Document:

Exhibit 4.1

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

CRYSTAL INTERNATIONAL TRAVEL
GROUP, INC.

WARRANT TO PURCHASE SHARES OF
COMMON STOCK

	
  No. CW-110601

  	
  November
  27, 2006

  

 

Void After November 27, 2011

THIS CERTIFIES THAT,
for value received, Arnold Income Fund LP, with its principal office at, or
assigns (the “Holder” or “Purchaser”), is entitled to
subscribe for and purchase at the Exercise Price (defined below) from CRYSTAL INTERNATIONAL TRAVEL GROUP, INC., a Delaware
corporation, with its principal office at (the “Company”),
the Exercise Shares (as defined below), at any time or from time to time during
the Exercise Period (as defined below), upon surrender to the Company at its
principal office (or at such other location as the Company may advise the
Holder in writing) of this Warrant properly endorsed, together with the
completed and executed Subscription Form attached hereto and, if applicable,
upon payment in cash or by check of the aggregate Exercise Price for the number
of shares for which this Warrant is being exercised determined in accordance
with the provisions hereof. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment as provided in Section 4 of
this Warrant.

This Warrant is subject to the following terms and
conditions:

1.             DEFINITIONS.  Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings given to them in that certain Secured Note and Warrant Purchase
Agreement, dated as of November 27, 2006 (as the same may be amended from time
to time, the “Purchase Agreement”), by and
among the Company and the Purchasers identified on the Schedule of Purchasers
thereto.  As
used herein, the following terms shall have the respective meanings set
forth below:

“Additional
Shares of Common Stock” shall mean all shares of Common Stock issued by the Company whether or
not subsequently reacquired or retired by the Company other than (A) shares of
Common Stock and/or options, warrants or other Common Stock purchase rights, and
the Common Stock issued pursuant to such options, warrants or other rights (as
adjusted for any stock dividends, distributions, combinations, splits,
recapitalizations and the like) after the Initial Closing Date to employees,
officers or directors of, or consultants or advisors to the Company or any
subsidiary pursuant to stock purchase or stock option plans or other
arrangements that are approved by the

 

Board;
(B) shares of Common Stock and/or options, warrants or other Common Stock
purchase rights, and the Common Stock issued pursuant to such options, warrants
or other rights issued for consideration other than cash pursuant to a merger,
consolidation, acquisition or similar business combination approved by the
Board; and (C) shares of Common Stock issued pursuant to any equipment leasing
arrangement, or debt financing from a bank or similar financial institution, or
strategic partnering arrangements or other similar transactions approved by the
Board of Directors.

“Expiration
Date” means five years from the date of this Warrant.

“Exercise
Period” means the date the Notice of Conversion of the Notes is
given to the Company in accordance with the terms of the Notes issued pursuant
to the Purchase Agreement, and ending at 5:00 p.m. (Eastern Time) on the Expiration
Date.

“Exercise
Price” means, subject to adjustment pursuant to Section 4 below,
the price per share shall be $0.10.

“Exercise Shares” means 400,000
shares of the Company’s Common Stock.

2.             EXERCISE OF WARRANT.  This Warrant is exercisable at the option of the
holder of record hereof, at any time or from time to time during the Exercise
Period for all or any part of the Exercise Shares (but not for a fraction of a
share) which may be purchased hereunder. 
Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder or persons affiliated with the Holder, if the Holder so
designates, shall be issued and delivered to the Holder within a reasonable time
after the rights represented by this Warrant shall have been so exercised.  In case of a purchase of less than all the
shares which may be purchased under this Warrant, the Company shall cancel this
Warrant and execute and deliver a new Warrant or Warrants of like tenor for the
balance of the shares purchasable under the Warrant surrendered upon such
purchase to the Holder hereof within a reasonable time.  The person in whose name any certificate or
certificates for Exercise Shares are to be issued upon exercise of this Warrant
shall be deemed to have become the holder of record of such shares on the date
on which this Warrant was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of such certificate or certificates,
except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have
become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open.

3.             SHARES TO BE FULLY PAID; RESERVATION OF SHARES.  The Company covenants and agrees
that the Exercise Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable and free from all preemptive rights of any
shareholder and free of all taxes, liens and charges with respect to the
issuance thereof.  The Company further
covenants and agrees that from and after the date of the Initial Closing Date,
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this Warrant, a sufficient number of shares of authorized but unissued
shares of Common

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Stock, as the case may
be, and Common Stock issuable upon conversion of the shares of Common Stock or
other securities and property, when and as required to provide for the exercise
of the rights represented by this Warrant, and the Company will take all such
action as may be necessary to assure that such shares of Common Stock may be
issued as provided herein without violation of any applicable law or
regulation.  The Company will not take
any action which would result in any adjustment of the Exercise Price
(i) if the total number of shares of Common Stock issuable after such
action upon exercise of all outstanding warrants, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company’s Certificate of Incorporation, or (ii) if the
total number of shares of Common Stock issuable after such action upon the
conversion of all such shares of Common Stock, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding would exceed the total number of shares of Common Stock then
authorized by the Company’s Certificate of Incorporation.

