Exhibit 10.1
 
VIRTUAL PIGGY, INC.
 
NOTE AND WARRANT PURCHASE AGREEMENT
 
THIS NOTE AND WARRANT PURCHASE AGREEMENT (this “Agreement”), dated as of
December 27, 2013, by and between VIRTUAL PIGGY, INC., a Delaware corporation
(the “Company”), and [____________] (the "Investor").  The Company and the
Investor are sometimes hereinafter referred to together as the “parties” or
individually, as a “party”.

WHEREAS, the Company desires to borrower from Investor the sum of [___________]
Dollars ($[____________]) (the “Loan”);

WHEREAS, in connection with procurement of the Loan, the Company desires to
issue to the Investor the Note (as defined below) and the Warrants (as defined
below), and the Investor desires to make the Loan and purchase the Warrants, on
the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
 
1.      Authorization and Sale of Note and Warrants.
 
1.1           Authorization of Note and Warrants.  The Company has duly
authorized the issuance of (a) a promissory note in the form of Exhibit A hereto
(the “Note”) in the original principal amount of $[____________] (the “Loan
Amount”), (b) a warrant in the form of Exhibit B hereto (“Warrant A”)
exercisable to purchase [____________] ([____________]) shares of the Company’s
common stock, $0.0001 par value per share (“Common Stock”), at an exercise price
of $0.01 per share, and (c) a warrant in the form of Exhibit C hereto (“Warrant
B”) exercisable to purchase [____________] ([____________]) shares of Common
Stock at an exercise price of $1.00 per share (Warrant A and Warrant B,
collectively, the “Warrants”, and together with the Note, the “Securities”).
 
1.2           Issuance of Note and Warrants.  In consideration of, and in
express reliance upon, the representations, warranties and covenants set forth
herein and subject to the terms and conditions set forth in this Agreement, at
the Closing, the Company shall issue to the Investor, and the Investor shall
procure from the Company, in consideration for the Investor’s funding of the
Loan Amount, the Note and the Warrants registered in the name of the
Investor.  The Loan Amount shall be delivered at the Closing by wire transfer of
immediately available funds to the following account:

[____________]
 
1.3           Closing.  The closing of the issuance of the Securities pursuant
to this Agreement (the “Closing”) shall take place virtually by exchange of
electronic signatures (with originals followed by overnight courier) on the date
hereof, or at such other time, date and place as are mutually agreeable to the
Company and the Investor.  The date of the Closing is hereinafter referred to as
the “Closing Date.”
 
 
 

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2.           Representations and Warranties of the Company.  As a material
inducement to the Investor to enter into and perform its obligations under this
Agreement, the Company represents and warrants to the Investor as of the date
hereof as follows:
 
2.1           Organization, Good Standing and Qualification.  The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as currently proposed to
be conducted.  The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify is reasonably
likely to have a material adverse effect on the business, properties, or
financial condition of the Company (a “Material Adverse Effect”).
 
2.2           Authorization.  All corporate action on the part of the Company
and its stockholders, directors and officers necessary for the authorization,
execution and delivery of, and performance under, this Agreement and the
Securities has been taken.
 
2.3           Enforceability. This Agreement and each of the Securities
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally or by equitable principles,
(b) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions may be limited by applicable
laws; provided, however, in the case of subparagraphs (b) and (c), the Company
waives all such limitations to the maximum extent permitted by applicable law.
 
2.4           Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority or any other person or entity is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for compliance with notice filing and other requirements
under federal and applicable state securities laws.
 
2.5           Brokers.  No broker, investment banker, financial advisor or other
person is entitled to any broker’s, finder’s or other similar fee or commission
in connection with this Agreement or the transactions contemplated hereby based
upon arrangements made by or on behalf of the Company.
 
2.6           No Violation of Law.  The execution, delivery and performance by
the Company of this Agreement, including the Company’s obligations with respect
to the Securities will not result in any violation of any agreement, indenture,
instrument, license, judgment, decree, order, law, statute, ordinance or other
governmental rule or regulation applicable to the Company.
 
 
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2.7           No Actions.  There are no pending or, to the best of the Company’s
knowledge after due and diligent inquiry, threatened actions or proceedings
before any court, judicial body, administrative agency or arbitrator which may
materially adversely affect the Company’s performance of its obligations with
respect to this Agreement and the Securities.
 
2.8           Offering Exemption.  Based in part on the representations of the
Investor set forth in Section 3 below, the offer, sale and issuance of the
Securities in conformity with the terms of this Agreement are exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”) and are exempt from the qualification or registration
requirements of applicable state securities laws.  Neither the Company nor any
agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Securities to any
person or entity so as to bring the sale of such Securities by the Company
within the registration provisions of the Securities Act or any state securities
laws.
 
3.            Representations and Warranties of the Investor.  As a material
inducement to the Company to enter into and perform its obligations under this
Agreement, the Investor represents and warrants to the Company as of the date
hereof as follows:
 
3.1           The Investor is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite power and authority to execute, deliver and
perform this Agreement on behalf of the Investor.  All action on the part of the
Investor necessary for the authorization, execution, delivery and performance of
all obligations of the Investor under this Agreement has been taken.  This
Agreement constitutes the valid and legally binding obligation of the Investor,
enforceable in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally or by equitable
principles, (b) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies and (c) to the
extent that the enforceability of indemnification provisions may be limited by
applicable laws; provided, however, in the case of subparagraphs (b) and (c),
the Investor waives all such limitations to the maximum extent permitted by
applicable law.
 
3.2           The Securities will be acquired by the Investor for its own
account for investment purposes and not with a view to, or for sale in
connection with, any distribution.  The Investor does not presently have any
contract, undertaking or agreement with any person or entity to sell, transfer
or grant participation rights to any other person or entity with respect to any
of the Securities.
 
3.3           The Investor is an “accredited investor” within the meaning of
Rule 501(a) promulgated under the Securities Act.  The Investor acknowledges and
agrees that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available.  The Investor understands that no public market now
exists for any securities issued by the Company and that a public market may
never exist for the Securities.
 
3.4           The Investor acknowledges that it has received all of the
information it considers necessary or appropriate for deciding whether to
acquire the Securities.  The Investor further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
business, assets, prospects and financial condition of the Company and to obtain
any additional information necessary to verify the accuracy of the information
provided by the Company and the risks associated with its decision to acquire
the Securities.
 
 
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4.             Conditions to Closing.
 
4.1           Conditions to Obligations of the Investor.  The obligations of the
Investor under this Agreement are subject to the fulfillment, or the waiver by
the Investor, of the conditions set forth in this Section 4.1 on or before the
Closing Date:
 
(a)           The representations and warranties of the Company contained in
Section 2 shall be true, correct and complete on and as of Closing with the same
force and effect as if they had been made at such time.
 
(b)           The Company shall have performed and complied in all material
respects with all conditions, covenants and agreements contained in this
Agreement required to be performed or complied with by it on or before the
Closing.
 
