Document:

ex10-3.htm

EXHIBIT 10.3

PLEDGE AGREEMENT

 

 

This PLEDGE AGREEMENT (the “Pledge Agreement”), is made as of September 22, 2009, jointly and severally by each of LoJack
Corporation, (“LoJack”), and the Canadian Borrowers and Foreign Borrowers defined in the Credit Agreement referred to below (collectively with LoJack, the “Pledgors”
and each sometimes referred to herein as a “Pledgor”), in favor of RBS CITIZENS, NATIONAL ASSOCIATION, as Administrative Agent for itself and the other Lenders hereinafter defined (the “Agent”).

 

WHEREAS, the Pledgors have entered into a Multicurrency Revolving Credit and Term Loan Agreement dated as of July 20, 2007 with the Agent and the other Lenders (the “Lenders”) defined therein (as may be further amended,
restated or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have made loans to the Pledgors;

 

WHEREAS, pursuant to a Waiver Agreement dated as of September 22, 2009 (the “Waiver Agreement”), the Pledgors have agreed to provide the Collateral defined herein to provide security for the Obligations;

 

WHEREAS, capitalized terms used herein and not otherwise defined herein have the meanings given in the Credit Agreement or the Waiver Agreement, as applicable;

 

WHEREAS, each Pledgor wishes to grant pledges, assignments and security interests in favor of the Agent as herein provided; and

 

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.  Pledge of Collateral.  

 

Each Pledgor hereby pledges, assigns, grants a security interest in, and delivers to the Agent for the benefit of Lenders the following collateral (the “Collateral”):

 

(a)  The $22,500,000 of cash wired by the Borrower to its operating account with the Agent ( the “Operating Account”)on September 21, 2009;

 

(b)  All right, title and interest of the Pledgors to the cash, cash equivalents and proceeds to be maintained in that certain Deposit Account to be created by the parties as possible after the date of this Agreement, and to thereupon be listed on Schedule A hereto, and
into which the Agent will, upon creation of the Account,  move the $22,500,000 of cash collateral referenced in Section 1(a) above (the “Cash Collateral Account”),

 

 

 

 

(c)  all property credited to or on deposit from time to time in the Cash Collateral Account;

 

(d)  All Cash Collateral and the Cash Collateral Account; and

 

(e)  all other property at any time assigned or pledged to the Agent hereunder (whether described herein or not),

 

in each case, together with all substitutions, accessions or additions thereto, together with all proceeds and products thereof, and all distributions, dividends, and income received thereon.

 

Each of the Pledgors also hereby agrees to add additional cash or cash equivalents to the Cash Collateral Account from time to time to the extent required by the Waiver Agreement, all of which additional amounts shall be Collateral hereunder.

 

Each of the Pledgors also hereby irrevocably authorizes the Agent at any time and from time to time to file in any filing office in any UCC jurisdiction any initial financing statements and amendments thereto indicating the Collateral.

 

2.  Definitions.  The term “Obligations”
and all other capitalized terms used herein without definition shall have the respective meanings provided therefor in the Credit Agreement.  Terms used herein and not defined in the Credit Agreement or otherwise defined herein that are defined in the Uniform Commercial Code of the Commonwealth of Massachusetts (the “UCC”) have such defined meanings herein, unless the context otherwise indicates or requires, and the following
additional terms shall have the following meanings:

 

Cash Collateral.  See §4.

 

Cash Collateral Account.  See §1(b).

 

Collateral. See §1.

 

Operating Account. See §1(a).

 

3.  Security for Obligations.  This Agreement and the
security interest in and assignment and pledge of the Collateral hereunder are made with and granted to the Agent as security for the payment and performance in full of all the Obligations.

 

4.  Interest, Dividends, etc.  Any sums or other property
paid or distributed upon or with respect to any of the Collateral, whether by dividend, interest or redemption or upon the liquidation or dissolution of the issuer thereof or otherwise, shall be paid over and delivered to the Agent to be held by the Agent as security for the payment and performance in full of all of the Obligations.

