Document:

Exhibit 10.2

 

NEITHER
THIS SECURITY NOR ANY SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS
BEEN REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISDICTION OR ANY EXCHANGE
OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND SUCH OTHER LAWS AND
REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION AND/OR
LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE REASONABLY ACCEPTABLE
TO THE ISSUER.

 

ASPYRA, INC.

 

SECURED, CONVERTIBLE PROMISSORY NOTE

 

	
  $ 

  	
   

  	
  , 2008

  

 

Calabasas, California

 

FOR VALUE RECEIVED, and upon and subject to
the terms and conditions set forth herein, Aspyra, Inc., a California
corporation (“Issuer”), hereby promises to pay
to the order of                                           ,
a                                   
(together with its permitted successors and assigns, “Holder”),
the principal sum of                                     
UNITED STATED DOLLARS (U.S. $                        )
on the Maturity Date, together with interest as provided herein.  This Note was issued under and is subject to
a Securities Purchase Agreement (the “Purchase Agreement”)
dated as of March     , 2008 among Issuer, payee and
certain other parties.  Capitalized terms
used and not otherwise defined herein will have the respective meanings given
to such terms in the Purchase Agreement.

 

1.             Maturity
Date.  This Note
will mature, and be due and payable in full, on March         ,
2010 (the “Maturity Date”), unless
Holder has elected to convert this Note pursuant to Section 3 hereof.

 

2.             Interest.  From and after the date hereof, all
outstanding principal of this Note will bear interest at the rate of eight
percent (8%) per annum. Outstanding interest shall be compounded on each July 15
and January 15 during which any interest on this Note shall be
outstanding. Upon the occurrence and during the continuance of any Event of
Default (as hereinafter defined) under this Note, all outstanding principal of
this Note shall bear interest at the rate of 24% per annum. All accrued
interest on this Note shall be payable on the Maturity Date or on such earlier
date as this Note shall be prepaid or converted into Common Stock.

 

 

3.             Optional
Conversion of the Note.

 

3.1          By
Holder.  At any time prior to repayment of this Note,
Holder may elect, in lieu of repayment, to convert all or a portion of the
outstanding principal and/or interest on this Note into that number of shares
of Common Stock (as defined in the Purchase Agreement) equal to the quotient
obtained by dividing (a) 100.0% of the amount of principal and/or interest
on this Note being converted, by (b) the Conversion Price (as hereinafter
defined).  Holder will inform Issuer of such
election at least 14 days prior to the date the Note or portion thereof is
converted into Common Stock.  If Holder
delivers such notice to Issuer, Issuer may not elect to pay to Holder the
amount of this Note to be converted without Holder’s written consent. For
purposes of this Note, “Conversion Price” will initially mean $          
per share. The Conversion Price will be subject to adjustment as provided in Section 3.3.
The Holder shall effect conversions by delivering to the Issuer a
Notice of Conversion, the form of which is attached hereto as Annex A (a
“Notice of Conversion”), specifying therein the principal amount of this
Note to be converted and the date on which such conversion shall be effected
(such date, the “Conversion Date”), provided that such date is on or
after the date of delivery of the Notice of Conversion.  If no Conversion Date is specified in a
Notice of Conversion, or the stated conversion date is prior to date of
delivery of the Notice of Conversion, the Conversion Date shall be the date
that such Notice of Conversion is deemed delivered hereunder.  To effect conversions hereunder, the Holder
shall not be required to physically surrender this Note to the Issuer unless
the entire principal amount of this Note, plus all accrued and unpaid interest
thereon, has been so converted. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Note in an amount equal to
the applicable conversion.  The Holder
and the Issuer shall maintain records showing the principal amount(s) converted
and the date of such conversion(s).  The
Issuer may deliver an objection to any Notice of Conversion within 1 Business
Day of delivery of such Notice of Conversion. 
The Holder, and any assignee by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Note, the unpaid and unconverted principal amount of this
Note may be less than the amount stated on the face hereof.

 

3.2          By Issuer.  At any time after March       ,
2009, but prior to repayment of this Note, if
the volume weighted average price of the Common Stock on the American
Stock Exchange exceeds 200% of the Conversion Price then in effect during each
day for twenty consecutive trading days or more (whether or not such volume
weighted average for any day thereafter is 200% or less of the Conversion Price
then in effect), then Issuer may give notice to Holder of its election to
convert all or a portion of the outstanding principal of, but not any
outstanding interest on, this Note into the same number of shares of Common
Stock as would be calculated pursuant to Section 3.1 above in the case of
an optional conversion by Holder.  Upon
conversion, Issuer will pay any outstanding interest on this Note in cash to
Holder.  Any notice of conversion will be delivered at
least 15 days prior to the date of such conversion and the Conversion Price
used in calculating the number of shares of Common Stock to be issued to Holder
will be the Conversion Price on the date of the actual conversion (which will
be the first date on which Holder becomes fully vested with all rights of such
holders of shares of Common Stock). To effect conversions hereunder, the
Holder shall not be required to physically surrender this Note to the Issuer
unless the entire principal amount of this Note, plus all accrued and unpaid
interest thereon, has been so converted. Conversions hereunder shall have the
effect of lowering 

 

2

 

the outstanding principal amount of this Note
in an amount equal to the applicable conversion.  The Holder and the Issuer shall maintain
records showing the principal amount(s) converted and the date of such
conversion(s).  The Issuer may deliver an
objection to any Notice of Conversion within 1 Business Day of delivery of such
Notice of Conversion.  The Holder, and
any assignee by acceptance of this Note, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of a portion of this
Note, the unpaid and unconverted principal amount of this Note may be less than
the amount stated on the face hereof.

