIES, LLC, a Delaware limited liability company (“Nexvu”),
CAPITAL GROWTH ACQUISITION, INC., a Delaware corporation (“CG Acquisition”), FNS 2007, INC., a Delaware corporation (“FNS”), GLOBAL CAPACITY DIRECT, LLC f/k/a VANCO DIRECT USA, LLC, a Delaware limited liability
company (“GCD”), and MAGENTA NETLOGIC LIMITED, a company incorporated under the laws of England and Wales (“Magenta”; Parent, GCG, Centrepath, 20/20 Inc., 20/20 LLC, Nexvu, CG Acquisition, FNS, GCD and Magenta each
referred to herein individually as a “Borrower” and collectively as the “Borrowers”), ACF CGS, L.L.C., a Delaware limited liability company, as administrative agent (the “Agent”), and the lenders
party thereto from time to time (as amended, modified and/or restated from time to time, the “Loan Agreement”; all capitalized terms used and not otherwise defined herein shall have their respective meanings as set forth in the Loan
Agreement). 
 WHEREAS, the Borrowers, the Agent and the Required Lenders entered into that certain Forbearance Agreement dated
as of December 22, 2009 (the “Forbearance Agreement”); and 
 WHEREAS, the Borrowers have requested that
the Agent and the Lenders amend certain terms of the Forbearance Agreement; and 
 NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
 1.
Existing Definitions. All capitalized terms used and not otherwise defined herein shall have their respective meanings as set forth in the Forbearance Agreement. 
 2. Amendments. 
 (a) Section 1(b) of the Forbearance Agreement
is hereby amended by deleting such section in its entirety and replacing it with the following: 
 “(b)
Forbearance. Subject to all of the terms and conditions set forth herein, the Agent and the Lenders agree to forbear from exercising their respective rights and remedies under the Loan Agreement and the other Loan Documents that are based
solely on the occurrence of the Specified Defaults until that date (the “Forbearance Termination Date”; the period from the Effective Date (as hereinafter defined) through the Forbearance Termination Date being the
“Forbearance Period”)) which is the earliest to occur of the following: (1) the date on which any Default other than (i) the Specified

 
Defaults occurs; or (ii) the Borrowers failure to comply with Item 19(a) of the Addendum to the Loan Agreement; (2) the failure of any Borrower to comply with any term set
forth in this Agreement, including, without limitation, the undertakings set forth in Section 2 hereof; (3) the date that any Borrower joins in, assists, cooperates or participates as an adverse party or adverse witness in any suit
or other proceeding against the Agent, any Lender, or any affiliate of any of the foregoing relating to any Obligations or any amounts owing hereunder, under the Loan Agreement or under any other Loan Document or in connection with or related to any
of the transactions contemplated by the Loan Agreement or any of the other Loan Documents, including this Agreement and any documents, agreements or instruments executed in connection with this Agreement; (4) the date any third party exercises
any right or remedy it may have as a result of any of the Specified Defaults or any of the events or omissions that constitute the Specified Defaults (including, without limitation and in any event, accelerating the payment of any Indebtedness,
declaring an “event of default”, exercising default remedies with respect to any collateral security); or (5) 12:01 A.M. (New York time) on February 22, 2010. On and after the Forbearance Termination Date, the Agent and each of
the Lenders may proceed, without any requirement for notice to the Borrowers or any other obligor, to enforce any or all of their rights and remedies under or in respect of this Agreement, the Loan Agreement, any of the other Loan Documents or
applicable law, including, without limitation, the right to require that the Borrowers repay immediately any amounts then owing under the Loan Agreement and the other Loan Documents.” 
 (b) Section 2(f) of the Forbearance Agreement is hereby amended by deleting such section in its entirety and replacing it with
the following: 
 “(f) Attached hereto as Exhibit A is an updated Vendor Payment Plan Budget approved
by Agent which shall be effective for the testing period ending December 18, 2009 through the testing period ending on February 19, 2010.” 
 (c) Section 2(g) of the Forbearance Agreement is hereby amended by deleting such section in its entirety and replacing it with the following: 
 “(g) On or before December 31, 2009, the Borrowers shall enter into a definitive transaction that will result in a
mandatory pay down of the Term Loan in an amount not less than $4,000,000 (the terms and conditions of such transaction subject to the sole and absolute satisfaction of the Agent).” 
 (d) Section 2(h) of the Forbearance Agreement is hereby amended by deleting such section in its entirety and replacing it with
the following: 
 “(h) In consideration of Agent and the Lenders entering into this Agreement, Borrowers
hereby agree to pay to Agent, for the account of the Lenders, Default Interest accruing from and after November 6, 2009 through February 22, 2010 in the amount of $111,266.00 (the “Default Interest Payment Amount”), which
amount shall be paid in cash simultaneously with the execution of this Agreement, and shall be non-refundable. During the Forbearance Period PIK Interest shall continue to accrue and shall not be payable in cash unless and until demanded to be paid
in cash by the Agent.” 
  