 

4.1.  Cash Collateral Account.  All sums of money that
are delivered to the Lender pursuant to this §4 shall be deposited into the Cash Collateral

  

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Account to be maintained with the Agent and to be listed on Schedule A hereto; provided, however, that as provided in Section 1, the initial deposit of the Cash Collateral shall be made into the Operating Account pending creation of the Cash Collateral Account.  The Cash
Collateral Account will be an interest bearing deposit account.  The Cash Collateral Account, all sums from time to time standing to the credit of the Cash Collateral Account, including interest thereon, and any and all proceeds of any thereof are hereinafter referred to as the “Cash Collateral”.  Agent has and will have “control” within the meaning of Section 9-104 of the UCC of the Operating Account
until such time as the Collateral is transferred to the Cash Collateral Account, and thereafter of the Cash Collateral Account.

 

4.2.  Withdrawals from Cash Collateral Account.  Except as otherwise expressly provided in §14 upon termination of this Pledge
Agreement, until such time as the Cash Collateral is  transferred to the Cash Collateral Account, the Pledgor shall have no right to withdraw (x) the Collateral from the Operating Account and (y) the Pledgors shall have no right to withdraw sums from the Cash Collateral Account, to receive any of the Cash Collateral or to require the Agent to part with the Agent's possession of any instruments or other writings evidencing any deposits within the Cash Collateral Account..

 

5.  Warranty of Title; Authority.  Each Pledgor hereby represents and warrants that:

 

(a)  such Pledgor has good and marketable title to the Collateral described in §1, subject to no pledges, liens, security interests, charges, options, restrictions or other encumbrances or other adverse claims except the pledge, assignment and security interest created by this Agreement,

 

(b)  such Pledgor has full power, authority and legal right to execute, deliver and perform its obligations under this Agreement and to pledge, assign and grant a security interest in all of the Collateral pursuant to this Agreement, and

 

(c)  the execution, delivery and performance hereof and the pledge and assignment of and granting of a security interest in the Collateral hereunder have been duly authorized by such Pledgor and do not contravene any law, rule or regulation or any judgment, decree or order of any tribunal or of any agreement or instrument to which such
Pledgor is a party or by which such Pledgor or any of such Pledgor's property is bound or affected or constitute a default thereunder.

 

Each Pledgor covenants that:

 

(x) the Pledgor will defend the Agent's rights and security interest in the Collateral against the claims and demands of all persons whomsoever;

  

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(y) the Pledgor will have the like title to and right to pledge and assign and grant a security interest in the Collateral hereafter pledged or assigned or in which a security interest is granted to the Agent hereunder and will likewise defend the Agent's rights, pledge, assignment and security interest
thereof and therein;

6.  Remedies.  

 

The occurrence of the Termination Date (as defined in the Waiver Agreement) shall constitute an “Event of Default” under this Pledge Agreement.  Upon occurrence of any Event of Default, the Agent shall thereafter have the following rights and remedies in addition to the rights and remedies of a secured party under the Uniform
Commercial Code of the Commonwealth of Massachusetts, all such rights and remedies being cumulative, not exclusive, and enforceable alternatively, successively or concurrently, at such time or times as the Agent deems expedient:

 

(a)  the Agent may demand, sue for, collect or make any compromise or settlement the Agent deems suitable in respect of any of the Collateral;

 

(b)  the Agent may sell, resell, assign or deliver or otherwise dispose of any or all of the Collateral, for cash or credit or both and upon such terms at such place or places, at such time or times and to such entities or other persons as the Agent thinks expedient, all without demand for performance by the Pledgors or any notice or
advertisement whatsoever except as expressly provided herein or as may otherwise be required by law and the Agent may instruct any custodian to effect the immediate sale, transfer or other disposition of all or any part of the Collateral;

 

(c)   the Agent may cause all or any part of the Collateral to be transferred into its name or the name of its nominee or nominees and, for such purpose, without limitation upon any other rights or remedies available to the Agent, may give instructions to such effect to any issuer of any of the Collateral or any broker or other
financial intermediary or book-entry custodian in possession of any of the Collateral or upon whose books any of the Collateral is then registered; and

 

(d)  the Agent may set off or otherwise apply against any of the Obligations any and all sums deposited with it or held by it, including without limitation, any sums standing to the credit of the Cash Collateral Account.

