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EXHIBIT 10.16
 
CONVERTIBLE PROMISSORY NOTE AND SECURED LOAN AGREEMENT
DATED MAY 10, 2010 - PRESLEY REED AND PATRICIA STACEY REED

 
 
 

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THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

SPICY PICKLE FRANCHISING, INC.
CONVERTIBLE PROMISSORY NOTE AND SECURED LOAN AGREEMENT
MAY 10, 2010

$2,000,000                    
Denver, Colorado

FOR VALUE RECEIVED, Spicy Pickle Franchising, Inc., a Colorado corporation (the
“Company“), promises to pay to Presley and Patricia Stacey Reed (the “Holder“),
or their registered assigns, the principal sum of Two Million and No/100’s
Dollars (US$2,000,000.00), or the aggregate unpaid principal amount of all
advances made by the Holder to the Company hereunder, whichever is less,
together with interest from the date of this Convertible Promissory Note (this
“Note”) on the unpaid principal balance as provided in Section 2 below. This
Note evidences the Company's indebtedness under a revolving line of credit with
the Holder. During the period from the date hereof until the Termination Date
(as hereafter defined), the Holder shall make advances thereunder and the
Company may borrow, repay and reborrow; provided, however, that the aggregate
amount of all advances at any one time outstanding shall not exceed the face
amount of this Note; and provided, further, that the Holder's obligation to make
advances and the Company's right to borrow, repay and reborrow are subject to
the terms, conditions and limitations contained in this Note.  All advances made
by the Holder to the Company shall be evidenced by the books and records of the
Holder which shall be conclusive, absent manifest error. The Company and the
Holder acknowledge and agree that an initial advance of Five Hundred Thousand
and No/100’s Dollars (US$500,000.00) shall be made upon execution and delivery
of this Note (the “Initial Advance”). The following is a statement of the rights
of the Holder and the conditions to which this Note is subject, and to which the
Holder hereof, by the acceptance of this Note, agrees:

1. Maturity

If any advances are made during the period from the date hereof until May 1,
2013 (as such date may be extended, in writing from time to time, in the
Holder's sole and absolute discretion, the “Maturity Date“), the outstanding
principal balance of all advances hereunder plus accrued but unpaid interest
thereon, and all other indebtedness under this Note, if not sooner paid, shall
(subject to Section 3) be due and payable upon demand by the Holder at any time
after the Maturity Date. Notwithstanding the foregoing, the entire unpaid
principal sum of this Note, together with all accrued interest thereon, shall
become immediately due and payable upon the occurrence of an Event of Default
(as hereinafter defined).

2. Interest

2.1 Interest Rate
The outstanding principal of all advances hereunder will bear interest at the
rate of Ten Percent (10%) per annum.

2.2 Interest Payments
Interest only on the outstanding principal of all advances shall be due and
payable in arrears at the rate set forth above on a recurring three month basis,
commencing on September 1, 2010, and continuing on the first day of the month of
each and every three month period thereafter to and including May 1, 2013.
Interest shall be computed on the basis of a Three Hundred Sixty-Five (365)-day
year and actual days elapsed.

2.3 Reduction of Interest
If at any time, the rate of interest, together with all amounts which constitute
interest and which are reserved, charged or taken by the Holder as compensation
for fees, services or expenses incidental to the making, negotiating or
collection of any advance evidenced hereby, shall be deemed by any competent
court of law, governmental
 
 
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agency or tribunal to exceed the maximum of rate of interest permitted to be
charged by the Holder to the Company, then, during such time as such rate of
interest would be deemed excessive, that portion of each sum paid attributable
to that portion of such interest rate that exceeds the maximum rate of interest
so permitted shall be deemed a voluntary prepayment of principal.

3. Conversion

3.1  Conversion upon First Equity Financing
From time to time, the Holder may convert any amount of the principal and
accrued interest due on this Note into shares of the Company’s common stock, par
value $0.001 (“Common Stock”) as set forth in this Section 3. In order to do so,
the Holder must give the Company five days prior written notice detailing the
amount to be converted.