 2 

 (e) Section 2 of the Forbearance Agreement is hereby amended by the addition of
the following subsection section (i): 
 “(i) The Borrowers agree that from and after the Effective Date
Section 2(c)(iv) of the Loan Agreement is hereby amended by deleting such section in its entirety and replacing it with the following: 
 (iv) No later than two (2) Business Days following the receipt by any Borrower of any BT receivable Payment, Borrowers shall prepay the outstanding principal amount of the Obligations in an amount
equal to one hundred percent (100%) of the BT Receivable Payment received by such Person. A payment hereunder shall not constitute a prepayment for purposes of any fees payable under Item 5 of the Addendum.” 

(f) Section 2 of the Forbearance Agreement is hereby amended by the addition of the following subsection section (j):

 “(j) The Borrowers agree that on the date the “Initial Closing” shall occur under that certain
Asset Purchase Agreement by and among Parent, GCG, GCD, and Global Telecom & Technology Americas, Inc. dated on or about December 30, 2009 (the “GTT Purchase Agreement”), the Borrowers shall make a mandatory pay down
of the Term Loan in an amount not less than $4,000,000.” 
 (g) Section 2 of the Forbearance Agreement is
hereby amended by the addition of the following subsection section (k): 
 “(k) On or before January 7,
2010, the Borrowers shall deliver consent letters countersigned by the applicable service provider, in form and substance to the sole and absolute satisfaction of the Agent, evidencing that all cash obligations of Sellers (as defined in the GTT
Purchase Agreement) for fees and expenses incurred in connection with the transactions contemplated in the GTT Purchase Agreement (including all associated brokerage fees), in no event shall exceed $500,000 in the aggregate for such fees and
expenses.” 
 3. Conditions Precedent. 
 This Amendment shall become effective on the date (the “Effective Date”) upon which the following conditions have been
satisfied in full or waived by the Agent in writing: 
 (a) The Agent shall have received an executed counterpart
of this Amendment duly executed by the Borrowers, the Agent and each of the Required Lenders; 
 (b) All
representations and warranties contained in this Amendment or otherwise made in writing to the Agent in connection herewith shall be true and correct; 
  

 3 

 (c) As of the date all other conditions in this Section 3 are
satisfied, no Default (other than the Specified Defaults) shall have occurred and be continuing; 
 (d) The
Borrowers shall have obtained all necessary equity holder and board approvals and consents; 
 (e) All legal
matters in connection with this Amendment shall be satisfactory to the Agent; and 
 (f) Borrowers shall have
paid in full the Default Interest Payment Amount. 
 4. Representations and Warranties. After giving effect to this
Amendment, each of the Borrowers, jointly and severally, reaffirm and restate the representations and warranties set forth in Section 4 of the Loan Agreement and in the other Loan Documents (except to the extent such representations and
warranties (i) expressly relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date, and (ii) are untrue as a result of the occurrence or
continuance of any of the Specified Defaults) and all such representations and warranties shall be true and correct on the date hereof with the same force and effect as if made on such date. Each of the Borrowers represents and warrants (which
representations and warranties shall survive the execution and delivery hereof) to the Agent and the Lenders that: 
 (b) It has the power and authority to execute, deliver and carry out the terms and provisions of this Amendment and the transactions contemplated hereby and has taken or caused to be taken all necessary action to authorize the execution,
delivery and performance of this Amendment and the transactions contemplated hereby; 
 (c) No consent of any
Person (including, without limitation, any of its equity holders or creditors), and no action of, or filing with, any governmental or public body or authority is required to authorize, or is otherwise required in connection with, the execution,
delivery and performance of this Amendment; 
 (d) This Amendment has been duly executed and delivered on its
behalf by a duly authorized officer, and constitutes its legal, valid and binding obligation enforceable in accordance with its terms, subject to bankruptcy, reorganization, insolvency, moratorium and other similar laws affecting the enforcement of
creditors’ rights generally and the exercise of judicial discretion in accordance with general principles of equity; and 
 (e) The execution, delivery and performance of this Amendment will not violate any law, statute or regulation, or any order or decree of any court or governmental instrumentality, or conflict with, or
result in the breach of, or constitute a default under, any contractual obligation of any Borrower. 
 5. Acknowledgment of
Liens. Each of the Borrowers hereby ratifies and confirms the grant of the security interest in and the Liens on its Collateral contained in the Loan Documents to which it is a party which were granted pursuant to the Loan Documents or
otherwise. 
  

