Exhibit
10.1


 


THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS THERE IS A (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT RELATED THERETO, (II) AN OPINION OF
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED, (III) RECEIPT OF A NO-ACTION LETTER(S) FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR (IV) UNLESS PURSUANT TO AN
EXEMPTION THEREFROM UNDER RULE 144 OF THE ACT.


 


TRESTLE
HOLDINGS, INC.


 


WARRANT TO PURCHASE

9,300  SHARES OF COMMON STOCK


 


	
  Bridge
  Warrant No. 1

  	
   

  	
  Dated March 3, 2004

  



 


TRESTLE HOLDINGS, INC., a
Delaware corporation (the “Company”), hereby certifies that, for value
received,    Zaykowski Partners, LP, or its registered assigns (“Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company
up to an aggregate of Nine Thousand Three Hundred (9,300) shares
of Common Stock, par value $0.001 per share (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such shares, the “Warrant
Shares”) at an exercise price equal to $ 4.40  per share (the “Exercise Price”), at
any time and from time to time during the Exercise Period, and subject to the
following terms and conditions:


 


1.             Registration of
Warrant.  The Company shall register
this Warrant, in the books of the Company to be maintained for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from
time to time.  The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for
the purpose of any exercise hereof or any distribution to the Holder, and for
all other purposes, and the Company shall not be affected by notice to the
contrary.


 


2.             Registration of
Transfers and Exchanges.


 


(a)           No Holder may transfer
any Warrant without the prior written consent of the Company, which consent may
be granted or denied in the sole discretion of the Company.  Should such consent be granted, the Warrants
so transferred shall continue to be bound by this restriction in the hands of a
subsequent Holder, and the Company shall not be required to recognize any
attempted transfer of the Warrants in violation of this Agreement.


 


(b)           Subject to the terms
hereof, the Warrants shall be transferable only on the Warrant Register
maintained at its principal office upon delivery thereof duly endorsed by


 

















 


the Holder or by its duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer.  In all cases of transfer by an attorney, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited and remain
with the Company.  Upon any registration
of transfer, the person to whom such transfer is made shall receive a new
Warrant or Warrants as to the portion of the Warrant transferred, and the
Holder of such Warrant shall be entitled to receive a new Warrant or Warrants
from the Company as to the portion thereof retained.  The Company may require the payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any such
transfer.


 


3.             Duration and
Exercise of Warrants.


 


(a)           The term of this
Warrant (the “Exercise Period”) shall be the period commencing
March 3, 2004 and ending on March 3, 2009 (the “Expiration Date”).


 


(b)           This Warrant shall be exercisable
by the registered Holder on any business day during the Exercise Period before
5:00 P.M., Los Angeles time.  At
5:00 P.M., Los Angeles time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.


 


(c)           Subject to Sections
2(b), 4 and 7, upon surrender of this Warrant, with the Form of Election to
Purchase attached hereto duly completed and executed, to the Company at its
office at 11835 W. Olympic Blvd., Suite 550, Los Angeles, CA 90064, Attention:
Chief Financial Officer, or at such other address as the Company may specify in
writing to the then registered Holder, and upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends to purchase
hereunder, in lawful money of the United States of America, in cash or by
certified or official bank check or checks (subject to the Conversion Right in
accordance with Section 3(d)), all as specified by the Holder in the Form
of Election to Purchase, the Company shall promptly (but in no event later than
ten (10) business days after the date of exercise) issue or cause to be issued
and cause to be delivered to or upon the written order of the Holder and in
such name or names as the Holder may designate, a certificate for the Warrant
Shares issuable upon such exercise.


 


(d)           In addition to and
without limiting the rights of the Holder under the terms of this Warrant,
Holder shall have the right to convert this Warrant or any portion thereof (the
“Conversion Right”) into Warrant Shares as provided in this
Section 3(d) at any time or from time to time during the Exercise Period
by delivering notice in accordance with Section 3(c).  Upon exercise of the Conversion Right with
respect to all or a specified portion of shares subject to this Warrant (the “Pre-Converted
Warrant Shares”), the Company shall deliver to Holder that number of
Warrant Shares equal to the quotient obtained by dividing (i) the value of this
Warrant (or the specified portion hereof) on the Exercise Date (as defined in
Section 3(e)), which value shall be equal to (A) the aggregate Fair Market
Value (as defined below) of the Pre-Converted Warrant Shares issuable upon
exercise of this Warrant on the Exercise Date less (B) the aggregate Exercise
Price of such Pre-Converted Warrant Shares immediately prior to the exercise of
the Conversion Right by (ii) the fair market value of one (1) Warrant Share on
the Exercise Date.


