Document:

Unassociated Document

    

    PROMISSORY
      NOTE- CMC XI

    Indigo-Energy,
      Inc.

    

    
      
        	$150,000 (One Hundred Fifty Thousand
                Dollars)	
                Dated:
                  11/04/08

              
	Principal Amount 	
                State
                  of
                  Nevada

              

      

    

     

    Funding
      Date-
      On or
      before November 4, 2008

    Due
      Date
      May 4,
      2009

    

    FOR
      VALUE
      RECEIVED, One Hundred Fifty Thousand Dollars ($150,000), the undersigned,
      Indigo-Energy, Inc., a Nevada Corporation, located at 701 N. Green Valley
      Parkway, Suite 200, Henderson, NV 89074 (Borrowers)
      hereby
      promises to pay to the order of Carr-Miller Capital
      (Maker)
      the sum
      of $150,000 (One Hundred Fifty Thousand Dollars). Said sum shall be paid in
      the
      manner following: 

    

    This
      Promissory
      Note
      shall bear Interest
      at twenty percent (20%) per annum from the Funding Date to the Due Date.

    

    At
      the Due Date Borrower will repay the Note in the following manner: 

    

    Borrower
      will repay the Principal Amount along with accrued Interest within 10 days
      of
      the Due Date via check to the Makers address. Borrower
      may pre-pay this note at any time without penalty by payment of Principal Amount
      and pro-rata interest.

    

    Additionally,
      the Maker shall receive ten (10) shares of Borrower’s common stock for each
      dollar amount of the Principal Amount within thirty (30) days of the receipt
      of
      funds, such stock to be restricted by Rule 144.

    

    Conversion
      Option - At
      the
      Due Date of this Note, or at any earlier date that Borrower pre-pays this note,
      Maker may elect to convert the principal and interest due to additional shares
      of the Borrower’s stock. If elected, the formula for conversion will be the
      average closing price (Price)
      of
      Borrower’s stock for the ten (10) trading days immediately preceding the Due
      Date. The conversion shares issued will be at a twenty percent (20%) discount
      to
      that Price.

    

    This
      Note
      shall at the option of the Maker be immediately due and payable upon the
      occurrence of any of the following:

    

    
      	1-  	
              Breach
                of any condition of any of the security
                interest.

            

    

    
      	2-  	
              Upon
                the insolvency, dissolution, or liquidation of the
                Borrowers.

            

    

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Wire
      Instructions for receipt of funds by Borrower are:

     

    Bank
      of
      America

    Branch
      NV
      ___________

    2638
      W.
      Horizon Ridge Parkway

    Henderson,
      NV 89052

    
      Indigo-
      Energy, Inc.

    Account
      #
      ___________

    Wire
      Routing ABA # ___________

     

    In
      the
      event this note shall be in default, and placed with an attorney for collection,
      then the Borrower agrees to pay all reasonable attorney fees and costs of
      collection. Payments not made within 10 days of due date shall be subject to
      a
      late charge of 10% of said payment. All payments hereunder shall be made to
      the
      Maker.

    

    The
      Borrowers agree to be fully bound hereunder until this note shall be fully
      paid
      and waive demand, presentment and protest and all notices thereto and further
      agrees to remain bound, notwithstanding any extension, renewal, modification,
      waiver, or other indulgence by the Maker or upon the discharge or release of
      the
      Borrowers, or upon the exchange, substitution, or release of any collateral
      granted as security for this Note. No modification or indulgence by Maker shall
      be binding unless in writing, and any indulgence for one occasion shall not
      be
      an indulgence for any other or future occasion. This Note shall take effect
      as a
      sealed instrument and shall be construed, governed, and enforced in accordance
      with the laws of the State of Nevada. 

    

    Signed
      the date recorded below:

    

    
      	 	 	 	 
	
              Stanley
                L. Teeple, CFO

              Indigo-Energy,
                Inc.