(c)           All consents and approvals required for the consummation of the
transactions contemplated by this Agreement shall have been obtained.
 
(d)           The Company shall have delivered to the Investor the Note and the
Warrants, duly executed by the Company.
 
4.2           Conditions to Obligations of the Company.  The obligations of the
Company under this Agreement are subject to the fulfillment, or the waiver in
writing by the Company, of the conditions set forth in this Section 4.2 on or
before the Closing Date:
 
(a)           The representations and warranties of the Investor contained in
Section 2 shall be true, correct and complete on and as of Closing with the same
force and effect as if they had been made at such time.
 
(b)           The Investor shall have performed and complied in all material
respects with all conditions, covenants and agreements contained in this
Agreement required to be performed or complied with by it on or before the
Closing.
 
(c)           All consents and approvals required for the consummation of the
transactions contemplated by this Agreement shall have been obtained.
 
(d)           The Investor shall have delivered to the Company the Loan Amount
in accordance with Section 1.2 above.
 
5.            Covenants of the Company.  The Company hereby covenants and
agrees, that, except as otherwise required hereby, until the date upon which all
outstanding amounts under the Note are fully repaid:
 
 
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5.1           Maintenance of Properties and Leases.  The Company shall keep its
properties in good repair, working order and condition, and from time to time
make all needed and proper, or legally required, repairs, renewals,
replacements, additions and improvements thereto; and the Company shall at all
times comply with each provision of all leases and agreements to which the
Company is a party or under which the Company occupies, or has possession of,
any property.
 
5.2           Accounts and Records.  The Company shall keep true records and
books of account in which full, true and correct entries shall be made of all
dealings or transactions in relation to its business and affairs as required in
accordance with U.S. generally accepted accounting principles.
 
5.3           Compliance with Requirements of Governmental Authorities.  The
Company shall duly observe and conform in all material respects to all
requirements of governmental authorities relating to the conduct of its business
or to its property or assets.
 
5.4           Further Assurances.  At any time, and from time to time, upon the
written request of the Investor, execute and deliver such further documents and
do such further acts and things as the Investor may reasonably request in order
to effect the purposes of this Agreement.
 
6.             Miscellaneous.
 
6.1           Survival.  All representations and warranties made by the Company
and the Investor in this Agreement or pursuant hereto shall survive the
Closing.  The covenants and agreements set forth in this Agreement shall survive
the Closing and shall continue until all obligations set forth therein shall
have been performed or satisfied or they shall have terminated in accordance
with their terms.
 
6.2           Successors and Assigns.  Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and permitted assigns of the
parties (including transferees of any Securities).  Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by the
Company.  Any attempted assignment made in contravention of this Agreement shall
be null and void and of no force or effect.
 
6.3           Entire Agreement.  This Agreement and the documents, schedules and
exhibits referred to herein constitute the entire agreement between the parties
and supersede all prior communications, representations, understandings and
agreements of the parties with respect to the subject matter hereof and
thereof.  No party shall be liable or bound to any other party in any manner by
any warranties, representations or covenants except as specifically set forth
herein or therein.  All schedules and exhibits hereto are hereby incorporated
herein by reference.  Nothing in this Agreement, express or implied, is intended
to confer upon any third party any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided in this
Agreement.
 
6.4           General Interpretation.  The terms of this Agreement have been
negotiated by the parties hereto and the language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent.  This Agreement shall be construed without regard to any
presumption or rule requiring construction against the party causing such
instrument or any portion thereof to be drafted, or in favor of the party
receiving a particular benefit under this Agreement.  No rule of strict
construction will be applied against any person or entity.
 
 
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6.5           Jury Trial Waiver.  To the fullest extent permitted by law, and as
separately bargained-for-consideration, each party hereby waives any right to
trial by jury in any action, suit, proceeding or counterclaim of any kind
arising out of or relating to this Agreement.
 
6.6           Governing Law.  This Agreement shall be governed by and construed
under the laws of the State of Delaware, without regard to its body of law
controlling conflicts of law.
 
6.7           Section Headings.  The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
 
6.8           Severability.  If any term of provision of this Agreement is
determined to be illegal, unenforceable or invalid in whole or in part for any
reason, such illegal, unenforceable or invalid provisions or party thereof shall
be stricken from this Agreement, and such provision shall not affect the
legality, enforceability or validity of the remainder of this Agreement.  If any
provision or part thereof of this Agreement is stricken in accordance with the
provisions of this Section 6.8, then such stricken provision shall be replaced,
to extent possible, with a legal, enforceable and valid provision that is as
similar in tenor to the stricken provision as is legally possible.
 
6.9           Notices.  All notices required or permitted under this Agreement
or the Notes shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1)
business day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.  All such
communications shall be sent to the Company at the address as set forth on the
signature page hereof (with a copy to Michael Grundei, Esq., Wiggin and Dana
LLP, Two Stamford Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901,
Fax: 203-363-7676) and to the Investor at the addresses set forth on the
signature page hereof or at such other address as the Company or the Investor
may designate by three (3) days advance written notice to the other party
hereto.
 
6.10          Amendments and Waivers.  Except as otherwise expressly set forth
in this Agreement, any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the Investor.
 
6.11          Pronouns.  Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neutral
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
 
 
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6.12           No Waiver.  No waiver of any provision or consent to any action
shall constitute a waiver of any other provision or consent to any other action,
whether or not similar.  No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver in the future except to
the extent specifically set forth in writing.
 
6.13          Counterparts.  This Agreement may be executed and delivered
(including by facsimile or other electronic transmission) in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same document.

 
[Remainder of page intentionally left blank.  Signatures on following page.]
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first written above.

 
COMPANY:
     
VIRTUAL PIGGY, INC.
 
a Delaware corporation
         
By:
     
Name:
   
Title:
     
Address:
221 Hermosa Ave., Suite 210
   
Hermosa Beach, CA 90254
 
Fax:
(310) 634-1246
 
Attn:
Chief Financial Officer
         
INVESTOR:
     
[____________]
             
[____________]
     
Address:
[____________]
   
[____________]

[Signature page to Note and Warrant Purchase Agreement]
 
 
 

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EXHIBIT A

VIRTUAL PIGGY, INC.
 
PROMISSORY NOTE
 
$[_________]
December 27, 2013

 
This Note is issued pursuant to that certain Note and Warrant Purchase Agreement
dated as of the date hereof (the “Purchase Agreement”).  Capitalized terms used
herein but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Purchase Agreement.
 
1.             Principal and Interest.
 
VIRTUAL PIGGY, INC., a Delaware corporation (the “Company”), for value received,
hereby promises to pay to [____________] (“Payee”), in lawful money of the
United States at the address of Payee the principal amount of [_____________]
($[_____________]), together with interest (computed on the basis of a 360-day
year for the actual number of days elapsed) accruing and compounding monthly
from the date hereof on the unpaid balance of such principal amount from time to
time outstanding at a rate equal to ten percent (10%) per annum until paid in
full as provided herein.
 