 


2

















 


Expressed as a formula,
such conversion shall be computed as follows:


 


	
  X =

  	
   

  	
  (A-B)

  	
   

  
	
   

  	
   

  	
  Y

  	
   

  



 


	
  where

  	
   

  	
  X  =

  	
   

  	
  the number of Warrant
  Shares to be issued to the Holder pursuant to this Section 3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y  =

  	
   

  	
  the Fair Market Value
  (as defined below) of one (1) Warrant Share.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A  =

  	
   

  	
  the aggregate fair
  market value of the Pre-Converted Warrant Shares at the time the Conversion
  Right is elected pursuant to this Section 3(d) (i.e., Fair Market Value
  (as defined below) per Warrant Share x Pre-Converted Warrant Shares).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B  =

  	
   

  	
  aggregate the Exercise
  Price of the Pre-Converted Warrant Shares (i.e., Exercise Price x
  Pre-Converted Warrant Shares).

  



 


For purposes of the
provisions of this Warrant requiring a determination in accordance with this
Section 3(d), “Fair Market Value” as of a particular date (the “Determination
Date”) shall mean (i) for any security if such security is traded on a
national securities exchange (an “Exchange”), the weighted average
(based on daily trading volume) of the mid-point between the daily high and low
trading prices of the security on each of the last ten (10) trading days prior
to the Determination Date reported on such Exchange, (ii) for any security that
is not traded on an Exchange but which is quoted on the Nasdaq Stock Market (“NASDAQ”)
or other electronic quotation system, the weighted average (based on daily
trading volume) of the mid-point between the daily high and low trading prices
reported on NASDAQ on each of the last ten (10) trading days (or if the
relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding business day on which there was such a
price or quotation, for a total of five trading days) prior to the
Determination Date, or (iii) for any security or any other asset, if no price
can be determined on the basis of the above methods of valuation, then the
judgment of valuation shall be determined in good faith by the Board of
Directors of the Company, which determination shall be described in a duly
adopted board resolution certified by the Company’s Secretary or Assistant
Secretary.


 


(e)           Any person so
designated by the Holder to receive Warrant Shares shall be deemed to have
become holder of record of such Warrant Shares as of the Date of Exercise of
this Warrant.  For purposes of this
Section 3, a “Date of Exercise” means the date on which the Company
shall have received (i) this Warrant (or any new Warrant, as applicable),
with the Form of Election to Purchase attached hereto (or attached to such new
Warrant) appropriately completed and duly executed, and (ii) payment of
the Exercise Price for the number of Warrant Shares so indicated by the holder
hereof to be purchased.


 


(f)            This Warrant shall be
exercisable, either in its entirety or, from time to time, for a portion of the
number of Warrant Shares so long as at least One Thousand


 


3

















 


(1,000) Warrant
Shares are purchased in any one exercise or, if less, all of the Warrant Shares
which may be purchased under this Warrant. 
If less than all of the Warrant Shares which may be purchased under this
Warrant are exercised at any time, the Company shall issue or cause to be
issued, at its expense, a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares for which no exercise has been evidenced by
this Warrant.


 


(g)           This Warrant shall only
be exercisable if, and shall be only exercisable to the extent, it is legal to
do so because, among other things, the Warrant Shares are registered pursuant
to a registration statement which has been declared effective by the Securities
and Exchange Commission, and which is still effective on the applicable date of
exercise, or the issuance of such Warrant Shares is exempt from the
registration requirements of the Securities Act of 1933, as amended.


 


4.             Payment of Taxes.  The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Warrant Shares or Warrants
in a name other than that of the Holder, and the Company shall not be required
to issue or cause to be issued or deliver or cause to be delivered the
certificates for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.  The Holder shall be
responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise hereof.


 


5.             Replacement of
Warrant.  If this Warrant is
mutilated, lost, stolen or destroyed, the Company may, in its discretion, issue
or cause to be issued in exchange and substitution for and upon cancellation
hereof, or in lieu of and substitution for this Warrant, a new Warrant, but
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction and indemnity, if requested, satisfactory to
it.  Applicants for a new Warrant under
such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.