 

6.1.  Sale of Collateral.  Pledgors waive all notice of any disposition of Collateral, including any notice under Section 9-611(b)
of the UCC.  The Agent may enforce its rights hereunder without any notice and without compliance with any condition precedent now or hereunder imposed by statute, rule of law or otherwise (all of which are hereby expressly waived by the Pledgors, to the fullest extent permitted by law).  The Agent may buy any part or all of the Collateral at any public sale and if any part or all of the Collateral is of a type customarily sold in a recognized market or is of the type which is the subject
of

  

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widely-distributed standard price quotations, the Agent may buy at private sale and may make payments thereof by any means.

 

6.2.  Proceeds of Sale or Disposition.  The Agent may apply the cash proceeds actually received from any sale or other disposition
or collection of any of the Collateral to the reasonable expenses of retaking, holding, preparing for sale, selling and the like, to reasonable attorneys' fees, travel and all other expenses which may be incurred by the Agent in attempting to collect any of the Obligations or to enforce this Agreement or in the prosecution or defense of any action or proceeding related to the subject matter of this Agreement, and then to the Obligations in the order set forth in the Credit Agreement or in
such order or preference as the Agent may determine after proper allowance for any Obligations not then due.  Only after such applications and the Obligations have been paid in full in cash, and after payment by the Agent of any amount required by §9-615(a)(3) of the UCC, need the Agent account to the Pledgors for any surplus.

 

7.  Marshalling.  The Agent shall not be required to marshal any present or future collateral security for (including but not limited
to this Agreement and the Collateral), or other assurances of payment of, the Obligations or any of them, or to resort to such collateral security or other assurances of payment in any particular order.  All of the Agent's rights and remedies hereunder and in respect of such security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising.  To the extent that the Pledgors lawfully may, the Pledgors hereby agree that the Pledgors
will not invoke any law relating to the marshalling of collateral that might cause delay in or impede the enforcement of the Agent's rights under this Agreement or under any other instrument evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and to the extent that it lawfully may the Pledgors hereby irrevocably waive the benefits of all such laws.

 

8.  Pledgors’ Obligations Not Affected.  The obligations of the Pledgors hereunder shall remain in full force and effect without
regard to, and shall not be impaired by, (i) any exercise or nonexercise, or any waiver, by the Agent of any right, remedy, power or privilege under or in respect of any of the Obligations or any collateral security therefor (including this Agreement); (ii) any amendment to or modification of the Credit Agreement or any of the other Loan Documents or any of the Obligations; (iii) any amendment to or modification of any instrument (other than this Agreement) securing any of the Obligations(, including, without
limitation, any of the Security Documents); or (iv) the taking of additional collateral security for, or any other assurances of payment of, any of the Obligations or the release or discharge or termination of any security or other assurances of payment or performance for any of the Obligations or the liability of the Borrower therefor; whether or not the Pledgors shall have notice or knowledge of any of the foregoing.

 

9.  Transfer, etc. by Pledgors.  Without the prior written consent of the Agent, the Pledgors will not sell, assign, transfer or
otherwise dispose of, grant any option with

 

  

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respect to, or pledge or grant any security interest in or otherwise encumber or restrict any of the Collateral or any interest therein, except for the pledge and assignment thereof and security interest therein provided for in this Agreement.

 

10.  Further Assurances.  The Pledgors will do all such acts, and will furnish to the  Agent all such financing statements,
certificates, legal opinions and other documents and will obtain all such governmental consents and/or other approvals and will do or cause to be done all such other things as the Agent may reasonably request from time to time in order to give full effect to this Agreement and to secure, preserve and protect the rights of the Agent and Lenders hereunder, all without any cost or expense to the Agent.  If the Agent so elects, a photocopy of this Agreement may at any time and from time to time be transmitted
to any issuer of any of the Collateral or any broker or other financial intermediary or book-entry custodian in possession of any of the Collateral or on whose books any of the Collateral is registered or be filed by the Agent as a financing statement in any recording office in any jurisdiction. This Agreement is a Loan Document.

 

11.  Agent and Lenders' Exoneration.  Under
no circumstances shall the Agent or Lenders be deemed to assume any responsibility for or obligation or duty with respect to any part or all of the Collateral or any nature or kind or any matter or proceedings arising out of or relating thereto.  The Agent and Lenders shall not be required to take any action of any kind to collect, preserve or protect its or the Pledgors’ rights in any of the Collateral or against other parties thereto.  The Agent ‘s   or Lenders'
prior recourse to any part or all of the Collateral shall not constitute a condition of any demand, suit or proceeding for payment or collection of any of the Obligations.