            	 	
              Date

               

            	 

    

     

    Accepted
      by Maker:

    

    
      	 	 	 	 	 	 
	Carr-Miller Capital 	 	Date	 	TIN	 

    

     

    
      
        
        

      

      
        2FORM
      OF WARRANT

    

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
      OR
      APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
      SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR
      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
      SAID
      ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION
      WITH A BONA FIDE MARGIN ACCOUNT.

    

    DERYCZ
      SCIENTIFIC, INC.

    

    Warrant
      To Purchase Common Stock

    

    
      	
              Warrant
                No.: ______

            	 	
              Number
                of Shares: _________

            

    

    

    Date
      of
      Issuance: July x, 2008

    

    Derycz
      Scientific, Inc., a Nevada corporation (the “Company”),
      hereby certifies that, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, _________________________
      (“Holder”), the registered holder hereof or its permitted assigns, is entitled,
      subject to the terms set forth below, to purchase from the Company upon
      surrender of this Warrant, at any time or times on or after the date hereof,
      but
      not after 11:59 P.M. Pacific Time on the Expiration Date (as defined herein)
      __________ fully paid and nonassessable shares of Common Stock (as defined
      herein) of the Company (the “Warrant
      Shares”)
      at the
      Warrant Exercise Price per share provided in Section 1(a) below or as
      subsequently adjusted.

    

    Section
      1.
      This
      Warrant is the common stock purchase warrant (the “Warrant”)
      issued
      pursuant to the Subscription Agreement (“Subscription
      Agreement”)
      dated
      the date hereof between the Company and the Holder.

    

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

    

    (i) “Business
      Day”
      means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      the City of Los Angeles are authorized or required by law to remain
      closed.

    (ii) “Closing
      Bid Price”
means
      the closing bid price of Common Stock as quoted on the Principal Market (as
      reported by Bloomberg Financial Markets (“Bloomberg”)
      through its “Volume at Price” function).

    

    (iii) “Common
      Stock”
means
      (i) the Company’s common stock, par value $0.001 per share, and (ii) any capital
      stock into which such Common Stock shall have been changed or any capital stock
      resulting from a reclassification of such Common Stock.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (iv) “Expiration
      Date”
means
      _____, 2011 or, if such date falls on a Saturday, Sunday or other day on which
      banks are required or authorized to be closed in the City of Los Angeles or
      the
      State of California or on which trading does not take place on the Principal
      Market or automated quotation system on which the Common Stock is traded (a
      “Holiday”),
      the
      next date that is not a Holiday.

    

    (v) “Issuance
      Date”
means
      the date hereof.

    

    (vi) “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization and a government or any
      department or agency thereof.

    (vii) “Principal
      Market”
means
      the New York Stock Exchange, the American Stock Exchange, the Nasdaq National
      Market, the Nasdaq SmallCap Market, whichever is at the time the principal
      trading exchange or market for such security, or the over-the-counter market
      on
      the electronic bulletin board for such security as reported by Bloomberg or,
      if
      no bid or sale information is reported for such security by Bloomberg, then
      the
      average of the bid prices of each of the market makers for such security as
      reported in the “pink sheets” by the National Quotation Bureau,
      Inc.

    

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

    

    (ix) “Warrant”
means
      this Warrant and all Warrants issued in exchange, transfer or replacement
      thereof. 

    

    (x) “Warrant
      Exercise Price”
shall
      be $2.00
      or as
      subsequently adjusted as provided in Section 8 hereof. 

     

    (xi) “Warrant
      Shares”
means
      the shares of Common Stock issuable at any time upon exercise of this Warrant.
      

    

    (b) Other
      Definitional Provisions. 

    

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

    

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

    

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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    Section
      2. Exercise
      of Warrant.
      

