Document:

ex42.htm

    EXHIBIT
4.2

    

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE/EXERCISABLE, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

    

    
      	 
      	
              Right
      to Purchase ____________ shares of Common Stock of Shrink
      Nanotechnologies, Inc. (subject to adjustment as provided
      herein)

            

    

    

    FORM
OF CLASS A COMMON STOCK PURCHASE WARRANT

     

    No. A-1___                                                                           Issue
Date: _______________ ___, 2010

     

    SHRINK
NANOTECHNOLOGIES, INC., a corporation organized under the laws of the State of
Delaware (the “Company”), hereby certifies
that, for value received, ____________________________,
______________________________________________, or its assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company at any time
commencing six months after the Issue Date of this Class A Common Stock Purchase
Warrant (the “Warrant”)
until 5:00 p.m., E.S.T on the date that is ___________________
__, 2013 {Enter the Thirty Six Month anniversary date (i.e. 3 years) of
Investment Date}  (the “Expiration Date” and, said
period during which this Warrant is exercisable being referred to herein as the
“Exercise Period”), up
to ____________ {half as number
of shares Note is convertible into } fully paid and nonassessable shares
of Common Stock at a per share purchase price of $1.00.  The
aforedescribed purchase price per share, as adjusted from time to time as herein
provided, is referred to herein as the "Purchase
Price."  The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided
herein.  The Company may reduce the Purchase Price for some or all of
the Warrants, temporarily or permanently provided that the same is done on a
pari pasu basis for all
holders of these Warrants.  Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Subscription Agreement”), the
first closing of which was on November 12, 2009, and entered into by the Company
and the initial subscriber for this Warrant.

    

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall
include Shrink Nanotechnologies, Inc., a Delaware corporation and any
corporation which shall succeed or assume the obligations Shrink
Nanotechnologies, Inc. hereunder.

     

    (b)           The
term “Common Stock”
includes (a) the Company's Common Stock, $0.001 par value per share, as
authorized on the date of the Subscription Agreement, and (b) any other
securities into which or for which any of the securities described in
(a) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

     

    (c)           The
term “Other Securities”
refers to any stock (other than Common Stock) and other securities of the
Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.

     

    (d)           The
term “Warrant Shares”
shall mean the Common Stock issuable upon exercise of this Warrant.

     

    1.           Exercise of
Warrant.

     

    1.1.           Number of Shares Issuable
upon Exercise.  From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Common Stock of the Company, subject to
adjustment pursuant to Section 4.

     

    1.2.           Full
Exercise.  This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A
hereto (the “Subscription
Form”) duly executed by such Holder and delivery within two days
thereafter of payment, in cash, wire transfer or by certified or official bank
check payable to the order of the Company, in the amount obtained by multiplying
the number of shares of Common Stock for which this Warrant is then exercisable
by the Purchase Price then in effect.  The original Warrant is not
required to be surrendered to the Company until it has been fully
exercised.

     

    1.3.           Partial
Exercise.  This Warrant may be exercised in part (but not for a
fractional share) by delivery of a Subscription Form in the manner and at the
place provided in subsection 1.2 except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares of Common Stock designated by the Holder in
the Subscription Form by (b) the Purchase Price then in
effect.  On any such partial exercise provided the Holder has
surrendered the original Warrant, the Company, at its expense, will forthwith
issue and deliver to or upon the order of the Holder hereof a new Warrant of
like tenor, in the name of the Holder hereof or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may request, the whole number of
shares of Common Stock for which such Warrant may still be
exercised.

