Exhibit 10.1

 

THIS WARRANT WAS ORIGINALLY ISSUED ON SEPTEMBER 1, 2015, AND SUCH ISSUANCE WAS
NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE
ON EXERCISE HEREOF MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND
THE COMPANY HAS RECEIVED EVIDENCE OF SUCH EXEMPTION REASONABLY SATISFACTORY TO
IT.

 

MAJESCO

 

STOCK PURCHASE WARRANT

 

Date of Issuance: September 1, 2015 Certificate No. W-4

 

FOR VALUE RECEIVED, MAJESCO, a California corporation (the “Company”), hereby
grants to MAXIM PARTNERS LLC, a limited liability company, or its registered
successors and/or assigns (individually and collectively, the “Registered
Holder”) the right to purchase from the Company 25,000 shares or such lower
amount as may be provided under Section 3J below (the “Warrant Quantity”) of its
Common Stock (defined below), at $7.00 per share. Certain capitalized terms used
in this Warrant are defined in Section 1 of this Warrant. This Warrant is being
issued to the initial Registered Holder pursuant to that certain engagement
letter between the Company and the initial Registered Holder dated August 4,
2015 (the “Engagement Letter”). The amount and kind of securities obtainable
pursuant to the rights granted under this Warrant and the purchase price for
such securities are subject to adjustment pursuant to the provisions contained
in this Warrant

 

This Warrant is subject to the following provisions:

 

SECTION 1.    DEFINITIONS.   The following terms have the meanings set forth
below:

 

“Additional Shares of Common Stock” means all shares (including treasury shares)
of Common Stock issued or sold (or deemed to be issued or sold) by the Company
after the Date of Issuance, whether or not subsequently reacquired or retired by
the Company, other than:

 

(a)          shares issued upon the exercise of this Warrant;

 

(b)          such number of additional shares as may become issuable upon the
exercise of this Warrant by reason of adjustments required pursuant to the
anti-dilution provisions applicable to this Warrant as in effect on the Date of
Issuance;

 

(c)          shares, warrants, options and other securities issued by the
Company at any time to the Registered Holder or any affiliate of the Registered
Holder; and

 

(d)          in connection with an Approved Share Plan; and

 

 

 

  

(e)          shares issuable upon exercise of (x) the warrant issued to
Michaelson Capital Special Finance Fund, LP, a Delaware limited partnership (as
successor to Imperium Commercial Finance Master Fund LP), and/or its registered
successors and/or assigns, dated June 26, 2015, substantially, (y) the warrant
to Robert Nathan, and/or his registered successors and/or assigns, as designated
by Monarch, dated June 26, 2015, and (z) the warrant to Monarch Capital Group,
LLC, a limited liability company, and/or its registered successors and/or
assigns, dated June 26, 2015.

 

“Aggregate Exercise Price” shall have the meaning as set forth in Section
2B(i)(d)(1) below.

 

“Anti-Dilution Trigger Price” means the lower of (a) the Exercise Price or (b)
the Current Market Price in effect immediately prior to an issue or sale that is
described in Section 3 of this Warrant.

 

“Approved Share Plan” means any employee benefit plan that has been approved by
the Company’s board of directors, pursuant to which the Company’s equity
securities may be issued to any employee, officer, consultant or director for
services provided to the Company or its subsidiaries.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the State of New York.

 

“Change of Control” means with respect to the Company on or after the Date of
Issuance, that any direct or indirect change in the composition of the Company’s
stockholders, of record or beneficially, as of the Date of Issuance shall occur
that would result in any stockholder or group acquiring 50.1% or more of any
class of stock of the Company, or that any Person (or group of Persons acting in
concert) shall otherwise acquire, directly or indirectly (including through
affiliates), the power to elect a majority of the Board of Directors of the
Company or otherwise direct the management or affairs of the Company by
obtaining proxies, entering into voting agreements or trusts, acquiring
securities or otherwise.

 

“Commission” means the U.S. Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.

 

“Common Stock” means the Company’s common stock, par value $0.002 per share, and
any other stock into which such common stock shall have been changed or any
stock resulting from any reclassification of such common stock, and all other
stock of any class or classes (however designated) of the Company, the holders
of which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.

 

“Company Covered Person” means, with respect to the Company as an “issuer” for
purposes of Rule 506 promulgated under the Securities Act, any person listed in
the first paragraph of Rule 506(d)(1) of the Securities Act.

 

 -2- 

 

  

“Convertible Securities” means any evidences of indebtedness, shares of stock
(other than Common Stock) or other securities directly or indirectly convertible
into or exchangeable for shares of Common Stock.

 

“Current Market Price” means, on any date specified herein, the average of the
daily Market Price during the twenty (20) consecutive trading days immediately
preceding such date, except that, if on any such date the shares of Common Stock
are not listed or admitted for trading on any national securities exchange or
quoted in the over-the-counter market, the Current Market Price shall be the
Market Price on such date.

 

“Date of Issuance” means the date the Company initially issues this Warrant as
set forth above.

 

“Demanding Security Holders” shall have the meaning as set forth in Section 5A
below.

 

“Discontinuation Event” shall have the meaning as set forth in Section 5B(v)
below.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.

 

“Exercise Price” shall have the meaning as set forth in the first paragraph.

 

“Exercise Time” shall have the meaning as set forth in Section 2B below.

 

“Fair Value” means, on any date specified herein (i) in the case of cash, the
dollar amount thereof, (ii) in the case of a security, the Current Market Price
and (iii) in all other cases, the fair value thereof (as of a date which is
within twenty (20) days of the date as of which the determination is to be made)
determined in good faith by the Company; provided that if the Registered Holder
provides written notice to the Company that it does not agree with the Company’s
determination of Fair Value within a reasonable period of time after receipt of
such valuation and the documentation on which it is based, such Fair Value shall
be determined by an appraiser jointly selected by the Company and the Registered
Holder or, if that selection cannot be made within ten (10) days, by an
appraiser selected by the American Arbitration Association in accordance with
its rules. The determination of such appraiser shall be final and binding on the
Company and the Registered Holder, and the fees and expenses of such appraiser
shall be shared equally by the Company and the Registered Holder.

