Document:

EX-10.5 SERIES C WARRANT TO PURCHASE SHARES

 

Exhibit 10.5

THIS WARRANT OR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO,
(ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7
OF THIS WARRANT.

SERIES C WARRANT TO PURCHASE SHARES

OF COMMON STOCK (this “WARRANT”)

Warrant No C-                    

Cruisestock, Inc., a Texas corporation (the “COMPANY”), hereby certifies that, for value received,
                     (the “HOLDER”) is the registered holder of a warrant (the “WARRANT”) to subscribe
for and purchase                      shares of the fully paid and nonassessable Common Stock (as
adjusted pursuant to Section 4 hereof, the “WARRANT SHARES”) of the Company, at a price per
share equal to forty cents ($0.40) (the “WARRANT PRICE,” as adjusted pursuant to Section 4
hereof), subject to the provisions and upon the terms and conditions hereinafter set forth.

As used herein, (a) the term “COMMON STOCK” shall mean the Company’s presently authorized Common
Stock, par value $.001 per share, and any stock into or for which such Common Stock may hereafter
be converted or exchanged, (b) the term “DATE OF GRANT” shall mean February ___, 2007, and (c) the
term “OTHER WARRANTS” shall mean any warrant issued upon transfer or partial exercise of this
Warrant. The term “WARRANT” as used herein shall be deemed to include Other Warrants unless the
context hereof or thereof clearly requires otherwise. The Warrant evidenced by this warrant
certificate is a portion of a series of like warrants (collectively, the “SERIES WARRANTS”)
exercisable for the purchase of up to an aggregate of up to 525,000 shares of the Company’s Common
Stock (the “SERIES WARRANT SHARES”), on the Date of Grant, which Series Warrants are evidenced by
certificates of like tenor (the “SERIES WARRANT CERTIFICATES”) that have been issued pursuant to
that certain Securities Purchase and Exchange Agreement of even date herewith (the “PURCHASE
AGREEMENT”).

	1.	 	Term. The purchase right represented by this Warrant is exercisable, in whole or in
part, at any time after the earlier of (a) the date the Registration Statement on Form SB-2
(or an alternative available form if the Company is not eligible to file a Form SB-2) covering
the underlying Warrant Shares is declared effective; or (b) twelve (12) months from the Date
of Grant (the “INITIAL EXERCISE DATE”) and from time to time thereafter through and including
the close of business on the date five (5) years from the Initial Exercise Date (the
“EXPIRATION DATE”).

 

 

	2.	 	Exercise; Expiration; Redemption.

	 	a.	 	Method of Exercise; Payment; Issuance of New Warrant. Subject to Section
1 hereof, the purchase right represented by this Warrant may be exercised by the
holder hereof, in whole or in part and from time to time after the Initial Exercise
Date, by the surrender of this Warrant (with the notice of exercise form attached
hereto as Exhibit A duly executed) at the principal office of the Company and
by the payment to the Company of an amount equal to the then applicable Warrant Price
multiplied by the number of Warrant Shares then being purchased. The person or persons
in whose name(s) any certificate(s) representing shares of Common Stock shall be
issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of
record of, and shall be treated for all purposes as the record holder(s) of, the shares
represented thereby (and such shares shall be deemed to have been issued) immediately
prior to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be delivered to the holder
hereof as soon as possible and in any event within thirty (30) days after such exercise
and, unless this Warrant has been fully exercised, a new Warrant representing the
portion of the Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the holder hereof as soon as possible
and in any event within such thirty (30) day period.
	 
	 	b.	 	Expiration. In the event that any portion of this Warrant is unexercised as of
the Expiration Date, such portion of this Warrant shall automatically expire, and the
Holder shall have no rights with respect to such unexercised portion of this Warrant.
	 
	 	c.	 	Maximum. In no event shall any holder be entitled to exercise any Warrant
Shares to the extent that, after such exercise, the sum of the number of shares of
Common Stock beneficially owned by any holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of the Warrant Shares or any unexercised right held by any holder
subject to a similar limitation), would result in beneficial ownership by any holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock (after
taking into account the shares to be issued to the holder upon such exercise). For
purposes of this Section 2(c), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.
Nothing herein shall preclude the holder from disposing of a
sufficient number of other shares of Common Stock beneficially owned by the holder so as to thereafter permit the
continued exercise of this Warrant.

	3.	 	Stock Fully Paid Reservation of Shares. All Warrant Shares that may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance pursuant to the
terms and conditions herein, be fully paid and non-assessable, and free from all taxes (other
than any taxes determined with respect to, or based upon, the income of the person

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	 	 	to whom such shares are issued), liens and charges (other than liens or charges created by
actions of the holder of this Warrant or the person to whom such shares are issued), and
pre-emptive rights with respect to the issue thereof. During the period within which the
rights represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented by this Warrant.

	4.	 	Adjustment of Warrant Price and Number of Shares. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:

	 	a.	 	Reclassification or Merger. In case of any reclassification, change or
conversion of securities of the class issuable upon exercise of this Warrant (other
than a change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any merger of
the Company with or into another corporation (other than a merger with another
corporation in which the Company is the acquiring and the surviving corporation and
which does not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to the holder of this
Warrant a new Warrant so that the holder of this Warrant shall have the right to
receive, at a total purchase price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the shares of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of shares of
stock, other securities, money and property receivable upon such reclassification,
change or merger by a holder of the number of shares of Common Stock then purchasable
under this Warrant. Such new Warrant shall provide for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 4. The provisions of this Section 4(a) shall similarly apply to
successive reclassifications, changes, mergers and transfers. Notwithstanding the
foregoing, this Section 4(a) shall not apply to the Reverse Merger (as defined
in the Certificate of Designations, Preferences and Rights of the Series A Convertible
Preferred Stock (the “CERTIFICATE OF DESIGNATIONS”).
	 
	 	b.	 	Subdivision or Combination of Shares. If at any time while this Warrant remains
outstanding and unexpired the Company shall subdivide or combine its outstanding shares
of Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision and increased in the case of a combination, effective at the close of
business on the date the subdivision or combination becomes effective.
	 
	 	c.	 	Stock Dividends. If at any time while this Warrant is outstanding and unexpired
the Company shall pay a dividend with respect to Common Stock payable in Common Stock,
then the Warrant Price shall be adjusted, from and after the date

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	 	 	 	of determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Warrant Price in effect immediately
prior to such date of determination by a fraction (i) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior to such
dividend, and (ii) the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend.
	 