4.             ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.  The Exercise Price and the number of shares
purchasable upon the exercise of this Warrant shall be subject to adjustment
from time to time upon the occurrence of certain events described in this
Section 4.  Upon each adjustment of the
Exercise Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
shares obtained by multiplying the Exercise Price in effect immediately prior to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the Exercise
Price resulting from such adjustment.

4.1          Subdivision
or Combination of Stock.  In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number
of shares, the Exercise Price in effect immediately prior to such combination
shall be proportionately increased.

4.2          Dividends
in Common Stock, etc.  If at any time or from time to
time the holders of Common Stock (or any shares of stock or other securities at
the time receivable upon the exercise of this Warrant) shall have received or
become entitled to receive, without payment therefor,

(a)           Common Stock or any shares of stock or
other securities which are at any time directly or indirectly convertible into
or exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution,

(b)           any cash paid or payable otherwise than
as a cash dividend, or

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(c)           Common Stock or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Common Stock issued as a stock split or adjustments in
respect of which shall be covered by the terms of Section 4.1 above), then and
in each such case, the Holder hereof shall, upon the exercise of this Warrant,
be entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clause (b) above and this clause (c)) which such
Holder would hold on the date of such exercise had he been the holder of record
of such Common Stock as of the date on which holders of Common Stock received
or became entitled to receive such shares or all other additional stock and
other securities and property.

4.3          Consolidation,
Merger or Sale.  If any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
or other transactions shall be effected in such a way that holders of Common
Stock, as the case may be, shall be entitled to receive stock, securities, or
other assets or property (an “Organic Change”),
then, as a condition of such Organic Change, lawful and adequate provisions
shall be made by the Company whereby the Holder hereof shall thereafter have
the right to purchase and receive (in lieu of the Exercise Shares immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby) such shares of stock, securities or other assets or property
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Exercise Shares equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby; provided, however, that (in case of a
consolidation or merger of the Company with another corporation in which the
stockholders of the Company immediately prior to such consolidation or merger,
own less than 50% of the surviving entity’s voting power immediately after such
consolidation or merger, or the sale of all or substantially all of its assets)
in the event the value of the stock, securities or other assets or property
(determined in good faith by the Board of Directors of the Company) issuable or
payable with respect to one share of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby is in excess of the Exercise Price hereof effective
at the time of such consolidation, merger or sale and securities received in
such reorganization, if any, are publicly traded, then this Warrant shall
automatically, and with no further action necessary on the part of Holder or
the Company, be converted into such number of Exercise Shares as would be
received by Holder had Holder made the net issue election pursuant to section
2.1 hereof immediately prior to such Organic Change.  In the event of any Organic Change,
appropriate provision shall be made by the Company with respect to the rights
and interests of the Holder of this Warrant to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
Exercise Price and of the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable, in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise
hereof.  The Company will not effect any
such consolidation, merger or sale (other than a consolidation, merger or sale
resulting in the automatic conversion of this Warrant pursuant to the first
sentence of this paragraph) unless, prior to the consummation thereof, the
successor corporation (if other than the Company) resulting from such
consolidation or the corporation purchasing such assets shall assume by

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written instrument
reasonably satisfactory in form and substance to the Holders of a majority of
the warrants to purchase Common Stock then outstanding, executed and mailed or
delivered to the registered Holder hereof at the last address of such Holder
appearing on the books of the Company, the obligation to deliver to such Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.

4.4          Adjustment
of Conversion Price Upon Issuance of Additional Shares of Common Stock.  In the event the Company, at any time after the
Initial Closing Date shall issue Additional Shares of Common Stock without
consideration or for a consideration per share less than the Exercise Price in
effect on the date of and immediately prior to such issue, then and in such
event, the Exercise Price shall be reduced, concurrently with such issue, to
the price at which the Additional Shares of Common Stock were issued.

4.5          Certain
Events.  If any change in the outstanding Common Stock
of the Company or any other event occurs as to which the other provisions of
this Section 4 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board of Directors of the Company
shall make an adjustment in the number and class of shares available under the
Warrant, the Exercise Price or the application of such provisions, so as to
protect such purchase rights as aforesaid. 
The adjustment shall be such as will give the Holder of the Warrant upon
exercise for the same aggregate Exercise Price the total number, class and kind
of shares as he would have owned had the Warrant been exercised prior to the
event and had he continued to hold such shares until after the event requiring
adjustment.