    

    (a) Subject
      to the terms and conditions hereof, this Warrant may be exercised by the holder
      hereof then registered on the books of the Company, pro rata as hereinafter
      provided, at any time on any Business Day on or after the opening of business
      on
      such Business Day, commencing with the first day after the date hereof, and
      prior to 11:59 P.M. Pacific Time on the Expiration Date

    

    (i) 
      by
      delivery of a written notice, in the form of the subscription notice attached
      as
Exhibit
      A
      hereto
      (the “Exercise
      Notice”),
      of
      such holder’s election to exercise this Warrant, which notice shall specify the
      number of Warrant Shares to be purchased, payment to the Company of an amount
      equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being
      purchased, multiplied by the number of Warrant Shares (at the applicable Warrant
      Exercise Price) as to which this Warrant is being exercised (plus any applicable
      issue or transfer taxes) (the “Aggregate
      Exercise Price”)
      in
      cash or wire transfer of immediately available funds and the surrender of this
      Warrant (or an indemnification undertaking with respect to this Warrant in
      the
      case of its loss, theft or destruction) to a common carrier for overnight
      delivery to the Company as soon as practicable following such date
      (“Cash
      Basis”)
      or
      (ii) on a “cashless” basis if, at the time of exercise, the Warrant Shares have
      not been subject to an effective registration statement for a 45 consecutive
      day
      period, by delivering an Exercise Notice and in lieu of making payment of the
      Aggregate Exercise Price in cash or wire transfer, elect instead to receive
      upon
      such exercise the “Net Number” of shares of Common Stock determined according to
      the following formula (the “Cashless
      Exercise”):
      

    

    Net
      Number = (A
      x
      B) - (A x C)

                                         B

    

    For
      purposes of the foregoing formula: 

    

    A
      = the
      total number of Warrant Shares with respect to which this Warrant is then being
      exercised. 

    

    B
      = the
      Closing Bid Price of the Common Stock on the date of exercise of the
      Warrant.

    

    C
      = the
      Warrant Exercise Price then in effect for the applicable Warrant Shares at
      the
      time of such exercise. 

    

    In
      the
      event of any exercise of the rights represented by this Warrant in compliance
      with this Section 2, the Company shall on or before the fifth (5th) Business
      Day
      following the date of receipt of the Exercise Notice, the Aggregate Exercise
      Price and this Warrant (or an indemnification undertaking with respect to this
      Warrant in the case of its loss, theft or destruction) and the receipt of the
      representations of the holder specified in Section 6 hereof, if requested by
      the
      Company (the “Exercise
      Delivery Documents”),
      and
      if the Common Stock is DTC eligible, credit such aggregate number of shares
      of
      Common Stock to which the holder shall be entitled to the holder’s or its
      designee’s balance account with The Depository Trust Company; provided, however,
      if the holder who submitted the Exercise Notice requested physical delivery
      of
      any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible
      then the Company shall, on or before the fifth (5th)
      Business Day following receipt of the Exercise Delivery Documents, issue and
      surrender to a common carrier for overnight delivery to the address specified
      in
      the Exercise Notice, a certificate, registered in the name of the holder, for
      the number of shares of Common Stock to which the holder shall be entitled
      pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
      Exercise Price referred to in clause (i) or (ii) above the holder of this
      Warrant shall be deemed for all corporate purposes to have become the holder
      of
      record of the Warrant Shares with respect to which this Warrant has been
      exercised. In the case of a dispute as to the determination of the Warrant
      Exercise Price, the Closing Bid Price or the arithmetic calculation of the
      Warrant Shares, the Company shall promptly issue to the holder the number of
      Warrant Shares that is not disputed and shall submit the disputed determinations
      or arithmetic calculations to the holder via facsimile within one (1) Business
      Day of receipt of the holder’s Exercise Notice. 

