chapeau10ksb063007ex10-31.htm


    
      

      

    

    
      Exhibit
        10.31


      STOCK
        PURCHASE AGREEMENT

      


      


      THIS
        STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into as
        of July 31, 2007, by and between Chapeau, Inc., a Utah corporation (the
“Company”), and ___________, an individual (the “Purchaser”).

      


      RECITALS

      


      WHEREAS,
        the Company has requested from the Purchaser funds in an amount of $300,000.00
        to be used by the Company for general corporate purposes, and the Company
        has
        agreed to sell to the Purchaser shares of its common stock, par value $0.001
        per
        share (the “Common Stock”) on the terms and conditions provided
        herein;

      


      WHEREAS,
        the Company desires to sell to the Purchaser, and the Purchaser desires to
        purchase from the Company, 1,000,000 shares of Common Stock (the “Stock”),
        together with warrants to purchase up to 1,000,000 additional shares of Common
        Stock (the “Warrants”) in accordance with the following terms and
        conditions,

      


      NOW,
        THEREFORE, in consideration of the foregoing and the mutual terms and
        provisions contained herein, the parties hereto agree as follows:

      


      
        	
                 

              	
                1.

              	
                Sale
                  and Purchase.

              


      

      


      (a)        Subject
        to the terms and conditions of this Agreement, the Company hereby agrees
        to sell
        and issue to the Purchaser, and the Purchaser hereby agrees to purchase from
        the
        Company the Stock for a purchase price equal to $0.30 per share or an aggregate
        of $300,000.00 (the “Purchase Price”).

      


      (b)        In
        further consideration for the payment of the Purchase Price by the Purchaser
        to
        the Company, the Company agrees to issue to the Purchaser simultaneously
        with
        the Stock, warrants to acquire an additional 1,000,000 shares of Common Stock
        at
        a purchase price of $0.50 per share of Common Stock (the “Warrants” and together
        with the Stock hereinafter referred to as, the “Shares”), the Warrants to be in
        the form attached to this Agreement as Exhibit
        1(b).

      


      
        	
                 

              	
                2.

              	
                Closing.

              


      

      


      (a)        The
        closing (the “Closing”) of the purchase and sale of the Shares shall occur at
        the office of the Company at 10:00 a.m. Pacific Time, on the date first written
        above.

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      (b)        The
        Company acknowledges that as of the Closing it has, in installments paid
        on
        January 20, 2006, February 10, 2006, February 14, 2006, February 27, 2006,
        March
        2, 2006 and March 10, 2006, received the Purchase Price in full, including
        without limitation the amount of $15,000.00, which the Company will pay directly
        to Calim Private Equity, LLC (“Calim”) as a placement fee (the “Placement Fee”),
        and Calim hereby acknowledges that payment of the Placement Fee by the Company
        satisfies in full the Company’s obligation to compensate Calim with respect to
        the transactions contemplated by this Agreement pursuant to Section 6(b)
        of that
        certain Financial Advisory Agreement made and entered into June 6, 2002 by
        and
        between Calim and the Company.  The Company acknowledges the duty of
        payment of the Placement Fee to Calim and further acknowledges that it is
        aware
        that Calim is an affiliate of the Purchaser.

      


      (c)        As
        soon as reasonably practicable following the Closing, the Company’s transfer
        agent shall deliver to the Purchaser the certificate representing the Stock,
        free and clear of all liens, claims, options or rights to purchase, warrants,
        security interests, pledges, encumbrances and other rights of third
        parties.  In addition, at the Closing the Company shall deliver to the
        Purchaser the Warrants.

      


      (d)        At
        the Closing, and thereafter, each party agrees to execute and deliver to
        the
        other any and all documents or instruments reasonably requested by the other
        party to effect the sale and purchase of the  Shares and the payment
        of the Purchase Price.

      


      3.         Representations
        and Warranties of the Company.  Except as set forth in
        the Schedule of Exceptions attached as Exhibit 3 to this Agreement, the Company
        represents and warrants to the Purchaser as follows:

      


      (a)        The
        Company (i) is duly organized, validly existing and in good standing as a
        corporation under the laws of the State of Utah; (ii) has the corporate power
        and authority to own or lease and operate its property and to conduct the
        business in which it is currently engaged; and (iii) is, to its knowledge,
        in
        compliance with all requirements of applicable law except to the extent that
        the
        failure to comply therewith would not reasonably be expected to, in the
        aggregate, have a material adverse effect on the business, operations, property
        or financial or other condition of the Company or its obligations under this
        Agreement and the Warrants (collectively, the “Transaction
        Documents”).