4.6          Notices
of Change.

(a)           Immediately upon any adjustment in the
number or class of shares subject to this Warrant and of the Exercise Price,
the Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.

(b)           The Company shall give written notice to
the Holder at least ten (10) business days prior to the date on which the
Company closes its books or takes a record for determining rights to receive
any dividends or distributions.

(c)           The Company shall also give written
notice to the Holder at least twenty (20) business days prior to the date on
which an Organic Change shall take place.

5.             ISSUE TAX.  The issuance of
certificates for the Exercise Shares upon the exercise of the Warrant shall be
made without charge to the Holder of the Warrant for any issue tax (other than
any applicable income taxes) in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.

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6.             CLOSING OF BOOKS.  The Company
will at no time close its transfer books against the transfer of any warrant or
of any shares of Common Stock issued or issuable upon the exercise of any
warrant in any manner which interferes with the timely exercise of this
Warrant.

7.             NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF
LIABILITY. 
Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company or any other matters or any rights whatsoever as a
stockholder of the Company.  No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised.  No provisions hereof, in the absence of
affirmative action by the holder to purchase shares of  Common Stock, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise to any
liability of such Holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by its creditors.

8.             WARRANTS TRANSFERABLE. 
Subject to compliance with applicable federal and state securities laws,
this Warrant and all rights hereunder are transferable, in whole or in part,
without charge to the holder hereof (except for transfer taxes), upon surrender
of this Warrant properly endorsed.  Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Warrant shall have been so endorsed, may
be treated by the Company, at the Company’s option, and all other persons dealing
with this Warrant as the absolute owner hereof for any purpose and as the
person entitled to exercise the rights represented by this Warrant, or to the
transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.

9.             REGISTRATION RIGHTS. 
Upon exercise of this Warrant, the Company covenants and agrees that it
will use commercially reasonable efforts to cause the shares held by Holders to
be included in any registration statement filed with the Securities and
Exchange Commission relating to an offering for the Company’s own account or
the account of others under the Securities Act of 1933 of any of its equity
securities, other than on Form S-4 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans.

10.          RIGHTS
AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT.  The rights and
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.

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

12.          NOTICES. 
Any notice, request or other document required or permitted to be given
or delivered to the holder hereof or the Company shall be in writing and shall
be deemed

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effectively given (i)
upon personal delivery to the party to be notified, (ii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iii) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.  All
communications shall be sent to each such holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor in the
first paragraph of this Warrant or such other address as either may from time
to time provide to the other.

13.          BINDING
EFFECT ON SUCCESSORS.  This Warrant shall be binding
upon any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company’s assets.  All of the obligations of the Company
relating to the Exercise Shares issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant.  All of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the holder
hereof.

14.          DESCRIPTIVE
HEADINGS AND GOVERNING LAW.  The description headings of the several
sections and paragraphs of this Warrant are inserted for convenience only and
do not constitute a part of this Warrant. 
This Warrant shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of New York.

15.          LOST
WARRANTS.  The Company represents and warrants to the
Holder hereof that 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 receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant.

16.          FRACTIONAL
SHARES. 
No fractional shares shall be issued upon exercise of this Warrant.  The Company shall, in lieu of issuing any
fractional share, pay the holder entitled to such fraction a sum in cash equal
to such fraction multiplied by the then effective Exercise Price.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed by its officers, thereunto
duly authorized this              
day of November, 2006.

	
   

  	
  CRYSTAL INTERNATIONAL TRAVEL

  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Fabrizzio Busso-Campana

  
	
   

  	
  Name:  Fabrizzio Busso-Campana

  
	
   

  	
  Title:  Chief
  Executive Officer

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/ Peter Gallic

  	
   

  	
   

  
	
  Secretary

  	
   

  
				

 

 

EXHIBIT A

SUBSCRIPTION FORM

Date:                                    ,
20   

 

Crystal
International Travel Group, Inc.

 

Attn:  President

Ladies
and Gentlemen:

o            The undersigned hereby elects to
exercise the warrant issued to it by Crystal International Travel Group, Inc.
(the “Company”) and dated                
, 2006 Warrant No. CW-    (the “Warrant”)
and to purchase thereunder                                                                   
shares of the Common Stock of the Company (the “Shares”)
at a purchase price of                                             
($           ) per Share
or an aggregate purchase price of                                                     
($           ) (the “Purchase Price”).

o            The undersigned hereby elects to
purchase                
shares of the Common Stock of the Company pursuant to the terms of the net
exercise provisions set forth in Section 2.1 of the attached Warrant, and shall
tender payment of all applicable transfer taxes, if any, pursuant to the terms
of the Warrant the undersigned has delivered the Purchase Price herewith in
full in cash or by certified check or wire transfer.