 

“Market Price” means as to any security, the closing price of such security’s
sales on the principal exchange on which such security may at the time be
listed, or, if there have been no sales on any such exchange on any day, the
average of the highest reported bid and lowest asked prices on such exchange at
the end of such day, or, if on any day such security is not so listed, the
average of the reported bid and asked prices quoted in the NASDAQ System as of
4:00 P.M., New York time, on such day, or, if on any day such security is not
quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of twenty-one (21) days

 

 -3- 

 

  

consisting of the day as of which “Market Price” is being determined and the
twenty (20) consecutive Business Days prior to such day; but if such security is
listed on a domestic securities exchange the term “Business Days” as used in
this sentence means Business Days on which the principal exchange is open for
trading. If at any time such security is not listed on any domestic securities
exchange or quoted in the NASDAQ System or the domestic over-the-counter market,
the “Market Price” shall be the Fair Value thereof.

 

“Options” means any rights, options or warrants to subscribe for, purchase or
otherwise acquire either Additional Shares of Common Stock or Convertible
Securities.

 

“Other Securities” means any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or otherwise) which the
holders of this Warrant at any time shall be entitled to receive, or shall have
received, upon the exercise of this Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Convertible Securities.

 

“Person” means an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

“Purchase Rights” shall have the meaning as set forth in Section 4 below.

 

“Registrable Securities” means (i) any of the shares of Common Stock issuable
upon the exercise of this Warrant and (ii) any shares of Common Stock issued or
to be issued with respect to the Common Stock issuable upon the exercise of this
Warrant by way of a stock dividend or stock split. As to any particular
Registrable Security, such security will cease to be a Registrable Security when
it (A) has been effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering such security, (B) has
been transferred through a broker-dealer in an open market transaction pursuant
to Rule 144 (or any similar provision then in force) or (C) is eligible for sale
pursuant to Rule 144(b) (or any similar provision then in force).

 

“Securities” shall have the meaning as set forth in Section 6 below.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

 

“Warrants” shall have the meaning as set forth in Section 9 below.

 

SECTION 2.    EXERCISE OF WARRANT.

 

2A.         Exercise Period and Elective Exercise.  The Registered Holder may
exercise, in whole or in part (but not as to a fractional share of Common
Stock), the purchase rights represented by this Warrant at any time and from
time to time after the first anniversary of the Date of Issuance until 5:00
p.m., Eastern Time, on September 1, 2020 (the “Exercise Period”) unless
forfeited under Section 3J.

 

 -4- 

 

  

2B.         Exercise Procedure.

 

(i)          This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the “Exercise Time”):

 

(a)          a completed Exercise Agreement, as described in Section 2C below
and in the form set forth in Exhibit I hereto, executed by the Person exercising
all or part of the purchase rights represented by this Warrant (the
“Purchaser”);

 

(b)          this Warrant;

 

(c)          if this Warrant is not registered in the name of the Purchaser, an
Assignment or Assignments in the form set forth in Exhibit II hereto evidencing
the assignment of this Warrant to the Purchaser together with such reasonably
requested supporting documentation and/or information relating thereto, if any,
as the Company has theretofore requested; and

 

(d)          either (1) a check payable to the Company in an amount equal to the
product of the Exercise Price multiplied by the number of shares of Common Stock
being purchased upon such exercise (the “Aggregate Exercise Price”) or (2) a
written notice to the Company that the Purchaser is executing a cashless
exercise of the Warrant (or a portion thereof) by authorizing the Company to
withhold from issuance the number of shares of Common Stock issuable upon such
exercise of the Warrant that, when multiplied by the Current Market Price of the
Common Stock, is equal to the Aggregate Exercise Price (and such withheld shares
shall no longer be issuable under this Warrant).

 

(ii)         Certificates for shares of Common Stock purchased upon exercise of
this Warrant shall be delivered by the Company to the Purchaser within ten (10)
Business Days after the date of the Exercise Time. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical to this
Warrant, representing the rights formerly represented by this Warrant which have
not expired or been exercised and shall, within such ten (10) Business Day
period, deliver such new Warrant to the Registered Holder.

 

(iii)        The Common Stock issuable upon the exercise of this Warrant shall
be deemed to have been issued to the Purchaser at the Exercise Time, and the
Purchaser shall be deemed for all purposes to have become the record holder of
such Common Stock at the Exercise Time, but if the Company shall have notified
the Purchaser, in writing, that additional documentation and/or information is
required to effect the exercise of this Warrant, for the purpose of Section
2B(i), the “Exercise Time” shall be the time when the Company receives such
documentation and/or information.

 

(iv)        The issuance of certificates for shares of Common Stock on exercise
of this Warrant shall be made without charge to the Registered Holder or the
Purchaser for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such exercise and the related issuance of shares of
Common Stock. Each share of Common Stock issuable upon exercise of this Warrant
shall, on payment of the Exercise Price therefor, be fully

 

 -5- 

 

  

paid and non-assessable and free from all taxes, liens and charges with respect
to the issuance thereof.

 

(v)         The Company shall not close its books against the transfer of this
Warrant or of any share of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Common Stock
acquirable on exercise of this Warrant is at all times equal to or less than the
Exercise Price then in effect.

 

(vi)        The Company shall assist and cooperate with the Registered Holder or
Purchaser, at the Registered Holder’s or Purchaser’s expense, except as provided
herein, required to make any governmental filings or obtain any governmental
approvals prior to or in connection with any exercise of this Warrant
(including, without limitation, making any filings required to be made by the
Company).