 

3.3          Adjustments.

 

(a)  Stock Dividends, Reclassifications,
Recapitalizations, Etc.  In the event
the Issuer:  (i) pays a dividend in
Common Stock or makes a distribution in Common Stock, (ii) subdivides its
outstanding Common Stock into a greater number of shares, (iii) combines
its outstanding Common Stock into a smaller number of shares or (iv) increases
or decreases the number of shares of Common Stock outstanding by
reclassification of its Common Stock (including a recapitalization in
connection with a consolidation or merger in which the Issuer is the continuing
corporation), then the Conversion Price on the record date of such
division or distribution or the effective date of such action shall be adjusted
by multiplying such Conversion Price by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately before such event
and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event.

 

(b)  Notice of Adjustment.  Whenever the Conversion Price is adjusted, as
herein provided, the Issuer shall deliver to the holders of the Note in a certificate
of the Issuer’s Chief Financial Officer setting forth, in reasonable detail,
the event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which (i) the Board of
Directors determined the fair value of any evidences of indebtedness, other
securities or property or warrants, options or other subscription or purchase
rights and specifying the Conversion Price after giving effect to such
adjustment.

 

(c)  Notice of Certain Transactions.  In the event that the Issuer shall propose (i) to
pay any dividend payable in securities of any class to the holders of its
Common Stock or to make any other non-cash dividend or distribution to the
holders of its Common Stock, (ii) to offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible into shares
of Common Stock or shares of stock of any class or any other securities, rights
or options, (iii) to effect any capital reorganization, reclassification,
consolidation or merger affecting the class of Common Stock, as a whole, or (iv) to
effect the voluntary or involuntary dissolution, liquidation or winding-up of
the Issuer, the Issuer shall, within the time limits specified below, send to
each Holder a notice of such proposed action or offer.  Such notice shall be mailed to the Holders at
their addresses as they appear in the records of the Issuer, which shall
specify the record date for the purposes of such dividend, distribution or
rights, or the date such issuance or event is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to be
fixed, and shall briefly indicate the effect of such action on the Common Stock
and the Conversion Price Such notice shall be given as promptly as 

 

3

 

possible and (x) in the case of any action covered by clause (i) or
(ii) above, at least ten (10) days prior to the record date for
determining holders of the Common Stock for purposes of such action or (y) in
the case of any other such action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of Common Stock, whichever shall be the earlier.

 

3.4          No Rights as a Shareholder.  Without limiting any rights that Holder is
entitled to under the Purchase Agreement, and if this Note has not been
converted, Holder will not be entitled to any voting or other rights as a
shareholder of Issuer in connection with this Note.

 

[The
following clause is optional at the request of the Purchaser of this Note, with
the choice between 4.99% and 9.99% being at the option of the Purchaser.]

 

3.5          Limitation on Beneficial Ownership. 
 Issuer will not effect and will have no obligation to effect any
conversion of this Note, and the Holder will have no right to convert any
portion of this Note, to the extent that after giving effect to such
conversion, the beneficial owner of such shares (together with such person’s
affiliates) would have acquired, through conversion of this Note or otherwise,
beneficial ownership of a number of shares of Common Stock that exceeds [4.99%
/ 9.99%] (“Maximum Percentage”) of
the number of shares of Common Stock outstanding immediately after giving effect
to such conversion.    For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by a person and its
affiliates shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) conversion of the remaining, nonconverted
portion of this Note beneficially owned by such person or any of its affiliates
and (B) exercise or conversion of the unexercised or unconverted portion
of any other securities of Issuer (including, without limitation, any Warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by such person or any of its
affiliates.  Except as set forth in the preceding sentence, for purposes
of this Section 3.5, beneficial ownership will be calculated in accordance
with Section 13(d) of the Exchange Act.  For purposes of this Section 3.5,
in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of shares of outstanding Common Stock as reflected in (1) Issuer’s
most recent Form 8-K, Form 10-Q, Form 10-QSB, Form 10-K or Form 10-KSB
as the case may be, (2) a more recent public announcement by Issuer, or (3) any
other notice by Issuer or its transfer agent setting forth the number of shares
of Common Stock outstanding.  Upon the written request of any Holder,
Issuer will promptly, but in no event later than 2 business days following the
receipt of such notice, confirm orally and in writing to any such Holder the
number of shares of Common Stock then outstanding.  In any case, the
number of outstanding shares of Common Stock will be determined after giving
effect to conversions of Preferred Shares by such Holder and its affiliates
since the date as of which such number of outstanding Common Stock was
reported.  By written notice to Issuer, the Holder may increase or
decrease the Maximum Percentage to any other percentage not in excess of 9.99%
specified in such notice, but (i) any such increase will not be effective
until the sixty-first (61st) day after such notice is delivered to Issuer, and (ii) any
such increase or decrease will apply only to the Holder and not to any other
Holder.

 

4

 

3.6  Shareholder
Approval    Unless and until Shareholder Approval has
been obtained and deemed effective, the Issuer shall not upon the conversion of
this Note issue shares of Common Stock to the extent that such issuance,
together with all previous issuances of Common Stock pursuant to the exercise of all Warrants and
the conversion of all Notes issued pursuant to the Purchase Agreement, would in the aggregate exceed a number of shares of Common Stock equal to more
than 19.99% of  the Issuer’s  issued and outstanding Common Stock on the
Closing Date.

