EXIBIT 10.30

Form of the Warrant dated September 24, 2007
 
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Execution Copy

THIS WARRANT (THIS “WARRANT”) AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR
SALE OR SOLD UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER OR SALE. THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED OR ASSIGNED TO ANY PERSON
EXCEPT IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS.
 
WARRANT
 
TO PURCHASE COMMON STOCK

OF
 
MANARIS CORPORATION
 
Issue Date: September 24, 2007
Warrant No. 2-A

 

THIS CERTIFIES that IMPERIUM MASTER FUND, LTD. or any subsequent holder hereof
(the “Holder”), has the right to purchase from MANARIS CORPORATION, a Nevada
corporation (the “Company”), up to 20,276,190 fully paid and nonassessable
shares of the Company’s common stock, par value $.00001 per share (the “Common
Stock”), subject to adjustment as provided herein, at a price per share equal to
the Exercise Price (as defined below), at any time and from time to time
beginning on the Issue Date and ending at 5:00 p.m., New York City time, on the
fifth (5th) anniversary of the Issue Date or, if such day is not a Business Day,
on the next succeeding Business Day (the “Expiration Date”).

This Warrant is issued pursuant to a Securities Purchase and Loan Agreement,
dated as of the date hereof (the “Loan Agreement”). If this Warrant is partially
assigned and divided into two or more notes, such additional warrants along with
the remainder of this Warrant are collectively referred to herein as the
“Warrants”.
 
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1. DEFINITIONS.

(a) Defined Terms. The following terms shall apply to this Warrant:
 
“Assumed Variable Market Price” has the meaning set forth in Section 7(e)(ii)(B)
of this Warrant.

“Cash Exercise” has the meaning set forth in Section 6 of this Warrant.

“Cashless Exercise” has the meaning set forth in Section 6 of this Warrant.

“Common Stock” has the meaning set forth in the preamble to this Warrant.

“Company” has the meaning set forth in the preamble to this Warrant.

“Convertible Securities” means any stock or securities (other than Options) of
the Company convertible into or exercisable or exchangeable for Common Stock. 

“Delivery Date” has the meaning set forth in Section 3 of this Warrant.
 
“Determination Date” has the meaning set forth in Section 7(c) of this Warrant.
 
“Dilutive Issuance” has the meaning set forth in Section 7(e)(i) of this
Warrant.
 
“Dispute Procedure” has the meaning set forth in Section 2(b) of this Warrant.
 
“Distribution”, “Distribution Date” and Distribution Notice” have the respective
meanings set forth in Section7(c) of this Warrant.

“DTC” has the meaning set forth in Section 3 of this Warrant.
 
“Expiration Date” has the meaning set forth in the preamble to this Warrant.

“Exercise Date” has the meaning set forth in Section 2(b) of this Warrant.

“Exercise Default” has the meaning set forth in Section 4(a) of this Warrant.
 
“Exercise Notice” has the meaning set forth in Section 2(b) of this Warrant.

“Exercise Price” has the meaning set forth in Section 2(a) of this Warrant.
 
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“FAST” has the meaning set forth in Section 3 of this Warrant.

“Holder” has the meaning set forth in the preamble to this Warrant.

“Issue Date” means the Issue Date set forth on the front page of this Warrant.

“Major Transaction” means the existence, occurrence or public announcement of,
or entering into an agreement contemplating, a merger, consolidation, business
combination, tender offer, exchange of shares, recapitalization, reorganization,
redemption or other similar event, as a result of which shares of Common Stock
shall be changed into, or exchanged or tendered for, the same or a different
number of shares of the same or another class or classes of stock or securities
or other assets of the Company or another entity.

“Market Price” means, as of a particular date, the highest daily VWAP during the
period of twenty (20) consecutive Trading Days occurring immediately prior to
(but not including) such date as reported in the Principal Market for such
securities. If Market Price cannot be calculated for the Common Stock because
the Common Stock is no longer publicly traded or otherwise, then the Company
shall submit such calculation to an independent investment banking firm of
national reputation reasonably acceptable to the Holder, and shall cause such
investment banking firm to perform such determination and notify the Company and
the Holder of the results of determination no later than five (5) Business Days
from the time such calculation was submitted to it by the Company.

“Options” means any rights, warrants or options to subscribe for, purchase or
receive Common Stock or Convertible Securities.

