NON-EXCLUSIVE SPECIAL ADVISORY SERVICES AGREEMENT

NON-EXCLUSIVE SPECIAL ADVISORY SERVICES AGREEMENT

This Special Advisory Services Agreement dated as of October 30, 2008 is entered into by and between Single Touch Systems Inc., a Delaware corporation (the “Company”) with its headquarters in San Diego, California and Peltz Capital Management, LLC, a Delaware limited liability company (the “Special Advisor”), with offices in New York and California.

RECITALS

WHEREAS, the Special Advisor has experience in corporate, financial and marketing matters; and

WHEREAS, the Special Advisor desires to provide certain corporate and business consulting services to the Company and the Company desires to retain the Special Advisor to provide such services to the Company.

AGREEMENT

NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1. Retention . The Company hereby retains the Special Advisor on a non-exclusive basis, and the Special Advisor agrees to be retained by the Company and to perform the Services (defined below) to the Company on a non-exclusive basis on the terms and conditions set forth herein. The parties agree that the Special Advisor shall be retained by the Company as an independent contractor and not as an employee of the Company.

2. Term . The term of this Agreement shall commence on the date hereof and end on September 30, 2009; provided, that this Agreement shall renew for up to two additional one-year terms commencing on September 30 ^th of each year unless on or prior to September 20 ^th of such year either party delivers a notice of non-renewal to the other (in which case this Agreement shall terminate on the date set forth in the notice), unless sooner terminated pursuant to the terms of this Agreement.

3. Duties of Special Advisor . The Special Advisor’s duties are limited solely to providing the Services to the Company (but not any affiliate thereof). The Special Advisor has no authority to make any decisions on behalf of the Company, and the Special Advisor is not acting as an agent or fiduciary of the Company, the security holders or creditors of the Company, or any other person in connection with this Agreement.

During the term of this Agreement, the Special Advisor shall use commercially reasonable efforts to perform the following (the “Services”):

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      All communications between the Company and the Special Advisor shall be directed, in the case of the Company, to Anthony Macaluso or the Board of Directors, and, in the case of the Special Advisor, shall be directed to Andy Peltz or Harlan Peltz by Anthony Macaluso or the Board of Directors.

4. Compensation . No compensation to be granted to the Special Advisor under this Agreement shall be in any way contingent upon the completion of any transaction by the Company or any of its affiliates, including but not limited to any offering of securities, any merger or sale, or any agreement or business relationship entered into with any third party. In consideration for making itself available and using commercially reasonable efforts to perform the Services pursuant to this Agreement, the Special Advisor agrees to accept and the Company agrees to grant to the Special Advisor compensation in the form of a warrant for the purchase of Five Million Nine Hundred Fifty Two Thousand Three Hundred Sixty Two (5,952,362) shares of common stock of the Company at an exercise price of $2.10 per share, with such warrant to be issued pursuant to the warrant agreement attached hereto as Exhibit A (the “Warrant Agreement”). All warrants, once vested, shall not be subject to revocation, cancellation or termination for any reason whatsoever except to the extent expressly set forth in the warrant agreement for any such warrant. Any holder (a “Holder”) of warrants issued pursuant to the Warrant Agreement will have the benefit of certain registrations rights pursuant to a registration rights agreement in the form attached hereto Exhibit B (the “Registration Rights Agreement”). To the extent that the Company at any time grants registration rights to any person that are more favorable with respect to such person than the registration rights granted under the Registration Rights Agreement with respect to a Holder, the Registration Rights Agreement for each such Holder will be automatically amended to include such more favorable registration rights. Each Holder may exercise registration rights acquired pursuant to such an automatic amendment independent of the exercise of similar registration rights by the person who received the registration rights that gave rise to such amendment. By way of example, if a person is given demand registration rights, the Registration Rights Agreement of each Holder will be amended

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without further action by any party to include such demand registration rights, and such demand registration rights may be exercised by each Holder regardless of whether the demand registration rights have been exercised by the person or persons initially given such demand registration rights.

      5. Press Release . The Special Advisor recognizes that as a publicly traded company the Company is required to make a public press release announcing the engagement of the Special Advisor. The Special Advisor shall cooperate with the Company in drafting the press release and shall review and approve the content and timing of the press release, prior to its dissemination. Such approval shall not be unreasonably withheld.

