Exhibit 10.4

COMMON STOCK PURCHASE WARRANT

 

1,100,000 Common Stock

 

(a Nevada corporation)

 

Dated: May 2, 2013

  

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), NOR UNDER
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT, OR
PURSUANT TO AN OPINION OF COUNSEL OF THE HOLDER HEREOF, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

 THIS CERTIFIES THAT STRATEGIC CAPITAL RESOURCES, INC., a FLORIDA corporation
(hereinafter called the “Holder”) is entitled to purchase from MONARCH
INVESTMENT PROPERTIES, INC., a NEVADA corporation (hereinafter called the
“Company”), during the period as hereinafter specified, 1,100,000 shares (the
“Shares”) of the Company’s common stock, par value $.001 per share (“Common
Stock”), at an exercise price of $.001 per Share (the “Exercise Price”).

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 This Warrant shall be exercisable for a period of ten (10) years from the date
hereof (the “Exercise Period”) and shall be exercisable at any time and from
time to time as to any number of shares as may be determined by the Holder
hereof, up to and including the entire 1,100,000 shares subject to this Warrant:
provided, however that at such time as the Holder hereof has exercised its right
to receive the entire 1,100,000 shares which are subject to this Warrant, the
Holder shall have no further right to purchase any of such Shares, and this
Warrant shall be of no further effect. Further, to the extent that any part of
this Warrant shall not have been exercised prior to May 2, 2013, this Warrant
shall expire on the last day of the Exercise Period and the Holder shall have no
further right to purchase any of such Shares effective 5:00 p.m. Eastern
Daylight Savings Time, on the last day of the Exercise Period.

1.     Nothing to the contrary withstanding if at any time the number of shares
is reduced through subdivision, recapitalization, reclassification or otherwise,
or if the Company declares a dividend on Common or Preferred Stock payable in
common stock, or if the Company merges or consolidates with or into another
entity or sells all or substantially all of its assets, the number and nature of
the common stock issuable or issued on the exercise of the warrants shall be
adjusted so that each holder of the warrants or the original holder of the
exercised shares outstanding at the time of such event shall have the right to
purchase the same kind and amount of securities (number of shares) which the
holder would have received if such event (i.e. a reverse stock split) had not
taken place at the original exercise price.

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2.     The rights represented by this Warrant may be exercised at any time, and
from time to time, during the Exercise Period, by (i) the surrender of this
Warrant (with the purchase form at the end hereof properly executed) at the
principal executive office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company); (ii) payment to the Company
of the Exercise Price for the number of Shares specified in the above mentioned
purchase form together with applicable stock transfer taxes, if any; and (iii)
delivery to the Company of a duly executed agreement signed by the Holder to the
effect that such person agrees to be bound by the provisions of Paragraphs 6 and
7 hereof. This Warrant shall be deemed to have been exercised, in whole or in
part to the extent specified, immediately prior to the close of business on the
date this Warrant is surrendered and payment is made in accordance with the
foregoing provisions of this Paragraph 2, and the person or persons in whose
name or names the certificates for Shares shall be issuable upon such exercise
shall become the holder or holders of record of such Shares as of that time and
date. The certificates for the Shares so purchased shall be delivered to the
Holder within a reasonable time after the rights represented by this Warrant
shall have been so exercised. Within a reasonable time after the Holder has
surrendered this Warrant in order to exercise a portion hereof, the Company
shall issue to Holder a replacement warrant identical to this Warrant in all
respects other than as to the number of Shares subject thereto, which revised
number of Shares shall be the amount of the Shares subject hereto less the
number of such Shares for which the Holder has submitted payment in accordance
with this Paragraph 2(a) and a completed purchase form.

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(a)     Payment of the exercise price of this warrant may be made in cash or by
surrendering to the Company that number of shares of Common Stock having a fair
market value equal to such exercise price. As use herein, “fair market value”
shall mean (i) in the case of shares that may be immediately publicly resold by
the holder under Rule 144(d), the last sales price of the Common Stock is then
being traded on a national securities exchange) or the last bid price for the
Common Stock on such day (if the Common Stock is then being traded in the NASDAQ
National or SmallCap Market or the OTC Bulletin Board), and (ii) in the case of
shares that may not immediately be publicly resold by the holder under Rule
144(d), the price per share determined as provide in clause (i), less a discount
of 20%.