 4 

 6. Ratification; Waiver of Defenses; and Release. 
 (a) Except as herein agreed, the Loan Agreement and the other Loan Documents remain in full force and effect and are hereby ratified and
affirmed by the Borrowers. Each of the Borrowers hereby (i) confirms and agrees that the Borrowers are truly and justly indebted to the Agent and the Lenders in the aggregate amount of the Obligations without defense, counterclaim or offset of
any kind whatsoever; and (ii) reaffirms and admits the validity and enforceability of the Loan Agreement and the other Loan Documents. 
 (b) Each of the Borrowers, on its own behalf and on behalf of its successors and assigns, hereby waives, releases and discharges the Agent and each Lender and all of the affiliates of the Agent and each
Lender, and all of the directors, officers, employees, attorneys, agents, successors and assigns of the Agent, each Lender and such affiliates, from any and all claims, demands, actions or causes of action (known and unknown) arising out of or in
any way relating to any of the Loan Documents or any documents, agreements, dealings or other matters connected with any of the Loan Documents, in each case to the extent arising (x) on or prior to the date hereof or (y) out of, or
relating to, any actions, dealings or matters occurring on or prior to the date hereof. The waivers, releases, and discharges in this Section 6 shall be effective on the Effective Date regardless of whether any post-Effective Date
conditions to this Amendment are satisfied and regardless of any other event that may occur or not occur after the date hereof. 
 (c) This Amendment shall be limited precisely as written and, except as expressly provided herein, shall not be deemed (i) to be a consent granted pursuant to, or a waiver, modification or forbearance of, any term or condition of the
Loan Agreement, the other Loan Documents or any of the instruments or agreements referred to therein or a waiver of any Default (including, without limitation, the Specified Defaults), whether or not known to the Agent or any of the Lenders, or
(ii) to prejudice any right or remedy which the Agent or any of the Lenders may now have or have in the future under or in connection with the Loan Agreement, the other Loan Documents or any of the instruments or agreements referred to therein.
Subject to the forbearance in respect of the Specified Defaults set forth in Section 1(b) above, the Loan Agreement, the other Loan Documents and each of the other Loan Documents shall continue in full force and effect and are hereby
ratified and confirmed. 
 (d) Parent and Borrowers expressly acknowledge the occurrence and continued existence of the
Specified Defaults. Parent and Borrowers agree that Agent and Lenders have no obligation (i) to grant the forbearance contemplated by this Amendment, (ii) to enter into discussions with Parent and Borrowers with regard to waiving the
Specified Defaults and/or modifying the financial covenants set forth in the Loan Agreement, or (iii) to enter into any amendment or modification of the terms and provisions of the Loan Agreement or the other Loan Documents, and any of the same
shall be within the sole discretion of the Agent and the Lenders. Parent and Borrowers expressly acknowledge and agree, as a condition of Agent and Lenders entering into this Amendment, that they shall not raise any claim, cause of action or defense
based upon any allegations of failure of Agent and Lenders to do or agree to do any of the foregoing, or failure of Agent or Lenders to negotiate in good faith to accomplish any of the same. 
  

 5 

 7. References. All references to the “Loan Agreement”,
“thereunder”, “thereof” or words of like import in the Loan Agreement or any other Loan Document and the other documents and instruments delivered pursuant to or in connection therewith shall mean and be a reference to the Loan
Agreement and as each may in the future be amended, restated, supplemented or modified from time to time. 
 8.
Counterparts. This Amendment may be executed by the parties hereto individually or in combination, in one or more counterparts, each of which shall be an original and all of which shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Amendment by telecopier or electronic transmission (in pdf format) shall be effective as delivery of a manually executed counterpart of this Amendment. 
 9. Successors and Assigns. The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. 
 10. Severability. If any provision of this Amendment shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or enforceability without in any manner affecting the validity or enforceability of such provision
in any other jurisdiction or the remaining provisions of this Amendment in any jurisdiction. 
 11. Governing Law.
THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. 
 12. Miscellaneous. The parties hereto shall, at any time from time to time following the execution of this Amendment, execute and
deliver all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to carry out the provisions of this Amendment. 
 13. Headings. Section headings in this Amendment are included for convenience of reference only and are not to affect the
construction of, or to be taken into consideration in interpreting, this Amendment. 
 [The remainder of this page left blank
intentionally] 
  

 6 

 IN WITNESS WHEREOF, the Borrowers, the Agent and the Lenders have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year first above written. 
  

			
	BORROWERS:
	
	CAPITAL GROWTH SYSTEMS, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	GLOBAL CAPACITY GROUP, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	CENTREPATH, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	20/20 TECHNOLOGIES, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	20/20 TECHNOLOGIES I, LLC
		
	By:	 	  

	Name:	 	  

	Title:	 	  

			
	NEXVU TECHNOLOGIES, LLC
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	CAPITAL GROWTH ACQUISITION, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	FNS 2007, INC.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	GLOBAL CAPACITY DIRECT, LLC f/k/a VANCO DIRECT USA, LLC
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	MAGENTA NETLOGIC LIMITED
		
	By:	 	  

	Name:	 	  

	Title:	 	  

			
	AGENT and REQUIRED LENDER:
	 ACF CGS, L.L.C.

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

 EXHIBIT A 
 Updated Vendor Payment Plan Budgetf8k123109ex4i_previns.htm

    Exhibit 4.1

     

    
      
        NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

      

       

      PREVENTION
INSURANCE.COM

    

    Warrant
to Purchase Common Stock

    

    Warrant
No.: A-6

    Number of
Shares of Common Stock: 75,000,000

    Date of
Issuance: December 31, 2009

    

             PREVENTION
INSURANCE.COM, a Nevada corporation (the "Company"), hereby certifies that, for
$75,000, the receipt and sufficiency of which are hereby acknowledged, Paragon
Capital LP and/or its affiliates and/or designees, the registered holder hereof
or its permitted assigns (the "Holder"), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined
below) then in effect, upon surrender of this Warrant, to purchase Common Stock
(including any warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, the "Warrant"), at any time or times on or after the date
hereof, but not after 11:59 p.m., New York time, on the Expiration Date (as
defined below), 75,000,000 fully paid nonassessable shares of Common Stock (as
defined below) (the "Warrant Shares"). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section
17.  This Warrant is the Warrant to purchase Common Stock issued
pursuant to a Stock Purchase Agreement dated as of December 31, 2009 (the
"Closing Date"), by and between the Company and the Holder (the
"Agreement").