 

4.             Registration
Rights.  The Common
Stock issuable on conversion of this Note, is subject to registration pursuant
to a Registration Rights Agreement, dated as of the date of this Note, among
Issuer, the placement agent for the securities contemplated under the Purchase
Agreement, Holder and the other purchasers under the Purchase Agreement.

 

5.             Security.  Repayment of this Note is secured, pari passu with Holders of all other Notes issued pursuant
to the Purchase Agreement, by a security interest (second in priority only to a
security interest in the assets held by Western Commercial Bank) in
substantially all the assets of Issuer pursuant to a security agreement,
related collateral assignments and such other necessary documents entered into
by Issuer in favor of                             ,
as collateral agent for the purchasers.

 

6.             Prepayment.  Issuer may not prepay this Note prior to the
Maturity Date, without the written consent of Holder.

 

7.             Transfer.  Purchaser may transfer this Note in
compliance with applicable U.S. federal and state and/or foreign securities
laws and in accordance with Section 5.1 of the Purchase Agreement.

 

8.             Financial Covenants. Until this Note
has been redeemed or otherwise satisfied in accordance with its terms the
Issuer shall not, unless the holders of Notes representing at least a majority
of the aggregate principal amount of the Notes then outstanding, shall
otherwise consent in writing, the Issuer shall comply with every financial
covenant contained in the Issuer’s loan agreements, notes and other documents
with any person to which the Issuer owes any Material Indebtedness, including,
without limitation, Western Commercial Bank.

 

9.             Events
of Default.  An “Event of Default” will occur if:

 

(a)           The Issuer fails to pay (a) any
principal of any Note when such amount becomes due and payable in accordance
with the terms thereof and such payment is not made with three Business Days of
when it is due, or (b) any interest on any Note or any other payment of
money required to be made to any of the Purchaser and such payment is not made
within three Business Days of when it is due; or

 

(b)           Any representation or warranty made
to the Purchasers in any Transaction Document or in any certificate, agreement
or instrument executed and delivered to the Purchasers by the Issuers or any of
its subsidiaries or by its accountants or officers pursuant to any Transaction
Document is false, inaccurate or misleading in any material respect on the date
as of which made, and the Issuer receives notice thereof from the Placement Agent,
a Purchaser, or a third party; or

 

5

 

(c)           the Issuer or any of its subsidiaries
defaults in the performance of any term, covenant, agreement, condition,
undertaking or provision of any Transaction Document other than  the Registration Rights Agreement, including,
but not limited to,  its covenants under
Sections 4.2.6, 4.2.7 and 4.4 of the Purchase Agreement, or any financial
covenants set forth in or referred to in this Note, or, in the case of any
default in the performance of any term, covenant, agreement, condition,
undertaking or provision of any Transaction Document which is capable of being
cured, such default is not cured or waived within five (5) Business Days
after the Issuer receives notice of such default from the Placement Agent, a
Purchaser, or from a third party, or after an officer or director of the Issuer;
or

 

(d)           (i) the Issuer or any of its subsidiaries
fails to pay any principal of or interest on any of its Material Indebtedness
for a period longer than the grace period, if any, provided for such payment;
or (ii) any default, other than one described in (i) of this Section9(d),
under any instrument or agreement evidencing, creating, securing or otherwise
relating to Material Indebtedness (including, without limitation, any guaranty
or assumption agreement relating to such indebtedness) or other event occurs
and continues beyond any applicable notice and cure period (for purposes of
this Note the term “Material Indebtedness” means mean indebtedness, in an
amount of $100,000  or more, for
borrowed money, under capitalized leases or evidenced by a bond, debenture,
note or similar instrument, and shall include, without limitation, any such
indebtedness assumed or guaranteed); or

 

(e)           (i) One or more final judgments,
decrees or orders shall be entered against the Issuer or any of its
subsidiaries involving in the aggregate a liability (not fully covered by
insurance other than applicable deductibles) of $75,000 or more and all such
judgments, decrees or orders shall not have been vacated, paid or discharged,
dismissed, or stayed or bonded pending appeal (or other contest by appropriate
proceedings) within sixty (60) days from the entry thereof; (ii) pursuant
to one (1) or more judgments, decrees, orders, or other proceedings,
whether legal or equitable, any warrant of attachment, execution or other writ
is levied upon any property or assets of the Issuer or any subsidiary and is
not satisfied, dismissed or stayed (or other contests by appropriate
proceedings without bond or stay) within sixty (60) days; (iii) all or any
substantial part of the assets or properties of the Issuer or any subsidiary are
condemned, seized or appropriated by any government or governmental authority;
or  (iv) any order is entered in any
proceeding directing the winding up, dissolution or split-up of the Issuer or
any subsidiary; or

 

(f)            The Issuer (i) commences any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, 

 

6

 

composition
or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its assets, or (ii) is the debtor
named in any other case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (ii) remains
undismissed, undischarged or unbonded for a period of sixty (60) days, or (iii) takes
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence to, any order, adjudication or appointment of a nature referred to
in clause (i) or (ii) above, or (iv) shall generally not be
paying, shall be unable to pay, or shall admit in writing its inability to pay
its debts as they become due, or (e) shall make a general assignment for
the benefit of its creditors; or

 