     

    1.4.           Fair Market Value.
Fair Market Value of a share of Common Stock as of a particular date (the "Determination Date") shall
mean:

     

    (a)           If
the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
Global Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange, the American Stock Exchange, LLC, OTC Bulletin Board, or
Pink Sheets LLC, then the average of the closing or last sale prices,
respectively, reported for the ten trading days immediately preceding the
Determination Date;

     

    (b)           If
the Company's Common Stock is not traded on an exchange or on the NASDAQ Global
Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New York
Stock Exchange, the American Stock Exchange, LLC, OTC Bulletin Board, or Pink
Sheets LLC, but is traded in the over-the-counter market, then the average of
the closing bid and ask prices reported for the ten trading days immediately
preceding the Determination Date;

     

    (c)           Except
as provided in clause (d) below and Section 3.1, if the Company's Common
Stock is not publicly traded, then as the Holder and the Company agree, or in
the absence of such an agreement, by arbitration in accordance with the rules
then standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and
training to pass on the matter to be decided with such arbitration to be
conducted in San Diego, California; or

     

    (d)           If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.

     

    1.5.           Company
Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

     

    1.6.           Trustee for Warrant
Holders. In the event that a bank or trust company shall have been
appointed as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and
duties of a warrant agent (as hereinafter described) and shall accept, in its
own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.

     

               1.7           Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that the shares of
Common Stock purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as of the close
of business on the date on which delivery of a Subscription Form shall have
occurred and payment made for such shares as aforesaid. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
fourteen (14) business days thereafter (“Warrant Share Delivery Date”),
the Company at its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of and delivered to the Holder
hereof, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly issued, fully
paid and non-assessable shares of Common Stock (or Other Securities) to which
such Holder shall be entitled on such exercise, (but not any fractional
shares).  The Company understands that a delay in the delivery of the
Warrant Shares after the Warrant Share Delivery Date could result in economic
loss to the Holder.  The Company shall not, however, be responsible
for any out of pocket or potential lost profits as a result of a decline in
stock price during any reasonable delay.  Furthermore, in addition to
any other remedies which may be available to the Holder, in the event that the
Company fails for any reason to effect delivery of the Warrant Shares by the
Warrant Share Delivery Date, the Holder may revoke all or part of the relevant
Warrant exercise by delivery of a notice to such effect to the Company,
whereupon the Company and the Holder shall each be restored to their respective
positions immediately prior to the exercise of the relevant portion of this
Warrant.

     

    2.           Cashless
Exercise.

     

    (a)           This
Warrant may be exercised in whole or in part during the Exercise Period
(i) by paying cash, wire transfer or by certified or official bank check
payable to the order of the Company equal to the applicable aggregate Purchase
Price, (ii) by “cashless exercise” method by delivery of Common Stock issuable
upon exercise of the Warrants in accordance with Section (b) below or
(iii) by a combination of any of the foregoing methods, for the number of
Common Stock specified in such form (as such exercise number shall be adjusted
to reflect any adjustment in the total number of shares of Common Stock issuable
to the holder per the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully-paid
and non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

     

    (b)           Subject
to the provisions herein to the contrary, if the Fair Market Value of one share
of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Subscription
Form in which event the Company shall issue to the holder a number of shares of
Common Stock computed using the following formula:

     

    X=Y (A-B)

              A

    

    Where           X=           the
number of shares of Common Stock to be issued to the holder

    

    
      	
               
      

            	
              Y=

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A=

            	
              the
      average of the closing sale prices of the Common Stock for the ten (10)
      Trading Days immediately prior to (but not including) the Exercise Date,
      or Fair Market Value, whichever is
less

            

    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have commenced, on the date
this Warrant was originally issued pursuant to the Subscription Agreement,
regardless of whether subsequent changes or modifications have been made to this
Warrant or the exercise price.

     

    3.           Adjustment for
Reorganization, Consolidation, Merger, Subsequent Share Issuances
etc.

     

