nrom_ex44





 


 





 


 


EXHIBIT
4.4



 


WARRANT

 


 


THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY
STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED
UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS
EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND
FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE
QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN
LAW.

 


 


Original Issue
Date: February 7, 2020

 


 


FOR
VALUE RECEIVED, NOBLE ROMANS, INC., an Indiana corporation (the
“Company”),
hereby certifies that Corbel Structured Equity Partners, SBIC, L.P.
or its registered assigns (“Holder”) is entitled to purchase
from the Company Two Million Two Hundred Fifty Thousand (2,250,000)
duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock (subject to adjustment as provided herein)
at a purchase price of (a) $0.57 per share, in the case of
1,200,000 of such Warrant Shares (such 1,200,000 Warrant Shares,
the “Tranche 1
Shares”), (b) $0.72 per share, in the case of 900,000
of such Warrant Shares (such 900,000 Warrant Shares, the
“Tranche 2
Shares”) and (c) $0.97 per share, in the case of
150,000 of such Warrant Shares (such 150,000 Warrant Shares, the
“Tranche 3
Shares”) (each respective purchase price, subject to
adjustment as provided herein, the “Exercise Price”), all subject to
the terms, conditions and adjustments set forth below in this
Warrant. Certain capitalized terms used herein are defined in
Section 1 hereof. This
Warrant was issued to Holder pursuant to the Purchase
Agreement.

 


 

1. Definitions. As used in this
Warrant, the following terms have the respective meanings set forth
below:

 


 


“Aggregate Exercise Price” means an
amount equal to the product of (a) the number of Warrant Shares in
respect of which this Warrant is then being exercised pursuant to
Section 3 hereof,
multiplied by (b) the
Exercise Price applicable to such Warrant Shares in effect as of
the applicable Exercise Date in accordance with the terms of this
Warrant.

 


 


“Attribution Parties” has the
meaning set forth in Section
3(j)(i).

 


 


“Beneficial Ownership Limitation”
has the meaning set forth in Section 3(j)(iv). “Board” means the board of
directors of the Company.


“Business Day” means any day,
except a Saturday, Sunday or legal holiday, on which banking
institutions in the city of Los Angeles, California or
Indianapolis, Indiana are authorized or obligated by law or
executive order to close.





	












 

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“Common Stock” means the common
stock, no par value, of the Company, and any capital stock into
which such Common Stock shall have been converted, exchanged or
reclassified following the date hereof.

 


 


“Common Stock Deemed Outstanding”
means, at any given time, the sum of (a) the number of shares of
Common Stock actually outstanding at such time, plus (b) the number of shares of Common
Stock issuable upon exercise of Options actually outstanding at
such time, plus


(c) the
number of shares of Common Stock issuable upon conversion or
exchange of Convertible Securities actually outstanding at such
time (treating as actually outstanding any Convertible Securities
issuable upon exercise of Options actually outstanding at such
time), in each case, regardless of whether the Options or
Convertible Securities are actually exercisable at such time in
accordance with their terms; provided, that Common Stock
Deemed Outstanding at any given time shall not include treasury or
other shares owned or held by or for the account of the Company or
any of its subsidiaries.

 


 


“Company” has the meaning set forth
in the preamble.

 


“Conditions to Forced Exercise” has
the meaning set forth in Section
3(i)(i). “Convertible
Securities” means any securities (directly or
indirectly) convertible into or

 


exercisable or
exchangeable for Common Stock, but excluding Options.

 


 


“Excluded Issuances” means any
issuance or sale (or deemed issuance or sale in accordance with
Section 4(d)) by the Company
after the Original Issue Date of: (1) any Warrant Shares issued
upon the exercise of this Warrant; (2) shares of Common Stock
issued upon the exercise or conversions of any Options or
Convertible Securities outstanding on the Original Issue Date; and
(3) up to 550,000 shares of Common Stock (adjusted proportionately
for stock splits, stock dividends, recapitalizations and the like)
issued on the exercise of Options granted by the Board to officers,
directors, employees or service providers to the Company and its
subsidiaries.

 


 


“Exercise Date” means, for any
given exercise of this Warrant, the date on which the conditions to
such exercise as set forth in Section 3 shall have been satisfied at
or prior to 5:00 p.m., Eastern time, on a Business Day, including,
without limitation, the receipt by the Company of the Exercise
Agreement, the Warrant and the Aggregate Exercise Price payable
with respect to the Warrant Shares in question.

 


 


“Exercise Agreement” has the
meaning set forth in Section
3(a)(i). “Exercise
Period” has the meaning set forth in Section 2.


“Exercise Price” has the meaning
set forth in the preamble, as applicable to the Tranche 1 Shares,
Tranche 2 Shares or Tranche 3 Shares in question.

 


 


“Fair Market Value” means, as of
any particular date: (a) the average of the closing sales prices of
the Common Stock for such day on all domestic securities exchanges
on which the Common Stock may at the time be listed; (b) if there
have been no sales of the Common Stock on




 

2








 





 


 

 


any
such exchange on any such day, the average of the highest bid and
lowest asked prices for the Common Stock on all such exchanges at
the end of such day; (c) if on any such day the Common Stock is not
listed on a domestic securities exchange, the closing sales price
of the Common Stock as quoted on the OTC Bulletin Board, the Pink
OTC Markets or similar quotation system or association for such
day; or (d) if there have been no sales of the Common Stock on the
OTC Bulletin Board, the Pink OTC Markets or similar quotation
system or association on such day, the average of the highest bid
and lowest asked prices for the Common Stock quoted on the OTC
Bulletin Board, the Pink OTC Markets or similar quotation system or
association at the end of such day; in each case, averaged over
three (3) consecutive Business Days ending on the Business Day
immediately prior to the day as of which “Fair Market
Value” is being determined; provided, that if the Common
Stock is listed on any domestic securities exchange, the term
“Business Day” as used in this sentence means Business
Days on which such exchange is open for trading. If at any time the
Common Stock is not listed on any domestic securities exchange or
quoted on the OTC Bulletin Board, the Pink OTC Markets or similar
quotation system or association, the “Fair Market
Value” of the Common Stock shall be the fair market value per
share as determined jointly by the Board and the
Holder.

 


 


“Holder” has the meaning set forth
in the preamble.

 


 


“Options” means any warrants or
other rights or options to subscribe for or purchase Common Stock
or Convertible Securities.

 


 


“Original Issue Date” means
February 7, 2020. “Nasdaq” means The NASDAQ Stock
Market LLC.


“OTC Bulletin Board” means the
Financial Industry Regulatory Authority OTC Bulletin Board
electronic inter-dealer quotation system.

 


 


“Person” means any individual, sole
proprietorship, partnership, limited liability company,
corporation, joint venture, trust, incorporated organization or
government or department or agency thereof.

 


 


“Pink OTC Markets” means the OTC
Markets Group Inc. electronic inter-dealer quotation system,
including OTCQX, OTCQB and OTC Pink.

 


 


“Purchase Agreement” means the
Senior Secured Promissory Note and Warrant Purchase Agreement,
dated as of the date hereof, between the Company, as the
“Issuer”, the “Purchasers” named therein,
and Holder as the “Agent” for the Purchasers
thereunder.

 


 


“Put Notes” means Senior Secured
Promissory Notes, in substantially the form and with substantially
the same terms as those applicable to the Senior Notes (including
the terms applicable to the “Notes” as defined and as
set forth in the Purchase Agreement), other than those providing
for the accrual and payment of PIK Interest on such Senior Notes
and the maturity date for such Put Notes shall be the second
anniversary of the date of issuance of the Put Notes in
question.




 

3








 





 


 

 


“Put Notice” has the meaning set
forth in Section 6.
“Securities Act”
has the meaning set forth in Section 11.