 


6.             Adjustments 


 


(a)           For Changes in
Common Stock.  If the Company, at
any time and from time to time while this Warrant is outstanding,
(i) subdivides its outstanding shares of Common Stock into a larger number
of shares, or (ii) combines its outstanding shares of Common Stock into a
smaller number of shares, then, and in each such case, the number of Warrant
Shares shall be proportionately increased (in the case of a subdivision
described in clause (i) above), or proportionately decreased (in the case of a
combination described in clause (ii) above) to become effective immediately
after the day upon which such subdivision or combination becomes
effective.  The Company shall give
written notice of each adjustment or readjustment of the number of Warrant
Shares or other securities issuable upon exercise of this Warrant; provided,
however, that the failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice. 
The notice shall describe the adjustment or readjustment and show in
reasonable detail the facts on which the adjustment or readjustment is based.


 


4

















 


(b)           Merger, Sale or
Reclassification.  In case of any
(i) consolidation or merger (including a merger in which the Company is the
surviving entity), (ii) sale or other disposition of all or substantially all
of the Company’s assets or distribution of property to shareholders (other than
distributions payable out of earnings or retained earnings), or (iii)
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination), Holder shall thereafter have the right to receive
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such consolidation, merger, sale
or other disposition, reclassification, change or conversion by a holder of the
number of Warrant Shares then purchasable under this Warrant.  The provisions of this Section 6(b)
shall similarly apply to successive reclassifications, changes and conversions.


 


7.             Fractional Shares.  The Company shall not be required to issue
or cause to be issued fractional Warrant Shares on the exercise of this
Warrant.  The number of full Warrant
Shares which shall be issuable upon the exercise of this Warrant shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of this Warrant so presented. 
If any fraction of a Warrant Share would be issuable on the exercise of
this Warrant, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon exercise shall, on an aggregate basis, be
rounded down  to the nearest whole
number of shares.


 


8.             Notices.  Any and all notices or other communications
or deliveries hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified in this Section 8 prior to 4:30 P.M. (Los Angeles time) on
a business day, (ii) the business day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section 8 later than 4:30 P.M. (Los
Angeles time) on any date and earlier than 11:59 P.M. (Los Angeles time) on
such date, (iii) the business day following the date of mailing, if sent
by nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.  The addresses for such communications shall
be:  (i) if to the Company, to
Trestle Holdings, Inc., 11835 W. Olympic Blvd, Suite 550, Los Angeles, CA
90064, Attention: Chief Financial Officer, or to facsimile no.  (310) 444-4101, or (ii) if to the
Holder, to the Holder at the address or facsimile number appearing on the
Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section 8.


 


9.             Warrant Agent.  The Company shall serve as warrant agent
under this Warrant.  Upon thirty (30)
days’ notice to the Holder, the Company may appoint a new warrant agent.  Any new warrant agent shall be a party to
this Warrant without any further act. 
Any new warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder’s last address as shown on the Warrant Register.


 


10.           Holder’s
Representations and Warranties.  As
of the date hereof, Holder hereby makes the representations, warranties and
covenants set forth on Exhibit A hereto as though fully set forth
herein.


 


5

















 


11.           Stockholder Rights.  Until the valid exercise of this Warrant,
the Holder shall not be entitled to any of the rights of a stockholder of the
Company.


 


12.           Miscellaneous.


 


(a)           This Warrant shall be
binding on and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  This
Warrant may be amended only in writing signed by the Company and the Holder.


 


(b)           Subject to
Section 12(a), nothing in this Warrant shall be construed to give to any
person or entity other than the Company and the Holder any legal or equitable
right, remedy or cause under this Warrant; this Warrant shall be for the sole
and exclusive benefit of the Company and the Holder.


 


(c)           This Warrant and the
Warrant Shares (and the securities issuable, directly or indirectly, upon
conversion of the Warrant Shares, if any) shall be imprinted with one or all of
the following legends:


 


(i)                                     “THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS THERE IS A (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT RELATED THERETO, (II) AN OPINION OF
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED, (III) RECEIPT OF A NO-ACTION LETTER(S) FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR (IV) UNLESS PURSUANT TO AN
EXEMPTION THEREFROM UNDER RULE 144 OF THE ACT.”


 


(ii)                                  any
legend required by applicable state securities laws;


 


(iii)                               any
legend required by the Company’s certificate of incorporation or certificate of
determination; and/or


 


(iv)                              any
legend required by any applicable shareholders’ agreement.


 


(d)           This Warrant shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware without regard to the principles of conflicts of law
thereof.


 


6

















 


(e)           The headings herein are
for convenience only, do not constitute a part of this Warrant and shall not be
deemed to limit or affect any of the provisions hereof.