Subject to the terms hereof, the principal of, and all accrued but unpaid
interest on, this Note are due and payable on the earliest of the following
(such date, “Maturity Date”):
 
(a)           within five (5) days after the sale of the Company’s securities in
one transaction or series of related transactions, which sale results in gross
proceeds to the Company of at least $3,000,000;
 
(b)           upon (i) the sale or other disposition of all or substantially all
of the Company’s assets or (ii) the acquisition of the Company by another entity
by means of any transaction or series of related transactions to which the
Company is party (including, without limitation, any stock acquisition,
reorganization, merger or consolidation but excluding any sale of stock for
capital raising purposes) other than a transaction or series of transactions in
which the holders of the voting securities of the Company outstanding
immediately prior to such transaction continue to retain (either by such voting
securities being converted into voting securities of the surviving entity), as a
result of shares in the Company held by such holders prior to such transaction,
at least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such transaction or series of transactions; or
 
(c)           February 28, 2014.
 
 
 

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Upon payment in full of all amounts payable hereunder, this Note shall be
surrendered to the Company for cancellation.
 
2.            Prepayment.  This Note may be prepaid in whole or in part at any
time without the payment of any unearned interest, penalty or premium, upon five
(5) days’ prior written notice to Payee.  Each and every payment (including all
partial payments or prepayments) received by the Payee under this Note shall be
applied first to costs due in connection with this Note, then to outstanding
interest and then to outstanding principal.
 
3.            Event of Default.  The outstanding principal of, and all accrued
but unpaid interest on, this Note shall become immediately due and payable, at
the election of Payee, if (a) the Company commences any proceeding in bankruptcy
or for dissolution, liquidation, winding-up, composition or other relief under
state or federal bankruptcy laws; (b) any such proceeding is commenced against
the Company, or a receiver or trustee is appointed for the Company or a
substantial part of its property; (c) the Company breaches any representation,
warranty, covenant or agreement set forth in the Purchase Agreement or this Note
and such breach remains uncured for a period of seven (7) days after the Company
receives written notice thereof (each, an “Event of Default”).  Interest shall
accrue after an Event of Default at the rate of fifteen percent (15%) per annum
until this Note is paid in full or such Event of Default is cured (the “Default
Rate”).
 
4.            Waivers.  The Company hereby waives presentment, demand for
performance, notice of non-performance, protest, notice of protest and notice of
dishonor.  No waiver of any provision or consent to any action shall constitute
a waiver of any other provision or consent to any other action, whether or not
similar.  No waiver or consent shall constitute a continuing waiver or consent
or commit a party to provide a waiver in the future except to the extent
specifically set forth in writing.  The Payee shall not be deemed, by any act of
omission or commission, to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by the Payee and then only to the
extent specifically set forth in writing.  THE COMPANY ACKNOWLEDGES THAT THE
OBLIGATION EVIDENCED BY THIS NOTE IS A COMMERCIAL TRANSACTION AND WAIVES ITS
RIGHTS TO NOTICE AND HEARING UNDER APPLICABLE LAW, OR AS OTHERWISE ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE
MAY DESIRE TO USE.
 
5.            Attorney’s Fees.  Should this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection following any Event of Default,
the Company agrees to pay, in addition to the principal, any late payment charge
and interest due and payable hereunder, all costs of collecting or attempting to
collect this Note, including reasonable attorneys' fees and expenses and court
costs, regardless of whether any legal proceeding is commenced hereunder,
together with interest thereon at the Default Rate from the date paid by Payee
until such expenses are repaid to Payee.
 
6.            Governing Law.  This Note shall be governed by and construed under
the laws of the State of Delaware, without regard to its body of law controlling
conflicts of law.
 
 
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7.            Legal Interest.  Notwithstanding anything heretofore set forth to
the contrary, in no event shall any interest payable under this Note exceed the
maximum interest rate permitted under law or the rate that could subject Payee
to either civil or criminal liability as a result of being in excess of the
maximum interest rate that the Company is permitted by applicable law to
contract or agree to pay.  If by the terms of this Note, the Company is at any
time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of such maximum rate, the interest rate
hereinabove set forth or the Default Rate, as the case may be, shall be deemed
to be immediately reduced to such maximum rate and all previous payments in
excess of the maximum rate shall be deemed to have been payments in reduction of
principal and not on account of the interest due hereunder.  All sums paid or
agreed to be paid to the Payee for the use, forbearance, or detention of the
indebtedness hereunder, shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
this Note until payment in full so that the rate or amount of interest on
account of the indebtedness hereunder does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding. The Company agrees to an effective rate of interest
that is the rate stated herein plus any additional rate of interest resulting
from any other charges in the nature of interest paid or to be paid by or on
behalf of the Company, or any benefit received or to be received by Payee, in
connection with this Note.
 
8.            Amendment.  Except as otherwise set forth in the Purchase
Agreement, any term of this Note may be amended and the observance of any term
of this Note may be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and Payee.
 
9.            Remedies Cumulative.  The rights, powers and remedies of the
Payee, available at law, in equity or as stated herein, shall be cumulative and
concurrent and may be exercised or otherwise pursued by the Payee singly,
successively or concurrently against the Company at the sole discretion of the
Payee, and may be exercised as often as occasion therefor shall incur.  The
failure to exercise any such right or remedy shall in no event be construed as a
waiver or release thereof.
 
10.           Jury Trial Waiver.  To the fullest extent permitted by law, and as
separately bargained-for-consideration, each party hereby waives any right to
trial by jury in any action, suit, proceeding or counterclaim of any kind
arising out of or relating to this Note.
 
[Remainder of page intentionally left blank.  Signature on following page.]
 
 
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed and
delivered by its proper and duly authorized officer as of the date first written
above.

 
VIRTUAL PIGGY, INC.
 
a Delaware corporation
                   
By:
 
   
Name:
   
Title:

 
[Signature Page to Promissory Note – [____________]]
 
 
 

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EXHIBIT B

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.
 
WARRANT TO PURCHASE COMMON STOCK
 
OF
 
VIRTUAL PIGGY, INC.

WARRANT NO. 2013- _________

This WARRANT (“Warrant”) is to verify that, FOR VALUE RECEIVED,
[____________] (“Holder”), is entitled to purchase, subject to the terms and
conditions hereof, from Virtual Piggy, Inc. a Delaware corporation (the
“Company”), [____________] ([____________]) shares of common stock, $0.0001 par
value per share, of the Company (the “Common Stock”), at any time during the
period commencing at 9:00 a.m. Eastern Time on the date hereof (the
“Commencement Date”) and ending at 5:00 p.m. Eastern Time on the second (2nd)
anniversary hereof (the “Termination Date”), at an exercise price (the “Exercise
Price”) of $0.01 per share of Common Stock.  The number of shares of Common
Stock purchasable upon exercise of this Warrant and the Exercise Price per share
shall be subject to adjustment from time to time upon the occurrence of certain
events as set forth below.
 
