Document:

Exhibit 4.1

 

THE SECURITIES
REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”).  NOR
HAVE SUCH SECURITIES BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR UNDER THE SECURITIES (OR
SIMILAR) LAWS OF ANY OTHER JURISDICTION. 
AS A RESULT, SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, RESOLD, ASSIGNED, PLEDGED,
OR HYPOTHECATED, EXCEPT AS PERMITTED UNDER THE ACT, AND ANY APPLICABLE U.S.
STATE SECURITIES LAWS AND THE SECURITIES (OR SIMILAR) LAWS OF ANY OTHER
JURISDICTION THAT MAY BE APPLICABLE TO THE PARTIES INVOLVED IN ANY TRANSACTION,
PROCEDURE OR PROCEEDING TO EFFECT THE FOREGOING.  THE HOLDER OF THESE SECURITIES MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF AN INVESTMENT IN THESE SECURITIES FOR AN INDEFINITE PERIOD
OF TIME.  THE ISSUER OF THESE SECURITIES
MAY REQUIRE A STATEMENT FROM OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER, RESALE,
ASSIGNMENT, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT, ANY
APPLICABLE U.S. STATE SECURITIES LAWS AND THE SECURITIES (OR SIMILAR) LAWS OF
ANY OTHER APPLICABLE JURISDICTION.

 

PROMISSORY
NOTE

 

	
   

  	
   

  	
  «Date», 2004

  
	
   

  	
   

  	
   

  
	
  $10,000

  	
   

  	
  Leeds, England

  

 

For value received on the date hereof, Authoriszor, Inc., a Delaware
corporation (the “Company”), promises to pay to Commercial
Technology Limited (the “Holder”), the principal sum of Ten Thousand
dollars ($10,000), with interest at the annual rate of six
percent (6%), compounded annually.  Interest on this promissory
note (the “Note”) shall accrue from the date of this Note on any unpaid
principal amount under it.  This Note is
one of a series of promissory notes containing substantially identical terms as
those set forth herein and is being issued pursuant to that Loan and Warrant
Purchase Agreement dated March 15, 2004 (the “Purchase Agreement”).  Such promissory notes are referred to herein
as the “Notes”,
and the holder thereof (and any of its permitted transferees) is referred to
herein as the “Holder”.  Any terms not
otherwise defined herein shall have the meaning set forth in the Purchase
Agreement.

 

This Note is subject to the following terms and conditions:

 

1.  Maturity, Pre-Payment and Payment.

 

This Note is payable on demand and in any case if not called sooner,
will automatically mature and be due and payable on December 31, 2004  (the “Maturity Date”); however, the Company may,
at its option, repay this Note sooner without penalty.

 

1

 

2.  Accrual and
Payment of Interest

 

2.1 Payment and Apportionment

 

Interest shall accrue on this Note and any payment made on this Note
shall be credited first to the accrued interest under it, and the remainder
applied to principal.

 

2.2 Result of Payment

 

Upon payment in full of this Note and all interest accrued hereunder,
this Note shall be deemed paid in full and cancelled, and the Company will be
forever released from all of its obligations and liabilities under this Note.

 

3.  Transfer; Successors and Assigns

 

The terms and conditions of this Note shall inure to the benefit of and
be binding upon the respective successors and assigns of the parties.  Notwithstanding the foregoing, the Holder
may not assign, pledge, or otherwise transfer this Note without the prior
written consent of the Company, except for transfers to another legal entity
investing in the Company or its affiliates, or transfers made for estate
planning or succession purposes.  In all
cases, this Note may be transferred only upon surrender of the original Note,
duly endorsed, or accompanied by a duly executed written instrument of transfer
in form satisfactory to the Company. 
Thereupon, a new note for any outstanding principal amount and interest
will be issued to, and registered in the name of, the transferee.  Interest and principal are payable only to
the registered Holder of this Note.

 

4.  Governing Law

 

This Note and the rights and obligations of the Company and the Holder
under it shall be governed, construed and interpreted in accordance with the
internal laws of the State of Delaware without regard to
conflicts of laws; provided however that with regard to matters of US federal
securities laws, US federal securities laws shall govern.

 

5.  Notices

 

Any notice
required or permitted under this Note shall be given in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed facsimile; or (c) one business
day for deliveries within the United States and two business days for
deliveries outside of the United States, following deposit with Federal Express
or any other internationally recognized overnight courier service, addressed in
the case of CTL to the address indicated for it on the last page of this Note,
and in the case of the Company, c/o WRDC Logsys, First Floor, Ebor Court,
Westgate, Leeds, LS1 4ND facsimile +44 (0) 113 245 4798, or at such other
location as the Holder olHor the Company may designate (as applicable) by
giving at least five (5) business days advance written notice to the other. In
the case of notice being given by or to the Company, a copy shall be
simultaneously sent

 

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to Thompson Legal Advisory Services, attn: Tamara L.
Thompson, 229 Brannan Street, Suite 18G, San Francisco, CA USA 94107 facsimile
+1 415 896 5166.