    

             Section
1. Exercise of Warrant.

    

                (a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including,
without limitation, the limitations set forth in Section 1(f)), this Warrant may
be exercised by the Holder on any day on or after the date hereof, in whole or
in part, by (i) delivery of a written notice, in the form attached hereto as
Exhibit A (the "Exercise Notice"), of the Holder's election to exercise this
Warrant and (ii) (A) payment to the Company of an  amount equal to the
applicable Exercise Price multiplied by the number of Warrant Shares as to which
this Warrant is being exercised (the "Aggregate Exercise Price") in cash or wire
transfer of immediately available funds or (B) by notifying the Company that
this Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 1(d)). The Holder shall not be required to deliver the original Warrant
in order to effect an exercise hereunder. Execution and delivery of the Exercise
Notice with respect to less than all of the Warrant Shares shall have the same
effect as cancellation of the original Warrant and issuance of a new Warrant
evidencing the right to purchase the remaining number of Warrant Shares. On or
before the first Business Day following the date on which the Company has
received each of the Exercise Notice and the Aggregate Exercise Price (or notice
of a Cashless Exercise) (the "Exercise Delivery Documents"), the Company shall
transmit an acknowledgment of confirmation of receipt of the Exercise Delivery
Documents to the Holder and the Company's transfer agent (the "Transfer Agent").
On or before the third Business Day following the date on which the Company has
received all of the Exercise Delivery Documents, the Company shall (X) issue and
deliver to the address specified in the Exercise Notice, a certificate,
registered in the name of the holder of this Warrant or its designee, for the
number of shares of Common Stock to which the holder of this Warrant is entitled
pursuant to such exercise, or (Y) provided that the Transfer Agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such aggregate number
of shares of Common Stock to which the Holder is entitled pursuant to such
exercise to the Holder's or its designee's balance account with DTC through its
Deposit Withdrawal Agent Commission system. Upon delivery of the Exercise Notice
and Aggregate Exercise Price referred to in clause (ii)(A) above or notification
to the Company of a 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Cashless
Exercise referred to in Section 1(d), the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
of delivery of the certificates evidencing such Warrant Shares. If this Warrant
is submitted in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three
Business Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 8(d)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock to be
issued shall be rounded up to the nearest whole number. The Company shall pay
any and all taxes which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant.

    

                (b)
Exercise Price. For purposes of this Warrant, "Exercise Price" means $0.005,
subject to adjustment as provided herein.

    

                (c)
Company's Failure to Timely Deliver Securities. If the Company shall fail for
any reason or for no reason to issue to the Holder within three Business Days of
receipt of the Exercise Delivery Documents, a certificate for the number of
shares of Common Stock to which the Holder is entitled and register such shares
of Common Stock on the Company's share register or to credit the Holder's
balance account with DTC for such number of shares of Common Stock to which the
Holder is entitled upon the Holder's exercise of this  Warrant, and if
on or after such Business Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock issuable upon such exercise that
the Holder anticipated receiving from the Company, then the Company shall,
within three Business Days after the Holder's request and in the Holder's
discretion, either (i) pay cash to the Holder in an amount equal to the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased (the "Buy-In Price"), at which point the Company's
obligation to deliver such certificate (and to issue such shares of Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such shares of Common Stock
and pay cash to the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Bid Price on the date of exercise.

    

                (d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary,
the Holder may, in its sole discretion, exercise this Warrant in whole or in
part and, in lieu of making the cash payment otherwise contemplated to be made
to the Company upon such exercise in payment of the Aggregate Exercise Price (a
"Cash Exercise"), elect instead to receive upon such exercise the "Net Number"
of shares of Common Stock determined according to the following formula (a
"Cashless Exercise"):

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    

                                                (A
x B) - (A x C)

        Net
Number =
              -------------------------

                                                           B

    

                   For
purposes of the foregoing formula:

    

                         A
= the total number of Warrant Shares with respect to which this Warrant is then
being exercised.

    

                         B
= the Closing Sale Price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the Exercise
Notice.

    

                         C
= the Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.

    

                (e)
Disputes. In the case of a dispute as to the determination of the Exercise Price
or the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the Holder the number of Warrant Shares that are not disputed and
resolve such dispute in accordance with Section 14.

    

                (f)
Limitations on Exercise; Beneficial Ownership. The Holder shall not have any
restriction on exercise of this Warrant except that the Holder shall not
exercise this Warrant unless and until there is
 enough authorized Common Stock available
to satisfy the number of shares of Common Stock that is to be issued to the
Holder upon exercise of this Warrant.

