Unassociated Document


    EXHIBIT
      4.2

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933 OR THE SECURITIES LAWS OF ANY STATE (COLLECTIVELY, THE “LAWS”). THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
      ABSENCE OF EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE APPLICABLE LAWS OR (II) AN OPINION OF COUNSEL IN FORM, SUBSTANCE
      AND
      SCOPE REASONABLY ACCEPTABLE TO THE ISSUER, TO THE EFFECT THAT SUCH REGISTRATION
      IS NOT REQUIRED DUE TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF THE APPLICABLE LAWS.

     

    NICKLEBYS.COM,
      INC.

    


    WARRANT
      TO PURCHASE COMMON STOCK

    


    
      	
              Warrant
                No.___

            	
              Date
                of Issuance: February 28, 2006

            


    

    


    Nicklebys.com,
      Inc., a Colorado corporation (the “Company”), hereby certifies that, for value
      received, Oceanus Value Fund, L.P., and permitted assigns, the registered holder
      hereof (“Holder”), is entitled, subject to the terms set forth below, to
      purchase from the Company upon surrender of this Warrant to Purchase Common
      Stock (the “Warrant”), at any time after the date hereof, but not after 5:00
      P.M. California time on the Expiration Date (as defined herein) up to 890,995
      fully-paid and nonassessable shares of Common Stock (as defined herein) of
      the
      Company (each a “Warrant Share” and collectively the “Warrant Shares”) at a
      purchase price (the “Warrant Exercise Price”) equal to $1.04 per
      share; provided, however, that (i) upon the occurrence of an event of default
      under the Note (as defined in the Securities Purchase Agreement), upon written
      notice to the Company (the “Notice”) by the holder of this Warrant within one
      (1) year after the date of such event of default, the holder may reset the
      Warrant Exercise Price to an amount equal to the closing price of the Common
      Stock on the trading day immediately preceding the date of the Notice (as
      specified in the Notice) as quoted on the OTC Bulletin Board or such national
      securities exchange or other market on which the Common Stock is then listed
      or
      quoted and (ii) upon Notice by the holder of this Warrant within one (1) year
      after the date that the Note has been paid in full, the holder may reset the
      Warrant Exercise Price to an amount equal to the closing price of the Common
      Stock on the trading day immediately preceding the date of the Notice (as
      specified in the Notice) as quoted on the OTC Bulletin Board or such national
      securities exchange or other market on which the Common Stock is then listed
      or
      quoted. The Warrant Exercise Price shall be paid in lawful money of the United
      States. Both the number of Warrant Shares purchasable hereunder and the Warrant
      Exercise Price are subject to adjustment as provided in Section 9
      below.

    


    Section
      1. Definitions.

    


    (a)
      The
      following words and terms used in this Warrant shall have the following
      meanings:

    


    “Common
      Stock” means (i) the Company's $.0001 par value common stock and (ii) any
      capital stock into which such Common Stock shall have been changed or any
      capital stock resulting from a reclassification of such Common
      Stock.

     

    
      
        
        

      

      
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    “Expiration
      Date” means the date which is five (5) years from the date of this Warrant or,
      if such date falls on a Saturday, Sunday or other day on which banks are
      required or authorized to be closed in the State of California (a “Holiday”),
      the next preceding date that is not a Holiday.

     

    “Market
      Price” means the average of the closing stock prices for the Common Stock for
      the ten (10) trading days immediately prior to the date on which a Notice of
      Exercise is delivered to the Company, as quoted on the OTC Bulletin Board or
      such national securities exchange or other market on which the Common Stock
      may
      then be listed or quoted.

     

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

     

    “Securities
      Purchase Agreement” shall mean the Securities Purchase Agreement between the
      Holder (or its predecessor in interest) and the Company for the purchase of
      this
      Warrant and the other Securities (as defined in the Securities Purchase
      Agreement).