      


      (b)        The
        authorized capital stock of the Company as of the date of the Company’s
        Quarterly Report on Form 10-QSB for the quarter ended March 31, 2007 consists
        of
        (i) 325,000,000 shares of the Common Stock, of which there are currently
        54,732,704 issued and outstanding, and (ii) 5,000,000 shares of preferred
        stock,
        par value $0.001 per share (the “Preferred Stock”), of which none are currently
        issued and outstanding.  All issued shares of Common Stock are validly
        issued, fully paid and non-assessable.

      



      
        
          
          

        

        
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      (c)        The
        Company has the corporate power and authority to make, deliver and perform
        its
        obligations under each of the Transaction Documents and to issue the Shares
        hereunder and has taken all necessary corporate action to authorize this
        Agreement and the other transactions contemplated hereby on the terms and
        conditions of this Agreement and to authorize the execution, delivery and
        performance of its obligations under this Agreement and the
        Warrants.  No consent of any other person (including security holders
        and creditors of the Company), and no authorization of, notice to, or other
        act
        by or in respect of any governmental authority, is required in connection
        with
        the execution, delivery, performance, validity or enforceability of this
        Agreement or the Warrants except for the filing of a Form D pursuant to
        Regulation D of the U.S. Securities and Exchange Commission under the Securities
        Act of 1993, as amended (the “Securities Act”) and any other filings or notices
        required by applicable state law.  This Agreement and the Warrants
        have been duly executed and delivered on behalf of the Company, and assuming
        due
        authorization, execution and delivery hereof by the Purchaser, constitutes
        a
        legal, valid and binding obligation of the Company, enforceable against the
        Company in accordance with its terms, except as enforceability may be limited
        by
        applicable bankruptcy, insolvency, reorganization, moratorium or similar
        laws
        affecting the enforcement of creditors’ rights generally and general principles
        of equity.

      


      (d)        Upon
        issuance, sale and delivery in accordance with the terms and conditions of
        this
        Agreement, the Stock will be free and clear of any and all liens, claims,
        options or rights to purchase, security interests, pledges, encumbrances
        or any
        other restrictions or rights of third parties, except for restrictions on
        transfer under the securities laws.

      


      (e)        The
        Stock, when issued, sold and delivered to the Purchaser in accordance with
        the
        terms and conditions of this Agreement, will be fully paid, validly issued
        and
        non-assessable, and the shares of Common Stock issuable upon payment by the
        Purchaser of the exercise price as set forth herein (as may be adjusted from
        time to time pursuant to the terms and conditions of the Warrants) and exercise
        of the Warrants in accordance with the terms and conditions of the Transaction
        Documents will, upon issuance, sale and delivery to the Purchaser, be fully
        paid, validly issued and non-assessable.

      


      (f)         The
        Company’s Quarterly Report on Form 10-QSB as filed with the United States
        Securities and Exchange Commission for the Quarter ended March 31, 2007 is
        true,
        correct and complete in all material respects, and, from the date thereof
        to the
        date hereof, there have been no material adverse changes in the business
        of the
        Company.

      


      4.           Purchaser
        Representations.  The Purchaser
        represents and warrants to the Company as follows:

      


      (a)        This
        Agreement has been duly executed and delivered by the Purchaser and constitutes
        a legal, valid and binding obligation of the Purchaser enforceable against
        the
        Purchaser in accordance with its terms and conditions, subject to applicable
        bankruptcy, insolvency, reorganization and moratorium laws and other laws
        of
        general application affecting the enforcement of creditors' rights generally
        and
        general principles of equity.

      


      (b)        The
        Shares are being acquired for investment for the Purchaser’s own account, not as
        a nominee or agent, and not with a view to the resale or distribution of
        any
        part thereof, and the Purchaser has no present intention of selling, granting
        any participation in, or otherwise distributing the Shares, in whole or in
        part.  The Purchaser does not have any contract, undertaking,
        agreement or arrangement with any person to sell, transfer or grant
        participations to such person or to any third person, with respect to any
        of the
        Shares.

      



      
        
          
          

        

        
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      (c)        The
        Purchaser is an investor in securities of companies in the development stage
        and
        acknowledges that she is able to fend for herself, can bear the economic
        risk of
        her investment, has adequate means for providing for her current needs and
        contingencies and has no need for liquidity with respect to her investment
        in
        the Company, and has such knowledge and experience in financial or business
        matters such that she is capable of evaluating the merits and risks of the
        investment in the Shares.

      


      (d)        The
        Purchaser is an “accredited investor” as that term is defined in Rule 501 of
        Regulation D as a result of the Purchaser being either:

      


      (i)         a
        natural person whose individual net worth, or joint net worth with that person's
        spouse, at the time of his purchase exceeds $1,000,000; or

      


      (ii)        a
        natural person who had an individual income in excess of $200,000 in each
        of the
        two most recent years or joint income with that person's spouse in excess
        of
        $300,000 in each of those years and has a reasonable expectation of reaching
        the
        same income level in the current year.

