exv4w5



 






Exhibit 4.5



The securities represented by this Warrant and issuable upon exercise hereof have not been
registered under the Securities Act of 1933, as amended (the “Act”), or under the provisions of any
applicable state securities laws, but have been acquired by the registered holder hereof for
purposes of investment and in reliance on statutory exemptions under the Act, and under any
applicable state securities laws. These securities and the securities issued upon exercise hereof
may not be sold, pledged, transferred or assigned, nor may this Warrant be exercised, except in a
transaction which is exempt under the provisions of the Act and any applicable state securities
laws or pursuant to an effective registration statement.




COMMON STOCK PURCHASE WARRANT




 




			
	Date of Issuance: February 12, 2006
	 	Certificate No. WD-3






     For value received, The Fashion House Holdings, Inc., a Colorado corporation (the
“Company”), hereby grants to Diaz Management, Inc., a New York corporation, or its
permitted transferees and assigns (“Diaz”), the right to purchase from the Company a total of
55,000 shares of the Company’s common stock (“Common Stock”), at a price per share of equal
to $0.80 (the “Initial Exercise Price”). The exercise price and number of Warrant Shares
(and the amount and kind of other securities) for which this Warrant is exercisable shall be
subject to adjustment as provided in Section 2 hereof. This Warrant is being issued in connection
with the extension of the Loan Agreement between Diaz and the Company of even date herewith (the
“Extension Agreement”). Certain capitalized terms used herein are defined in Section 4
hereof.



     This Warrant is subject to the following provisions:



     SECTION 1. Exercise of Warrant.



          (a) Terms of Warrants; Exercise Period. Subject to the terms of this Agreement, the
Registered Holder shall have the right, commencing on the date hereof and expiring on the 10 year
anniversary hereof (the “Expiration Date”), to exercise this Warrant, in whole or in part,
and receive from the Company the number of Warrant Shares which the Registered Holder may at the
time be entitled to receive on exercise of this Warrant and payment of the Exercise Price then in
effect for the Warrant Shares. To the extent not exercised prior to the Expiration Date, this
Warrant shall become void and all rights thereunder and all rights in respect thereof under this
Agreement shall cease as of such time.




          (b) Exercise Procedure.




 









 








               (i) This Warrant shall be deemed to have been exercised on the date specified in a written
notice from the Registered Holder to the Company (the “Exercise Time”) and within three
business days following the Exercise Time, the Registered Holder shall deliver the following to the
Company:



               (A) a completed Exercise Agreement, as described in Section 1(c) below;



               (B) this Warrant;



               (C) if this Warrant is not registered in the name of the Registered Holder, an Assignment or
Assignments in the form set forth in Exhibit II hereto evidencing the assignment of this
Warrant to the Registered Holder, in which case the Registered Holder shall have complied with the
provisions set forth in Section 6 hereof; and



               (D) either (x) a check payable to the Company in an amount equal to the product of the
Exercise Price (as such term is defined in Section 2) multiplied by the number of Warrant Shares
being purchased upon such exercise (the “Aggregate Exercise Price”), (y) the surrender to
the Company of shares of Common Stock of the Company having a Fair Market Value equal to the
Aggregate Exercise Price, or (z) the delivery of a notice to the Company that the Registered Holder
is exercising the Warrant by authorizing the Company to reduce the number of Warrant Shares subject
to the Warrant by that number of shares having an aggregate Fair Market Value in excess of the
total Exercise Price for such shares equal to the Aggregate Exercise Price.



               (ii) Certificates for Warrant Shares purchased upon exercise of this Warrant shall be
delivered by the Company to the Registered Holder within five 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 hereto,
representing the rights formerly represented by this Warrant that have not expired or been
exercised and shall, within such five day period, deliver such new Warrant to the Person designated
for delivery in the Exercise Agreement.



               (iii) The Warrant Shares issuable upon the exercise of this Warrant shall be deemed to have
been issued to the Registered Holder at the Exercise Time, and the Registered Holder shall be
deemed for all purposes to have become the record holder of such Warrant Shares at the Exercise
Time.