	 	d.	 	Rights Offerings. In case the Company shall, at any time after the Date of
Grant, issue rights, options or warrants to the holders of equity securities of the
Company, entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible or exchangeable into Common Stock) (excluding Exempt Securities,
as such term is defined in Section 4(l) below) at a price per share of Common
Stock (or having a conversion or exchange price per share of Common Stock if a security
convertible or exchangeable into Common Stock) less than the Series A Conversion Price
(as defined in the Certificate of Designations) per share of Common Stock on the record
date for such issuance (or the date of issuance, if there is no record date), the
Warrant Price to be in effect on and after such record date (or issuance date, as the
case may be) shall be reduced, concurrently with such issue, to a price equal to the
consideration received per share in connection with the issuance of such Additional
Shares of Common Stock. In case such purchase or subscription price may be paid in part
or in whole in a form other than cash, the fair value of such consideration shall be
determined by the Board of Directors of the Company in good faith as set forth in a
duly adopted board resolution certified by the Company’s Secretary or Assistant
Secretary. Such adjustment shall be made successively whenever such an issuance occurs;
and in the event that such rights, options, warrants, or convertible or exchangeable
securities are not so issued or expire or cease to be convertible or exchangeable
before they are exercised, converted, or exchanged (as the case may be), then the
Warrant Price shall again be adjusted to be the Warrant Price that would then be in
effect if such issuance had not occurred. Additionally, the Company shall adjust the
number of Warrant Shares issued upon any exercise of this Warrant after the adjustment
required pursuant to this Section 4(e) but prior to the date such subsequent
adjustment is made, in order to equitably reflect the fact that such rights, options,
warrants, or convertible or exchangeable securities were not so issued or expired or
ceased to be convertible or exchangeable before they were exercised, converted, or
exchanged (as the case may be).
	 
	 	e.	 	Other Issuances of Securities. In case the Company or any Subsidiary shall, at
any time after the Date of Grant, issue shares of Common Stock, or rights, options,
warrants or convertible or exchangeable securities containing the right to subscribe
for or purchase shares of Common Stock (excluding (i) shares, rights, options,
warrants, or convertible or exchangeable securities issued in any of the transactions
described in Sections 4(a), 4(b), 4(c), or 4(d) above; (ii) shares issued upon
the exercise of such rights, options or warrants or upon conversion or exchange of such
convertible or exchangeable securities; (iii) this Warrant and any shares issued upon
exercise thereof; and (iv) Exempt Securities (as defined in Section 4(l) below), at a
price per share of Common Stock (determined in the case

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	 	 	 	of such rights, options, warrants, or convertible or exchangeable securities by
dividing (x) the total amount receivable by the Company in consideration of the sale
and issuance of such rights, options, warrants, or convertible or exchangeable
securities, plus the total minimum consideration payable to the Company upon
exercise, conversion, or exchange thereof by (y) the total maximum number of shares
of Common Stock covered by such rights, options, warrants, or convertible or
exchangeable securities) lower than the Series A Conversion Price (as defined in
Certificate of Designations), then the Warrant Price shall be reduced, concurrently
with such issue, to a price equal to the consideration received per share in
connection with the issuance of such Additional Shares of Common Stock. For the
purposes of such adjustment, the maximum number of shares of Common Stock which the
holder of any such rights, options, warrants or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of such sale and issuance and the
consideration received by the Company therefore shall be deemed to be the
consideration received by the Company for such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum consideration or premium
stated in such rights, options, warrants, or convertible or exchangeable securities
to be paid for the shares of Common Stock covered thereby. In case the Company shall
sell and issue shares of Common Stock, or rights, options, warrants, or convertible
or exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then, in determining the price per share of
Common Stock and the consideration received by the Company for purposes of the first
sentence of this Section 4(h), the Board of Directors of the Company shall
determine, in good faith, the fair value of said property, and such determination
shall be described in a duly adopted board resolution certified by the Company’s
Secretary or Assistant Secretary. In case the Company shall sell and issue rights,
options, warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock together with one (1) or more other
securities as a part of a unit at a price per unit, then, in determining the price
per share of Common Stock and the consideration received by the Company for purposes
of the first sentence of this Section 4(h), the Board of Directors of the Company
shall determine, in good faith, which determination shall be described in a duly
adopted board resolution certified by the Company’s Secretary or Assistant
Secretary, the fair value of the rights, options, warrants, or convertible or
exchangeable securities then being sold as part of such unit. Such adjustment shall
be made successively whenever such an issuance occurs, and in the event that such
rights, options, warrants, or convertible or exchangeable securities expire or cease
to be convertible or exchangeable before they are exercised, converted, or exchanged
(as the case may be), then the Warrant Price shall again be adjusted to the Warrant
Price that would then be in effect if such sale and issuance had not occurred, but
such subsequent adjustment shall not affect the number of Warrant Shares issued upon
any exercise of the Warrant prior to the date such subsequent adjustment is made.

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	 	f.	 	Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the
number of Warrant Shares purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Warrant Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the numerator
of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter
	 
	 	g.	 	Determination of Fair Market Value. For purposes of this Section 4,
“FAIR MARKET VALUE” of a share of Common Stock as of a particular date (the
“DETERMINATION DATE”) shall mean (i) if shares of Common Stock are traded on a national
securities exchange (an “EXCHANGE”), the weighted average of the closing sale price of
a share of the Common Stock of the Company on the last five (5) trading days prior to
the Determination Date reported on such Exchange as reported in The Wall Street Journal
(weighted with respect to the trading volume with respect to each
such day); (ii) if shares of Common Stock are not traded on an Exchange but trade in the over-the-counter
market and such shares are quoted on the National Association of Securities Dealers
Automated Quotations System (“NASDAQ”), the weighted average of the closing sale price
of a share of the Common Stock of the Company on the last five (5) trading days prior
to the Determination Date reported on NASDAQ as reported in The Wall Street Journal
(weighted with respect to the trading volume with respect to each such day); (iii) if
such shares are an issue for which last sale prices are not reported on NASDAQ, the
average of the closing sale price, in each case on the last five (5) trading days (or
if the relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding business day on which there was such a price
or quotation) prior to the Determination Date as reported by the Over the Counter
Bulletin Board (the “OTCBB”), the National Quotation Bureau, Incorporated, or any other
successor organization; (iv) if no closing sales price is reported for the Common Stock
by the OTCBB, National Quotation Bureau, Incorporated or any other successor
organization for such day, the average of the high and low bid and asked price of any
of the market makers for the Common Stock as reported on the OTCBB or in the “pink
sheets” by the Pink Sheets, LLC on the last five (5) trading days; or (v) if no price
can be determined on the basis of the above methods of valuation, then the judgment of
valuation shall be determined in good faith by the Board of Directors of the Company,
which determination shall be described in a duly adopted board resolution certified by
the Company’s Secretary or Assistant Secretary. If the Board of Directors of the
Company is unable to determine any Valuation (as defined below), or if the holders of
at least fifty percent (50%) of all of the Warrant Shares then issuable hereunder
(collectively, the “REQUESTING HOLDERS”) disagree with the Board’s determination of any
Valuation by written notice delivered to the Company within five (5) business days
after the determination thereof by the Board of Directors of the Company is
communicated to holders of the Warrants affected thereby, which notice specifies a
majority-in-interest of the Requesting Holders’ determination of such Valuation, then
the Company and a majority-in-interest of the Requesting Holders shall select a