    

             Section
2. Adjustment of Exercise Price and Number of Warrant Shares. The Exercise Price
and the number of Warrant Shares shall be adjusted from time to time as
follows:

    

                (a)
Adjustment upon Issuance of shares of Common Stock. If and whenever on or after
the Closing Date the Company issues or sells, or in accordance with this Section
2 is deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding shares of Common Stock deemed to have been issued
or sold by the Company in connection with any Excluded Security) for a
consideration per share (the "New Issuance Price") less than a price (the
"Applicable Price") equal to the Exercise Price in effect immediately prior to
such issue or sale or deemed issuance or sale (the foregoing a "Dilutive
Issuance"), then immediately after such Dilutive Issuance, the Exercise Price
then in effect shall be reduced to an amount equal to the New Issuance Price.
Upon each such adjustment of the Exercise Price hereunder, the number of Warrant
Shares shall be adjusted to the number of shares of Common Stock determined by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares acquirable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment. For purposes of determining the
adjusted Exercise Price under this Section 2(a), the following shall be
applicable:

    

                         (i)
Issuance of Options. If the Company in any manner grants any Options and the
lowest price per share for which one share of Common Stock is issuable upon the
exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share. For purposes of this
Section 2(a)(i), the "lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion, exercise or
exchange of such Convertible Securities" shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the granting or sale of the
Option, upon exercise of the Option and upon conversion, exercise or exchange of
any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Exercise Price shall be made upon the actual issuance of such
shares of Common Stock or of such Convertible Securities upon the exercise of
such Options or upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

                         (ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells
any Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is
less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per share.
For the purposes of this Section 2(a)(ii), the "lowest price per share for which
one share of Common Stock is issuable upon the conversion, exercise or exchange"
shall be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the Convertible Security. No further adjustment of
the Exercise Price shall be made upon the actual issuance of such shares of
Common Stock upon conversion, exercise or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of this Warrant has been or is
to be made pursuant to other provisions of this Section 2(a), no further
adjustment of the Exercise Price shall be made by reason of such issue or
sale.

    

                         (iii)
Change in Option Price or Rate of Conversion. If the purchase price provided for
in any Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such
increase or decrease shall be adjusted to the Exercise Price and the number of
Warrant Shares which would have been in effect at such time had such Options or
Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this
Section 2(a)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Warrant are increased or
decreased in the manner described in the immediately preceding sentence, then
such Option or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such increase or decrease. No adjustment pursuant
to this Section 2(a) shall be made if such adjustment would result in an
increase of the Exercise Price then in effect or a decrease in the number of
Warrant Shares.

    

                         (iv)
Calculation of Consideration Received. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options will be deemed to
have been issued for a consideration of $0.01. If any shares of Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefore will be deemed to
be the net amount received by the Company therefore. If any shares of Common
Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration 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 Closing Sale Price of such security on the date of
receipt. If any shares of Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving entity, the amount of consideration
therefore will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such shares of
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
jointly by the Company and the Holder. If such parties are unable to reach
agreement within ten days after the occurrence of an event requiring valuation
(the "Valuation Event"), the fair value of such consideration will be determined
within five Business Days after the tenth day following the Valuation Event by
an independent, reputable appraiser selected by the Holder and approved by the
Company. The determination of such appraiser shall be final and binding upon all
parties absent manifest error and the fees and expenses of such appraiser shall
be borne by the Company.

     

    
      
        
        

      

      
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                         (v)
Record Date. If the Company takes a record of the  holders of shares
of Common Stock for the purpose of  entitling them (A) to receive a
dividend or other distribution payable in shares of Common Stock, Options
or  in Convertible Securities or (B) to subscribe for
or  purchase shares of Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or  the date of the granting of such right of subscription or
purchase, as the case may be.

    

               (b)
Adjustment upon Subdivision or Combination of shares of Common Stock. If the
Company at any time on or after the Closing Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased. If
the Company at any time on or after the Closing Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased. Any adjustment under
this Section 2(b) shall become effective at the close of business on the date
the subdivision or combination becomes effective.

    

                (c)
Other Events. If any event occurs of the type contemplated by the provisions of
this Section 2 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Company's Board of
Directors will make an appropriate adjustment in the Exercise Price so as to
protect the rights of the Holder; provided that no such adjustment pursuant to
this Section 2(c) will increase the Exercise Price or decrease the number of
Warrant Shares as otherwise determined pursuant to this Section 2.

    

                Section
3. Rights upon Distribution of Assets. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "Distribution"), at any time after the issuance of this
Warrant, then, in each such case:

    

                (a)
any Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid
Price of the shares of Common Stock on the trading day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Holder and approved by the Company's Board of Directors) applicable
to one share of Common Stock, and (ii) the denominator shall be the Closing Bid
Price of the shares of Common Stock on the trading day immediately preceding
such record date; and

     

    
      
        
        

      

      
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                 (b)
the number of Warrant Shares shall be increased to a number of shares equal to
the number of shares of Common Stock obtainable immediately prior to the close
of business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding paragraph (a); provided that in
the event that the Distribution is of shares of or common stock ("Other Shares
of Common Stock") of a company whose common shares are traded on a national
securities exchange or a national automated quotation system, then the Holder
may elect to receive a warrant to purchase Other Shares of Common Stock, the
terms of which shall be identical to those of this Warrant, except that such
warrant shall be exercisable into the number of shares of Other Shares of Common
Stock that would have been payable to the Holder pursuant to the Distribution
had the Holder exercised this Warrant immediately prior to such record date and
with an aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a), and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).