“Record Date” has the meaning set forth in Section 7(c) of this Warrant.
 
“VWAP” on a Trading Day means the volume weighted average price of the Common
Stock for such Trading Day on the Principal Market as reported by Bloomberg
Financial Markets or, if Bloomberg Financial Markets is not then reporting such
prices, by a comparable reporting service of national reputation selected by the
Holders and reasonably satisfactory to the Company.

“Warrant Shares” has the meaning set forth in Section 2(a) of this Warrant.

(b) Terms Defined in the Loan Agreement. Any capitalized term used but not
defined herein has the meaning specified in the Loan Agreement.

(c) Usage.  All definitions contained in this Warrant are equally applicable to
the singular and plural forms of the terms defined. The words “hereof”, “herein”
and “hereunder” and words of similar import refer to this Warrant as a whole and
not to any particular provision of this Warrant.
 
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2. EXERCISE.

(a)  Right to Exercise; Exercise Price. The Holder shall have the right to
exercise this Warrant at any time and from time to time during the period
beginning on the Issue Date and ending at 5 p.m., New York City time, on the
Expiration Date as to all or any part of the shares of Common Stock covered
hereby (the “Warrant Shares”). The “Exercise Price” for each Warrant Share
purchased by the Holder upon the exercise of this Warrant shall be $0.11,
subject to adjustment for the events specified in Section 7 of this Warrant.

(b)  Exercise Notice. In order to exercise this Warrant, the Holder shall (i)
send by facsimile transmission, at any time prior to 5:00 p.m., New York City
time, on the Business Day on which the Holder wishes to effect such exercise
(the “Exercise Date”), to the Company an executed copy of the notice of exercise
in the form attached hereto as Exhibit A (the “Exercise Notice”) and (ii) in the
case of a Cash Exercise, deliver the Exercise Price to the Company by wire
transfer of immediately available funds. The Holder shall promptly thereafter
deliver the original Warrant to the Company for cancellation (and replacement
with a new Warrant if exercised in part) pursuant to Section 2(d) of this
Warrant. The Exercise Notice shall also state the name or names in which the
Warrant Shares issuable on such exercise shall be issued if other than the
Holder. In the case of a dispute as to the calculation of the Exercise Price or
the number of Warrant Shares issuable hereunder (including, without limitation,
the calculation of any adjustment pursuant to Section 7 below), the Company
shall promptly issue to the Holder the number of Warrant Shares that are not
disputed and shall submit the disputed calculations to a certified public
accounting firm of national recognition (other than the Company’s independent
accountants) within two (2) Business Days following the date on which the
Exercise Notice is delivered to the Company. The Company shall use its best
efforts to cause such accountant to calculate the Exercise Price and/or the
number of Warrant Shares issuable hereunder and to notify the Company and the
Holder of the results in writing no later than two (2) Business Days following
the day on which such accountant received the disputed calculations (the
“Dispute Procedure”). Such accountant’s calculation shall be deemed conclusive
absent manifest error. The fees of any such accountant shall be borne by the
party whose calculations were most at variance with those of such accountant.

(c) Holder of Record. The Holder shall, for all purposes, be deemed to have
become the holder of record of the Warrant Shares specified in an Exercise
Notice on the Exercise Date specified therein, irrespective of the date of
delivery of such Warrant Shares. Except as specifically provided herein, nothing
in this Warrant shall be construed as conferring upon the Holder hereof any
rights as a stockholder of the Company prior to the Exercise Date.

(d)  Cancellation of Warrant. This Warrant shall be canceled upon its exercise
and, if this Warrant is exercised in part, the Company shall, at the time that
it delivers Warrant Shares to the Holder pursuant to such exercise as provided
herein, issue a new warrant, and deliver to the Holder a certificate
representing such new warrant, with terms identical in all respects to this
Warrant (except that such new warrant shall be exercisable into the number of
shares of Common Stock with respect to which this Warrant shall remain
unexercised); provided, however, that the Holder shall be entitled to exercise
all or any portion of such new warrant at any time following the time at which
this Warrant is exercised, regardless of whether the Company has actually issued
such new warrant or delivered to the Holder a certificate therefor.
 
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3. DELIVERY OF WARRANT SHARES UPON EXERCISE.