“Senior Notes” means the Senior
Secured Promissory Notes issued and sold to Holder or the other
“Purchasers” named in, and as provided in, the Purchase
Agreement.

 


 


“Tranche 1 Shares” has the meaning
set forth in the preamble. “Tranche 2 Shares” has the meaning
set forth in the preamble. “Tranche 3 Shares” has the meaning
set forth in the preamble.


“Warrant” means this Warrant and
all warrants issued upon division or combination of, or in
substitution for, this Warrant.

 


 


“Warrant Share Put Right” has the
meaning set forth in Section
6.

 


 


“Warrant Shares” means the shares
of Common Stock or other capital stock of the Company then
purchasable upon exercise of this Warrant in accordance with the
terms of this Warrant.

 


 

 


“Weighted Average Price” has the
meaning set forth in Section
3(i)(ii).

 


 

2. Term of Warrant. Subject to the
terms and conditions hereof, at any time or from time to time
following the Original Issue Date and prior to 5:00 p.m. Central
time on the first six (6) year anniversary of the date hereof or,
if such day is not a Business Day, on the next preceding Business
Day (such period, the “Exercise Period”), the Holder of
this Warrant may exercise this Warrant for all or any part of the
Warrant Shares purchasable hereunder (subject to adjustment as
provided herein).

 


 

 




3.

Exercise of
Warrant.





 


 

(a) Exercise Procedure. This Warrant may be
exercised by Holder from time to time on any Business Day during
the Exercise Period, for all or any part of the unexercised Warrant
Shares, upon:


 

 

(i) surrender of this
Warrant to the Company at its then principal executive offices (or
an indemnification undertaking with respect to this Warrant in the
case of its loss, theft or destruction), together with an Exercise
Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly
completed (including specifying the number and type of Warrant
Shares to be purchased) and executed; and

 


 

(ii) payment
to the Company of the Aggregate Exercise Price in accordance with
Section 3(b).




 

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(b) Payment of the Aggregate Exercise Price.
Payment of the Aggregate Exercise Price shall be made at the option
of the Holder as expressed in the Exercise Agreement, by the
following methods:

 


 

(i) In the case of the
Tranche 1 Shares, Tranche 2 Shares or Tranche 3 Shares, by delivery
to the Company of a certified or official bank check payable to the
order of the Company or by wire transfer of immediately available
funds to an account designated in writing by the Company, in the
amount of such Aggregate Exercise Price;

 


 




(ii)

in the case of the
Tranche 3 Shares:





 


 

(A) by instructing the
Company to withhold a number of Warrant Shares then issuable upon
exercise of this Warrant with an aggregate Fair Market Value as of
the Exercise Date equal to such Aggregate Exercise Price (i.e. a
“cashless exercise”);

 


 

(B) by surrendering to
the Company (x) Warrant Shares previously acquired by the Holder
with an aggregate Fair Market Value as of the Exercise Date equal
to such Aggregate Exercise Price and/or (y) other securities of the
Company having a value as of the Exercise Date equal to the
Aggregate Exercise Price (which value in the case of debt
securities shall be the principal amount thereof plus accrued and
unpaid interest, in the case of preferred stock shall be the
liquidation value thereof plus accumulated and unpaid dividends and
in the case of shares of Common Stock shall be the Fair Market
Value thereof); or

 


 




(C)

any combination of
the foregoing.





 


 

(iii) In
the event of any withholding of Warrant Shares or surrender of
equity securities pursuant to Section 3(b)(ii)(A), 3(b)(ii)(B) or 3(b)(ii)(C) above where the number of
shares whose value is equal to the Aggregate Exercise Price is not
a whole number, the number of shares withheld by or surrendered to
the Company shall be rounded up to the nearest whole share and the
Company shall make a cash payment to the Holder (by delivery of a
certified or official bank check or by wire transfer of immediately
available funds) based on the incremental fraction of a share being
so withheld by or surrendered to the Company in an amount equal to
the product of (x) such incremental fraction of a share being so
withheld or surrendered multiplied by (y) in the case of Common
Stock, the Fair Market Value per share of Common Stock as of the
Exercise Date, and, in all other cases, the value thereof as of the
Exercise Date as determined in accordance with Section 3(b)(ii)(B)(y)
above.

 


 

 

(c) Delivery of Stock Certificates. Upon (i)
any Forced Exercise pursuant to Section 3(i) or (ii) Holder’s
exercise of this Warrant pursuant to Section 3(a), including delivery to the
Company of the Exercise Agreement, surrender of this Warrant and
payment of the Aggregate Exercise Price (in accordance with
Section 3(b) hereof), the
Company shall, as promptly as practicable, execute (or cause to be
executed) and deliver (or cause to be delivered) to




 

5








 





 


 

 


the
Holder a certificate or certificates representing the Warrant
Shares issuable upon such exercise, together with cash in lieu of
any fraction of a share as provided in Section 3(d) hereof, if applicable. The
stock certificate or certificates so delivered shall be in such
denomination or denominations as the exercising Holder shall
reasonably request in the Exercise Agreement and shall be
registered in the name of the Holder or such other Person’s
name as shall be designated in the Exercise Agreement. This Warrant
shall be deemed to have been exercised and such certificate or
certificates of Warrant Shares shall be deemed to have been issued,
and the Holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such
Warrant Shares for all purposes, as of the Exercise
Date.

 


 

(d) Fractional Shares. The Company shall not
be required to issue a fractional Warrant Share upon exercise of
any Warrant. As to any fraction of a Warrant Share that the Holder
would otherwise be entitled to purchase upon such exercise, the
Company shall either (i) round the number of Warrant Shares to be
issued up to the next whole number or (ii) pay to such Holder an
amount in cash (by delivery of a certified or official bank check
or by wire transfer of immediately available funds) equal to the
product of (A) such fraction multiplied by (B) the Fair Market
Value of one Warrant Share on the Exercise Date.

 


 

(e) Delivery of New Warrant. Unless the
purchase rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, at the time of
delivery of the certificate or certificates representing the
Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the
Holder a new Warrant evidencing the rights of the Holder to
purchase the unexpired and unexercised Warrant Shares called for by
this Warrant. Such new Warrant shall in all other respects be
identical to this Warrant.

 


 

(f) Valid Issuance of Warrant and Warrant Shares;
Payment of Taxes. With respect to the exercise of this
Warrant, the Company hereby represents, covenants and
agrees:

 


 

(i) This Warrant is,
and any Warrant issued in substitution for or replacement of this
Warrant shall be, upon issuance, duly authorized and validly
issued.

 


 

(ii) All
Warrant Shares issuable upon the exercise of this Warrant pursuant
to the terms hereof shall be, upon issuance, and the Company shall
take all such actions as may be necessary or appropriate in order
that such Warrant Shares are, validly issued, fully paid and
non-assessable, issued without violation of any preemptive or
similar rights of any stockholder of the Company and free and clear
of all taxes, liens, claims, encumbrances and charges.

 


 

 

(iii) The
Company shall take all such actions as may be necessary to ensure
that all such Warrant Shares are issued without violation by the
Company of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares
of Common Stock or other securities constituting Warrant Shares may
be listed at the time of such exercise (except for official notice
of issuance which shall be immediately delivered by the Company
upon each such issuance).




 

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(iv) The
Company shall use its best efforts to cause the Warrant Shares,
immediately upon such exercise, to be listed on any domestic
securities exchange upon which shares of Common Stock or other
securities constituting Warrant Shares are listed at the time of
such exercise.

 


 

 

(v) The Company shall
pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed with respect to, the
issuance or delivery of Warrant Shares upon exercise of this
Warrant; provided,
that the Company shall not be required to pay any tax or
governmental charge that may be imposed with respect to any
applicable withholding or the issuance or delivery of the Warrant
Shares to any Person other than the Holder or its designated
affiliates, and no such issuance or delivery shall be made unless
and until the Person requesting such issuance has paid to the
Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been
paid.