    3.1.           Fundamental Transaction. 
If, at any time while this Warrant is outstanding, (A) the Company 
effects any merger or  consolidation  of the Company with or into
another entity, (B) the Company effects any sale of all or
substantially all of its assets in one or
a series of related transactions,  (C)
any tender offer or exchange offer (whether by the
Company or another entity) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their
shares for other securities, cash or property, (D) the
Company consummates a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with one or more persons or entities whereby such other
persons or entities acquire more than the 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by such other
persons or entities making or party to, or associated or affiliated with the
other persons or entities making or party to, such stock purchase agreement or
other business combination), (E) any "person" or "group" (as these terms are
used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall
become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate Common Stock of the
Company, or (F) the Company effects any reclassification of
the Common Stock or any compulsory share exchange
pursuant to
which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such
case, a "Fundamental 
Transaction"), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option of the
Holder, (a) upon exercise of this Warrant, the number of shares of Common
Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional
consideration (the "Alternate
Consideration") receivable upon or as a result of
such reorganization,
reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such
event or (b) if the Company is acquired in (1) a transaction
where the consideration paid to the holders of the Common Stock consists solely
of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934
Act, or (3) a transaction involving a person or entity not traded on a national
securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market
or the Nasdaq Capital Market, cash equal to the Black-Scholes
Value.  For purposes of any such exercise, the
determination of the Purchase Price shall
be appropriately adjusted to apply to such Alternate
Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and
the Company shall apportion the Purchase Price
among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration.  If holders of Common Stock
are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given
the same choice as to the Alternate Consideration it receives upon any exercise
of this Warrant following such Fundamental Transaction.  To the extent
necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a
new warrant consistent with
the foregoing provisions and evidencing the
Holder's right to exercise such warrant into Alternate
Consideration.  The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of
this Section 3.1 and insuring that this Warrant (or any such
replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction.  “Black-Scholes Value” shall be determined in
accordance with the Black-Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg L.P. using (i) a price per share of Common Stock equal to
the VWAP of the Common Stock for the Trading Day immediately preceding the date
of  consummation of the applicable Fundamental Transaction, (ii) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of this Warrant as of the date of such request and
(iii) an expected volatility equal to the 100 day volatility obtained from the
HVT function on Bloomberg L.P. determined as of the Trading Day immediately
following the public announcement of the applicable Fundamental
Transaction.

     

    3.2.           Dissolution.  In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable by
the Holder of the Warrants after the effective date of such dissolution pursuant
to this Section 3 to a bank or trust company (a "Trustee") having its principal
office in California or New York as trustee for the Holder of the
Warrants.  Such property shall be delivered only upon payment of the
Warrant exercise price.

     

    3.3.           Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4.  In the event this Warrant does not
continue in full force and effect after the consummation of the transaction
described in this Section 3, then only in such event will the Company's
securities and property (including cash, where applicable) receivable by the
Holder of the Warrants be delivered to the Trustee as contemplated by
Section 3.2.

     

    3.4.           Omitted.

     

    4.           Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this
Section 4. The number of shares of Common Stock that the Holder of this
Warrant shall thereafter, on the exercise hereof, be entitled to receive shall
be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4 be
in effect, and (b) the denominator is the Purchase Price in effect on the date
of such exercise.

     

    5.           Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant and any Warrant Agent
of the Company (appointed pursuant to Section 11 hereof).

     

    6.           Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial
Statements.   The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.  This Warrant entitles the
Holder hereof to receive copies of all financial and other information
distributed or required to be distributed to the holders of the Company's Common
Stock.

     

    7.           Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B
attached hereto (the “Transferor Endorsement Form")
and together with an opinion of counsel reasonably satisfactory to the Company
that the transfer of this Warrant will be in compliance with applicable
securities laws, the Company will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant so surrendered by the
Transferor.

     

    8.           Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at the Holder’s expense, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.

     

    9.           Subscription
Agreement.  The terms of the Subscription Agreement are
incorporated herein by this reference.  Specifically, and without
limitation, the benefits of the covenants set forth in Section 6.2
thereof.

     

    10.           Maximum
Exercise.  The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock on such date.  For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities 1934 Act , and Rule
13d-3 thereunder.  Subject to the foregoing, the Holder shall not be
limited to aggregate exercises which would result in the issuance of more than
4.99%.  The restriction described in this paragraph may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage to up to 9.99%, but not in
excess of 9.99%.  The Holder may decide whether to convert a
Convertible Note or exercise this Warrant to achieve an actual 4.99% or up to
9.99% ownership position as described above, but not in excess of
9.99%.

