WARRANT TO PURCHASE COMMON STOCK OF PRIDE BUSINESS DEVELOPMENT HOLDINGS, INC. (Void after ______, 2007)

(Void after ______, 2007)

THIS CERTIFIES THAT, for value received, _______________ or registered assigns (the “Holder”), from and after the Commencement Date (as defined below), and subject to the terms and conditions herein set forth, is entitled to purchase from Pride Business Development Holdings, Inc., a Nevada corporation (the “Company”), until 5:00 p.m. Los Angeles, California time on _________ (the “Termination Date”), _________ (_____) shares (the “Warrant Shares”) of the Company’s common stock, $.001 par value per share (the “Common Stock”), at a price per share equal to the Warrant Price (as defined below) upon exercise of this Warrant pursuant to Section 5 hereof. The number of Warrant Shares is subject to adjustment under Section 2.

1. Definitions. As used in this Warrant, the following terms have the definitions ascribed to them below:

(a)

“Business Day” means any day other than a Saturday, Sunday or a day on which commercial banks in The City of Los Angeles, California are authorized or required by law or executive order to remain closed.

 

(b)

“Commencement Date” means ___________.

 

(c)

“Issuance Date” means ______________.

 

(d)

“Offering Warrants” shall have the meaning ascribed to the term in Section 9.

 

(e)

“Optional Redemption Date” means, with respect to the redemption of this Warrant pursuant to Section 6, the Business Day, selected by the Company in accordance with Section 6, on which this Warrant is to be redeemed.

 

(f)

“Optional Redemption Period” means the period that commences on _________, and ends on _________.

(g)

“Optional Redemption Price” means $0.01.

 

 

(h)

“Other Purchase Agreements” means the agreements other then the Purchase Agreements, by and between the Company and the respective initial holders of the Warrants.

(i)

“Other Warrants” means the several Warrants to purchase Common Stock of the Company issued by the Company pursuant to the Other Purchase Agreements, or any such Warrant issued upon transfer thereof or in replacement of any such Warrant that is lost, stolen, destroyed or mutilated, as the same may be amended or supplemented in accordance with the terms hereof and thereof.

 

(j)

“Person” means any individual, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

 

(k)

“Principal Market” means at any time OTC or such other U.S. market or exchange which is the principal market on which the Common Stock is then listed for trading.

 

(l)

“Purchase Agreement” means that certain Subscription Agreement dated as of _________________ between the Company and the initial Holder of this Warrant.

 

(n)

“Trading Day” means at any time a day on which the Principal Market is open for the general trading of securities.

 

(p)

“Warrant Price” means US$1.00 per share subject to adjustment under Section 2.

 

2. Adjustments and Notices. The Warrant Price and/or the Warrant Shares shall be subject to adjustment from time to time in accordance with this Section 2. The Warrant Price and/or the Warrant Shares shall be adjusted to reflect all of the following events that occur on or after the Issuance Date.

(a) Subdivision, Stock Dividends or Combinations. In case the Company shall at any time subdivide the outstanding shares of the Common Stock or shall issue a stock dividend with respect to the Common Stock, the Warrant Price in effect immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and the number of Warrant Shares for which this Warrant may be exercised immediately prior to such subdivision or the issuance of such dividend shall be proportionately increased. In case the Company shall at any time combine the outstanding shares of the Common Stock, the Warrant Price in effect immediately prior to such combination shall be proportionately increased, and the number of Warrant Shares for which this Warrant may be exercised immediately prior to such combination shall be proportionately decreased. In each of the foregoing cases, the adjustment shall be effective at the close of business on the date of such subdivision, dividend or combination, as the case may be.

 

(b) Reclassification, Exchange or Substitution . Upon any reclassification, exchange, substitution or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, the Holder shall be entitled to receive, upon exercise of this Warrant, the number and kind of securities that Holder would have received if this Warrant had been exercised immediately before the record date for such reclassification, exchange, substitution, or other event. The Company or its successor shall promptly issue to Holder a new warrant for such new securities. The new warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 2 including, without limitation, adjustments to the Warrant Price and to the number of securities issuable upon exercise or conversion of the new warrant. The provisions of this Section 2(b) shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

 

(c) Reorganization, Merger etc. In case of any merger or consolidation of the Company into or with another corporation where the Company is not the surviving corporation, or sale, transfer or lease (but not including a transfer or lease by pledge or mortgage to a bona fide lender) of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall, as a condition to closing any such reorganization, merger or sale, duly execute and deliver to the Holder hereof a new warrant so that the Holder shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise or conversion of the unexercised portion of this Warrant, and in lieu of the Warrant Shares theretofore issuable upon exercise or conversion of this Warrant, the kind and amount of shares of stock, other securities, money and property that would have been receivable upon such reorganization, merger or sale by the Holder with respect to the Warrant Shares if this Warrant had been exercised immediately before the consummation of such transaction. Such new warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 2. The provisions of this subparagraph (c) shall similarly apply to successive transactions of the type described in this subparagraph (c).