 


(f)            In case any one or
more of the provisions of this Warrant shall be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable
provision which shall be a commercially reasonable substitute therefor, and
upon so agreeing, shall incorporate such substitute provision in this Warrant.


 


IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed by its authorized officer
as of the date first written above.


 


	
   

  	
  TRESTLE HOLDINGS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  GARY FREEMAN

  	
   

  
	
   

  	
   

  	
  Gary Freeman

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and agreed
  to:

  	
   

  
	
   

  	
   

  
	
  /s/
  PAUL ZAYKOWSKI

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Paul Zaykowski

  	
   

  	
   

  
	
  its

  	
   

  	
   

  	
   

  
								



 


7

















 


FORM OF ELECTION TO
PURCHASE


 


(To be executed by the
Holder to exercise the right to purchase shares of Common Stock under the
foregoing Warrant)


 


To Trestle Holdings,
Inc.:


 


[CHECK PARAGRAPH THAT
APPLIES]


 


                
In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase 
                      
shares of Common Stock, par value $0.001 per share (the “Common Stock”),
of Trestle Holdings, Inc. and encloses herewith
$                
in cash or certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares
of Common Stock to which this Form of Election to Purchase relates, together
with any applicable taxes payable by the undersigned pursuant to the Warrant.


 


- OR -


 


                  
In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to convert such Warrant into
                     
shares of Common Stock by cashless exercise pursuant to Section 3(e) of
the Warrant.  Also enclosed is
documentation supporting the calculation of such number of shares of Common
Stock to which this Form of Election to Purchase relates.


 


The undersigned requests
that certificates for the shares of Common Stock issuable upon this exercise be
issued in the name
of                                                .


 


	
  PLEASE INSERT SOCIAL SECURITY

  OR TAX IDENTIFICATION NUMBER

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print
  name and address)

  
	
   

  
	
   

  



 

















 


If the number of shares
of Common Stock issuable upon this exercise shall not be all of the shares of
Common Stock which the undersigned is entitled to purchase in accordance with
the enclosed Warrant, the undersigned requests that a new Warrant evidencing
the right to purchase the shares of Common Stock not issuable pursuant to the
exercise evidenced hereby be issued in the name of and delivered to:


 


	
   

  
	
  (Please print
  name and address)

  
	
   

  
	
   

  



 


 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  	
  Name of Holder:

  
	
   

  	
   

  
	
   

  	
  (Print)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (By:)

  	
   

  	
   

  
	
   

  	
  (Name:)

  	
   

  	
   

  
	
   

  	
  (Title:)

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature must conform
  in all respects to name of holder as specified on the face of the Warrant)

  
												



 


A-2

















 


[To be
completed and executed only upon transfer of Warrant]


 


FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto
                                                       
the right represented by the within Warrant to purchase                         
shares of Common Stock, par value $0.001 per share, of Trestle Holdings, Inc.
to which the within Warrant relates and appoints
                           
attorney to transfer said right on the books of Trestle Holdings, Inc. with
full power of substitution in the premises.


 


	
  Dated:

  
	
   

  
	
   

  	
  ,

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
  (Signature must conform
  in all respects to name of holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  of Transferee

  
	
   

  	
   

  
	
  In the presence of:

  
	
   

  
	
   

  	
   

  	
   

  
							



 


A-3

















 


EXHIBIT A


 


Representations, Warranties and Covenants of Holder


 


Holder hereby represents,
warrants and covenants to the Company as follows:


 


1.                                       Holder
has full capacity, power and authority to countersign and deliver the Warrant.


 


2.                                       The
execution and delivery by Holder of the Warrant have been duly and validly
authorized by all necessary action by Holder, and no other action on the part
of Holder is required to authorize the execution, delivery and performance of
the Warrant.


 


3.                                       Without
limiting the terms of the investment representations set forth below, Holder
represents that Holder has:


 


(a)                                  had
an opportunity to ask questions and receive answers from the Company and its
officers and directors regarding matters relevant to the Company and an
investment therein;


 


(b)                                 further
had the opportunity to obtain any and all information that Holder deemed
necessary or appropriate to evaluate the Company and the investment represented
by the Warrant (and the other Securities, as defined below) as well as to
verify the accuracy of information otherwise provided to Holder; and


 


(c)                                  received
and reviewed all information that Holder deemed necessary or appropriate to
evaluate the Company and the investment represented by the Warrant (and the
other Securities, as defined below).