      6. Confidentiality . The Special Advisor acknowledges that as a consequence of its relationship with the Company, it has been and will continue to be given access to ideas, trade secrets, technology information, contracts pending, business plans and other confidential and proprietary information of the Company which has not been made public (collectively, “Confidential Information”). The Special Advisor agrees to maintain in confidence and not to disclose directly or indirectly to any third parties for any purpose (other than the performance hereof) the Confidential Information for the term of this Agreement and a period of two years thereafter, unless previously approved by the Company in writing or otherwise found in the public domain. Upon termination of the Agreement, the Special Advisor shall immediately return all Confidential Information related to the Company under this Agreement.

7. Compliance with Law . The Special Advisor agrees that in performing this Agreement the Special Advisor and its agents and affiliates shall comply with (i) the applicable provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended, the applicable rules and regulations of the Securities and Exchange Commission thereunder, the statutes of any state security commissions and departments, the applicable rules and regulations of the Financial Industry Regulatory Authority and any other applicable federal or state laws, rules and regulations.

8. Indemnity . The Company agrees to provide indemnification, contribution and reimbursement to the Special Advisor and certain other parties in accordance with, and the Company further agrees to be bound by the other provisions set forth in, Schedule A attached hereto, which Schedule A is incorporated herein and made a part hereof.

9. Termination . Either party may terminate this Agreement upon 30 days written notice to the other party hereto. Notwithstanding a termination of this Agreement pursuant to the expiration of its term set forth in Section 2 or a termination pursuant to this Section 9, the provisions of Section 6, 8 and 10 of this Agreement shall survive the termination of this Agreement.

10. Applicable Law and Venue . The provisions of this Agreement will be construed in accordance with the laws of the State of New York. The parties agree that any action concerning this Agreement must be brought in a federal district court within

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the State of New York and they do hereby submit to the jurisdiction of such court regardless of their residence or where this Agreement may be executed.

      11. Counterparts . This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement.

      12. Due Authority . By signing below, the signatories warrant that they have the authority to execute this Agreement on behalf of the party indicated and all actions necessary to authorize the execution of this Agreement have been taken.

      13. Not Exclusive . This Agreement is not exclusive, and no business activities between third parties and the Company or the Special Advisor shall be prohibited, restricted or otherwise limited by this Agreement. For the avoidance of doubt, the parties hereby agree that the Special Advisor and the Company may engage in activities of the type contemplated hereunder with other persons, including but not limited to (i) the Company retaining persons other than the Special Advisor to provide corporate, financial, marketing or other types of strategic and/or business consulting and advising services, (ii) the Special Advisor providing corporate, financial, marketing or other types of business consulting and advising services to persons other than the Company, including competitors thereof and of the Company’s affiliates and (iii) the Special Advisor investing in, acquiring or otherwise taking positions in the debt or equity (and/or voting the equity) of the Company or its affiliates. The Special Advisor agrees to make itself reasonably available to the Company, and the Company hereby acknowledges and agrees that the Special Advisor may have significant obligations with regards to other persons during the term of this Agreement that may impact the Special Advisor’s ability to promptly perform the duties and services contemplated by this Agreement and any reasonable delay on account of such other obligations shall not be a breach of this Agreement or otherwise give rise to any liability of the Special Advisor.

[SIGNATURE PAGE FOLLOWS]

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If the foregoing sets forth your understanding of our Agreement, kindly indicate your compliance on the space provided below.

AGREED AND ACCEPTED BY:

Single Touch Systems Inc.

Peltz Capital Management, LLC

SCHEDULE A

This Schedule is attached to, and constitutes a material part of, that certain Special Advisory Services Agreement dated as of October [30], 2008 is entered into by and between Single Touch Systems Inc., a Delaware corporation (the “Company”) with its headquarters in San Diego, California and Peltz Capital Management, a Delaware corporation (the “Special Advisor”), with offices in New York and California. Unless otherwise noted, all capitalized terms used herein shall have the meanings set forth in the Agreement.