 

6.  Amendments and Waivers

 

Any or all of
the terms of this Note may be amended only with the express written consent of
the Company and the Holder. Any amendment or waiver affected in accordance with
this Section 6 shall be binding upon the Company and the Holder.

 

7.  Severability

 

If
one or more provisions of this Note are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Note and the
balance of this Note shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its terms.

 

8. 
Further
Assurances

 

From
and after the date of this Note, upon the request of the Holder or the Company, the Company and
the Holder shall execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Note.

 

9.  Stockholders, Agents, Officers and Directors
Not Liable

 

In no event shall any stockholder, agent, officer or director of the
Company be liable for any amounts due or payable pursuant to this Note.

 

 

[Balance of this page left intentionally blank]

 

3

 

	
   

  	
  AUTHORISZOR, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/Garcia Hanson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Garcia
  Hanson

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  

 

 

AGREED TO AND ACCEPTED:

 

COMMERCIAL TECHNOLOGY LIMITED

 

 

	
  By:

  	
  /s/Ian McNeill

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Ian McNeill

  
	
   

  	
   

  
	
  Address:

  	
  The Old Granary, Paradise Lane

  Hazelwood, Tadcaster, North Yorkshire

  LS24 9NJ, United Kingdom

  
	
   

  	
   

  
	
  Phone:

  	
  +44 (0) 193 753 1555

  
	
   

  	
   

  
	
  Facsimile:

  	
  +44 (0) 870 458 0410

  

 

 

SIGNATURE PAGE TO THE
NOTE

 

4Exhibit
4.2

 

THE SECURITIES
REPRESENTED BY THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE OF IT (COLLECTIVELY, THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  NOR HAVE SUCH SECURITIES BEEN REGISTERED OR
OTHERWISE QUALIFIED UNDER THE SECURITIES LAWS OF ANY U.S. STATE OR UNDER THE
SECURITIES (OR SIMILAR) LAWS OF ANY OTHER JURISDICTION.  AS A RESULT, SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED, RESOLD,
ASSIGNED, PLEDGED, OR HYPOTHECATED, EXCEPT AS PERMITTED UNDER THE ACT, AND ANY
APPLICABLE U.S. STATE SECURITIES LAWS AND THE SECURITIES (OR SIMILAR) LAWS OF
ANY OTHER JURISDICTION THAT MAY BE APPLICABLE TO THE PARTIES INVOLVED IN ANY
TRANSACTION, PROCEDURE OR PROCEEDING TO EFFECT THE FOREGOING. THE HOLDER OF
THESE SECURITIES REPRESENTS THAT THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  THE HOLDER OF
THESE SECURITIES MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN INVESTMENT
IN THESE SECURITIES FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE A STATEMENT FROM OR
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER, RESALE, ASSIGNMENT, PLEDGE OR HYPOTHECATION
IS IN COMPLIANCE WITH THE ACT, ANY APPLICABLE U.S. STATE SECURITIES LAWS AND
THE SECURITIES (OR SIMILAR) LAWS OF ANY OTHER APPLICABLE JURISDICTION.

 

AUTHORISZOR, INC.

 

COMMON STOCK WARRANT

 

	
  Number of Shares
  Exercisable for: 7,000,000

  	
  Date of Issuance: March 15, 2004

  
	
  (subject to
  adjustment)

  	
   

  
	 
	 

 

This warrant  (the “Warrant”) to purchase the common stock (the “Common Stock”) of Authoriszor, Inc. (the “Company”) is being issued pursuant to the Loan and Warrant Purchase Agreement (the “Purchase Agreement”) dated as of March 15, 2004, between the Company and Commercial Technology Limited (the “Lender”).  This Warrant is subject to the terms and conditions of the Purchase Agreement.  Any term not otherwise defined herein shall have the meaning ascribed to it in the Purchase Agreement.
 
The Company, in consideration for Lender’s agreement to make the Full Loan Amount available to the Company up and until December 31, 2004, hereby issues to Lender or its registered assigns (the “Registered Holder”), subject to the terms set forth below, this Warrant to purchase from the Company, at any time after the date hereof, and on or before the Expiration Date (as defined in Section 5 below), up to 7,000,000 fully paid and nonassessable shares (as adjusted from time to time pursuant to the provisions of this Warrant) of Common Stock.  The warrant exercise price is $0.01 per share (the “Warrant Exercise Price”). The shares of Common Stock purchasable upon exercise of this Warrant (the “Warrant Stock”) and the Warrant Exercise Price shall be adjusted from time to time pursuant to the provisions of this Warrant.