The shares of Common Stock or any other shares or other units of stock or other
securities or property, or any combination thereof, then receivable upon
exercise of this Warrant, as adjusted from time to time, are sometimes referred
to hereinafter as “Exercise Shares.”  The exercise price per share as from time
to time in effect is referred to hereinafter as the “Exercise Price.”
 
1.            Exercise of Warrant; Issuance of Exercise Shares.

(a)           Exercise of Warrant.  Subject to the terms hereof, the purchase
rights represented by this Warrant are exercisable by the Holder in whole or in
part, at any time, and from time to time, by the surrender of this Warrant and
the Notice of Exercise annexed hereto duly completed and executed on behalf of
the Holder, 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 Holder at the address of
the Holder appearing on the books of the Company) accompanied by payment of the
Exercise Price in full in cash or by bank or certified check for the Exercise
Shares with respect to which this Warrant is exercised and a completed and duly
executed Notice of Exercise form attached hereto as Appendix A.
 
 
 

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In the event that this Warrant shall be duly exercised in part prior to the
Termination Date, the Company shall issue a new Warrant or Warrants of like
tenor evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.
 
(b)           Issuance of Exercise Shares; Delivery of Warrant Certificate.  The
Company shall, within three (3) business days after the exercise of this Warrant
(“Warrant Share Delivery Date”), issue in the name of and cause to be delivered
to the Holder one or more certificates representing the Exercise Shares to which
the Holder shall be entitled upon such exercise under the terms hereof.  Such
certificate or certificates shall be deemed to have been issued and the Holder
shall be deemed to have become the record holder of the Exercise Shares as of
the date of the due exercise of this Warrant.  In addition to any other rights
available to the Holder, if the Company fails to transmit to the Holder a
certificate or the certificates representing the Exercise Shares or to credit
the Holder’s balance account for such number of Exercise Shares pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market transaction
or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Exercise
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Amount”) exceeds
(y) the amount obtained by multiplying (1) the number of Exercise Shares that
the Company was required to deliver to the Holder in connection with the
exercise at issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the Holder,
either (i) reinstate the portion of the Warrant and equivalent number of
Exercise Shares for which such exercise was not honored and refund the exercise
paid therefor or (ii) deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder.  For example, if the Holder’s Buy-In Amount
is $11,000 to cover a Buy-In with respect to an attempted exercise of shares of
Common Stock and if the aggregate sales price of the shares giving rise to such
Buy-In obligation was $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000.  The Holder
shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In and, upon request of the Company, evidence of
the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
 
(c)           Exercise Shares Fully Paid and Non-assessable.  The Company agrees
and covenants that all Exercise Shares issuable upon the due exercise of the
Warrant represented by this Warrant certificate (“Warrant Certificate”) will,
upon issuance and payment therefor in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Section 2 hereof, the Company
shall not be obligated to pay) or liens, charges, and security interests created
or permitted by the Company with respect to the issuance thereof.
 
 
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(d)           Reservation of Exercise Shares.  The Company covenants that during
the term that this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Exercise Shares upon the exercise of this Warrant.
 
(e)           Fractional Shares.  The Company shall not be required to issue
fractional shares of capital stock upon the exercise of this Warrant or to
deliver Warrant Certificates that evidence fractional shares of capital
stock.  In the event that any fraction of an Exercise Share would, except for
the provisions of this subsection (e), be issuable upon the exercise of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant
is exercised.  For purposes of this Warrant, the “Current Market Value” for any
day shall be determined as follows:
 
(i)           if the Exercise Shares are traded in the over-the-counter market
and not on any national securities exchange, the average of the mean between the
last bid and asked prices per share, as reported by Bloomberg, L.P., or an
equivalent generally accepted reporting service, or if not so reported, the
average of the closing bid and asked prices for an Exercise Share as furnished
to the Company by any member of the Financial Industry Regulatory Authority,
selected by the Company for that purpose; or
 
(ii)           if the Exercise Shares are listed or traded on a national
securities exchange, the closing price on the principal national securities
exchange on which they are so listed or traded, on the last business day prior
to the date of the exercise of this Warrant.  The closing price referred to in
this clause (ii) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed; or
 
(iii)           if the Exercise Shares are not traded in the over-the-counter
market or on any national securities exchange or no such closing price or
closing bid and asked prices are available, as determined in any reasonable
manner as may be prescribed by the Board of Directors of the Company.
 
2.            Payment of Taxes.

(a)           Stamp Taxes.  The Company will pay all documentary stamp taxes, if
any, attributable to the initial issuance of Exercise Shares upon the exercise
of this Warrant; provided, however, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Exercise Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant, and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.  Except as specifically provided in this
Section 2, Holder shall be responsible for the payment of all other taxes
incurred in connection with the receipt, transfer or sale of the Warrant or the
Exercise Shares.
 
 
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(b)Withholding.  The Holder shall pay to the Company, or make arrangements
satisfactory to the Company regarding payment of, any federal, state, local
and/or payroll taxes of any kind required by law to be withheld with respect to
the grant of this Warrant or the issuance of the Exercise Shares.  The Company
may, to the extent permitted by law, deduct any such taxes from any payment of
any kind otherwise due to the Holder whether or not pursuant to this
Warrant.  The Holder may elect, with the consent of the Company, to have such
tax withholding obligation satisfied, in whole or in part, by: (i) authorizing
the Company to withhold from the Exercise Shares a number of shares of Common
Stock having an aggregate Current Market Value that would satisfy the minimum
withholding amount due, or (ii) delivering to the Company a number of shares of
Common Stock of which the Holder is the record and beneficial owner and that
have been held by the Holder for at least six (6) months with an aggregate
Current Market Value that would satisfy the minimum withholding amount due.  The
Company may require that any fractional share amount be settled in cash.  For
the purposes of this Section 2, Current Market Value shall be determined as of
the date on which the amount of tax to be withheld is determined.
 
3.            Mutilated or Missing Warrant Certificates.  In case any Warrant
shall be mutilated, lost, stolen or destroyed, the Company may in its discretion
issue, in exchange and substitution for and upon cancellation of the mutilated
Warrant, or in lieu of and in substitution for the Warrant lost, stolen or
destroyed, a new Warrant or Warrants of like tenor and in the same aggregate
denomination, but only (i) in the case of loss, theft or destruction, upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and indemnity or bond, if requested, also reasonably
satisfactory to the Company and (ii) in the case of mutilation, upon surrender
of the mutilated Warrant.  Applicants for such substitute Warrants shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or its counsel may prescribe.

4.            Rights of Holder.  The Holder shall not, by virtue of anything
contained in this Warrant or otherwise, be entitled to any right whatsoever,
either in law or equity, of a stockholder of the Company, including without
limitation, the right to receive dividends or to vote or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
the election of directors of the Company or any other matter.