As a material part of the consideration for the agreement of the Special Advisor to furnish its services under the Agreement, the Company agrees (i) to indemnify and hold harmless the Special Advisor and its affiliates, and their respective past, present and future directors, officers, shareholders, partners, members, employees, agents, representatives, advisors, subcontractors and controlling persons (collectively, the “Indemnified Parties”), to the fullest extent lawful, from and against any and all losses, claims, damages or liabilities (or actions in respect thereof), joint or several, arising out of or relating to the Agreement, the Special Advisor’s engagement under the Agreement, any transaction or proposed transaction, or any actions taken or omitted to be taken by an Indemnified Party or the Company in connection with the Agreement, and (ii) to reimburse each Indemnified Party for all expenses (including without limitation the fees and expenses of counsel) as they are incurred in connection with investigating, preparing, pursuing, defending, settling or compromising any action, suit, dispute, inquiry, investigation or proceeding, pending or threatened, brought by or against any person (including without limitation any shareholder or derivative action), arising out of or relating to the Agreement, or such engagement, transaction or actions. However, the Company shall not be liable under the foregoing indemnity and reimbursement agreement for any loss, claim, damage or liability which is finally judicially determined by a court of competent jurisdiction to have resulted primarily from the willful misconduct or gross negligence of such Indemnified Party.

If for any reason the foregoing indemnification or reimbursement is unavailable to any Indemnified Party or insufficient fully to indemnify any such party or to hold it harmless in respect of any losses, claims, damages, liabilities or expenses referred to in such indemnification or reimbursement provisions, then the Company shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Special Advisor, on the other hand, in connection with the matters contemplated by the Agreement. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then the Company shall contribute to such amount paid or payable by any Indemnified Party in such proportion as is appropriate to reflect not only such relative benefits, but also the relative fault of the Company, on the one hand, and such Indemnified Party, on the other hand, in connection therewith, as well as any other relevant equitable considerations. Notwithstanding the foregoing, in no event shall the Indemnified Parties be required to contribute an aggregate amount in excess of the

amount of fees actually received by the Special Advisor from the Company pursuant to the Agreement. Relative benefits received by the Company, on the one hand, and the Special Advisor, on the other hand, shall be deemed to be in the same proportion as (i) the total value paid or received or contemplated to be paid or received by the Company, and its security holders, creditors, and other affiliates, as the case may be, pursuant to the transaction(s) (whether or not consummated) contemplated by the engagement hereunder, bears to (ii) the fees received by the Special Advisor under the Agreement. The Company shall not settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, suit, dispute, inquiry, investigation or proceeding in respect of which indemnification may be sought hereunder (whether or not an Indemnified Party is an actual or potential party thereto), unless such settlement, compromise, consent or termination contains a release of the Indemnified Parties reasonably satisfactory in form and substance to the Special Advisor.

      The Company further agrees that neither the Special Advisor nor any other Indemnified Party shall have any liability (whether direct or indirect and regardless of the legal theory advanced) to the Company or any person or entity asserting claims on behalf of or in right of the Company related to or arising out of the Agreement, Special Advisor engagement under the Agreement, any transaction or proposed transaction, or any actions taken or omitted to be taken by an Indemnified Party or the Company in connection with the Agreement, except for losses, claims, damages or liabilities incurred by the Company which are finally judicially determined by a court of competent jurisdiction to have resulted primarily from the willful misconduct or gross negligence of such Indemnified Party. The indemnity, reimbursement, and other obligations and agreements of the Company set forth herein (i) shall apply to any services provided by the Special Advisor in connection with this engagement prior to the date hereof and to any modifications of the Agreement, (ii) shall be in addition to any obligation or liability which the Company may otherwise have to any Indemnified Party, (iii) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Company or any Indemnified Party or any person controlling any of them, and (iv) shall survive the completion of the services described in, and any expiration or termination of the relationship established by, the Agreement.

See attached.

See attached.

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WARRANT

Warrant Certificate No. ___

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL IN A GENERALLY ACCEPTABLE FORM, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (3) SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER THE 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.

Date of Issuance: October [30], 2008

Void After: Expiration Date

      For good and valuable consideration of which the receipt and sufficiency are hereby acknowledged, Single Touch Systems Inc., a Delaware corporation (the “ Company ”), hereby issues to Peltz Capital Management, LLC, a Delaware limited liability company (“ Peltz ”), this warrant