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	 	 	 	mutually acceptable investment banking firm of national reputation which has not had
a material relationship with the Company or any officer of the Company within the
preceding two (2) years, which shall determine such Valuation. Such investment
banking firm’s determination of such Valuation shall be final, binding and
conclusive on the Company and the holders of all of the Warrants issued hereunder
and then outstanding. Any and all costs and fees of such investment banking firm
shall be borne equally by the Company and the Requesting Holders, however, if the
Valuation is within ninety percent (90%) of either party’s valuation, then the other
party shall pay all of the costs and fees of such investment banking firm. For
purposes of this Section 4(g), the term “VALUATION” shall mean the
determination, to be made initially by the Board of Directors of the Company, of the
fair market value per share of Common Stock pursuant to clause (v) above.
	 
	 	h.	 	Subsequent Changes. If, at any time after any adjustment of the Warrant Price
shall have been made hereunder as the result of any issuance, sale or grant of any
rights, options, warrants or convertible or exchangeable securities, any of such
rights, options or warrants or the rights of conversion or exchange associated with
such convertible or exchangeable securities shall expire by their terms or any of such
rights, options, warrants or convertible or exchangeable securities shall be
repurchased by the Company or a Subsidiary for a consideration per underlying share of
Common Stock not exceeding the amount of such consideration received by the Company in
connection with the issuance, sale or grant of such rights, options, warrants or
convertible or exchangeable securities, the Warrant Price then in effect shall
forthwith be increased to the Warrant Price that would have been in effect if such
expiring right, option or warrant or rights of conversion or exchange or such
repurchased rights, options, warrants or convertible or exchangeable securities had
never been issued. Similarly, if at any time after any such adjustment of the Warrant
Price shall have been made pursuant to Section 4(e) above (i) any additional
aggregate consideration is received or becomes receivable by the Company in connection
with the issuance or exercise of such rights, options, warrants or convertible or
exchangeable securities; or (ii) there is a reduction in the conversion or exchange
ratio applicable to such convertible or exchangeable securities so that fewer shares of
Common Stock will be issuable upon the conversion or exchange thereof or there is a
decrease in the number of shares of Common Stock issuable upon exercise of such rights,
options or warrants (except where such reduction or decrease results from a combination
of shares described in Section 4(b) above), the Warrant Price then in effect
shall be forthwith readjusted to the Warrant Price that would have been in effect had
such changes taken place at the time that such rights, options, warrants or convertible
or exchangeable securities were initially issued, granted or sold. In no event shall
any readjustment under this Section 4(h) affect the validity of any Warrant
Shares issued upon any exercise of this Warrant prior to such readjustment.
	 
	 	i.	 	Excluded Transactions. Notwithstanding the foregoing, Sections 4(d)
or 4(e) above shall not apply to: (i) the Company’s offering of up to 1,500,000
shares of Series A Convertible Preferred Stock, with related Series A Warrants and
Series

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	 	 	 	B Warrants pursuant to the Securities Purchase and Share Exchange Agreement of even
date herewith (the “OFFERING”); (ii) shares of Common Stock issued or deemed issued
to employees or directors of, or consultants to, the Company or any of its
subsidiaries for services rendered pursuant to a plan, agreement, or arrangement
approved by the Board of Directors of the Company; (iii) the issuance of securities
pursuant to the conversion or exercise of convertible or exercisable securities
outstanding on the date hereof; (iv) shares of Common Stock issued in connection
with any stock split or stock dividend; (v) the issuance of Series A Convertible
Preferred Stock, Series A Warrants or Series B Warrants in connection with the
Offering; (vi) the issuance of shares of Common Stock upon conversion or exercise,
as applicable, of the Series A Convertible Preferred Stock, Series A Warrants or
Series B Warrants in connection with the Offering, in each case, provided the
issuance is pursuant to the terms of such option or convertible security; (vii)
warrants issued to Midtown Partners & Co., LLC, as placement agent in connection
with Offering, and shares of Common Stock issued in connection with the exercise
thereof; (viii) shares of Common Stock issued or issuable in connection with a bona
fide joint venture or business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock, or otherwise; provided
that any such issuance is approved by the Board of Directors; (ix) the Reverse
Merger (as defined in the Certificate of Designations of the Series A Convertible
Preferred Stock); and (x) Series A Warrants and Series B Warrants issued pursuant to
Section 2 of the Investor Rights Agreement of even date herewith (the
“INVESTOR RIGHTS AGREEMENT”)(collectively, the “EXEMPT SECURITIES”).

	5.	 	Notice of Adjustments. Whenever the Warrant Price or the number of Warrant Shares
purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company
shall deliver to the holder of this Warrant a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the Warrant Price and
the number of Warrant Shares purchasable hereunder after giving effect to such adjustment

	6.	 	Fractional Shares. No fractional shares of Common Stock will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company shall make a
cash payment therefor based on the fair market value (as determined in accordance with
Section 4(f) above) of a share of Common Stock on the date of exercise, or round up to
the next whole number of shares, at the Company’s option.

	7.	 	Compliance with Securities Act and Investor Rights Agreement; Disposition of Warrant or
Warrant Shares.

	 	a.	 	Compliance with Securities Act. The holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued upon
exercise hereof are being acquired for investment purposes only and that such holder
will not offer, sell or otherwise dispose of this Warrant, or any shares of Common
Stock to be issued upon exercise hereof, except under circumstances

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	 	 	 	which will not result in a violation of the Securities Act. Upon exercise of this
Warrant, the holder hereof shall confirm in writing, by executing the form attached
as Schedule 1 to Exhibit A hereto, that the shares of Common Stock
so purchased are being acquired for investment and not with a view toward
distribution or resale. This Warrant and all shares of Common Stock issued upon
exercise of this Warrant (unless registered under the Securities Act) shall be
stamped or imprinted with a legend in substantially the following form:

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN
OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE
ISSUED DIRECTLY OR INDIRECTLY.”

	b.	 	Representations. In addition, in connection with the issuance of this Warrant,
the holder specifically represents to the Company by acceptance of this Warrant as
follows:

     (i) The holder is aware of the Company’s business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant. The holder is
acquiring this Warrant for its own account for investment purposes only and not
with a view to, or for the resale in connection with, any “distribution” thereof
for purposes of the Securities Act.