               (iv) The Company shall not close its books against the transfer of this Warrant or of any
Warrant Shares issued or issuable upon the exercise of this Warrant in any manner which interferes
with the timely exercise of this Warrant.



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               (v) The Company shall assist and cooperate with the Registered Holder or any Registered Holder
required to make any governmental filings or obtain any governmental approvals prior to or in
connection with any exercise of this Warrant.



               (vi) The Company shall at all times reserve and keep available out of its authorized but
unissued capital stock, solely for the purpose of issuance upon the exercise of this Warrant, the
maximum number of Warrant Shares issuable upon the exercise of this Warrant. All Warrant Shares
which are so issuable shall, when issued and upon the payment of the Exercise Price therefor, be
duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges.
The Company shall take all such actions as may be necessary to assure that all such Warrant Shares
may be so issued without violation by the Company of any applicable law or governmental regulation
or any requirements of any domestic securities exchange upon which securities of the Company may be
listed (except for official notice of issuance which shall be immediately delivered by the Company
upon each such issuance).



          (c) Exercise Agreement. Upon any exercise of this Warrant, the Registered Holder
shall deliver an Exercise Agreement in the form set forth in Exhibit I hereto, except that
if the Warrant Shares are not to be issued in the name of the Person in whose name this Warrant is
registered, the Exercise Agreement shall also state the name of the Person to whom the certificates
for the Warrant Shares are to be issued, and if the number of Warrant Shares to be issued does not
include all the Warrant Shares purchasable hereunder, it shall also state the name of the Person to
whom a new Warrant for the unexercised portion of the rights hereunder is to be issued. Such
Exercise Agreement shall be dated the actual date of execution thereof.




     SECTION 2. Adjustment of Exercise Price and Number of Shares. In order to prevent
dilution of the rights granted under this Warrant, the Initial Exercise Price shall be subject to
adjustment from time to time as provided in this Section 2 (such price or such price as last
adjusted pursuant to the terms hereof, as the case may be, is herein called the “Exercise
Price”), and the number of Warrant Shares obtainable upon exercise of this Warrant shall be
subject to adjustment from time to time as provided in this Section 2.



          (a) Reorganization, Reclassification, Consolidation, Merger or Sale. In case of any
reclassification, capital reorganization, consolidation, merger, sale of all or substantially all
of the Company’s assets to another Person or any other change in the Common Stock of the Company,
other than as a result of a subdivision, combination, or stock dividend provided for in Section
2(b) below (any of which, a “Change Event”), then, as a condition of such Change Event,
lawful provision shall be made, and duly executed documents evidencing the same from the Company or
its successor shall be delivered to the Registered Holder, so that the Registered Holder shall have
the right at any time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant (subject to adjustment of the Exercise Price as
provided in Section 2), the kind and amount of shares of stock and other securities and property
receivable in connection with such Change Event by a holder of the same number of shares of Common
Stock as were purchasable by the Registered Holder immediately prior to such Change Event. In any
such case appropriate




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provisions shall be made with respect to the rights and interest of the Registered Holder so
that the provisions hereof shall thereafter be applicable with respect to any shares of stock or
other securities and property deliverable upon exercise hereof, and appropriate adjustments shall
be made to the purchase price per share payable hereunder, provided the aggregate purchase price
shall remain the same.




          (b) Subdivisions, Combinations and Other Issuances. If the Company shall at any time
prior to the expiration of this Warrant (i) subdivide its Common Stock, by split-up or otherwise,
or combine its Common Stock, or (ii) issue additional shares of its Common Stock or other equity
securities as a dividend with respect to any shares of its Common Stock, the number of shares of
Common Stock issuable on the exercise of this Warrant shall forthwith be proportionately increased
in the case of a subdivision or stock, or proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the purchase price payable per share, but the
aggregate purchase price payable for the total number of Warrant Shares purchasable under this
Warrant (as adjusted) shall remain the same. Any adjustment under this Section 2(b) shall become
effective at the close of business on the date the subdivision or combination becomes effective, or
as of the record date of such dividend, or in the event that no record date is fixed, upon the
making of such dividend.