(g)           At any time there
occurs a Change of Control Transaction (for purposes of this Note, a “Change of
Control Transaction” shall mean (i) a sale, lease or other disposition of
assets or properties of the Issuer and it subsidiaries (calculated on a
consolidated basis) having a book value of fifty-one percent (51%) or more of
the book value of all the assets and properties thereof, or (ii) any
transaction in which any person shall directly or indirectly acquire from the
holders thereof, by purchase or in a merger, consolidation or other transfer or
exchange of outstanding capital stock, ownership of or control over capital
stock of the Issuer (or securities exchangeable for or convertible into such
stock or interests) entitled to elect a majority of the Issuer’s Board of
Directors or representing at least fifty-one percent (51%) of the number of
shares of Common Stock outstanding; or

 

(h)           On or at any time
after the date of this Note (i) any of the Transaction Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, (ii) the Security Agreement shall cease to provide the Purchasers a
valid security interest in any of the collateral purported to be covered
thereby, perfected and with the priority required thereby, subject only to
liens permitted under this Agreement and such Security Agreement, and such
default in clause (i) or (ii) is not cured or waived within ten (10) days
after the Issuer receives notice of such default from a Purchaser or from a
third party, or (c) the Issuer or any subsidiary of the Issuer contests
the validity or enforceability of any Transaction Document in writing or denies
that it has any further liability under any Transaction Document to which it is
party, or gives notice to such effect.

 

10.          Remedies.  At such time that an Event of Default has
occurred and is continuing, then Holder, by written notice to Issuer (the “Notice”),
may declare all amounts hereunder immediately due and payable in cash and
Holder will be entitled to reimbursement of its reasonable costs and expenses
related to collection of all amounts owing in connection thereof.  Except for the Notice, Holder need not
provide, and Issuer hereby waives, any presentment, demand, protest or other
notice of any kind, and Holder may immediately and without expiration of any
grace period enforce any and all of its rights and remedies hereunder and all
other remedies available to it under applicable law. Such election may be
rescinded and annulled by Holder at any time prior to payment hereunder.  No such rescission or annulment will affect
any subsequent Event of Default or impair any right consequent thereon. In the
case of the occurrence of an Event of Default arising out of a breach by the
Issuer of the covenant contained 

 

7

 

in
Section 4.4 of the Purchase Agreement (but in no other event), in lieu of
declaring all amounts immediately due hereunder, each Purchaser, upon prior
written notice to the Issuer, may sell to the Issuer all of the Notes  (or all shares of Common Stock issued to the
Purchaser upon conversion of the Notes) for a price equal to 125% of the
Subscription Price paid by the Purchaser. 
The sale referred to in the preceding sentence shall be consummated at a
closing to be held not later than ten (10) days after such notice is given
and the purchase price shall be paid by the Issuer to the Purchaser at such
closing in full in cash.

 

11.          Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder will be in writing
and will be deemed given and effective on the earliest of (a) the date of
transmission if such notice or communication is delivered by fax prior to 5:30 p.m.
(Eastern Time) on a Business Day, (b) the next Business Day after the date
of transmission if such notice or communication is delivered via fax on a day
that is not a Business Day or later than 5:30 p.m. (Eastern Time) on a
Business Day, (c) the 2nd business day after the date of
mailing if sent by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The
facsimile number and address for such notices and communications are as set
forth on the signature pages to the Purchase Agreement or as otherwise
notified by any party in a writing to the others in accordance herewith from
time to time.

 

SIGNED, SEALED AND DELIVERED as of the date first above
written.

 

	
   

  	
  ASPYRA,
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

8

 

ANNEX A

 

NOTICE OF CONVERSION

 

                The undersigned hereby elects to
convert principal under the Secured Convertible Promissory Note due March       ,
2010 (the “Note”) of Aspyra, Inc., a California corporation (the “Company”), into shares of common stock, no par
value per share (the “Common Stock”), of the Company according to the
conditions hereof, as of the date written below.  If shares of Common Stock are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith.  No fee will be charged to the
holder for any conversion, except for such transfer taxes, if any.

 

                By the delivery of this Notice
of Conversion the undersigned represents and warrants to the Company that its
ownership of the Common Stock does not exceed the amounts specified under Section 3.6
of the Note, as determined in accordance with Section 13(d) of the
Exchange Act.

 

                The undersigned agrees to comply
with the prospectus delivery requirements under the applicable securities laws
in connection with any transfer of the aforesaid shares of Common Stock.

 

Conversion calculations:

 

Date to Effect Conversion:

 

Principal Amount of Note to be Converted:

 

Payment of Interest in Common Stock     
yes       no

 

If yes $           of
Interest Accrued on Account of Conversion at Issue.

 

Number of shares of Common Stock to be issued:

 

Signature:

Name:

Address:

 

Or

 

DWAC Instructions:

Broker No:

Account No:

 

9Exhibit 10.3

 

Exhibit A

to

Securities Purchase Agreement

 

FORM OF WARRANT

 

NEITHER THIS SECURITY NOR ANY SECURITIES WHICH MAY BE ISSUED UPON
EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER
JURISDICTION OR ANY EXCHANGE OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED,
AND SUCH OTHER LAWS AND REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
SUCH REGISTRATION AND/OR LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE
REASONABLY ACCEPTABLE TO THE COMPANY.

 

ASPYRA, INC.

 

COMMON STOCK WARRANT

 

	
  No.

