Document:

Unassociated Document

    Property
      Lease Agreement

    

    Landlord
      (Party A): Shenzhen Jin Tong Hai Enterprises Ltd.

    Address:

    Postal
      Code:

    Authorized
      Agent: Chen Xue Feng

    Address:

    Postal
      Code:

    

    Tenant
      (Party B): Shenzhen Fuqi Jewelry Co., Ltd.

    Address:

    Postal
      Code:

    Business
      License No.:

    Authorized
      Agent: 

    Address:

    Postal
      Code:

    

    Governing
      by the “Contract Laws of Peoples’ Republic of China” ,“Municipal Property
      Management Regulation of Peoples’ Republic of China”, “Lease Property Rules of
      Shenzhen Special Economic Zone” and other relevant executive rulings, Party A
      and Party B have mutually negotiated and entered into this
      agreement:

    

    
      	1.  	
              Party
                A leases the property located at 4/F., Block One, Shi Hua Industrial
                Park,
                Luo Hu District (the “Property”) to Party B. Area of Property is 3,000
                squared meters in a six storey
                building.

            

    

    
      	 	 

    

    Beneficiary
      of Property: Shenzhen Jin Tong Hai Enterprises Ltd.; 

     

    Property
      Ownership Certificate number or other title documents reference: (2003) [Chinese
      character] 177;

    
      	 	 

    

    
      	2.  	
              Property
                lease rental is calculated on a monthly unit rate of the RMB Yuan
                25 per
                squared meter (said Twenty-Five Yuan) at a total of RMB Yuan 75,000
                per
                month (said Seventy-Five Thousand
                Yuan).

            

    

    
      	 	 

    

    
      	3.  	
              Party
                B should pay the rental for the first month of RMB Yuan 75,000 (said
                Seventy-Five Thousand Yuan) on or before May 12,
                2005.

            

    

    
      	 	 

    

    
      	4.  	
              Party
                should pay the lease rental to Party A on or before the 3rd
                day each month. And Party A should issue a tax receipt for the rental
                received.

            

    

    
      	 	 

    

    
      	5.  	
              Lease
                term: From July 1, 2005 to June 30,
                2010.

            

    

    
      	 	 

    

    The
      term
      could not exceed the term of Land Use Right and any period beyond the Right
      is
      void. Both parties could mutually agree on the possible damage and loss for
      the
      void term. If there is not a mutual agreement, Party A is liable for all damages
      and losses arising from the void term. 

    
      	 	 

    

    
      	6.  	
              The
                legislated scope of property usage of the Property is Plant and Office.
                If
                Party B needs to change the property usage, Party B must notify Party
                A in
                written form and must seek the approval of the change from relevant
                regulatory bodies.

            

    

    
      	 	 

    

    
      	7.  	
              Party
                A must make the Property available for Party B on or before May 25,
                2005
                with proper handover procedures. 

            

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    If
      Party
      A could not make the Property available to Party B on the abovementioned date,
      Party B is entitled to deferred the term of this Agreement accordingly and
      both
      parties must duly signed and registered with relevant regulatory bodies the
      deferral.

    
      	 	 

    

    
      	8.  	
              At
                the time of handover, both parties must confirm the conditions and
                fixtures of the Property and attach such a confirmation as the supplement
                of this Agreement.

            

    

    
      	 	 

    

    
      	9.  	
              At
                the time of handover, Party A would receive a rental deposit not
                exceeding
                the amount of rental for three months, which is amounting to RMB
                Yuan
                150,000 (said One Hundred and Fifty Thousand
                Yuan).

            

    

    
      	 	 

    

    Party
      A
      should issue a receipt upon the payment of the deposit.

     

    The
      conditions for returning the deposit:

    
      	 	 

    

    
      	a.  	
              The
                Property is in a good condition without any
                damage.

            

    

    
      	 	 

    

    
      	b.  	
              The
                Property is not sub-leased to a third
                party.

            

    

    
      	 	 

    

    
      	c.  	
              No
                breach of any terms in this
                Agreement.

            

    

    
      	 	 

    

    If
      the
      following conditions may appear, Party A has the right to hold the deposit
      for
      damages:

    
      	 	 

    

    
      	a.  	
              Major
                damage to the Property.

            

    

    
      	 	 

    

    
      	b.  	
              Sub-leased
                the Property to a third party without the consent of Party
                A.

            

    

    
      	 	 

    

    
      	c.  	
              Modify
                the structure of the Property without the consent of Party
                A.

            

    

    
      	 	 

    

    
      	10.  	
              During
                the period of lease term, Party should pay all taxes, levies arising
                from
                the lease and lease management fees; Party B should pay all utilities,
                cleaning, property management fees and relevant expenditures arising
                from
                the use of the Property.

            

    

    
      	 	 

    

    
      	11.  	
              Party
                A guarantee the Property and its facilities can serve the purpose
                of this
                Agreement and guarantee the safety of Property structure is in compliance
                with all relevant laws, regulations and
                rulings.

            

    

    
      	 	 

    

    Party
      B
      could claim for damages arising from the breach of this provision by Party
      A.

    
      	 	 

    

    
      	12.  	
              Party
                B must properly use the Property and must not conduct any criminal
                activities in the Property. Party A should not interfere the activities
                in
                the Property if Party B makes use of the Property in proper and legal
                manner.