     (ii) The holder understands that this Warrant and the Warrant Shares have not
been registered under the Securities Act in reliance upon a specific exemption
there from, which exemption depends upon, among other things, the bona fide nature
of the holder’s investment intent as expressed herein. In this connection, the
holder understands that, in the view of the SEC, the statutory basis for such
exemption may be unavailable if the holder’s representation was predicated solely
upon a present intention to hold the Warrant and the Warrant Shares for the minimum
capital gains period specified under applicable tax laws, for a deferred sale, for
or until an increase or decrease in the market price of the Warrant and the Warrant
Shares, or for a period of one (1) year or any other fixed period in the future.

     (iii) The holder further understands that this Warrant and the Warrant Shares
must be held indefinitely unless subsequently registered under the Securities Act
and any applicable state securities laws, or unless exemptions from registration
are otherwise available.

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     (iv) The holder is aware of the provisions of Rule 144 and 144A, promulgated
under the Securities Act, which, in substance, permit limited public resale of
“restricted securities” acquired, directly or indirectly, from the issuer thereof
(or from an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other things:
the availability of certain public information about the Company, the resale
occurring not less than one (1) year after the party has purchased and paid for the
securities to be sold; the sale being made through a broker in an unsolicited
“broker’s transaction” or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934, as amended) and the
amount of securities being sold during any three (3) month period not exceeding the
specified limitations stated therein.

     (v) The holder further understands that at the time it wishes to sell this
Warrant and the Warrant Shares there may be no public market upon which to make
such a sale, and that, even if such a public market then exists, the Company may
not be satisfying the current public information requirements of Rule 144 and 144A,
and that, in such event, the holder may be precluded from selling this Warrant and
the Warrant Shares under Rule 144 and 144A even if the one (1)-year minimum holding
period has been satisfied.

     (vi) The holder further understands that, in the event that all of the
requirements of Rule 144 and 144A are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration exemption
will be required; and that, notwithstanding the fact that Rule 144 and 144A are not
exclusive, the Staff of the SEC has expressed its opinion that persons proposing to
sell private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 and 144A will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in such
transactions do so at their own risk.

	c.	 	Compliance with Investor Rights Agreement. The holder of this Warrant, by
acceptance hereof, understands and agrees that this Warrant is subject to, and the
transfer of the Warrant Shares may be prohibited by, the Investor Rights Agreement, and
holder hereby specifically understands and agrees as follows:

THIS WARRANT, AND THE SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES
EVIDENCED HEREBY, ARE SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND
CONDITIONS OF THAT CERTAIN INVESTOR RIGHTS AGREEMENT, OF EVEN DATE HEREWITH, BY AND
AMONG THE HOLDER, THE COMPANY, AND CERTAIN HOLDERS OF STOCK OF THE COMPANY, AND, BY
ACCEPTING ANY INTEREST HEREIN, THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO
AGREE TO AND SHALL BE BOUND BY ALL OF THE PROVISIONS OF SUCH AGREEMENT. COPIES OF
THE INVESTOR RIGHTS AGREEMENT MAY

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BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY’S SECRETARY.

	d.	 	Exchange. This Warrant may be exchanged, without payment of any service charge,
for one (1) or more new Warrants of like tenor exercisable for the same aggregate
number of shares of Common Stock upon surrender to the Company by the registered holder
hereof in person or by legal representative or by attorney duly authorized in writing
and, upon issuance of the new Warrant or Warrants, the surrendered Warrant shall be
cancelled and disposed of by the Company.

	e.	 	Disposition of Warrant or Warrant Shares. With respect to any offer, sale or
other disposition of this Warrant, or any Warrant Shares acquired pursuant to the
exercise of this Warrant prior to registration of such Warrant or Warrant Shares, the
holder hereof and each subsequent holder of this Warrant agrees to give written notice
to the Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder’s counsel, if reasonably requested by the Company, to
the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Securities Act as then in effect or any
federal or state law then in effect) of this Warrant or such Warrant Shares and
indicating whether or not under the Securities Act certificates for this Warrant or
such Warrant Shares to be sold or otherwise disposed of require any restrictive legend
as to applicable restrictions on transferability in order to ensure compliance with
applicable laws. Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly as practicable, shall
notify such holder that such holder may sell or otherwise dispose of this Warrant or
such Warrant Shares, all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this Section 7(e) that
the opinion of counsel for the holder is not reasonably satisfactory to the Company,
the Company shall so notify the holder promptly after such determination has been made
and neither this Warrant nor any Warrant Shares shall be sold or otherwise disposed of
until such disagreement has been resolved. The foregoing notwithstanding, this Warrant
or such Warrant Shares may (i) as to such federal laws, be offered, sold or otherwise
disposed of in accordance with Rule 144 and 144A under the Securities Act, provided
that the Company shall have been furnished with such information as the Company may
reasonably request to provide a reasonable assurance that the provisions of Rule 144
and 144A have been satisfied and (ii) be offered, sold, distributed or otherwise
transferred to Affiliates of the Holder without regard to this Section 7(e),
but only if the Company is in receipt of an opinion of counsel as to the permissibility
of such transfer under federal and state securities laws and an investor representation
letter from the transferee, in form and substance reasonably satisfactory to the
Company. Each certificate representing this Warrant or the Warrant Shares thus
transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with such
laws, unless, in the aforesaid opinion of counsel for the holder, such legend is not
required in order to ensure compliance with such laws. The Company may issue stop
transfer instructions to its transfer agent or, if

11

 

acting as its own transfer agent, the Company may stop transfer on its corporate
books, in connection with such restrictions. As used herein, “AFFILIATE OF THE
HOLDER” shall mean (x) any owner, shareholder, partner or member of the Holder, and
(y) any other Person that directly or indirectly, through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
Holder.

	9.	 	Rights as Stockholders; Information. No holder of this Warrant, as such, shall be
entitled to vote or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the holder of this Warrant, as such, any
of the rights of a stockholder of the Company or any right to vote for the election of the
directors or upon any matter submitted to stockholders at any meeting thereof, or to receive
notice of meetings, until this Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise hereof shall have become deliverable, as provided herein.

	10.	 	Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the party against
which enforcement of the same is sought

	11.	 	Notices. Unless otherwise specifically provided herein, all communications under this
Warrant shall be in writing and shall be deemed to have been duly given (i) on the date of
service if served personally on the party to whom notice is to be given; (ii) on the day of
transmission if sent by facsimile transmission to the number shown on the books of the
Company, and telephonic confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the day after delivery to Federal Express or similar overnight courier;
or (iv) on the fifth day after mailing, if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid, and properly addressed, return
receipt requested, to each such holder at its address as shown on the books of the Company or
to the Company at the address indicated therefor on the signature page of this Warrant. Any
party hereto may change its address for purposes of this Section by giving the other party
written notice of the new address in the manner set forth herein.

