Document:

EXHIBIT
4.1

 

FORM
OF WARRANT

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
WITHOUT EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (II) AN OPINION OF COUNSEL, IN A FORM
REASONABLY ACCEPTABLE TO THE COMPANY, THAT SUCH TRANSFER MAY BE MADE WITHOUT
REGISTRATION OR QUALIFICATION UNDER SAID ACT OR (III) SUCH TRANSFER BEING MADE
PURSUANT TO RULE 144 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.

 

SMARTVIDEO
TECHNOLOGIES, INC.

 

WARRANT

 

Warrant
No.: ________

 

Number of
Shares: _________ 

 

Date of
Issuance: March ___, 2005 ("Issuance
Date")

 

SmartVideo
Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, the receipt and sufficiency of which
are hereby acknowledged, [NAME OF
HOLDER], 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, 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), [NUMBER OF
SHARES (____)] 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 (including all Warrants
issued in exchange, transfer or replacement hereof, the "Warrants") is one
of the Warrants (the "SPA
Warrants") issued
pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of
March __, 2005 (the "Subscription
Date"), among
the Company and the investors (the "Buyers")
referred to therein (the "Securities
Purchase Agreement").

 

1.     EXERCISE
OF WARRANT.

 

(i)  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)). Upon exercise in full of this Warrant, the Holder
shall deliver the original Warrant in order to effect an exercise hereunder, or,
in the alternative, an affidavit of lost instrument in form reasonably
satisfactory to the Company. 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 by facsimile 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 "Share
Delivery Date"), the
Company shall (X) provided that the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast
Automated Securities Transfer Program and if the Holder is entitled to receive
shares not bearing a legend pursuant to Section 2(g) of the Securities Purchase
Agreement, 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, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, issue and
dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company's share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise
Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or
notification to the Company of a 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 7(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. 

 

(ii)  Exercise
Price. For
purposes of this Warrant, "Exercise
Price" means
$3.50, subject to adjustment as provided herein.

 

(iii)  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 (3) 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, then, in addition to all other remedies available to
the Holder, the Company shall pay in cash to the Holder on each day after such
third Business
Day that the issuance of such shares of Common Stock is not timely effected an
amount equal to 1.5% of the product of (A) the sum of the number of shares of
Common Stock not issued to the Holder on a timely basis and to which the Holder
is entitled and (B) the Closing Sale Price of the shares of Common Stock on the
trading day immediately preceding the last possible date which the Company could
have issued such shares of Common Stock to the Holder without violating Section
1(a). In addition to the foregoing, if within three (3) trading days after the
Company's receipt of the facsimile copy of a Exercise Notice the Company shall
fail to issue and transmit for delivery a certificate to the Holder and register
such shares of Common Stock on the Company's share register or credit the
Holder's balance account with DTC for the number of shares of Common Stock to
which the Holder is entitled upon such holder's exercise hereunder, and if on or
after such Trading 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 (a "Buy-In"), 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.

 

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(iv)  Cashless
Exercise.
 Notwithstanding
anything contained herein to the contrary, if a Registration Statement (as
defined in the Registration Rights Agreement) covering the Warrant Shares that
are the subject of the Exercise Notice (the "Unavailable
Warrant Shares") is not
available for the resale of such Unavailable Warrant Shares, 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, elect instead to
receive upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless
Exercise"):

 

Net
Number = (A x
B) - (A x C)

B

 

For
purposes of the foregoing formula:

 

A= the
total number of 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.

 

(v)  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.

 

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(vi)  Limitations
on Exercises. The
Company shall not effect the exercise of this Warrant, and the Holder shall not
have the right to exercise this Warrant, to the extent that after giving effect
to such exercise, such Person (together with such Person's affiliates) would
beneficially own in excess of 4.99% of the shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by
such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude shares of Common
Stock which would be issuable upon (i) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by such Person and its affiliates and
(ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by such Person and its
affiliates (including, without limitation, any convertible notes or convertible
preferred stock or warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in the
preceding sentence, for purposes of this paragraph, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company's most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding.
For any reason at any time, upon the written or oral request of the Holder, the
Company shall within one Business Day confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including the
SPA Warrants, by the Holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported.