    

             Section
4. Purchase Rights; Fundamental Transactions.

    

                (a)
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if
at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the
"Purchase Rights"), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

    

                (b)
Fundamental Transactions. If the Company enters into or is party to a
Fundamental Transaction, then the Holder shall have the right to either (A)
purchase and receive upon the basis and upon the terms and conditions herein
specified and in lieu of the Warrant Shares immediately theretofore issuable
upon exercise of the Warrant, such shares of stock, securities or assets
(including cash) as would have been issuable or payable with respect to or in
exchange for a number of Warrant Shares equal to the number of Warrant Shares
immediately theretofore issuable upon exercise of the Warrant, had such
Fundamental Transaction not taken place or (B) require the repurchase of this
Warrant for a purchase price, payable in cash within five Business Days after
such request, equal to the Black Scholes Value of the remaining unexercised
portion of this Warrant on the date of such request. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity and Holder to comply with the
provisions of this Section 4(b). The provisions of this Section shall apply
similarly and equally to successive Fundamental Transactions and shall be
applied without regard to any limitations on the exercise of this
Warrant.

    

             Section
5. Noncircumvention. The Company hereby covenants and agrees that the Company
will not, by amendment of its Articles of Incorporation, Bylaws or through any
reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall 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, (ii) shall 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, and
(iii) shall, so long as this Warrant is outstanding, take all action necessary
to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Warrant,
the number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of this Warrant then outstanding (without regard to any
limitations on exercise).

     

    
      
        
        

      

      
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             Section
6. Reservation of Authorized Shares.

    

                (a)
Initial Reservation. Within 60 days of a written demand by the Holder, the
Company shall reserve out of its authorized and unissued Common Stock the number
of shares of Common Stock needed to satisfy a full exercise of this Warrant and
provide to the Holder evidence thereof in form and substance satisfactory to the
Holder.

    

                (b)
Ongoing Reservation. So long as this Warrant is outstanding, the Company shall
take all actions necessary to reserve and keep available out of its authorized
and unissued Common Stock, solely for the purpose of effecting the exercise of
this Warrant, the number of shares of Common Stock as shall at all times after
60 days from a written demand by the Holder and from time to time thereafter as
necessary to effect the exercise of this Warrant; provided that at no time shall
the number of shares of Common Stock so reserved be less than the number of
shares required to be reserved by Section 6(a) hereof (without regard to any
limitations on conversions) (the "Required Reserve Amount").

    

                (c)
Insufficient Authorized Shares. If, at any time after 60 days of a written
demand by the Holder while this Warrant remain outstanding the Company does not
have a sufficient number of authorized and unreserved shares of Common Stock to
satisfy its obligation to reserve for issuance  upon the exercise of
this Warrant at least a number of shares of Common Stock equal to the Required
Reserve Amount (an "Authorized Share Failure"), then the Company shall
immediately take all  action necessary to increase the Company's
authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for this Warrant. Without limiting the
generality of the foregoing sentence, as soon as practicable after the date of
the occurrence of an Authorized Share Failure, but in no event later than 60
days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders for the approval of an increase in the number
of authorized shares of Common Stock. In connection with such meeting, the
Company shall provide each stockholder with a proxy statement and shall use its
best efforts to solicit its stockholders' approval of such increase in
authorized shares of Common Stock and to cause its Board of Directors to
recommend to the stockholders that they approve such proposal.

    

             Section
7. Warrant Holder not Deemed a Stockholder. Except as otherwise specifically
provided herein, the Holder, solely in such Person's capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in such
Person's capacity as the Holder of this Warrant, any of the rights of a
shareholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which such Person is then entitled
to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a
shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 7, the Company
shall provide the Holder with copies of the same notices and other information
given to the shareholders of the Company generally, contemporaneously with the
giving thereof to the shareholders.

     

    
      
        
        

      

      
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             Section
8. Reissuance of Warrants.

    

                (a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall
surrender this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with
Section 8(d)), registered as the Holder may request.

    

                (b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or destruction, of
any indemnification undertaking by the Holder to the Company in customary form
and, in the case of mutilation, upon surrender and cancellation of this Warrant,
the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 8(d)).

    

                (c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Warrant or Warrants (in accordance with Section 8(d)) representing in the
aggregate the right to purchase the number of Warrant Shares then underlying
this Warrant, and each such new Warrant will represent the right to purchase
such portion of such Warrant Shares as is designated by the Holder at the time
of such surrender; provided, however, that no Warrants for fractional shares of
Common Stock shall be given.

    

                (d)
Issuance of New Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a)
or Section 8(c), the Warrant Shares designated by the
Holder  which,  when added to the number of shares of Common
Stock  underlying the other new Warrants issued in connection with
such issuance, does not exceed the number of Warrant Shares
then  underlying  this Warrant),  (iii) shall have
an issuance date,  as  indicated  on the face of
such new  Warrant  which is the same as the
Closing  Date,  and (iv)  shall  have
the same  rights  and  conditions  as
this Warrant.