 

(vii)       Notwithstanding any other provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company, the exercise of any portion of this Warrant
may, at the election of the Registered Holder hereof, be conditioned on the
consummation of the public offering or sale of the Company in which case such
exercise shall not be deemed to be effective until the consummation of such
transaction.

 

(viii)      The Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the purpose of
issuance on the exercise of the Warrants, such number of shares of Common Stock
issuable upon the exercise of all outstanding Warrants. The Company shall take
all such actions as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange on which
shares of Common Stock may be listed (except for official notice of issuance
which shall be immediately delivered by the Company upon each such issuance).
The Company shall not take any action which would cause the number of authorized
but unissued shares of Common Stock to be less than the number of such shares
required to be reserved hereunder for issuance on exercise of the Warrants.

 

(ix)        On any exercise of this Warrant, the Company may require customary
investment representations from the Registered Holder and the Purchaser to
assure that the issuance of the Common Stock hereunder shall not require
registration or qualification under the Securities Act or any applicable state
securities laws and the Registered Holder or the Purchaser, as the case may be,
agrees promptly to provide such investment representations to the Company.

 

2C.         Exercise Agreement.  On any exercise of this Warrant, the Exercise
Agreement shall be substantially in die form set forth in Exhibit I hereto,
except that if the shares of Common Stock are not to be issued in the name of
the Registered Holder or Purchaser, the Exercise Agreement shall also state the
name of the Registered Holder or Purchaser, and if the number of shares of
Common Stock to be issued does not include all the shares of Common Stock
purchasable hereunder, it shall also state the name of the Registered Holder or
Purchaser

 

 -6- 

 

  

for the unexercised portion of the rights hereunder is to be delivered. Such
Exercise Agreement shall be dated the actual date of execution thereof.

 

2D.         Fractional Shares.  If a fractional share of Common Stock would, but
for the provisions of paragraph 2A, be issuable upon exercise of the rights
represented by this Warrant, the Company shall, within ten (10) Business Days
after the date of the Exercise Time, deliver to the Purchaser a check payable to
the Purchaser in lieu of such fractional share in an amount equal to title
difference between Current Market Price of such fractional share as of the date
of the Exercise Time and the Exercise Price of such fractional share.

 

SECTION 3.    ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.  In order to
prevent dilution of the rights granted under this Warrant, the Warrant Quantity
and Exercise Price shall be subject to adjustment from time to time as provided
in this Section 3.

 

3A.         Adjustment of Number of Shares and Exercise Price on Certain
Issuances.  If the Company, at any time or from time to time after the date
hereof, shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 3B and
3C below) without consideration or for consideration per share less than the
Anti-Dilution Trigger Price, then, in each such case, the Warrant Quantity shall
be increased, and the Exercise Price shall be simultaneously and proportionately
decreased, concurrently with such issue or sale, to an amount determined by
multiplying such Warrant Quantity by a fraction:

 

(i)          the numerator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale, provided that, for the
purposes of this Section 3A(i), (x) immediately after any Additional Shares of
Common Stock are deemed to have been issued pursuant to Section 3B, such
Additional Shares shall be deemed to be outstanding, and (y) treasury shares
shall not be deemed to be outstanding, and

 

(ii)         the denominator of which shall be the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issue or sale plus
(y) the number of shares of Common Stock which the aggregate consideration
received by the Company for the total number of such Additional Shares of Common
Stock so issued or sold would purchase at the Anti-Dilution Trigger Price
(before giving effect to the adjustment pursuant to this section 3A).

 

(iii)        The determination of Additional Shares of Common Stock is set forth
below in this Section 3.

 

3B.         Treatment of Options and Convertible Securities.   If the Company at
any time or from time to time after the Date of Issuance shall issue, sell,
grant or assume, or shall fix a record date for the determination of holders of
any class of securities of the Company entitled to receive, any Options or
Convertible Securities (whether or not the rights thereunder are immediately
exercisable), then, and in each such case, the maximum number of Additional
Shares of Common Stock (as set forth in the instrument relating thereto, without
regard to any provisions contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares

 

 -7- 

 

  

of Common Stock issued as of the time of such issue, sale, grant or assumption
or, in case such a record date shall have been fixed, as of the close of
business on such record date (or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading), provided,
that, such Additional Shares of Common Stock shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Section 3D) of
such shares would be less than the Anti-Dilution Trigger Price in effect on the
date of and immediately prior to such issue, sale, grant or assumption or
immediately prior to the close of business on such record date (or, if the
Common Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading), as the case may be, and provided, further,
that in any such case in which Additional Shares of Common Stock are deemed to
be issued:

 

(i)          whether or not the Additional Shares of Common Stock underlying
such Options or Convertible Securities are deemed to be issued, no further
adjustment of the Warrant Quantity shall be made on the subsequent issue or sale
of Convertible Securities or shares of Common Stock on the exercise of such
Options or the conversion or exchange of such Convertible Securities, except in
the case of any such Options or Convertible Securities which contain provisions
requiring an adjustment, subsequent to the date of the issue or sale thereof, of
the number of Additional Shares of Common Stock issuable upon the exercise of
such Options or the conversion or exchange of such Convertible Securities by
reason of (x) a change of control of the Company, (y) the acquisition by any
Person or group of Persons of any specified number or percentage of the voting
securities of the Company or (z) any similar event or occurrence, each such case
to be deemed hereunder to involve a separate issuance of Additional Shares of
Common Stock, Options or Convertible Securities, as the case may be;

 

(ii)         if such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any increase in the consideration
payable to the Company, or decrease in the number of Additional Shares of Common
Stock issuable, on the exercise, conversion or exchange thereof (by change of
rate or otherwise), the Warrant Quantity computed on the original issue, sale,
grant or assumption thereof (or on the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be, with
respect thereto), and any subsequent adjustments based thereon, shall, on any
such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options, or the rights of
conversion or exchange under such Convertible Securities, which are outstanding
at such time;