 

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 Common Stock. If and
whenever on or after the Subscription 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 Excluded Securities)
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:

 

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(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 or number
of Warrant Shares shall be made upon the actual issuance of such Common Stock or
of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion, exercise or exchange of
such Convertible Securities. 

 

(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 and upon conversion, exercise or exchange of
such Convertible Security. No further adjustment of the Exercise Price or number
of Warrant Shares shall be made upon the actual issuance of such 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 or number of Warrant Shares 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 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 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.

 

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(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 $0.0001. If any Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed
to be the net amount received by the Company therefor. If any 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
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 therefor 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 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 Board of Directors of the
Company and the holders of SPA Warrants representing at least a majority of the
shares of Common Stock obtainable upon exercise of the SPA Warrants then
outstanding. If such parties are unable to reach agreement within 10 days after
the occurrence of an event requiring valuation (the "Valuation
Event"), the
fair value of such consideration will be determined within fifteen Business
Days after the tenth day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the holders of SPA
Warrants representing at least a majority of the shares of Common Stock
obtainable upon exercise of the SPA Warrants then outstanding. 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.

 

(v)  Record
Date. If the
Company takes a record of the holders of Common Stock for the purpose of
entitling them (A) to receive a dividend or other distribution payable in
Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase 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 Common Stock. If the
Company at any time after the date of issuance of this Warrant 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 after the date of issuance
of this Warrant 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 and the number of Warrant Shares so
as to protect the rights of the holder of this Warrant; 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.

 

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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 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 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 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
Common Stock on the trading day immediately preceding such record date minus the
value of the Distribution (as determined in good faith 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 Common Stock on the trading day
immediately preceding such record date; and

 

(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 common stock ("Other
Common Stock") of a
company whose common stock is traded on a national securities exchange or a
national automated quotation system, then the holder of this Warrant may elect
to receive a warrant to purchase Other Common Stock in lieu of an increase in
the number of Warrant Shares, 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 Common Stock that would have been payable to the holder of this
Warrant 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).

 

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4.    FUNDAMENTAL
TRANSACTIONS.
The
Company shall not enter into or be party to a Fundamental Transaction unless
the
Successor Entity assumes in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance with the
provisions of this Section (4) pursuant
to written agreements in form and substance satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction,
including agreements to deliver to each holder of Warrants in exchange for such
Warrants a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, including, without
limitation, an adjusted exercise price equal to the value for the shares of
Common Stock reflected by the terms of such Fundamental Transaction, and
exercisable for a corresponding number of shares of capital stock equivalent to
the shares of Common Stock acquirable and receivable upon exercise of this
Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and satisfactory to the Required Holders
and (b) (i)
the
Successor Entity (including its Parent Entity) is a publicly traded corporation
whose common stock is quoted on or listed for trading on an Eligible
Market.
Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the "Company" shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein. Upon consummation of the Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon
exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other
securities, cash, assets or other property) purchasable
upon the exercise of the Warrant
prior to
such Fundamental Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had this Warrant been
exercised immediately prior to such Fundamental Transaction, as adjusted in
accordance with the provisions of this Warrant.
In
addition to and not in substitution for any other rights hereunder, prior to the
consummation of any Fundamental Transaction pursuant to which holders of shares
of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a "Corporate
Event"), the
Company shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this Warrant
at any
time after the consummation of the
Fundamental Transaction but prior
to the Expiration Date, in lieu
of the shares of the Common Stock (or other
securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental
Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been
entitled to receive upon the happening of such Fundamental Transaction had the
Warrant been exercised immediately prior to such Fundamental Transaction.
Provision
made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Required Holders. The provisions of this Section
shall apply similarly and equally to successive Fundamental Transactions and
Corporate Events. Provision made pursuant to the preceding sentence shall be in
a form and substance satisfactory to the Required Holders. The provisions of
this Section shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events and shall be applied without regard to any
limitations on the exercise of this Warrant. Notwithstanding the foregoing,
if the
Successor Entity is not a publicly traded corporation whose common stock is
quoted on or listed for trading on an Eligible Market, such Successor Entity
agrees to pay the Holder, at the closing of the transactions contemplated by
such Fundamental Transaction, for the outstanding Warrants immediately prior to
the effective time of such Fundamental Transaction and in consideration of the
cancellation of each such outstanding Warrant, an amount in cash determined
according to the Black-Scholes Option Pricing Method.