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (b) If
      the
      holder and the Company are unable to agree upon the determination of the Warrant
      Exercise Price or arithmetic calculation of the Warrant Shares within one (1)
      day of such disputed determination or arithmetic calculation being submitted
      to
      the holder, then the Company shall immediately submit via facsimile (i) the
      disputed determination of the Warrant Exercise Price or the Closing Bid Price
      to
      an independent, reputable investment banking firm or (ii) the disputed
      arithmetic calculation of the Warrant Shares to its independent, outside
      accountant. The Company shall cause the investment banking firm or the
      accountant, as the case may be, to perform the determinations or calculations
      and notify the Company and the holder of the results no later than forty-eight
      (48) hours from the time it receives the disputed determinations or
      calculations. Such investment banking firm’s or accountant’s determination or
      calculation, as the case may be, shall be deemed conclusive absent manifest
      error.

    

    (c) Unless
      the rights represented by this Warrant shall have expired or shall have been
      fully exercised, the Company shall, as soon as practicable and in no event
      later
      than five (5) Business Days after any exercise and at its own expense, issue
      a
      new Warrant identical in all respects to this Warrant exercised except it shall
      represent rights to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant exercised, less the number
      of Warrant Shares with respect to which such Warrant is exercised.

    

    (d) No
      fractional Warrant Shares are to be issued upon any pro rata exercise of this
      Warrant, but rather the number of Warrant Shares issued upon such exercise
      of
      this Warrant shall be rounded up or down to the nearest whole
      number.

    

    Section
      3. Covenants
      as to Common Stock.
      The
      Company hereby covenants and agrees as follows:

    

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

    

    (b) All
      Warrant Shares which may be issued upon the exercise of the rights represented
      by this Warrant will, upon issuance, be validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.

    

    (c) During
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved at least one hundred
      percent (100%) of the number of shares of Common Stock needed to provide for
      the
      exercise of the rights then represented by this Warrant and the par value of
      said shares will at all times be less than or equal to the applicable Warrant
      Exercise Price. If at any time the Company does not have a sufficient number
      of
      shares of Common Stock authorized and available, then the Company shall call
      and
      hold a special meeting of its stockholders within sixty (60) days of that time
      for the sole purpose of increasing the number of authorized shares of Common
      Stock.

    

    (d) If
      at any
      time after the date hereof the Company shall file a registration statement
      (other than on Form S-4 or S-8, or any then equivalent thereof), the Company
      shall include the Warrant Shares issuable to the holder, pursuant to the terms
      of this Warrant and shall maintain, so long as any other shares of Common Stock
      shall be so registered, such registration of all Warrant Shares from time to
      time issuable upon the exercise of this Warrant. In the event of such
      registration, the Company shall list on each national securities exchange or
      automated quotation system, as the case may be, and shall maintain such listing
      of, any other shares of capital stock of the Company issuable upon the exercise
      of this Warrant if and so long as any shares of the same class shall be listed
      on such national securities exchange or automated quotation
      system.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (e) The
      Company will not, by amendment of its Articles of Incorporation or through
      any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms to be observed or performed by
      it
      hereunder, but will at all times in good faith assist in the carrying out of
      all
      the provisions of this Warrant and in the taking of all such action as may
      reasonably be requested by the holder of this Warrant in order to protect the
      exercise privilege of the holder of this Warrant against dilution or other
      impairment, consistent with the tenor and purpose of this Warrant. The Company
      will not increase the par value of any shares of Common Stock receivable upon
      the exercise of this Warrant above the Warrant Exercise Price then in effect,
      and will take all such actions as may be necessary or appropriate in order
      that
      the Company may validly and legally issue fully paid and nonassessable shares
      of
      Common Stock upon the exercise of this Warrant.

    

    (f) This
      Warrant will be binding upon any entity succeeding to the Company by merger,
      consolidation or acquisition of all or substantially all of the Company’s
      assets.

    

    (g) The
      Company will remain a reporting company pursuant to the Securities Exchange
      Act
      of 1934, as amended, for a period of not less than one year from the date of
      this Warrant 

    

    Section
      4. Taxes.
      The
      Company shall pay any and all transfer or documentary taxes, except any
      applicable withholding taxes, which may be payable with respect to the issuance
      and delivery of Warrant Shares upon exercise of this
      Warrant.