 

(iii)        on the expiration (or purchase by the Company and cancellation or
retirement) of any such Options which shall not have been exercised or the
expiration of any rights of conversion or exchange under any such Convertible
Securities which (or purchase by the Company and cancellation or retirement of
any such Convertible Securities the rights of conversion or exchange under
which) shall not have been exercised, the Warrant Quantity computed upon the
original issue, sale, grant or assumption thereof (or on the occurrence of the
record date, or date prior to the commencement of ex-dividend trading, as the
case may be, with respect thereto), and any subsequent adjustments based
thereon, shall, on such expiration (or such cancellation or retirement, as the
case may be), be recomputed as if:

 

 -8- 

 

  

(a)          in the case of Options for Common Stock or Convertible Securities,
the only Additional Shares of Common Stock issued or sold were the Additional
Shares of Common Stock, if any, actually issued or sold upon the exercise of
such Options or the conversion or exchange of such Convertible Securities and
the consideration received therefor was the consideration actually received by
the Company for the issue, sale, grant or assumption of all such Options,
whether or not exercised, plus the consideration actually received by the
Company upon such exercise, or for the issue or sale of all such Convertible
Securities which were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Company upon such conversion or
exchange, and

 

(b)          in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued or sold upon the exercise of
such Options were issued at the time of the issue or sale, grant or assumption
of such Options, and the consideration received by the Company for the
Additional Shares of Common Stock deemed to have then been issued was the
consideration actually received by the Company for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Company (pursuant to Section 3D) on the
issue or sale of such Convertible Securities with respect to which such Options
were actually exercised;

 

(iv)        no readjustment pursuant to subdivision (ii) or (iii) above shall
have the effect of decreasing the Warrant Quantity by an amount in excess of the
amount of the adjustment thereof originally made in respect of the issue, sale,
grant or assumption of such Options or Convertible Securities; and

 

(v)         in the case of any such Options which expire by their terms not more
than thirty (30) days after the date of issue, sale, grant or assumption
thereof, no adjustment of the Warrant Quantity shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall be
made in the manner provided in subdivision (iii) above.

 

3C.         Stock Dividends, Splits, etc.   If the Company at any time or from
time to time after the date hereof shall declare or pay any dividend on the
Common Stock payable in Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, Additional Shares of Common Stock shall be
deemed to have been issued (a) in the case of any such dividend, immediately
after the close of business on the record date for the determination of holders
of any class of securities entitled to receive such dividend, or (b) in the case
of any such subdivision, at the close of business on the day immediately prior
to the day on which such corporate action becomes effective.

 

3D.         Computation of Consideration.   For the purposes of this Section 3,
the consideration for the issue or sale of any Additional Shares of Common Stock
shall, irrespective of the accounting treatment of such consideration,

 

(i)          insofar as it consists of cash, be computed at the amount of cash
received by the Company, without deducting any expenses paid or incurred by the
Company or any

 

 -9- 

 

  

commissions or compensations paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in connection with
such issue or sale,

 

(ii)         insofar as it consists of property (including securities) other
than cash, be computed at the Fair Value thereof at the time of such issue or
sale, and

 

(iii)        in case Additional Shares of Common Stock are issued or sold
together with other stock or securities or other assets of the Company for a
consideration which covers both, the portion of such consideration so received,
computed as provided in clauses (i) and (ii) above, allocable to such Additional
Shares of Common Stock, such allocation to be determined in the same manner that
the Fair Value of property not consisting of cash or securities, is to be
determined as provided in the definition of Fair Value in this Warrant;

 

(iv)        Additional Shares of Common Stock deemed to have been issued
pursuant to Section 3B, relating to Options and Convertible Securities, shall be
deemed to have been issued for a consideration per share determined by dividing:

 

(a)          the total amount, if any, received and receivable by the Company as
consideration for the issue, sale, grant or assumption of the Options or
Convertible Securities in question, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon the exercise in full of such
Options or the conversion or exchange of such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities, in each case computing such consideration as provided in this
subsection (a)

 

by

 

(b)          the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities; and

 

(v)         Additional Shares of Common Stock deemed to have been issued
pursuant to Section 3C, relating to stock dividends, stock splits, etc., shall
be deemed to have been issued for no consideration.

 

3E.         Adjustments for Combinations, etc.   In case the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Quantity
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately decreased (with a corresponding increase to the Exercise Price).

 

3F.         Dilution in Case of Other Securities.  In case any Other Securities
shall be issued or sold or shall become subject to issue or sale upon the
conversion or exchange of any stock (or Other Securities) of the Company (or any
issuer of Other Securities or any other Person referred to in Section 1) or to
subscription, purchase or other acquisition pursuant to any Options issued

 

 -10- 

 

  

or granted by the Company (or any such other issuer or Person) or a
consideration such as to dilute, on a basis consistent with the standards
established in the other provisions of this Section 3, the purchase rights
granted by this Warrant, then, and in each such case, the computations,
adjustments and readjustments provided for in this Section 3 with respect to the
Warrant Quantity shall be made as nearly as possible in the manner so provided
and applied to determine the amount of Other Securities from time to time
receivable on the exercise of this Warrant, so as to protect the Registered
Holder of this Warrant against the effect of such dilution.

 

3G.         De Minimis Adjustments.   If the amount of any adjustment of the
Warrant Quantity required pursuant to this Section 3 would be less than one-half
of one (0.5%) percent of the Warrant Quantity in effect at the time such
adjustment is otherwise so required to be made, such amount shall be carried
forward and adjustment with respect thereto made at the time of and together
with any subsequent adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate a change in the Warrant
Quantity of at least one-half of one (0.5%) percent of such Warrant Quantity.
All calculations under this Warrant shall be made to the nearest 1/10 of a
share.