 

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5.    NONCIRCUMVENTION. The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms 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 of this Warrant. Without limiting the
generality of the foregoing, the Company (i) will not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, (ii) will take all such actions as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (iii) will, so long as any of the SPA
Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the exercise of the SPA Warrants, 100% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any limitations
on exercise).

 

6.    HOLDER
NOT DEEMED A STOCKHOLDER. Except
as otherwise specifically provided herein, no holder, solely in such Person's
capacity as a holder, of this Warrant shall be entitled to vote or receive
dividends or be deemed the holder of shares of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the holder
hereof, solely in such Person's capacity as a 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 this Warrant 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 such holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 6, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

 

7.    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 of this Warrant a new Warrant (in accordance with Section 7(d)),
registered as the holder of this Warrant may request, representing the right to
purchase the number of Warrant Shares being transferred by the Holder and, if
less then the total number of Warrant Shares then underlying this Warrant is
being transferred, a new Warrant (in accordance with Section 7(d)) to the holder
of this Warrant representing the right to purchase the number of Warrant Shares
not being transferred.

 

(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 of
this Warrant 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 7(d))
representing the right to purchase the Warrant Shares then underlying this
Warrant.

 

(c)    Warrant
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 7(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 of this Warrant at the time of such surrender;
provided, however, that no Warrants for fractional shares of Common Stock shall
be given.

 

-9-

(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 7(a) or Section 7(c), the Warrant
Shares designated by the holder of this Warrant 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 Issuance Date, and (iv) shall have the
same rights and conditions as this Warrant.

 

8.    NO
SHORT TRANSACTIONS. During
the term of the Warrant, the Holder, and any Person who shall have a beneficial
ownership interest (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended), or a direct or indirect pecuniary interest
(within the meaning of Rule 16-a-1(a)(2) under the Securities Exchange Act of
1934, as amended) in the Warrant Shares, shall not, directly or indirectly, make
any short sale or maintain any short position, establish or maintain a “put
equivalent position” (within the meaning of Rule 16-a-1(h) under the Securities
Exchange Act of 1934, as amended), enter into any swap, derivative transaction
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock (whether any such
transaction is to be settled by delivery of Common Stock, other securities, cash
or other consideration) or any securities convertible into, exercisable for or
exchangeable for Common Stock of the Company.

 

9.    CALL
OPTION. At any
time that the Closing Sale Price of the Common Stock shall equal or exceed 200%
of the then existing Exercise Price of the Warrants for a period of twenty
consecutive trading days, and provided that a Registration Statement (as defined
in the Registration Rights Agreement) covering the Warrant is available for the
resale of the related Warrant Shares during such twenty trading day period, the
Company shall have the right, upon twenty days written notice to the Holders, to
call the Warrant for cancellation in whole. Unless on or prior to the expiration
of such twenty day period, a Holder exercises its right to purchase any of the
Warrant Shares covered by the Warrant pursuant to the terms of this Warrant,
such Holder shall forfeit its right to do so, and the Warrants not so exercised
shall automatically expire without any consideration to the Holder or any
further action by the Holder or the Company and the Warrants shall be canceled
on the books and records of the Company.

 

10.   NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise
provided herein, such notice shall be given in accordance with Section 9(f) of
the Securities Purchase Agreement. The Company shall provide the holder of this
Warrant with prompt written notice of all actions taken pursuant to this
Warrant, including in reasonable detail a description of such action and the
reason therefore. Without limiting the generality of the foregoing, the Company
will give written notice to the holder of this Warrant (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 Common Stock, (B) with
respect to any grants, issues or sales of any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property to holders of
Common Stock or (C) for determining rights to vote with respect to any Organic
Change, 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 such holder.