          (c) Issuance of New Warrant. Upon the occurrence of any of the events listed in this
Section 2 that results in an adjustment of the type, number or exercise price of the securities
underlying this Warrant, the Registered Holder shall have the right to receive a new warrant
reflecting such adjustment upon the Registered Holder tendering this Warrant in exchange. The new
warrant shall otherwise have terms identical to this Warrant.




          (d) Notices.




               (i) The Company shall give written notice to the Registered Holder of this Warrant at least 10
days prior to the date on which the Company closes its books or takes a record for determining
rights to vote with respect to any event described in this Section 2 or any dissolution or
liquidation.



               (ii) The Company shall also give written notice to the Registered Holder of this Warrant at
least 10 days prior to the date on which any event described in this Section 2 or any dissolution
or liquidation shall take place.



     SECTION 3. Registration Rights.



          (a) Piggyback Registration.




               (i) If, at any time commencing on the date hereof and expiring on the Expiration Date, the
Company prepares and files a Registration Statement under the Act or otherwise registers securities
under the Act as to any of its securities (other than under a Registration Statement



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pursuant to
Form S-8 or Form S-4) (each such filing, a “Registration Document”), it will give written
notice by registered mail, at least 20 days prior to the filing of such Registration Document
to the Registered Holders of the Registrable Securities of its intention to do so. The Company
shall include all Registrable Securities in such Registration Documents with respect to which the
Company has received written requests for inclusion therein within 15 days of actual receipt of the
Company’s notice.




               (ii) Subject to the Extension Agreement, the Company shall have the right at any time after it
shall have given written notice pursuant to this Section 3(a) (irrespective of whether a written
request for inclusion of any Registration Securities shall have been made) to elect not to file any
such Registration Document, or to withdraw the same after the filing but prior to the effective
date thereof.



          (b) Covenants of the Company with Respect to Registration. In connection with the
filing of any Registration Document by the Company, the Company covenants and agrees as follows:




               (i) The Company shall use its best efforts to have any registration statement declared
effective at the earliest practicable time. The Company will promptly notify each Registered
Holder of such Registrable Securities and confirm such advice in writing, (i) when such
registration statement becomes effective, (ii) when any post-effective amendment to such
registration statement becomes effective and (iii) of any request by the SEC for any amendment or
supplement to such registration statement or any prospectus relating thereto or for additional
information.



               (ii) The Company shall furnish to each Registered Holder of such Registrable Securities such
number of copies of such registration statement and of each such amendment and supplement thereto
(in each case including each preliminary prospectus and summary prospectus) in conformity with the
requirements of the Act, and such other documents as the Registered Holders may reasonably request
in order to facilitate the disposition of the Registrable Securities by such Registered Holders.



               (iii) If the Company shall fail to comply with the provisions of Sections 3(a) and 3(b), the
Company shall, in addition to any other equitable or other relief available to the Registered
Holder(s), be liable for any or all special and consequential damages sustained by the Registered
Holder(s) requesting registration of their Registrable Securities.



               (iv) The Company shall prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be reasonably
necessary to keep such registration statement effective for at least 12 months (or such longer
period as permitted by the Act), and to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Registered Holder or Registered Holders
of Registrable Securities set forth in such registration statement. If at any time the SEC



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should
institute or threaten to institute any proceedings for the purpose of issuing a stop order
suspending
the effectiveness of any such registration statement, the Company will promptly notify each
Registered Holder of Registrable Securities and will use all reasonable efforts to prevent the
issuance of any such stop order or to obtain the withdrawal thereof as soon as possible. The
Company will use its good faith reasonable efforts and take all reasonably necessary action which
may be required in qualifying or registering the Registrable Securities included in a registration
statement for offering and sale under the securities or blue sky laws of such states as reasonably
are required by the Registered Holder(s), provided that the Company shall not be obligated to
execute or file any general consent to service of process or to qualify as a foreign corporation to
do business under the laws of any such jurisdiction. The Company shall use its good faith
reasonable efforts to cause such Registrable Securities covered by such registration statement to
be registered with or approved by such other governmental agencies or authorities of the United
States or any State thereof as may be reasonably necessary to enable the Registered Holder(s)
thereof to consummate the disposition of such Registrable Securities.