	12.	 	Binding Effect on Successors. This Warrant shall be binding upon any corporation
succeeding the Company by merger, consolidation or acquisition of all or substantially all of
the Company’s assets, and all of the obligations of the Company relating to the Common Stock
issuable upon the exercise or conversion of this Warrant shall survive the exercise,
conversion and termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the holder hereof. The
Company will, at the time of the exercise or conversion of this Warrant, in whole or in part,
upon request of the holder hereof but at the Company’s expense, acknowledge in writing its
continuing obligation to the holder hereof in respect of any rights to which the holder hereof
shall continue to be entitled after such exercise or conversion in accordance with this
Warrant; provided, however, that the failure of the

12

 

	 	 	holder hereof to make any such request shall not affect the continuing obligation of the
Company to the holder hereof in respect of such rights.

	13.	 	Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that,
upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate and, in the case of any
loss, theft or destruction, upon receipt of an executed lost securities bond or indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender
and cancellation of such Warrant or stock certificate, the Company will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.

	14.	 	Descriptive Headings. The descriptive headings of the several paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this Warrant.

	15.	 	Governing Law. This Warrant shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of Florida.

	16.	 	Remedies. In case any one (1) or more of the covenants and agreements contained in
this Warrant shall have been breached, the holders hereof (in the case of a breach by the
Company), or the Company (in the case of a breach by a holder), may proceed to protect and
enforce their or its rights either by suit in equity and/or by action at law, including, but
not limited to, an action for damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained in this Warrant.

	17.	 	Acceptance. Receipt of this Warrant by the holder hereof shall constitute acceptance
of and agreement to the foregoing terms and conditions.

	18.	 	No Impairment of Rights. The Company will not, by amendment of its Certificate of
Incorporation or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against impairment.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on its behalf by one of its
officers thereunto duly authorized.

	 	 	 	 	 	 	 
	CRUISESTOCK, INC.	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	Dated: January   , 2007	 	 

13

 

NOTICE TO FLORIDA RESIDENTS:

WHERE SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA (EXCLUDING CERTAIN INSTITUTIONAL PURCHASERS
DESCRIBED IN SECTION 517.061(7) OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT) (THE “ACT”),
ANY SUCH SALE MADE PURSUANT TO SECTION 517.061(11) OF THE ACT SHALL BE VOIDABLE BY THE PURCHASER
EITHER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
ISSUER, OR AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY
OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

14

 

EXHIBIT A

NOTICE OF EXERCISE

To:                                        

1. The undersigned hereby elects to purchase     shares of Common Stock of pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

2. Please issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name or names as are specified below:

                                                            

(Name)

                                                            

                                                            

(Address)

3. The undersigned represents that the aforesaid shares are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of distributing or reselling
such shares. In support thereof, the undersigned has executed an Investment Representation
Statement attached hereto as Schedule 1

                                                            

(Signature)

                                                            

(Date)

15EX-10.6 PLACEMENT AGENT AGREEMENT

 

Exhibit 10.6

Midtown Partners & Co., LLC

4902 Eisenhower Blvd., Suite 185

Tampa, FL 33634

Phone: 813.885.5744 Fax: 813.885.5911

 

PLACEMENT AGENT AGREEMENT

     This agreement (the “Agreement”), made as of this 11th day of December, 2006, by and between
Brookside Technology Partners, Inc., a Texas corporation, (the “Company”), with its principal
place of business at 5800 Airport Blvd., Austin, Texas 78725 and MIDTOWN PARTNERS & CO., LLC, (the
“Placement Agent”, “Midtown” or “Midtown
Partners”), a Florida limited liability company, with its
principal place of business at 4902 Eisenhower Blvd., Suite 185, Tampa, Fl 33634, confirms the
understanding and agreement between the Company and the Placement Agent as follows:

SECTION I

     The Company hereby engages the Placement Agent as the Company’s exclusive placement agent in
connection with a proposed private placement in the United States (the “Offering”) of up to one
million seven hundred fifty thousand dollars (US$1,750,000) of the Company’s securities (the
“Financing”). The Offering will be made to solely “accredited investors” (the “Accredited
Investors”), as such term is defined in Rule 501(a) of Regulation D (“Regulation D”) promulgated
under the United States Securities Act of 1933, as amended (the “Securities Act”), pursuant to an
exemption from registration under applicable federal and state securities laws available under Rule
506 of Regulation D and in accordance with the terms of this Agreement. The terms and conditions
of the Financing shall be similar to those terms and provisions as attached in Exhibit A hereto
subject to a final term Sheet to be set forth at a later date to be approved by the
Company. The Placement Agent hereby accepts such engagement upon the terms and conditions set
forth in this Agreement. This Agreement shall not give rise to any commitment or obligation by the
Placement Agent to purchase any of the Financing or, except as set forth herein, to find purchasers
for the Financing.

     The Placement Agent shall provide the following services (the “Services”):

     (a) Advise the Company with regard to the size of the Offering and the structure and terms of
the Financing in light of the current market environment;

     (b) Assist the Company in identifying and evaluating prospective qualified Accredited
Investors;

     (c) Approach such investors on a “best efforts basis” regarding an investment in the Company;
and

     (d) Work with the Company to develop a negotiating strategy and assist with the negotiations
with such potential investors.

     In connection with the Placement Agent providing the Services, the Company agrees to keep the
Placement Agent up to date and apprised of all material business, market and legal developments
related to the Company and its operations and management. The Placement Agent shall devote such
time and effort, as it deems commercially reasonable under the circumstances in rendering the
Services. The Placement Agent shall not provide any work that is in the ordinary purview of a
certified public accountant. The

 

 

Placement Agent cannot guarantee results on behalf of the Company, but shall pursue all
avenues that it deems reasonable through its network of contacts.

SECTION II

     The Placement Agent, its affiliates and any person acting on its or their behalf hereby
represent, warrant and agree as follows (the “Placement Agent Parties”):

     (a) The Financing offered and sold by the Placement Agent have been and will be offered and
sold in compliance with all federal and state securities laws and regulations governing the
registration and conduct of broker-dealers, and each Placement Agent Party making an offer or sale
of Financing was or will be, at the time of any such offer or sale, registered as a broker-dealer
pursuant to Section 15(b) of the United States Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and under the laws of each applicable state of the United States (unless exempted
from the respective state’s broker-dealer registration requirements), and in good standing with the
National Association of Securities Dealers, Inc.

     (b) The Financing offered and sold by the Placement Agent have been and will be offered and
sold only to Accredited Investors in accordance with Rule 506 of Regulation D and applicable state
securities laws; provided, however, the Company shall make all necessary filings under Rule 503 of
Regulation D and such similar notice filings under applicable state securities laws. The Placement
Agent Parties represent and warrant that they have reasonable grounds to believe and do believe
that each person to whom a sale, offer or solicitation of an offer to purchase Financing was or
will be made was and is an Accredited Investor. Prior to the sale and delivery of a security to
any such investor, the Placement Agent Parties will obtain an executed subscription agreement and
an executed investors’ rights agreement in the form agreed upon by the Company and the Placement
Agent (the “Subscription Documents”).