(“ Warrant ”) to purchase shares (each such share as from time to time adjusted as hereinafter provided being a “ Warrant Share ” and all such shares being the “ Warrant Shares ”) of the Company’s Common Stock (as defined below), at the Exercise Price (as defined below), as adjusted from time to time as provided herein, at any time after the date hereof but not after October 31, 2013 (the “ Expiration Date ”), or if the Company directly or indirectly grants or issues any warrants or other derivative or convertible securities having a term of greater than five years, the Expiration Date shall be deemed extended such that the term of this Warrant shall equal the term of such other instrument, all subject to the following terms and conditions. The number of Warrant Shares issuable pursuant to this Warrant is (a) until the " Financing Trigger Date " (as defined in Section 3(d), below) the greater of (i) Five Million Nine Hundred Fifty Two Thousand Three Hundred Sixty Two (5,952,362) or (ii) the number of shares equal to 5.2% of the total outstanding Common Stock, calculated on a fully diluted basis (inclusive of any shares of Capital Stock (as defined below) issuable upon the exercise, exchange or conversion of any debt, Equity (as defined below) or other derivative securities or instruments or contracts, agreements, understandings or arrangements then existing or outstanding and inclusive of any adjustments arising from any anti-dilution provisions, resets or similar provisions of any documents outstanding from time to time or which may be executed in connection with any financing or transaction (including a financing or transaction described in the last paragraph of Section 3(d) of this warrant)) (such number of shares, as so calculated in this subclause (a)(ii), being referred to as the " Fully Diluted Number of Shares "), and (b) from and after the Financing Trigger Date, the greater of the amounts set forth in the immediate foregoing subclauses (a)(i) and (a)(ii), but in no event more than Eleven Million (11,000,000), as adjusted for any of

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the transactions described in Sections 3(a)-(c) and 3(f) of this Warrant. Except as specifically set forth in Section 3, no increase in the number of Warrant Shares shall result in an adjustment to the per share Exercise Price (as defined below). This Warrant is one of the warrants issued to Peltz by the Company and certain of its stockholders pursuant to that certain Non-Exclusive Special Advisory Services Agreement, dated as of even date herewith, between the Company and Peltz.

      As used in this Warrant, (i) “ Business Day ” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York, New York, are authorized or required by law or executive order to close; (ii) “ Common Stock ” means the common stock of the Company, par value $0.001 per share, including any securities issued or issuable with respect thereto or into which or for which such shares may be exchanged for, or converted into; (iii) “ Exercise Price ” means $2.10 per share of Common Stock, subject to adjustment as provided herein; (iv) “ Trading Day ” means any day on which the Common Stock is traded on the primary national or regional stock exchange on which the Common Stock is listed, or if not so listed, the OTC Bulletin Board, if quoted thereon, is open for the transaction of business; (v) “ Affiliate ” means any person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a person, as such terms are used and construed in Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”), (vi) the “ Holder ” means Peltz and its transferees, successors and/or assigns vii) " Capital Stock " means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a person or entity (other than a corporation) and any and all warrants or options to purchase any of the foregoing (including this warrant and any other warrants held by Peltz or its affiliates), (viii) " Equity " shall mean all shares, membership interests, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in a person or entity, whether voting or nonvoting, including common stock, preferred stock, or any other "equity security" (as such term is defined in Rule 3a11-1 promulgated under the Securities Exchange Act or 1934, and any instrument, understanding, contract or arrangement that is exercisable or exchangeable for or convertible into any of the foregoing) and (ix) “ Independent Directors ” means those directors on the Board of the Company that (A) have no material relationship with the Company or its Affiliates (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company or its Affiliates), (B) who are not employees of the Company or its Affiliates, (C) whose family members are not executive officers of the Company or its Affiliates, (D) who have not received more than $100,000 per year in compensation or benefits from the Company or its Affiliates, (E) who are not affiliated with or employed by a present or former auditor of or advisor to the Company or its Affiliates and have no immediately family members so affiliated or employed; and (F) who are not executive officers or employees of a company that makes payments to, or receives payments from, the Company or its Affiliates for property or services in an amount which, in any single fiscal year exceeds $100,000 and have no family members so employed or holding such office.

1. DURATION AND EXERCISE OF WARRANTS

      (a) Exercise Period . The Holder may exercise this Warrant in whole or in part on any Business Day on or before 5:00 P.M., Eastern Time, on the Expiration Date, at which time (i) if the Fair Market Value (as defined below) of the Common Stock on such date exceeds the Exercise Price, then this Warrant shall be deemed to have been automatically exercised on a “cashless exercise” basis without further action by any party or (ii) if such Fair Market Value is equal to or less than the Exercise Price, then this Warrant shall become void and of no value.

(b) Exercise Procedures .