 

(d) Certificate of Adjustment. In each case of an adjustment or readjustment of the Warrant Price, the Company, at its own expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the Holder. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based. No adjustment of the Warrant Price shall be required to be made unless it would result in an increase or decrease of at least one cent, but any adjustments not made because of this sentence shall be carried forward and taken into account in any subsequent adjustment otherwise required hereunder.

 

(e) No Impairment. The Company shall not, by amendment of its charter, by-laws or other organizational documents, or through a 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 under this Warrant by the Company, but shall subject to Section 10 at all times in good faith assist in carrying out all of the provisions of this Section 2 and in taking all such action as may be necessary or appropriate to protect the Holder’s rights under this Section 2 against impairment.

 

(f) Fractional Shares. No fractional shares shall be issuable upon exercise or conversion of the Warrant and the number of shares to be issued shall be rounded down to the nearest whole share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying the Holder an amount computed by multiplying the fractional interest by the fair market value of a full share or rounding up to the next whole share, as it determines in its sole discretion.

 

3. No Shareholder Rights. This Warrant, by itself, as distinguished from any shares purchased hereunder, shall not entitle the Holder to any of the rights of a shareholder of the Company.

4. Reservation of Stock. The Company will reserve from its authorized and unissued stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of this Warrant. Issuance of this Warrant shall constitute full authority to the Company’s officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issuable upon the exercise of this Warrant.

5. Exercise of Warrant.  This Warrant may be exercised by the Holder hereof, in whole or in part, at any time from and after the Commencement Time and prior to the termination of this Warrant, at the election of the Holder hereof (with the notice of exercise substantially in the form attached hereto as Attachment 1 duly completed and executed), by the surrender of this Warrant at the principal office of the Company or transfer agent and the payment to the Company, by certified or bank check, or by wire transfer to an account designated by the Company of an amount equal to the then applicable Warrant Price multiplied by the number of Warrant Shares then being purchased. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date. As promptly as practicable after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full Warrant Shares issuable upon such exercise.

6. Optional Redemption.

(a) Optional Redemption. At any time during the Optional Redemption Period, the Company shall have the right to redeem this Warrant in whole, or during any thirty day period, in part, but not for less than 25% of the then outstanding Warrants, as provided herein by payment of the Optional Redemption Price pursuant to this Section 6 on the Optional Redemption Date, so long as the following conditions precedent are satisfied:

(i) on at least 15 Trading Days in the period of 20 consecutive Trading Days ending on and including a Trading Day that is not more than five Trading Days prior to the date the Company gives the Optional Redemption Notice, the average closing price of the Common Stock shall have been at least 185% percent of the Warrant Price then in effect on such Trading Day; and

(ii) on the date the Optional Redemption Notice is given, the Company has funds available to pay the Optional Redemption Price on the Optional Redemption Date,

(b) Procedures for Exercising Optional Redemption. In order to exercise its right of redemption under this Section 6, the Company shall give an Optional Redemption Notice to the Holder not less than forty calendar days or more than sixty calendar days prior to the Optional Redemption Date, stating that:

(i) the Company is exercising its right to redeem this Warrant in accordance with this Section 6;

(ii) the number of shares of Common Stock subject to this Warrant to be redeemed;

(iii) the Optional Redemption Date; and

(iv) that all of the conditions of this Section 6 entitling the Company to call this Warrant for redemption have been met.

On the Optional Redemption Date (or such later date as the Holder surrenders this Warrant to the Company) the Company shall pay to or upon the order of the Holder, the Optional Redemption Price by wire transfer or check to the Holder.