  	
   

  	
  March            ,
  2008

  

 

ASPYRA,
INC., a
California corporation (the “Company”), hereby certifies that
                                                                     
 , its permissible transferees,
designees, successors and assigns (collectively, the “Holder”), for
value received, is entitled to purchase from the Company at any time commencing
on the effective date (the “Effective Date”), which shall be the date of
the Closing (as defined in the Securities Purchase Agreement, dated as of March         ,
2008, by and among the Company and the Purchasers listed on Schedule 1
thereto (the “Securities Purchase Agreement”)), and terminating on the third
anniversary of such date (the “Termination Date”) up to
                          
shares (each, a “Share” and collectively the “Shares”) of the
Company’s common stock, no par value per Share (the “Common Stock”), at
an exercise price per Share equal to
                                  
($      ) (the “Exercise Price”).  The number of Shares purchasable hereunder
and the Exercise Price are subject to adjustment as provided in Section 4
hereof.

 

1

 

1.             Method of Exercise; Payment.

 

(a)           Cash
Exercise.  The purchase rights
represented by this Warrant may be exercised by the Holder, in whole or in
part, at any time, or from time to time, by the surrender of this Warrant (with
the notice of exercise form (the “Notice of Exercise”) attached hereto
as Exhibit A duly executed) at the principal office of the Company,
and by payment to the Company of an amount equal to the Exercise Price
multiplied by the number of the Shares being purchased, which amount may be
paid, at the election of the Holder, by 
wire transfer or certified check payable to the order of the Company.
The person or persons in whose name(s) any certificate(s) representing
Shares 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.

 

(b)           Net Issue Exercise. In lieu of
exercising this warrant pursuant to Section l (a) hereof, the Holder
may elect to receive a number of Shares equal to of the value (as determined below)
of such portion of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
Notice of Cashless Exercise annexed hereto as Exhibit C duly executed;
provided that the Net Issue Exercise set forth in this Section 1(b) is
subject to adjustments set forth in Section 4 of this Warrant. In such
event, the Company shall issue to the Holder a number of Shares computed using
the following formula:

 

	
   

  	
   

  	
  X = 

  	
  Y (A-B)

  	
   

  
	
   

  	
   

  	
   

  	
  A

  	
   

  

 

	
  Where

  	
  X

  	
   

  	
  =

  	
   

  	
  the
  number of Shares to be issued to the Holder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Y

  	
   

  	
  =

  	
   

  	
  the
  number of Shares subject to this Warrant or, if only a portion of this
  Warrant is being exercised, the portion of the Warrant being canceled (at the
  time of such calculation).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A

  	
   

  	
  =

  	
   

  	
  the
  fair market value of one share of the Company’s Common Stock (at the date of
  such calculation).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B

  	
   

  	
  =

  	
   

  	
  the
  Exercise Price (as adjusted to the date of such calculation).

  

 

(c)           Fair Market Value.  For purposes of this Section 1, the fair
market value of the Company’s Common Stock shall mean:

 

(i)            The
average of the closing sales prices of the Company’s Common Stock quoted on the
American Stock Exchange, or if the American Stock Exchange is not the principal
market for the Company’s Common Stock, then the Nasdaq Stock Market or in the
Over-The-Counter Market Summary or the closing price quoted on any other
exchange on which the Common Stock is listed, whichever is applicable, as
published in the The Wall Street Journal for the ten (10) trading days
prior to the date of determination of fair market value;

 

2

 

(ii)           If
the Company’s Common Stock is not traded on the Nasdaq Stock Market or
Over-The-Counter or on an exchange, the fair market value of the Common Stock
per share shall be agreed upon by the parties hereto.  If parties cannot agree on the fair market
value within five (5) business days of delivery of the Notice of Exercise,
the Board of Directors in good faith shall determine the fair market value of
the Common Stock; provided, however, that the fair market value of the Common
Stock shall be no greater than the price at which the Company last sold its
Common Stock or the exercise price of its last granted options, whichever
occurs later.

 

(d)           Stock Certificates.  In the event of any exercise of the rights
represented by this Warrant, as promptly as practicable after this Warrant is
surrendered and delivered to the Company along with all other appropriate
documentation on or after the date of exercise and in any event within ten (10) days
thereafter, the Company at its expense shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of Shares issuable upon such exercise. 
In the event this Warrant is exercised in part, the Company at its
expense will execute and deliver a new Warrant of like tenor exercisable for
the number of Shares for which this Warrant may then be exercised.

 

(e)           Taxes.  The issuance of the Shares upon the exercise
of this Warrant, and the delivery of certificates or other instruments
representing such Shares, shall be made without charge to the Holder for any
tax or other charge in respect of such issuance.

 

2.             Warrant.

 

(a)           Exchange,
Transfer and Replacement.  At any
time prior to the exercise hereof, this Warrant may be exchanged upon
presentation and surrender to the Company, alone or with other warrants of like
tenor of different denominations registered in the name of the same Holder, for
another warrant or warrants of like tenor in the name of such Holder
exercisable for the aggregate number of Shares as the warrant or warrants
surrendered.

 

(b)           Replacement
of Warrant.  Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver in lieu thereof, a new Warrant of like tenor.

 

(c)           Cancellation;
Payment of Expenses.  Upon the
surrender of this Warrant in connection with any transfer, exchange or replacement
as provided in this Section 2, this Warrant shall be promptly
canceled by the Company.  The Holder
shall pay all taxes and all other expenses (including legal expenses, if any,
incurred by the Holder or transferees) and charges payable in connection with
the preparation, execution and delivery of Warrants pursuant to this Section 2.

 

3

 

(d)           Warrant
Register.  The Company shall
maintain, at its principal executive offices (or at the offices of the transfer
agent for the Warrant or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant (the “Warrant
Register”), 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 and each prior owner of this Warrant.