 

12.  No Waiver, etc.  Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated except by a written
instrument expressly referring to this Agreement and to the provisions so modified or limited, and executed by the party to be charged.  No act, failure or delay by the Agent or Lenders shall constitute a waiver of its rights and remedies hereunder or otherwise.  No single or partial waiver by the Agent of any default or right or remedy that it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion.  The
Pledgors hereby waive acceptance and notice of acceptance of this Agreement and presentment, notice of dishonor and protest of all instruments, included in or evidencing any of the Obligations or any of the Collateral, and any and all other notices and demands whatsoever.  The Pledgors further waive all rights of subrogation, contribution or reimbursement against the Borrower until all of the Obligations have been finally paid in full in cash.

 

13.  Notice, etc.  Any communication to be made hereunder shall be made in writing and to the address of each party set forth in
the Credit Agreement, by any of the following means:  (i) by facsimile transmission, and shall be deemed made or delivered to the party receiving notice when transmitted; (ii) by overnight courier service, and shall be deemed made or delivered at 9 am on the next Business Day; (iii) by hand delivery, and shall be deemed made or delivered when received; or (iv) by first class mail, and shall be deemed made or delivered five (5) days after being mailed, postage

  

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prepaid, if sent by first class mail.  Notices shall be delivered to the address of the party identified with its signature below (unless such party has by five (5) Business Days written notice specified another address).

 

14.  Termination.  Upon final payment and performance in full in cash of all of the Obligations, this Agreement shall terminate and
the Agent shall, at the Pledgors’ request and expense, return such Collateral in the possession or control of the Agent as has not theretofore been disposed of pursuant to the provisions hereof, together with any moneys and other property at the time held by the Agent hereunder.

 

15.  Overdue Amounts.  Until paid, all amounts due and payable by the Pledgors hereunder shall be a debt secured by the Collateral
and shall bear, whether before or after judgment, interest at the rate of interest for overdue principal set forth in the Credit Agreement.

 

16.  Governing Law; Consent to Jurisdictions.  THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.  The Pledgors agree that any suit for the enforcement of this Agreement may be brought in the courts of the Commonwealth of Massachusetts  or any federal court sitting therein and consents to the non-exclusive jurisdiction of such court and to service of process in any such suit being made upon the Pledgors by mail at the address referred to in §13.  The Pledgors hereby waive any objection
that the Pledgors may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient court.

 

17.  Waiver of Jury Trial.  THE PLEDGORS WAIVE THE PLEDGORS’ RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS.  Except as prohibited by law, the Pledgors waive any right which the Pledgors may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages.  The Pledgors (i) certify that none of the Agent, Lenders nor any
representative, agent or attorney of the Agent or Lenders has represented, expressly or otherwise, that the Agent would not, in the event of litigation, seek to enforce the foregoing waivers and (ii) acknowledge that, in entering into the Credit Agreement and the other Loan Documents to which the Agent and Lenders  are parties, the Agent and Lenders are relying upon, among other things, the waivers and certifications contained in this §17.

18.  Miscellaneous.  The
headings of each section of this Agreement are for convenience only and shall not define or limit the provisions thereof.  This Agreement and all rights and obligations hereunder shall be binding upon the Pledgors and their respective heirs, representatives, successors and assigns, and shall inure to the benefit of the Agent and the Lenders and their successors and assigns.  If any term of this Agreement shall be held to be 

 

 

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invalid, illegal or unenforceable, the validity of all other terms hereof shall be in no way affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not been included herein.  The Pledgors acknowledge receipt of a copy of this Agreement.  This Agreement may
be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or email shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement
by telefacsimile or email also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

 

 

 

 

 

 

 

 [Remainder of page intentionally left blank.]

  

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IN WITNESS WHEREOF, intending to be legally bound, each Pledgor and the Agent have caused this Agreement to be executed under seal as of the date first above written.

	  	
LOJACK CORPORATION

 

By: /s/ Ronald V. Waters

Title: President and CEO

 

	  	  	
LOJACK EXCHANGECO CANADA INC.