5.            Registration of Transfers and Exchanges.  This Warrant may be
transferred or exchanged, at the option of the Holder thereof and without
change, when surrendered to the Company at its principal office, or at the
office of its transfer agent, if any, for another Warrant or other Warrants of
like tenor and representing in the aggregate the right to purchase from the
Company a like number and kind of Exercise Shares as the Warrant surrendered for
exchange, and the Warrant so surrendered shall be canceled by the Company or
transfer agent, as the case may be.
 
 
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6.            Adjustment of Exercise Shares and Exercise Price.  The Exercise
Price and the number and kind of Exercise Shares purchasable upon the exercise
of this Warrant shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter provided. The Exercise Price in
effect at any time and the number and kind of securities purchasable upon
exercise of each Warrant shall be subject to adjustment as follows:

(a)           In case of any consolidation or merger of the Company with another
corporation (other than a merger with another corporation in which the Company
is the surviving corporation and which does not result in any reclassification
or change -- other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination -- of outstanding Common Stock issuable upon such exercise), the
rights of the Holder of this Warrant shall be adjusted in the manner described
below:
 
(i)           In the event that the Company is the surviving corporation or is
merged into a wholly owned subsidiary for the purpose of incorporating the
Company in a different jurisdiction, this Warrant shall, without payment of
additional consideration therefor, be deemed modified so as to provide that the
Holder of this Warrant, upon the exercise thereof, shall procure, in lieu of
each share of Common Stock theretofore issuable upon such exercise, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change, consolidation or merger by the holder of each
share of Common Stock, had exercise of this Warrant occurred immediately prior
to such reclassification, change, consolidation or merger. This Warrant (as
adjusted) shall be deemed to provide for further adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 6.  The provisions of this clause (i) shall similarly apply to
successive reclassifications, changes, consolidations and mergers.
 
(ii)           In the event that the Company is not the surviving corporation
(except in the case of a merger of the Company into a wholly owned subsidiary
for the purpose of incorporating the Company in a different jurisdiction),
Holder shall be given at least fifteen (15) days prior written notice of such
transaction and shall be permitted to exercise this Warrant, to the extent it is
exercisable as of the date of such notice, during this fifteen (15) day
period.  Upon expiration of such fifteen (15) day period, this Warrant and all
of Holder’s rights hereunder shall terminate.
 
(b)   If the Company, at any time while this Warrant, or any portion thereof,
remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 6.
 
 
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(c)           In case the Company shall (i) pay a dividend or make a
distribution on its shares of Common Stock in shares of Common Stock, (ii)
subdivide or reclassify its outstanding Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding Common Stock into a
smaller number of shares, the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification, shall be proportionally adjusted
so that the Holder of this Warrant exercised after such date shall be entitled
to receive the aggregate number and kind of shares that, if this Warrant had
been exercised by such Holder immediately prior to such date, he would have
owned upon such exercise and been entitled to receive upon such dividend,
subdivision, combination or reclassification.  For example, if the Company
declares a 2 for 1 stock dividend or stock split and the Exercise Price
immediately prior to such event was $0.40 per share, the adjusted Exercise Price
immediately after such event would be $0.20 per share. Such adjustment shall be
made successively whenever any event listed above shall occur.  Whenever the
Exercise Price payable upon exercise of each Warrant is adjusted pursuant to
this subsection (c), the number of Exercise Shares purchasable upon exercise of
this Warrant shall simultaneously be adjusted by multiplying the number of
Exercise Shares initially issuable upon exercise of this Warrant by the Exercise
Price in effect on the date hereof and dividing the product so obtained by the
Exercise Price, as adjusted.
 
(d)           In the event that at any time, as a result of an adjustment made
pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant
thereafter shall become entitled to receive any Exercise Shares of the Company,
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in subsections (a), (b) or
(c) above.
 
(e)           Irrespective of any adjustments in the Exercise Price or the
number or kind of Exercise Shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the same price
and number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant.
 
(f)           Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section 6, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer’s certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment.  Each such officer’s certificate shall be made available at all
reasonable times for inspection by the holder and the Company shall, forthwith
after each such adjustment, mail a copy of such certificate to the Holder.
 
(g)           All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one one-hundredth (1/100th) of a share, as the case may
be.
 
7.             Investment Intent, Exercise Restrictions and Transfer
Restrictions.
 
(a)           The Warrant and the Exercise Shares may not be offered for sale or
sold, or otherwise transferred or sold by the Holder in any transaction which
would constitute a sale thereof within the meaning of the Securities Act of
1933, as amended (the “1933 Act”), unless (i) such security has been registered
for sale under the 1933 Act and registered or qualified under applicable state
securities laws relating to the offer and sale of securities, or (ii) exemptions
from the registration requirements of the 1933 Act and the registration or
qualification requirements of all such state securities laws are available and
the Company shall have received an opinion of counsel satisfactory to the
Company that the proposed sale or other disposition of such securities may be
effected without registration under the 1933 Act and would not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and such opinion to be
satisfactory to the Company.
 
 
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The Holder agrees to indemnify and hold harmless the Company against any loss,
damage, claim or liability arising from the disposition of this Warrant or any
Exercise Share held by such holder or any interest therein in violation of the
provision of this Section 7(a).
 
(b)           The certificates evidencing any Exercise Shares issued upon the
exercise of this Warrant shall have endorsed thereon (except to the extent that
the restrictions described in any such legend are no longer applicable)
substantially the following legend, appropriate notations thereof will be made
in the Company's stock transfer books, and stop transfer instructions reflecting
these restrictions on transfer will be placed with the transfer agent of the
Exercise Shares.
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.

 
8.           Notices.  All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile or
other electronic transmission service to the appropriate address or number as
set forth below:

If to the Company:

Virtual Piggy, Inc.
1221 Hermosa Avenue, Suite 210
Hermosa Beach, CA 90254
Fax: (310) 634-1246
Attention: Chief Financial Officer
 
 
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with a copy to:
 
Wiggin and Dana LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, CT 06901
Fax: (203) 363-7676
Attention: Michael Grundei

and to the Holder at the address of the Holder appearing on the books of the
Company or the Company's transfer agent, if any.

Either of the Company or the Holder may from time to time change the address to
which notices to it are to be mailed hereunder by notice in accordance with the
provisions of this Section 8.
 
9.            Supplements and Amendments.  The Company may from time to time
supplement or amend this Warrant without the approval of the Holder of this
Warrant in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision, or to make any other provisions in regard to matters or questions
herein arising hereunder which the Company may deem necessary or desirable and
which shall not materially adversely affect the interests of the Holder.  Except
as set forth in the immediately preceding sentence, this Warrant may not be
amended, modified or supplemented except by an instrument or instruments in
writing signed by the party against whom enforcement of any such amendment,
modification or supplement is sought.

10.           Successors.  This Warrant shall inure to the benefit of and be
binding on the respective successors, assigns and legal representatives of the
Holder and the Company.

11.           Severability.  If for any reason any provision, paragraph or terms
of this Warrant is held to be invalid or unenforceable, all other valid
provisions herein shall remain in full force and effect and all terms,
provisions and paragraphs of this Warrant shall be deemed to be severable.