     

    11.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the
purpose of issuing Common Stock (or Other Securities) on the exercise of this
Warrant pursuant to Section 1, exchanging this Warrant pursuant to
Section 7, and replacing this Warrant pursuant to Section 8, or any of
the foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such Warrant Agent.

     

    12.           Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

     

    13.           Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, or email with
confirmation, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice.  Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur.  The addresses for such communications
shall be: (i) if to the Borrower to: Shrink Nanotechnologies, 2038 Corte del
Nogal, Suite 110, Carlsbad, CA 92011 Attn: Mark L. Baum, Esq. or current
President, fax: 760-804-8845, with a copy by facsimile only to: Levy
International Law 22 W. 48 Street, Suite 601, New York, New York 10013, Attn:
Ronniel Levy, Esq., and (ii) if to the Holder, to the name, address and
facsimile number set forth on the front page of this Note or email address set
forth in the Purchase Agreement (provided that such notice is with
confirmation).

    

    14.           Law Governing This
Warrant.  This Warrant shall be governed by and construed in
accordance with the laws of the State of California without regard to principles
of conflicts of laws.  Any action brought by either party against the
other concerning the transactions contemplated by this Warrant shall be brought
only in the state courts of California or in the federal courts located in the
County of San Diego in the State of California.  The parties to this
Warrant hereby irrevocably waive any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement or
any other Transaction Document by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.

    

     

    IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

     

    
      	 
      	
              SHRINK
      NANOTECHNOLOGIES, INC.

               

               

               

              By:           

              Name:

                            Title:

               

               

               

               

            
	 
      	 
      	 
      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit A

    

    FORM OF
SUBSCRIPTION

    (to be
signed only on exercise of Warrant)

    TO:  SHRINK
NANOTECHNOLOGIES, INC.

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

    

    ___           ________ shares of the Common
Stock covered by such Warrant; or

    ___           the
maximum number of shares of Common Stock covered by such Warrant pursuant to the
cashless exercise procedure set forth in Section 2.

    

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or
boxes):

    

    ___           $__________
in lawful money of the United States; and/or

    ___           the
cancellation of such portion of the attached Warrant as is exercisable for a
total of _______ shares of Common Stock (using a Fair Market Value of $_______
per share for purposes of this calculation); and/or

    

    ___           the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2, to exercise this
Warrant with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in
Section 2.

    

    The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to _____________________________________________________ whose
address is _________________________________________________

    ______________________________________ .

    

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities
Act"), or pursuant to an exemption from registration under the Securities
Act.

    

    
      	
              Dated:___________________

            	
               

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

               

               

               

              (Address)

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit B

    

    

    FORM OF
TRANSFEROR ENDORSEMENT

    (To be
signed only on transfer of Warrant)

     

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of SHRINK NANOTECHNOLOGIES, INC. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of SHRINK
NANOTECHNOLOGIES, INC. with full power of substitution in the
premises.

     

    

    
      	
              Transferees

            	
              Percentage Transferred

            	
              Number Transferred

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    

    

    
      	
              Dated:  ______________,
      ___________

               

               

               

              Signed
      in the presence of:

               

               

              (Name)

               

               

              ACCEPTED
      AND AGREED:

              [TRANSFEREE]

               

               

               

              (Name)

               

            	
               

              (Signature
      must conform to name of holder as specified on the face of the
      warrant)

               

               

               

               

               

              (address)

               

               

               

              (address)ex101.htm

    EXHIBIT
10.1

    

    SECURITIES
PURCHASE AGREEMENT

    

    THIS
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
_____________________________  _____, 2010 by and between Shrink
Nanotechnologies, Inc., a Delaware corporation (the “Company” or “Borrower”) and the subscribers
identified herein and on the signature pages hereto (each a “Subscriber” and collectively
the "Subscribers").