(c) The Company shall not be entitled to give the Optional Redemption Notice or to redeem any portion of this Warrant with respect to which the Holder has given a Notice of Exercise on or prior to the date the Company gives the Optional Redemption Notice. Notwithstanding the giving of the Optional Redemption Notice, the Holder shall be entitled to exercise all or any portion of this Warrant, at any time until the Optional Redemption Date, in accordance with the terms of this Warrant, by giving a notice of exercise and paying the exercise price. On and after the Optional Redemption Date, the Holder shall have no further rights except to receive, upon surrender of this agreement the Optional Redemption Price.

(d) In order that the Company shall not discriminate among the Holder and the holders of the Other Warrants, the Company agrees that the redemption of this Warrants pursuant to this Section 6 shall be made at the same time as a redemption by the Company of the Other Warrants and that such redemption shall be made pro rata based on the number of shares of Common Stock issuable upon the exercise of this Warrant and the Other Warrants outstanding on the date the Company gives the Optional Redemption Notice. In order that the Company not discriminate among the Holders and the holders of the Other Warrants, the Company agrees that it shall not redeem any of the other Warrants pursuant to the provisions thereof similar to this Section 6(c) unless the Company simultaneously redeems this Warrant in accordance with this Section 6(c).

7. Transfer of Warrant. This Warrant may be transferred or assigned by the Holder hereof as a whole or in part, provided that the transferor provides, at the Company’s request, an opinion of counsel satisfactory to the Company that such transfer does not require registration under the Securities Act.

8. Legends. Upon issuance, the certificate or certificates evidencing any Warrant Shares shall bear legends similar to that stated above, restricting the transfer of the Warrant Shares unless there is a registration or exemption pursuant to the United States securities laws.

9. Termination. This Warrant shall terminate at 5:00 p.m. Los Angeles, California time on the Termination Date.

11. Miscellaneous. This Warrant shall be governed by the laws of the State of California, as such laws are applied to contracts to be entered into and performed entirely in California by California residents. Any and all disputes relating to and/or arising out of this Warrant shall be adjudicated in the Los Angeles Superior Court. The headings in this Warrant are for purposes of convenience and reference only, and shall not be deemed to constitute a part hereof. Neither this Warrant nor any term hereof may be changed or waived orally, but only by an instrument in writing signed by the Company and the Holder. All notices and other communications from the Company to the Holder of this Warrant shall be delivered personally or by facsimile transmission or mailed by first class mail, postage prepaid, to the address or facsimile number furnished to the Company in writing by the last Holder of this Warrant who shall have furnished an address or facsimile number to the Company in writing, and if mailed shall be deemed given three days after deposit in the United States mail. Upon receipt of evidence satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same aggregate number of shares of Common Stock.

 

 

 

ISSUED: __________, _____
PRIDE BUSINESS DEVELOPMENT HOLDINGS, INC.
By:
Name:
Title:

 

 

 

 

NOTICE OF EXERCISE

TO:  PRIDE BUSINESS DEVELOPMENT HOLDINGS, INC.

1.	The undersigned hereby elects to purchase  ___________   shares of Common Stock of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

2.

The undersigned confirms the disclosures made about itself and its affiliates in the investor questionnaire provided to the company at the time of the purchase of the Warrants, and notes below any exceptions thereto. It is understood by the holder of the Warrant that it will not be able to exercise the Warrant unless the Company is satisfied that the holder is entitled to receive the Warrant Shares pursuant to an exemption from registration under the United States Federal and state securities laws.

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

______________________________

(Name in which certificate(s) are to be issued)

_______________________________

(Address)

________________________________

(Name of Warrant Holder)

By:_____________________________

Title:____________________________

Date signed: ______________________

 

 

 

 

TO:  

(Name of Holder)

 

1. Pursuant to the terms of the Warrant to purchase Common Stock (the “Warrant”), Pride Business Development Holdings, Inc., a Nevada corporation (the “Company”), the Company hereby notifies the above-named Holder that the Company is exercising its right to redeem the Warrant in accordance with Section 6 of the Warrant as set forth below:

(i) The number of shares of Common Stock of the Company issuable pursuant to the Warrant to be redeemed is _________.

(ii) The aggregate Optional Redemption Price is _________ ($.01 x ___ - number of warrants being redeemed).

(iii) The Optional Redemption Date is                        .

2. All of the conditions of Section 6 of the Warrant for this redemption have been satisfied.

3. Capitalized terms used herein and not otherwise defined herein have the respective meanings provided in the Warrant.