 


 

(g) Conditional Exercise. Notwithstanding
any other provision hereof, if an exercise of any portion of this
Warrant is to be made in connection with or with the expectation of
the completion of a public offering or a sale of the Company
(pursuant to a merger, sale of stock, or otherwise), such exercise
may at the election of the Holder be conditioned upon the
consummation of such transaction, in which case such exercise shall
not be deemed to be effective until immediately prior to the
consummation of such transaction.

 


 

(h) Reservation of Shares. During the
Exercise Period, the Company shall at all times reserve and keep
available out of its authorized but unissued Common Stock or other
securities constituting Warrant Shares, 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, and, if
applicable, the par value per Warrant Share shall at all times be
less than or equal to the applicable Exercise Price. The Company
shall not increase the par value of any Warrant Shares receivable
upon the exercise of this Warrant above the Exercise Price then in
effect, and shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and non-assessable Warrant Shares upon the exercise of
this Warrant.

 


 

(i) Forced Exercise. After the Original
Issue Date, if the Conditions to Forced Exercise set forth below
then are satisfied, the Company may elect to require that the
Holder exercise this Warrant with respect to the Tranche 1 Shares
or the Tranche 2 Shares, as applicable, as set forth in this
Section 3(i), by delivering
to the Holder a written notice in the form of Exhibit B attached hereto
(“Forced Exercise
Notice”), duly completed and executed on behalf of the
Company; provided,
that notwithstanding anything to the contrary herein, the Holder
may elect not to exercise this Warrant pursuant to any Forced
Exercise Notice if the Holder delivers written notice to the
Company to such effect and confirms in writing that it forfeits its
right to exercise the Warrants with respect to those Tranche 1
Shares or those Tranche 2 Shares that are subject to the Forced
Exercise Notice, as applicable. If the Conditions to Forced
Exercise cease to be met prior to the receipt of the Notice of
Exercise by the Holder, the Forced Exercise Notice shall be deemed
withdrawn, invalid, and null and void ab initio. For purposes of
this Section
3(i):




 

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(i) “Conditions to Forced Exercise”
means that each of the following conditions have been and continue
to be met as of the Holder’s receipt of the Forced Exercise
Notice and as of the issuance of any Warrant Shares pursuant
thereto:

 


 

(A) the Weighted
Average Price of the Common Stock or other applicable capital stock
of the Company then issuable upon exercise of this Warrant exceeds
(x) in the case of a forced exercise of the Warrant with respect to
the Tranche 1 Shares, $1.40 per share (subject to appropriate
adjustments for stock splits, stock dividends, stock combinations
and other similar transactions affecting the Common Stock or other
applicable capital stock after the Original Issue Date) and (y) in
the case of a forced exercise of the Warrant with respect to the
Tranche 2 Shares, $1.50 per share (subject to appropriate
adjustments for stock splits, stock dividends, stock combinations
and other similar transactions affecting the Common Stock or other
applicable capital stock after the Original Issue Date), in each
case for each of the forty-five (45) consecutive trading days
immediately preceding the date of delivery of the Forced Exercise
Notice;

 


 

(B) a registration
statement filed pursuant to the Securities Act of 1933, as amended,
is effective and available for the immediate resale of any and all
Tranche 1 Shares or Tranche 2 Shares, as applicable, to be issued
upon exercise of the Warrants pursuant to the Forced Exercise
Notice;

 


 

(C) the Common Stock is
quoted on OTC Bulletin Board, the Pink OTC Markets or similar
quotation system or association, or designated for quotation on the
NASDAQ Global Market or another U.S. national securities exchange
and must not have been suspended from trading on such market nor
shall delisting or suspension by such market been threatened or
pending either (x) in writing by such market, or (y) by falling
below the minimum listing maintenance requirements of the market on
which it then is trading; and

 


 

(D) the Company
otherwise must be in material compliance with and must not have
breached in any material respect any provision, covenant,
representation or warranty of any Note Document (as defined in the
Purchase Agreement) which breach remains uncured.

 


 

(ii) “Weighted
Average Price” means, with respect to the Common Stock
or other applicable capital stock then issuable upon exercise of
this Warrant as of any applicable date(s), the dollar
volume-weighted average trading price for such
security

 


(A) on
the domestic securities exchanges on which the Common Stock is
listed on the applicable date(s) or (B) if on any such applicable
date(s) the Common Stock or other applicable capital stock then
issuable upon exercise of this Warrant is not listed on a domestic
securities exchange, the dollar volume-weighted trading average
price of the Common Stock on the OTC Bulletin Board, the Pink OTC
Markets or similar quotation system or association for such
applicable date(s).




 

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(j) Holder’s Exercise
Limitations.

 


 

(i) Notwithstanding the
foregoing or anything to the contrary herein, the number of Warrant
Shares issuable upon any exercise of this Warrant shall be limited
to the number of Warrant Shares that (after giving effect to such
proposed exercise and issuance) can be beneficially owned by the
Holder, Holder’s affiliates, and any other Persons acting as
a group together with the Holder or any of the Holder’s
affiliates (such other Persons, “Attribution Parties”)), without
exceeding the Beneficial Ownership Limitation (as defined below).
For purposes of the foregoing sentence, the number of Warrant
Shares beneficially owned by the Holder, Holder’s affiliates
and any applicable Attribution Parties shall include the number of
Warrant Shares issuable upon the exercise of this Warrant with
respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of
this Warrant beneficially owned by the Holder, Holder’s
affiliates or any applicable Attribution Parties and (B) exercise
or conversion of the unexercised or unconverted portion of any
other securities of the Company (including, without limitation, any
Convertible Securities or Options) that (x) are beneficially owned
by the Holder, Holder’s affiliates and any applicable
Attribution Parties and (y) are subject to a limitation on
conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes
of this Section 3(j),
“beneficial ownership” shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. In addition, a determination as
to any “group” status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and
the applicable rules and regulations promulgated
thereunder.

 


 

(ii) To
the extent that the Beneficial Ownership Limitation applies, the
determination of whether and to what extent this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any of its Attribution Parties) and the portion of
this Warrant that is exercisable shall be determined in the sole
discretion of the Holder, and the submission of an Exercise
Agreement and the other items required to exercise this Warrant as
provided in Section 3(a)
above shall be deemed to be the Holder’s determination of
whether and which portion of this Warrant is exercisable (in
relation to other securities owned by the Holder together with
Holder’s affiliates and any applicable Attribution Parties),
in each case subject to the Beneficial Ownership Limitation, and
the Company shall have no obligation to independently verify or
confirm the accuracy of such determination.

 


 

(iii) For
purposes of this Section
3(j), in determining the number of issued and outstanding
shares of Common Stock, Holder may rely on the number of issued and
outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice
from the Company or the Company’s transfer agent setting
forth the number of shares of Common Stock outstanding. Upon the
written request of a Holder, the Company shall within two Business
Days confirm orally and in writing to Holder the number of shares
of Common




 

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Stock
then issued and outstanding. In any case, the number of issued and
outstanding shares of Common Stock shall be determined after giving
effect to any conversion, exercise or exchange of any Convertible
Securities or Options in accordance with their terms, including
this Warrant, held by the Holder, Holder’s affiliates or any
applicable Attribution Parties since the date as of which such
number of issued and outstanding shares of Common Stock was
reported.