Upon receipt of an Exercise Notice pursuant to Section 2 of this Warrant, the
Company shall, (A) in the case of a Cash Exercise no later than the close of
business on the later to occur of (i) the third (3rd) Business Day following the
Exercise Date set forth in such Exercise Notice and (ii) the date on which the
Company has received payment of the Exercise Price, and (B) in the case of a
Cashless Exercise, no later than the close of business on the third (3rd)
Business Day following the Exercise Date set forth in such Exercise Notice, and
(C) with respect to Warrant Shares that are the subject of a Dispute Procedure,
the close of business on the third (3rd) Business Day following the
determination made pursuant to Section 2(b) of this Warrant (each of the dates
specified in the foregoing clauses (A), (B) or (C) being referred to as a
“Delivery Date”), issue and deliver or cause to be delivered to the Holder the
number of Warrant Shares as shall be determined as provided herein. The Company
shall effect delivery of Warrant Shares to the Holder by delivering to the
Holder or its nominee physical certificates representing such Warrant Shares, no
later than the close of business on such Delivery Date. If the Transfer Agent
participates in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer program (“FAST”), and the Holder so specifies in an Exercise Notice or
otherwise in writing on or before the Exercise Date, the Company shall effect
delivery of Warrant Shares by crediting the account of the Holder or its nominee
at DTC (as specified in the applicable Exercise Notice) with the number of
Warrant Shares required to be delivered, no later than the close of business on
such Delivery Date. If any exercise would create a fractional Warrant Share,
such fractional Warrant Share shall be disregarded and the number of Warrant
Shares issuable upon such exercise, in the aggregate, shall be the nearest whole
number of Warrant Shares. Warrant Shares delivered to the Holder shall not
contain any restrictive legend unless such legend is required by applicable
securities laws.

4. FAILURE TO DELIVER WARRANT SHARES.

(a) In the event that the Company fails for any reason (other than as a result
of the Holder’s failure, in the case of a Cash Exercise, to pay the aggregate
Exercise Price for the Warrant Shares being purchased) to deliver to the Holder
the number of Warrant Shares specified in the applicable Exercise Notice
(without any restrictive legend if so required under the Loan Agreement) on or
before the third (3rd) Business Day following the Delivery Date therefor, or
fails to remove any restrictive legend from outstanding Warrant Shares at the
request of the Holder to the extent required under the Loan Agreement on or
before the third (3rd) Business Day following such request (an “Exercise
Default”), the Holder shall have the right to receive from the Company an amount
equal to (i) (N/365) multiplied by (ii) the aggregate Market Price of the
Warrant Shares (calculated as of the date on which the applicable Exercise
Notice was delivered) which are the subject of such Exercise Default multiplied
by (iii) the lower of eighteen percent (18%) and the maximum rate permitted by
applicable law or by the applicable rules or regulations of any Governmental
Authority, where “N” equals the number of days elapsed between the original
Delivery Date of such Warrant Shares (or from such third Business Day in the
event of a failure to remove a legend from outstanding Warrant Shares) and the
date on which such Exercise Default has been cured. Amounts payable under the
preceding sentence shall be paid to the Holder in immediately available funds on
or before the second (2nd) Business Day following written notice from the Holder
to the Company specifying the amount owed to it by the Company. In the event
that shares of Common Stock are purchased by or on behalf of the Holder in order
to make delivery on a sale effected in anticipation of receiving Warrant Shares
upon an exercise, the Holder shall have the right to receive from the Company,
in addition to the foregoing amounts, (i) the aggregate amount paid by or on
behalf of the Holder for such shares of Common Stock minus (ii) the aggregate
amount of net proceeds, if any, received by the Holder from the sale of the
Warrant Shares issued by the Company pursuant to such exercise.
 
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(b) In addition to its rights under Section 4(a) of this Warrant, upon an
Exercise Default, the Holder shall have the right to pursue all other remedies
available to it at law or in equity (including, without limitation, a decree of
specific performance and/or injunctive relief). 
 