3.2  Conversion Price
In the event of a conversion in accordance with Section 4(a) hereof, this Note
shall be converted into that number of fully paid and nonassessable shares of
Common Stock determined by dividing the amount of unpaid principal and interest
then due under this Note designated for conversion by the Holder by the closing
stock price of the Company’s stock as of the end of the day that this Note is
executed (as adjusted for stock dividends, stock splits, reverse splits or
recapitalizations occurring after the date hereof) (the “Conversion Price”).

3.3  Issuance of Securities on Conversion
As soon as practicable after receiving written notice of conversion from the
Holder, the Company, at its expense, will cause to be issued in the name of and
delivered to the Holder of this Note, a certificate or certificates representing
the number of fully paid and nonassessable shares of Common Stock to which
Holder shall be entitled on such conversion. No fractional shares will be issued
on conversion of this Note. If Holder would otherwise be entitled to a
fractional share, Holder shall receive a cash payment equal to the Conversion
Price multiplied by the fractional share Holder would otherwise be entitled to
receive.

3.4  Termination of Rights
If all amounts due under this Note are converted as provided for herein, then
all rights with respect to this Note shall terminate upon the issuance of the
final shares of Common Stock representing full payment of this Note, whether or
not this Note has been surrendered. Notwithstanding the foregoing, the Holder
agrees to surrender this Note to the Company for cancellation as soon as is
practicable following conversion of this Note.

3.5  Warrant Coverage
For every two shares of common stock issued by the Company upon a conversion as
contemplated herein, the Company shall issue to the Holder a warrant to purchase
one share of Common Stock (the “Warrant”), in a form substantially similar to
that attached as Exhibit A.  The initial exercise price of the Warrant shall be
equal to 120% of the price per share of Common Stock calculated using the
average volume weighted average price per share for the 10 trading days prior to
the Holder’s election to convert.  The Warrant shall expire five years from the
date of issuance.

4. Payment

All payments shall be made in lawful money of the United States of America at
such place as the Holder hereof may from time to time designate in writing to
the Company. Payment shall be credited first to the accrued interest then due
and payable and the remainder applied to principal. The Company shall have the
right to prepay this Note, in whole or in part, prior to the Maturity Date
without penalty.

5. Events of Default

The occurrence of any of the following shall constitute an “Event of
Default”  hereunder:

5.1  Failure to Pay
The Company shall fail to pay (i) any principal payment on the due date
hereunder or (ii) any interest or other payment required pursuant to the terms
hereof on the date due and such payment shall not have been made within 10
business days of Company's receipt of Holder's written notice to the Company of
such failure to pay; or
 
 

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5.2  Breaches of Covenants
The Company shall fail to observe or perform any obligation, condition or
agreement contained herein (other than those covenants specified in Section 5.1
of this Note) and (i) such failure shall continue for 30 days after the
Company’s receipt of holder’s written notice detailing said failure, or (ii) if
such failure is not curable within such 30-day day period, but is reasonably
capable of cure within 60 days, either (A) such failure shall continue for 60
days after the Company’s receipt of holder’s written notice detailing said
failure or (B) Company shall not have commenced a cure in a manner reasonably
satisfactory to Holder within the initial 15-day period after notice; or

5.3  Voluntary Bankruptcy or Insolvency Proceedings
The Company shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit
of its or any of its creditors, (iv) be dissolved or liquidated in full or in
part, (v) become insolvent (as such term may be defined or interpreted pursuant
to any applicable statute), (vi) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts pursuant to any bankruptcy, insolvency or other similar law now or
hereafter in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or
other proceeding commenced against it, or (vii) take any action for the purpose
of effecting any of the foregoing; or

5.4  Involuntary Bankruptcy or Insolvency Proceedings
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of the Company or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to the Company or the debts thereof pursuant to any
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced and an order for relief entered or such proceeding shall not be
dismissed or discharged within 60 days of commencement.

6. Rights of Holder upon Default

Upon the occurrence or existence of any Event of Default and at any time
thereafter during the continuance of such Event of Default, Holder may, by
written notice to the Company, declare all outstanding obligations payable by
the Company hereunder to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived. In addition to the foregoing remedies, upon the occurrence or
existence of any Event of Default, Holder may exercise any other right, power or
remedy granted to it hereunder or pursuant to applicable law. The Company agrees
to pay all taxes levied or assessed upon the outstanding principal against any
holder of this Note and to pay all reasonable costs, including attorneys' fees,
costs relating to the appraisal and/or valuation of assets and all other costs
and expenses incurred in the collection, protection, defense, preservation, or
enforcement of this Note or any endorsement of this Note or in any litigation
arising out of the transactions of which this Note or any endorsement of this
Note is a part.