    

             Section
9. Notices. Whenever notice is required to be given under this Warrant, unless
otherwise provided herein, such notice shall be given in accordance with Section
7 of the Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Warrant, including in reasonable
detail a description of such action and the reason therefor. Without limiting
the generality of the foregoing, the Company will give written notice to the
Holder (i) immediately upon any adjustment of the Exercise Price, setting forth
in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least fifteen days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or distribution upon
the shares of Common Stock, (B) with respect to any grants, issuances or sales
of any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to the Holder.

    

             Section
10. Amendment and Waiver. Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the prior written consent of the Holder;
provided that no such action may increase the Exercise Price of this Warrant or
decrease the number of shares or class of stock obtainable upon exercise of this
Warrant.

     

    
      
        
        

      

      
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             Section
11. Severability. If any provision of this Warrant or the application thereof
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of the terms of this Warrant will continue in
full force and effect.

    

             Section
12. Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Warrant and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
ANY TRANSACTION CONTEMPLATED HEREBY.

    

             Section
13. Construction; Headings. This Warrant shall be deemed to be jointly drafted
by the Company and the Holder and shall not be construed against any person as
the drafter hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Warrant.

    

             Section
14. Dispute Resolution. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company
shall submit the disputed determinations or arithmetic calculations within two
Business Days of receipt of the Exercise Notice giving rise to such dispute, as
the case may be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within one Business Day of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within one Business Day submit (a) the disputed determination of the Exercise
Price to an independent, reputable investment bank selected by the Holder and
approved by the Company or (b) the disputed arithmetic calculation of the
Warrant Shares to an independent, reputable accounting firm selected by the
Holder and approved by the Company. The Company shall cause, at its expense, the
investment bank or the accounting firm, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the
results no later than five Business Days from the date it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

    

             Section
15. Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder to seek actual damages for any failure by
the Company to comply with the terms of this Warrant. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

     

    
      
        
        

      

      
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             Section
16. Transfer. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company.

    

             Section
17.  Certain  Definitions.  For purposes of this
Warrant, the following terms shall have the following meanings:

    

              "Affiliate"
means, as to any Person, any other Person which directly or indirectly controls,
is controlled by, or is under common control with such Person. For purposes of
this definition, "control" of a Person includes (A) the power, direct or
indirect, (i) to vote or direct the voting of 10% or more of the outstanding
shares of Voting Stock of such Person, or (ii) to direct or cause the direction
of the management and policies of such Person (whether by ownership of Capital
Stock, by contract or otherwise) or (B) the ownership of Capital Stock or other
securities representing 10% or more of the total economic interests of such
Person; provided, that the Holder shall be deemed to be an Affiliate of the
Company.

    

                "Aggregate
Exercise Price" has the meaning set forth in Section 1(a).

    

                "Applicable
Price" has the meaning set forth in Section 2(a).

    

                "Approved
Stock Plan" means any employee benefit plan which has been approved by the Board
of Directors of the Company, pursuant to which the Company's securities may be
issued to any employee, officer or director for services provided to the
Company.

    

                "Authorized  Share  Failure"  has
the  meaning  set forth in Section 6(b).

    

                "Black
Scholes Value" means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the "OV" function on Bloomberg determined as
of the day immediately following the public announcement of the applicable
Fundamental Transaction and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term
of this Warrant as of such date of request is 2.5% and (ii) an expected
volatility equal to 60%.

    

                "Bloomberg"
means Bloomberg Financial Markets.

    

                "Business
Day" means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York, New York are authorized or required by law to
remain closed.

    

                "Buy-In
Price" has the meaning set forth in Section 1(c).

    

                "Capital
Stock" means and includes, with respect to any Person (a) any and all shares,
interests, participations or other equivalents of or interests in (however
designated) corporate stock, including shares of preferred or preference stock
of such Person, (b) all partnership interests (whether general or limited) in
such Person which is a partnership, (c) all membership interests or limited
liability company interests in such Person which is a limited liability company,
(d) any interest or participation that confers on a Person the right to receive
a share of the profits and/or losses of, or distributions of assets of such
Person, and (e) all equity or ownership interests in such Person of any other
type, and any and all warrants, rights or options to purchase any of the
foregoing.

    

                "Cash
Exercise" has the meaning set forth in Section 1(d).

     

    
      
        
        

      

      
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                "Cashless
Exercise" has the meaning set forth in Section 1(d).

    

                 "Closing
Bid Price" and "Closing Sale Price" means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such
security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the
closing bid price or the closing trade price, as the case may be, then the last
bid price or last trade price, respectively, of such security prior to 4:00:00
p.m., New York time, as reported by Bloomberg, or, if the Principal Market is
not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on
the principal securities exchange or trading market where such security is
listed or traded as reported by Bloomberg, or if the foregoing do not apply, the
last closing bid price or last trade price, respectively, of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the "pink sheets" by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price
cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of
such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
in the same manner as the disputes described in Section 14. All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.

    

                "Closing
Date" has the meaning set forth in the preamble to this Warrant.