      


      (e)        At
        no time was the Purchaser presented with or solicited by any publicly issued
        or
        circulated newspaper, mail, radio, television or other form of general
        advertising or solicitation in connection with the offer, sale and purchase
        of
        the Shares.

      


      (f)         The
        Purchaser has received or has had full access to all the information it
        considers necessary or appropriate to make an informed investment decision
        with
        respect to the Shares. The Purchaser further has had an opportunity to ask
        questions of and receive answers from the Company regarding the terms and
        conditions of the offering of the Shares and to obtain additional information
        (to the extent the Company possessed such information or could acquire it
        without unreasonable effort or expense) necessary to verify any information
        furnished to the Purchaser or to which the Purchaser had access.

      


      (g)        The
        Purchaser understands that the Shares (and the Common Stock underlying the
        Warrants) that it is purchasing or otherwise taking delivery of are or will
        be
        characterized as “restricted securities” as that term is defined in Rule 144
        promulgated under the Securities Act inasmuch as they are being acquired
        from
        the Company in a transaction not involving a public offering and that under
        the
        Securities Act and applicable federal and state statutes and regulations
        such
        securities may be resold without registration only in certain limited
        circumstances.  The Purchaser represents that it is familiar with Rule
        144 promulgated under the Securities Act, as presently in effect, and which
        permits limited resale of stock purchased in a private placement subject
        to the
        satisfaction of certain conditions, including among other things, the existence
        of a public market for the stock, the availability of certain current public
        information about the issuer, the resale occurring not less than one year
        after
        a party has purchased and paid for the stock to be sold, the sale being effected
        through a “broker’s transaction” or in transactions directly with a “market
        maker” and the number of shares of stock being sold during any three-month
        period not exceeding specified limitations.  The Purchaser understands
        and hereby acknowledges that the Company may not be satisfying the current
        public information requirement of Rule 144 at the time the Purchaser wishes
        to sell the Stock or the Common Stock issued upon exercise of the Warrants,
        and
        that, in such event, the Purchaser may be precluded from selling such securities
        under Rule 144, even if the other requirements of Rule 144 have been
        satisfied.

      



      
        
          
          

        

        
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                5.

              	
                Transfer
                  Restrictions.

              


      

      


      (a)        The
        Purchaser agrees not to make any disposition of all or any portion of the
        Shares
        unless and until the transferee has agreed in writing for the benefit of
        the
        Company to be bound by this Section 5, and:

      


      (i)         there
        is then in effect a registration statement under the Securities Act covering
        the
        proposed disposition and such disposition is made in accordance with such
        registration statement; or

      


      (ii)        (A)
        the Purchaser shall have notified the Company of the proposed disposition
        and
        shall have furnished the Company with a detailed statement of the circumstances
        surrounding the proposed disposition and (B) if reasonably requested by the
        Company, the Purchaser shall have furnished the Company with an opinion of
        counsel, reasonably satisfactory to the Company, that such disposition will
        not
        require registration of the applicable Shares under the Securities Act;
        and

      


      (iii)       notwithstanding
        (i) and (ii) above, no such registration statement or opinion of counsel
        shall
        be necessary for a transfer by Purchaser (A) that is a partnership to a partner
        of such partnership or a retired partner of such partnership who retires
        after
        the date hereof, or to the estate of any such partner or retired partner
        or the
        transfer by gift, will or intestate succession of any partner to his or her
        spouse or to the siblings, lineal descendants or ancestors of such partner
        or
        his or her spouse, or (B) to any entity that is controlled by, controls or
        is
        under common control with the Purchaser; if the transferee agrees in writing
        to
        be subject to the terms of this Agreement to the same extent as if it were
        an
        original Purchaser hereunder.

      


      (b)        Certificates
        evidencing the Shares shall bear one or all of the following
        legends:

      


      (i)         “The
        securities represented hereby have not been registered under the Securities
        Act
        of 1933, as amended (the “Act”), or under applicable state securities
        laws.  These securities are subject to restrictions on transferability
        and resale and may not be offered, sold, pledged, hypothecated, assigned,
        transferred or resold except as permitted under the Act and applicable state
        securities laws pursuant to (i) a registration statement under the Act, which
        has become effective and is current with respect to these securities, or
        (ii) an
        exemption therefrom.  The issuer of these securities may require an
        opinion of counsel in form and substance satisfactory to the issuer to the
        effect that any proposed pledge, hypothecation, assignment, transfer or resale
        is in compliance with the Act and any applicable state securities laws.”
and

      



      
        
          
          

        

        
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      (ii)        Any
        legend required by the laws of the State and any other applicable state of
        the
        United States.