            

    

    
      	 	 

    

    
      	13.  	
              If,
                during the lease term and not by the fault of Party B, the Property
                may
                exist any damage which may affect the safety of the structure, Party
                B
                should notify Party A; and Party A must repair or authorize Party
                B to
                repair such damage without 5 (Five) days. If Party B has difficulty
                to
                notify Party A or Party A does not respond the notification of Party
                B,
                Party B may repair such damage on behalf of Party A by notifying
                relevant
                regulatory bodies.

            

    

    
      	 	 

    

    In
      case
      of emergency, Party B may repair such damage immediately and notify Party A
      in
      reasonable time.

     

    All
      reasonable costs related to the repairs by Party B should be reimbursed by
      Party
      A. In Party B does not repair such damage under emergency conditions and does
      notify Party A in time to repair such damage, Party B must be responsible for
      all extra repairing costs. 

    
      	 	 

    

    
      	14.  	
              If
                the cause of a structural damage is identified as the misuse of the
                Property by Party B, Party B must notify Party A in time and Party
                B is
                responsible for all repairing
                costs.

            

    

    
      	 	 

    

    
      	15.  	
              If,
                during the term of the lease, either party may need to alter the
                structure
                of the Property, a separate agreement must be signed by both parties.
                And
                the modification is subject to the approval of relevant regulatory
                bodies.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	16.  	
              During
                the term of this lease, Party B may sublease all or part of the Property
                to a third party with written consent of Party A and proper registration
                to relevant regulatory bodies. The sublease term could not exceed
                the term
                of this lease.

            

    

    
      	 	 

    

    
      	17.  	
              During
                the term of this lease, if Party A will transfer the whole or partial
                title of the Property, Party A should notify Party B in writing before
                one
                month of the transfer. With the same consideration, Party B has the
                first
                right to purchase the whole or partial of the
                Property.

            

    

    
      	 	 

    

    If
      the
      Property is sold to a third party, Party A must notify the purchaser this lease
      must be continuously executed until the end of the lease term.

    
      	 	 

    

    
      	18.  	
              During
                the term of this Agreement, this Agreement can be terminated under
                the
                following conditions:

            

    

    
      	 	 

    

    
      	a.  	
              Force
                Majeure Events.

            

    

    
      	 	 

    

    
      	b.  	
              Acts
                of governments

            

    

    
      	 	 

    

    
      	c.  	
              Mutual
                agreement.

            

    

    
      	 	 

    

    
      	19.  	
              Under
                the following conditions, Part A may claim damages, hold the rental
                deposit and receive a penalty of RMB Yuan 75,000 (said Seventy-Five
                Thousand Yuan) from Party B:

            

    

    
      	 	 

    

    a.
      Monthly rental payment is overdue over 10 (Ten) days.

     

    b.
      Party
      B conduct illegal acts in the Property.

     

    c.
      Party
      B alters the structure and usage of the Property.

     

    d.
      Party
      B breaches the provision under clause 14 of this Agreement.

     

    e.
      Party
      B renovates the Property without the consent of Party A and approval from
      relevant regulatory bodies.

     

    f.
      Party
      B subleases the Property to a third party without the consent of Party
      A.

     

    Party
      A
      reserves the right to terminate or amend the conditions and provision of this
      Agreement if Party B violates any one of the above provision.

    
      	 	 

    

    
      	20.  	
              Under
                the following conditions, Part B may claim damages, receive a penalty
                of
                RMB Yuan 75,000 (said Seventy-Five Thousand Yuan) from Party
                A:

            

    

    
      	 	 

    

    
      	a.  	
              Party
                A delay the handover of the Property more than 10 (Ten)
                days.

            

    

    
      	 	 

    

    
      	b.  	
              Party
                A breaches the provision in clause 13 of this
                Agreement.

            

    

    
      	 	 

    

    
      	c.  	
              Without
                the consent of Party B and approval from relevant regulatory bodies,
                Party
                A alter the structure of the
                Property.

            

    

    
      	 	 

    

    Party
      B
      reserves the right to terminate or amend the conditions and provision of this
      Agreement if Party A violates any one of the above provision.

     

    During
      the period starting from Party B is notified for a compensation of damage to
      the
      time of receipt of such compensation, Party B do not need to pay any rental
      under this Agreement.

    
      	 	 

    

    
      	21.  	
              Upon
                the expiry of this Agreement, Party B should remove from the Property
                within 5 (Five) days and resume the Property to the condition at
                the time
                handover. Party B should execute proper procedure to handover the
                Property
                to Party A.

            

    

    
      	 	 

    

    
      	22.  	
              If
                Party B will extend this Agreement, Party B should notify Party A
                the
                request 3 (Three) months before the end of lease term. With the same
                terms
                from a third party, Party B has the first right to extend the lease.
                The
                new agreement should be registered with relevant regulatory
                bodies.

            

    

    
      	 	 

    

    
      	23.  	
              Both
                parties agree to comply with provisions and conditions in this Agreement
                and agree to compensate the other party in case of
                breach.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	24.  	
              Both
                parties agree to supplement if there are provisions and conditions
                not
                covered in this Agreement.