 

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1.                                      Exercise
 
a)                                      Manner Of Exercise.  This Warrant may be exercised by the Registered Holder at any time after the date hereof until the earliest of (i) March 15, 2014, or (ii) immediately prior to the closing or consummation of one of the events set forth in Section 5(a) hereof (the “Exercise Period”), in whole or in part, by surrendering this Warrant with the purchase form appended hereto as Exhibit A duly executed by such Registered Holder or by such Registered Holder’s duly authorized attorney, at the principal office of the Company or if the Company so designates at the office of its legal counsel, accompanied by payment in full via bank draft or wire transfer to the Company of the Warrant Exercise Price payable with respect to the number of shares of Warrant Stock purchased upon such exercise.
 
b)                                      Effective Time Of Exercise.  Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 1(a) above. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 1(d) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates.
 
c)                                      Delivery To Holder.  As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within thirty (30) days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:
 
(i.)                                 a certificate or certificates for the number of shares of Warrant Stock to which such Registered Holder shall be entitled, and
 
(ii.)                             in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in Section 1(a) above.
 
2.                                       Adjustments for any Stock Splits and Dividends.
 
If the Company shall issue any shares of the same class as the Warrant Stock as a stock dividend or subdivide the number of outstanding shares of such class into a greater number of shares, then, in either such case, the Warrant Exercise Price in effect before such dividend or subdivision shall be proportionately reduced and the number of shares of Warrant Stock at that time issuable pursuant to the exercise of this Warrant shall be proportionately increased; and, conversely, if the Company shall contract the number of outstanding shares of the same class as the Warrant Stock by combining such shares into a smaller number of shares, then the Warrant Exercise Price in effect before such combination shall be proportionately increased and the number of shares of Warrant Stock at that time issuable pursuant to the exercise or conversion of this Warrant shall be proportionately decreased.  Each adjustment in the number of shares of Warrant Stock issuable shall be to the nearest whole share.

 

2

 

3.                                      Transfers
 
a)                                      Unregistered Security.  Each holder of this Warrant acknowledges that this Warrant and the Warrant Stock have not been registered under the Act, and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an effective registration statement under the Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable U.S. federal or state securities law then in effect or (ii) a statement from or legal opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. Each certificate or other instrument for Warrant Stock issued upon the exercise of this Warrant shall bear a legend substantially to the foregoing effect.
 
b)                                      Transferability.  Subject to the provisions of Section 3(a) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of the Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal office of the Company.
 
c)                                      Warrant Register.  The Company will maintain a register containing the name(s) and address(es) of the Registered Holder(s) of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes; provided, however, that if this Warrant is properly assigned in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. Any Registered Holder may change its address as shown on the warrant register by written notice to the Company requesting such change.
 
4.                                      No Impairment
 
The Company will not intentionally, by amendment of its charter or through reorganization, consolidation, merger, dissolution, sale of assets, contact or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant.
 
5.                                      Notices Of Certain Transactions
 
In the event:
 
a)                                      of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company or a subsidiary of the Company in the case of a reverse merger transaction with or into another corporation, or the acquisition of the Company by another company or any transfer or sale of all or substantially all of the assets or voting securities of the Company or a subsidiary of the Company in the case of a reverse merger transaction, or
 
b)                                      of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,
 
then, the Company will promptly send the Registered Holder of this Warrant a notice specifying, as the case may be and to the extent known by the Company, information setting out (i) the date on which any record date is to be set, (ii) the estimated date on which any of the event(s) being notified are reasonably expected by the Company to occur, (iii) reasonable details (in summary form) regarding the nature of the event, subject to any confidentiality restrictions that may be in place, and (iv) applicable contact details and reply information.

 

3

 

6.                                      Reservation Of Stock
 

The Company will
at all times reserve and keep available, solely for the issuance and delivery
upon the exercise of this Warrant, such shares of Warrant Stock and other
stock, securities and property, as from time to time shall be issuable upon the
exercise of this Warrant.

 

7.                                      Exchange Of Warrants
 

Upon the surrender
by the Registered Holder of any Warrant or Warrants, properly endorsed, to the
Company at the principal office of the Company, or to the legal counsel of the
Company if the Company so requests, the Company will, subject to the provisions
of Section 3 hereof, issue and deliver to or upon the order of such Holder, at
the Company’s expense, a new Warrant or Warrants of like tenor, in the name of
such Registered Holder or as such Registered Holder (upon payment by such
Registered Holder of any applicable transfer taxes) may direct, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant or Warrants so surrendered.