      


      6.         Indemnification.  The
        Purchaser agrees to indemnify and hold harmless the Company, its officers,
        directors, affiliates, subsidiaries, employees and agents from any and all
        losses suffered by them as a result of any liability related to a breach
        by
        Purchaser of a representation or warranty or failure by Purchaser to satisfy
        any
        covenant or obligation contained in this Agreement (including the reasonable
        fees and expenses of defending against such liability or alleged
        liability).

      


      7.         Agreement. The
        Company agrees to pay or reimburse the Purchaser, upon invoice, for its
        reasonable legal fees and expenses incurred in connection with this Agreement
        and the transactions contemplated hereby.

      


      
        	
                 

              	
                8.

              	
                Miscellaneous.

              


      

      


      (a)        This
        Agreement together with all schedules and exhibits attached hereto and the
        Warrants constitutes the entire agreement and understanding between the parties
        hereto related to the sale of Shares and supersedes and controls all prior
        verbal and written agreements between the parties relating to the sale of
        the
        Shares.

      


      (b)        This
        Agreement shall be governed by, and construed in accordance with, the laws
        of
        the internal laws of the State of California, without reference to principles
        of
        conflict of laws or choice of laws.

      


      (c)        This
        Agreement shall be binding upon and shall inure to the benefit of each of
        the
        parties and their respective successors and assigns. Neither this Agreement
        nor
        any of the rights, interests or obligations hereunder shall be transferred
        or
        assigned (by operation of law or otherwise) by either party hereto without
        the
        prior written consent of the other party such consent not to be unreasonably
        withheld.  Any transfer or assignment of any of the rights, interests
        or obligations hereunder in violation of the terms and conditions of this
        Agreement shall be void and of no force or effect.

      


      (d)        As
        used herein and as the context requires, the masculine, feminine, and neuter
        genders shall include the others; the singular shall include the plural and
        vice
        versa.

      


      (e)        If
        any term or other provision of this Agreement is invalid, illegal or incapable
        of being enforced by virtue of any rule of law, or public policy, the parties
        hereto shall negotiate in good faith to modify this Agreement so as to effect
        the original intent of the parties as closely as possible in an acceptable
        manner to the end that the transactions contemplated hereby are fulfilled
        to the
        maximum extent possible.  In the event that the parties cannot reach a
        mutually agreeable and enforceable replacement for such provision, then
        (i) such provision shall be excluded from this Agreement, (ii) the
        balance of the Agreement shall be interpreted as if such provision were so
        excluded, and (iii) the balance of the Agreement shall be enforceable in
        accordance with its terms.

      



      
        
          
          

        

        
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      (f)         The
        representations, warranties and covenants of the Company and the Purchaser
        contained in or made pursuant to this Agreement shall survive the execution
        and
        delivery of this Agreement, shall expire upon the expiration of the applicable
        statute of limitations (including extensions thereof) in respect thereof,
        and shall in no way be affected by any investigation of the subject matter
        thereof made by or on behalf of either of the Purchaser or the Company, as
        the
        case may be.

      


      (g)        Unless
        otherwise provided, any notice required or permitted under this Agreement
        shall
        be given in writing and shall be deemed effectively given (i) upon personal
        delivery to the party to be notified, (ii) upon confirmed transmission by
        facsimile, (iii) four business days after deposit with the United States
        Post
        Office, by registered or certified mail, postage prepaid, or (iv) one business
        day after deposit with a reputable overnight courier service for next day
        delivery, and addressed to the party to be notified at the address indicated
        for
        such party on the signature pages hereof, or at such other address as such
        party
        may designate by ten days' advance written notice to the other
        parties.

      


      (h)        This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        instrument.  This Agreement may be executed and delivered by facsimile
        and upon such delivery the facsimile signature will be deemed to have the
        same
        effect as if the original signature had been delivered to the other
        parties.

      


      


      


      


      


      


      [Remainder
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      EXECUTED
        AND DELIVERED as of the date and year first written above.

      


      


      


      
        	 	
                CHAPEAU,
                  INC.

              
	 	 
	 	 
	 	
                ________________________

              
	 	
                By:   ____________________

              
	 	
                Its:  
                  ____________________

              
	 	 
	 	 
	 	 
	 	
                ________________________

              
	 	
                Purchaser

              


      

      


      


      


      ACKNOWLEDGED
        as of the date first written above with respect to Section 2(b)
        by:

      


      


      CALIM
        PRIVATE EQUITY, LLC

      


      


      


      ________________________

      By:      __________________

      Its:       __________________

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
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      EXHIBIT
        1(b)

      


         to

      


      STOCK
        PURCHASE AGREEMENT

      


      


      


      Form
        of Warrant

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      
        	
                THIS
                  WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
                  NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
                  ACT”).  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
                  HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
                  REGISTRATION STATEMENT UNDER THE 1933 ACT, OR AN OPINION OF COUNSEL
                  SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
                  THE
                  1933 ACT AND APPLICABLE STATE SECURITIES
                  LAW.