    Section
      5. Warrant
      Holder Not Deemed a Stockholder.
      Except
      as otherwise specifically provided herein, no holder, as such, of this Warrant
      shall be entitled to vote or receive dividends or be deemed the holder of shares
      of capital stock of the Company for any purpose, nor shall anything contained
      in
      this Warrant be construed to confer upon the holder hereof, as such, any of
      the
      rights of a stockholder of the Company or any right to vote, give or withhold
      consent to any corporate action (whether by reorganization, issue of stock,
      reclassification of stock, consolidation, merger, conveyance or otherwise),
      receive notice of meetings, receive dividends or subscription rights, or
      otherwise, prior to the issuance to the holder of this Warrant of the Warrant
      Shares which he or she is then entitled to receive upon the due exercise of
      this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as
      imposing any liabilities on such holder to purchase any securities (upon
      exercise of this Warrant or otherwise) or as a stockholder of the Company,
      whether such liabilities are asserted by the Company or by creditors of the
      Company. Notwithstanding this Section 5, the Company will provide the holder
      of
      this Warrant with copies of the same notices and other information given to
      the
      stockholders of the Company generally, contemporaneously with the giving thereof
      to the stockholders.

    

    Section
      6. Representations
      of Holder.
      The
      holder of this Warrant, by the acceptance hereof, represents that it is
      acquiring this Warrant and the Warrant Shares for its own account for investment
      only and not with a view towards, or for resale in connection with, the public
      sale or distribution of this Warrant or the Warrant Shares, except pursuant
      to
      sales registered or exempted under the Securities Act; provided, however, that
      by making the representations herein, the holder does not agree to hold this
      Warrant or any of the Warrant Shares for any minimum or other specific term
      and
      reserves the right to dispose of this Warrant and the Warrant Shares at any
      time
      in accordance with or pursuant to a registration statement or an exemption
      under
      the Securities Act. 

    

    Section
      7. Ownership
      and Transfer.
      The
      Company shall maintain at its principal executive offices (or such other office
      or agency of the Company as it may designate by notice to the holder hereof),
      a
      register for this Warrant, in which the Company shall record the name and
      address of the person in whose name this Warrant has been issued, as well as
      the
      name and address of each transferee. The Company may treat the person in whose
      name any Warrant is registered on the register as the owner and holder thereof
      for all purposes, notwithstanding any notice to the contrary, but in all events
      recognizing any transfers made in accordance with the terms of this
      Warrant.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Section
      8. Adjustment
      of Warrant Exercise Price and Number of Shares.
      The
      Warrant Exercise Price and the number of shares of Common Stock issuable upon
      exercise of this Warrant shall be adjusted from time to time as
      follows:

    

    (a) Adjustment
      of Warrant Exercise Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company at any time after the date of issuance of this Warrant subdivides (by
      any stock split, stock dividend, recapitalization or otherwise) one or more
      classes of its outstanding shares of Common Stock into a greater number of
      shares, any Warrant Exercise Price in effect immediately prior to such
      subdivision will be proportionately reduced and the number of shares of Common
      Stock obtainable upon exercise of this Warrant will be proportionately
      increased. If the Company at any time after the date of issuance of this Warrant
      combines (by combination, reverse stock split or otherwise) one or more classes
      of its outstanding shares of Common Stock into a smaller number of shares,
      any
      Warrant Exercise Price in effect immediately prior to such combination will
      be
      proportionately increased and the number of Warrant Shares issuable upon
      exercise of this Warrant will be proportionately decreased. Any adjustment
      under
      this Section 8(a) shall become effective at the close of business on the date
      the subdivision or combination becomes effective.

    

    (b) Notices.

    

    (i) Immediately
      upon any adjustment of the Warrant Exercise Price, the Company will give written
      notice thereof to the holder of this Warrant, setting forth in reasonable
      detail, and certifying, the calculation of such adjustment.