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 2Exhibit 4.2

THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGIS­TERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A
SECURITIES PURCHASE AGREEMENT DATED AS OF JUNE 30, 2006, NEITHER THIS WARRANT
NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRA­TION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN
OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL
IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

Right to 

Purchase 

1,500,000 

Shares of 

Common Stock, par 

value $.0001 

per share

STOCK PURCHASE WARRANT

THIS CERTIFIES THAT, for value
received, AJW Qualified Partners, LLC or its registered assigns, is entitled to
purchase from Crystal International Travel Group, Inc.,
a Delaware corporation (the “Company”), at any time or from time to time during
the period specified in Paragraph 2 hereof, 1,500,000 fully paid and
nonassessable shares of the Company’s Common Stock, par value $.0001 per share
(the “Common Stock”), at an exercise price per share equal to $.20 (the “Exercise
Price”).  The term “Warrant Shares,” as
used herein, refers to the shares of Common Stock purchasable hereunder.  The Warrant Shares and the Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof.  The term “Warrants” means this Warrant and
the other warrants issued pursuant to that certain Securities Purchase
Agreement, dated June 30, 2006, by and among the Company and the Buyers listed
on the execution page thereof (the “Securities Purchase Agreement”).

This Warrant is subject to the following terms, provisions, and
conditions:

1.                
Manner of
Exercise; Issuance of Certificates; Payment for Shares. Subject
to the provisions hereof, this Warrant may be exercised by the holder hereof,
in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the “Exercise
Agreement”), to the Company during normal business hours on any business day at
the Company’s principal executive offices (or such other office or agency of
the

 

Company as it may designate by notice to the holder
hereof), and upon (i) payment to the Company in cash, by certified or offi­cial
bank check or by wire transfer for the account of the Company of the Exercise
Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the
resale of the Warrant Shares by the holder is not then registered pursuant to
an effective registration statement under the Securities Act of 1933, as
amended (the “Securities Act”), delivery to the Company of a written notice of
an election to effect a “Cashless Exercise” (as defined in Section 11(c) below)
for the Warrant Shares specified in the Exercise Agreement.  The Warrant Shares so purchased shall be
deemed to be issued to the holder hereof or such holder’s designee, as the
record owner of such shares, as of the close of business on the date on which
this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been deliv­ered, and payment shall have been made for such shares as
set forth above.  Certifi­cates for the
Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding five (5) business days, after this
Warrant shall have been so exercised. 
The certificates so delivered shall be in such denominations as may be
requested by the holder hereof and shall be registered in the name of such
holder or such other name as shall be designated by such holder.  If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this
Warrant shall not then have been exercised. 
In addition to all other available remedies at law or in equity, if the
Company fails to deliver certificates for the Warrant Shares within five (5)
business days after this Warrant is exercised, then the Company shall pay to
the holder in cash a penalty (the “Penalty”) equal to 2% of the number of
Warrant Shares that the holder is entitled to multiplied by the Market Price
(as hereinafter defined) for each day that the Company fails to deliver
certificates for the Warrant Shares.  For
example, if the holder is entitled to 100,000 Warrant Shares and the Market
Price is $2.00, then the Company shall pay to the holder $4,000 for each day
that the Company fails to deliver certificates for the Warrant Shares.  The Penalty shall be paid to the holder by
the fifth day of the month following the month in which it has accrued.

Notwithstanding anything in this Warrant to the contrary, in no event
shall the holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of
the unexercised Warrants and the unexercised or unconverted portion of any
other securities of the Company (including the Notes (as defined in the
Securities Purchase Agreement)) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being
made, would result in beneficial ownership by the holder and its affiliates of
more than 4.9% of the outstanding shares of Common Stock.  For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder, except as otherwise provided in clause (i) of the preceding
sentence.  Notwithstanding anything to
the contrary contained herein, the limitation on exercise of this Warrant set
forth herein may not be amended without (i) the written consent of the holder
hereof and the Company and (ii) the approval of a majority of shareholders of
the Company.

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2.                
Period of Exercise.  This
Warrant is exercisable
at any time or from time to time on or after the date on which this Warrant is
issued and delivered pursuant to the terms of the Securities Purchase Agreement
and before 6:00 p.m., New York, New York time on the seventh (7th) anniversary of the date of issuance
(the “Exercise Period”).