               (v) The Company shall indemnify the Registered Holder(s) of the Registrable Securities to be
sold pursuant to any registration statement and each person, if any, who controls such Registered
Holders within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
all loss, claim, damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any of them may become
subject under the Act, the Exchange Act or otherwise, arising from such registration statement.



               (vi) If requested by the Company prior to the filing of any registration statement covering
the Registrable Securities, each of the Registered Holder(s) of the Registrable Securities to be
sold pursuant to a registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against all loss, claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever) to which they may
become subject under the Act, the Exchange Act or otherwise, arising from written information
furnished by such Registered Holder, or their successors or assigns, for specific inclusion in such
registration statement, except that the maximum amount which may be recovered from each Registered
Holder pursuant to this paragraph or otherwise shall be limited to the amount of net proceeds
received by the Registered Holder from the sale of the Registrable Securities.



               (vii) Nothing contained in this Agreement shall be construed as requiring the Registered
Holder(s) to exercise their Warrants prior to the filing of any registration statement or the
effectiveness thereof.



               (viii) The Company shall furnish to each Registered Holder participating in an offering and to
the managing underwriter, if any, a signed counterpart, addressed to such Registered Holder or
underwriter, of (i) an opinion of counsel to the Company, dated the effective



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date of such
registration statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under the underwriting agreement), and (ii) a “Cold
Comfort” letter dated the effective date of such registration statement (and, if such registration
includes an underwritten public offering, a letter dated the date of the closing under the
underwriting agreement) signed by the independent public accountants who have issued a report on
the Company’s financial statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants’ letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in opinions of issuer’s
counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of
securities.




               (ix) The Company shall deliver promptly to each Registered Holder participating in an offering
and to the managing underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all non-privileged memoranda relating to discussions with the
SEC or its staff with respect to the registration statement and permit each Registered Holder and
underwriter to do such investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably necessary to comply
with applicable securities laws or rules of the NASD. Such investigation shall include access to
books, records and properties and opportunities to discuss the business of the Company with its
officers and independent auditors, all to such reasonable extent and at such reasonable times and
as often as any such Registered Holder shall reasonably request.



               (x) The Company shall not, directly or indirectly, enter into any merger, business combination
or consolidation in which (i) the Company shall not be the surviving corporation and (ii) the
shareholders of the Company are to receive, in whole or in part, capital stock or other securities
of the surviving corporation, unless the surviving corporation shall, prior to such merger,
business combination or consolidation, agree in writing to assume the obligations of the Company
under this Agreement, and for that purpose references hereunder to “Registrable Securities”
shall be deemed to include the securities which the Registered Holders would be entitled to receive
in exchange for Registrable Securities under any such merger, business combination or
consolidation, provided that to the extent such securities to be received are convertible into
shares of Common Stock of the issuer thereof, then any such shares of Common Stock as are issued or
issuable upon conversion of said convertible securities shall also be included within the
definition of “Registrable Securities.”