(i) While this Warrant remains outstanding and exercisable in accordance with

Section 1(a), the Holder may in its sole discretion exercise this Warrant in whole or in part at any time

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and from time to time by either (1) delivery to the Company of a duly completed and executed copy of the notice of exercise attached as Exhibit A (the “ Notice of Exercise ”); and payment of the then-applicable Exercise Price per share multiplied by the number of Warrant Shares being purchased upon exercise of the Warrant (such amount, the “ Aggregate Exercise Price ”) made in the form of cash, or by certified check, wire transfer, bank draft or money order payable in lawful money of the United States of America or (2), exercising on a “cashless” or “net-issue” exercise basis (a “ Cashless Exercise ”) by delivering to the Company a Notice of Exercise indicating that the Holder has a elected a Cashless Exercise, pursuant to which the Holder shall surrender the right to receive upon exercise of this Warrant, a number of Warrant Shares having a value (as determined below) equal to the Aggregate Exercise Price, in which case, the number of Warrant Shares to be issued to the Holder upon such exercise shall be calculated using the following formula:

      The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Notice of Exercise 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.

      “ Fair Market Value ” shall mean (A) the closing sales price, as quoted on the primary national or regional stock exchange on which the Common Stock is listed, or, if not listed, the OTC Bulletin Board if quoted thereon, or (B) if the Common Stock is not publicly traded as set forth above or if the average daily trading volume of the Common Stock is less than 30,000 shares per Trading Day and the Holder so elects by providing notice to the Company of such election, as determined by (i) mutual agreement of the Company and the Holder or (ii) if the Holder and the Company are unable to mutually agree upon such determination within three (3) Business Days after the date of the Notice of Exercise, the fair market value as determined by an independent, reputable third-party appraiser, selected by the Holder, that regularly provides valuation services to publicly traded companies. The Company shall cause at its expense such appraiser to take all commercially reasonable efforts to perform the determination and notify the Company and the Holder of the results within ten (10) Business Days from the time the disputed determination is first submitted to such appraiser. Such appraiser’s determination shall be binding upon all parties absent demonstrable error.

      (ii) Upon the exercise of this Warrant in compliance with the provisions of this Section 1, the Company shall promptly issue and cause to be delivered to the Holder a certificate for the Warrant Shares to which the Holder is entitled upon such exercise. On or before the first Business Day following the date on which the Company has received each of the Notice of Exercise and the Aggregate Exercise Price (or, in the case of a Cashless Exercise, notice of a Cashless Exercise in accordance with Section 1(b)(i)) (the “ Exercise Delivery Documents ”), the Company shall transmit an acknowledgment of receipt of the Exercise Delivery Documents to the Holder and the Company’s transfer agent (the

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“ Transfer Agent ”). On the first (1 ^st ) Trading 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, 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 Notice of Exercise, 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 Delivery Documents, 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 Section 1(b) and the number of Warrant Shares represented by the Warrant submitted for exercise is greater than the actual number of Warrant Shares being acquired upon such an exercise, then the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise and at its own expense, issue a new warrant 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, and otherwise containing substantially identical terms and conditions as the Warrant.

      (iii) If the Company shall fail for any 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 such exercise of the Warrant, then, in addition to all other remedies available to the Holder, the Company shall pay a cash amount to the Holder equal to the product of (A) the difference between the Fair Market Value of the Common Stock as of the Share Delivery Date and the Fair Market Value of the Common Stock as of the day that such certificate is delivered (to the extent that such difference is a positive number), times (B) the number of shares of Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled, times (C) 1.5. In addition to the foregoing, if within three (3) Business Days after the Company’s receipt of the facsimile copy of the of a Notice of Exercise, the Company shall fail to issue and deliver a certificate to the Holder 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 such exercise of the Warrant, and if on or after such Business Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale of shares of Common Stock that the Holder anticipated receiving from the Company upon such exercise (a “ Buy-In ”), then the Company shall, within three (3) Business Days and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to 1.5 times 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 Fair Market Value on the date of exercise, times (C) 1.5.

      (iv) Notwithstanding any other provision of this Warrant, if the exercise of all or any portion of this Warrant is to be made in connection with a registered public offering, a sale of the Company or other transaction or event, such exercise may, at the election of the Holder, be conditioned upon consummation of such transaction or event in which case such exercise shall not be deemed

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effective until the consummation of such transaction or event.

      (c) Vesting. The exercise of this Warrant as set forth above shall be subject to vesting as follows:

      (d) 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 16.

2. ISSUANCE OF WARRANT SHARES

      (a) The Company covenants that all Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be (i) duly authorized, fully paid and non-assessable, and (ii) free from all taxes, liens, charges and security interests, with the exception of claims arising through the acts or omissions of the Holder and except as arising from applicable Federal and state securities laws.