 

3H.         Abandoned Dividend or Distribution.   If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution (which results in an adjustment to the
Warrant Quantity under the terms of this Warrant) and shall, thereafter, and
before such dividend or distribution is paid or delivered to stockholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity (and Exercise
Price) by reason of the taking of such record shall be reversed, and any
subsequent adjustments, based thereon, shall be recomputed.

 

3I.           Reorganization, Reclassification, Consolidation, Merger or
Sale.   Any recapitalization, reorganization, reclassification, consolidation,
merger or sale of all or substantially all of the Company’s assets or other
transaction, in each case which is effected in such a way that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock is referred to herein as an “Organic Change”. Prior to the
consummation of any Organic Change, the Company shall make appropriate provision
(in form and substance satisfactory to the Registered Holder of the Warrants
representing a majority of the Common Stock obtainable upon exercise of all
Warrants then outstanding) to insure that the Registered Holder of the Warrants
shall thereafter have the right to acquire and receive, in lieu of or in
addition to (as the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable on the exercise of the Registered Holder’s
Warrant, such shares of stock, securities or assets as would have been issued or
payable in such Organic Change (if the Registered Holder had exercised this
Warrant immediately prior to such Organic Change) with respect to or in exchange
for the number of shares of Common Stock immediately theretofore acquirable and
receivable on exercise of the Registered Holder’s Warrant had such Organic
Change not taken place. In any such case, the Company shall make provision (in
form and substance commercially reasonably satisfactory to the Registered
Holder) with respect to the Registered Holder’s’ rights and interests to insure
that the provisions of this Section 3 and Section 4 hereof shall thereafter
apply to the Warrants. The Company shall not effect any such consolidation,
merger or sale, unless prior to the consummation thereof, the successor entity
(if other than the Company) resulting

 

 -11- 

 

  

from consolidation or merger or the entity purchasing such assets assumes by
written instrument (in form and substance commercially reasonably satisfactory
to the Registered Holder), the obligation to deliver to the Registered Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Registered Holder may be entitled to acquire.

 

3J.          Forfeiture.   If the Company terminates that the Engagement Letter
for Cause (as defined in the Engagement Letter) effective within five months of
the execution of the Letter Agreement, the Registered Holder shall forfeit the
pro rata amount of the Warrants, based on the amount of time remaining in such
five month period and the Warrant Quantity shall automatically be deemed
adjusted to reflect such forfeiture. In the event that the Company terminates
the Engagement Letter due to a finding by a court of competent jurisdiction that
the Registered Holder has committed a breach of Confidentiality Provisions (as
defined in the Engagement Letter), this entire Warrant shall be deemed forfeited
and of no further force and effect.

 

3K.         Certain Events.   If any event occurs of the type contemplated by
the provisions of this Section 3 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features unless granted
under an Approved Share Plan), then the Company’s board of directors shall make
an appropriate adjustment in the Warrant Quantity and Exercise Price so as to
protect the rights of the Registered Holder of the Warrants; provided that no
such adjustment shall decrease the number of shares of Common Stock obtainable
as otherwise determined pursuant to this Section 3.

 

3L.         Notices.

 

(i)          Immediately upon any adjustment of the Warrant Quantity, the
Company shall give written notice thereof to the Registered Holder, setting
forth in reasonable detail and certifying the calculation of such adjustment.

 

(ii)         The Company shall give written notice to the Registered Holder at
least twenty (20) days prior to the date on which the Company closes its books
or takes a record (A) with respect to any pro rata subscription offer to holders
of Common Stock or (B) for determining rights to vote with respect to any
Organic Change, dissolution or liquidation.

 

SECTION 4.    PURCHASE RIGHTS.   If at any time the Company issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants or equity
securities pro rata to the record holders of any class of Common Stock (the
“Purchase Rights”), then the Registered Holder of this Warrant shall be entitled
to acquire, on the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Registered Holder could have acquired if the
Registered Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights; provided
that the Registered Holder provides the Company with written notice of its
election to acquire such Purchase Rights within five (5) Business Days of
receipt of notice thereof by the Company.

 

 -12- 

 

  

SECTION 5.    REGISTRATION RIGHTS.

 

5A.         Piggyback Registration Rights.   Until such time as the Registrable
Securities may be sold in accordance with Rule 144(b) under the Securities Act,
if the Company at any time proposes to file on its behalf and/or on behalf of
any of its security holders (the “Demanding Security Holders”) a registration
statement under the Securities Act on any form (other than a registration
statement on Form S-4 or S-8 or any successor form or to the Company’s employees
pursuant to any employee benefit plan, respectively) for the general
registration of securities to be sold for cash with respect to the Common Stock,
it will give written notice to the Registered Holder at least ten (10) days
before the initial filing with the Commission of the registration statement (or,
in the case of a registration statement that has already been filed with the
Commission but has not yet been declared effective, within ten (10) days before
the anticipated effective date of the registration statement), which notice
shall set forth the intended method of disposition of the securities that the
Company proposes to register. The notice shall offer to include in such filing
the aggregate number of Registrable Securities as the Registered Holder may
request. Nothing in this Section 5A shall preclude the Company from
discontinuing the registration of its securities being effected on its behalf
under this Section 5A at any time and for any reason before the effective date
of the registration relating thereto; but, in that event, the Company shall
notify the Registered Holder of such discontinuation of the registration.

 

The Registered Holder desiring to have Registrable Securities registered under
this Section 5 A shall advise the Company in writing within five (5) days after
the date of receipt of such offer from the Company, setting forth the amount of
Registrable Securities for which registration is being requested. The Company
shall thereupon include in such filing the number of shares of Registrable
Securities for which registration is so requested, subject to the next sentence.
If the managing underwriter or underwriters of the proposed public offering
shall advise the Company in writing that, in their good faith opinion, the
number of Registrable Securities to be included in such registration would
materially and adversely affect the marketing or price of such securities to be
sold, the Company will allocate the securities to be included in such
registration in accordance with the following priority: (a) first, the
securities to be included in such registration by the Company or the holder or
holders initiating the registration and (b) next, the Registrable Securities
requested to be included in such registration by the Registered Holder. Except
as otherwise provided in Section 5D, the Company shall bear all expenses of such
registration.