 


4.                                       Holder
is experienced in making investments in the unregistered and restricted
securities of development stage companies. 
Holder understands that such investments (including that represented by
the Securities) involve a high degree of speculation and risk.  Holder has such knowledge and experience in
financial and business matters that Holder is capable of evaluating the merits
and risks of the investment in the Company represented by the Securities and,
by reason of Holder’s financial and business experience, Holder has the
capacity to protect Holder’s interest in connection with the investment in the
Securities.  Holder is financially able
to bear the economic risk of the investment represented by the Securities,
including a total loss of such investment.


 


5.                                       Either
(i) Holder has a preexisting personal or business relationship with the
Company or one or more of its officers, directors or control persons or
(ii) by reason of Holder’s business or financial experience, Holder is
capable of evaluating the risks and merits of the investment represented by the
Securities and of protecting Holder’s own interests in connection with such
investment.


 


6.                                       Holder
is an “accredited investor”
as that term is defined in Rule 501 promulgated under the Securities Act of
1933, as amended (the “Act”).


 


A-1

















 


7.                                       The
Warrant, any Warrant Shares and any securities issuable, directly or
indirectly, upon conversion of the Warrant Shares (collectively the “Securities”) are being and will be
acquired by Holder (i) solely for investment purposes, (ii) for
Holder’s own account only and (iii) not for sale, transfer or with a view
to any distribution of all or any part of such Securities.  No other person will have any direct or
indirect beneficial interest in the Securities.


 


8.                                       Holder
understands that no public market now exists for any securities of the Company
and that the Company has made no assurances or representations whatsoever that
a public market will ever exist for any of the Company’s securities.


 


9.                                       Holder
has not engaged any brokers, finders or agents and has not incurred, and will
not incur, directly or indirectly, any liability for brokerage or finder’s fees
or agents’ commissions or any similar charges in connection with the Securities
and the transactions contemplated hereby.


 


10.                                 Holder
acknowledges that the Securities have not been and will not be registered under
the Act or qualified under any state securities or blue sky laws in reliance,
in part, on the representations and warranties herein.


 


11.                                 Holder
understands that (i) the Securities are “restricted securities” under the federal securities laws (e.g.,
the Act) insofar as the Securities will be acquired from the Company in a
transaction not involving a public offering, (ii) under such laws and
applicable regulations, the Securities may be resold without registration under
the Act only in certain limited circumstances and (iii) in the absence of
registration under the Act (which is not presently contemplated and with
respect to which the Company has no obligation) the Securities must be held
indefinitely.  Holder understands the
resale limitations imposed by the Act and is familiar with Rule 144 under the
Act, as presently in effect, and the conditions that must be met in order for
Rule 144 to be available with respect to the resale of “restricted
securities.”  Holder understands that
the Company does not presently meet conditions for the availability of Rule 144
under certain circumstances (e.g., the provision of current “public company”
information) and that the Company has no present plans ever to do so.


 


12.                                 Without
in any way limiting the representations set forth above, Holder further agrees
not to make any disposition of all or any portion of the Securities purchased
hereunder unless and until:


 


(a)                                  there
is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement and any applicable requirements of state securities laws; or


 


(b)                                 Holder
shall have (1) notified the Company of the proposed disposition,
(2) furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition and (3) furnished the Company with a
written opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of any securities under the Act or
the


 


A-2

















 


consent of (or a permit from) any authority under any
applicable state securities laws.


 


13.                                 In
the case of any disposition of any Securities pursuant to Rule 144 under the
Act, then in addition to the matters set forth above, Holder shall promptly
forward to the Company a copy of any Form 144 filed with the Securities and
Exchange Commission (the “SEC”)
with respect to such disposition and a letter from the executing broker
satisfactory to the Company evidencing compliance with Rule 144.  If Rule 144 is amended or if the SEC’s
interpretations thereof in effect at the time of any such disposition by Holder
have changed from the SEC’s present interpretations thereof, Holder shall
provide the Company with such additional documents as the Company may
reasonably require.


 


14.                                 In
the event of an initial public offering relating to any of the Company’s
securities, or any securities into which such securities may be converted or
exchanged, Holder shall enter into a lock-up agreement upon such terms as shall
be requested by the managing underwriter for such offering.


 


15.                                 At
the request of the Company, Holder agrees to enter into any shareholders’
agreement with respect to the Common Stock into which this Warrant is exercised
in the form entered into by the other holders of Common Stock.


 


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