12.           Governing Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.

13.           Attorneys' Fees.  If the Holder or the Company institutes legal
action to resolve any dispute arising under or in connection with this
Agreement, the prevailing party in such action (as determined by the court,
agency or other authority before which such suit or proceeding is commenced),
shall be entitled to such reasonable attorneys' fees, costs and expenses as may
be fixed by the decision maker.  The foregoing includes reasonable attorneys'
fees, expenses and costs of investigation incurred in (1) appellate proceedings;
(2) in any post-judgment proceedings to collect or enforce the judgment; (3)
establishing the right to indemnification; and (4) any action or participation
in, or in connection with, any case or proceeding under Chapter 7, 11 or 13 of
the Bankruptcy Code (11 United States Code Sections 101 et seq.), or any
successor statutes.  This provision is separate and several and shall survive
the termination of this Agreement.
 
 
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14.           Headings.  Section and subsection headings used herein are
included herein for convenience of reference only and shall not affect the
construction of this Warrant nor constitute a part of this Warrant for any other
purpose.

15.           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be treated as an original but all of which taken together
shall constitute but one and the same instrument.  Facsimile or other
electronically transmitted signatures shall be treated as originals for all
purposes.
 
[Remainder of page intentionally left blank.  Signatures on following page.]
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the Company has caused this Warrant No. 2013-_________ to be
duly executed and delivered by its proper and duly authorized officer as of the
27th day of December, 2013.

 
VIRTUAL PIGGY, INC.
 
a Delaware corporation
                   
By:
 
   
Name:
   
Title:

 

ACKNOWLEDGED AND AGREED:
     
[____________]
         
 
 
[____________]
 

 
 
 
 
[Signature Page to Warrant to Purchase Common Stock of Virtual Piggy, Inc.]
 
 
 

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APPENDIX A

NOTICE OF EXERCISE

 
To:
Virtual Piggy, Inc.

1221 Hermosa Avenue, Suite 210
Hermosa Beach, CA 90254

Attention: Chief Financial Officer
 

(1)           The undersigned hereby elects to purchase ____________ shares of
Common Stock of Virtual Piggy, Inc., a Delaware corporation, pursuant to the
terms of the attached Warrant, and tenders herewith payment of the Exercise
Price for such shares in full in accordance with the terms of the Warrant.
 
(2)           In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon conversion hereof
are being acquired solely for the account of the undersigned, not as a nominee
for any other party, and for investment purposes only (unless such shares are
subject to resale pursuant to an effective prospectus), and that the undersigned
will not offer, sell or otherwise dispose of any such shares of Common Stock
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.
 
(3)           Terms not otherwise defined in this Notice of Exercise shall have
the meanings ascribed to such terms in the attached Warrant
 
(4)           Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned.
 

     
HOLDER
                       
 
 
 
   
(Date)
 
(Signature)
 

 
 

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EXHIBIT C

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.
 
WARRANT TO PURCHASE COMMON STOCK
 
OF
 
VIRTUAL PIGGY, INC.

WARRANT NO. 2013- _________

This WARRANT (“Warrant”) is to verify that, FOR VALUE RECEIVED, [____________]
(“Holder”) is entitled to purchase, subject to the terms and conditions hereof,
from Virtual Piggy, Inc. a Delaware corporation (the “Company”), [____________]
([____________]) shares of common stock, $0.0001 par value per share, of the
Company (the “Common Stock”), at any time during the period commencing at 9:00
a.m., Eastern Time on the date hereof (the “Commencement Date”) and ending at
5:00 p.m. Eastern Time on the second (2nd) anniversary hereof (the “Termination
Date”), at an exercise price (the “Exercise Price”) of $1.00 per share of Common
Stock.  The number of shares of Common Stock purchasable upon exercise of this
Warrant and the Exercise Price per share shall be subject to adjustment from
time to time upon the occurrence of certain events as set forth below.
 
The shares of Common Stock or any other shares or other units of stock or other
securities or property, or any combination thereof, then receivable upon
exercise of this Warrant, as adjusted from time to time, are sometimes referred
to hereinafter as “Exercise Shares.”  The exercise price per share as from time
to time in effect is referred to hereinafter as the “Exercise Price.”
 
1.             Exercise of Warrant; Issuance of Exercise Shares.

(a)           Exercise of Warrant.  Subject to the terms hereof, the purchase
rights represented by this Warrant are exercisable by the Holder in whole or in
part, at any time, and from time to time, by the surrender of this Warrant and
the Notice of Exercise annexed hereto duly completed and executed on behalf of
the Holder, 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 Holder at the address of
the Holder appearing on the books of the Company) accompanied by payment of the
Exercise Price in full in cash or by bank or certified check for the Exercise
Shares with respect to which this Warrant is exercised and a completed and duly
executed Notice of Exercise form attached hereto as Appendix A.
 
 
 

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In the event that this Warrant shall be duly exercised in part prior to the
Termination Date, the Company shall issue a new Warrant or Warrants of like
tenor evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.
 
(b)           Issuance of Exercise Shares; Delivery of Warrant Certificate.  The
Company shall, within three (3) business days after the exercise of this Warrant
(“Warrant Share Delivery Date”), issue in the name of and cause to be delivered
to the Holder one or more certificates representing the Exercise Shares to which
the Holder shall be entitled upon such exercise under the terms hereof.  Such
certificate or certificates shall be deemed to have been issued and the Holder
shall be deemed to have become the record holder of the Exercise Shares as of
the date of the due exercise of this Warrant.  In addition to any other rights
available to the Holder, if the Company fails to transmit to the Holder a
certificate or the certificates representing the Exercise Shares or to credit
the Holder’s balance account for such number of Exercise Shares pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market transaction
or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Exercise
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Amount”) exceeds
(y) the amount obtained by multiplying (1) the number of Exercise Shares that
the Company was required to deliver to the Holder in connection with the
exercise at issue times (2) the price at which the sell order giving rise to
such purchase obligation was executed, and (B) at the option of the Holder,
either (i) reinstate the portion of the Warrant and equivalent number of
Exercise Shares for which such exercise was not honored and refund the exercise
paid therefor or (ii) deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder.  For example, if the Holder’s Buy-In Amount
is $11,000 to cover a Buy-In with respect to an attempted exercise of shares of
Common Stock and if the aggregate sales price of the shares giving rise to such
Buy-In obligation was $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000.  The Holder
shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In and, upon request of the Company, evidence of
the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
 
(c)           Exercise Shares Fully Paid and Non-assessable.  The Company agrees
and covenants that all Exercise Shares issuable upon the due exercise of the
Warrant represented by this Warrant certificate (“Warrant Certificate”) will,
upon issuance and payment therefor in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Section 2 hereof, the Company
shall not be obligated to pay) or liens, charges, and security interests created
or permitted by the Company with respect to the issuance thereof.
 