    

    (ii) The
      Company will give written notice to the holder of this Warrant at least ten
      (10)
      days prior to the date on which the Company closes its books or takes a record
      (A) with respect to any dividend or distribution upon the Common Stock, (B)
      with
      respect to any pro rata subscription offer to holders of Common Stock or (C)
      for
      determining rights to vote with respect to any Organic Change (as defined
      below), dissolution or liquidation, provided that such information shall be
      made
      known to the public prior to or in conjunction with such notice being provided
      to such holder.

    

    (iii) The
      Company will also give written notice to the holder of this Warrant at least
      ten
      (10) days prior to the date on which any Organic Change, dissolution or
      liquidation will take place, provided that such information shall be made known
      to the public prior to or in conjunction with such notice being provided to
      such
      holder.

    

    Section
      9.
      Purchase
      Rights; Reorganization, Reclassification, Consolidation, Merger or
      Sale.

    

    (a) In
      addition to any adjustments pursuant to Section 8 above, if at any time the
      Company grants, issues or sells any options, convertible securities or rights
      to
      purchase stock, warrants, securities or other property pro rata to the record
      holders of any class of Common Stock (the “Purchase
      Rights”),
      then
      the holder of this Warrant will be entitled to acquire, upon the terms
      applicable to such Purchase Rights, the aggregate Purchase Rights which such
      holder could have acquired if such holder had held the number of shares of
      Common Stock acquirable upon complete exercise of this Warrant immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    (b) Any
      recapitalization, reorganization, reclassification, consolidation, merger,
      sale
      of all or substantially all of the Company’s assets to another Person or other
      transaction in each case which is effected in such a way that holders of Common
      Stock are entitled to receive (either directly or upon subsequent liquidation)
      stock, securities or assets with respect to or in exchange for Common Stock
      is
      referred to herein as an “Organic
      Change.”
Prior
      to the consummation of any (i) sale of all or substantially all of the Company’s
      assets to an acquiring Person or (ii) any other Organic Change following which
      the Company is not a surviving entity, the Company will secure from the Person
      purchasing such assets or the successor resulting from such Organic Change
      (in
      each case, the “Acquiring
      Entity”)
      a
      written agreement (in form and substance satisfactory to the holders of Warrants
      representing at least two-thirds of the Warrant Shares issuable upon exercise
      of
      the Warrants then outstanding) to deliver to each holder of Warrants in exchange
      for such Warrants, a security of the Acquiring Entity evidenced by a written
      instrument substantially similar in form and substance to this Warrant and
      satisfactory to the holders of the Warrants (including an adjusted warrant
      exercise price equal to the value for the Common Stock reflected by the terms
      of
      such consolidation, merger or sale, and exercisable for a corresponding number
      of shares of Common Stock acquirable and receivable upon exercise of the
      Warrants without regard to any limitations on exercise, if the value so
      reflected is less than any Applicable Warrant Exercise Price immediately prior
      to such consolidation, merger or sale). Prior to the consummation of any other
      Organic Change, the Company shall make appropriate provision (in form and
      substance satisfactory to the holders of Warrants representing a
      majority of
      the
      Warrant Shares issuable upon exercise of the Warrants then outstanding) to
      insure that each of the holders of the Warrants will thereafter have the right
      to acquire and receive in lieu of or in addition to (as the case may be) the
      Warrant Shares immediately theretofore issuable and receivable upon the exercise
      of such holder’s Warrants (without regard to any limitations on exercise), such
      shares of stock, securities or assets that would have been issued or payable
      in
      such Organic Change with respect to or in exchange for the number of Warrant
      Shares which would have been issuable and receivable upon the exercise of such
      holder’s Warrant as of the date of such Organic Change (without taking into
      account any limitations or restrictions on the exercisability of this Warrant).
      This Section 9 shall not apply to acquisitions of other businesses by the
      Company.