 

-10-

11.    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
written consent of the holders of SPA Warrants representing at least a majority
of the shares of Common Stock obtainable upon exercise of the SPA Warrants then
outstanding; provided that no such action may increase the exercise price of any
SPA Warrant or decrease the number of shares or class of stock obtainable upon
exercise of any SPA Warrant without the written consent of the holder of this
Warrant. No such amendment shall be effective to the extent that it applies to
less than all of the holders of the SPA Warrants then outstanding.

 

12.    GOVERNING
LAW. This
Warrant shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this
Warrant shall be governed by, the internal laws of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Delaware.

 

13.    CONSTRUCTION;
HEADINGS. This
Warrant shall be deemed to be jointly drafted by the Company and all the Buyers
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.

 

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 via facsimile within two
Business Days of receipt of the Exercise Notice giving rise to such dispute, as
the case may be, to the holder of this Warrant. If the holder of this Warrant
and the Company are unable to agree upon such determination or calculation of
the Exercise Price or the Warrant Shares within three Business Days of such
disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall, within two Business Days submit via facsimile (a) the
disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the holder of this
Warrant or (b) the disputed arithmetic calculation of the Warrant Shares to the
Company's independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten Business Days from the time 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.

 

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, the Securities Purchase Agreement
and the Registration Rights Agreement, 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 of this Warrant to pursue 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 of this Warrant 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.

 

-11-

16.    TRANSFER. This
Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company, except as may otherwise be required by Section 2(f) of
the Securities Purchase Agreement.

 

17.    CERTAIN
DEFINITIONS. For
purposes of this Warrant, the following terms shall have the following
meanings:

 

(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.

 

(b)    "Bloomberg" means
Bloomberg Financial Markets.

 

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

 

(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 pursuant to
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.

 

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

 

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

 

-12-

(h)    "Eligible
Market" means
the Principal Market, The New York Stock Exchange, Inc., the American Stock
Exchange, the Nasdaq National Market or The Nasdaq SmallCap Market.

 

(i)    "Excluded
Securities" means
any Common Stock issued or issuable: (i) in connection with any Approved Stock
Plan; (ii) upon exercise of the Warrants; (iii) pursuant to a bona fide firm
commitment underwritten public offering with a nationally recognized underwriter
which generates gross proceeds to the Company in excess of $25,000,000 (other
than an "at-the-market offering" as defined in Rule 415(a)(4) under the 1933 Act
and "equity lines"); (iv) upon conversion of any Options or Convertible
Securities which are outstanding on the day immediately preceding the
Subscription Date, provided that the terms of such Options or Convertible
Securities are not amended, modified or changed on or after the Subscription
Date; (v) in connection with acquisitions or strategic investments (including,
without limitation, any licensing or distribution arrangements); or (vi)
securities issued to commercial banks or financial institutions, the primary
business of which is not making equity-related loans) or lessors in connection
with commercial credit arrangements, equipment financings or similar
transactions, where the principal consideration for such transaction is not the
issuance of such securities.

 

(j)    "Expiration
Date" means
the sixty month anniversary of the Issuance Date.

 

(k)    "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.

 

(l)    "Options" means
any rights, warrants or options to subscribe for or purchase Common Stock or
Convertible Securities.

 

(m)   "Parent
Entity" of a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.

 

(n)   "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.

 

-13-

(o)   "Principal
Market" means
the OTC Bulletin Board.

 

(p)   "Registration
Rights Agreement" means
that certain registration rights agreement dated the Subscription Date by and
among the Company and the Buyers.

 

(q)   "Required
Holders" means
the holders of the SPA Warrants representing at least a majority of shares of
Common Stock underlying the SPA Warrants then outstanding.

 

(r)    "Successor
Entity" means
the Person (or, if so elected by the Required Holders, the Parent Entity) formed
by, resulting from or surviving any Fundamental Transaction or the Person (or,
if so elected by the Required Holders, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.