    

    Principal
Amount of 12% Convertible
Notes:                                                                           $_____________________

    

    Number of
Common shares Underlying
Notes:                                                                           ______________________

    

    No. Class
A
Warrants:                                                                                                               
   ______________________

    

    RECITALS

    

    WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Rule 506 of
Regulation D and Section 4(2) of the Securities Act (as defined below), the
Company desires to offer and sell to certain accredited investors at face value,
an aggregate initially (and if not oversubscribed) of up to $3,000,000 principal
amount (the "Purchase
Price" or “Principal
Amount”) of subordinated 12% Convertible Promissory Notes, a form of
which is annexed hereto as Exhibit
1 (each,
a  “Note”),
which are convertible into shares of the Company's Common Stock, $0.001 par
value (the "Common
Stock") at a per share conversion price initially set at $.50 per share
as more fully set forth in the Note (“Conversion Price”), together
with Class A Common Stock Purchase Warrants to purchase Common Stock (the “Warrant Shares”), initially
exercisable at $1.00 per share, substantially in the form as annexed hereto as
Exhibit
2 (the “Class A
Warrants”).  The
Notes, shares of Common Stock issuable upon conversion of the Notes (the “Shares”), Class A Warrants and
Warrant Shares, are sometimes collectively referred to herein as the "Securities";

    

    NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and
for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and the Subscribers agree as
follows:

    

    1. Agreement to
Purchase.

     

    1.1           Closing
Date.                                The
“Closing Date” shall be
the date that the Purchase Price is transmitted by wire transfer or otherwise
credited to or for the benefit of the Company. This offering may be consummated
in one or more closings from time to time and each such date a “Closing
Date.”  The consummation of the transactions contemplated herein for
the first Closing Date shall take place not later than March 31, 2010 upon the
satisfaction or waiver of all conditions to closing set forth in this
Agreement.  Thereafter, additional closings may be held from time to
time for a period of up to 60 days or until $3,000,000 of Notes and Class A
Warrants are sold.

    

    1.1.1           Oversubscriptions.  The
Company may accept subscriptions in excess of $3,000,000 at its exclusive
option.

    

    1.2           Closing.   Subject
to the satisfaction or waiver of the terms and conditions of this Agreement, on
each Closing Date, each Subscriber closing thereupon shall purchase and the
Company shall issue to each Subscriber, a Note in the Principal Amount
designated on the signature page hereto for the Purchase Price indicated thereon
and a Class A Warrant exercisable for 50% of the number of Shares initially
issuable upon conversion of the Note (e.g. 50,000 Class A Warrants for each
$50,000 Principal Amount of Notes sold).

    

    2. Representations,
Warranties and Covenants of the Subscriber.  Each Subscriber
represents and warrants to the Company, and covenants for the benefit of the
Company and each other Subscriber, as follows:

     

    (a) The
Subscriber is an "accredited investor" as defined under Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities Act");

     

    (b) The
Subscriber is acquiring the Notes and Class A Warrants for its own account and
not with a view to any distribution of any of the Securities in violation of the
Securities Act;

     

    (c) The
Subscriber acknowledges that it has significant prior investment experience,
including investment in non-listed and non-registered securities, and that the
Subscriber recognizes the highly speculative nature of this
investment.  In particular, and without limitation, the Subscriber
represents that it understands that the Company’s securities have suffered
significant illiquidity and that its current Common Stock price is not
necessarily indicative of the Company’s value and that other restricted
shareholders are eligible to sell securities pursuant to Rule 144 of the
Securities Act. The Subscriber represents that it has been furnished with, and
has reviewed, all of the Company’s securities filings, its most recent private
offering circular, and all documents and other information regarding the Company
that the Subscriber had requested or desired to know and all other documents
which could be reasonably provided have been made available for the Subscriber’s
inspection and review;

     

    (d) The
Subscriber understands and acknowledges that the Notes shall be subordinate to
any existing indebtedness to Noctua Fund, L.P., which is an affiliate of the
Company, as well as interest or penalties (if any) thereon;

     