 


 

(iv) The
“Beneficial Ownership
Limitation” shall be 9.9999% of the number of shares
of Common Stock that would be outstanding immediately after giving
effect to the issuance of Warrant Shares issuable upon the
applicable exercise of this Warrant. Notwithstanding the foregoing,
the Holder may increase or decrease the Beneficial Ownership
Limitation percentage upon notice to the Company; provided, that any increase in
the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is
delivered to the Company or such other, later date as may be
specified in the notice of increase. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 3(j) to the extent necessary to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation contained herein or to make changes or supplements
necessary or desirable to properly give effect to the Beneficial
Ownership Limitation and the purpose and intent of this
Section 3(j). To the extent
the Beneficial Ownership Limitation applies to limit the number of
Warrant Shares issued upon any proposed exercise of this Warrant,
the Warrant Shares that are not issued as a result of the
Beneficial Ownership Limit shall remain subject to this Warrant and
may be issued upon a subsequent exercise of this Warrant in
accordance with its terms.

 

4. Adjustment to Exercise Price and
Number of Warrant Shares. In order to prevent dilution of
the purchase rights granted under this Warrant, the Exercise Price
and the number of Warrant Shares issuable upon exercise of this
Warrant shall be subject to adjustment from time to time as
provided in this Section 4
(in each case, after taking into consideration any prior
adjustments pursuant to this Section 4).

 


 

(a) Adjustment to Exercise Price Upon Issuance of
Common Stock. Except as provided in Section 4(c) and except in the case of
an event described in either Section 4(e) or Section 4(f), if the Company shall, at
any time or from time to time after the Original Issue Date, issue
or sell, or in accordance with Section 4(d) is deemed to have issued or
sold, any shares of Common Stock without consideration or for
consideration per share less than the applicable Exercise Price(s)
in effect immediately prior to such issuance or sale (or deemed
issuance or sale), then immediately upon such issuance or sale (or
deemed issuance or sale), each Exercise Price in effect immediately
prior to such issuance or sale (or deemed issuance or sale) that is
higher than the consideration per share applicable to the issuance
and sale (or deemed issuance or sale) in question shall be reduced
(and in no event increased) to an Exercise Price equal to the then
the Exercise Price (calculated to the nearest one-hundredth of a
cent) determined in accordance with the following
formula:

 


 

 


CP2 = CP1 * (A + B) ÷ (A + C).




 

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For
purposes of the foregoing formula, the following definitions shall
apply:

 


 

(i) “CP2”
shall mean the Exercise Price in effect immediately after such
issuance or deemed issuance of shares of Common Stock;

 


 

(ii) “CP1”
shall mean the Exercise Price in effect immediately prior to such
issuance or deemed issuance of Common Stock;

 


 

(iii) “A”
shall mean the number of shares of Common Stock outstanding
immediately prior to such issuance or deemed issuance Common Stock
(treating for this purpose as outstanding all shares of Common
Stock issuable upon exercise of Options outstanding immediately
prior to such issuance (including the Warrants) or upon conversion
or exchange of Convertible Securities outstanding immediately prior
to such issuance;

 


 

(iv) “B”
shall mean the number of shares of Common Stock that would have
been issued if such issuance or deemed issuance of Common Stock had
occurred at a price per share equal to CP1 (determined by dividing the aggregate
consideration received by the Corporation in respect of such
issuance or deemed issuance by CP1); and

 


 

(v) “C”
shall mean the number of shares of Common Stock issued or deemed
issued in such transaction.

 


 

 

(b) Adjustment to Number of Warrant Shares Upon
Adjustment to Exercise Price. Upon any and each adjustment
of the Exercise Price as provided in Section 4(a), the number of Warrant
Shares issuable upon the exercise of this Warrant immediately prior
to any such adjustment shall be increased to a number of Warrant
Shares issuable upon exercise of this Warrant after giving effect
to such adjustment equal to the quotient obtained by
dividing:

 


 

(i) the product of (A)
the Exercise Price in effect immediately prior to any such
adjustment multiplied by (B) the number of Warrant Shares issuable
upon exercise of this Warrant immediately prior to any such
adjustment; by

 


 




(ii)

the Exercise Price
resulting from such adjustment.





 


 

(c) Exceptions To Adjustment Upon Issuance of
Common Stock. Anything herein to the contrary
notwithstanding, there shall be no adjustment to the Exercise Price
or the number of Warrant Shares issuable upon exercise of this
Warrant with respect to any Excluded Issuance.

 


 

(d) Effect of Certain Events on Adjustment to
Exercise Price. For purposes of determining the adjusted
Exercise Price under Section
4(a) hereof, the following shall be applicable:

 


 

 

(i) Issuance of Options. If the Company
shall, at any time or from time to time after the Original Issue
Date, in any manner grant or sell any Options (whether directly or
by assumption in a merger, consolidation or otherwise), whether or
not such Options or




 

11








 





 


 

 


the
right to convert, exercise or exchange any Convertible Securities
issuable upon the exercise of such Options are immediately
exercisable, and the lowest price per share (determined as provided
in this Section 4(d)(i) and
Section 4(d)(iv)) for which
any one share of Common Stock is issuable upon the exercise of any
such Option or upon the conversion, exercise or exchange of any
Convertible Security issuable upon the exercise of any such Option
is less than any Exercise Price in effect immediately prior to the
time of the granting or sale of such Options, then such share of
Common Stock issuable upon the exercise of such Option or upon
conversion, exercise or exchange of such Convertible Security
issuable upon the exercise of such Option shall be deemed to have
been issued as of the date of granting or sale of such Options (and
thereafter shall be deemed to be outstanding for purposes of
adjusting the Exercise Price under Section 4(a), at a price per share equal
to such lowest price per share). For purposes of this Section 4(d)(i), the lowest price per
share for which any one share of Common Stock is issuable upon the
exercise of any such Option or upon the conversion, exercise or
exchange of any Convertible Security issuable upon the exercise of
any such Option shall be equal to the sum (which sum shall
constitute the applicable consideration received for purposes of
Section 4(a)) of the lowest
amounts of consideration, if any, received or receivable by the
Company as consideration with respect to any one share of Common
Stock upon each of (A) the granting or sale of the Option, plus (B)
the exercise of the Option, plus (C) in the case of an Option which
relates to Convertible Securities, the issuance or sale of the
Convertible Security and the conversion, exercise or exchange of
the Convertible Security. Except as otherwise provided in
Section 4(d)(iii), no
further adjustment of the applicable Exercise Price(s) shall be
made upon the actual issuance of Common Stock or of Convertible
Securities upon exercise of such Options or upon the actual
issuance of Common Stock upon conversion, exercise or exchange of
such Convertible Securities issuable upon the exercise of such
Options.

 


 

(ii) Issuance
of Convertible Securities. If the Company shall, at any time
or from time to time after the Original Issue Date, in any manner
grant or sell (whether directly or by assumption in a merger,
consolidation or otherwise) any Convertible Securities, whether or
not the right to convert, exercise or exchange any such Convertible
Securities is immediately exercisable, and the lowest price per
share (determined as provided in this paragraph and in Section 4(d)(iv)) for which one share of
Common Stock is issuable upon the conversion, exercise or exchange
of any such Convertible Securities is less than any Exercise Price
in effect immediately prior to the time of the granting or sale of
such Convertible Securities, then such share of Common Stock
issuable upon conversion, exercise or exchange of such Convertible
Security shall be deemed to have been issued as of the date of
granting or sale of such Convertible Securities (and thereafter
shall be deemed to be outstanding for purposes of adjusting the
Exercise Price under Section
4(a)), at a price per share equal to such lowest price per
share. For purposes of this Section
4(d)(ii), the lowest price per share for which any one share
of Common Stock is issuable upon the conversion, exercise or
exchange of any such Convertible Security shall be equal to the sum
(which sum shall constitute the applicable consideration received
for purposes of Section
4(a)) of the lowest amounts of consideration, if any,
received or receivable by the




 

12








 





 


 

 


Company
as consideration with respect to any one share of Common Stock upon
each of

(A) the granting or
sale of the Convertible Security, plus (B) the conversion, exercise
or exchange of the Convertible Security. Except as otherwise
provided in Section
4(d)(iii),

(x) no further
adjustment of any Exercise Price(s) shall be made upon the actual
issuance of Common Stock upon conversion, exercise or exchange of
such Convertible Securities and (y) no further adjustment of the
applicable Exercise Price(s) shall be made by reason of the issue
or sale of Convertible Securities upon conversion, exercise or
exchange of such Convertible Securities in accordance with the
terms thereof, to the extent adjustments of the Exercise Price
already have been made pursuant to the other provisions of this
Section 4(d).