 

 

[Signature
Page Follows]

 

 

-14-

 

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

 

 

	 	 	 
	 	SMARTVIDEO
      TECHNOLOGIES, INC.
	 
 	 
 	 
 
		By:  	/s/ 
	 	
      

      Name: Richard E. Bennett, Jr.
	 	Title:  President
      & CEO

 

EXHIBIT
A

 

EXERCISE
NOTICE

 

TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

 

SMARTVIDEO
TECHNOLOGIES, INC.

 

To:   SmartVideo
Technologies, Inc.

 

The
undersigned is the holder of Warrant No. ______ (the "Warrant") issued
by SmartVideo Technologies, Inc., a Delaware corporation (the "Company").
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

 

1.    The
Warrant is currently exercisable to purchase a total of _________ Warrant
Shares.

 

2.    The
undersigned holder hereby exercises its right to purchase ____________ Warrant
Shares pursuant to the Warrant.

 

3.    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.

 

4.    Pursuant
to this exercise, the Company shall deliver to the holder __________ Warrant
Shares in accordance with the terms of the Warrant.

 

5.    Following
this exercise, the Warrant shall be exercisable to purchase a total of
________________ Warrant Shares.

 

Please
issue the Warrant Shares in the following name and to the following
address:

 

	 	Issue
      to:	____________________________________________________________________________________
	 	 	____________________________________________________________________________________ 
	 	 	____________________________________________________________________________________

 

	 	Account
      Number: 	_______________________________________________________________________________
	 	
       (if electronic book entry transfer)

 

  

	 	DTC
      Participant Number: 	____________________________________________________________________
	 	
      (if electronic book entry
transfer)

 

Date:
_______________ , ______

 

__________________________________

         
Name of Registered Holder

 

By:      _______________________________     

Name:

Title:

 

ACKNOWLEDGMENT

 

 

The
Company hereby acknowledges this Exercise Notice and hereby directs Continental
Stock Transfer and Trust Company to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated March
__, 2005 from the Company and acknowledged and agreed to by Continental Stock
Transfer and Trust Company.

 

	 	 	 
	 	SMARTVIDEO
      TECHNOLOGIES,
      INC.
	 
 	 
 	 
 
		By:  	/s/ 
	 	
      

      Name:
      Richard E. Bennett, Jr.
	 	Title:  President
      & CEO

FORM
OF ASSIGNMENT

 

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

 

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

 

	 	 
	 	 
	
      Dated:
      _________________,
      _____

       
	
      Registered
      Holder: 

       

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

       

	 	 
	 	 
	 	
      Address
      of Transferee

       

	 	 
	 	 
	 	 
	 	 
	 	 
	
      In
      the presence of:EXHIBIT
4.2

NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS
WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED,
TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS
EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

 

CALLABLE
WARRANT

 

 

To
Purchase [_________] Shares of the Common Stock 

 

of

 

SMARTVIDEO
TECHNOLOGIES, INC.

 

THIS
CERTIFIES that, for value received, ___________ (the "Holder"), is entitled,
upon the terms and subject to the conditions hereinafter set forth, at any time
on or after the date hereof (the "Exercise Date") and on or prior to the close
of business on the date which is five years after the date hereof (the
"Termination Date"), to subscribe for and purchase from SmartVideo Technologies,
Inc. (the "Company"), up to [_________] (______________________) shares (the
"Warrant Shares") of common stock, par value $.001 per share (the "Common
Stock") of the Company. The purchase price of one share of Common Stock (the
"Exercise Price") under this Warrant shall be $3.50. The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. 

 

1.     Title
to Warrant. Prior
to the Termination Date and subject to compliance with applicable laws and the
terms of this Warrant, this Warrant and all rights hereunder are transferable,
in whole or in part, at the office or agency of the Company by the holder hereof
in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.