 

3.             Rights
and Obligations of Holders of this Warrant. 
The Holder of this Warrant shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or in equity; provided,
however, that in the event any certificate representing shares of Common
Stock or other securities is issued to the holder hereof upon exercise of this
Warrant, such holder shall, for all purposes, be deemed to have become the
holder of record of such Common Stock on the date on which this Warrant,
together with a duly executed Election to Purchase, was surrendered and payment
of the aggregate Exercise Price was made, irrespective of the date of delivery
of such Common Stock certificate.

 

4.             Adjustments.

 

(a)           Stock
Dividends, Reclassifications, Recapitalizations, Etc.  While this Warrant is outstanding, in the
event the Company:  (i) pays a
dividend in Common Stock or makes a distribution in Common Stock, (ii) subdivides
its outstanding Common Stock into a greater number of shares, (iii) combines
its outstanding Common Stock into a smaller number of shares or (iv) increases
or decreases the number of shares of Common Stock outstanding by
reclassification of its Common Stock (including a recapitalization in
connection with a consolidation or merger in which the Company is the
continuing corporation), then (1) the Exercise Price on the record date of
such division or distribution or the effective date of such action shall be
adjusted by multiplying such Exercise Price by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately before
such event and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event, and (2) the number of shares of
Common Stock for which this Warrant may be exercised immediately before such
event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the Exercise Price immediately before such event and the
denominator of which is the Exercise Price immediately after such event.

 

(b)           Combination:
Liquidation.  While this Warrant is
outstanding, (i) In the event of a Combination (as defined below), each
Holder shall have the right to receive upon exercise of the Warrant the kind
and amount of shares of capital stock or other securities or property which
such Holder would have been entitled to receive upon or as a result of such
Combination had such Warrant been exercised immediately prior to such event
(subject to further adjustment in accordance with the terms hereof).  Unless 

 

4

 

paragraph (ii) is applicable to a Combination, the Company
shall provide that the surviving or acquiring Person (the “Successor Company”)
in such Combination will assume by written instrument the obligations under
this Section 4 and the obligations to deliver to the Holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to acquire. “Combination” means
an event in which the Company consolidates with, mergers with or into, or sells
all or substantially all of its assets to another Person, where “Person”
means any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity; (ii)  In the event of (x) a Combination where
consideration to the holders of Common Stock in exchange for their shares is
payable solely in cash or (y) the dissolution, liquidation or winding-up
of the Company, the Holders shall be entitled to receive, upon surrender of
their Warrant, distributions on an equal basis with the holders of Common Stock
or other securities issuable upon exercise of the Warrant, as if the Warrant
had been exercised immediately prior to such event, less the Exercise Price.  In case of any Combination described in this Section 4,
the surviving or acquiring Person and, in the event of any dissolution,
liquidation or winding-up of the Company, the Company, shall deposit promptly
with an agent or trustee for the benefit of the Holders of the funds, if any,
necessary to pay to the Holders the amounts to which they are entitled as
described above.  After such funds and
the surrendered Warrant are received, the Company is required to deliver a
check in such amount as is appropriate (or, in the case or consideration other
than cash, such other consideration as is appropriate) to such Person or
Persons as it may be directed in writing by the Holders surrendering such
Warrant.

 

(c) Notice of Adjustment.  Whenever the Exercise Price or the number of
shares of Common Stock and other property, if any, issuable upon exercise of
the Warrant is adjusted, as herein provided, the Company shall deliver to the
holders of the Warrant in accordance with Section 10 a certificate
of the Company’s Chief Financial Officer setting forth, in reasonable detail,
the event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which (i) the Board of
Directors determined the fair value of any evidences of indebtedness, other securities
or property or warrants, options or other subscription or purchase rights and (ii) the
Current Market Value of the Common Stock was determined, if either of such
determinations were required), and specifying the Exercise Price and number of
shares of Common Stock issuable upon exercise of  Warrant after giving effect to such
adjustment.

 

(d)  Notice of Certain Transactions.  While this Warrant is outstanding, in the
event that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
non-cash dividend or distribution to the holders of its Common Stock, (b) to
offer the holders of its Common Stock rights to subscribe for or to purchase
any securities convertible into shares of Common Stock or shares of stock of
any class or any other securities, rights or options, (c) to effect any
capital reorganization, reclassification, consolidation or merger affecting the
class of Common Stock, as a whole, or (d) to effect the voluntary or
involuntary dissolution, liquidation or winding-up of the Company, the Company
shall, within the 

 

5

 

time limits specified below, send to each Holder a notice of such
proposed action or offer.  Such notice
shall be mailed to the Holders at their addresses as they appear in the Warrant
Register (as defined in Section 2(d)), which shall specify the
record date for the purposes of such dividend, distribution or rights, or the
date such issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
shall briefly indicate the effect of such action on the Common Stock and on the
number and kind of any other shares of stock and on other property, if any, and
the number of shares of Common Stock and other property, if any, issuable upon
exercise of each Warrant and the Exercise Price after giving effect to any
adjustment pursuant to Section 4 which will be required as a result
of such action.  Such notice shall be
given as promptly as possible and (x) in the case of any action covered by
clause (a) or (b) above, at least ten (10) days prior to the
record date for determining holders of the Common Stock for purposes of such
action or (y) in the case of any other such action, at least twenty (20)
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be the
earlier.