3.                
Certain
Agreements of the Company. 
The Company hereby covenants and agrees as follows:

(a)           Shares
to be Fully Paid. 
All Warrant Shares will, upon issuance in accordance with the terms of
this Warrant, be validly issued, fully paid, and nonassessable and free from
all taxes, liens, and charges with respect to the issue thereof.

(b)           Reservation
of Shares. 
During the Exercise Period, the Company shall at all times have
authorized, and reserved for the purpose of issuance upon exercise of this
Warrant, a suf­ficient number of shares of Common Stock to provide for the
exercise of this Warrant.

(c)           
Certain Actions Prohibited.  The Company will not, by amendment of its
charter 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.  Without limiting the
general­ity of the foregoing, the Company (i) will not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, and (ii) 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.

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

4.                
Antidilution
Provisions. During the Exercise Period, the Exercise Price and
the number of Warrant Shares shall be subject to adjustment from time to time
as provided in this Paragraph 4.

In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
to the nearest cent.

(a)           Adjustment
of Exercise Price and Number of Shares upon Issuance of Common Stock.  Except as otherwise provided in Paragraphs
4(c) and 4(e) hereof, if and whenever on or after the date of issuance of this
Warrant, the Company issues or sells, or in accordance with Paragraph 4(b)
hereof is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share (before deduction of reasonable
expenses or commissions or underwriting discounts or allowances in connection
therewith) less than the Market Price on the date of issuance (a “Dilutive
Issuance”), then immediately upon the Dilutive Issuance, the Exercise Price
will be reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i) the 

 3
 

 

numerator of
which is an amount equal to the sum of (x) the number of shares of Common Stock
actually outstanding immediately prior to the Dilutive Issuance, plus (y) the
quotient of the aggregate consideration, calculated as set forth in Paragraph
4(b) hereof, received by the Company upon such Dilutive Issuance divided by the
Market Price in effect immediately prior to the Dilutive Issuance, and (ii) the
denominator of which is the total number of shares of Common Stock Deemed
Outstanding (as defined below) immediately after the Dilutive Issuance.

(b)           Effect
on Exercise Price of Certain Events.  For purposes of determining the adjusted
Exercise Price under Paragraph 4(a) hereof, the following will be applicable:

(i)            Issuance
of Rights or Options.  If the Company in any manner issues or grants
any warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Common Stock or other securities convertible into
or exchangeable for Common Stock (“Convertible Securities”) (such warrants,
rights and options to purchase Common Stock or Convertible Securities are
hereinafter referred to as “Options”) and the price per share for which Common
Stock is issuable upon the exercise of such Options is less than the Market
Price on the date of issuance or grant of such Options, then the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
will, as of the date of the issuance or grant of such Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share.  For purposes of the preceding
sentence, the “price per share for which Common Stock is issuable upon the
exercise of such Options” is determined by dividing (i) the total amount, if
any, received or receivable by the Company as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable).  No further adjustment to the Exercise Price
will be made upon the actual issuance of such Common Stock upon the exercise of
such Options or upon the conversion or exchange of Convertible Securities
issuable upon exercise of such Options.

(ii)           Issuance
of Convertible Securities.  If the Company in any manner issues or sells
any Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the price per
share for which Common Stock is issuable upon such conversion or exchange is
less than the Market Price on the date of issuance, then the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued and
sold by the Company for such price per share. 
For the purposes of the preceding sentence, the “price per share for
which Common Stock is issuable upon such conversion or exchange” is determined
by dividing (i) the total amount, if any, received or receivable by the Company
as consideration for the issuance or sale of all such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or 

 4
 

 

exchange of
all such Convertible Securities.  No
further adjustment to the Exercise Price will be made upon the actual issuance
of such Common Stock upon conversion or exchange of such Convertible
Securities.  [Need to discuss option
plan]

(iii)         Change
in Option Price or Conversion Rate.  If there is a change at any time in (i) the
amount of additional consideration payable to the Company upon the exercise of
any Options; (ii) the amount of additional consideration, if any, payable to
the Company upon the conversion or exchange of any Convertible Securities; or
(iii) the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock (other than under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the time
of such change will be readjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued or
sold.

(iv)          Treatment
of Expired Options and Unexercised Convertible Securities.  If, in any case, the total number of shares
of Common Stock issuable upon exercise of any Option or upon conversion or
exchange of any Convertible Securities is not, in fact, issued and the rights
to exercise such Option or to convert or exchange such Convertible Securities
shall have expired or terminated, the Exercise Price then in effect will be
readjusted to the Exercise Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible Securities, to
the extent outstanding immediately prior to such expiration or termination
(other than in respect of the actual number of shares of Common Stock issued
upon exercise or conversion thereof), never been issued.