              


      

      


      


      Warrant
        to Purchase Common Stock

      of

      Chapeau,
        Inc.

      


      Void
        after July 31,  2009

      


      This
        Warrant is issued to ___________, or her registered
        assigns (the “Holder”) by Chapeau, Inc., a Utah corporation (the “Company”), as
        of July 31, 2007 (the “Warrant Issue Date”).  This Warrant is issued
        pursuant to that certain Stock Purchase Agreement dated as of the Warrant
        Issue
        Date (the “Purchase Agreement”).  Unless otherwise defined herein,
        capitalized terms used herein shall have the meanings assigned them in the
        Purchase Agreement.

      


      1.         Shares.Subject
        to the terms and conditions of this Warrant, the Holder is entitled, upon
        surrender of this Warrant at the principal office of the Company (or at such
        other place as the Company shall notify the Holder in writing), to purchase
        from
        the Company 1,000,000 fully paid and non-assessable shares of Common Stock,
        as
        constituted on the Warrant Issue Date. The number of shares of Common Stock
        issuable pursuant to this Section 1 (the “Shares”) shall be subject to
        adjustment pursuant to Section 9 below.

      


      2.         Exercise
        Price. The purchase price for the Shares shall be equal to $0.50 per
        share, as adjusted from time to time pursuant to Section 10 below (the “Exercise
        Price”).

      


      3.         Exercise
        Period.  This Warrant shall be exercisable, in whole or in
        part, during the term commencing on the Warrant Issue Date and ending at
        5:00
        p.m. on the second anniversary of the Warrant Issue Date; provided that in
        the
        event (each a “Disposition Event”) of (i) the closing of the Company’s sale or
        transfer of all or substantially all of its assets, or (ii) the closing of
        the
        acquisition of the Company by another entity by means of merger, consolidation
        or other transaction or series of related transactions, resulting in the
        exchange of the outstanding shares of the Common Stock (unless (A) the
        shareholders of the Company immediately prior to such transaction or series
        of
        related transactions are holders of a majority of the voting equity securities
        of the surviving or acquiring corporation immediately thereafter, and (B)
        each
        of such shareholders immediately prior to such transaction or series of related
        transactions holds the same pro rata share of such majority of the voting
        equity
        securities of the surviving or acquiring corporation as each hold of the
        Company
        immediately prior to such transaction or series of related transactions),
        this
        Warrant shall, on the date of a Disposition Event, no longer be exercisable
        and
        become null and void. The Company shall notify the Holder at least 20 days
        prior
        to the consummation of any Disposition Event; provided that the Holder shall
        in
        any event have at least 40 days after the Warrant Issue Date to exercise
        this
        Warrant.

      



      
        
          
          

        

        
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      4.         Method
        of Exercise.  While this Warrant remains outstanding and
        exercisable, the Holder may exercise this Warrant, in whole or in part, at
        one
        time or from time to time, by:

      


      (a)        the
        surrender of this Warrant, together with a duly executed copy of the form
        of
        Notice of Election attached hereto, to the Secretary of the Company at its
        principal offices; and

      


      (b)        the
        payment to the Company of an amount equal to the aggregate Exercise Price
        for
        the number of Shares being purchased.

      


      In
        the
        event of a partial exercise of this Warrant, the Company shall cause to be
        issued to the Holder a Warrant of like tenor to this Warrant for the number
        of
        Shares for which this Warrant has not yet been exercised.

      


      5.         Representations
        and Warranties of Holder.  The Holder hereby represents and
        warrants that:

      


      (a)        This
        Warrant and the Shares to be received by it upon exercise of this Warrant
        (collectively, the “Securities”) are being acquired for investment for the
        Holder’s own account, not as a nominee or agent, and not with a view to the
        resale or distribution of any part thereof, and the Holder has no present
        intention of selling, granting any participation in, or otherwise distributing
        the Securities, in whole or in part.  The Holder does not have any
        contract, undertaking, agreement or arrangement with any person to sell,
        transfer or grant participations to such person or to any third person, with
        respect to the Securities.

      


      (c)        The
        Holder is an investor in securities of companies in the development stage
        and
        acknowledges that she is able to fend for herself, can bear the economic
        risk of
        her investment, has adequate means for providing for her current needs and
        contingencies and has no need for liquidity with respect to her investment
        in
        the Company, and has such knowledge and experience in financial or business
        matters such that she is capable of evaluating the merits and risks of the
        investment in the Securities.