 


 

(iii) Change
in Terms of Options or Convertible Securities. Upon any
change in any of (A) the lowest amounts of consideration, if any,
received or receivable by the Company as consideration with respect
to any one share of Common Stock upon the granting or sale of any
Options or Convertible Securities referred to in Section 4(d)(i) or Section 4(d)(ii) hereof, (B) the lowest
amounts of additional consideration, if any, payable to the Company
with respect to any one share of Common Stock upon exercise of any
Options or upon the issuance, conversion, exercise or exchange of
any Convertible Securities referred to in Section 4(d)(i) or Section 4(d)(ii) hereof, (C) the rate at
which Convertible Securities referred to in Section 4(d)(i) or Section 4(d)(ii) hereof are convertible
into or exercisable or exchangeable for Common Stock, or (D) the
maximum number of shares of Common Stock issuable in connection
with any Options referred to in Section 4(d)(i) hereof or any
Convertible Securities referred to in Section 4(d)(ii) hereof (in each case,
other than in connection with an Excluded Issuance), then (whether
or not the original issuance or sale or deemed issuance or sale of
such Options or Convertible Securities resulted in an adjustment to
the Exercise Price pursuant to this Section 4) each Exercise Price in effect
at the time of such change shall be adjusted or readjusted, as
applicable, to the Exercise Price which would have been in effect
at such time pursuant to the provisions of this Section 4 had such Options or
Convertible Securities still outstanding provided for such changed
consideration, conversion rate or maximum number of shares, as the
case may be, at the time initially granted, issued or sold, but
only if as a result of such adjustment or readjustment each
applicable Exercise Price then in effect is reduced, and the number
of Warrant Shares issuable upon the exercise of this Warrant
immediately prior to any such adjustment or readjustment shall be
correspondingly adjusted or readjusted pursuant to the provisions
of Section
4(b).

 


 

(iv) Calculation
of Consideration Received. If the Company shall, at any time
or from time to time after the Original Issue Date, issue or sell,
or is deemed to have issued or sold in accordance with Section 4(d) any shares of Common Stock,
Options or Convertible Securities: (A) for cash, the consideration
received therefor shall be deemed to be the net amount received by
the Company therefor; (B) for consideration other than cash, the
amount of the consideration other than cash received by the Company
shall be the fair value of such consideration, except where such
consideration consists of marketable securities, in which case the
amount of consideration received by the Company




 

13








 





 


 

 


shall
be the market price (as reflected on any securities exchange,
quotation system or association or similar pricing system covering
such security) for such securities as of the end of business on the
date of receipt of such securities; (C) for no specifically
allocated consideration in connection with an issuance or sale of
other securities of the Company, together comprising one integrated
transaction, the amount of the consideration therefor shall be
deemed to be the fair value of such portion of the aggregate
consideration received by the Company in such transaction as is
attributable to such shares of Common Stock, Options or Convertible
Securities, as the case may be, issued or deemed issued in such
transaction; or (D) to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving
corporation, the amount of consideration therefor shall be deemed
to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of
Common Stock, Options or Convertible Securities, as the case may
be, issued or deemed issued to such owners. The net amount of any
cash consideration and the fair value of any consideration other
than cash or marketable securities shall be determined in each case
in good faith by the Board.

 


 

(v) Record Date. For purposes of any
adjustment to the Exercise Price or the number of Warrant Shares in
accordance with this Section
4, in case the Company shall take a record of the holders of
its Common Stock or other applicable capital stock for the purpose
of entitling them (A) to receive a dividend or other distribution
payable in Common Stock or other applicable capital stock, Options
or Convertible Securities or

(B) to subscribe for or
purchase Common Stock or other applicable capital stock, Options or
Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock or
other applicable capital stock deemed to have been issued or sold
upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

 


 

(vi) Treasury
Shares. The number of shares of Common Stock or other
applicable capital stock outstanding at any given time shall not
include treasury or other shares owned or held by or for the
account of the Company or any of its subsidiaries, and the
disposition of any such shares (other than the cancellation or
retirement thereof or the transfer of such shares among the Company
and its wholly-owned subsidiaries) shall be deemed an issue or sale
of Common Stock or other applicable capital stock for the purpose
of this Section
4.

 


 

 

(vii) Other
Dividends and Distributions. Subject to the provisions of
this Section 4(d), if the
Company shall, at any time or from time to time after the Original
Issue Date, make or declare, or fix a record date for the
determination of holders of Common Stock or other applicable
capital stock entitled to receive, a dividend or any other
distribution payable in securities of the Company (other than a
dividend or distribution of shares of Common Stock or other
applicable capital stock, Options or Convertible Securities in
respect of outstanding shares of Common Stock or other applicable
capital stock), cash or other property, then, and in each such
event, concurrently with the making or payment of any such dividend
or distribution, the Holder shall receive the same
kind




 

14








 





 


 

 


and
amount of securities of the Company, cash or other property which
the Holder would have been entitled to receive had the Warrant been
exercised in full into Warrant Shares immediately prior to such
event (or the record date for such event, whichever is more
favorable to the Holder) and had the Holder held such Warrant
Shares through the time such dividend or distribution of
securities, cash or property was made to the holders of Common
Stock or other applicable capital stock.

 


 

(e) Adjustment to Exercise Price and Warrant Shares
Upon Dividend, Subdivision or Combination of Common Stock.
If the Company shall, at any time or from time to time after the
Original Issue Date, (i) pay a dividend or make any other
distribution upon the Common Stock or any other capital stock of
the Company payable in shares of Common Stock or other applicable
capital stock or in Options or Convertible Securities, or (ii)
subdivide (by any stock split, recapitalization or otherwise) its
outstanding shares of Common Stock or other applicable capital
stock or into a greater number of shares, the Exercise Price in
effect immediately prior to any such dividend, distribution or
subdivision shall be proportionately reduced and the number of
Warrant Shares issuable upon exercise of this Warrant shall be
proportionately increased. If the Company at any time combines (by
combination, reverse stock split or otherwise) its outstanding
shares of Common Stock or other applicable capital stock or into a
smaller number of shares, the Exercise Price in effect immediately
prior to such combination shall be proportionately increased and
the number of Warrant Shares issuable upon exercise of this Warrant
shall be proportionately decreased. Any adjustment under this
Section 4(e) shall become
effective at the close of business on the date the dividend,
distribution, subdivision or combination is made or becomes
effective, as applicable.