            

    

    
      	 	 

    

    
      	25.  	
              If
                a dispute or claim shall arise with respect to any of the terms or
                provisions of this Agreement, or with respect to the performance
                by any of
                the parties under this Agreement, then the parties agree to submit
                the
                dispute to binding and non-appealable arbitration in a venue located
                in
                Shenzhen, China in accordance with the rules of the American Arbitration
                Association (“AAA”). Any award rendered in arbitration may be enforced in
                any court of competent jurisdiction

            

    

    
      	 	 

    

    
      	26.  	
              This
                Agreement is effective immediately upon signature by both parties.
                Each
                party shall register this Agreement with 10 (Ten) days to relevant
                governing regulatory bodies.

            

    

    
      	 	 

    

    
      	27.  	
              The
                final interpretation of provisions and conditions of this Agreement
                is
                based on Chinese version.

            

    

    
      	 	 

    

    
      	28.  	
              There
                are four copies of this Agreement. Party A and Party B will each
                hold 1
                (One) copy and register 1 (One) to each governing regulatory
                bodies.

            

    

    
      	 	 

    

    
      	29.  	
              Others:
                

            

    

    
      	 	 

    

    
      	1.  	
              Party
                A cannot off set any of the rental deposit against any outstanding
                rental
                payments. Party B will wire the first month rental to Party A’s account on
                July 1, 2005.

            

    

    
      	 	 

    

    
      	2.  	
              If
                Party B agrees to extend the lease upon expiry, Party A agrees to
                increase
                the rental for 5% per annum only.

            

    

    
      	 	 

    

    
      	3.  	
              Party
                A has the responsibility to handle all property affairs with the
                property
                management office.

            

    

    

    

    Signatures:

    Party
      A:

    (by
      authorized agent)

     

    

    Party
      B:

    (authorized
      signature)

    

    

    Government
      Registry:

    

    

    Date
      this: May 8, 2005NEITHER
      THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
      WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN
      MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
      OR
      AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
      OPINION OF COUNSEL FOR THE COMPANY, IS AVAILABLE.

    

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

     

    as
      defined in the Warrant

     

    CLASS
      A

    COMMON
      STOCK PURCHASE WARRANT

    OF

    SHUMATE
      INDUSTRIES, INC.

    

     

    This
      is
      to certify that, FOR VALUE RECEIVED, ______________________________ (“Holder”),
      is entitled to purchase, subject to the provisions of this warrant
      (“Warrant”
or
      “Class
      A Warrant”),
      from
      Shumate Industries, Inc., a Texas corporation (the “Company”),
      at an
      exercise price per share of $1.25, subject to adjustment as provided in this
      Warrant (the “Warrant
      Exercise Price”),
      __________________ (___________) shares of common stock, par value $0.001 per
      share (“Common
      Stock”).
      The
      shares of Common Stock deliverable upon such exercise, and as adjusted from
      time
      to time (including shares issued as dividends or upon any stock split or
      recapitalization), are hereinafter sometimes referred to as “Warrant
      Shares.”
      

     

    1. ISSUANCE
      OF WARRANT.
      This
      Warrant is being issued pursuant to that certain Subscription Agreement dated
      as
      of the date hereof between the Company and the Holder (the “Subscription
      Agreement”)
      pursuant to which the Company, through First Montauk Securities Corp., is the
      Placement (as defined below) and as otherwise described in the Company’s Private
      Placement Memorandum dated as of September 20, 2006, as amended (“Memorandum”).
      Capitalized terms used herein and not otherwise defined shall have the meanings
      ascribed thereto in the Subscription Agreement or Memorandum, as the case may
      be. In addition, the following terms have the meanings set forth below:

     

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

    

    “Exercise
      Period”
shall
      mean the period commencing on the date hereof and ending at 5 p.m., Eastern
      Time
      on December 15, 2010. 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    “Permitted
      Issuances”
shall
      mean (i) Common Stock issued pursuant to a stock split or
      subdivision,
      or (ii)
      Common Stock issuable or issued to employees, consultants or directors of the
      Company directly or pursuant to a stock plan or other compensation arrangement
      (including upon exercise of options or warrants) approved by the Board of
      Directors of the Company at the then fair market value, or (iii) capital stock,
      debt instruments convertible into capital stock or warrants or options to
      purchase capital stock issued in connection with bona fide acquisitions,
      mergers, purchases, corporate partnering agreements, consulting agreements,
      joint ventures or similar transactions, the terms of which are approved by
      the
      Board of Directors of the Company, or (iv) Common Stock issued or issuable
      upon
      conversion of the Class A Warrants, or (v) Common Stock issuable upon exercise
      of warrants issued to First Montauk Securities Corp. (or its assignees) as
      compensation in connection with the Offering, or (vi) Common Stock or any other
      securities exercisable or exchangeable for, or convertible into shares of Common
      Stock outstanding as of September 20, 2006.

    

    “Placement”
means
      the private placement by the Company of up to $6,000,000 worth of its
      securities, including the over-allotment option, consisting of shares of the
      Company’s Common Stock and Class A Warrants, including this Warrant, as
      described in the Memorandum.