      


      (d)        The
        Holder is an “accredited investor” as that term is defined in Rule 501 of
        Regulation D as a result of the Holder being either:

      



      
        
          
          

        

        
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      (i)         a
        natural person whose individual net worth, or joint net worth with that person's
        spouse, at the time of his purchase exceeds $1,000,000; or

      


      (ii)        a
        natural person who had an individual income in excess of $200,000 in each
        of the
        two most recent years or joint income with that person's spouse in excess
        of
        $300,000 in each of those years and has a reasonable expectation of reaching
        the
        same income level in the current year.

      


      (e)        At
        no time was the Holder presented with or solicited by any publicly issued
        or
        circulated newspaper, mail, radio, television or other form of general
        advertising or solicitation in connection with the offer, sale and purchase
        of
        this Warrant.

      


      (f)         The
        Holder has received or has had full access to all the information it considers
        necessary or appropriate to make an informed investment decision with respect
        to
        the Securities. The Holder further has had an opportunity to ask questions
        of
        and receive answers from the Company regarding the terms and conditions of
        the
        offering of the Securities and to obtain additional information (to the extent
        the Company possessed such information or could acquire it without unreasonable
        effort or expense) necessary to verify any information furnished to the Holder
        or to which the Holder had access.

      


      (g)        The
        Holder understands that the Securities that it is purchasing or otherwise
        taking
        delivery of are or will be characterized as “restricted securities” as that term
        is defined in Rule 144 promulgated under the Securities Act of 1933, as amended
        (the “1933 Act”) inasmuch as they are being acquired from the Company in a
        transaction not involving a public offering and that under the 1933 Act and
        applicable federal and state statutes and regulations such securities may
        be
        resold without registration only in certain limited
        circumstances.  The Holder represents that it is familiar with Rule
        144 promulgated under the 1933 Act, as presently in effect, and which permits
        limited resale of stock purchased in a private placement subject to the
        satisfaction of certain conditions, including among other things, the existence
        of a public market for the stock, the availability of certain current public
        information about the issuer, the resale occurring not less than one year
        after
        a party has purchased and paid for the stock to be sold, the sale being effected
        through a “broker’s transaction” or in transactions directly with a “market
        maker” and the number of shares of stock being sold during any three-month
        period not exceeding specified limitations.  The Holder understands
        and hereby acknowledges that the Company may not be satisfying the current
        public information requirement of Rule 144 at the time the Holder wishes to
        sell the Securities, and that, in such event, the Holder may be precluded
        from
        selling such securities under Rule 144, even if the other requirements of
        Rule 144 have been satisfied.

      


      
        	
                 

              	
                6.

              	
                Transfer
                  Restrictions.

              


      

      


      (a)        The
        Holder agrees not to make any disposition of all or any portion of the
        Securities unless and until the transferee has agreed in writing for the
        benefit
        of the Company to be bound by this Section 6, and:

      



      
        
          
          

        

        
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      (i)         there
        is then in effect a registration statement under the 1933 Act covering the
        proposed disposition and such disposition is made in accordance with such
        registration statement; or

      


      (ii)        (A)
        the Holder shall have notified the Company of the proposed disposition and
        shall
        have furnished the Company with a detailed statement of the circumstances
        surrounding the proposed disposition and (B) if reasonably requested by the
        Company, the Holder shall have furnished the Company with an opinion of counsel,
        reasonably satisfactory to the Company, that such disposition will not require
        registration of the applicable Securities under the 1933 Act; and

      


      (iii)       
        notwithstanding (i) and (ii) above, no such registration statement or opinion
        of
        counsel shall be necessary for a transfer by Holder (A) that is a partnership
        to
        a partner of such partnership or a retired partner of such partnership who
        retires after the date hereof, or to the estate of any such partner or retired
        partner or the transfer by gift, will or intestate succession of any partner
        to
        his or her spouse or to the siblings, lineal descendants or ancestors of
        such
        partner or his or her spouse, or (B) to any entity that is controlled by,
        controls or is under common control with the Holder; if the transferee agrees
        in
        writing to be subject to the terms of this Warrant to the same extent as
        if it
        were an original Holder hereunder.

      


      (b)        Certificates
        evidencing the Securities shall bear one or all of the following
        legends:

      


      (i)         “The
        securities represented hereby have not been registered under the Securities
        Act
        of 1933, as amended (the “Act”), or under applicable state securities
        laws.  These securities are subject to restrictions on transferability
        and resale and may not be offered, sold, pledged, hypothecated, assigned,
        transferred or resold except as permitted under the Act and applicable state
        securities laws pursuant to (i) a registration statement under the Act, which
        has become effective and is current with respect to these securities, or
        (ii) an
        exemption therefrom.  The issuer of these securities may require an
        opinion of counsel in form and substance satisfactory to the issuer to the
        effect that any proposed pledge, hypothecation, assignment, transfer or resale
        is in compliance with the Act and any applicable state securities laws.”
and

      


      (ii)        Any
        legend required by the laws of the State and any other applicable state of
        the
        United States.