    (e) The
Subscriber acknowledges that the Securities have not been passed upon or
reviewed by the Securities and Exchange Commission.  The Subscriber
agrees that it will not sell, transfer or otherwise dispose of any of the Shares
until they are registered under the Securities Act, or unless an exemption from
such registration is available and that a legend substantially in the form as
provided in Section 4 below will be placed on the certificate(s) representing
the shares to such effect;

     

    (f) This
Agreement constitutes a valid and binding agreement and obligation of the
Subscriber enforceable against the Subscriber in accordance with its terms,
subject to limitations on enforcement by general principles of equity and
bankruptcy or other laws affecting the enforcement of creditors' rights
generally;

     

    (g) Subscriber
is not acquiring the Securities as part of a group, as such term is defined in
Section 13 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and is not
acting in concert with any person acting in such manner.  Subscriber
makes its own voting and dispositive decisions and has not agreed to grant any
proxy or enter into any form of voting trust, agreement or similar arrangement
with respect to the Shares other than as set forth in the Waiver of even date
herewith;

     

    (h) This
Agreement has been duly authorized, validly executed and delivered on behalf of
the Subscriber, and the Subscriber has full power and authority to execute and
deliver this Agreement and the other agreements and documents contemplated
hereby and to perform his obligations hereunder and thereunder; and

     

    (i)           Subscriber
has not paid any finders fees, commissions or broker fees in connection with
his/her/its investment herein and has not been solicited by means of any form of
advertisement, public dissemination or solicitation.

    

    3. Representations,
Warranties and Covenants of the Seller.  The Company
represents and warrants to the Subscriber, and covenants for the benefit of the
Subscriber, as follows:

     

    (a) Organization and
Qualification.  The Company is duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the State of
Delaware, with the requisite power and authority to own and use its properties
and assets and to carry on its business as currently conducted.  The
Company is not in any material violation of any of the provisions of its
certificate of incorporation, bylaws or other organizational or charter
documents.

     

    (b) Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated herein
and otherwise to carry out its obligations hereunder, subject to consents and
waiver of anti dilution provisions of various existing
shareholders.  The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of the
Company and no further action is required by the Company in connection
therewith.  This Agreement has been duly executed by the Company and,
when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies, or (ii) laws relating to the availability of specific
performance, injunctive relief or other equitable principles of general
application.

     

    (c) No Violation or
Conflict. Assuming the representations and warranties of the Subscribers
in Section 2 are true and correct, neither the issuance and sale of the
Securities nor the performance of the Company’s obligations under this
Agreement, the Note and all other agreements entered into by the Company
relating thereto by the Company will:

     

     (i) violate, conflict with,
result in a breach of, or constitute a default (or an event which with the
giving of notice or the lapse of time or both would be reasonably likely to
constitute a default) under (A) the articles or certificate of incorporation,
charter or bylaws of the Company, (B) to the Company's knowledge, any decree,
judgment, order, law, treaty, rule, regulation or determination applicable to
the Company of any court, governmental agency or body, or arbitrator having
jurisdiction over the Company or over the properties or assets of the Company or
any of its Affiliates, (C) the terms of any bond, debenture, note or any other
evidence of indebtedness, or any agreement, stock option or other similar plan,
indenture, lease, mortgage, deed of trust or other instrument to which the
Company or any of its Affiliates is a party, by which the Company or any of its
Affiliates is bound, or to which any of the properties of the Company or any of
its Affiliates is subject, or (D) the terms of any "lock-up" or similar
provision of any underwriting or similar agreement to which the Company, or any
of its Affiliates is a party except the violation, conflict, breach, or default
of which would not have a Material Adverse Effect; or

     

    (ii) result in the creation or
imposition of any lien, charge or encumbrance upon the Securities or any of the
assets of the Company or any of its Affiliates except as described herein;
or

     

    (iii) except as have been waived,
result in the activation of any anti-dilution rights or a reset or re-pricing of
any debt or security instrument of any other creditor or equity holder of the
Company, nor result in the acceleration of the due date of any obligation of the
Company.