 

By: /s/ Richard T. Riley

Title: President

 

	  	  	
RBS CITIZENS, NATIONAL ASSOCIATION 

(successor by merger to Citizens Bank of 

Massachusetts), as Administrative Agent

 

By: /s/ David Bugbee

Title: Senior Vice President

 

Signature Page to Pledge Agreement

  

 

  

CONSENT OF GUARANTORS

LoJack Global LLC, LoJack Operating Company, L.P. and Boomerang Tracking Inc. (collectively, the “Guarantors”) have each guarantied certain indebtedness, obligations and liabilities of the Borrowers pursuant to Guarantees dated as of July 20, 2007 and delivered in connection with the Credit Agreement (collectively, the “Guarantees”).  By
executing this consent, each Guarantor hereby absolutely and unconditionally reaffirms to Agent and the Lenders that its Guaranty remains in full force and effect.  In addition, each Guarantor hereby acknowledges and agrees to the terms and conditions of the foregoing Pledge Agreement and the other Loan Documents as amended hereby (including, without limitation, the making of any representations and warranties and the performance of any covenants applicable to it herein or therein).

 

	  	  
	
LOJACK GLOBAL LLC

 

By: /s/ Richard T. Riley

Title: President

 

	
LOJACK OPERATING COMPANY, L.P.

 

By: LoJack Corporation

Its: General Partner

 

By: /s/ Ronald V. Waters

Title: President and Chief Executive Officer

 

	
BOOMERANG TRACKING INC.

 

By: /s/ Richard T. Riley

Title: President

 

	  

Signature Page to Pledge Agreement

 

 

 

 

CERTIFICATE OF ACKNOWLEDGMENT

 

COMMONWEALTH OF MASSACHUSETTS                         )

)  ss.

COUNTY OF NORFOLK                                                )

 

Before me, the undersigned, a Notary Public in and for the county aforesaid, on this 22nd day of September, 2009 personally appeared Ronald V. Waters, to me known personally, who acknowledged that he is the Chief Executive Officer and President of LoJack Corporation and this instrument to be his free act and deed.

 

/s/ Jennifer L. Shoop

Notary Public: Jennifer L. Shoop

My commission expires: November 14, 2014

 

 

CERTIFICATE OF ACKNOWLEDGMENT

 

COMMONWEALTH OF MASSACHUSETTS                         )

)  ss.

COUNTY OF NORFOLK                                                )

 

Before me, the undersigned, a Notary Public in and for the county aforesaid, on this 22nd day of September, 2009 personally appeared Richard T. Riley, to me known personally, who acknowledged that he is the President of LoJack ExchangeCo Canada, Inc. and this instrument to be hisfree act and deed.

 

/s/ Jennifer L. Shoop

Notary Public: Jennifer L. Shoop

My commission expires: November 14, 2014

 

 

 

 

 

 

 

 

 

  

 

  

Schedule A

Cash Collateral Accountexh4-1_warrant.htm

 

 

 

 

 

 

 

 

EXHIBIT 4.1

 

FORM OF WARRANT TO BE ISSUED TO

MIDTOWN PARTNERS & CO, LLC AND ASSIGNS

 

  

  

  

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

SPICY PICKLE FRANCHISING, INC.

 

 

	Warrant Shares: ________	 Initial Exercise Date:  September __, 2009 

 

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, ________________________________________ (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the 5 year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Spicy
Pickle Franchising, Inc., a Colorado corporation (the “Company”), up to _______ shares (the “Warrant Shares”) of Common Stock.  The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.       Definitions.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Common Stock” means the common stock of the Company, par value $0.001 per 

 

 

 

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share, and any other class of securities into which such securities may hereafter be reclassified or changed into.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Registration Statement” means the registration statement, as amended from time to time, filed on April 8, 2009 and deemed effective upon April 16, 2009 with a file number from the Securities and Exchange Commission of 333-158493 and covering the resale of the
shares of Common Stock issued and issuable upon exercise of the Warrants by the Holder.

 

“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Trading Day” means a day on which the New York Stock Exchange is open for trading.

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. or other reasonably reliable source (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time); (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on the OTC Bulletin Board
and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

 

 

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Section 2.     Exercise.