     

    (b)
      Other
      definitional provisions:

     

    (i)
      Except as otherwise specified herein, all references herein (A) to the Company
      shall be deemed to include the Company’s successors and (B) to any applicable
      law shall be deemed references to such applicable law as the same may be amended
      or supplemented from time to time.

     

    (ii)
      When
      used in this Warrant, unless otherwise specified in a particular instance,
      the
      words “herein,” “hereof,” and “hereunder,” and words of similar import, shall
      refer to this Warrant as a whole and not to any provision of this Warrant,
      and
      the words “Section” and “Exhibit” shall refer to Sections of, and Exhibits to,
      this Warrant unless otherwise specified.

     

    (iii)
      Whenever the context so requires, the neuter gender includes the masculine
      or
      feminine, and the singular number includes the plural, and vice
      versa.

     

    (iv)
      When
      used in this Warrant, “transfer” shall include any disposition of this Warrant
      or any Warrant Shares, or of any interest in either thereof, which would
      constitute a sale thereof within the meaning of the Securities Act or applicable
      state securities laws.

     

    Section
      2. Exercise
      of Warrant.

     

    (a)
      Subject to the terms and conditions hereof, this Warrant may be exercised by
      the
      Holder, as a whole or in part (except that this Warrant shall not be exercisable
      as to a fractional share), at any time prior to 5:00 p.m. California time on
      the
      Expiration Date. The rights represented by this Warrant shall be exercised
      by
      the Holder by (i) delivery of a written notice in the form attached as Exhibit
      I
      hereto (a “Notice of Exercise”) of the Holder's election to exercise this
      Warrant, which notice shall specify the number of Warrant Shares to be
      purchased, (ii) payment to the Company of an amount equal to the Warrant
      Exercise Price multiplied by the number of Warrant Shares as to which the
      Warrant is being exercised, plus any applicable issuance or transfer taxes,
      in
      immediately available funds (either by wire transfer or a certified or cashier's
      check drawn on a United States bank) and (iii) the surrender of this Warrant,
      properly endorsed, at the principal office of the Company
      (or at such other agency or office of the Company as the Company may designate
      by notice to the Holder).

     

    
      
        
        

      

      
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    (b)
      In
      addition, and notwithstanding anything to the contrary contained in this
      Warrant, at such time as the Market Price per share of the Common Stock exceeds
      the Warrant Exercise Price, this Warrant may be exercised by presentation and
      surrender of this Warrant to the Company in a cashless exercise, including
      a
      written calculation of the number of Warrant Shares to be issued upon such
      exercise in accordance with the terms hereof (a “Cashless Exercise”). In the
      event of a Cashless Exercise, in lieu of paying the Warrant Exercise Price,
      the
      Holder shall surrender this Warrant for, and the Company shall issue in respect
      thereof, the number of Warrant Shares determined by multiplying the number
      of
      Warrant Shares to which the Holder would otherwise be entitled by a fraction,
      the numerator of which shall be determined by subtracting the Warrant Exercise
      Price from the then current Market Price per share of Common Stock, and the
      denominator of which shall be the then current Market Price per share of Common
      Stock.

     

    (c)
      Any
      Warrant Shares shall be deemed to be issued to the Holder or Holder’s designee,
      as the record owner of such Warrant Shares, as of the date on which this Warrant
      shall have been surrendered, the completed Notice of Exercise shall have been
      delivered, and payment (or notice of an election to effect a Cashless Exercise)
      shall have been made for such Warrant Shares as set forth above, irrespective
      of
      the date of delivery of such share certificate, except that, if the date of
      such
      surrender and payment is a date when the stock transfer books of the Company
      are
      properly closed, such person shall be deemed to have become the holder of such
      Warrant Shares at the opening of business on the next succeeding date on which
      the stock transfer books are open. For each exercise of the rights represented
      by this Warrant in compliance with this Section 2, a certificate or certificates
      for the Warrant Shares so purchased, registered in the name of, or as directed
      by, the Holder, shall be delivered to, or as directed by, the Holder within
      three (3) business days after such rights shall have been so
      exercised.