7. Transfer and Assignment

The terms and conditions of this Note shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties.
Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise
transfer this Note without the prior written consent of the Company, except for
transfers to affiliates. Subject to the preceding sentence, this Note may be
transferred only upon surrender of the original Note for registration of
transfer, duly endorsed, or accompanied by a duly executed written instrument of
transfer in form satisfactory to the Holder. Thereupon, a new note for the same
principal amount and interest will be issued to, and registered in the name of,
the transferee. Interest and principal are payable only to the registered holder
of this Note. Neither this Note nor any of the rights, interests or obligations
hereunder may be assigned, by operation of law or otherwise, in whole or in
part, by the Company without the prior written consent of Holder except in
connection with an assignment in whole to a successor corporation to the
Company, provided that such successor corporation acquires all or substantially
all of the Company's property and assets and Holder's rights hereunder are not
impaired.

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8. Governing Law

This Note and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the laws of the State of Colorado, without giving effect to
principles of conflicts of law.

9. Notices

Any notice required or permitted by this Note shall be in writing and shall be
deemed sufficient upon delivery, when delivered personally or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 72
hours hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth below or as subsequently modified by written
notice.

10. Amendments and Waivers

Any term of this Note may be amended or waived only with the written consent of
the Company and the Holder. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon the Company, the Holder and each
transferee of the Note.

11. Shareholders, Officers and Directors Not Liable

In no event shall any shareholder, officer or director of the Company be liable
for any amounts due or payable pursuant to this Note.

12. Subordination

The Holder acknowledges by acceptance hereof that the Company has previously
entered into three secured promissory notes along with three corresponding
security agreements issued to ALT, LLC; ALT II, LLC; and ALT III, LLC (the “ALT
Companies”), all on March 1, 2008, in conjunction with the Company’s purchase of
assets from the ALT Companies via an asset purchase agreement of the same
date.  The indebtedness and security interest herein may be subordinate to the
security interest held by the ALT Companies.

13. Representations of Holder and Transfer Restrictions

Holder hereby represents and warrants to the Company with respect to the
purchase of this Note and any Common Stock or Equity Securities of the Company
issued upon conversion of (or with respect to) this Note (the “Note Shares“):

13.1 Binding Obligation
The Holder has full legal capacity, power and authority to execute and deliver
this Note and to perform its obligations hereunder. This Note is a valid and
binding obligation of the Holder, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws of general application
relating to or affecting the enforcement of creditors' rights generally and
general principles of equity.

13.2 Investment and Accredited Investor
The Holder understands that the investment in the Note and the Note Shares is a
speculative investment, and represents that it is aware of the business affairs
and financial condition of the Company, and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Note, and that it is purchasing the Note for investment for its own account only
and not with a view to, or for resale in connection with, any “distribution“
within the meaning of the Securities Act of 1933, as amended (the “Securities
Act“) or applicable state securities laws. Holder further represents that it
understands that the Note and the Note Shares have not been registered under the
Securities Act or applicable state securities laws by reason of specific
exemptions therefrom, which exemptions depend upon, among other things, the bona
fide nature of the Holder's investment intent as expressed herein. The Holder
acknowledges and understands that the Note and the Note Shares must be held
indefinitely unless subsequently registered under the Securities Act and
qualified under applicable state securities laws or unless exemptions from such
registration and qualification requirements are available, and that the Company
 
 
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is under no obligation to register or qualify the Note or the Note Shares. The
Holder is an accredited investor as such term is defined in Rule 501 of
Regulation D promulgated pursuant to the Securities Act.

13.3 Access to Data
The Holder acknowledges that it has had an opportunity to discuss the Company's
business, management and financial affairs with its officers and directors. The
Holder understands that such discussions as well as any written information
issued by the Company were intended to describe the aspects of the Company's
business and prospects which it believes to be material but were not necessarily
a thorough or exhaustive description.