 

2.     Authorization
of Shares. The
Company covenants that all shares of Common Stock which may be issued upon the
exercise of rights represented by this Warrant will, upon exercise of the rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

 

3.     Exercise
of Warrant. Except
as provided in Section 4 herein, exercise of the purchase rights represented by
this Warrant may be made at any time or times on or after the Exercise Date and
before the close of business on the Cancellation Date (as defined in Section 4
herein) or the Termination Date, whichever comes first, by the surrender of this
Warrant and the Notice of Exercise Form annexed hereto duly executed, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered holder hereof at the address of
such holder appearing on the books of the Company) and upon payment of the
Exercise Price of the shares thereby purchased by wire transfer or cashier’s
check drawn on a United States bank, the holder shall be entitled to receive a
certificate for the number of shares of Common Stock so purchased. Certificates
for shares purchased hereunder shall be delivered to the holder hereof within
twenty (20) business days after the date on which this Warrant shall have been
exercised as aforesaid. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and the
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Holder faxes a Notice of Exercise to the Company, provided that such fax
notice is followed by delivery of the original notice and payment to the Company
of the Exercise Price and all taxes required to be paid by the Holder, if any,
pursuant to Section 6 prior to the issuance of such shares, have been paid
within three (3) business days of such fax notice. If this Warrant shall have
been exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to the Holder a
new Warrant evidencing the rights of Holder to purchase the unpurchased shares
of Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant. 

 

-1-

4.    Call
of Warrants.

 

(a)    Procedures.
Commencing at the close of business on July 1, 2005 the Company may, subject to
the conditions set forth herein, call for the exercise of this Warrant provided
that the average closing price of the Common Stock for the twenty (20)
consecutive trading days ending three (3) days prior to the date of the Call
Notice is at least $7.00, subject to adjustment for stock dividends, stock
splits and other anti-dilution provisions as provided for in Section 12 of this
Warrant. For purposes of this Section 4, “closing price” at any date shall be
deemed to be: (i) the last sale price regular way as reported on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or (ii) if the Common Stock is not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked prices
regular way for the Common Stock as reported by the Nasdaq National Market or
Nasdaq SmallCap Market of the Nasdaq Stock Market, Inc. (“Nasdaq”) or (iii) if
the Common Stock is not listed or admitted for trading on any national
securities exchange, and is not reported by Nasdaq, the average of the closing
bid and asked prices, as reported on the OTC Bulletin Board or if no such
quotation is available, then the closing bid and asked prices in the
over-the-counter market as furnished by the National Quotation Bureau, Inc., or
if no such quotation is available, the fair market value of the Common Stock as
determined in good faith by the Board of Directors of the Company. The Call
Notice shall be deemed effective upon mailing and the time of mailing is the
“Effective Date of the Notice.” The Call Notice shall state the exercise period
and cancellation date not less than twenty (20) days from the Effective Date of
the Notice (the “Cancellation Date”). In the event the number of shares of
Common Stock issuable upon exercise of this Warrant being called are adjusted
pursuant to Section 12 hereof, then upon each such adjustment the Exercise Price
will be adjusted by multiplying the Exercise Price in effect immediately prior
to such adjustment by a fraction, the numerator of which is the number of shares
of Common Stock issuable upon exercise of this Warrant being exercised
immediately prior to such adjustment and the denominator of which is the number
of shares of Common Stock issuable upon exercise of this Warrant being exercised
immediately after such adjustment. The Holder may exercise this Warrant between
the Effective Date of the Notice and the Cancellation Date, such exercise being
effective if done in accordance with Section 3 hereof, and if this Warrant, with
the form of election to purchase duly executed, and the Exercise Price are
actually received by the Company at its office located at 1650 Oakbrook Drive,
Suite 405, Norcross, GA 30093, no later than 5:00 PM Atlanta, Georgia time on
the Cancellation Date. 

 

-2-

(b)    Return
of Warrant. If
Holder does not wish to exercise this Warrant, the Holder should mail this
Warrant to the Company at its office located at 1650 Oakbrook Drive, Suite 405,
Norcross, GA 30093 after receiving the Call Notice required by this Section. If
the Call Notice shall have been so mailed, then, on and after such Cancellation
Date, notwithstanding that this Warrant subject to Call shall not have been
surrendered for redemption, the obligation evidenced by this Warrant not so
surrendered or effectively exercised shall be deemed no longer outstanding, and
all rights with respect hereto shall forthwith cease and terminate.