               (xi) In the event of an underwritten registered offering the managing underwriter(s) advise
the Company in writing that in their opinion the number of Registrable Securities exceeds the
number of Registrable Securities which can be sold therein without adversely affecting the
marketability of the offering, the Company will include in such registration the number of
Registrable Securities requested to be included which in the opinion of such underwriter(s) can be
sold without adversely affecting the marketability of the offering, pro rata among the respective
holders thereof on the basis of the amount of Registrable Securities owned by each such holder. In



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the event the number of shares available under a registration statement filed pursuant to Section
3(a)
is insufficient to cover 100% of the Registrable Securities required to be covered by such
Registration Statement, the Company shall amend the registration statement, or file a new
registration statement (on the short form available therefor, if applicable), or both, so as to
cover 100% of the number of such Registrable Securities as of the trading day immediately preceding
the date of the filing of such amendment or new registration statement, in each case, as soon as
practicable, but in any event not later than 45 days after the necessity therefor arises. The
Company shall use it reasonable best efforts to cause such amendment or new registration statement
to become effective as soon as practicable following the filing thereof.




               (xii) All expenses incident to the Company’s performance of or compliance with this Agreement,
including without limitation all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other Persons retained by the Company will
be borne by the Company. In no event shall the Company be obligated to be pay any discounts or
commissions with respect to the shares sold by any holder of Registrable Securities. In connection
with each Registration Document, the Company will reimburse the holders of Registrable Securities
covered by such registration for the reasonable fees and disbursements of one counsel chosen by the
holders of a majority of the Registrable Securities initially requesting such registration.



     SECTION 4. Definitions. The following terms have the meanings set forth below:



     “Act” means the Securities Act of 1933, as amended.



     “Convertible Securities” means any evidence of indebtedness, shares or other
securities convertible into or exchangeable for Common Stock.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Fair Market Value” shall be determined on a per Share basis as of the close of the
business day preceding the date of exercise, which determination shall be made as follows: (a) if
the Common Stock is listed on a national securities exchange or admitted to unlisted trading
privileges on such an exchange or quoted on either the National Market System or the Small Cap
Market of the automated quotation service operated by The Nasdaq Stock Market, Inc., the Fair
Market Value shall be the last reported sale price of that security on such exchange or system on
the day for which the current market price is to be determined or, if no such sale is made on such
day, the average of the highest closing bid and lowest asked price for such day on such exchange or
system; (b) if the Common Stock is not so listed or quoted or admitted to unlisted trading
privileges, the Fair Market Value shall be the average of the last reported highest bid and lowest
asked prices quoted on the Nasdaq Electronic Bulletin Board, or, if not so quoted, then by the
National Quotation Bureau, Inc. on the last business day prior to the day for which the Fair Market
Value is to be determined; or (c) if the Common Stock is not so listed or quoted or admitted to
unlisted trading privileges and bid and



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asked prices are not reported, the Fair Market Value shall
be determined by the Company’s Board of Directors in its
reasonable, good faith judgment.




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



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



     “Registered Holders” means, collectively, Elevation and each other holder of a Warrant
or Warrant Shares, if any, reflected as such on the books of the Company.



     “Registrable Securities” means the Warrant Shares.



     “Warrant” means the right to purchase one or more Warrant Shares pursuant to the terms
of this Warrant, as the same may be transferred, divided or exchanged pursuant to the terms hereof.



     “Warrant Shares” means shares of the Common Stock issuable upon exercise of the
Warrant; provided, however, that if there is a change such that the securities issuable upon
exercise of the Warrant are issued by an entity other than the Company or there is a change in the
class of securities so issuable, then the term “Warrant Shares” shall mean shares of the security
issuable upon exercise of the Warrant if such security is issuable in shares, or shall mean the
equivalent units in which such security is issuable if such security is not issuable in shares.



     SECTION 5. No Voting Rights; Limitations of Liability. This Warrant shall not entitle
the holder hereof to any voting rights or other rights as a stockholder of the Company. No
provision hereof, in the absence of affirmative action by the Registered Holder to purchase Warrant
Shares, 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 Warrant Shares acquirable by
exercise hereof or as a stockholder of the Company.



     SECTION 6. Warrant Transferable. Subject to compliance with applicable securities
laws and the terms of this Section 6, 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) at the principal office of
the Company.