    

    Section
      10. Lost,
      Stolen, Mutilated or Destroyed Warrant.
      If this
      Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
      on
      receipt of an indemnification undertaking (or, in the case of a mutilated
      Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
      this Warrant so lost, stolen, mutilated or destroyed.

    

    Section
      11. Notice.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Warrant must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of receipt received
      by
      the sending party transmission is mechanically or electronically generated
      and
      kept on file by the sending party); or (iii) one Business Day after deposit
      with
      a nationally recognized overnight delivery service, in each case properly
      addressed to the party to receive the same. The addresses and facsimile numbers
      for such communications shall be:

    

    
      	
              If
                to the Company, to:

            	
              Derycz
                Scientific, Inc.

            
	 	
              10990
                Wilshire Boulevard, Suite 1410

            
	 	
              Los
                Angeles, CA 90024

            
	 	
              Attention:
                Peter Derycz

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
              With
                a copy to:

            	
              Richardson
                & Patel, LLP

            
	 	
              ATTN:
                Addison Adams, Esq.

            
	 	
              10900
                Wilshire Boulevard, Suite 500

            
	 	
              Los
                Angeles, CA 90024

            

    

    

    If
      to a
      holder of this Warrant, to it at the address and facsimile number set forth
      on
Exhibit
      C
      hereto,
      with copies to such holder’s representatives as set forth on Exhibit
      C,
      or at
      such other address and facsimile as shall be delivered to the Company upon
      the
      issuance or transfer of this Warrant. Each party shall provide five days’ prior
      written notice to the other party of any change in address or facsimile number.
      Written confirmation of receipt (A) given by the recipient of such notice,
      consent, facsimile, waiver or other communication, or (B) provided by a
      nationally recognized overnight delivery service shall be rebuttable evidence
      of
      personal service, receipt by facsimile or receipt from a nationally recognized
      overnight delivery service in accordance with clause (i), (ii) or (iii) above,
      respectively.

    

    Section
      12. Date.
      The
      date of this Warrant is set forth on page 1 hereof. This Warrant, in all events,
      shall be wholly void and of no effect after the close of business on the
      Expiration Date, except that notwithstanding any other provisions hereof, the
      provisions of Section 8(b) shall continue in full force and effect after such
      date as to any Warrant Shares or other securities issued upon the exercise
      of
      this Warrant.

    

    Section
      13. Amendment
      and Waiver.
      Except
      as otherwise provided herein, the provisions of the Warrants may be amended
      and
      the Company may take any action herein prohibited, or omit to perform any act
      herein required to be performed by it, only if the Company has obtained the
      written consent of the holders of Warrants representing at least two-thirds
      of
      the Warrant Shares issuable upon exercise of the Warrants then outstanding;
      provided that, except for Section 8(a), no such action may increase the Warrant
      Exercise Price or decrease the number of shares or class of stock obtainable
      upon exercise of any Warrant without the written consent of the holder of such
      Warrant.

    

    Section
      14. Descriptive
      Headings; Governing Law.
      The
      descriptive headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only and do not constitute a part of this Warrant.
      The
      corporate laws of the State of Nevada shall govern all issues concerning the
      relative rights of the Company and its stockholders. All other questions
      concerning the construction, validity, enforcement and interpretation of this
      Warrant shall be governed by the internal laws of the State of California,
      without giving effect to any choice of law or conflict of law provision or
      rule
      (whether of the State of California or any other jurisdictions) that would
      cause
      the application of the laws of any jurisdictions other than the State of
      California. Each party hereby irrevocably submits to the exclusive jurisdiction
      of the state and federal courts sitting in the City of Los Angeles for the
      adjudication of any dispute hereunder or in connection herewith or therewith,
      or
      with any transaction contemplated hereby or discussed herein, and hereby
      irrevocably waives, and agrees not to assert in any suit, action or proceeding,
      any claim that it is not personally subject to the jurisdiction of any such
      court, that such suit, action or proceeding is brought in an inconvenient forum
      or that the venue of such suit, action or proceeding is improper. Each party
      hereby irrevocably waives personal service of process and consents to process
      being served in any such suit, action or proceeding by mailing a copy thereof
      to
      such party at the address for such notices to it under this Warrant 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 manner permitted by law. 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    Section
      15. Waiver
      of Jury Trial.
      AS
      A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
      PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