 

If any registration pursuant to this Section 5A is underwritten, the Company
will select investment banker(s) and managers) and make other decisions
regarding the underwriting arrangements for the offering.

 

Unless otherwise consented to in writing by the managing underwriter or
underwriters, neither the Company nor any holder of Registrable Securities will
effect any public sale or distribution of its Common Stock or its Convertible
Securities during the ten (10) day period before, and during the one hundred
eighty (180) day period beginning on the closing date of each underwritten
offering by the Company made pursuant to a registration statement filed pursuant
to this Section 5A (except as part of such underwritten registration) plus the
extension period that is requested by the managing underwriter or underwriters
to address FINRA regulations regarding the publication of research whether or
not the holder participates in such registration; and, except

 

 -13- 

 

  

as may be required under agreements that the Company enters into before the date
hereof, the Company shall cause each holder of its privately placed Common Stock
or Convertible Securities issued by it at any time on or after the date of this
Warrant to agree not to effect any public sale or distribution of any such
securities during such period, including a sale pursuant to Rule 144 or Rule
144A of the Commission under the Securities Act.

 

5B.         Registration Procedures.   The Company shall use its commercially
reasonable efforts to effect the registration of any of its Registrable
Securities under the Securities Act, to complete the following as expeditiously
as possible:

 

(i)          prepare and file with the Commission such amendments and
supplements to the registration statement and the prospectus used in connection
therewith as may be necessary to keep the registration statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by the registration statement during
the Effectiveness Period;

 

(ii)         furnish to such selling security holders such number of copies of a
summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as such selling security holders may reasonably request;

 

(iii)        register or qualify the securities covered by the registration
statement under such other securities or blue sky laws of such jurisdictions as
each holder of such securities shall request (but, the Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any general
consent to service or process or to subject itself to taxation in any
jurisdiction), and do such other reasonable acts and things as may be required
of it to enable such security holder to consummate the disposition in such
jurisdiction of the securities covered by the registration statement;

 

(iv)        cause the securities covered by the registration statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable such security holder to consummate the disposition
of the securities covered by the registration statement;

 

(v)         notify each security holder of any securities covered by the
registration statement, promptly at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the occurrence of a
Discontinuation Event (as defined below) and the Registered Holder agrees by its
acquisition of such Registrable Securities that, on receipt of a notice from the
Company of the occurrence of a Discontinuation Event, the Registered Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable registration statement until the Registered Holder’s receipt of the
copies of the supplemented prospectus and/or amended registration statement or
until it is advised in writing by the Company that the use of the applicable
prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such prospectus or registration statement For
purposes of this Warrant, a “Discontinuation Event” shall mean (1) when the
Commission notifies the Company that there will be a “review” of such
registration statement and whenever the

 

 -14- 

 

  

Commission comments in writing on such registration statement and until the
Company has addressed the comments in a supplemented prospectus and/or amended
registration statement and/or supplementally; (2) any request by the Commission
or any other Federal or state governmental authority for amendments or
supplements to such registration statement or prospectus or for additional
information and until the request has been responded to; (3) the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement covering any or all of the Registrable Securities or the initiation of
any proceedings for that purpose; (4) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening, in writing, of any proceeding
for such purpose; and (5) the occurrence of any event or passage of time that
makes the financial statements included in such registration statement
ineligible for inclusion therein or any statement made in such registration
statement or prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to such registration statement, prospectus or other
documents so that, in the case of such registration statement or prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under which they were
made, not misleading. The Company agrees to notify the Registered Holder
promptly of the occurrence of any Discontinuation Event and to use its
reasonable best efforts to eliminate or remove any Discontinuation Event
described in (1) through (5) as promptly as practicable.

 

(vi)        enter into customary agreements (including an underwriting agreement
in customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities;

 

(vii)       make available for inspection by any selling security holder, by any
underwriter participating in any disposition to be effected pursuant to the
registration statement and by any attorney, accountant or other agent retained
by any such selling security holder or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of the
Company, and cause all of the Company’s officers, directors and employees to
supply all information reasonably requested by such selling security holder,
underwriter, attorney, accountant or agent in connection with such registration
statement; and

 

(viii)      otherwise comply in all material respects with all applicable rules
and regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, but not later than 18 months after the
effective date of the registration statement, an earnings statement covering the
period of at least 12 months beginning with the first full month after the
effective date of the registration statement, which earnings statements shall
satisfy the provisions of Section 11 (a) of the Securities Act and Rule 158
thereunder.

 

It shall be a condition precedent to the Company’s obligation to take any action
pursuant to this Section 5 in respect of the Registrable Securities at the
request of the Registered Holder that the Registered Holder shall furnish to the
Company such information regarding the securities held by the Registered Holder,
the intended method of disposition thereof and any other information as the
Company shall reasonably request and as shall be required in connection with the
action taken by the Company. The Registered Holder may not participate in any

 

 -15- 

 

  

underwritten registration pursuant to this Warrant unless it (a) agrees to sell
its securities on the basis provided in any underwriting arrangements approved
by the Persons entitled under this Warrant to approve such arrangements; (b)
completes and executes all questionnaires, powers of attorney, lock-up
agreements, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and (c) provides all
such information reasonably requested by the Company in connection with such
registration.