(v)            Calculation
of Consideration Received.  If any Common Stock, Options or Convertible
Securities are issued, granted or sold for cash, the consideration received
therefor for purposes of this Warrant will be the amount received by the
Company therefor, before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale.  In case any Common Stock, Options or
Convertible Securities are issued or sold for a consideration part or all of
which shall be other than cash, the amount of the consideration other than cash
received by the Company will be the fair value of such consideration, except
where such consideration consists of securities, in which case the amount of
consideration received by the Company will be the Market Price thereof as of
the date of receipt.  In case any Common
Stock, Options or Convertible Securities are issued in connection with any
acquisition, merger or consolidation in which the Company is the surviving
corporation, the amount of consideration therefor will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving
corporation as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be.  The fair
value of any consideration other than cash or securities will be determined in
good faith by the Board of Directors of the Company.

(vi)          Exceptions
to Adjustment of Exercise Price.  No adjustment to
the Exercise Price will be made (i) upon the exercise of any warrants, options
or convertible securities granted, issued and outstanding on the date of
issuance of this Warrant; (ii) upon the grant or exercise of any stock or
options which may hereafter be granted or exercised under any employee benefit
plan, stock option plan or restricted stock plan of the Company now existing or
to be implemented in the future, so long as the issuance of such stock or
options is approved by a 

 5
 

 

majority of
the independent members of the Board of Directors of the Company or a majority
of the members of a committee of independent directors established for such
purpose; or (iii) upon the exercise of the Warrants.

(c)           Subdivision
or Combination of Common Stock.  If the Company at any time subdivides (by any
stock split, stock dividend, recapitalization, reorganization, reclassification
or otherwise) the shares of Common Stock acquirable hereunder into a greater
number of shares, then, after the date of record for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced.  If the
Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price in effect immediately
prior to such combination will be proportionately increased.

(d)           Adjustment
in Number of Shares.  Upon each adjustment of the Exercise Price
pursuant to the provisions of this Paragraph 4, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

(e)           Consolidation,
Merger or Sale. 
In case of any consolidation of the Company with, or merger of the
Company into any other corporation, or in case of any sale or conveyance of all
or substantially all of the assets of the Company other than in connection with
a plan of complete liquidation of the Company, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder of this Warrant will have the right to acquire and receive
upon exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for the number of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of this Warrant had such consolidation, merger or sale
or conveyance not taken place.  In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly
as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. 
The Company will not effect any consolidation, merger or sale or conveyance
unless prior to the consummation thereof, the successor corporation (if other
than the Company) assumes by written instrument the obligations under this
Paragraph 4 and the obligations to deliver to the holder of this Warrant such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire.

(f)            Distribution
of Assets. 
In case the Company shall declare or make any distribution of its assets
(including cash) to holders of Common Stock as a partial liquidating dividend,
by way of return of capital or otherwise, then, after the date of record for
determining shareholders entitled to such distribution, but prior to the date
of distribution, the holder of this Warrant shall be entitled upon exercise of
this Warrant for the purchase of any or all of the shares of Common Stock
subject hereto, to receive the amount of such assets which would have been
payable to the holder had such holder been the holder of such shares of Common
Stock on the record date for the determination of shareholders entitled to such
distribution.

 6
 

 

(g)           Notice
of Adjustment. 
Upon the occurrence of any event which requires any adjustment of the
Exercise Price, then, and in each such case, the Company shall give notice
thereof to the holder of this Warrant, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease in the number
of Warrant Shares purchasable at such price upon exercise, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.  Such calculation
shall be certified by the Chief Financial Officer of the Company.

(h)           Minimum
Adjustment of Exercise Price.  No adjustment of the Exercise Price shall be
made in an amount of less than 1% of the Exercise Price in effect at the time
such adjustment is otherwise required to be made, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which, together with any adjustments so
carried forward, shall amount to not less than 1% of such Exercise Price.

(i)            No
Fractional Shares.  No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of
Common Stock on the date of such exercise.