    

    Section
      16.  Company’s
      Right to Redeem Warrant.
      Once
      the shares that would be issued upon exercise of this Warrant are subject to
      an
      effective registration statement, then this Warrant may be redeemed by the
      Company, upon ten (10) days prior written notice (“Notice Period”) by the
      Company, at a redemption price of $0.01 per warrant share (the “Redemption
      Price”), so long as the following conditions are met:

    

    (a) The
      Company’s Closing Bid Price for the shares must have been in excess of $3.00 per
      share for at least 10 of the 25 consecutive trading days preceding the notice
      of
      demand for exercise;

    (b) The
      registration statement covering the resale of the Warrant Shares shall have
      remained effective during the entire Notice Period.

    (c) Upon
      notice to the Holder hereof, and only if the conditions have been met then
      the
      Holder will have ten (10) days in which to exercise the Warrants being redeemed
      or accept the Redemption Price.

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be signed as of the date first set forth
      above.

    

    
      	
              DERYCZ
                SCIENTIFIC, INC.

            
	 	 
	
              By:

            	  
	 	
              Name:
                Peter Derycz

            
	 	
              Title:
                President and Chief Executive
                Officer

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    EXHIBIT
      A TO WARRANT

    EXERCISE
      NOTICE

    

    TO
      BE EXECUTED 

    BY
      THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

    DERYCZ
      SCIENTIFIC, INC.

    

    The
      undersigned holder hereby exercises the right to purchase ______________ of
      the
      shares of Common Stock (“Warrant
      Shares”)
      of
      Derycz Scientific, Inc. (the “Company”),
      evidenced by the attached Warrant (the “Warrant”).
      Capitalized terms used herein and not otherwise defined shall have the
      respective meanings set forth in the Warrant.

    

    1.
      ___ Cash
      Exercise

     

    (a)
       Payment
      of Warrant Exercise Price.
      The
      holder shall pay the Aggregate Exercise Price of $______________ to the Company
      in accordance with the terms of the Warrant. 

     

    (b)
       Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    2.
      ___ Cashless
      Exercise

     

    (a)
       Payment
      of Warrant Exercise Price.
      In lieu
      of making payment of the Aggregate Exercise Price, the holder elects to receive
      upon such exercise the Net Number of shares of Common Stock determined in
      accordance with the terms of the Warrant. 

     

    (b)
       Delivery
      of Warrant Shares.
      The
      Company shall deliver to the holder _________
      Warrant
      Shares in accordance with the terms of the Warrant. 

     

    Date:
      _______________ __, ______

    

    Name
      of
      Registered Holder

    

    
      	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    

    EXHIBIT
      B TO WARRANT

    FORM
      OF WARRANT POWER

    

    FOR
      VALUE RECEIVED,
      the
      undersigned does hereby assign and transfer to ________________, Federal
      Identification No. __________, a warrant to purchase ____________ shares of
      the
      capital stock of Derycz Scientific, Inc. represented by warrant certificate
      no.
      _____, standing in the name of the undersigned on the books of said corporation.
      The undersigned does hereby irrevocably constitute and appoint ______________,
      attorney to transfer the warrants of said corporation, with full power of
      substitution in the premises.

    

    
      	
              Dated:

            	 
	 	 
	 	
              By:

            
	 	
              Name:

            
	 	
              Title:

            

    

     

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    EXHIBIT
      C TO WARRANT

    

    HOLDER’S
      ADDRESS

    
      
         

      

      
        C-1

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