     (c) In connection with the offers and sales of the Financing, the Placement Agent Parties have
not and will not

     (1) Offer or sell, or solicit any offer to buy, any Financing by any form of “general
solicitation” or “general advertising”, as such terms are used in Regulation D, or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities Act;

     (2) Use any written material other than the term sheet, that will be approved by the Company
at a later date, and the Placement Agent, a copy of which is attached hereto as Exhibit A,
and the Subscription Documents, and shall only rely upon and communicate information that is
publicly available regarding the Company to any potential investors (without limiting the
foregoing, none of the Placement Agent Parties is authorized to make any representation or warranty
to any offeree concerning the Company or an investment in the Financing); or

     (3) Take any action that would constitute a violation of Regulation M under the Exchange Act.

     (d) The Placement Agent shall cause each affiliate or each party acting on its or their behalf
with whom they enter into contractual arrangements relating to the offer and sale of any Financing
to agree, for the benefit of the Company, to the same provisions contained in this Agreement.

SECTION III

     During the Term (as defined below), the Placement Agent is hereby retained by the Company to
make limited introductions on a best efforts basis to provide financing for the Company in an
amount and form to be mutually determined by the Company and the Placement Agent.

SECTION IV

     The Company hereby represents warrants and agrees as follows:

     (a) This Agreement has been authorized, executed and delivered by the Company and, when
executed by the Placement Agent will constitute the valid and binding agreement of the Company

 

 

enforceable against the Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or reorganization, moratorium or other similar laws
relating to or affecting creditors’ rights generally or by general equitable principles.

     (b) The offer and sale of the Financing, the Shares, and the Warrants shall be exempt from
registration under the Securities Act, and will comply, in all material respects with the
requirements of Rule 506 of Regulation D promulgated under the Securities Act and any applicable
state securities laws. No documents prepared by the Company in connection with the Offering, or any
amendment or supplement thereto, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

     (c) The financial statements, audited and unaudited (including the notes thereto), included in
the Company’s latest annual information form and subsequent quarterly reports (the “Financial
Statements”), present fairly the financial position of the Company as of the dates indicated and
the results of operations and cash flows of the Company for the periods specified. Such Financial
Statements have been prepared in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods involved except as otherwise stated therein.

     (d) No federal, state or foreign governmental agency has issued any order preventing or
suspending the Offering.

     (e) The Company is a Texas corporation organized, existing and with active status under the
laws of Texas, with corporate power and authority under such laws to own, lease and operate its
properties and conduct its business as now conducted. The Company has all power, authority,
authorization and approvals as may be required to enter into this Agreement and each of the
Subscription Documents, and to carry out the provisions and conditions hereof and thereof, and to
issue and sell the Financing, the Shares, and Warrants.

     (f) The Financing, the Shares, the Warrants, and common shares issuable upon exercise of the
Warrants (the “Warrant Shares”), have all been authorized for issuance and sale pursuant to the
Subscription Documents, and when issued and delivered by the Company against payment therefore in
accordance with the terms of the Subscription Documents, will be validly issued and fully paid and
non-assessable.

     (g) With the exception of any approvals required by the Securities and Exchange Commission
related to the Offering, no further approval or authorization of any shareholder of the Company,
its Board of Directors or other person or group is required for the issuance and sale of the
Financing, the Shares, the Warrants or the Warrant Shares.

     (h) Since the latest unaudited financial statements there has not been any (A) material
adverse change in the business, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company, (B) transaction that is material to the Company, except
transactions in the ordinary course of business, (C) obligation that is material to the Company,
direct or contingent, incurred by the Company, except obligations incurred in the ordinary course
of business, (D) change that is material to the Company or in the common shares or outstanding
indebtedness of the Company, or (E) dividend or distribution of any kind declared, paid, or made in
respect of the common shares.

SECTION V

     The parties agree that the close of the Offering (the “Closing”) shall be subject to the
satisfaction of the following conditions, unless expressly waived in writing by the parties:

     (a) The Offering shall not be subject to any regulatory or judicial proceeding questioning or
reviewing its effectiveness for the purpose of offering the Financing for sale and issuance.

     (b) The Company shall deliver a certificate of an officer of the Company dated as of the
Closing that affirms the accuracy of the representations and warranties contained in Section IV
hereof.

 

 

     (c) The Agent shall have received an opinion of counsel to the Company, dated as of the
Closing, that the Financing offered and sold in compliance with this Agreement are not required to
be registered under the Securities Act.

     (d) The Company shall have paid, or made arrangements satisfactory to the Agent for the
payment of, all such expenses as required by Section VIII below.

     (e) The Placement Agent and the Company shall have finalized and agreed to the form of the
warrant agreement and registration rights agreement referred to in Section VIII below.

SECTION VI

     (a) The term of this Agreement shall commence on the date first written above and shall expire
the earlier of one (1) year after the date the Company (aa) provides the Placement Agent with
requested due diligence materials and (bb) the Company and the Placement Agent mutually agree that
information documents (including, but not limited to: a business plan; executive summary;
three-year historical income statement, statement of cash flows, and balance sheet; five-year
projected financial statements; use of proceeds statement; investor presentation; valuation
analysis), to be provided and approved by the Company and are ready for presentation to the
Placement Agent’s network of potential financing sources or the closing of the Offering or eighteen
(18) months after the date first written, unless terminated in accordance with the provisions set
forth below, or extended by the mutual written consent of the parties hereto (the “Term”). This
Agreement may be terminated only:

     (1) By the Placement Agent for any reason at any time upon thirty (30) days’ prior written
notice; or

     (2) By the Placement Agent upon default in the payment of any amounts due to the Placement
Agent pursuant to this Agreement, if such default continues for more than fifteen (15) days
following receipt by the Company from the Placement Agent of written notice of such default and
demand for payment.

     (a) In the event of termination, the Placement Agent shall be immediately paid in full on all
items of compensation and expenses (including any amounts deferred) payable to the Placement Agent
pursuant hereto, as of the date of termination.

     (b) The Placement Agent Fee or Financing Fee shall become due and payable to PLACEMENT AGENT
upon the date that the Company receives the proceeds of the financing from the party providing the
financing. A Placement Agent Fee shall also be payable with respect to any Qualified Offering or
any subsequent Qualified Financing accepted and received by Company within twelve (12) months after
the termination or expiration of this Agreement, by any party or source of funding introduced or
facilitated by PLACEMENT AGENT to Company; or

     (3) By the Company or the Placement Agent for any reason at any time upon fifteen (15) days’
prior written notice after the completion of the initial Term; or

     (4) By mutual agreement of the parties.