 


 

(f) Adjustment to Exercise Price and Warrant Shares
Upon Reorganization, Reclassification, Consolidation or
Merger. In the event of any (i) capital reorganization of
the Company, (ii) reclassification of the stock of the Company
(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 stock
dividend or subdivision, split-up or combination of shares), (iii)
consolidation or merger of the Company with or into another Person,
(iv) sale of all or substantially all of the Company’s assets
to another Person or (v) other similar transaction (other than any
such transaction covered by Section
4(e)), in each case which entitles the holders of Common
Stock or other applicable capital stock to receive (either directly
or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for Common Stock or other applicable
capital stock, each Warrant shall, immediately after such
reorganization, reclassification, consolidation, merger, sale or
similar transaction, remain outstanding and shall thereafter, in
lieu of or in addition to (as the case may be) the number of
Warrant Shares then exercisable under this Warrant, be exercisable
for the kind and number of shares of stock or other securities or
assets of the Company or of the successor Person resulting from
such transaction to which the Holder would have been entitled upon
such reorganization, reclassification, consolidation, merger, sale
or similar transaction if the Holder had exercised this Warrant in
full immediately prior to the effective time of such
reorganization, reclassification, consolidation, merger, sale or
similar transaction (or any applicable record date with respect
thereto, whichever is more favorable to the Holder) and acquired
the applicable number of Warrant Shares then issuable hereunder as
a result of such exercise (without taking into




 

15








 





 


 

 


account
any limitations or restrictions on the exercisability of this
Warrant); and, in such case, appropriate adjustment (in form and
substance satisfactory to the Holder) shall be made with respect to
the Holder’s rights under this Warrant to insure that the
provisions of this Section 4
hereof shall thereafter be applicable, as nearly as possible, to
this Warrant in relation to any shares of stock, securities or
assets thereafter acquirable upon exercise of this Warrant
(including, in the case of any consolidation, merger, sale or
similar transaction in which the successor or purchasing Person is
other than the Company, an immediate adjustment in the Exercise
Price to the value per share for the Common Stock or other
applicable capital stock reflected by the terms of such
consolidation, merger, sale or similar transaction, and a
corresponding immediate adjustment to the number of Warrant Shares
acquirable upon exercise of this Warrant without regard to any
limitations or restrictions on exercise, if the value so reflected
is less than the Exercise Price(s) in effect immediately prior to
such consolidation, merger, sale or similar transaction). The
provisions of this Section
4(f) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or similar
transactions. The Company shall not effect any such reorganization,
reclassification, consolidation, merger, sale or similar
transaction unless, prior to the consummation thereof, the
successor Person (if other than the Company) resulting from such
reorganization, reclassification, consolidation, merger, sale or
similar transaction, shall assume, by written instrument
substantially similar in form and substance to this Warrant and
satisfactory to the Holder, the obligation to deliver to the Holder
such shares of stock, securities or assets which, in accordance
with the foregoing provisions, such Holder shall be entitled to
receive upon exercise of this Warrant. Notwithstanding anything to
the contrary contained herein, (I) with respect to any corporate
event or other transaction contemplated by the provisions of this
Section 4(f), the Holder
shall have the right and shall be provided reasonable prior written
notice from the Company and a reasonable opportunity to elect prior
to the consummation of such event or transaction (or the record
date applicable thereto, whichever is more favorable to the
Holder), to give effect to the exercise rights contained in
Section 2 instead of giving
effect to the provisions contained in this Section 4(f) with respect to this
Warrant; and (II) if such transaction consists of a merger pursuant
to which the Company’s outstanding shares will be converted
into the right to exclusively receive cash or other consideration
with a value per share less than an applicable Exercise Price then
in effect, upon the closing of such transaction, the unexercised
portion of the Warrants covering those Warrant Shares with an
Exercise Price less than the value of such per share merger
consideration shall be cancelled and of no further force or
effect.

 


 

 

(g) Certain Events. If any event of the type
contemplated by the provisions of this Section 4 but not expressly provided for
by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights
with equity features) occurs, then the Board shall in good faith
make an appropriate and equitable adjustment in the Exercise Price
and the number of Warrant Shares issuable upon exercise of this
Warrant so as to protect the rights of the Holder in a manner
consistent with the purpose and intent of the provisions of this
Section 4; provided, that no such
adjustment pursuant to this Section
4(g) shall increase the Exercise Price or decrease the
number of Warrant Shares issuable as otherwise determined pursuant
to this Section
4.




 

16








 





 


 

 


(h) Certificate as to
Adjustment.

 


 

(i) As promptly as
reasonably practicable following any adjustment of the Exercise
Price, but in any event not later than two (2) Business Days
thereafter, the Company shall furnish to the Holder a certificate
of an executive officer of the Company setting forth in reasonable
detail such adjustment and the facts upon which it is based and
certifying the calculation thereof.

 


 

(ii) As
promptly as reasonably practicable following the receipt by the
Company of a written request by the Holder, but in any event not
later than two (2) Business Days thereafter, the Company shall
furnish to the Holder a certificate of an executive officer
certifying the Exercise Price then in effect and the number of
Warrant Shares or the amount, if any, of other shares of stock,
securities or assets then issuable upon exercise of the
Warrant.

 


 




(i)

Notices. In the event:





 


 

(i) that the Company
shall propose to take a record of the holders of its Common Stock
(or other capital stock or securities at the time issuable upon
exercise of the Warrant) for the purpose of entitling or enabling
them to receive any dividend or other distribution, to vote at a
meeting (or by written consent), to receive any right to subscribe
for or purchase any shares of capital stock of any class or any
other securities, to receive any other security, or to otherwise
exercise any material right as a stockholder; or

 


 

(ii) of
any capital reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the
Company with or into another Person, or sale of all or
substantially all of the Company’s assets to another Person;
or

 


 

 

(iii) of
the voluntary or involuntary dissolution, liquidation or winding-up
of the Company;

 


 


then,
and in each such case, the Company shall send or cause to be sent
to the Holder at least fifteen


(15)
days prior to the applicable record date or the applicable expected
effective date, as the case may be and whichever is more favorable
to the Holder, for the event, a written notice specifying, as the
case may be, (A) the record date for such dividend, distribution,
meeting or consent or other right or action, and a description of
such dividend, distribution or other right or action to be taken at
such meeting or by written consent, or (B) the effective date on
which such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up is proposed to take
place, and the date, if any is to be fixed, as of which the books
of the Company shall close or a record shall be taken with respect
to which the holders of record of Common Stock (or such other
capital stock or securities at the time issuable upon exercise of
the Warrant) shall be entitled to exchange their shares of Common
Stock (or such other capital stock or securities) for securities or
other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale,




 

17








 





 


 

 


dissolution,
liquidation or winding-up, and the amount per share and character
of such exchange applicable to the Warrant and the Warrant
Shares.

 


 




5.

Purchase Rights; Anti-Dilutive
Issuances. In addition to any adjustments pursuant
to






Section 4 above:

 


 

 

(a) If at any time
while this Warrant is outstanding the Company proposes to grant,
issue or sell any shares of Common Stock, Options, Convertible
Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders or beneficial owners
of Common Stock or other applicable capital stock of the Company
(the “Purchase
Rights”), then the Holder shall be entitled to acquire
and exercise, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which the Holder would have acquired
if the Holder had held the number of Warrant Shares acquirable upon
complete exercise of this Warrant immediately before the date on
which a record is taken for the grant, issuance, sale or exercise
of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of Common Stock or other applicable
capital stock of the Company are to be determined for the grant,
issue, sale or exercise of such Purchase Rights. Notwithstanding
anything to the contrary herein, the Holder shall not be entitled
to the Purchase Rights granted herein with respect to any Excluded
Issuance.

 


 

(b) If at any time
between the date this Warrant is exercised in whole or in part and
the seven (7) year anniversary of the Original Issue Date, any
Convertible Securities or Options are converted, exercised or
exchanged or any Purchase Rights are issued or exercised as a
result of which the percentage of the Common Stock Deemed
Outstanding held by Holder is or would be reduced, the Company
shall provide prompt written notice to the Holder and shall issue
to Holder without any consideration and without reducing the number
of Warrant Shares issuable pursuant to this Warrant (to the extent
any portion hereof then remains unexercised) that number of shares
of Common Stock or other applicable capital stock of the Company as
is necessary for the Holder to maintain or be restored to holding
the same percentage of the Common Stock Deemed Outstanding that was
held by Holder prior to such conversion, exercise or exchange of
Convertible Securities, Options or Purchase Rights, as
applicable.