5. EXERCISE LIMITATION.

The Holder shall not be permitted to exercise this Warrant, or part thereof, if,
upon such exercise, the number of shares of Common Stock beneficially owned by
the Holder (other than shares which may be deemed beneficially owned except for
being subject to a limitation on exercise or exercise analogous to the
limitation contained in this Section 5), would exceed 9.9% of the number of
shares of Common Stock then issued and outstanding, it being the intent of the
Company and the Holder that the Holder not be deemed at any time to have the
power to vote or dispose of greater than 9.9% of the number of shares of Common
Stock issued and outstanding at any time. Nothing contained herein shall be
deemed to restrict the right of the Holder to exercise this Warrant at such time
as such exercise will not violate the provisions of this Section 5. As used
herein, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act. The holders of Common Stock are to be deemed
third-party beneficiaries of the limitation imposed hereby and, accordingly,
this Section 5 may not be amended without the consent of the holders of a
majority of the shares of Common Stock then outstanding; provided, however, that
the Holder shall have the right, upon sixty (60) days’ prior written notice to
the Company, to waive the provisions of this Section 5 without obtaining such
consent.

6. PAYMENT OF THE EXERCISE PRICE; CASHLESS EXERCISE.

The Holder may pay the Exercise Price through a cash exercise (a “Cash
Exercise”) by delivering immediately available funds on the Exercise Date, or if
at any time after August 22, 2008 all or some of the Warrant Shares may not be
sold pursuant to an effective registration statement, the Holder may elect to
pay the Exercise Price through a cashless exercise (a “Cashless Exercise”),
whether exclusively or in combination with a Cash Exercise. The Holder shall
effect a Cashless Exercise by surrendering this Warrant to the Company and
noting on the Exercise Notice that the Holder wishes to effect a Cashless
Exercise, upon which the Company shall issue to the Holder a number of Warrant
Shares determined as follows:
 
X = Y x (A-B)/A

where:   X = the number of Warrant Shares to be issued to the Holder;

Y = the number of Warrant Shares with respect to which this Warrant is being
exercised;
 
A = the VWAP on the Trading Day immediately preceding the date of such election;
and

B = the Exercise Price.
 
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It is intended and acknowledged that the Warrant Shares issued in a Cashless
Exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares required by Rule 144 shall be deemed
to have been commenced, on the Issue Date.

7. ANTI-DILUTION ADJUSTMENTS; DISTRIBUTIONS; OTHER EVENTS.

The Exercise Price and the number of Warrant Shares issuable hereunder shall be
subject to adjustment from time to time as provided in this Section 7.

(a) Stock Splits, Stock Interests, Etc. If, at any time on or after the Issue
Date, the number of outstanding shares of Common Stock is increased by a stock
split, stock dividend, reclassification or other similar event, the Exercise
Price shall be proportionately reduced, or if the number of outstanding shares
of Common Stock is decreased by a reverse stock split, combination,
reclassification or other similar event, the Exercise Price shall be
proportionately increased.
 
(b) Major Transactions. If, at any time after the Issue Date, any Major
Transaction shall occur, then the Holder shall thereafter have the right to
exercise this Warrant in whole or in part at any time prior to, on or after the
record date for the receipt of the consideration payable to the holders of
Common Stock and shall be entitled to receive, in lieu of the shares of Common
Stock otherwise issuable upon exercise of this Warrant, such shares of stock,
securities and/or other assets as would have been issued or payable upon such
Major Transaction with respect to or in exchange for the number of shares of
Common Stock which would have been issuable upon exercise of this Warrant had
such Major Transaction not taken place (without giving effect to any limitations
on such exercise contained in this Warrant). The Company shall not effect any
Major Transaction unless (1) subsequent to the public disclosure by the Company
of such Major Transaction, the Holder has been given written notice of such
transaction by the earlier of (A) the date that is thirty (30) days (sixty one
(61) days if, without giving effect to the limitation on exercise contained in
Section 5, the Holder would beneficially own more than 9.9% of the Common Stock
then outstanding) prior to the date on which such transaction is consummated,
and (B) the date that is fifteen (15) days prior to the record date for the
determination of the Company’s stockholders entitled to vote with respect to
such transaction, and (2) the resulting successor or acquiring entity (if not
the Company) assumes by written instrument (in form and substance reasonably
satisfactory to the Holder) the obligations of the Company under this Warrant,
with such adjustments to the Exercise Price and the securities covered hereby as
may be necessary in order to preserve the economic benefits of this Warrant to
the Holder. The above provisions shall apply regardless of whether or not there
would have been a sufficient number of shares of Common Stock authorized and
available for issuance upon exercise of this Warrant as of the date of such
transaction, and shall similarly apply to successive Major Transactions.
 