 

a)  Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company); and, within three (3) Trading Days of the date said Notice of Exercise is delivered to the Company,
the Company shall have received  payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.  Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the
Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number
of Warrant Shares purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise Form within 2 Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any
given time may be less than the amount stated on the face hereof.

 

b)  Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $0.20,
subject to adjustment hereunder (the “Exercise Price”).

 

c)  Cashless Exercise.  If at any time after the completion of the applicable holding period required by Rule
144, or any successor provision then in effect, there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = the VWAP on the Trading Day immediately preceding the date of such election;

 

(B) = the Exercise Price of this Warrant, as adjusted; and

 

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

 

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d)  Mechanics of Exercise.

 

i.  Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted
by the transfer agent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system and there is an effective Registration Statement permitting the resale of the Warrant Shares by the Holder, and otherwise by physical delivery to the address specified by the Holder
in the Notice of Exercise within 3 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”).  This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company.  The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vi) prior to the issuance of such shares, have been paid. .

 

ii.  Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company
shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to such Holder a new Warrant evidencing the rights of such Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii.  Rescission Rights.  If the Company fails to cause its transfer agent to transmit to the Holder a certificate
or certificates representing the Warrant Shares pursuant to Section 2(e)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv.  No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant.  As to any fraction of a share which a Holder would otherwise be entitled to purchase upon such exercise, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

 

4

 

 

v.  Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge
to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

vi.  Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms hereof.

 

Section 3.     Certain Adjustments.

 

a)  Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues
by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)  Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company
shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common
stock of the successor or acquiring corporation, or any cash, 

 

 

5

 

 

shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders of Common Stock of the Company, then the
Holder shall have the right thereafter to receive, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b)
cash equal to the value of this Warrant as determined in accordance with the Black-Scholes option pricing formula.  In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of Warrant Shares for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 3(b).  For purposes of this Section 3(b), “common stock of the successor or acquiring corporation” shall include stock of such corporation of any class which
is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.  The foregoing provisions of this Section 3(b)
shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets.

 

c)  Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

d)  Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

e)  Notice to Holder.

 

i.  Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3,
the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

 

 

6

 

ii.  Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice.

 

Section 4.     Transfer of Warrant.

 

a)  Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant 

 

 

 

7

 

 

shall promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b)  New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid
office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges
shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c)  Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d)  Transfer Restrictions. If, at the time of the
surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, provide, at
their cost, to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Warrants under the Securities Act and under applicable state securities or blue sky laws.  As
a condition of transfer, any such transferee shall agree in writing to be bound by the same terms as the Holder with relation to the Warrants being transferred.  Upon a cashless exercise of the Warrants, the holding period for purpose of Rule 144 shall tack back to the original date issuance of such Warrants.

 

Section 5.      Miscellaneous.

 

a)  No Rights as Shareholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights
or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(e)(i).

 

b)  Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock 

 

 

8

 

 

certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c)  Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d)  Authorized Shares.

 

The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of
this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except as and to the extent waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

 

9

 

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)  Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant
shall be governed by and construed and enforced in accordance with the internal laws of the State of Colorado, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of Denver.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Denver for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an  inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address as provided on the signatory page (or as altered by the parties from time to time in writing) and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If either party shall commence an action or proceeding to enforce any provisions of this Warrant, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.

 

f)  Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant,
if not registered, will have restrictions upon resale imposed by state and federal securities laws.

 

g)  Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on
the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

 

10

 

 

h)  Notices.  Any and all notices or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is
not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following 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 address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

i)  Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j)  Remedies.  Holder, in addition to being entitled to exercise all rights granted by law, including recovery
of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k)  Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l)  Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent
of the Company and the Holder.

 

m)  Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n)  Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for
any purpose, be deemed a part of this Warrant.

 

 

11

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	SPICY PICKLE FRANCHISING, INC.	 
	 	 	 	 
	
Date
	
By: 
	/s/ 	 
	 	 	Name:  Marc Geman	 
	 	 	Title:  CEO	 
	 	 	 	 

  

12

  

NOTICE OF EXERCISE

TO:           SPICY PICKLE FRANCHISING, INC.

(1)  The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.

 

(2)  Payment shall take the form of (check applicable box):

 

[  ]  in lawful money of the United States; or

 

[ ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)  Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4)   Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

  

  

  

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:           _____________________________

Holder’s Address:             _____________________________

_____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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