    

                "Common
Stock" means (i) the Company's shares of common stock, $0.001 par value per
share, and (ii) any share capital into which such common stock shall have been
changed or any share capital resulting from a reclassification of such common
stock.

    

                "Company"
has the meaning set forth in the preamble to this Warrant.

    

                "Convertible
Securities" means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common
Stock.

    

                "Dilutive
Issuance" has the meaning set forth in Section 2(a).

    

                "Distribution"
has the meaning set forth in Section 3.

    

                "DTC"
has the meaning set forth in Section 1(a).

    

                "Excluded
Security" means any Common Stock issued or issuable: (i) in connection with any
Approved Stock Plan; (ii) upon conversion of any Preferred Stock or this
exercise of the Warrant; and (iii) upon conversion of any Options or Convertible
Securities which are outstanding on the day immediately preceding the Closing
Date, provided that the terms of each such Options or Convertible Securities are
not amended, modified or changed on or after the Closing Date.

    

                 "Exercise
Delivery Documents" has the meaning set forth in Section 1(a).

    

                "Exercise
Price" has the meaning set forth in Section 1(b).

     

    
      
        
        

      

      
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                "Exercise
Notice" has the meaning set forth in Section 1(a).

    

                "Expiration
Date" means the date three year after the Closing Date or, if such date falls on
a day other than a Business Day or on which trading does not take place on the
Principal Market (a "Holiday"), the next date that is not a
Holiday.

    

                "Fundamental
Transaction" means that the Company shall, directly or indirectly, in one or
more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Person, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person, or (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of either the outstanding shares of Common Stock
(not including any shares of Common Stock held by the Person or Persons making
or party to, or associated or affiliated with the Persons making or party to,
such purchase, tender or exchange offer), or (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), or (v) reorganize, recapitalize or
reclassify its Common Stock.

    

                "Holder"
has the meaning set forth in the preamble to this Warrant.

    

                "New
Issuance Price" has the meaning set forth in Section 2(a).

    

                "Maximum
Percentage" has the meaning set forth in Section 1(f).

    

                "Consulting
Agreement" has the meaning set forth in the preamble to this
Warrant.

    

                "Options"
means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.

    

                "Other
Shares of Common Stock" has the meaning set forth in Section 3(b).

    

                 "Person"
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

    

                "Principal
Market" means the NASD OTC Bulletin Board.

    

                "Purchase
Rights" has the meaning set forth in Section 4(a).

    

                "Registration
Rights Agreement" means that certain Registration Rights Agreement, dated as of
even date herewith, by and among the Company and the Holder.

    

                "Required
Reserve Amount" has the meaning set forth in Section 6(a).

    

                "Transfer
Agent" has the meaning set forth in Section 1(a).

    

                "Valuation
Event" has the meaning set forth in Section 2(a)(iv).

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

                "Voting
Stock" means, with respect to any Person, the Capital Stock of such Person of
any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of members of the Board of
Directors (or Persons performing similar functions) of such Person.

    

                "Warrant"
has the meaning set forth in the preamble to this Warrant.

    

                "Warrant
Shares" has the meaning set forth in the preamble to this Warrant.

    

     
 

     

    [Signature
Page Follows]

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

             IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to
be duly executed as of the Date of Issuance set out above.

    

    PREVENTION
INSURANCE.COM

    

    By:    /s/  Alan P.
Donenfeld                                                       

    Name:
Alan P.
Donenfeld                                                          

    Title:   CEO

    

     
 

    
 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     
 

    EXHIBIT
A

    

    EXERCISE
NOTICE

    TO BE
EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
TO PURCHASE COMMON STOCK

    

    PREVENTION
INSURANCE.COM.

    

     The
undersigned holder hereby exercises the right to purchase _________________ of
the shares of Common Stock ("Warrant Shares") of PREVENTION INSURANCE.COM, a
Nevada corporation (the "Company"), evidenced by the attached Warrant to
Purchase Common Stock (the "Warrant"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the
Warrant.

    

             1.
Form of Exercise  Price.  The Holder intends that payment of
the Exercise Price shall be made as:

    

                ____________
a "Cash Exercise" with respect to _________________ Warrant Shares;
and/or

    

                ____________
a "Cashless Exercise" with respect to ____________ Warrant Shares.

    

              2.
Payment of Exercise Price. In the event that the holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the
Warrant.

    

             3.
Delivery of Warrant Shares. The Company shall deliver to the holder __________
Warrant Shares in accordance with the terms of the Warrant.

    

    Date:
_______________ __, ______

    

    ________________________________

    Name
of  Holder

    

    By:______________________________

     

    Name:____________________________

    

    Title:___________________________

    

     
 

    
      
        
        

      

      
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    ACKNOWLEDGMENT

    

              The
Company hereby acknowledges this Exercise Notice and hereby directs OTR to issue
the above indicated number of shares of Common Stock in accordance with the
Transfer Agent Instructions from the Company and acknowledged and agreed to by
OTR.

    

                                                                    PREVENTION
INSURANCE.COM

    

    By:
/s/  Alan P.
Donenfeld                                                        

    Name:
Alan P. Donenfeld

    Title:   CEO

     

     

     

    16

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