      (b) The Company shall register this Warrant upon records to be maintained by the Company for that purpose in the name of the record holder of such Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner thereof for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

      (c) The Company will not, by amendment of its articles of incorporation, by-laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of the Warrant and in the taking of all action necessary or appropriate in order to protect the rights of the Holder to exercise the Warrant, or against impairment of such rights.

      (d) The Company further covenants and agrees that the Company will at all times have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise in full of the rights represented by this Warrant. If at any time the number of authorized but unissued shares of Common Stock of the Company shall not be sufficient to effect the exercise of the Warrant in full, then the Company will take all such corporate action as may, in the opinion of counsel to the Company, be necessary or advisable to increase the number of its authorized shares of Common Stock as shall be sufficient to permit the exercise of the Warrant in full, including without limitation, using its best efforts to obtain any necessary stockholder approval of such increase. The Company further covenants and agrees that if any shares of capital stock to be reserved for the purpose of the issuance of shares upon the exercise of this Warrant require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued or delivered upon exercise, then the Company will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be. If and so long as the common stock of the Company is listed on any national securities exchange, the Nasdaq Stock Market, or the OTC Bulletin

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Board, the Company will, if permitted by the rules of such exchange or market, list and keep listed on such exchange or market, upon official notice of issuance, all shares of such common stock issuable upon exercise of this Warrant.

3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND TYPE OF WARRANT SHARES

Subject to the number of Warrant Shares issuable pursuant to this Warrant being (x) until the Financing Trigger Date, the greater of (i) Five Million Nine Hundred Fifty Two Thousand Three Hundred Sixty Two (5,952,362) or (ii) the number of shares equal to 5.2% of the Fully Diluted Number of Shares of Common Stock, and (b) from and after the Financing Trigger Date, the greater of the amounts set forth in the immediate foregoing subclauses (x)(i) and (x)(ii), but in no event more than Eleven Million (11,000,000), as adjusted for any of the transactions described in Sections 3(a)-(c) and 3(f), below, the Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

      (a) Subdivision or Combination of Stock . In case the Company shall at any time subdivide (whether by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased, and conversely, in case the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse stock split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares shall be proportionately decreased. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a). Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

      (b) Dividends in Stock, Property, Reclassification . If at any time, or from time to time, holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefore:

      (i) any shares of stock or other securities that are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or

      (ii) additional stock or other securities or property (including cash) by way of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of Section 3(a) above),

then and in each such case, the Exercise Price and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately, and the Holder hereof shall receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to above) that such Holder would hold on the date of such dividend or distribution had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(b) .

      (c) Reorganization, Reclassification, Consolidation, Merger or Sale . If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of

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the Company with another corporation, or the sale of all or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or other assets or property (an “ Organic Change ”), then lawful and adequate provisions (in form and substance satisfactory to the Holder) shall be made by the Company, prior (and as a condition) to the consummation of such Organic Change, whereby the Holder hereof shall thereafter have the right to receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable by the Holder assuming the full exercise of the rights represented by this Warrant. In the event of any Organic Change, appropriate provision (in form and substance satisfactory to the Holder) shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company shall not effect any reorganization, recapitalization, consolidation or merger unless, prior to the consummation thereof, the successor entity (if other than the Company) assumes by written instrument reasonably satisfactory in form and substance to the Holder executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to acquire; provided, that any assumption shall not relieve the Company of its obligations hereunder. If there is an Organic Change, then the Company shall cause to be mailed to the Holder at its last address as it shall appear on the books and records of the Company, at least 10 calendar days before the effective date of the Organic Change, a notice stating the date on which such Organic Change is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares for securities, cash, or other property delivered upon such Organic Change; provided , that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to exercise this Warrant during the 10-day period commencing on the date of such notice to the effective date of the event triggering such notice. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law.

      (d) Adjustments for Certain Dilutive Issuances . If at any time, the Company issues or sells any Common Stock (including the issuance or sale of Common Stock owned or held by or for the account of the Company for a consideration per share) for a price (the “ Applicable Price ”) that is less than $2.10 per share of Common Stock (the foregoing, a “ Dilutive Issuance ”), then concurrently with such Dilutive Issuance (1) the Exercise Price shall be reduced to be equal to the Applicable Price and (2) the number of shares acquirable by exercise of this Warrant shall be increased such that the calculation of the Aggregate Exercise Price in the event that the Warrant is exercised in whole (the “ Maximum Aggregate Exercise Price ”) immediately prior to such Dilutive Issuance shall be equal (after taking into account the aforementioned adjustment in Exercise Price purs