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(c) Distributions. If, at any time after the Issue Date, the Company declares or
makes any distribution of cash or any other assets (or rights to acquire such
assets) to holders of Common Stock, including without limitation any dividend or
distribution to the Company’s stockholders in shares (or rights to acquire
shares) of capital stock of a subsidiary (a “Distribution”), the Company shall
deliver written notice of such Distribution (a “Distribution Notice”) to the
Holder at least fifteen (15) days prior to the earlier to occur of (i) the
record date for determining stockholders entitled to such Distribution (the
“Record Date”) and (ii) the date on which such Distribution is made (the
“Distribution Date”) (the earlier of such dates being referred to as the
“Determination Date”). Upon receipt of the Distribution Notice, the Holder shall
promptly (but in no event later than three (3) Business Days) notify the Company
whether it has elected (A) to receive the same amount and type of assets
(including, without limitation, cash) being distributed as though the Holder
were, on the Determination Date, a holder of a number of shares of Common Stock
into which this Warrant is exercisable as of such Determination Date (such
number of shares to be determined without giving effect to any limitations on
such exercise) or (B) upon any exercise of this Warrant on or after the
Distribution Date, to reduce the Exercise Price in effect on the Business Day
immediately preceding the Record Date (such date being deemed the Exercise Date
for purposes hereof) by an amount equal to the fair market value of the assets
to be distributed divided by the number of shares of Common Stock as to which
such Distribution is to be made, such fair market value to be reasonably
determined in good faith by the Board of Directors and reasonably acceptable to
the Holder. Upon receipt of such election notice from the Holder, the Company
shall timely effectuate the transaction or adjustment contemplated in the
foregoing clause (A) or (B), as applicable.  If the Holder does not notify the
Company of its election pursuant to the preceding sentence on or prior to the
Determination Date, the Holder shall be deemed to have elected clause (A) of the
preceding sentence.
 
(d) Convertible Securities; Options. If, at any time after the Issue Date, the
Company issues Convertible Securities or Options to the record holders of the
Common Stock, whether or not such Convertible Securities or Options are
immediately convertible, exercisable or exchangeable, then the Holders shall be
entitled, upon any exercise of this Warrant on or after the date of record for
determining stockholders entitled to receive such Convertible Securities or
Options (or if no such record is taken, the date on which such Convertible
Securities or Options are issued), to receive the aggregate number of
Convertible Securities or Options which the Holder would have received with
respect to the shares of Common Stock issuable upon such exercise (without
giving effect to any limitations on such exercise contained in this Warrant) had
the Holder been the holder of such shares of Common Stock on the record date for
the determination of stockholders entitled to receive such Convertible
Securities or Options (or if no such record is taken, the date on which such
Convertible Securities or Options were issued).
 
(e) Dilutive Issuances.
 
(i) Adjustment Upon Dilutive Issuance.
 
If, at any time after the Issue Date, the Company issues or sells, or in
accordance with Section 7(e)(ii) is deemed to have issued or sold, any shares of
Common Stock for no consideration or for a consideration per share less than the
Exercise Price in effect on the date of such issuance or sale (or deemed
issuance or sale) (a “Dilutive Issuance”), then the Exercise Price shall be
adjusted so as to equal the consideration received or receivable by the Company
(on a per share basis) for the additional shares of Common Stock so issued, sold
or deemed issued or sold in such Dilutive Issuance (which, in the case of a
deemed issuance or sale, shall be calculated in accordance with Section 7(e)(ii)
below). Notwithstanding the foregoing, no adjustment shall be made pursuant to
this Section 7(e)(i) if such adjustment would result in an increase in the
Exercise Price.
 
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(ii) Effect On Exercise Price Of Certain Events. For purposes of determining the
adjusted Exercise Price under Section 7(e)(i), the following will be applicable:

(A) Issuance Of Options. If the Company issues or sells any Options, whether or
not immediately exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Options (and the price of any conversion of
Convertible Securities, if applicable) is less than the Exercise Price in effect
on the date of issuance or sale of such Options (such date being deemed the
Exercise Date for purposes hereof), then the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion, exercise or exchange of Convertible Securities, if applicable)
shall, as of the date of the issuance or sale of such Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For purposes of the preceding sentence, the “price per share for which
Common Stock is issuable upon the exercise of such Options” shall be determined
by dividing (x) the total amount, if any, received or receivable by the Company
as consideration for the issuance or sale of all such Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the exercise of all such Options, plus, in the case of Convertible
Securities issuable upon the exercise of such Options, the minimum aggregate
amount of additional consideration payable upon the conversion, exercise or
exchange thereof (determined in accordance with the calculation method set forth
in Section 7(e)(ii)(B) below) at the time such Convertible Securities first
become convertible, exercisable or exchangeable, by (y) the maximum total number
of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion, exercise or exchange of Convertible Securities, if
applicable). No further adjustment to the Exercise Price shall be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion, exercise or exchange of Convertible Securities issuable upon
exercise of such Options. To the extent that shares of Common Stock or
Convertible Securities are not delivered pursuant to such Options, upon the
expiration or termination of such Options, the Exercise Price shall be
readjusted to the Exercise Price that would then be in effect had the
adjustments made upon the issuance of such Options been made on the basis of
delivery of only the number of shares of Common Stock actually delivered.
 
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(B) Issuance Of Convertible Securities. If the Company issues or sells any
Convertible Securities, whether or not immediately convertible, exercisable or
exchangeable, and the price per share for which Common Stock is issuable upon
such conversion, exercise or exchange is less than the Exercise Price in effect
on the date of issuance or sale of such Convertible Securities (such date being
deemed the Exercise Date for purposes hereof), then the maximum total number of
shares of Common Stock issuable upon the conversion, exercise or exchange of all
such Convertible Securities shall, as of the date of the issuance or sale of
such Convertible Securities, be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. If the Convertible Securities
so issued or sold do not have a fluctuating conversion or exercise price or
exchange ratio, then for the purposes of the immediately preceding sentence, the
“price per share for which Common Stock is issuable upon such conversion,
exercise or exchange” shall be determined by dividing (A) the total amount, if
any, received or receivable by the Company as consideration for the issuance or
sale of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion,
exercise or exchange thereof (determined in accordance with the calculation
method set forth in this Section 7(e)(ii)(B)) at the time such Convertible
Securities first become convertible, exercisable or exchangeable, by (B) the
maximum total number of shares of Common Stock issuable upon the exercise,
conversion or exchange of all such Convertible Securities. If the Convertible
Securities so issued or sold constitute a Variable Rate Security, then for
purposes of the first sentence of this Section 7(e)(ii)(B), the “price per share
for which Common Stock is issuable upon such conversion, exercise or exchange”
shall be deemed to be the lowest price per share which would be applicable
(assuming all holding period and other conditions to any discounts contained in
such Variable Rate Security have been satisfied) if the conversion price of such
Variable Rate Security on the date of issuance or sale thereof were equal to the
actual conversion price on such date (or such higher minimum conversion price if
such Variable Rate Security is subject to a minimum conversion price) (the
“Assumed Variable Market Price”), and, further, if the conversion price of such
Variable Rate Security at any time or times thereafter is less than or equal to
the Assumed Variable Market Price last used for making any adjustment under this
Section 7(e) with respect to any Variable Rate Security, the Exercise Price in
effect at such time shall be readjusted to equal the Exercise Price which would
have resulted if the Assumed Variable Market Price at the time of issuance of
the Variable Rate Security had been equal to the actual conversion price of such
Variable Rate Security existing at the time of the adjustment required by this
sentence; provided, however, that if the conversion or exercise price or
exchange ratio of a Convertible Security may fluctuate solely as a result of
provisions designed to protect against dilution, such Convertible Security shall
not be deemed to be a Variable Rate Security. No further adjustment to the
Exercise Price shall be made upon the actual issuance of such Common Stock upon
conversion, exercise or exchange of such Convertible Securities.
 
(C) Change In Option Price Or Conversion Rate. If there is a change at any time
in (x) the amount of additional consideration payable to the Company upon the
exercise of any Options; (y) the amount of additional consideration, if any,
payable to the Company upon the conversion, exercise or exchange of any
Convertible Securities; or (z) the rate at which any Convertible Securities are
convertible into or exercisable or exchangeable for Common Stock (in each such
case, other than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of such change shall be
readjusted to the Exercise Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion, exercise or exchange
rate, as the case may be, at the time initially issued or sold.
 