    

    2. EXERCISE
      OF WARRANT.
      (a)
      This Warrant may be exercised in whole or in part at any time or from time
      to
      time from the date hereof until the end of the Exercise Period by presentation
      and surrender hereof to the Company at its principal office, or at the office
      of
      its stock transfer agent, if any, with the Purchase Form annexed hereto duly
      executed and accompanied by payment of the Warrant Exercise Price for the number
      of shares of Common Stock specified in such form. If this Warrant should be
      exercised in part only, the Company shall, upon surrender of this Warrant for
      cancellation, execute and deliver a new Warrant evidencing the rights of the
      Holder hereof to purchase the balance of the shares of Common Stock purchasable
      hereunder. Upon receipt by the Company of this Warrant at its office, or by
      the
      stock transfer agent of the Company at its office, in proper form for exercise,
      the Holder shall be deemed to be the holder of record of the shares of Common
      Stock issuable upon such exercise, notwithstanding that the stock transfer
      books
      of the Company shall then be closed or that certificates representing such
      shares of Common Stock shall not then be actually delivered to the Holder.
      As
      soon as practicable after each exercise of this Warrant, in whole or in part,
      and in any event within five (5) days thereafter, the Company at its expense
      (including the payment by it of any applicable issue or transfer taxes and
      transfer agent fees or opinions of counsel) will cause to be issued in the
      name
      of and delivered to the Holder hereof or, subject to Section 6 hereof, as the
      Holder may direct a certificate or certificates (with appropriate restrictive
      legends, as applicable) for the number of duly authorized, validly issued,
      fully
      paid and non-assessable shares of Common Stock to which the Holder shall be
      entitled upon exercise plus, in lieu of any fractional share to which the Holder
      would otherwise be entitled, all issuances of Common Stock shall be rounded
      up
      to the nearest whole share.

     

    (b) Notwithstanding
      the foregoing, at any time after December 15, 2007 that a Registration Statement
      (as defined in the Subscription Agreement) covering the resale of the Warrant
      Shares is not effective or is suspended, or that the related Prospectus (as
      defined in the

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

    Subscription
      Agreement) is outdated, defective or requires a supplement or amendment for
      any
      reason, including upon the occurrence of any event contemplated by the
      Subscription Agreement, the Holder may, at its option during such time, elect
      to
      pay some or all of the Exercise Price payable upon an exercise of this Warrant
      by canceling a portion of this Warrant exercisable for such number of Warrant
      Shares as is determined by dividing (i) the total Exercise Price payable in
      respect of the number of Warrant Shares being purchased upon such exercise
      by
      (ii) the excess of the Fair Market Value per share of Common Stock as of
      the effective date of exercise, as determined pursuant to Section 3(d) below
      (the “Exercise Date”) over the Exercise Price per share. If the Holder wishes to
      exercise this Warrant pursuant to this method of payment with respect to the
      maximum number of Warrant Shares purchasable pursuant to this method, then
      the
      number of Warrant Shares so purchasable shall be equal to the total number
      of
      Warrant Shares, minus the product obtained by multiplying (x) the total
      number of Warrant Shares by (y) a fraction, the numerator of which shall be
      the Exercise Price per share and the denominator of which shall be the Fair
      Market Value per share of Common Stock as of the Exercise Date. 

    

    (c) For
      purposes of this Warrant, “Fair Market Value” shall mean, on any
      day:

    

    (i) the
      closing price of the Common Stock on a national securities exchange or as quoted
      on the Nasdaq Global Select Market, Nasdaq Global Market or the Nasdaq Capital
      Market on such day, as reported by the Wall Street Journal; or 

    

    (ii) if
      the
      Common Stock is quoted on the Nasdaq Global Select Market, Nasdaq Global Market
      or the Nasdaq Capital Market but no sale occurs on such day, the average of
      the
      closing bid and asked prices of the Common Stock on the Nasdaq Global Select
      Market, Nasdaq Global Market or the Nasdaq Capital Market on such day, as
      reported by the Wall Street Journal; or

    

    (iii) if
      the
      Common Stock is not so listed or quoted, the average of the closing bid and
      asked prices of the Common Stock in the U.S. over-the-counter market; or

    

    (iv) if
      no
      such trading market is readily available, the fair market value of the Common
      Stock as determined in good faith and certified by a majority of the members
      of
      the Board of Directors of the Company. 

     

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

     

    4. EXCHANGE,
      TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
      This
      Warrant is exchangeable, without expense, at the option of the Holder, upon
      presentation and surrender hereof to the Company for other Warrants of different
      denominations entitling the

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    holder
      thereof to purchase in the aggregate the same number of shares of Common Stock
      purchasable hereunder. Upon surrender of this Warrant to the Company or at
      the
      office of its stock transfer agent, if any, with the Assignment Form annexed
      hereto duly executed and funds sufficient to pay any transfer tax, the Company
      shall, without charge, execute and deliver a new Warrant in the name of the
      assignee named in such instrument of assignment and this Warrant shall promptly
      be canceled. This Warrant may be divided or combined with other Warrants which
      carry the same rights upon presentation hereof at the office of the Company
      or
      at the office of its stock transfer agent, if any, together with a written
      notice specifying the names and denominations in which new Warrants are to
      be
      issued and signed by the Holder hereof. The term “Warrant” as used herein
      includes any Warrants into which this Warrant may be divided or exchanged.
      Upon
      receipt by the Company of evidence satisfactory to it of the loss, theft,
      destruction or mutilation of this Warrant, and (in the case of loss, theft
      or
      destruction) of reasonably satisfactory indemnification, and upon surrender
      and
      cancellation of this Warrant, if mutilated, the Company will execute and deliver
      a new Warrant of like tenor. Any such new Warrant executed and delivered shall
      constitute an additional contractual obligation on the part of the Company,
      whether or not this Warrant so lost, stolen, destroyed, or mutilated shall
      be at
      any time enforceable by anyone.