     

    (d)
      Unless this Warrant shall have expired or shall have been fully exercised,
      the
      Company shall issue a new Warrant identical in all respects to the Warrant
      exercised except that it shall represent rights to purchase the number of
      Warrant Shares purchasable immediately prior to such exercise under the Warrant
      exercised, less the number of Warrant Shares with respect to which such Warrant
      is exercised (or, in the case of a Cashless Exercise, the number of shares
      to
      which the Holder would otherwise have been entitled).

     

    (e)
      In
      the case of any dispute with respect to an exercise, the Company shall promptly
      issue such number of Warrant Shares as are not disputed in accordance with
      this
      Section. If such dispute only involves the number of Warrant Shares receivable
      by the Holder under a Cashless Exercise, the Company shall submit the disputed
      calculations to an independent accounting firm of national standing via
      facsimile within two (2) business days of receipt of the Notice of Exercise.
      The
      accountant shall review the calculations and notify the Company and the Holder
      of the results no later than two (2) business days from the date it receives
      the
      disputed calculations. The accountant’s calculation shall be deemed conclusive
      absent manifest error. The Company shall then issue the appropriate number
      of
      shares of Common Stock in accordance with this Section.

     

    
      
        
        

      

      
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    Section
      3. Covenants
      as to Common Stock.
      The
      Company covenants and agrees that all Warrant Shares which may be issued upon
      the exercise of the rights represented by this Warrant will, upon issuance,
      be
      validly issued, fully paid and nonassessable. The Company further covenants
      and
      agrees that during the period within which the rights represented by 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 the rights then represented by this Warrant and that the par value
      of said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price.

     

    Section
      4. Taxes.
      The
      Company shall not be required to pay any tax or taxes attributable to the
      initial issuance of the Warrant Shares or any transfer involved in the issuance
      or delivery of any certificates for Warrant Shares in a name other than that
      of
      the Holder or any permitted transferee of this Warrant.

     

    Section
      5. Warrant
      Holder Not Deemed a Stockholder.
      No
      Holder of this Warrant, as such, shall be entitled to vote or receive dividends
      or be deemed the holder of shares of the Company for any purpose, nor shall
      anything contained in this Warrant be construed to confer upon the Holder,
      as
      such, any of the rights of a stockholder of the Company or any right to vote,
      give or withhold consent to any corporate action (whether any reorganization,
      issuance of stock, reclassification of stock, consolidation, merger, conveyance
      or otherwise), receive notice of meetings, receive dividends or subscription
      rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
      which the Holder is then entitled to receive upon the due exercise of this
      Warrant. Notwithstanding the foregoing, the Company will provide the Holder
      with
      copies of the same notices and other information given to the stockholders
      of
      the Company generally, contemporaneously with the delivery thereof to the
      stockholders.

     

    Section
      6. No
      Limitation on Corporate Action.
      No
      provisions of this Warrant and no right or option granted or conferred hereunder
      shall in any way limit, affect or abridge the exercise by the Company of any
      of
      its corporate rights or powers to recapitalize, amend its Articles of
      Incorporation, reorganize, consolidate or merge with or into another
      corporation, or to transfer all or any part of its property or assets, or the
      exercise of any other of its corporate rights and powers.

     

    Section
      7. Representations
      of Holder.
      By the
      acceptance hereof, the Holder represents that the Holder is acquiring this
      Warrant and the Warrant Shares for the Holder’s own account for investment and
      not with a view to, or for sale in connection with, any distribution hereof
      or
      of any of the shares of Common Stock or other securities issuable upon the
      exercise hereof, and not with any present intention of distributing any of
      the
      same. The Holder further represents, by acceptance hereof, that, as of this
      date, the Holder is an “accredited investor” as such term is defined in Rule
      501(a) of Regulation D promulgated by the Securities and Exchange Commission
      under the Securities Act. Upon exercise of this Warrant, the Holder shall,
      if
      requested by the Company, confirm the foregoing representations in writing,
      in a
      form satisfactory to the Company. If the Holder cannot make such representations
      because they would be factually incorrect, it shall be a condition to the
      Holder's exercise of the Warrant that the Company receive such other
      representations as the Company considers reasonably necessary to assure the
      Company that the issuance of its securities upon exercise of the Warrant shall
      not violate any federal or state securities laws.