 
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(d)           Reservation of Exercise Shares.  The Company covenants that during
the term that this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Exercise Shares upon the exercise of this Warrant.
 
(e)           Fractional Shares.  The Company shall not be required to issue
fractional shares of capital stock upon the exercise of this Warrant or to
deliver Warrant Certificates that evidence fractional shares of capital
stock.  In the event that any fraction of an Exercise Share would, except for
the provisions of this subsection (e), be issuable upon the exercise of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant
is exercised.  For purposes of this Warrant, the “Current Market Value” for any
day shall be determined as follows:
 
(i)           if the Exercise Shares are traded in the over-the-counter market
and not on any national securities exchange, the average of the mean between the
last bid and asked prices per share, as reported by Bloomberg, L.P., or an
equivalent generally accepted reporting service, or if not so reported, the
average of the closing bid and asked prices for an Exercise Share as furnished
to the Company by any member of the Financial Industry Regulatory Authority,
selected by the Company for that purpose; or
 
(ii)           if the Exercise Shares are listed or traded on a national
securities exchange, the closing price on the principal national securities
exchange on which they are so listed or traded, on the last business day prior
to the date of the exercise of this Warrant.  The closing price referred to in
this clause (ii) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed; or
 
(iii)           if the Exercise Shares are not traded in the over-the-counter
market or on any national securities exchange or no such closing price or
closing bid and asked prices are available, as determined in any reasonable
manner as may be prescribed by the Board of Directors of the Company.
 
2.             Payment of Taxes.

(a)           Stamp Taxes.  The Company will pay all documentary stamp taxes, if
any, attributable to the initial issuance of Exercise Shares upon the exercise
of this Warrant; provided, however, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Exercise Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant, and the Company
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.  Except as specifically provided in this
Section 2, Holder shall be responsible for the payment of all other taxes
incurred in connection with the receipt, transfer or sale of the Warrant or the
Exercise Shares.
 
 
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(b)Withholding.  The Holder shall pay to the Company, or make arrangements
satisfactory to the Company regarding payment of, any federal, state, local
and/or payroll taxes of any kind required by law to be withheld with respect to
the grant of this Warrant or the issuance of the Exercise Shares.  The Company
may, to the extent permitted by law, deduct any such taxes from any payment of
any kind otherwise due to the Holder whether or not pursuant to this
Warrant.  The Holder may elect, with the consent of the Company, to have such
tax withholding obligation satisfied, in whole or in part, by: (i) authorizing
the Company to withhold from the Exercise Shares a number of shares of Common
Stock having an aggregate Current Market Value that would satisfy the minimum
withholding amount due, or (ii) delivering to the Company a number of shares of
Common Stock of which the Holder is the record and beneficial owner and that
have been held by the Holder for at least six (6) months with an aggregate
Current Market Value that would satisfy the minimum withholding amount due.  The
Company may require that any fractional share amount be settled in cash.  For
the purposes of this Section 2, Current Market Value shall be determined as of
the date on which the amount of tax to be withheld is determined.
 
3.             Mutilated or Missing Warrant Certificates.  In case any Warrant
shall be mutilated, lost, stolen or destroyed, the Company may in its discretion
issue, in exchange and substitution for and upon cancellation of the mutilated
Warrant, or in lieu of and in substitution for the Warrant lost, stolen or
destroyed, a new Warrant or Warrants of like tenor and in the same aggregate
denomination, but only (i) in the case of loss, theft or destruction, upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and indemnity or bond, if requested, also reasonably
satisfactory to the Company and (ii) in the case of mutilation, upon surrender
of the mutilated Warrant.  Applicants for such substitute Warrants shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or its counsel may prescribe.

4.             Rights of Holder.  The Holder shall not, by virtue of anything
contained in this Warrant or otherwise, be entitled to any right whatsoever,
either in law or equity, of a stockholder of the Company, including without
limitation, the right to receive dividends or to vote or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
the election of directors of the Company or any other matter.

5.             Registration of Transfers and Exchanges.  This Warrant may be
transferred or exchanged, at the option of the Holder thereof and without
change, when surrendered to the Company at its principal office, or at the
office of its transfer agent, if any, for another Warrant or other Warrants of
like tenor and representing in the aggregate the right to purchase from the
Company a like number and kind of Exercise Shares as the Warrant surrendered for
exchange, and the Warrant so surrendered shall be canceled by the Company or
transfer agent, as the case may be.
 
 
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6.             Adjustment of Exercise Shares and Exercise Price.  The Exercise
Price and the number and kind of Exercise Shares purchasable upon the exercise
of this Warrant shall be subject to adjustment from time to time upon the
happening of certain events as hereinafter provided. The Exercise Price in
effect at any time and the number and kind of securities purchasable upon
exercise of each Warrant shall be subject to adjustment as follows:

(a)           In case of any consolidation or merger of the Company with another
corporation (other than a merger with another corporation in which the Company
is the surviving corporation and which does not result in any reclassification
or change -- other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination -- of outstanding Common Stock issuable upon such exercise), the
rights of the Holder of this Warrant shall be adjusted in the manner described
below:
 
(i)           In the event that the Company is the surviving corporation or is
merged into a wholly owned subsidiary for the purpose of incorporating the
Company in a different jurisdiction, this Warrant shall, without payment of
additional consideration therefor, be deemed modified so as to provide that the
Holder of this Warrant, upon the exercise thereof, shall procure, in lieu of
each share of Common Stock theretofore issuable upon such exercise, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change, consolidation or merger by the holder of each
share of Common Stock, had exercise of this Warrant occurred immediately prior
to such reclassification, change, consolidation or merger. This Warrant (as
adjusted) shall be deemed to provide for further adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 6.  The provisions of this clause (i) shall similarly apply to
successive reclassifications, changes, consolidations and mergers.
 
(ii)           In the event that the Company is not the surviving corporation
(except in the case of a merger of the Company into a wholly owned subsidiary
for the purpose of incorporating the Company in a different jurisdiction),
Holder shall be given at least fifteen (15) days prior written notice of such
transaction and shall be permitted to exercise this Warrant, to the extent it is
exercisable as of the date of such notice, during this fifteen (15) day
period.  Upon expiration of such fifteen (15) day period, this Warrant and all
of Holder’s rights hereunder shall terminate.
 
(b)   If the Company, at any time while this Warrant, or any portion thereof,
remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 6.
 
 
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(c)           In case the Company shall (i) pay a dividend or make a
distribution on its shares of Common Stock in shares of Common Stock, (ii)
subdivide or reclassify its outstanding Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding Common Stock into a
smaller number of shares, the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification, shall be proportionally adjusted
so that the Holder of this Warrant exercised after such date shall be entitled
to receive the aggregate number and kind of shares that, if this Warrant had
been exercised by such Holder immediately prior to such date, he would have
owned upon such exercise and been entitled to receive upon such dividend,
subdivision, combination or reclassification.  For example, if the Company
declares a 2 for 1 stock dividend or stock split and the Exercise Price
immediately prior to such event was $0.40 per share, the adjusted Exercise Price
immediately after such event would be $0.20 per share. Such adjustment shall be
made successively whenever any event listed above shall occur.  Whenever the
Exercise Price payable upon exercise of each Warrant is adjusted pursuant to
this subsection (c), the number of Exercise Shares purchasable upon exercise of
this Warrant shall simultaneously be adjusted by multiplying the number of
Exercise Shares initially issuable upon exercise of this Warrant by the Exercise
Price in effect on the date hereof and dividing the product so obtained by the
Exercise Price, as adjusted.
 