 


 

6. Warrant Share Put Rights.
Holder shall have the right by delivering written notice to the
Company (a “Put
Notice”) at any time and from time to time within six
months after the issuance of any specific Warrant Shares under this
Warrant to elect to require the Company to purchase some or all of
such Warrant Shares then held by the Holder in exchange for cash
or, at the election of the Company, Put Notes (such right, the
“Warrant Share Put
Right”). The Put Notice shall specify the number of
Warrant Shares which the Holder is electing to require the Company
to purchase and the original principal amount of Put Notes to be
delivered as consideration therefor. The Put Notes issued by the
Company to purchase the Warrant Shares upon exercise of the Warrant
Shares Put Right shall be issued against the surrender to the
Company of the Warrant Shares as to which the Put Notes are
issuable and have an aggregate principal amount equal to the number
of Warrant Shares to be purchased pursuant to the Put Notice
multiplied by (a)
in the case of Warrant Shares issued upon a forced conversion
pursuant to Section 3(i),
the greater of (i)
the average of the Weighted Average Prices of the Common Stock
during the forty-five (45) consecutive trading days taken into
account in determining the satisfaction of the Conditions to Forced
Exercise and




 

18








 





 


 

 


(ii)
the average of the Weighted Average Prices of the Common Stock
during the forty-five (45) consecutive trading days preceding the
date of delivery of the applicable Put Notice and (b) in the case
of Warrant Shares issued upon the election of the Holder to
exercise this Warrant pursuant to Section 3(a), (ii) the average of the
Weighted Average Prices of the Common Stock during the 10
consecutive trading days preceding the date of delivery of the
applicable Put Notice.

 


 

 

7. Transfer of Warrant. This
Warrant and all rights hereunder are transferable, in whole or in
part, by the Holder without charge to the Holder, upon surrender of
this Warrant to the Company at its then principal executive offices
with a properly completed and duly executed Assignment in the form
attached hereto as Exhibit
C, together with funds sufficient to pay any transfer taxes
described in Section 3(f)(v)
in connection with the making of such transfer. Upon such
compliance, surrender and delivery and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant, if
any, not so assigned and this Warrant shall promptly be
cancelled.

 


 

8. Holder Not Deemed a Stockholder;
Limitations on Liability. Except as otherwise specifically
provided herein (including Section
4(d)(vii)), prior to the issuance to the Holder of any of
the Warrant Shares which the Holder is entitled to receive upon the
due exercise of this Warrant, the Holder shall not be entitled to
vote or receive dividends or be deemed the holder of any Warrant
Shares issuable upon exercise of this Warrant for any purpose, nor
shall anything contained in this Warrant be construed in and of
itself to confer upon the Holder by virtue of holding this Warrant
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, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise.
In addition, nothing contained in this Warrant shall be construed
in and of itself as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or
otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 8, the Company shall provide the
Holder with copies of the same notices and other information given
to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.

 


 

 




9.

Replacement on Loss; Division and
Combination.





 


 

 

(a) Replacement of Warrant on Loss. Upon
receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and upon
delivery of an indemnity reasonably satisfactory to it (it being
understood that a written indemnification agreement or affidavit of
loss of the Holder shall be a sufficient indemnity and in no event
shall the Holder be required to post a bond or other security in
connection with any loss, theft, destruction or mutilation or the
other matters described in this Section 9) and, in case of mutilation,
upon surrender of such Warrant for cancellation to the Company, the
Company at its own expense shall execute and deliver to the Holder,
in lieu hereof, a new Warrant of like tenor and exercisable for an
equivalent number of Warrant Shares as the Warrant so lost,
stolen,




 

19








 





 


 

 


mutilated or
destroyed; provided, that, in the case of
mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for
cancellation.

 


 

(b) Division and Combination of Warrant.
This Warrant may be divided or, following any such division of this
Warrant, subsequently combined with other Warrants, upon the
surrender of this Warrant or Warrants to the Company at its then
principal executive offices, together with a written notice
specifying the names and denominations in which new Warrants are to
be issued, signed by the respective Holders or their agents or
attorneys. The Company shall at its own expense execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants
so surrendered in accordance with such notice. Such new Warrant or
Warrants shall be of like tenor to the surrendered Warrant or
Warrants and shall be exercisable in the aggregate for an
equivalent number of Warrant Shares as the Warrant or Warrants so
surrendered in accordance with such notice.

 


 

10. No Impairment. The Company
shall not, by amendment of its Certificate of Incorporation or
Bylaws, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or
any other voluntary action or omission, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed by it hereunder, but shall at all times in good faith
assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested
by the Holder in order to protect the exercise rights of the Holder
against dilution or other impairment, consistent with the tenor,
purpose and intent of this Warrant.

 


 

11. Compliance with the Securities Act;
Legend. The Holder, by acceptance of this Warrant, agrees to
comply in all respects with the provisions of this Section 11 and the restrictive legend
requirements set forth on the face of this Warrant and further
agrees that such Holder shall not offer, sell or otherwise dispose
of this Warrant or any Warrant Shares to be issued upon exercise
hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended (the
“Securities
Act”). This Warrant and all Warrant Shares issued upon
exercise of this Warrant (unless registered under the Securities
Act or unless an exception from registration shall be available to
the Holder at the time of issuance of the Warrant Shares) shall be
stamped or imprinted with a legend in substantially the following
form:

 


 


“THIS WARRANT
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN
SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A
REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE
ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II)
THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN
LAW.”




 

20








 





 


 

 

12. Warrant Register. The Company
shall keep and properly maintain at its principal executive offices
books for the registration of the Warrant and any transfers
thereof. The Company may deem and treat the Person in whose name
the Warrant is registered on such register as the Holder thereof
for all purposes, and the Company shall not be affected by any
notice to the contrary, except any assignment, division,
combination or other transfer of the Warrant effected in accordance
with the provisions of this Warrant.

 


 

13. Notices. All notices, requests,
consents, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been
given: (a) when delivered by hand; (b) when received by the
addressee if sent by a nationally recognized overnight courier
(receipt requested); (c) on the date sent by e-mail (with
confirmation of transmission or receipt) if sent during normal
business hours of the recipient, and on the next Business Day if
sent after normal business hours of the recipient; or (d) on the
fifth day after the date mailed, by certified or registered mail,
return receipt requested, postage prepaid. Such communications must
be sent to the respective parties at the addresses indicated below
(or at such other address for a party as shall be specified in a
notice given in accordance with this Section 13).

 


 



If to the
Company:                                            

Noble Romans,
Inc.






6612 E.
75th Street Suite
450


Indianapolis,
Indiana 46250


E-mail:
pmobley@nobleromans.com Attention:
Paul Mobley

 


 


If to
the Holder: Corbel Capital Partners SBIC, L.P. 11777 San
Vicente Blvd., Suite 777 Los Angeles, California 90049


E-mail:
michael@corbelsep.com Attention:
Michael H. Jones

 


 

14. Cumulative Remedies. Except to
the extent expressly provided in Section 8 to the contrary, the rights
and remedies provided in this Warrant are cumulative and are not
exclusive of, and are in addition to and not in substitution for,
any other rights or remedies available at law, in equity or
otherwise.

 


 

15. Equitable Relief. Each of the
Company and the Holder acknowledges that a breach or threatened
breach by such party of any of its obligations under this Warrant
would give rise to irreparable harm to the other party hereto for
which monetary damages would not be an adequate remedy and hereby
agrees that in the event of a breach or a threatened breach by such
party of any such obligations, the other party hereto shall, in
addition to any and all other rights and remedies that may be
available to it in respect of such breach, be entitled to equitable
relief, including a restraining order, an injunction, specific
performance and any other relief that may be available from a court
of competent jurisdiction, without any requirement to post a bond
or other security or any requirement to prove the inadequacy or
unavailability of monetary damages.