 

(e)  Current Market Value.  “Current Market Value” per share of
Common Stock or any other security at any date means (i) if the security
is not registered under the Securities Exchange Act of 1934 and/or traded on a
national securities exchange, quotation system or bulletin board, as amended
(the “Exchange Act”), (a) the value of the security, determined in
good faith by the Board of Directors of the Company and certified in a board
resolution, based on the most recently completed arm’s-length transaction
between the Company and a Person other than an affiliate of the Company or
between any two such Persons and the closing of which occurs on such date or
shall have occurred within the six-month period preceding such date, or (b) if
no such transaction shall have occurred within the six-month period, the value
of the security as determined by an independent financial expert or an agreed
upon financial valuation model or (ii) if the security is registered under
the Exchange Act and/or traded on a national securities exchange, quotation system
or bulletin board, the average of the daily closing bid prices (or  the equivalent in an over-the-counter market)
for each day on which the Common Stock is traded for any period on the
principal securities exchange or other securities market on which the common
Stock is being traded (each, a “Trading Day”) during the period
commencing thirty (30) days before such date and ending on the date one day
prior to such date.

 

5.             Registration
Rights.  The Holder is entitled to
the benefit of such registration rights in respect of the Shares as are set
forth in the Registration Rights Agreement dated as of March         ,
2008 by and between the Company and the Holder.

 

6.             Fractional
Shares.  In lieu of issuance of a
fractional share upon any exercise hereunder, the Company will issue an
additional whole share in lieu of that fractional share, calculated on the
basis of the Exercise Price.

 

7.             Legends.  Prior to issuance of the shares of Common
Stock underlying this Warrant, all such certificates representing such shares
shall bear a restrictive legend to the effect that the Shares represented by
such certificate have not been registered under the 1933 Act, and that the
Shares may not be sold or transferred in the absence of such registration or an
exemption therefrom, such legend to be substantially in the form of the
bold-face language appearing at the top of Page 1 of this Warrant.

 

6

 

8.             Disposition
of Warrants or Shares.  The Holder of
this Warrant, each transferee hereof and any holder and transferee of any
Shares, by his or its acceptance thereof, agrees that no public distribution of
Warrants or Shares will be made in violation of the provisions of the 1933
Act.  Furthermore, it shall be a
condition to the transfer of this Warrant that any transferee thereof deliver
to the Company his or its written agreement to accept and be bound by all of
the terms and conditions contained in this Warrant.

 

9.             Merger
or Consolidation.  The Company will
not merge or consolidate with or into any other corporation, or sell or
otherwise transfer its property, assets and business substantially as an
entirety to another corporation, unless the corporation resulting from such
merger or consolidation (if not the Company), or such transferee corporation,
as the case may be, shall expressly assume, by supplemental agreement
reasonably satisfactory in form and substance to the Holder, the due and
punctual performance and observance of each and every covenant and condition of
this Warrant to be performed and observed by the Company.

 

10.           Notices.  Except as otherwise specified herein to the
contrary, all notices, requests, demands and other communications required or
desired to be given hereunder shall only be effective if given in writing by
certified or registered U.S. mail with return receipt requested and postage
prepaid; by private overnight delivery service (e.g. Federal Express); by
facsimile transmission (if no original documents or instruments must accompany
the notice); or by personal delivery. 
Any such notice shall be deemed to have been given (a) on the
business day immediately following the mailing thereof, if mailed by certified
or registered U.S. mail as specified above; (b) on the business day
immediately following deposit with a private overnight delivery service if sent
by said service; (c) upon receipt of confirmation of transmission if sent
by facsimile transmission; or (d) upon personal delivery of the
notice.  All such notices shall be sent
to the following addresses (or to such other address or addresses as a party
may have advised the other in the manner provided in this Section 10):

 

	
  if
  to the Company:

  	
  Aspyra, Inc.

  	
   

  
	
   

  	
  26115-A Mureau Road

  	
   

  
	
   

  	
  Calabasas, California
  91302

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with
  copy to:

  	
  Sichenzia Ross Friedman
  Ference LLP

  
	
   

  	
  1065 Avenue of the
  Americas, 21st Floor

  
	
   

  	
  New York, NY 10018

  
	
   

  	
  Attention: Darrin M. Ocasio, Esq.

  
	
   

  	
  Facsimile: (212) 930-9725

  

 

7

 

	
  if to the Holder:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
				

 

Notwithstanding the time
of effectiveness of notices set forth in this Section, an Election to Purchase
shall not be deemed effectively given until it has been duly completed and
submitted to the Company together with this original Warrant and payment of the
Exercise Price in a manner set forth in this Section.

 

11.           Limitation on Exercise.
Notwithstanding anything to the contrary contained herein, the number of shares
of Common Stock that may be acquired by the Holder upon any exercise of
this Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the
total number of shares of Common Stock then beneficially owned by such Holder
and its affiliates and any other persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed [4.999%/9.999%] of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares
of Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. Each
delivery of an Exercise Notice hereunder will constitute a representation by
the Holder that it has evaluated the limitation set forth in this paragraph and
determined that issuance of the full number of Warrant Shares requested in such
Exercise Notice is permitted under this paragraph. This provision shall not
restrict the number of shares of Common Stock which a Holder may receive
or beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a merger or
other business combination or reclassification involving the Company. This
restriction may not be waived without the consent of the Holder.

 

12.           Governing
Law.  This Warrant shall be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed in the State of New York.

 

13.           Successors
and Assigns.  This Warrant shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.

 

8

 

14.           Headings.  The headings of various sections of this
Warrant have been inserted for reference only and shall not affect the meaning
or construction of any of the provisions hereof.

 

15.           Severability.
If any provision of this Warrant is held to be unenforceable under applicable
law, such provision shall be excluded from this Warrant, and the balance hereof
shall be interpreted as if such provision were so excluded.