(b)     Unless the Shares shall have been registered pursuant to the provisions
of Paragraph 6 hereof, all Shares acquired upon the exercise of the Warrant
shall be “restricted securities” as that term is defined in Rule 144 promulgated
under the Securities Act of 1933, as amended (“Act”). In such event, the
certificate(s) representing the Shares shall bear an appropriate legend
restricting their transfer and such Shares cannot be sold, transferred, assigned
or otherwise hypothecated without registration under the Act or unless a valid
exemption from registration is then available under applicable federal and state
securities laws and the Company has been furnished with an opinion of counsel
satisfactory in form and substance to it that such registration is not required.

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3.     This Warrant and, until such time as the underlying Shares of Common
Stock are registered under the Act pursuant to the provisions of Paragraph 6
hereof, the underlying Shares may only be assigned to a company wherein Holder
controls at least 80% of the voting stock.

 

Except as otherwise permitted herein, in the event of any attempt by the Holder
to alienate, assign, pledge, hypothecate or otherwise dispose of this Warrant or
of any right hereunder, or in the event of any levy or any attachment, execution
or similar process upon the rights or interest herein conferred, or if Holder’s
ownership interest in the voting stock of a company to which this Warrant has
been assigned falls below 80%, the Company may cancel this Warrant by notice to
the Holder and it shall thereupon become null and void. Any permitted assignment
shall be effected by the Holder (i) completing and executing the form of
assignment at the end hereof and (ii) surrendering this Warrant with such duly
completed and executed assignment form for cancellation, accompanied by funds
sufficient to pay any transfer taxes, at the principal executive office of the
Company, accompanied by a certificate signed by the Holder stating that each
assignee is a permitted assignee under this Paragraph and accompanied by the
written representation from each such assignee addressed to the Company stating
that such assignee agrees to be bound by the terms of this Warrant; whereupon
the Company shall issue, in the name or names specified by the Holder a new
warrant or warrants of like tenor with appropriate legends restricting transfer
under the Act and representing in the aggregate rights to purchase the same
number of Shares as remain at such time purchasable hereunder.

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4.     The Company covenants and agrees that all Shares purchased hereunder
will, upon issuance, be duly and validly issued, fully paid and non-assessable.
The Company further covenants and agrees that during the period within which
this Warrant may be exercised, the Company will at all times have authorized and
reserved a sufficient number of shares of Common Stock to provide for the
exercise of this Warrant.

 

5.     This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.

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6.      (a)   The Company shall advise the Holder, whether the Holder holds this
Warrant or has exercised all or a portion of this Warrant and holds shares of
common stock, by written notice at least 30 days prior to the filing of any
registration statement under the Act covering any securities of the Company
inclusive of any registration statement on Form S-1 or any successor form
thereto, for its own account or for the account of others, and will until the
earlier of May 2, 2023, or such time as all of the Registerable Securities (as
defined herein) have been registered under the Act, upon the request of the
Holder, include on one occasion in any such registration statement such
information a may be required to permit a public offering of any of the Shares
(the “Registerable Securities”). The Company shall supply prospectuses in order
to facilitate the public sale or other disposition of the Registerable
Securities, use its best efforts to register and qualify any of the Registerable
Securities for sale in such states as such Holder reasonably designates and do
any and all other acts and things which may be necessary to enable the Holder to
consummate the public sale of the Registerable Securities, and furnish
indemnification in the manner provided in Paragraph 7 hereof. The Holder shall
furnish information reasonably requested by the Company in connection with such
registration statement, including its intentions with respect thereto, and shall
furnish indemnification as set for the in Paragraph 7. The Company shall
continue to advise the Holder of the Registerable Securities of its intention to
file a registration statement or amendment pursuant to this subparagraph 6(a)
until the earlier of (i) May 2, 2013; or (ii) such times as all of the
Registerable Securities have been registered under the Act. The provisions of
this section shall not apply, however, to a registration statement of Forms S-4
or S-8 (or successor forms thereto) or to any underwritten offering if the
underwriter determined in its sole discretion not to include the Shares
described herein. These “piggy-back” rights shall only be used one time.