      


      7.         Indemnification.  The
        Holder agrees to indemnify and hold harmless the Company, its officers,
        directors, affiliates, subsidiaries, employees and agents from any and all
        losses suffered by them as a result of any liability related to a breach
        by
        Holder of a representation or warranty or failure by Holder to satisfy any
        covenant or obligation contained in this Warrant (including the reasonable
        fees
        and expenses of defending against such liability or alleged
        liability).

      


      



      
        
          
          

        

        
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      8.         Certificates
        for Shares.  Upon the exercise of the purchase rights
        evidenced by this Warrant, one or more certificates for the number of Shares
        so
        purchased shall be issued as soon as practicable thereafter (with appropriate
        restrictive legends, if applicable), and in any event within 15 days following
        compliance by the Holder with the requirements of Section 4
        above.  The Company shall not be required to issue any fractional
        shares, and if any fraction of a Share would be issuable on the exercise
        of this
        Warrant in full, the Company shall pay an amount in cash equal to the then
        current fair market value of a Share, as then determined in good faith by
        the
        Board of Directors of the Company, times the applicable fraction.

      


      9.         Reservation
        of Shares. The Company covenants that it will at all times keep
        available such number of authorized shares of Common Stock, free from all
        preemptive rights with respect thereto, which will be sufficient to permit
        the
        exercise of this Warrant for the full number of Shares specified herein.
        The
        Company covenants that the Shares, when issued pursuant to the exercise of
        this
        Warrant and in exchange for the Exercise Price, will be duly and validly
        issued,
        fully paid and non-assessable and free from all taxes, liens, and charges
        with
        respect to the issuance thereof.

      


      10.       Adjustment
        of Exercise Price and Number of Shares. The number of and kind of
        Shares purchasable or receivable upon exercise of this Warrant and the Exercise
        Price shall be subject to adjustment from time to time as follows:

      


      (a)        Subdivisions,
        Combinations and Other Issuances. If the Company shall subdivide the Common
        Stock, by split-up or otherwise, combine the Common Stock or issue additional
        shares of Common Stock as a dividend or other distribution with respect to
        any
        of its securities, the number of Shares issuable on the exercise of this
        Warrant
        shall be proportionately increased in the case of a subdivision, dividend
        or
        distribution and shall be proportionately decreased in the case of a
        combination. Appropriate adjustments shall also be made to the Exercise Price,
        but the aggregate purchase price payable for the total number of Shares
        purchasable under this Warrant (as adjusted) shall remain the same. Any
        adjustment under this Section 10(a) shall become effective at the close of
        business on the date the subdivision or combination becomes effective, or
        as of
        the record date of a dividend or other distribution, or in the event that
        no
        record date is fixed, upon the making of such dividend or
        distribution.

      


      (b)        Reclassification,
        Reorganization and Consolidation. In the event of any reclassification,
        capital reorganization or change in the Common Stock, other than as a result
        of
        an event provided for in (a) above, then, as a condition of such transaction,
        the Holder shall have the right at any time prior to the expiration of this
        Warrant to purchase, at a total price equal to that payable upon the exercise
        of
        this Warrant, the kind and amount of shares of stock and other securities
        and
        property receivable in connection with the applicable transaction by a holder
        of
        the same number of shares of Common Stock as were purchasable by the Holder
        immediately prior to the transaction. In any such case appropriate provisions
        shall be made with respect to the rights and interest of the Holder so that
        this
        provision shall thereafter be applicable with respect to any securities
        deliverable upon exercise of this Warrant, and appropriate adjustments shall
        be
        made to  the Exercise Price; provided that the aggregate purchase
        price shall remain the same.

      



      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      


      (c)        Notice
        of Adjustment. When any adjustment is required to be made in the number or
        kind of securities receivable upon exercise of this Warrant, or in the Exercise
        Price, the Company shall promptly notify the Holder thereof and of the number
        of
        Shares or other securities thereafter receivable upon exercise of this Warrant
        and the adjusted Exercise Price per share.

      


      (d)        No
        Impairment.  The Company and the Holder will not, by any
        voluntary action, avoid or seek to avoid the observance or performance of
        any of
        the terms to be observed or performed hereunder by the Company or the Holder,
        respectively, but will at all times in good faith assist in the carrying
        out of
        all the provisions of this Section 10 and in the taking of all such action
        as
        may be necessary or appropriate in order to protect the rights of the Company
        and the Holder against impairment.