 

5C.         Expenses.   All expenses incurred in complying with Section 5,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD, printing expenses, fees and
disbursements of counsel for the Company and its independent public accountants,
including, without limitation, expenses of any special audits incident to or
required by any such registration, fees and expenses incurred in connection with
the listing of the securities on any securities exchange on which the Common
Stock is then listed, the reasonable fees and expenses of one counsel for the
selling security holders (selected by those holding a majority of the
Registrable Securities being registered), fees and expenses of complying with
the securities or blue sky laws of any jurisdictions pursuant to subsection
5B(iii) and any fees and disbursements of underwriters customarily paid by the
issuers or sellers of securities, shall be paid by the Company, except that the
Company shall not be liable for any underwriting discounts or commissions or any
transfer taxes.

 

5D.         Indemnification and Contribution.   In the event of any registration
of any Registrable Securities under the Securities Act pursuant to this Section
5:

 

(i)          the Company shall indemnify and hold harmless the holder of such
Registrable Securities, such holder’s directors and officers, each underwriter
who participated in the offering of such Registrable Securities and each other
Person, if any, who controls such holder or underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such holder, such director or officer or underwriter or
controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based on (a) any alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (b) any alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse such holder or such
director, officer, underwriter or controlling Person for any legal or any other
expenses reasonably incurred by such holder or such director, officer,
underwriter or controlling Person in connection with investigating or defending
any such loss, claim, damage, liability or action; but the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based on (i) any alleged untrue statement or
alleged omission made in such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance on and in conformity with
written information furnished to the Company by such holder, director, officer,
underwriter or controlling Person, as the case may be, specifically for use
therein or (ii) a failure by the indemnified party to deliver a copy of the
registration statement or prospectus or an amendment or supplement thereto after
the Company has furnished the indemnified party with a sufficient number of
copies of the same. Such indemnity shall remain in full force and effect

 

 -16- 

 

  

regardless of any investigation made by or on behalf of such holder or such
director, officer, underwriter or controlling Person, and shall survive the
transfer of such securities by such holder;

 

(ii)         Each holder of any Registrable Securities, by acceptance thereof,
agrees to indemnify and hold harmless the Company, its directors and officers
and each other Person, if any, who controls the Company within the meaning of
the Securities Act against any losses, claims, liabilities, joint or several, to
which the Company, any such director or officer or any such Person may become
subject under the Securities Act or any other statute or at common law, insofar
as such losses, claims, liabilities (or actions in respect thereof) arise out of
or are based on information in writing provided to the Company by such holder of
such Registrable Securities contained, on the effective date thereof, in any
registration statement under which securities were registered under the
Securities Act at the request of such holder, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto; but
such holder’s indemnification obligations under this subsection 5D(ii) shall be
limited to an amount equal to the net proceeds actually received by the holder
from the sale of Registrable Securities covered by the applicable registration
statement;

 

(iii)        If the indemnification provided for in this Section 5 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other tilings,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party under this Section 5 as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this subsection 5D(iii) were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

(iv)        If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against any holder or any
Person controlling a holder in respect of which indemnity may be sought from the
Company, such holder or controlling Person shall promptly notify the Company in
writing, and the Company shall assume the defense thereof, including the
employment of counsel satisfactory to a majority of the holders to be

 

 -17- 

 

  

indemnified and the payment of all reasonable expenses in relation thereto. All
such holders or such controlling Persons shall have the right to employ, at
their own expense, one counsel plus additional local counsel in any such action
and to participate in the defense thereof; provided that if in the reasonable
judgment of such holders or such controlling Persons, a conflict of interest
exists and it is therefore advisable for such holders or controlling Persons to
be jointly represented by separate counsel, then the Company shall pay the
reasonable fees and expenses of one such separate counsel, and local counsel, as
appropriate, for all such holders and controlling Persons. The Company shall not
be liable for any settlement of any such action or proceeding effected without
its written consent, but if settled with its written consent, or if there be a
final judgment for the plaintiff in any such action or proceeding, the Company
agrees to indemnify and hold harmless each holder and any such controlling
Person from and against any loss or liability by reason of such settlement or
judgment; and

 

(v)         Indemnification similar to that specified in subsections (i) and
(ii) of this Section 5D shall be given by the Company and each holder (with such
modifications as shall be appropriate) with respect to any required
registration, or other qualification of the Registrable Securities under any
Federal or state law or regulation of any governmental authority other than the
Securities Act.

 

5E.         Public Availability of Information.   From and after the date when
any registration statement with respect to the Registrable Securities becomes
effective and as long as required under the Exchange Act, the Company shall
maintain the registration of its Common Stock under Section 12 of the Exchange
Act and shall keep effective such registration and shall timely file such
information, documents and reports as the Commission may require or prescribe
under Section 13 of the Exchange Act, or otherwise. From and after the date when
any registration statement of the Registrable Securities becomes effective, the
Company shall comply with the reporting requirements of Section 15(d) of the
Exchange Act (whether or not it shall be required to do so pursuant to the
provisions of said Section 15(d)) and shall comply with, all other public
information reporting requirements required by the Commission as a condition to
the availability of an exemption from the Securities Act for the sale of any
Registrable Securities, presently existing or hereafter adopted, including Rules
144 and 144A thereunder.

 

5F.         Supplying Information.   The Company shall cooperate with each
holder of Registrable Securities in supplying such information as may be
reasonably necessary for such holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Registrable Securities. The Company shall provide the Register Holder with
written notice as soon as possible with respect to the possible occurrence of
any event of default under this Warrant.

 

SECTION 6.    REPRESENTATIONS AND WARRANTIES OF THE REGISTERED HOLDER.

 

6A.         Acquire Entirely for Own Account.   The Warrants and Warrant
Quantity (collectively the “Securities”) to be acquired by the Registered Holder
pursuant to this Warrant will be acquired for the Registered Holder’s own
account and not with a view to, or intention of, distribution thereof in
violation of the Securities Act, or any applicable state or foreign securities

 

 -18- 

 

  

laws, and the Securities will not be disposed of in contravention of the
Securities Act or any applicable state or foreign securities laws.