     

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

     

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

     

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

     

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

     

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

     

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

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

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

     

    (b) Certain
      Other Distributions and Adjustments.
      

     

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

     

    (A) cash,
      

     

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

     

    (C) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of its stock or any other securities or property of
      any
      nature whatsoever (other than Convertible Securities or shares of Common
      Stock),

     

    then,
      upon exercise of this Warrant, Holder shall be entitled to receive such dividend
      or distribution with respect to the amount of Common Stock received on such
      exercise, and, if such dividend or distribution shall have been securities,
      any
      property subsequently distributed with respect thereto. However, in the event
      that at the time the Company has taken a record of the holders of its Common
      Stock for the purposes described above: (i) the resale of the shares of Common
      Stock issuable upon exercise of this Warrant is not registered with the SEC
      for
      resale to the public under an effective registration statement; and (ii) the
      Common Stock issuable upon exercise of this Warrant is not quoted on the OTCBB
      or a similar electronic quotation system or stock exchange, Holder shall be
      entitled to receive such dividend or distribution as if Holder had exercised
      this Warrant.

     

    (ii) A
      reclassification of the Common Stock (other than a change in par value, or
      from
      par value to no par value or from no par value to par value) into shares of
      Common Stock and shares of any other class of stock shall be deemed a
      distribution by the Company to the holders of its Common Stock of such shares
      of
      such other class of stock and in such event, upon exercise of this Warrant,
      Holder shall be entitled to receive such distribution with respect to the amount
      of Common Stock received on such exercise, and, if such dividend or distribution
      shall have been securities, any property subsequently distributed with respect
      thereto, and, if the outstanding shares of Common Stock shall be changed into
      a
      larger or smaller number of shares of Common Stock as a part of such
      reclassification, such change shall be deemed a

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

    subdivision
      or combination, as the case may be, of the outstanding shares of Common Stock
      within the meaning of Section 6(a). However, in the event that at the time
      the
      Company has reclassified its Common Stock, as described above: (i) the resale
      of
      the shares of Common Stock issuable upon exercise of this Warrant is not
      registered with the SEC for resale to the public under an effective registration
      statement; and (ii) the Common Stock issuable upon exercise of this Warrant
      is
      not quoted on the OTCBB or a similar electronic quotation system or stock
      exchange, Holder shall be entitled to receive such distribution, and, if such
      dividend or distribution shall have been securities, any property subsequently
      distributed with respect thereto, as if Holder had exercised this
      Warrant.

     

    (c) Issuance
      of Additional Shares of Common Stock.
      

     

    (i) (A)
      If
      the Company at any time prior to the earlier to occur of: (i) the date that
      is
      fifteen (15) months after the date of the final Closing; or (ii) the Company
      and
      @Balance Americas, a Shell Technology Ventures company, entering into a
      definitive distribution agreement for the Company’s Hemiwedge®
      DIV product, shall
      sell shares of Common Stock (or securities convertible into shares of Common
      Stock) at a price per share (or having a conversion price per share, if a
      security convertible into Common Stock) which is less than the Warrant Exercise
      Price (a “Subsequent
      Offering Price”),
      other
      than Permitted Issuances, then the Warrant Exercise Price shall be reduced
      to
      equal the Subsequent Offering Price. 

     

    (B) If,
      at
      any time after the earlier to occur of: (i) the date that is fifteen (15) months
      after the date of the final Closing; or (ii) the Company and @Balance Americas,
      a Shell Technology Ventures company, entering into a definitive distribution
      agreement for the Company’s Hemiwedge®
      DIV product,
      the
      Company shall issue or sell any shares of Common Stock in exchange for
      consideration in an amount per share of Common Stock less than the Warrant
      Exercise Price (the “Discounted
      Price,”
each
      such sale or issuance a “Discounted
      Price Transaction”
and
      the
      number of shares sold or issued in such Discounted Price Transaction the
“Discounted
      Sale Volume”),
      other
      than Permitted Issuances, then (a) the Warrant Exercise Price then in effect
      shall be adjusted so that it shall equal the price determined by multiplying
      the
      Warrant Exercise Price in effect immediately prior to such event by a fraction,
      of which the numerator shall be the sum of the amount of Common Stock
      outstanding immediately before such Discounted Price Transaction, plus the
      quotient obtained by dividing the total proceeds of such Discounted Price
      Transaction by such Warrant Exercise Price, and of which the denominator shall
      be the amount of Common Stock outstanding immediately following such exercise
      (for purposes of determining the amount of Common Stock outstanding, all
      outstanding securities exercisable for or convertible into Common Stock shall
      be
      deemed to have been so exercised or converted), and (b) the number of shares
      of
      Common Stock for which this Warrant is exercisable shall be adjusted to equal
      the product obtained by multiplying the Warrant Exercise Price in effect
      immediately prior to such Discounted Price Transaction by the number of shares
      of Common Stock for which this Warrant is exercisable immediately prior to
      such
      Discounted Price Transaction and dividing the product thereof by the Warrant
      Exercise Price resulting from the adjustment made pursuant to clause (a)
      above.