 

21








 





 


 

 

16. Entire Agreement. This Warrant
(together with the Purchase Agreement and the other Note Documents,
including any Put Notes issued pursuant to Section 6, as applicable) constitutes
the sole and entire agreement of the parties to this Warrant with
respect to the collective subject matter contained herein and
therein, and supersedes all prior and contemporaneous
understandings and agreements, both written and oral, with respect
to such subject matter.

 


 

 

17. Successor and Assigns. This
Warrant and the rights evidenced hereby shall be binding upon and
shall inure to the benefit of the parties hereto and the successors
of the Company and the successors and permitted assigns of the
Holder. Such successors and/or permitted assigns of the Holder
shall be deemed to be a Holder for all purposes
hereunder.

 


 

18. No Third-Party Beneficiaries.
This Warrant is for the sole benefit of the Company and the Holder
and their respective successors and, in the case of the Holder,
permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever, under
or by reason of this Warrant.

 


 

19. Headings. The headings in this
Warrant are for convenience of reference only and shall not affect
the interpretation of this Warrant.

 


 

20. Amendment and Modification;
Waiver. Except as otherwise provided herein, this Warrant
may only be amended, modified or supplemented by an agreement in
writing signed by each party hereto. No waiver by the Company or
the Holder of any of the provisions hereof shall be effective
unless explicitly set forth in writing and signed by the party so
waiving. No waiver by any party shall operate or be construed as a
waiver in respect of any failure, breach or default not expressly
identified by such written waiver, whether of a similar or
different character, and whether occurring before or after that
waiver. No failure to exercise, or delay in exercising, any rights,
remedy, power or privilege arising from this Warrant shall operate
or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.

 


 

21. Severability. If any term or
provision of this Warrant is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other term or provision of this Warrant or
invalidate or render unenforceable such term or provision in any
other jurisdiction.

 


 

22. Governing Law. This Warrant
shall be governed by and construed in accordance with the internal
laws of the State of Indiana without giving effect to any choice or
conflict of law provision or rule (whether of the State of Indiana
or any other jurisdiction) that would cause the application of laws
of any jurisdiction other than those of the State of
Indiana.

 


 

23. Waiver of Jury Trial. Each
party acknowledges and agrees that any controversy which may arise
under this Warrant is likely to involve complicated and difficult
issues and, therefore, each such party irrevocably and
unconditionally waives any right it may have to a trial by jury
in




 

22








 





 


 

 


respect
of any legal action arising out of or relating to this Warrant or
the transactions contemplated hereby.

 


 

24. Counterparts. This Warrant may
be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed to be one and
the same agreement. A signed copy of this Warrant delivered by
facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original
signed copy of this Warrant.

 


 

25. No Strict Construction. This
Warrant shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party
drafting an instrument or causing any instrument to be
drafted.

 


 

26. Survival. The provisions of
this Warrant shall survive the expiration of the Exercise Period
for so long as the Company or the Holder have any executory rights
or obligations hereunder, including, without limitation, pursuant
to Sections 5 and
6 hereof.

 


 


[SIGNATURE PAGE
FOLLOWS]




 

23








 






 

 


 


IN
WITNESS WHEREOF, the Company has duly executed this Warrant on the
Original Issue Date.


 


NOBLE
ROMANS. INC.


 


 


By:

 


Name:
Paul Mobley

 


Title:
Chairman and Chief Financial Officer


 


 

 


 

 


Accepted and
agreed:

 


 


CORBEL
CAPITAL PARTNERS SBIC, L.P.

 


 



By: 

Corbel Capital
Advisors SBIC, LLC, its General Partner






 


 



By:           

Name: Jeffrey B.
Schwartz





 


Title:
Managing Member


 


 

 


 



By:           

Name: Jeffrey S.
Serota





 


Title:
Managing Member


 


 

 


 



By:           

Name: Michael H.
Jones





 


Title:
Managing Member


 


 


 


 


 


 


 


 


 


 


 

 


 


[Signature Page to
Warrant)




 

24








 





 


IN
WITNESS WHEREOF, the Company has duly executed this Warrant on the
Original Issue Date.

 


 

 


NOBLE
ROMANS, INC.


 

 



By:           

Name: Paul
Mobley






Title:
Chairman and Chief Financial Officer


 

 


 

 


Accepted and
agreed:

 


 


CORBEL
CAPITAL PARTNERS SBIC, L.P.

 


 



By: 

Corbel Capital
Advisors SBIC, LLC, its General Partner







By: 

 
Name:
Michael H. Jones,  Title: Managing
Member






 


 

 





 


 


 


 


 


 


 


 

 


 

 


[Signature Page to
Warrant]




 

25








 






 

 



EXHIBIT A

 


 

 


EXERCISE
AGREEMENT

 


 



To:            

Noble Romans,
Inc.






6612 E.
75th Street Suite
450


Indianapolis,
Indiana 46250

 


 

1. Capitalized terms
used but not otherwise defined herein have the meanings ascribed
thereto in the Warrant. The undersigned, pursuant to the provisions
of the Warrant, hereby elects to exercise the Warrant with respect
to [NUMBER] [Tranche 1 Shares] [Tranche 2 Shares] [Tranche 3
Shares] (as defined in the Warrant).

 


 

2. The undersigned
herewith tenders payment for such shares, together with any
applicable transfer taxes, in the following manner (please check
the applicable type or types of payment and indicate the portion of
the Exercise Price to be paid by each type of
payment):

 


 



           

 Exercise
pursuant to Section 3(b)(i) of the Warrant





 


 



           

 Exercise
pursuant to Section 3(b)(ii)(A) of the Warrant





 


 



           

 Exercise
pursuant to Section 3(b)(ii)(B) of the Warrant





 


 



           

 Exercise
pursuant to Section 3(b)(ii)(C) of the Warrant





 


 

3. Please issue a
certificate or certificates representing the Warrant Shares
issuable in respect hereof under the terms of the attached Warrant
Agreement, as follows:


 

 


 


(Name
of Record Holder/Transferee)


 

 


and
deliver such certificate or certificates to the following
address:


 

 


 


 


 


(Address of Record
Holder/Transferee)


 


 

 


 


(Signature)


 


 


 


 

 


 

 


A-1




 

26








 






 

 



EXHIBIT B

 


 

 



[Form of Forced Exercise Notice]

 


 


Date:

 


 

 


TO:
[Insert Name and Address of Holder] RE: Forced Exercise of
Warrant


The
undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby delivers notice of a forced exercise of the Warrant
for [NUMBER] Warrant Shares. The undersigned represents and
warrants to the Holder that the Conditions to Forced Exercise (as
defined in the Warrant) applicable to the Warrant Shares subject to
this Forced Exercise Notice have been satisfied and remain
satisfied as of the date of delivery of this Forced Exercise Notice
to Holder.

 


 


NOBLE
ROMANS, INC.


 


 

 



By:                                                                             

Name:
Title:






 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

 


 

 


B-1




 

27









	

EXECUTION
COPY









 






 

 



EXHIBIT C

 


 

 


ASSIGNMENT


 


(To
be executed upon assignment of Warrant)


 

 


 

 



For
value                                                                        

received,
_                                        

hereby
sells,                              

assignsand
transfers unto







                                      

the attached
Warrant, together with all rights, title and interest therein, and
does hereby irrevocably constitute and appointattorney to transfer
said Warrant on the books of the Company with full power of
substitution in the premises.






 


 

 


[Name
of Transferor]


 

 


 



By:                                                                  

Name:
Title:






 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

 


 


C-1




 

28