(d)           In the event that at any time, as a result of an adjustment made
pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant
thereafter shall become entitled to receive any Exercise Shares of the Company,
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in subsections (a), (b) or
(c) above.
 
(e)           Irrespective of any adjustments in the Exercise Price or the
number or kind of Exercise Shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the same price
and number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant.
 
(f)           Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section 6, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer’s certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment.  Each such officer’s certificate shall be made available at all
reasonable times for inspection by the holder and the Company shall, forthwith
after each such adjustment, mail a copy of such certificate to the Holder.
 
(g)           All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one one-hundredth (1/100th) of a share, as the case may
be.
 
7.             Investment Intent, Exercise Restrictions and Transfer
Restrictions.
 
(a)           The Warrant and the Exercise Shares may not be offered for sale or
sold, or otherwise transferred or sold by the Holder in any transaction which
would constitute a sale thereof within the meaning of the Securities Act of
1933, as amended (the “1933 Act”), unless (i) such security has been registered
for sale under the 1933 Act and registered or qualified under applicable state
securities laws relating to the offer and sale of securities, or (ii) exemptions
from the registration requirements of the 1933 Act and the registration or
qualification requirements of all such state securities laws are available and
the Company shall have received an opinion of counsel satisfactory to the
Company that the proposed sale or other disposition of such securities may be
effected without registration under the 1933 Act and would not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and such opinion to be
satisfactory to the Company.
 
 
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The Holder agrees to indemnify and hold harmless the Company against any loss,
damage, claim or liability arising from the disposition of this Warrant or any
Exercise Share held by such holder or any interest therein in violation of the
provision of this Section 7(a).
 
(b)           The certificates evidencing any Exercise Shares issued upon the
exercise of this Warrant shall have endorsed thereon (except to the extent that
the restrictions described in any such legend are no longer applicable)
substantially the following legend, appropriate notations thereof will be made
in the Company's stock transfer books, and stop transfer instructions reflecting
these restrictions on transfer will be placed with the transfer agent of the
Exercise Shares.
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.

 
8.           Notices.  All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile or
other electronic transmission service to the appropriate address or number as
set forth below:

If to the Company:

Virtual Piggy, Inc.
1221 Hermosa Avenue, Suite 210
Hermosa Beach, CA 90254
Fax: (310) 634-1246
Attention: Chief Financial Officer
 
 
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with a copy to:
 
Wiggin and Dana LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, CT 06901
Fax: (203) 363-7676
Attention: Michael Grundei

and to the Holder at the address of the Holder appearing on the books of the
Company or the Company's transfer agent, if any.

Either of the Company or the Holder may from time to time change the address to
which notices to it are to be mailed hereunder by notice in accordance with the
provisions of this Section 8.
 
9.            Supplements and Amendments.  The Company may from time to time
supplement or amend this Warrant without the approval of the Holder of this
Warrant in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision, or to make any other provisions in regard to matters or questions
herein arising hereunder which the Company may deem necessary or desirable and
which shall not materially adversely affect the interests of the Holder.  Except
as set forth in the immediately preceding sentence, this Warrant may not be
amended, modified or supplemented except by an instrument or instruments in
writing signed by the party against whom enforcement of any such amendment,
modification or supplement is sought.

10.           Successors.  This Warrant shall inure to the benefit of and be
binding on the respective successors, assigns and legal representatives of the
Holder and the Company.

11.           Severability.  If for any reason any provision, paragraph or terms
of this Warrant is held to be invalid or unenforceable, all other valid
provisions herein shall remain in full force and effect and all terms,
provisions and paragraphs of this Warrant shall be deemed to be severable.

12.           Governing Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.

13.           Attorneys' Fees.  If the Holder or the Company institutes legal
action to resolve any dispute arising under or in connection with this
Agreement, the prevailing party in such action (as determined by the court,
agency or other authority before which such suit or proceeding is commenced),
shall be entitled to such reasonable attorneys' fees, costs and expenses as may
be fixed by the decision maker.  The foregoing includes reasonable attorneys'
fees, expenses and costs of investigation incurred in (1) appellate proceedings;
(2) in any post-judgment proceedings to collect or enforce the judgment; (3)
establishing the right to indemnification; and (4) any action or participation
in, or in connection with, any case or proceeding under Chapter 7, 11 or 13 of
the Bankruptcy Code (11 United States Code Sections 101 et seq.), or any
successor statutes.  This provision is separate and several and shall survive
the termination of this Agreement.
 
 
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14.           Headings.  Section and subsection headings used herein are
included herein for convenience of reference only and shall not affect the
construction of this Warrant nor constitute a part of this Warrant for any other
purpose.

15.           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be treated as an original but all of which taken together
shall constitute but one and the same instrument.  Facsimile or other
electronically transmitted signatures shall be treated as originals for all
purposes.
 
[Remainder of page intentionally left blank.  Signatures on following page.]
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the Company has caused this Warrant No. 2013-_________ to be
duly executed and delivered by its proper and duly authorized officer as of the
27th day of December, 2013.

 
VIRTUAL PIGGY, INC.
 
a Delaware corporation
                   
By:
 
   
Name:
   
Title:

 

ACKNOWLEDGED AND AGREED:
     
[____________]
         
 
 
[____________]
 

[Signature Page to Warrant to Purchase Common Stock of Virtual Piggy, Inc.]
 
 
 

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APPENDIX A

NOTICE OF EXERCISE

 
To:
Virtual Piggy, Inc.

1221 Hermosa Avenue, Suite 210
Hermosa Beach, CA 90254

Attention: Chief Financial Officer
 

(1)           The undersigned hereby elects to purchase ____________ shares of
Common Stock of Virtual Piggy, Inc., a Delaware corporation, pursuant to the
terms of the attached Warrant, and tenders herewith payment of the Exercise
Price for such shares in full in accordance with the terms of the Warrant.
 
(2)           In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon conversion hereof
are being acquired solely for the account of the undersigned, not as a nominee
for any other party, and for investment purposes only (unless such shares are
subject to resale pursuant to an effective prospectus), and that the undersigned
will not offer, sell or otherwise dispose of any such shares of Common Stock
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.
 
(3)           Terms not otherwise defined in this Notice of Exercise shall have
the meanings ascribed to such terms in the attached Warrant
 
(4)           Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned.
 

     
HOLDER
                       
 
 
 
   
(Date)
 
(Signature)
 

 

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