     

    
      
        
        

      

      
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    Section
      8. Restrictions
      on Transfer.
      The
      Holder understands that (i) this Warrant and the Warrant Shares have not been
      and are not being registered under the Securities Act or any state securities
      laws (other than as described in the Securities Purchase Agreement and the
      Registration Rights Agreement entered into concurrently therewith (the
“Registration Rights Agreement”)), and may not be offered for sale, sold,
      assigned or transferred unless (A) subsequently registered thereunder or (B)
      pursuant to an exemption from such registration, and (ii) neither the Company
      nor any other person is under any obligation to register such securities (other
      than as described in the Securities Purchase Agreement and the Registration
      Rights Agreement) under the Securities Act or any state securities laws or
      to
      comply with the terms and conditions of any exemption thereunder.

     

    Section
      9. Adjustments.

     

    (a)
      Reclassification
      and Reorganization.
      In case
      of any reclassification, capital reorganization or other change of outstanding
      shares of the Common Stock, or in case of any consolidation or merger of the
      Company with or into another corporation (other than a consolidation or merger
      in which the Company is the continuing corporation and which does not result
      in
      any reclassification, capital reorganization or other change of outstanding
      shares of Common Stock), the Company shall cause effective provision to be
      made
      so that the Holder shall have the right thereafter, by exercising this Warrant,
      to purchase the kind and number of shares of stock or other securities or
      property (including cash) receivable upon such reclassification, capital
      reorganization or other change, consolidation or merger by a holder of the
      number of shares of Common Stock that could have been purchased upon exercise
      of
      the Warrant immediately prior to such reclassification, capital reorganization
      or other change, consolidation or merger. Any such provision shall include
      provision for adjustments that shall be as nearly equivalent as may be
      practicable to the adjustments provided for in this Section 9. The foregoing
      provisions shall similarly apply to successive reclassifications, capital
      reorganizations and other changes of outstanding shares of Common Stock and
      to
      successive consolidations or mergers. If the consideration received by the
      holders of Common Stock is other than cash, the value shall be as determined
      by
      the Board of Directors of the Company acting in good faith.

     

    (b)
      Dividends
      and Stock Splits.
      If and
      whenever the Company shall effect a stock dividend, a stock split, a stock
      combination, or a reverse stock split of the Common Stock, the number of Warrant
      Shares purchasable hereunder and the Warrant Exercise Price shall be
      proportionately adjusted in the manner determined by the Company's Board of
      Directors acting in good faith. The number of shares, as so adjusted, shall
      be
      rounded down to the nearest whole number and the Warrant Exercise Price shall
      be
      rounded to the nearest cent.

     

    Section
      10. Lost,
      Stolen, Mutilated or Destroyed Warrant.
      If this
      Warrant is lost, stolen or destroyed, the Company shall, on receipt of an
      indemnification undertaking reasonably satisfactory to the Company, issue a
      new
      Warrant of like denomination and tenor as the Warrant so lost, stolen or
      destroyed. In the event the Holder asserts such loss, theft or destruction
      of
      this Warrant, the Company may require the Holder to post a bond issued by a
      surety reasonably satisfactory to the Company with respect to the issuance
      of
      such new Warrant.

     

    Section
      11. Notice.
      Any
      notices required or permitted to be given under the terms of this Warrant shall
      be sent by mail or delivered personally or by courier or facsimile, and shall
      be
      effective five
      days
      after being placed in the mail, if mailed, certified or registered, return
      receipt requested, or upon receipt, if delivered personally or by courier or
      by
      facsimile, in each case properly addressed to the party to receive the same.
      The
      addresses for such communications shall be as provided in Section 8(f) of the
      Securities Purchase Agreement (with Holder being defined therein as the
“Buyer”). Each party shall provide notice to the other party of any change in
      address.