SECTION VII

     At any time during the twelve (12) months following the termination of this Agreement, the
Placement Agent shall be entitled to the compensation and fees as set forth in Section VIII of this
Agreement for any Qualified Financing (as defined below) received by the Company. “Qualified
Financing” shall mean an investment from a person after the termination of this Agreement that
directly results from the Placement Agent’s performance of the Services hereunder during the Term
of this Agreement (for the avoidance of doubt this shall mean any solicitation of a potential
investor or an introduction of a potential investor to the Company by the Placement Agent related
to the Offering during the Term of this Agreement). The Placement Agent agrees to provide to the
Company within ten (10) days after the termination of this Agreement (the “Delivery Deadline”) a
list of all persons solicited on behalf of the Company or introduced to the Company by the
Placement Agent related to the Offering (the

 

 

“Solicitation List”) to assist the parties in making a later determination as to whether a
Qualified Financing has occurred. If the Solicitation List is not provided to the Company prior to
the expiration of the Delivery Deadline, the Company’s obligation to pay any commissions or fees
related to a Qualified Financing pursuant to this Section VII shall immediately terminate. For
purposes of this Agreement, receipt of Qualified Financing shall be deemed to be received by the
Company on the date that a definitive agreement regarding the Qualified Financing is executed by
the Company and the party providing such financing. The compensation or fees shall become payable
to the Placement Agent upon the date that the Company receives the proceeds of the Qualified
Financing.

     The provisions set forth in this Section VII shall survive any termination of this Agreement.

SECTION VIII

     In consideration for the performance of the Services hereunder, the Company hereby agrees to
pay to the Placement Agent such fees (“The Placement Agent Fee or the Financing Fee”) as outlined
below:

     (a) If the Placement Agent receives subscriptions for Financing as a part of the Offering (the
“Placement Agent Investors”), the Company shall:

     1) Pay to the Placement Agent in US dollars via wire from the attorney’s escrow at closing an
amount equal to ten percent (10%) of the principal amount of the Financing purchased by the
Placement Agent Investors (the “Financing Fee”), and pay to the Placement Agent five percent (5%)
on the execution of any Warrants purchased by the Investors. At the option of the Placement Agent,
the Placement Agent can accept up to 50% of the Financing Fee as “in kind” payment accepting the
same Securities as the investors.

     2) On each closing date of a Financing on which aggregate consideration is paid or becomes
payable to the Company for its Equity Securities, the Company shall issue to the Placement Agent or
its permitted assigns warrants (the “Warrants”) to purchase such number of shares of the common
stock of the Company equal to fourteen percent (14%) of the aggregate number of shares of common
stock of the Company issued and issuable by the Company under and in connection with the
Financings. On each closing date of a Financing the Company shall issue to the Placement Agent all
Series of Warrants equal to fourteen percent (14%) of the number of Warrants issued to the
Placement Agent Investors. The number of shares of common stock issuable upon exercise of the
Warrants shall include all shares of common stock issuable under the Securities, including, without
limitation, shares issuable upon conversion or exercise of the Securities. The Warrants shall have
a ten (10) year term and shall provide for cashless exercise (even if the Purchasers do not have
such right) and have terms and conditions identical to the Securities purchased by the Purchasers,
including, without limitation, anti-dilution and full ratchet provisions to take into account any
issuance of additional shares of common stock as a result of an adjustment to the Securities or the
shares of common stock underlying the Securities. The Warrants shall be exercisable after the date
of issuance and shall expire ten (10) years after the date of issuance, unless otherwise extended
by the Company. The Warrants shall include anti-dilution protection, including protection against
issuances of securities at prices (or with exercise prices, in the case of warrants, options or
rights) below the exercise price of the Warrants. The Warrants shall not be callable or redeemable.
The Warrants shall also include one (1) demand registration right exercisable following the first
anniversary of the closing, and piggyback registration rights. The Warrants shall be transferable
within MIDTOWN PARTNERS, at the Placement Agent’s discretion.

     3) An escrow with a third party agent approved by the parties hereto will be used for each
closing to which the Placement Agent shall be a party. All consideration due the Placement Agent
shall be paid to the Placement Agent directly there from.

     4) Cause its affiliates to, pay to the Placement Agent all compensation described in this
Section VIII with respect to all Securities sold to a purchaser or purchasers at any time prior to
the expiration of thirty-six (36) months after the expiration of this Agreement (the “Tail Period”)
if (i) such purchaser or purchasers were identified to the Company by the Placement Agent during
the Term authorized, (ii) the Placement Agent advised the Company with respect to such purchaser or
purchasers during the Term authorized or (iii) the Company or the Placement Agent had discussions
with such purchaser or purchasers during the Term authorized.

 

 

     5) It is acknowledged and agreed that the Company shall bear all costs and expenses incident
to the issuance, offer, sale and delivery of the Financing. These costs and expenses will include
but are not limited to state “Blue Sky” fees, legal fees, printing costs, travel costs, mailing,
couriers, personal background checks, and other expenses incidental to the advancement and
completion of the Offering. Full payment of Placement Agent’s expenses shall be made in same day
funds at the Closing or, if the Offering is terminated for any reason, within ten (10) days of
receipt by the Company of a written request from the Placement Agent for reimbursement of expenses,
including documentation therefore satisfactory to the Company.

     Subject to the other requirements set forth in this Agreement, the Placement Agent may introduce
investors to the Offering directly or through other NASD member broker-dealers. If the Placement
Agent utilizes any intermediaries, the Placement Agent shall be the Company’s point of contact, not
the intermediary, and the Placement Agent, not the Company, shall be responsible for any
compensation arrangement with the intermediary. The Company’s sole compensation arrangement,
responsibility and obligation are with the Placement Agent. The Placement Agent will disclose the
identity and compensation arrangements with all of its intermediaries in order to allow the Company
to adequately disclose such arrangements, where necessary.