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

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

     

    (d) Issuance
      of Warrants or Other Rights.
      If at
      any time the Company shall: (i) take a record of the holders of its Common
      Stock
      for the purpose of entitling them to receive a distribution of, or (ii) in
      any
      manner issue or sell, any warrants or other rights to subscribe for or purchase
      any shares of Common Stock or any Convertible Securities, whether or not the
      rights to exchange or convert thereunder are immediately exercisable, and the
      price per share for which Common Stock is issuable upon the exercise of such
      warrants or other rights or upon conversion or exchange of such Convertible
      Securities shall be less than the Warrant Exercise Price, then the number of
      shares for which this Warrant is exercisable and the Warrant Exercise Price
      shall be adjusted as provided in Section 6(c) on the basis that the maximum
      number of shares of Common Stock issuable pursuant to all such warrants or
      other
      rights or necessary to effect the conversion or exchange of all such Convertible
      Securities shall be deemed to have been issued and outstanding and the Company
      shall be deemed to have received all the consideration payable therefor, if
      any,
      as of the date of issuance of such warrants or other rights. No further
      adjustment of the Warrant Exercise Price(s) shall be made upon the actual issue
      of such Common Stock or of such Convertible Securities upon exercise of such
      warrants or other rights or upon the actual issuance of such Common Stock upon
      such conversion or exchange of such Convertible Securities.

     

    (e) Issuance
      of Convertible Securities.
      If at
      any time the Company shall take a record of the holders of its Common Stock
      for
      the purpose of entitling them to receive a distribution of, or shall in any
      manner (whether directly or by assumption in a merger in which the Company
      is
      the surviving corporation) issue or sell, any Convertible Securities, whether
      or
      not the rights to exchange or convert thereunder are immediately exercisable,
      and the price per share for which Common Stock is issuable upon such conversion
      or exchange shall be less than the Warrant Exercise Price, then the number
      of
      shares of Common Stock for which this Warrant is exercisable and the Warrant
      Exercise Price shall be adjusted as provided in Section 6(c) on the basis that
      the maximum number of shares of Common Stock necessary to effect the conversion
      or exchange of all such Convertible Securities shall be deemed to have been
      issued and outstanding and the Company shall have received all of the
      consideration payable therefor, if any, as of the date of issuance of such
      Convertible Securities. If any issue or sale of Convertible Securities is made
      upon exercise of any warrant or other right to subscribe for or to purchase
      any
      such Convertible Securities for which adjustments of the number of shares of
      Common Stock for which this Warrant is exercisable and the Warrant Exercise
      Price have been or are to be made pursuant to Section 6(d), no further
      adjustment of the number of shares of Common Stock for

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

    which
      this Warrant is exercisable and the Warrant Exercise Price shall be made by
      reason of such record, issue or sale.

     

    (f) Superseding
      Adjustment.
      If at
      any time after any adjustment of the number of shares of Common Stock for which
      this Warrant is exercisable and the Warrant Exercise Price(s) shall have been
      made pursuant to Section 6(d) or Section 6(e) as the result of any issuance
      of
      warrants, rights or Convertible Securities, 

     

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

     

    (ii) the
      consideration per share for which shares of Common Stock are issuable pursuant
      to such warrants or rights, or the terms of such other Convertible Securities,
      shall be increased solely by virtue of provisions therein contained for an
      automatic increase in such consideration per share upon the occurrence of a
      specified date or event,

     

    then
      for
      each outstanding Warrant such previous adjustment shall be rescinded and
      annulled and the shares of Common Stock which were deemed to have been issued
      by
      virtue of the computation made in connection with the adjustment so rescinded
      and annulled shall no longer be deemed to have been issued by virtue of such
      computation made in connection with the adjustment so rescinded and annulled
      shall no longer be deemed to have been issued by virtue of such computation.
      Thereupon, a re-computation shall be made of the effect of such rights or
      options or other Convertible Securities on the basis of:

     

    (A) treating
      the number of shares of Common Stock or other property, if any, theretofore
      actually issued or issuable pursuant to the previous exercise of any such
      warrants or rights or any such right of conversion or exchange, as having been
      issued on the date or dates of any such exercise and for the consideration
      actually received and receivable therefor, and

     

    (B) treating
      any such warrants or rights or any such other Convertible Securities which
      then
      remain outstanding as having been granted or issued immediately after the time
      of such increase of the consideration per share for which shares of Common
      Stock
      or other property are issuable under such warrants or rights or other
      convertible Securities; whereupon a new adjustment of the number of shares
      of
      Common Stock for which this Warrant is exercisable and the Warrant Exercise
      Price(s) shall be made, which new adjustment shall supersede the previous
      adjustment so rescinded and annulled.

     

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

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

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

     

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

     

    (j) Notwithstanding
      the foregoing, no adjustment shall be effected due to, or as a result of, any
      Permitted Issuances except for Common Stock issued pursuant to a stock split
      or
      subdivision.

     

    (k) Other
      Action Affecting Common Stock.
      In case
      at any time or from time to time the Company shall take any action in respect
      of
      its Common Stock, other than any action described in this Section 6, then,
      unless such action will not have a materially adverse effect upon the rights
      of
      the Holders, the number of shares of Common Stock or other stock for which
      this
      Warrant is exercisable and/or the purchase price thereof shall be adjusted
      in
      such manner as may be equitable in the circumstances.