 

5.    Cashless
Exercise.
Notwithstanding
anything contained herein to the contrary, if a Registration Statement (as
defined in the Registration Rights Agreement) covering the Warrant Shares that
are the subject of the Exercise Notice (the "Unavailable Warrant Shares") is not
available for the resale of such Unavailable Warrant Shares, 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, elect instead to
receive upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless Exercise"):

 

Net
Number = (A x
B) - (A x C)

                      
B

 

For
purposes of the foregoing formula:

 

A= the
total number of 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.

 

5.     No
Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to the
Exercise Price.

 

6.    Charges,
Taxes and Expenses.
Issuance of certificates for shares of Common Stock upon the exercise of this
Warrant shall be made without charge to the holder hereof for any issue or
Federal or State transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall be paid by
the Company, and such certificates shall be issued in the name of the holder of
this Warrant or in such name or names as may be directed by the holder of this
Warrant; provided, however, that in the event certificates for shares of Common
Stock are to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the holder hereof; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

 

-3-

 

7.     Closing
of Books. The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant.

 

 

8.     Transfer,
Division and Combination.

 

(a)   the
Holder (and its transferees and assigns), by acceptance of this Warrant,
covenants and agrees that it is acquiring the Warrants evidenced hereby, and,
upon exercise hereof, the Warrant Shares, for its own account as an investment
and not with a view to the resale or distribution thereof. The Warrant Shares
have not been registered under the Securities Act or any state securities laws
and no transfer of any Warrant Shares shall be permitted unless the Company has
received notice of such transfer, at the address of its principal office set
forth in the Exchange Agreement, in the form of assignment attached hereto,
accompanied by an opinion of counsel reasonably satisfactory to the Company that
an exemption from registration of such Warrants or Warrant Shares under the
Securities Act is available for such transfer, except that no such opinion shall
be required after the registration for resale by the Holder of the Warrant
Shares, as contemplated by the Registration Rights Agreement. Upon any exercise
of the Warrants, certificates representing the Warrant Shares shall bear a
restrictive legend substantially identical to that set forth on the face of this
Warrant certificate. Any purported transfer of any Warrant or Warrant Shares not
in compliance with the provisions of this section shall be null and
void.

 

(b)   This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with Section
8(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.

 

(c)   The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 8.

 

(d)   The
Company agrees to maintain, at its aforesaid office or the office of its
transfer or registration agent, books for the registration and the registration
of transfer of the Warrants.

 

9.     No
Rights as Stockholder until Exercise. This
Warrant does not entitle the holder hereof to any voting rights or other rights
as a shareholder of the Company prior to the exercise hereof. Upon the surrender
of this Warrant and the payment of the aggregate Exercise Price, the Warrant
Shares so purchased shall be and be deemed to be issued to such holder as the
record owner of such shares as of the close of business on the later of the date
of such surrender or payment. 

 

10.    Loss,
Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
certificate or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which shall not exceed that customarily charged by the Company’s transfer
agent), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.

 

-4-

11.    Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

 

12.    Adjustments
of Exercise Price and Number of Warrant Shares.

 

(a)   Stock
Splits, etc. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares of Common Stock, (iii) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issue any shares of its capital stock in a reclassification of the
Common Stock, then the number of Warrant Shares purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which he would have been entitled to receive
had such Warrant been exercised in advance thereof. Upon each such adjustment of
the kind and number of Warrant Shares or other securities of the Company which
are purchasable hereunder, the holder of this Warrant shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

 

(b)   Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case
the Company shall reorganize its capital, reclassify its capital stock (other
than a change in nominal value to no nominal value, or from no nominal value to
nominal value, or as a result of a subdivision, combination or other event
described in paragraph (a) of this Section), consolidate or merge with or into
another corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other Property"), are to be received by or distributed to the holders of
Common Stock of the Company, then Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of common stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.
For purposes of this Section 12, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

 

-5-

 

13.   Voluntary
Adjustment by the Company. The
Company may at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

 

14.   Notice
of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall promptly mail by registered or
certified mail, return receipt requested, to the holder of this Warrant notice
of such adjustment or adjustments setting forth the number of Warrant Shares
(and other securities or property) purchasable upon the exercise of this Warrant
and the Exercise Price of such Warrant Shares (and other securities or property)
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made. Such notice, in the absence of manifest error, shall be conclusive
evidence of the correctness of such adjustment.