      


      11.       No
        Shareholder Rights.  Prior to exercise of this Warrant, the
        Holder shall not be entitled to any rights of a shareholder with respect
        to this
        Warrant or the Shares, including without limitation the right to vote, receive
        dividends or other distributions thereon, exercise preemptive rights or,
        other
        than as may be provided in the Purchase Agreement, be notified of shareholder
        meetings, and the Holder shall not be entitled to any notice or other
        communication concerning the business or affairs of the Company. However,
        nothing in this Section 11 shall limit the right of the Holder to be provided
        the notices required under this Warrant and, in addition, the Company will
        afford to the Holder the right, upon advance notice, to meet periodically
        with
        the Company’s chief executive and chief financial officers during mutually
        agreeable business hours to discuss the Company’s business and
        affairs.

      


      12.       Transfers.  Subject
        to compliance with the requirements of Section 6 above, this Warrant and
        all
        rights (but only with all related obligations) hereunder are transferable
        in
        whole or in part by the Holder upon reasonable prior written notification
        to the
        Company. The transfer shall be recorded on the books of the Company upon
        (i) the
        surrender of this Warrant, properly endorsed, to the Company at its principal
        offices; (ii) the payment to the Company of all transfer taxes and other
        governmental charges imposed on such transfer; and (iii) the transferee’s
        agreement in writing to be bound by and subject to the terms and conditions
        of
        this Warrant.  In the event of a partial transfer, the Company shall
        issue to the Holders one or more appropriate new Warrants of like tenor to
        this
        Warrant.

      


      13.       Successors
        and Assigns. The terms and provisions of this Warrant shall inure to
        the benefit of, and be binding upon, the Company and the Holders and their
        respective successors and assigns.

      


      



      
        
          
          

        

        
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      14.       Registration
        Rights. The Shares issuable upon exercise of this Warrant shall be
        entitled to be included, pari passu, with any other shares of Common
        Stock and any securities issuable upon conversion of the Common Stock, under
        the
        terms of any registration rights, if any, that the Company may have heretofore
        granted or may hereafter grant to any other persons whomsoever, and the Company
        agrees to do all such things in connection with any registration rights
        agreements or registration of the Common Stock under the 1933 Act to ensure
        that
        the rights of the Holder hereunder are recognized in connection
        therewith.

      


      15.       Amendments
        and Waivers.  Any term of this Warrant may be amended and the
        observance of any term of this Warrant may be waived (either generally or
        in a
        particular instance and either retroactively or prospectively), with the
        written
        consent of the Company and the Holder.

      


      16.       Captions.  The
        section and subsection headings of this Warrant are inserted for convenience
        only and shall not constitute a part of this Warrant in construing or
        interpreting any provision hereof.

      


      17.       Governing
        Law.  This Warrant shall be governed by the laws of the State
        of Utah.

      


      


      


      


      


      [Remainder
        of Page Intentionally Left Blank]

      


      


      


      


      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
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      IN
        WITNESS WHEREOF,
        this Warrant to be executed by the Company and acknowledged by the Holder
        July
        31, 2007.

      


      


      
        


        
          	 	
                  CHAPEAU,
                    INC.

                
	 	 
	 	 
	 	
                  ________________________

                
	 	
                  By:   ____________________

                
	 	
                  Its:  
                    ____________________

                


        

      

      


      


      ACCEPTED
        AND ACKNOWLEDGED:

      


      


      ______________________________

      Holder

      


      


      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
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      NOTICE
        OF EXERCISE

      


      


      


      To:  Chapeau,
        Inc.

      


      The
        undersigned hereby elects to purchase _________ shares of the Common Stock
        of
        Chapeau, Inc. (the “Company”) pursuant to the terms of the attached Warrant, and
        payment of the Exercise Price per share required under the Warrant accompanies
        this notice.

      


      


      The
        undersigned hereby affirms each and every one of the representations and
        warranties contained in Section 5 of the Warrant as of the date of this Notice
        of Exercise.

      


      


      


      
        	 	
                WARRANT
                  HOLDER:

              
	 	 
	 	
                _________________________________________

              
	 	 
	 	 
	 	
                By:______________________________________

              
	 	 
	 	 
	 	
                Date:
                  ____________________________________

              


      

      


      


      


      


      Name
        in
        which shares should be registered:

      


      


      _________________________________________

      


      


      


      


      


      


      


      


      



      
        
          
          

        

        
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      EXHIBIT
        3

      


      to

      


      STOCK
        PURCHASE AGREEMENT

      


      


      


      Disclosure
        Schedule

      


      


      1.          The
        representations and warranties contained in Sections 3(b) and 3(f) are subject
        in their entirety to any and all disclosure contained in or incorporated
        by
        reference into the Company’s Quarterly Report on Form 10-QSB for the quarter
        ended March 31, 2007 filed with the United States Securities and Exchange
        Commission (“SEC”) on May 15, 2007, and the Company’s Current Report on Form 8-K
        filed with the SEC on June 29, 2007.