     

    7. REDEMPTION
      OF WARRANT.
      If
      at
      anytime during the Exercise Period the Common Stock trades at or above $2.50
      per
      share (subject to adjustment for forward and reverse stock splits,
      recapitalizations, stock dividends and the like) (the "Threshold
      Price")
      during
      10 consecutive Trading Days (the "Measurement
      Period"),
      then
      the Company may, upon 30 days prior written notice “Redemption
      Notice”),
      call
      for redemption (“Call”)
      of all
      but not less than all of the Warrants then outstanding provided that the Common
      Stock has traded an
      average of 100,000 shares per day during the Measurement Period (“Threshold
      Volume”).
      If the
      conditions set forth below for such Call are satisfied from the period from
      the
      date of the Redemption Notice through and including the Redemption Date (as
      defined below), then this Warrant for which a Notice of Exercise shall not
      have
      been received by the Redemption Date will be cancelled
      at 5:00 p.m. (New York City time) on the 30th day after the date the Call Notice
      is placed in the United States mail (by first class mail) (such date, the
      "Redemption
      Date").
      In
      furtherance thereof, the Company covenants and agrees that it will honor all
      Notices of Exercise with respect to Warrant Shares subject to a Redemption
      Notice that are tendered prior to 5:00 p.m. (New York City time) on the
      Redemption Date. Notwithstanding anything to the contrary set forth in this
      Warrant, the Company may not deliver a Redemption Notice or require the
      cancellation of this Warrant (and any Redemption Notice will be void), unless,
      from the beginning of the 10th consecutive Trading Day used to determine whether
      the Common Stock has achieved the Threshold Price through the Redemption Date,
      the Company has effective under the Securities Act of 1933, as amended, a
      registration statement providing for the resale of the Warrant Shares and the
      prospectus thereunder available for use by the Holders for the resale of all
      such Warrant Shares. 

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

    8. OFFICER’S
      CERTIFICATE.
      Whenever the Warrant Exercise Price(s) shall be adjusted as required by the
      provisions of Section 6 of this Warrant, the Company shall forthwith file in
      the
      custody of its Secretary or an Assistant Secretary at its principal office
      and
      with its stock transfer agent, if any, an officer’s certificate showing the
      adjusted Warrant Exercise Price(s) and the adjusted number of shares of Common
      Stock issuable upon exercise of each Warrant, determined as herein provided,
      setting forth in reasonable detail the facts requiring such adjustment,
      including a statement of the number of additional shares of Common Stock, if
      any, and such other facts as shall be necessary to show the reason for and
      the
      manner of computing such adjustment. Each such officer’s certificate shall be
      forwarded to Holder as provided in Section 13.

     

    9. NOTICES
      TO WARRANT HOLDERS.
      So long
      as this Warrant shall be outstanding, (1) if the Company shall pay any dividend
      or make any distribution upon Common Stock, or (2) if the Company shall offer
      to
      the holders of Common Stock for subscription or purchase by them any share
      of
      any class or any other rights, or (3) if any capital reorganization of the
      Company, reclassification of the capital stock of the Company, consolidation
      or
      merger of the Company with or into another entity, tender offer transaction
      for
      the Company’s Common Stock, sale, lease or transfer of all or substantially all
      of the property and assets of the Company, or voluntary or involuntary
      dissolution, liquidation or winding up of the Company shall be effected, or
      (4)
      if the Company shall file a registration statement under the Securities Act
      of
      1933, as amended (the “Act”),
      on
      any form other than on Form S-4 or S-8 or any successor form, then in any such
      case, the Company shall cause to be mailed by certified mail to the Holder,
      at
      least ten days prior to the date specified in clauses (1), (2), (3) or (4),
      as
      the case may be, of this Section 9 a notice containing a brief description
      of
      the proposed action and stating the date on which (i) a record is to be taken
      for the purpose of such dividend, distribution or rights, or (ii) such
      reclassification, reorganization, consolidation, merger, tender offer
      transaction, conveyance, lease, dissolution, liquidation or winding up is to
      take place and the date, if any is to be fixed, as of which the holders of
      Common Stock or other securities shall receive cash or other property
      deliverable upon such reclassification, reorganization, consolidation, merger,
      conveyance, dissolution, liquidation or winding up, or (iii) such registration
      statement is to be filed with the SEC.

     

    10. RECLASSIFICATION,
      REORGANIZATION OR MERGER.
      In case
      of any reclassification, capital reorganization or other change of outstanding
      shares of Common Stock of the Company, or in case of any consolidation or merger
      of the Company with or into another corporation (other than a merger with a
      subsidiary in which merger the Company is the continuing or surviving
      corporation and which does not result in any reclassification, capital
      reorganization or other change of outstanding shares of Common Stock of the
      class issuable upon exercise of this Warrant) or in case of any sale, lease
      or
      conveyance of all or substantially all of the assets of the Company, the Company
      shall, as a condition precedent to such transaction, cause effective provisions
      to be made so that (i) the Holder shall have the right thereafter by exercising
      this Warrant, to purchase the kind and amount of shares of stock and other
      securities and property receivable upon such reclassification, capital
      reorganization and other change, consolidation, merger, sale or conveyance
      by a
      holder of the number of shares of Common Stock which could have been purchased
      upon exercise of this Warrant immediately prior to such reclassification,
      change, consolidation, merger, sale or conveyance, and (ii) the successor
      or

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

    acquiring
      entity shall expressly assume the due and punctual observance and performance
      of
      each covenant and condition of this Warrant to be performed and observed by
      the
      Company and all obligations and liabilities hereunder (including but not limited
      to the provisions of Section 3 regarding the increase in the number of shares
      of
      Warrant Shares potentially issuable hereunder). Any such provision shall include
      provision for adjustments which shall be as nearly equivalent as possible to
      the
      adjustments provided for in this Warrant. The foregoing provisions of this
      Section 10 shall similarly apply to successive reclassifications, capital
      reorganizations and changes of shares of Common Stock and to successive
      consolidations, mergers, sales or conveyances. In the event that in connection
      with any such capital reorganization or reclassification, consolidation, merger,
      sale or conveyance, additional shares of Common Stock shall be issued in
      exchange, conversion, substitution or payment, in whole in part, for a security
      of the Company other than Common Stock, any such issue shall be treated as
      an
      issuance of Common Stock covered by the provisions of Section 6 of this
      Warrant.