(j)            Other
Notices.  In
case at any time:

(i)            the
Company shall declare any dividend upon the Common Stock payable in shares of
stock of any class or make any other distribution (including dividends or
distributions payable in cash out of retained earnings) to the holders of the
Common Stock;

(ii)           the
Company shall offer for subscription pro rata to the holders of the Common
Stock any additional shares of stock of any class or other rights;

(iii)         there
shall be any capital reorganiza­tion of the Company, or reclassification of the
Common Stock, or consolidation or merger of the Company with or into, or sale
of all or substan­tially all its assets to, another corporation or entity; or

(iv)          there
shall be a voluntary or involun­tary dissolution, liquidation or winding up of
the Company;

then, in each such case, the Company shall give to the
holder of this Warrant (a) notice of the date on which the books of the Company
shall close or a record shall be taken for determining the holders of Common
Stock entitled to receive any such divi­dend, distribution, or subscription
rights or for determining the holders of Common Stock entitled to vote in
respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take
place.  Such notice shall also specify
the date on which the holders of Common Stock shall be entitled to receive such
dividend, distribution, or subscription rights or to exchange their Common
Stock for stock or other securities or property deliverable upon such
reorganization, re­classification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. 
Such notice shall be given at least 30 days prior to the record date or
the date on which the Company’s books are 

 7
 

 

closed in respect thereto.  Failure to give any such notice or any defect
therein shall not affect the validity of the proceedings referred to in clauses
(i), (ii), (iii) and (iv) above.

(k)           Certain
Events.  If
any event occurs of the type contemplated by the adjustment provisions of this
Paragraph 4 but not expressly provided for by such provisions, the Company will
give notice of such event as provided in Paragraph 4(g) hereof, and the Company’s
Board of Directors will make an appropriate adjustment in the Exercise Price
and the number of shares of Common Stock acquirable upon exercise of this
Warrant so that the rights of the holder shall be neither enhanced nor
diminished by such event.

(l)            Certain Definitions.

(i)            “Common
Stock Deemed Outstanding” shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable
upon the exercise of Options, as of the date of such issuance or grant of such
Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum
total number of shares of Common Stock issuable upon conversion or exchange of
Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.

(ii)           “Market
Price,” as of any date, (i) means the average of
the last reported sale prices for the shares of Common Stock on the OTCBB for
the five (5) Trading Days immediately preceding such date as reported by
Bloomberg, or (ii) if the OTCBB is not the principal trading market for the
shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period as
reported by Bloomberg, or (iii) if market value cannot be calculated as of such
date on any of the foregoing bases, the Market Price shall be the fair market
value as reasonably determined in good faith by (a) the Board of Directors of
the Company or, at the option of a majority-in-interest of the holders of the
outstanding Warrants by (b) an independent investment bank of nationally
recognized standing in the valuation of businesses similar to the business of
the corporation. The manner of determining the Market Price of the Common Stock
set forth in the foregoing definition shall apply with respect to any other
security in respect of which a determination as to market value must be made
hereunder.

(iii)         “Common
Stock,” for purposes of this Paragraph 4, includes
the Common Stock, par value $.0001 per share, and any additional class of stock
of the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant
shall include only shares of Common Stock, par value $.0001 per share, in
respect of which this Warrant is exercisable, or shares resulting from any
subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Paragraph 4(e) hereof, the stock or other securities
or property provided for in such Paragraph.

5.                
Issue Tax.  The issuance
of certificates for Warrant Shares upon the exercise of this Warrant shall be
made without charge to the holder of this Warrant or such shares for any
issuance tax or other costs in respect thereof, provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
the holder of this Warrant.

 8
 

 

6.                
No Rights
or Liabilities as a Shareholder. 
This Warrant shall not entitle the holder hereof to any voting rights or
other rights as a shareholder of the Company. 
No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

7.             Transfer,
Exchange, and Replacement of Warrant.

(a)           Restriction
on Transfer. 
This Warrant and the rights granted to the holder hereof are
transferable, in whole or in part, upon surrender of this Warrant, together
with a properly executed assignment in the form attached hereto, at the office
or agency of the Company referred to in Paragraph 7(e) below, pro­vided,
however, that any transfer or assignment shall be subject to the conditions set
forth in Paragraph 7(f) hereof and to the applicable provisions of the
Securities Purchase Agreement.  Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
con­trary.

(b)           Warrant
Exchangeable for Different Denomina­tions.  This Warrant is exchange­able, upon the
surrender hereof by the holder hereof at the office or agency of the Company
referred to in Paragraph 7(e) below, for new Warrants of like tenor representing
in the aggregate the right to purchase the number of shares of Common Stock
which may be purchased hereunder, each of such new Warrants to represent the
right to purchase such number of shares as shall be designated by the holder
hereof at the time of such surrender.

(c)           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.

(d)           Cancellation;
Payment of Expenses.  Upon the surrender of this Warrant in
connection with any trans­fer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company.  The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than 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 Paragraph 7.

(e)           Register.  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 and each prior owner of this Warrant.