13.4 Restrictions on Transferability
The Note and the Note Shares shall not be sold, assigned, transferred or pledged
except upon the conditions specified in this Section 13, which conditions are
intended to ensure compliance with the provisions of the Securities Act. Each
Investor will cause any proposed purchaser, assignee, transferee, or pledgee of
the Note and the Note Shares held by the Investor to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Section 13. Prior to any proposed sale, assignment, transfer or pledge of this
Note or the Note Shares (collectively the “Restricted Securities“), unless there
is in effect a registration statement under the Securities Act covering the
proposed transfer, the Holder shall give written notice to the Company of the
Holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be
accomplished at the Holder's expense by either (i) an unqualified written
opinion of legal counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to the Company, addressed to the Company, to the effect
that the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, or (ii) a “no action“ letter from the
Securities and Exchange Commission (the “Commission“) to the effect that the
transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the Holder of such Restricted Securities shall be entitled to
transfer such Restricted Securities in accordance with the terms of the notice
delivered by the Holder to the Company. Each certificate evidencing the
Restricted Securities transferred as above provided shall bear, except if such
transfer is made pursuant to the Commission's Rule 144, an appropriate
restrictive legend, except that such certificate shall not bear such restrictive
legend if, in the opinion of counsel for the Holder and the Company, such legend
is not required in order to establish compliance with any provisions of the
Securities Act. The Note Shares shall be subject to the registration rights
granted to the Holder under the terms of the Investor's Rights Agreement.

14. Treatment of Note

To the extent permitted by generally accepted accounting principles, the Company
will treat, account and report the Note as debt and not equity for accounting
purposes and with respect to any returns filed with federal, state or local tax
authorities.

15. Advance Request

With the exception of the Initial Advance, the Company must notify the Holder of
its intent to draw on an advance with not less than ten (10) days written
notice.

16. Security Interest.

Subject to section 12 above, as security for this Note, the Company hereby
grants Holder a security interest in all assets of the Company, including,
without limitation, all goods, money, inventories, equipment, accounts, chattel
paper and general intangibles, together with the products and proceeds thereof
(the “Collateral“). In the event of any default in the payment of this
promissory note, the Holder or its agent shall have and may exercise any and all
remedies of a secured party under the Colorado Uniform Commercial Code, and any
other remedies available at law or equity, with respect to the Collateral. The
Company and Holder acknowledge and agree that this Note is one of a three
promissory notes, including the convertible promissory note held by Presley Reed
and the convertible promissory note held by Raymond BonAnno, both dated
September 30, 2009, with an aggregate principal amount, including this note, of
up to Two Million Eight Hundred Seventeen Thousand Two Hundred Forty-one and
68/100’s Dollars ($2,817,241.68), which are being or have been issued by the
Company to raise capital pending improvement in the Company’s cash flow or the
completion of a larger, overall financing (the “Bridge Notes“).  Notwithstanding
 
 
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the foregoing and the provisions the Colorado Uniform Commercial Code, Holder
and the Company agree that the security interest in the Collateral granted by
the Company pursuant to this Note shall rank on a parity with the security
interest in the Collateral granted by the Company pursuant to all Bridge Notes,
including this Note.

17. Representations and Warranties of Holder

The Parties hereby represent and warrant to one another as follows:

17.1  Binding Obligation
The Company has full legal capacity, power and authority to execute and deliver
this Note and to perform its obligations hereunder. The Note issued to the
Holder is a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.

17.2  Investment and Accredited Holder
The Holder understands that the Note and the underlying shares of capital stock
(collectively referred to as the “Securities“) are a speculative investment, and
represents that it is aware of the business affairs and financial condition of
the Company, and has acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities, and that it is
purchasing the Securities for investment for its own account only and not with a
view to, or for resale in connection with, any “distribution“ within the meaning
of the Securities Act of 1933, as amended (the “Securities Act“) or applicable
state securities laws. Holder further represents that it understands that the
Securities have not been registered under the Securities Act or applicable state
securities laws by reason of specific exemptions therefrom, which exemptions
depend upon, among other things, the bona fide nature of the Holder's investment
intent as expressed herein. The Holder acknowledges and understands that the
Securities must be held indefinitely unless subsequently registered under the
Securities Act and qualified under applicable state securities laws or unless
exemptions from such registration and qualification requirements are available,
and that the Company is under no obligation to register or qualify the
Securities. The Holder is an accredited Holder as such term is defined in Rule
501 of Regulation D promulgated pursuant to the Securities Act.