     

    11. TRANSFER
      TO COMPLY WITH THE SECURITIES ACT OF 1933; REGISTRATION
      RIGHTS.
      This
      Warrant or the Warrant Shares or any other security issued or issuable upon
      exercise of this Warrant may not be sold or otherwise disposed of except as
      follows:

     

    (i) to
      a
      person who, in the opinion of counsel for the Company, is a person to whom
      this
      Warrant or Warrant Shares may legally be transferred without registration and
      without the delivery of a current prospectus under the Act with respect thereto
      and then only against receipt of an agreement of such person to comply with
      the
      provisions of this Section 11 with respect to any resale or other disposition
      of
      such securities which agreement shall be satisfactory in form and substance
      to
      the Company and its counsel; or

     

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

     

    (iii) The
      Holder of this Warrant shall be entitled to the registration rights as described
      in the Subscription Agreement with respect to the Warrant Shares.

    

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

     

    13. NOTICES.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (i) the date of transmission, if such notice or communication
      is delivered via
      facsimile at the facsimile telephone number specified in this Section prior
      to
      6:30 p.m. (New York City time) on a Business Day, (ii) the Business Day after
      the date of transmission, if such notice or communication is delivered
via
      facsimile at the facsimile telephone number specified in this Agreement later
      than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m.
      (New
      York City time) on such date, (iii) the Business Day following the date of
      mailing, if sent by nationally recognized overnight courier service, or (iv)
      upon actual receipt by the party to whom such notice is required to be given.
      The address for such notices and communications shall be as
      follows:

     

    If
      to the
      Company:

    Shumate
      Industries,
      Inc.

    Attention:
      Matthew C. Flemming

    12060
      FM
      3083

    Conroe,
      Texas 77301

    Tel:
      (936) 539-9533

    Fax:
      (936) 539-9396

    

    If
      to the
      Holder:

    To
      the
      Address Set Forth In the Records of the Company

    

    With
      copies to:

    First
      Montauk Securities Corporation

    328
      Newman Springs Road

    Red
      Bank,
      NJ 07701

    Fax:
      (732) 783-0212

    Attn:
      Ernest Pellegrino

    

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

     

    15. WARRANT
      SOLICITATION FEE.
      The
      Company has agreed that First Montauk Securities Corp. (“FMSC”), a registered
      broker dealer, shall be entitled to a cash fee of 2.5% of the Exercise Price
      then in effect of each Warrant being exercised hereunder, with respect to the
      exercise of any Warrant or portion thereof which is exercised by the Holder
      pursuant to the efforts of FMSC.

    

    [SIGNATURE
      PAGE FOLLOWS]

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      this
      Warrant has been duly executed as of December ___, 2006.

    

    

    SHUMATE
      INDUSTRIES, INC.

     

     

    By:
      ________________________________

    Name:

    Title:

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     

    PURCHASE
      FORM

     

    

     

    To
      Shumate Industries, Inc.:

    

    In
      accordance with the Warrant enclosed with this Form of Election to Purchase,
      the
      undersigned hereby irrevocably elects to purchase _____________ shares of common
      stock (“Common Stock”), $0.001 par value per share, of Shumate Industries, Inc.
      The undersigned herewith makes payment of $____________, representing the full
      purchase price for such shares at the Exercise Price provided for in such
      Warrant, together with any applicable taxes payable by the undersigned pursuant
      to the Warrant. Such payment takes the form of (check applicable box or
      boxes):

    

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

            

    

    

    
      	
               ̈

            	
              The
                cancellation of such portion of the attached Warrant as is exercisable
                for
                a total of _____ Warrant Shares (using a Fair Market Value of $_____
                per
                share for purposes of this
                calculation).

            

    

    

    (please
      check if applicable):

    

    
      	
               ̈

            	
              The
                undersigned acknowledges that First Montauk Securities Corp. participated
                in and solicited the exercise of this warrant and is entitled to
                a warrant
                solicitation fee of 2.5% of the aggregate exercise price of this
                Warrant.

            

    

    

    The
      undersigned requests that certificates for the shares of Common Stock issuable
      upon this exercise be issued in the name of:

    

    _________________________________

    (Name)

     

    _________________________________

     

    _________________________________

    (Address)

     

    _________________________________

    (SSN
      or
      Tax ID No.)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
      FORM

     

    

     

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

    

    Name:_______________________________________________

    (Please
      typewrite or print in block letters)

     

    Address:_____________________________________________

     

    Social
      Security or Employer Identification No.:__________________________

     

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

     

    Dated:
      _________________, 200_.

     

    

     

    Signature:________________________________

     

    

    Signature
      Guaranteed:

    

    

    ___________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]