     SECTION 7. 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 Warrants of like tenor representing in the aggregate the purchase rights
hereunder, and each of such new Warrants shall represent such portion of such rights as is
designated by the Registered Holder at the time of such surrender. 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




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certificates representing the unexpired and unexercised rights formerly represented by
this Warrant shall be
issued. All Warrants representing portions of the rights hereunder are referred to herein as
the “Warrants.”




     SECTION 8. Replacement. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership and 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 upon
surrender of such certificate, the Company shall (at the expense of the Registered Holder) 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 the date of such
lost, stolen, destroyed or mutilated certificate.



     SECTION 9. Notices. All notices, requests, deliveries, consents and other
communications provided for herein shall be in writing and shall be effective upon delivery in
person, faxed, or mailed by certified or registered mail, return receipt requested, postage
pre-paid, addressed as follows:



     If to the Company, to:


The Fashion House Holdings, Inc.

6310 San Vicente Blvd.



Suite 330



Los Angeles, CA 90048



Attn: John Hanna




     If to Diaz, to:


Diaz Management, Inc.

63-34 Austin Street



Rego Park, NY 11374



Attn: Gualberto Diaz




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or, in any case, at such other address or addresses as shall have been furnished in writing to the
Company (in the case of a Registered Holder of Warrants) or to the Registered Holders of Warrants
(in the case of the Company) in accordance with the provisions of this paragraph.




     SECTION 10. Amendment and Waiver. Except as otherwise provided herein, the provisions
of the Warrants 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 Holders of Warrants representing a majority of the Warrant Shares
obtainable upon exercise of the then-outstanding Warrants; provided, however, that no such action
may change the Exercise Price of the Warrants or the number of shares or class of capital stock
obtainable upon exercise of each Warrant without the written consent of all Registered Holders.



     SECTION 11.  Descriptive Headings; Governing Law. 



          (a) The descriptive headings of the several Sections of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant.




          (b) All issues and questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by, and construed in accordance with, the laws
of the State of California, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of California.




     SECTION 12. Warrant Register. The Company shall maintain at its principal executive
office books for the registration and the registration of transfer of this Warrant. The Company
may deem and treat the Registered Holder as the absolute owner hereof (notwithstanding any notation
of ownership or other writing thereon made by anyone) for all purposes and shall not be affected by
any notice to the contrary.



     SECTION 13. Fractions of Shares. The Company may, but shall not be required, to issue
a fraction of a Warrant Share upon the exercise of this Warrant in whole or in part. As to any
fraction of a share which the Company elects not to issue, the Company shall make a cash payment in
respect of such fraction in an amount equal to the same fraction of the market price of a Warrant
Share on the date of such exercise (as determined by the board of directors in its reasonable
discretion).



* * * * *




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



	 	 	 	 	 
	 	THE FASHION HOUSE HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	John Hanna 	 
	 	 	Title:  	CEO 	 
	 




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EXHIBIT I




EXERCISE AGREEMENT




	 	 	 
	To:

	 	Dated:






     The undersigned, pursuant to the provisions set forth in the attached Warrant (Certificate No.
WD-3), hereby agrees to subscribe for the purchase of                      Warrant Shares covered by such Warrant
and makes payment herewith in full therefor at the price per share provided by such Warrant.
Please issue the Warrant Shares in the following names and amounts:



	 	 	 
	Name
	 	Number of Warrant Shares






	 	 	 	 	 	 	 
	 

	 	Signature	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address	 	 	 	 
	 

	 	 	 	 	 	 





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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 the Warrant Shares covered thereby set forth below, unto:



	 	 	 	 	 
	Names of Assignee
	 	Address
	 	No. of Shares






	 	 	 	 	 	 	 
	Dated:

	 	Signature	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Witness	 	 	 	 
	 

	 	 	 	 	 	 




The Assignee agrees to be bound by the terms of the Warrant.




	 	 	 	 	 	 	 
	 

	 	Signature	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Witness	 	 	 	 
	 

	 	 	 	 	 	 





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