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(b)     To the extent permitted by law, the Company shall bear the entire cost
and expense of any registration of securities initiated by it under subparagraph
6(a) hereof notwithstanding that the Registerable Securities subject to this
Warrant may be included in any such registration. Notwithstanding the foregoing,
the Holder shall, however, bear the fees of any counsel retained by it, blue sky
fees relating to such Registerable Securities and attendant legal fees, and any
transfer taxes or underwriting discounts or commissions applicable to the
Registerable Securities sold by them pursuant thereto and any additional
registration fees attributable to the registration of the Holder’s Registerable
Securities.

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7.      (a)   Whenever, pursuant to Paragraph 6, a registration statement
relating to any Registerable Securities is filed under the Act, amended or
supplemented, the Company, by executing this Warrant, acknowledges that it will
indemnify and hold harmless the Holder against any losses, claims, damages or
liabilities, joint or several, to which the Holder may become subject, under the
act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any such
registration statement or any preliminary prospectus or final prospectus
constituting a part thereof or any amendment or supplement thereto, or arise out
of or are based upon the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading;
and will reimburse the Holder for any legal or other expenses reasonably
incurred by the Holder in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with information
furnished by the Holder for use in the preparation thereof.

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(b)     Whenever, pursuant to Paragraph 6, a registration statement relating to
any Registerable Securities is filed under the Act, amended or supplemented, the
Holder by its acceptance of this Warrant acknowledges that it will indemnify and
hold harmless the Company, each of its directors, officers and agents and each
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims, damages or liabilities to which the Company or any such
director, officer, agent or controlling person may become subject, under the act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in any such registration statement or
any preliminary prospectus of final prospectus constituting a part thereof, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in said
registration statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon the in conformity with information
furnished by the Holder for use in the preparation thereof. The Holder will
reimburse the Company or any such director, officer, agent or controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.

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(c)     After receipt by an indemnified party under this Paragraph 7 of notice
of the commencement of any action, such indemnified party will, within fifteen
(15) days thereof, give the indemnifying party notice of the commencement of
such action if a claim in respect thereof is to be made against any indemnifying
party. The omission by the indemnified party to notify the indemnifying party
will relieve the indemnifying party from any liability which it may have to any
indemnified party under this Paragraph 7. Notice shall be mailed, delivered or
telegraphed and confirmed, if to Holder, at:

 

Strategic Capital Resources, Inc.

1801 North Military Trail / Suite 204

Boca Raton, FL 33431

 

and if to the Company, at:

Monarch Investment Properties, Inc.

1801 North Military Trail / Suite 204

Boca Raton, FL 33431

 

with a copy to:

 

David Miller

7691 Porto Vecchio Place

Delray Beach, FL 33446

 

or to such other addresses as the Holder and the Company may provide the other.

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(d)     In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Paragraph 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.

 

(e)     In the event any indemnified party pays any amount in total or partial
settlement of any claim without the prior written approval of any indemnifying
party, which approval shall not be unreasonably withheld, then the failure to
obtain such approval will relieve the indemnifying party from any liability it
may have to any indemnified party under this Paragraph 7.

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8.     In the event that the Company shall at any time subdivide or combine into
a grater or lesser number the number of outstanding Shares of common stock, the
number of Shares purchasable upon exercise of the Warrant shall be
proportionately increased and the Exercise Price proportionally decreased in the
case of subdivision or, in the case of combination, the number of Shares
purchasable upon the exercise of the Warrant shall be proportionately decreased
and the exercise Price proportionately increased. Irrespective of any
adjustments in the Exercise Price or the number of Shares purchasable upon
exercise of the Warrant, the Warrant theretofore or thereafter issued may
continue to express the same price and number and kind of Shares as are stated
in the Warrant initially issued.

 

9.     This Warrant shall be governed by and in accordance with the laws of the
State of Florida and may not be amended other than by written instrument
executed by the parties hereto.

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IN WITNESS WHEREOF, MONARCH INVESTMENT PROPERTIES, INC. has caused this Warrant
to be signed by its duly authorized officer and this Warrant to be effective as
of May 2, 2013.

 

MONARCH INVESTMENT PROPERTIES, INC.   a Nevada corporation       /s/ David
Miller       By: David Miller   Its: President

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