     

    
      
        
        

      

      
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    Section
      12. Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged, or terminated
      only by an instrument in writing signed by the party or Holder against which
      enforcement of such change, waiver, discharge or termination is sought. This
      Warrant shall be governed by and interpreted under the laws of the State of
      Kansas, without regard to the principles of conflict of laws. Headings are
      for
      convenience only and shall not affect the meaning or construction of any of
      the
      provisions hereof. This Warrant shall be binding upon the Company and its
      successors and assigns and shall inure to the benefit of the Holder and its
      permitted successors and assigns. The Holder may not assign this Warrant except
      in accordance with applicable federal and state securities laws.

     

    Section
      13. Attorney’s
      Fees.
      If
      Holder or the Company shall bring any action for relief against the other
      arising out of or in connection with this Warrant, in addition to all other
      remedies to which the prevailing party may be entitled, the losing party shall
      be required to pay to the prevailing party a reasonable sum for attorney's
      fees
      and costs incurred in bringing such action and/or enforcing any judgment granted
      therein, all of which shall be deemed to have accrued upon the commencement
      of
      such action and shall be paid whether or not such action is prosecuted to
      judgment. Any judgment or order entered in such action shall contain a specific
      provision providing for the recovery of attorney's fees and costs incurred
      in
      enforcing such judgment. For the purposes of this Section, attorney's fees
      shall
      include, without limitation, fees incurred with respect to the following: (i)
      post-judgment motions, (ii) contempt proceedings, (iii) garnishment, levy and
      debtor and third party debtor and third party examinations, (iv) discovery
      and
      (v) bankruptcy litigation.

     

    Section
      14. Effect
      of Expiration.
      This
      Warrant, in all events, shall be wholly void and of no effect after the close
      of
      business on the Expiration Date, except that notwithstanding any other
      provisions hereof, the provisions of Sections 8 and 12 shall continue in full
      force and effect after such date as to any Warrant Shares or other securities
      issued upon the exercise of this Warrant.

    


    NICKLEBYS.COM,
      INC.

     

    By: 
      /s/ James W. France

    
      
        

      

    

    President

     

    By: 
      /s/ Robert Ostrander

    
      
        

      

    

    Secretary

     

     

    
      
        
        

      

      
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    EXHIBIT
      I

     

    NOTICE
      OF EXERCISE FORM

     

    NICKLEBYS.COM,
      INC.

    


    The
      undersigned hereby exercises the right to purchase the number of Warrant Shares
      covered by the Warrant attached hereto as specified below according to the
      conditions thereof and herewith makes payment of U.S. $ (unless
      effected by a Cashless Exercise in accordance with the terms of the Warrant),
      which constitutes the aggregate Warrant Exercise Price of such Warrant Shares
      pursuant to the terms and conditions of the Warrant.

     

    (i)
      The
      undersigned agrees not to offer, sell, transfer or otherwise dispose of any
      Common Stock obtained upon exercise of the Warrant except under circumstances
      that will not result in a violation of the 1933 Act or applicable state
      securities laws.

     

    (ii)
      The
      undersigned requests that the stock certificates for the Warrant Shares be
      issued, and a Warrant representing any unexercised portion hereof be issued,
      pursuant to the terms of the Warrant in the name of the Holder (or such other
      person(s) indicated below) and delivered to the undersigned (or designee(s))
      at
      the address or addresses set forth below.

    


    


    Dated:_______,
      ___.

     

    HOLDER:__________________________________________

     

    By:_______________________________

    Title:______________________________

    Address:___________________________

    ___________________________________________________

     

    ___________________________________________________

     

    ___________________________________________________

     

     

    Number
      of
      Warrant Shares being
      purchased:______________________________________

     

     

    
      
        
        

      

      
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    .