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(D) Calculation Of Consideration Received. If any Common Stock, Options or
Convertible Securities are issued or sold for cash, the consideration received
therefor will be the amount received by the Company therefor. In case any Common
Stock, Options or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, including in the case of a
strategic or similar arrangement in which the other entity will provide services
to the Company, purchase services from the Company or otherwise provide
intangible consideration to the Company, the amount of the consideration other
than cash received by the Company (including the net present value of the
consideration expected by the Company for the provided or purchased services)
shall be the fair market value of such consideration. In case any Common Stock,
Options or Convertible Securities are issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair market value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. A majority of the independent members of the Company’s Board of
Directors shall calculate reasonably and in good faith, using standard
commercial valuation methods appropriate for valuing such assets, the fair
market value of any consideration.

(iii) Exceptions To Adjustment Of Exercise Price. Notwithstanding the foregoing,
no adjustment to the Exercise Price shall be made pursuant to this Section 7(e)
upon the issuance of any Excluded Securities.

(f) Notice Of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price pursuant to this Section 7 resulting in a
change in the Exercise Price by more than one percent (1%), or any change in the
number or type of stock, securities and/or other property issuable upon exercise
of this Warrant, the Company, at its expense, shall promptly compute such
adjustment, readjustment or change and prepare and furnish to the Holder a
certificate setting forth such adjustment, readjustment or change and showing in
detail the facts upon which such adjustment, readjustment or change is based.
The Company shall, upon the written request at any time of the Holder, furnish
to the Holder a like certificate setting forth (i) such adjustment, readjustment
or change, (ii) the Exercise Price at the time in effect and (iii) the number of
shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon exercise of this Warrant.
 
(g) Adjustments; Additional Shares, Securities or Assets. In the event that at
any time, as a result of an adjustment made pursuant to this Section 7, the
Holder of this Warrant shall, upon exercise of this Warrant, become entitled to
receive securities or assets (other than Common Stock) then, wherever
appropriate, all references herein to shares of Common Stock shall be deemed to
refer to and include such shares and/or other securities or assets; and
thereafter the number of such shares and/or other securities or assets shall be
subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 7. Any adjustment
made herein that results in a decrease in the Exercise Price shall also effect a
proportional increase in the number of shares of Common Stock into which this
Warrant is exercisable so that the aggregate Exercise Price that the Holder must
pay in order to exercise this Warrant in full shall remain unchanged immediately
before and after such adjustment.
 
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(h) True-Up. In the event that, at any time of determination,
 
(1) the sum of (i) the number of shares of Common Stock for which this Warrant
and the Advisory Fee Warrant are then exercisable plus (ii) the number of shares
into which the Convertible Note is then convertible plus (iii) the number of
shares of Common Stock issued prior to such time of determination under this
Warrant, the Advisory Fee Warrant or the Convertible Note is less than forty
percent (40%) of 
 
(2) the sum of (i) the number of shares of Common Stock outstanding as of the
date hereof (as adjusted for stock splits, reserve stock splits and similar
events) plus (ii) the number of shares of Common Stock outstanding at such time
of determination that were issued under the Options and Convertible Securities
outstanding as of the date hereof plus (iii) the number of shares of Common
Stock outstanding at such time of determination that were issued under any
Options or Convertible Securities issued after the date hereof (to the extent
such Options or Convertible Securities constitute “Excluded Securities” under
clause (ii) of the definition of “Excluded Securities” (as defined in the Loan
Agreement)); then,
 
the number of shares for which this Warrant may be exercised shall be increased
by such shortfall. The adjustment contemplated by this Section 7(h) may be made
at any time or from time to time, and after each such adjustment, the Company
shall comply with the notice requirements of Section 7(f).
 
8. MISCELLANEOUS.
 
(a) Failure to Exercise Rights not Waiver. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude any other or further exercise thereof.
All rights and remedies of the Holder hereunder are cumulative and not exclusive
of any rights or remedies otherwise available. In the event that the Company
breaches any of its obligations hereunder to issue Warrant Shares or pay any
amounts as and when due, the Company shall bear all costs incurred by the Holder
in collecting such amount, including without limitation reasonable legal fees
and expenses.
 
