Form of Investor Warrant

(a)           Capital Adjustments.  In case the Company shall at any time after the date this Warrant is issued: (i) declare a dividend on the outstanding Common Stock payable in shares of its capital stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then, in each case, the Exercise Price in effect, and the number of shares of Warrant Stock, at the time of the record date for such dividend or of the effective date of such subdivision or combination, shall be proportionately adjusted so that the holders of the Warrant shall be entitled to receive the aggregate number and kind of shares, for the same aggregate Exercise Price as in effect immediately prior to such dividend, subdivision or combination, which, if such Warrants had been exercised immediately prior to such time, such holders would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, or combination.  Such adjustment shall be made successively whenever any event listed above shall occur.  Any adjustment under this paragraph shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

 

(b) Mergers, Consolidations or Sale of Assets.  If the Company is a party to a reorganization (other than as provided for herein), or a merger or consolidation with or into another corporation, or the sale of the Company’s properties and assets as, or substantially as, an entirety to any other person, then, as a part of such transaction, lawful provision shall be made so that this Warrant shall pertain and apply to the securities and/or other property to which the holder of the number of shares of Common Stock of the Company then covered by this Warrant would have been entitled had this Warrant been exercised in whole immediately prior to the effective date of such reorganization, merger, consolidation or sale.  In any such case, appropriate adjustment shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the reorganization, merger, consolidation or sale to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any securities or other property deliverable after that event upon exercise of this Warrant.  Any such adjustment shall be made by and set forth in a supplemental agreement between the Company, or any successor thereto, and the Holder and shall for all purposes hereof conclusively be deemed to be an appropriate adjustment.  The Company shall not effect any such reorganization, merger, consolidation or sale unless upon or prior to the consummation thereof the successor corporation, or if the Company shall be the surviving corporation and is not the issuer of the shares of stock or other securities or property to be delivered to holders of shares of the Common Stock outstanding at the effective time thereof, then such issuer, shall assume by written instrument the obligation to deliver to the Holder such shares of stock, securities, cash or other property as the Holder shall be entitled to purchase in accordance with the foregoing provisions.

 

(c) Notice to Holder of Adjustment.  Whenever the number of shares of Warrant Stock or the Exercise Price is adjusted as herein provided, the Company shall cause to be mailed to the Holder a notice (i) stating that the number of shares of Warrant Stock have been adjusted, (ii) setting forth the adjusted number of shares of Warrant Stock, (iii) the Exercise Price, as adjusted, and (iv) showing in reasonable detail the computations and the facts, including the amount of consideration received or deemed to have been received by the Company, upon which such adjustments are based.

 

(d) De minimus Adjustments.  All calculations under this Section 6 shall be made to the nearest cent or to the nearest share, as the case may be; provided, however that, no adjustment in the Exercise Price shall be required if such adjustment is less than $.01; and provided, further, that any adjustments which by reason of this Section 6 are not required to be made shall be carried forward and taken into account in any subsequent adjustment.

(a) Investment Intent Only. This Warrant will be acquired for Holder’s own account, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).  Holder has no present intention of selling, granting any participation or interest in, or otherwise distributing, transferring or disposing of this Warrant.

 

(b) Accredited Holder.  Holder (a) is an “Accredited Investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act, and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of such Holder’s prospective investment in the Warrant; (b) has the ability to bear the economic risks of such Holder’s prospective investment, including a complete loss of Holder’s investment in the Warrant; (c) has not been offered the Warrant by any form of advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any such media; (d) has had an opportunity to ask questions and receive answers from representatives of the Company regarding the terms and conditions of the Warrant and the condition of the Company’s business, including, without limitation, its financial condition; and (e) acknowledges that Holder has conducted its own due diligence with respect to the Company, the Warrant and any other matter which Holder believes to be material to a decision to lend and further acknowledges that Holder is making its investment decision based on this due diligence.

 

(c) Compliance with Laws.  Holder acknowledges compliance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, also known as the “USA PATRIOT Act.”  Additionally, Holder represents that neither it nor any of its principal owners, partners, members, directors or officers are included on: (i) the Office of Foreign Assets Control list of foreign nations, organizations and individuals subject to economic and trade sanctions, based on United States foreign policy and national security goals; (ii) Executive Order 13224, which sets forth a list of individuals and groups with whom United States persons are prohibited from doing business because such individuals and groups have been identified as terrorists or persons who support terrorism or (iii) any other watch list issued by any governmental authority, including the Securities and Exchange Commission.

 

(d) No Registration; Legend.  Holder acknowledges that (a) neither the Warrant nor any securities obtainable upon conversion or payment thereof have been registered under the Securities Act or the securities laws of any state or other jurisdiction in reliance upon exemptions from such registration requirements for non-public offerings and (b) the Company is under no obligation to register the Warrant or securities obtainable upon exercise hereof under the Securities Act or any securities laws of any state or take any action to make any exemption from such registration provisions available.  Such Holder acknowledges the Warrant and any securities obtainable upon exercise hereof must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available.  Holder understands that no public market now exists for any of the securities issued by the Company hereunder and that there is no assurance that a public market will ever exist for such securities.  Holder agrees to the imprinting, so long as required by law, of a legend on this Warrant and the Warrant Stock should the Warrant be exercised in the following form or one similar to it.