17.3  Access to Data
The Holder acknowledges that it has received and reviewed this Agreement and
Exhibits hereto. The Holder has had an opportunity to discuss the Company's
business, management and financial affairs with its officers and directors. The
Holder understands that such discussions as well as any written information
issued by the Company were intended to describe the aspects of the Company's
business and prospects which it believes to be material but were not necessarily
a thorough or exhaustive description.

[Signatures are on the following page.]

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IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
first written above.

COMPANY:
Spicy Pickle Franchising, Inc.

By:  /s/ Mark Laramie                                     
Name: Mark Laramie
Title: CEO

AGREED TO AND ACCEPTED:

HOLDER:
Presley Reed
 
 
 
/s/ Presley Reed                                         
An individual

AND

HOLDER:
Patricia Stacey Reed

/s/ Patricia Stacey Reed                            
An individual

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EXHIBIT A
 
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

SPICY PICKLE FRANCHISING, INC.
 
 
No: Convertible Note 2010 - ___
 
Warrant Shares:
________                                                                                     Initial
Exercise Date:

 
THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, Presley and Stacey Reed (the “Holder”) are entitled, upon the terms
and subject to the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the date hereof (the “Initial Exercise Date”) and
on or prior to the close of business on the 5 year anniversary of the Initial
Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and
purchase from Spicy Pickle Franchising, Inc., a Colorado corporation (the
“Company”), up to _______ shares (the “Warrant Shares”) of Common Stock.  The
purchase price of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b).
 
Section 1.           Definitions.
 
“Board of Directors”      means the board of directors of the Company.
 
“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
 
“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed into.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 

1
 
 

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“Trading Day” means a day on which the New York Stock Exchange is open for
trading.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American
Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. or other
reasonably reliable source (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:00 p.m. (New York City time); (b)  if the OTC Bulletin Board is not a
Trading Market, the volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then quoted for trading on the OTC Bulletin Board and if
prices for the Common Stock are then reported in the “Pink Sheets” published by
Pink Sheets, LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser selected in good
faith by the Holder and reasonably acceptable to the Company.

Section 2.      Exercise.
 
a)  Exercise of Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form annexed
hereto (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of the Holder
appearing on the books of the Company); and, within three (3) Trading Days of
the date said Notice of Exercise is delivered to the Company, the Company shall
have received  payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the
final Notice of Exercise is delivered to the Company.  Partial exercises of this
Warrant resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased.  The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of
such purchases.  The Company shall deliver any objection to any Notice of
Exercise Form within 2 Business Days of receipt of such notice. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.
 
b)  Exercise Price.  The exercise price per share of the Common Stock under this
Warrant shall be $_____, subject to adjustment hereunder (the “Exercise Price”).
 
c)  Cashless Exercise.  If at any time after the completion of the applicable
holding period required by Rule 144, or any successor provision then in effect,
there is no effective registration statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the Holder, then
this Warrant may also be exercised at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a certificate for the
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where:
 
 
 (A) = the VWAP on the Trading Day immediately preceding the date of such
election;

 
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(B) = the Exercise Price of this Warrant, as adjusted; and

 
(X) = the number of Warrant Shares issuable upon exercise of this Warrant in
accordance with the terms of this Warrant by means of a cash exercise rather
than a cashless exercise.

d)  Mechanics of Exercise.
 
i.  Delivery of Certificates Upon Exercise.  Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s prime broker with the Depository
Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if
the Company is a participant in such system and there is an effective
registration statement permitting the resale of the Warrant Shares by the
Holder, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the delivery to the
Company of the Notice of Exercise Form, surrender of this Warrant (if required)
and payment of the aggregate Exercise Price as set forth above (“Warrant Share
Delivery Date”).  This Warrant shall be deemed to have been exercised on the
date the Exercise Price is received by the Company.  The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price (or by cashless exercise, if permitted) and
all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(v)
prior to the issuance of such shares, have been paid.
 
ii.  Delivery of New Warrants Upon Exercise.  If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to such Holder
a new Warrant evidencing the rights of such Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
 
iii.  Rescission Rights.  If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant
Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise.
 