 

6B.         Sophisticated Investor.   The Registered Holder is sophisticated in
financial matters and is able to evaluate the risks and benefits of its
investment in the Securities.

 

6C.         Accredited Investor.   The Registered Holder is an “accredited
investor” within the meaning of Regulation D of the Securities Act.

 

6D.         Risks.  The Registered Holder is able to bear the economic risk of
its investment in the Securities for an indefinite period of time because the
Securities have not been, and will not be, registered under the Securities Act
and, therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.

 

6E.         Disclosure of Information.  The Registered Holder (A) has had an
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of Securities, and (B) has had full access to such
other information concerning the Company and its subsidiaries as the Registered
Holder has requested in connection with the investment contemplated hereby.

 

6F.         Bad Actor Disqualification.  To the extent that the Registered
Holder is a Company Covered Person, the Registered Holder represents and
warrants that it is not a “bad actor” (as that term is described in Rule
506(d)(1)(i)-(viii) of the Securities Act).

 

SECTION 7.    NO VOTING RIGHTS; LIMITATIONS OF LIABILITY.  This Warrant shall
not entitle the Registered Holder or Purchaser to any rights as a stockholder of
the Company. No provision hereof, in the absence of affirmative action by the
Registered Holder to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Registered Holder shall give rise to any liability
of such holder for the Exercise Price of Common Stock acquirable by exercise
hereof or as a stockholder of the Company.

 

SECTION 8.    WARRANT TRANSFERABLE.  Subject to the transfer conditions referred
to in the legend endorsed hereon, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Registered Holder, upon
surrender of this Warrant with a properly executed Assignment (in the form of
Exhibit II hereto) and any other documentation reasonably requested by the
Company in connection therewith, at the principal office of the Company.

 

SECTION 9.    WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS.  This Warrant is
exchangeable, upon the surrender hereof by the Registered Holder at the
principal office of the Company, for new Warrant(s) of like tenor representing
in the aggregate the purchase rights hereunder. The date the Company initially
issues this Warrant shall be deemed to be the “Date of Issuance” hereof
regardless of the number of times new certificates representing the unexpired
and unexercised rights formerly represented by this Warrant shall be issued. All
Warrants representing portions of the rights hereunder are also referred to
herein as the “Warrants”.

 

 -19- 

 

 

SECTION 10.  REPLACEMENT.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any certificate
evidencing this Warrant, and in the case of any such loss, theft or destruction,
upon receipt of indemnity reasonably satisfactory to the Company, or, in the
case of any such mutilation on surrender of such certificate, the Company shall
execute and deliver in lieu of such certificate a new certificate of like kind
representing the same rights represented by such lost, stolen, destroyed or
mutilated certificate and dated as of the Date of Issuance.

 

SECTION 11.  NOTICES.  Except as otherwise expressly provided herein, all
notices referred to in this Warrant shall be in writing and shall be delivered
personally, sent by reputable overnight courier service (charges prepaid) or
sent by registered or certified mail, return receipt requested, postage prepaid
and shall be deemed to have been given when so delivered, sent or deposited in
the U.S. Mail (i) to the Company, at its principal executive offices or (ii) to
the Registered Holder of this Warrant, at the Registered Holder’s address as it
appears in the records of the Company (unless otherwise indicated by the
Registered Holder).

 

SECTION 12.  AMENDMENT AND WAIVER.  Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Registered
Holder.

 

SECTION 13.  DESCRIPTIVE HEADINGS; GOVERNING LAW.   The descriptive headings of
the several Sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. All questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal law of the State of California, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of California or any other jurisdictions) that would cause the application of
the laws of any jurisdictions other than the State of California.

 

 -20- 

 

  

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer and to be dated on the Date of Issuance hereof.

 

  MAJESCO         By:  /s/ Bithindra Bhattacharya

 

  Name: Bithindra Bhattacharya

 

  Title: Finance Controller

 

 -21- 

 

  

Accepted as of the Date of Issuance by the Registered Holder:

 

MAXIM PARTNERS LLC     By:  /s/ Clifford A. Teller  

 

Name: Clifford A. Teller  

 

Title: Head of IB  

 

 -22- 

 

  

EXHIBIT I

 

EXERCISE AGREEMENT

 

To: Dated:

 

The undersigned, pursuant to the provisions set forth in the attached Warrant
(Certificate No. W-     ), hereby agrees to subscribe for the purchase of
           shares of the Common Stock covered by such Warrant and makes payment
herewith in full therefor [in the amount of $                   (in cash)] [by
surrendering debt or equity securities of the Company or any of its wholly-owned
Subsidiaries having a Market Price equal to
                                    ] [by authorizing the Company to withhold
from issuance a number of shares of Common Stock issuable upon such exercise of
the Warrant which when multiplied by the Market Price of the Common Stock is
equal to                      (and such withheld shares shall no longer be
issuable under this Warrant)].

 

The certificate(s) evidencing               shares of Common Stock is to be
issued in the name of                                   , whose address is
                                         and whose (SS#)(FEIN#) is
                              .

 

[The number of shares of Common Stock to be issued does not include all shares
of Common Stock purchasable as provided in the attached Warrant and,
accordingly, a certificate evidencing a new Warrant for          shares of
Common Stock is to be issued in the name of                                whose
address is                          and whose (SS#)(FEIN#) is
                                 .]

 

  Signature  

 

  By  

 

  Title  

 

  Address  

 

 Exhibit I 

 

  

EXHIBIT II

 

ASSIGNMENT

 

FOR VALUE RECEIVED,                                 hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant
(Certificate No. W-      ) with respect to the number of shares of the Common
Stock covered thereby set forth below, unto:

 

Name(s) of Assignee(s) Address(es) No. of Shares

 

 

 

 

  Signature  

 

  By  

 

  Title  

 

  Date  

 

  Witness  

 

 Exhibit II