 

15.   Notice
of Corporate Action. If at
any time:

 

(a)   the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or

 

(b)   there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation with
or merger of the Company into, or any sale, transfer or other disposition of all
or substantially all the property, assets or business of the Company to, another
corporation or,

 

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

 

then, in
any one or more of such cases, the Company shall give to Holder (i) at least 10
days’ prior written notice of any record date for such dividend, distribution or
right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, at least 10 days’ prior written notice
of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, the date on
which the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed to
Holder at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

 

-6-

 

16.   Authorized
Shares. The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock may be listed.

 

The
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder against impairment.
Without limiting the generality of the foregoing, the Company will (a) not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action 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 (c) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant.

 

Before
taking any action which would result in an adjustment in the number of shares of
Common Stock for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

 

-7-

 

17.   Miscellaneous.

 

(a)   Jurisdiction. This
Warrant shall be binding upon any successors or assigns of the Company. This
Warrant shall constitute a contract under the laws of Delaware without regard to
its conflict of law, principles or rules, and be subject to arbitration pursuant
to the terms set forth in the Exchange Agreement.

 

(b)   Restrictions. The
holder hereof acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale imposed by
state and federal securities laws.

 

(c)   Nonwaiver
and Expenses. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of the Holder shall operate as a waiver of such right or otherwise
prejudice Holder’s rights, powers or remedies, except that all rights hereunder
terminate on the Termination Date. If the Company fails to comply with any
provision of this Warrant, the Company shall pay to the Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not limited
to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by the Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies
hereunder.

 

(d)   Notices. Any
notice, request or other document required or permitted to be given or delivered
to the holder hereof by the Company shall be delivered in accordance with the
notice provisions of the Exchange Agreement.

 

(e)   Limitation
of Liability. 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 the 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.

 

(f)    Remedies. The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.

 

(g)   Successors
and Assigns. Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of the
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Shares.

 

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

 

-8-

 

(i)    Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

 

 

(j)   Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

 

 

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

 

	 	Dated: December 31,
    2004
	 	 	 
	 	SMARTVIDEO TECHNOLOGIES,
      INC.
	 
 	 
 	 
 
		By:  	/s/ 
	 	
      

      Name:
      Richard E. Bennett, Jr.
	
       [Corporate
      Seal
	Title: President & CEO
    

 

-9-

 

NOTICE
OF EXERCISE

 

To:    SmartVideo
Technologies, Inc.

 

1.     The
undersigned hereby elects to purchase ________ shares of Common Stock (the
"Common Stock"), of SmartVideo Technologies, Inc. pursuant
to the terms of the attached Warrant, and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if
any.

 

2.     Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 	 	 
	 	Dated: _____________________,
      _______	 	 
	 	 	 Holder's Signature:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	Holder's Name:	 	 
	 	 	 	 	 
	 	 	Holder's Address:	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	Social
      Security, Employer or Other Tax Identification
Number
      of Holder:	 

 

 

NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in an fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.

 

ASSIGNMENT
FORM

 

 

(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)

 

 

	 	FOR VALUE RECEIVED, the foregoing
      Warrant and all rights evidenced thereby are hereby
	 	 	 	 	 
	 	assigned
      to	 

 

	 	whose
      address is	 
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	Dated: _____________________,
      _______

 

	 	Holder's
      Signature:		 
	 	 	 	 	 
	 	Holder's Name:	 	 	 
	 	 	 	 	 
	 	Holder's Address:	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

	 	
      Social
      Security, Employer or
Other
      Tax Identification Number of Holder: 

	 	 	 	 	 

 

	 	Signature Guaranteed: 	 	 

  

 

NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in an fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.

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