    

    (d) Issuance of the
Securities.  The Securities have been, or will be, duly and
validly authorized and on the date of issuance of the Shares upon conversion of
the Notes, the Shares will be duly and validly issued, fully paid and
non-assessable and if registered pursuant to the 1933 Act and resold pursuant to
an effective registration statement will be free trading and unrestricted, free
and clear of all liens.

     

    (e) SEC Reports; Financial
Statements.  The Company has filed all reports required to be
filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof
(or such shorter period as the Company was required by law to file such reports)
(the foregoing materials, as finally amended being collectively referred to
herein as the "SEC
Reports") on a timely basis or has timely filed a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension.  As of their respective dates, the SEC Reports, as
amended, complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent that such SEC Reports may have been
subsequently amended or supplemented to correct such misstatement or omission or
to correct information relating to the Company’s internal controls.

     

    (f) Certain Registration
Matters. Assuming the accuracy of each Subscriber’s representations and
warranties, no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Subscriber under this
Agreement.

     

    4. Other
Agreements of the Parties.

     

    5.1           Other
Agreements of the Parties. (a) The Company and each Subscriber agrees
that the Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of the Securities
other than pursuant to an effective registration statement, to the Company, to
an affiliate of a Subscriber or in connection with a pledge as contemplated in
Section 5.1(b),
the Company may require the transferor thereof to provide to the Company with an
opinion of counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Shares under the
Securities Act.  As a condition of transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement.

    

    (b)           (i)
Certificates evidencing the Shares and Warrant Shares will contain substantially
the following legend, until such time as such securities are sold pursuant to an
exemption from the Securities Act registration requirements:

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

     

    (ii)  The
Notes and Class A Warrants shall bear substantially the following
legend:

     

    “NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE/EXERCISABLE, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES. "

     

    5.2           Conversion
of Notes; Procedure.  (a)  Upon the conversion of a
Note or part thereof, the Company shall, at its own cost and expense, take all
necessary action, issue or cause the transfer agent to issue, stock certificates
in the name of Subscriber (or its permitted nominee) or such other persons as
designated by Subscriber and in such denominations to be specified at conversion
representing the number of Shares issuable upon such conversion.

     

    (b)           A
Subscriber will give notice of its decision to exercise its right to convert the
Note, interest, or part thereof by telecopying, or otherwise delivering a
completed Notice of Conversion (a form of which is annexed as “Exhibit A” to the
Note) to the Company via confirmed telecopier transmission or otherwise pursuant
to Section 13(a) of this Agreement.  Such Subscriber will not be
required to surrender the Note until the Note has been fully converted or
satisfied.  Each date on which a Notice of Conversion is telecopied to
the Company in accordance with the provisions hereof by 6 PM Eastern Time
(“ET”) (or if received
by the Company after 6 PM ET or at any time or a non-business day then the next
business day) shall be deemed a “Conversion
Date.”  The Company will exercise best efforts to issue or
cause the Company’s transfer agent to issue/transmit the Company's Common Stock
certificates representing the Shares issuable upon conversion of the Note to
such Subscriber via express courier for receipt by such Subscriber within
fourteen (14) business days after receipt by the Company of the Notice of
Conversion (such seventh day being the "Delivery Date").  In
the event the Shares are electronically transferable, then delivery of the
Shares may be made by electronic transfer (with appropriate legend) provided
request for such electronic transfer has been made by the
Subscriber.   A Note representing the balance of the Note not so
converted will be provided by the Company to such Subscriber if requested by
Subscriber, provided such Subscriber delivers the original Note to the
Company.  In the event that a Subscriber elects not to surrender a
Note for reissuance upon partial payment or conversion of a Note, such
Subscriber hereby indemnifies the Company against any and all loss or damage
attributable to a third-party claim in an amount in excess of the actual amount
then due under the Note.

     

    (c)           The
Company shall not be responsible for incidental damages or potential “lost
profits” in the event that Shares are not sold timely or at profitable rates, if
at all.