(b) Notices. Any notice, demand or request required or permitted to be given by
the Company or the Holder pursuant to the terms of this Warrant shall be in
writing and shall be deemed delivered (i) when delivered personally, against
written receipt therefor, or by verifiable facsimile transmission, unless such
delivery is made on a day that is not a Business Day, in which case such
delivery will be deemed to be made on the next succeeding Business Day, (ii) on
the next Business Day after timely delivery to a nationally recognized overnight
courier and (iii) on the Business Day actually received if deposited in the U.S.
mail (certified or registered mail, return receipt requested, postage prepaid),
addressed as follows:

If to the Company:

Manaris Corporation
400 boul. Montpellier
Montreal, Quebec
Canada H4N 2G7
Attn: John Fraser, Chief Executive Officer
Tel: (514) 904-6030
Fax: (514) 744-2080

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With a Copy to:

Sichenzia Ross Friedman & Ference
61 Broadway
32nd Floor
New York, New York 10006
Attn: Darren M. Ocasio, Esq.
Tel: (212) 930-9700
Fax: (212) 930-9725

If to the Holder:

Imperium Master Fund, Ltd.
153 East 53rd Street
29th Floor
New York, New York 10022
Attn: Maurice Hryshko, Esq.
Tel:  (212) 433-1360
Fax: (212) 433-1361

or as shall otherwise be designated by such party in writing to the other
parties hereto in accordance this Section 8(b). Written confirmation of receipt
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission shall be
rebuttable evidence of receipt by facsimile in accordance with clause (i) above.

(c)  Amendments and Waivers. No (i) amendment to this Warrant or (ii) waiver of
any agreement or other obligation of the Company under this Warrant may be made
or given except pursuant to a written instrument executed by the Company and the
Holder. No waiver of any provision of this Warrant applicable to the Holder may
be made except pursuant to a written instrument executed by the Holder and the
Company. Any waiver given pursuant hereto shall be effective only in the
specific instance and for the specific purpose for which given.
 
(d)  Transfer of Warrant. The Holder may sell, transfer or otherwise dispose of
all or any part of this Warrant (including without limitation pursuant to a
pledge) to any Person as long as such sale, transfer or disposition is the
subject of an effective registration statement under the Securities Act and
applicable state securities laws, or is exempt from registration thereunder, and
is otherwise made in accordance with the applicable provisions of the Loan
Agreement. From and after the date of any such sale, transfer or disposition,
the transferee hereof shall be deemed to be the holder of the portion of this
Warrant acquired by such transferee, and the Company shall, as promptly as
practicable (but in no event later than three business days from the date it
receives notice thereof), issue and deliver to such transferee a new Warrant
identical in all respects to this Warrant, in the name of such transferee. The
Company shall be entitled to treat the original Holder as the holder of this
entire Warrant unless and until it receives written notice of the sale, transfer
or disposition hereof.
 
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(e)  Lost or Stolen Warrant. Upon receipt by the Company of evidence of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnity or security reasonably satisfactory to
the Company, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant identical in
all respects to this Warrant.
 
(f)  Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
 
(g) Successors and Assigns. The terms and conditions of this Warrant shall inure
to the benefit of and be binding upon the respective successors (whether by
merger or otherwise) and permitted assigns of the Company and the Holder. The
Company may not assign its rights or obligations under this Warrant except as
specifically required or permitted pursuant to the terms hereof.

[Signature Page to Follow]
 
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IN WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as
of the Issue Date.
 

        MANARIS CORPORATION  
   
   
    By:      

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Name:
Title:

 

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EXHIBIT A to WARRANT

EXERCISE NOTICE
 
The undersigned Holder hereby irrevocably exercises the right to
purchase ___________ of the shares of Common Stock (“Warrant Shares”) of MANARIS
CORPORATION evidenced by the attached Warrant (the “Warrant”). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as:

______ a Cash Exercise with respect to _________________ Warrant Shares; and/or

______ a Cashless Exercise with respect to _________________ Warrant Shares.

2. Payment of Exercise Price. In the event that the Holder has elected a Cash
Exercise with respect to some or all of the Warrant Shares to be issued pursuant
hereto, the Holder shall pay the sum of $________________ to the Company in
accordance with the terms of the Warrant.
 
Date: ______________________
 
___________________________________
Name of Registered Holder
 
By: 

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Name:
Title:
 
Holder Requests Delivery to be made: (check one)
 

o
By Delivery of Physical Certificates to the Above Address

 

o
Through Depository Trust Corporation
(Account _________________________)

 

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