iv.  No Fractional Shares or Scrip.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which a Holder would otherwise be entitled to purchase upon
such exercise, the Company shall at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
 
v.  Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
 
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vi.  Closing of Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
 
Section 3.      Certain Adjustments.
 
a)  Stock Dividends and Splits. If the Company, at any time while this Warrant
is outstanding: (A) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or
(D) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
 
b)  Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets.  In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell, transfer
or otherwise dispose of all or substantially all its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation (“Other
Property”), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event or (b) cash
equal to the value of this Warrant as determined in accordance with the
Black-Scholes option pricing formula.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 3(b).  For purposes
of this Section 3(b), “common stock of the successor or acquiring corporation”
shall include stock of such corporation of any class which is not preferred as
to dividends or assets over any other class of stock of such corporation and
which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock.  The foregoing provisions of
this Section 3(b) shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
 
c)  Calculations. All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
 
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Common Stock (excluding treasury shares, if any) issued and outstanding.
 
d)  Voluntary Adjustment By Company. The Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for any
period of time deemed appropriate by the Board of Directors of the Company.
 
e)  Notice to Holder.
 
i.  Adjustment to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall promptly mail to
the Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.
 
ii.  Notice to Allow Exercise by Holder. If (A) the Company shall declare a
dividend (or any other distribution in whatever form) on the Common Stock; (B)
the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock; (C) the Company shall authorize the granting to
all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights; (D) the approval of
any stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such notice.
 
Section 4.             Transfer of Warrant.
 
a)  Transferability.  Subject to compliance with any applicable securities laws
and the conditions set forth in Section 4(d) hereof, this Warrant and all rights
hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.  Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
 
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b)  New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney.  Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall
be dated the Initial Exercise Date and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant thereto.
 
c)  Warrant Register. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder hereof from time to time.  The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
 
d)  Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall
not be registered pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer, that the Holder
or transferee of this Warrant, provide, at their cost, to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company,
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Warrants under the Securities Act and under applicable state
securities or blue sky laws.  As a condition of transfer, any such transferee
shall agree in writing to be bound by the same terms as the Holder with relation
to the Warrants being transferred.  Upon a cashless exercise of the Warrants,
the holding period for purpose of Rule 144 shall tack back to the original date
issuance of such Warrants.
 
Section 5.         Miscellaneous.
 
a)  No Rights as Shareholder Until Exercise.  This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof as set forth in Section 2(d)(i).
 
b)  Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
 
c)  Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.
 
d)  Authorized Shares.
 
The Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant.  The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant.  The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the
 
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Common Stock may be listed.  The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
 
Except as and to the extent waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment.  Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.
 
Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.
 
e)  Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Colorado, without regard to the principles of conflicts of law thereof.  Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Warrant
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of Denver.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of Denver for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an  inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address as provided on the signatory page (or as altered by
the parties from time to time in writing) and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.  If either party shall commence an action
or proceeding to enforce any provisions of this Warrant, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
 
f)  Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, will have restrictions upon
resale imposed by state and federal securities laws.
 
g)  Nonwaiver and Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
 
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Date.  If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
 
h)  Notices.  Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
 
i)  Limitation of Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
 
j)  Remedies.  Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant.  The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy
at law would be adequate.
 
k)  Successors and Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are intended to be
for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by the Holder or holder of Warrant Shares.
 
l)  Amendment.  This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.
 
m)  Severability.  Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
 
n)  Headings.  The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.
 
 
 
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.
 

  SPICY PICKLE FRANCHISING, INC.          
 
By:
        Name:  Mark Laramie       Title: CEO          

 
 
 
 
 
 
 
 
 
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NOTICE OF EXERCISE

TO:           SPICY PICKLE FRANCHISING, INC.

(1)  The undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
 
(2)  Payment shall take the form of (check applicable box):
 
[  ]  in lawful money of the United States; or
 
[  ] [if permitted] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 2(c), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in subsection
2(c).
 
(3)  Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:
 
_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4)    Accredited Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of Investing Entity:
_________________________________________________
Name of Authorized Signatory:
___________________________________________________________________
Title of Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________

 
 

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant
and all rights evidenced thereby are hereby assigned to
 

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s
Signature:                                        _____________________________

Holder’s
Address:                                           _____________________________

                             _____________________________
  

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

 
 

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