(f)            Exercise
or Transfer Without Registration.  If, at the time of the surrender of this
Warrant in connection with any exercise, transfer, or exchange of this Warrant,
this Warrant (or, in the case of any exercise, the Warrant Shares issuable
hereunder), shall not be 

 9
 

 

registered
under the Securities Act of 1933, as amended (the “Securities Act”) and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such exercise, transfer, or exchange, (i) that the holder
or transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel, which opinion and counsel are acceptable to the Company, to
the effect that such exercise, transfer, or exchange may be made without
registration under said Act and under applicable state securities or blue sky
laws, (ii) that the holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and (iii)
that the transferee be an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act; provided that no such opinion, letter or
status as an “accredited investor” shall be required in connection with a
transfer pursuant to Rule 144 under the Securities Act.  The first holder of this Warrant, by taking
and holding the same, represents to the Company that such holder is acquiring
this Warrant for investment and not with a view to the distribution thereof.

8.                     
Notices.  All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
holder of this Warrant shall be in writing, and shall be personally delivered,
or shall be sent by certified or registered mail or by recognized overnight
mail courier, postage prepaid and addressed, to such holder at the address shown for such holder
on the books of the Company, or at such other address as shall have been
furnished to the Company by notice from such holder.  All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be
sent by certified or registered mail or by recognized overnight mail courier,
postage prepaid and addressed, to the office of the Company at 641 Shunpike
Road, Suite 333, Chatham, NJ 07928, Attention: Chief Executive Officer, or at
such other address as shall have been furnished to the holder of this Warrant
by notice from the Company.  Any such
notice, request, or other communication may be sent by facsimile, but shall in
such case be subsequently confirmed by a writing personally delivered or sent
by certified or registered mail or by recognized overnight mail courier as
provided above.  All notices, requests,
and other communications shall be deemed to have been given either at the time
of the receipt thereof by the person entitled to re­ceive such notice at the
address of such person for purposes of this Paragraph 9, or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case
may be.

9.                     
Governing
Law.  THIS WARRANT SHALL
BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. 
BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED
BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN SHALL 

 10
 

 

AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.  BOTH
PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY
DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
CONNECTION WITH SUCH DISPUTE.

10.                 
Miscellaneous.

(a)           Amendments.  This Warrant and any provision hereof may
only be amended by an instrument in writing signed by the Company and the
holder hereof.

(b)           Descriptive
Headings. 
The descriptive headings of the several paragraphs of this Warrant are
in­serted for purposes of reference only, and shall not affect the meaning or
construction of any of the provisions hereof.

(c)           Remedies.  The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the holder, by
vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Warrant will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Warrant, that the holder shall be entitled,
in addition to all other available remedies at law or in equity, and in
addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Warrant and to enforce
specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 11

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be signed by its duly authorized officer.

	
   

  	
  CRYSTAL INTERNATIONAL TRAVEL 

  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Fabrizzio
  Busso-Campana

  
	
   

  	
   

  	
   Fabrizzio
  Busso Campana

  
	
   

  	
   

  	
   Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  Dated as of November 27, 2006

  	
   

  	
   

  

 

FORM OF EXERCISE AGREEMENT

Dated:                         ,
200

To:

The undersigned, pursuant
to the provisions set forth in the within Warrant, hereby agrees to purchase
              
shares of Common Stock covered by such Warrant, and makes pay­ment herewith in
full therefor at the price per share provided by such Warrant in cash or by
certified or official bank check in the amount of, or, if the resale of such
Common Stock by the undersigned is not currently registered pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
by surrender of securities issued by the Company (including a portion of the
Warrant) having a market value (in the case of a portion of this Warrant,
determined in accordance with Section 11(c) of the Warrant) equal to $                  .
Please issue a certificate or certifi­cates for such shares of Common Stock in
the name of and pay any cash for any fractional share to:

	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note:

  	
   

  	
  The above signature should 

  correspond exactly with the 

  name on the face of the 

  within Warrant, if applicable.

  

 

and, if said number of shares of Common Stock shall
not be all the shares purchasable under the within Warrant, a new Warrant is to
be issued in the name of said undersigned covering the balance of the shares
purchasable thereunder less any frac­tion of a share paid in cash.

 

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned
hereby sells, assigns, and transfers all the rights of the undersigned under
the within Warrant, with respect to the number of shares of Common Stock
covered thereby set forth hereinbelow, to:

	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  No of Shares

  
	
    

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  

 

, and hereby irrevocably constitutes and appoints                                                              
as agent and attorney-in-fact to trans­fer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated:                             ,
200      

	
  In the presence of:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
  Title of Signing Officer or Agent (if any):

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Note:

  	
  The above signature should 

  correspond exactly with the name on 

  the face of the within Warrant, if 

  applicable.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]