 

16.           Modification
and Waiver.  This Warrant and any
provision hereof may be amended, waived, discharged or terminated only by an
instrument in writing signed by the Company and the Holder.

 

17.           Specific
Enforcement.  The Company and the
Holder acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Warrant were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or cure breaches
of the provisions of this Warrant and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which either
of them may be entitled by law or equity.

 

18.           Assignment.  Subject 
to prior written approval by the Company, this Warrant may be
transferred or assigned, in whole or in part, at any time and from time to time
by the then Holder by submitting this Warrant to the Company together with a
duly executed Assignment in substantially the form and substance of the Form of
Assignment which accompanies this Warrant, as Exhibit B hereto, and, upon the Company’s receipt hereof,
and in any event, within five (5) business days thereafter, the Company
shall issue a warrant to the Holder to evidence that portion of this Warrant,
if any as shall not have been so transferred or assigned.

 

19.           Shareholder
Approval.    Unless and until Shareholder Approval has been
obtained and deemed effective, the Company shall not upon exercise of this
Warrant issue shares of  Common Stock to
the extent that such  issuance, together
with all previous issuances of Common Stock pursuant to the exercise of all
Warrants and the conversion of all Notes issued pursuant to the Securities
Purchase Agreement would in the aggregate exceed a number of shares of Common
Stock equal to more than 19.99% of the Company’s issued and outstanding Common
Stock on the Closing Date.

 

(signature page immediately follows)

 

9

 

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

 

	
   

  	
  ASPYRA, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:
  March      , 2008

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
   

  
	
   

  	
  Title:President
  and Chief Executive Officer

  	
   

  

 

10

 

 

EXHIBIT A

TO

WARRANT CERTIFICATE

 

ELECTION TO
PURCHASE

 

To Be Executed by the
Holder

in Order to Exercise the Warrant

 

The undersigned Holder
hereby elects to purchase
                Shares pursuant to the attached Warrant, and
requests that certificates for securities be issued in the name of:

 

	
   

  
	
  (Please type or
  print name and address)

  
	
   

  
	
   

  
	
   

  
	
  (Social Security
  or Tax Identification Number)

  
	
   

  

 

	
  and delivered

  	
   

  
	
   

  	
   

  
	
  to:

  	
   

  	
   

  
	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
   

  	
  (Please type or
  print name and address if different from above)

  	
   

  
				

 

If such number of Shares
being purchased hereby shall not be all the Shares that may be purchased
pursuant to the attached Warrant, a new Warrant for the balance of such Shares
shall be registered in the name of, and delivered to, the Holder at the address
set forth below.

 

In full payment of the
purchase price with respect to the Shares purchased and transfer taxes, if any,
the undersigned hereby tenders payment of
$                    
by check, money order or wire transfer payable in United States currency to the
order of ASPYRA, INC.

 

	
   

  	
   

  	
   

  	
   

  	
  HOLDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

 

11

 

 

EXHIBIT B

TO

WARRANT

 

FORM OF
ASSIGNMENT

(To be signed only on transfer of Warrant)

 

For value received, the
undersigned hereby sells, assigns, and transfers unto
                          
the right represented by the within Warrant to purchase
             shares
of Common Stock of Aspyra, Inc., a California corporation, to which the
within Warrant relates, and appoints
                                        
Attorney to transfer such right on the books of Aspyra, Inc., a California
corporation, with full power of substitution of premises.

 

	
  Dated:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  (signature must conform to name of holder as specified on the factof
  the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  

 

Signed in the presence of
:

 

Dated:

 

 

 

12

 

 

EXHIBIT C

 

TO

 

WARRANT

 

NOTICE OF EXERCISE OF COMMON STOCK WARRANT

 

PURSUANT TO NET ISSUE (“CASHLESS”) EXERCISE PROVISIONS

 

Aspyra, Inc.

26115-A Mureau Road

Calabasas,
California 91302

 

Number of Shares of

Common Stock to be

Issued Under this

Notice:

 

 

CASHLESS EXERCISE

 

Gentlemen:

 

The
undersigned, registered holder of the Warrant to Purchase Common Stock
delivered herewith (“Warrant”) hereby irrevocably exercises such Warrant for,
and purchases thereunder, shares of the Common Stock of ASPYRA, INC., a California corporation, as
provided below.  Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings given in the
Warrant.  The portion of the Aggregate
Price (as hereinafter defined) to be applied toward the purchase of Common
Stock pursuant to this Notice of Exercise is $                ,
thereby leaving a remainder Aggregate Price (if any) equal to $                .  Such exercise shall be pursuant to the net
issue exercise provisions of Section 1(b) of the Warrant. Therefore,
the holder makes no payment with this Notice of Exercise.  The number of shares to be issued pursuant to
this exercise shall be determined by reference to the formula in Section 1(b) of
the Warrant which requires the use of the fair market value (as defined in Section 1(c) of
the Warrant) of the Company’s Common Stock on the business day immediately
preceding the day on which this Notice is received by the Company.  To the extent the foregoing exercise is for
less than the full Aggregate Price of the Warrant, the remainder of the Warrant
representing a number of Shares equal to the quotient obtained by dividing the
remainder of the Aggregate Price by the Warrant Price (and otherwise of like
form, tenor and effect) may be exercised under Section 1(b) of the
Warrant. For purposes of this Notice the term “Aggregate Price” means the
product obtained by multiplying (i) the number of shares of Common Stock
for which the Warrant is exercisable times the Warrant Price;

 

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						

 

 

13

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