 

8.                                      Replacement Of Warrants
 

Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and (in the case of loss, theft or destruction)
upon delivery of an indemnity agreement (with surety if reasonably required) in
an amount reasonably satisfactory to the Company, or (in the case of
mutilation) upon surrender and cancellation of this Warrant, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

 

9.                                      Notices
 

Any notice
required or permitted under this Warrant shall be given in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be
notified; (b) when sent by confirmed facsimile; or (c) one business
day for deliveries within the United States and two business days for
deliveries outside of the United States, following deposit with Federal Express
or any other internationally recognized overnight courier service, to the party
to be notified at the location indicated for such party in this Agreement
(including any exhibit to it), or at such other address as a party may
designate by giving at least five (5) business days advance written notice. In
the case of notice being given by or to the Company, a copy shall be
simultaneously sent to Thompson Legal Advisory Services, attn: Tamara L.
Thompson, 229 Brannan Street, Suite 18G, San Francisco, CA USA 94107 facsimile
+1 415 896 5166

 

10.                               No Rights As A Stockholder
 

Until the exercise
of this Warrant, the Registered Holder of this Warrant shall not have or
exercise any rights by virtue hereof as a stockholder of the Company, except
the rights stated herein.

 

11.                               No Fractional Shares
 

No fractional
shares of Warrant Stock will be issued in connection with any exercise
hereunder. In lieu of any fractional shares which would otherwise be issuable,
the Company shall pay cash equal to the product of such fraction multiplied by
the fair market value of one share of Warrant Stock on the date of exercise.

 

4

 

12.                               Amendment Or Waiver
 

Any term of this
Warrant may be amended and the observance of any term may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Registered
Holder.  Any amendment or waiver
effected in accordance with this Section 12 shall be binding on each future
Registered Holder and the Company.

 

13.                               Headings
 

The headings in
this Warrant are for purposes of reference only and shall not limit or
otherwise affect the meaning of any provision of this Warrant.

 

14.                               Governing Law
 

This Warrant shall
be governed, construed and interpreted in accordance with the internal laws of
the State of Delaware, without giving effect to principles of conflicts of law,
except with regard to matters of US federal securities laws, in which case such
matters shall be governed by US federal securities laws.

 

 

[Balance of this page left intentionally blank]

 

5

 

	AUTHORISZOR, INC.

	 
	 

	By:
	/s/Garcia Hanson
	 

	 
	Garcia Hanson

	 
	 

	Title:
	Chief Executive Officer

	 
	 

	Address:
	First Floor, Ebor Court, Westgate,

	 
	Leeds, LS1 4ND, United Kingdom

	 
	 

	Phone:
	+44 (0) 113 245 4788

	Fax:
	+44 (0) 113 245 4798

 

 

 

SIGNATURE PAGE TO THE COMMON STOCK WARRANT

 

6

 
EXHIBIT A
 
PURCHASE FORM
 

	To:  Authoriszor, Inc.
	Dated:
	 
	 

	Attn:  President
	 

	First Floor Ebor Court
	 

	Westgate, Leeds, LS1 4ND
	 

	United Kingdom
	 

 
The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby irrevocably elects to purchase                                    shares of Common Stock covered by such Warrant and herewith makes payments by check or wire transfer to an account designated by the Company in the amount of the Warrant Exercise Price in an amount representing the full purchase price for all shares purchased at the price per share provided for in the Warrant.
 
The undersigned further acknowledges that it has reviewed the representations and warranties contained in Section 3 of the Purchase Agreement (as defined in the Warrant) and by its signature below hereby makes such representations and warranties to the Company as of the date hereof. Defined terms contained in such representations and warranties shall have the meanings assigned to them in the rest of the Purchase Agreement; provided, however, that the term “Lender” shall refer to the undersigned, the term “Securities” shall refer to the Warrant Stock and the term “Agreement” shall refer to the Warrant.
 
Commercial Technology Limited
 
 

	Authorised Signature:
	 
	 

	 

	
  Name:

  	
  Ian McNeill

  
	
   

  	
   

  
	
  Title:

  	
  Director

  
	
   

  	
   

  
	
  Address:

  	
  The Old Granary, Paradise Lane

  
	
   

  	
  Hazelwood, Tadcaster, North Yorkshire

  
	
   

  	
  LS24 9NJ, United Kingdom

  
	
   

  	
   

  
	
  Phone:

  	
  +44 (0) 193 753 1555

  
	
   

  	
   

  
	
  Facsimile:

  	
  +44 (0) 870 458 0410

  
				

 

1

 

EXHIBIT B
 
ASSIGNMENT FORM
 
 
FOR VALUE RECEIVED,                                                                                    hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant with respect to the number of shares of Common Stock covered thereby set forth below, unto:
 

	NAME OF ASSIGNEE
	 
	ADDRESS
	 
	NO. OF SHARES

 
 

	Dated:
	 
	 
	 
	Signature:
	 
	 

	 
	 
	 

	 
	 
	 

	Witness:
	 
	 
	 
	 

								

 

1

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