     

    5.3.           Conversion
Price of Note.
The Notes shall be convertible at a fixed Conversion Price of $.50 per
share, subject to adjustment in the event of stock split, combination, stock
dividend or reorganization as provided in the Note.  In the event of a
Borrower Mandated Conversion (which may only be after an Event of Default or
after the Maturity Date), as defined in the Note, the Conversion Price shall be
reduced (but not increased) to such amount as equals 80% of the Conversion Price
then in effect (i.e. $.40 based on the initial Conversion Price).

     

    5.4           Damages.
In the event the Subscriber is entitled to receive any liquidated damages
pursuant to the Transactions, the Subscriber may elect to receive the greater of
actual damages or such liquidated damages.

     

    5.5           Existing
Notes. The Notes shall be junior and subordinated in payment and
priority, to the existing outstanding indebtedness owed to the Noctua Fund,
L.P., an entity controlled by the Company’s affiliates, along with any interest
or penalties thereon, if any.

     

    5.6           Placement
Agent Fees/Expenses.                                                                The
Company acknowledges that it may retain one or more placement agents (who are
appropriately FINRA registered) to act as its managing placement agent in
connection with the sale of Notes and Warrants.  The Company has
reserved and may pay, a cash commission of up to 6% of the amount raised and a
non-accountable expense allowance, and blue sky related costs.  The
Company may also be required to pay any legal fees (of its own as well as
placement agent counsel), escrow and disbursement costs, printing, consulting or
due diligence fees of a placement agent in connection any
financing.

     

    5. Binding
Effect; Assignment.  This Agreement is
not assignable by the Company or the Subscriber without the prior written
consent of the other party.  This Agreement and the provisions hereof
shall be binding and shall inure to the benefit of the Company and its
successors and permitted assigns with respect to the obligations of the
Subscriber under this Agreement, and to the benefit of the Subscriber and its
successors and permitted assigns with respect to the obligations of the Company
under this Agreement.

     

    6. Governing
Law; Jurisdiction.  This Agreement
shall be governed by and interpreted in accordance with the laws of the State of
California, County of San Diego, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of
another jurisdiction.

     

    7. Entire
Agreement.  This Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein.  This
Agreement may not be amended or any provision hereof waived in whole or in part,
except by a written amendment signed by both of the parties.

     

    8. Survival.  The
representations and warranties of the Company and the Subscriber shall survive
the Closing hereunder.

     

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
        
          

          -  -

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    [Counter
Part Signature Page of Shrink Nanotechnologies, Inc., to Securities Purchase
Agreement Between Subscriber and Shrink Nanotechnologies, Inc.]

    

    IN
WITNESS WHEREOF, this Agreement was duly executed on the date first written
above and, the Company hereby issues to Subscriber such number of 12%
Convertible Notes and Class A Common Stock Purchase Warrants as is set forth on
the signature page of Subscriber, to this Agreement.

    

    SHRINK
NANOTECHNOLOGIES, INC.

    

    

    By:_______________________________________

          Name:

          Title:
President

    

    

    

    
      
        
          

          -  -

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    [Counter
Part Signature Page of Subscriber, to Securities Purchase Agreement Between
Subscriber and Shrink Nanotechnologies, Inc.]

    

    __________________________________________

     Print Name of
Subscriber:

    

    __________________________________________

     (Signature)

    __________________________________________

    Print name and title, if Subscriber is
an entity

    

    Investment Amount:
$                                                                           

    (same as amount identified in the line
below)

    

    Principal Amount of

    12% Convertible Notes:
$_____________________

    

    No. Class A
Warrants:   ______________________

    

    Social Security
No./EIN:                                                                           

    

    ADDRESS FOR NOTICE

    

    Street:                                                                           

    

    City/State/Zip:                                                                           

    

    Attention:                                                                           

    

    Tel:           

    

    Fax:           

    

    

     

    

     

    
      
        
          

          -  -

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
1

     

    Form of 12% Convertible
Promissory Note

     

    
      
        
          

          -  -

          

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
2

     

    Form of Class A Common Stock
Purchase Warrant

     

    

     

    
      
        
          

          -  -

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