SECTION IX

     The Company agrees to indemnify the Placement Agent and hold it harmless against any losses,
claims, damages or liabilities incurred by the Placement Agent, in connection with, or relating in
any manner, directly or indirectly, to the Placement Agent rendering the Services in accordance
with the Agreement, unless it is determined by a court of competent jurisdiction that such losses,
claims, damages or liabilities arose out of the Placement Agent’s breach of this Agreement, sole
negligence, gross negligence, willful misconduct, dishonesty, fraud or violation of any applicable
law. Additionally, the Company agrees to reimburse the Placement Agent immediately for any and all
expenses, including, without limitation, attorney fees, incurred by the Placement Agent in
connection with investigating, preparing to defend or defending, or otherwise being involved in,
any lawsuits, claims or other proceedings arising out of or in connection with or relating in any
manner, directly or indirectly, to the rendering of any Services by the Placement Agent in
accordance with the Agreement (as defendant, nonparty, or in any other capacity other than as a
plaintiff, including, without limitation, as a party in an interpleader action); provided, however,
that in the event a determination is made by a court of competent jurisdiction that the losses,
claims, damages or liability arose primarily out of the Placement Agent’s breach of this Agreement,
sole negligence, gross negligence, willful misconduct, dishonesty, fraud or any violation of any
applicable law, the Placement Agent will remit to the Company any amounts for which it had been
reimbursed under this paragraph. The Company further agrees that the indemnification and
reimbursement commitments set forth in this paragraph shall extend to any controlling person,
strategic alliance, partner, member, shareholder, director, officer, employee, agent or
subcontractor of the Placement Agent and their heirs, legal representatives, successors and
assigns. The provisions set forth in this Section IX shall survive any termination of this
Agreement.

SECTION X

     All notices, demands or other communications given hereunder shall be in writing and shall be
deemed to have been duly given when delivered in person or transmitted by facsimile transmission or
the fifth calendar day after being mailed by registered or certified mail, return receipt
requested, postage prepaid, to the addresses herein above first mentioned or to such other address
as any party hereto shall designate to the other for such purpose manner herein set forth.

SECTION XI

Governing Law. The subject matter of this Agreement shall be governed by and
construed in accordance with the laws of the State of Florida (without reference to its choice of
law principles), and to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding

 

 

 may be instituted. EACH PARTY HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION AND VENUE
OF THE STATE AND/OR FEDERAL COURTS LOCATED IN HILLSBOROUGH COUNTY, FLORIDA FOR RESOLUTION OF ALL
DISPUTES ARISING OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND
ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS
CONSTITUTE AN INCONVENIENT FORUM. AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT, EACH PARTY
SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO TRIABLE. If it becomes necessary
for any party to institute legal action to enforce the terms and conditions of this Agreement, the
prevailing party may be awarded reasonable attorneys fees, expenses and costs.

     Confidentiality. The Placement Agent may acquire certain non-public information
respecting the business of the Company in connection with the performance of services hereunder,
including information, which is reasonably understood to be proprietary or confidential in nature
(collectively, “Confidential Information”). The Placement Agent hereby agrees that all
Confidential Information shall be kept strictly confidential by the Placement Agent and its
affiliates, members, partners, shareholders, managers, directors, officers, employees, advisors,
agents, and controlling persons (collectively, “Representatives”), except that Confidential
Information or portions thereof may be disclosed to Representatives who need to know such
information for the purpose of enabling the Placement Agent to perform services hereunder (it being
understood that prior to such disclosure, such Representative will be informed by the Placement
Agent of the confidential nature of such Confidential Information and shall agree to be bound by
this Agreement). The Placement Agent shall be responsible for any breach of this provision by any
of its Representatives. For purposes hereof, Confidential Information shall not include any
information which (i) at the time of disclosure or thereafter is or becomes generally known by the
public (other than as a result of its disclosure by the Placement Agent or its Representatives),
(ii) was or becomes available to the Placement Agent on a non-confidential basis from a person who
is not subject to a confidentiality agreement concerning that information, or (iii) is required by
law to be disclosed by the Placement Agent (provided that if such disclosure is required by order
of a court or administrative agency, the Placement Agent shall notify the Company as soon as
possible so that the Company may seek a protective order).

     Assignments and Binding Effect. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective successors and permitted assigns. The rights
and obligations of the parties under this Agreement may not be assigned or delegated without the
prior written consent of both parties, and any purported assignment without such written consent
shall be null and void.

     Modification and Waiver. Only an instrument in writing executed by the parties hereto
may amend this Agreement. The failure of any party to insist upon strict performance of any of the
provisions of this Agreement shall not be construed as a waiver of any subsequent default of the
same or similar nature, or any other nature.

     Construction. The captions used in this Agreement are provided for convenience only
and shall not affect the meaning or interpretation of any provision of this Agreement.

     Facsimile Signatures. Facsimile transmission of any signed original document, and
re-transmission of any signed facsimile transmission, shall be the same as delivery of an original.
At the request of either party, the parties shall confirm facsimile transmitted signatures by
signing an original document. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which taken together shall constitute one and the same
agreement.

     Severability. If any provision of this Agreement shall be invalid or unenforceable in
any respect for any reason, the validity and enforceability of any such provision in any other
respect, and of the remaining provisions of this Agreement, shall not be in any way impaired.

     Exclusive. Midtown acknowledges and agrees that it is being granted exclusive rights
with respect to the Services to be provided to the Company and the Company is not free to engage
other parties to provide services similar to those being provided by Midtown hereunder without the
prior written consent of Midtown.

 

 

     Non-Circumvention. The Company hereby irrevocably agrees not to circumvent, avoid,
bypass, or obviate, directly or indirectly, the intent of this Agreement. The Company agrees not to
accept any business opportunity from any third party to whom PLACEMENT AGENT introduces to the
Company without the consent of PLACEMENT AGENT, unless for each business opportunity accepted by
the Company from a third party introduced by PLACEMENT AGENT, the Company remits a term sheet and
then a contract which defines a mutually agreeable compensation structure for PLACEMENT AGENT. In
addition, the Company shall not work with, negotiate with or enter into any equity linked financing
whatsoever with any Investor, Consultant or Placement Agent without Midtown’s prior written
consent. If the Company raises capital through in any equity offering or sale or equity linked
instrument while engaged with Midtown as the exclusive Placement Agent, the Company shall pay to
Midtown all of its fees in Section VIII, even if the Placement Agent has provided no assistance
whatsoever in raising such capital.

     Survivability. Neither the termination of this Agreement nor the completion of any
services to be provided by the Placement Agent hereunder, shall affect the provisions of this
Agreement that shall remain operative and in full force and effect.

     Entire Agreement. This Agreement constitutes the entire agreement and understanding
of the parties hereto with respect to the subject matter of this Agreement and supersedes all prior
understandings and agreements, whether written or oral, among the parties with respect to such
subject matter.

     If the foregoing correctly sets forth the understanding between the Placement Agent and the
Company, please so indicate in the space provided below for that purpose within 10 days of the date
hereof or this Agreement shall be withdrawn and become null and void. The undersigned parties
hereto have caused this Agreement to be duly executed by their authorized representatives, pursuant
to corporate board approval and intend to be legally bound.

	 	 	 	 	 	 	 
	BROOKSIDE TECHNOLOGY	 	MIDTOWN PARTNERS & CO., LLC
	PARTNERS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 

	 	By:	 	Bruce Jordan, President 

	 

	 	 

	 	 	 	Bruce Jordan, President

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