Document:

belvedere_10q-ex1003.htm

    Exhibit
10.3

     

    WARRANT
AGREEMENT

    

    THIS
WARRANT AGREEMENT (this “Agreement”) is made and
entered into by Belvedere SoCal, a California corporation (the “Company”), and Computershare,
Inc. a Delaware corporation and its fully owned subsidiary Computershare Trust
Company, N.A. a federally chartered trust company, having its principal office
at 250 Royall Street, Canton, MA 02021 (Collectively (“Warrant Agent”), or
individually “Computershare” and the “Trust Company”, respectively), agree as of
this 23rd day of
November , 2007, with regard to the following:

     

    A.           The
Company proposes to issue warrants (each individually, a “Warrant” and, collectively,
the “Warrants”) as
documented by certificates (the “Warrant Certificates”)
initially evidencing the right to purchase up to an aggregate of 44,729 shares
of common stock, no par value, of the Company (the “Common Stock”) pursuant to an
Agreement to Merge and Plan of Reorganization, dated as of February 1, 2007 and
amended on April 23 and August 7, 2007.

     

    B.           The
Company desires that Warrant Agent act on behalf of the Company in connection
with the issuance, transfer, exchange, exercise and replacement of the Warrants
and Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrants and Warrant Certificates and the
terms and conditions on which they may be issued, transferred, exchanged,
exercised and replaced.

     

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

     

    1.           Issuance, Execution and Delivery of
Warrants

     

    1.1           Issuance of
Warrants.  The Company shall issue the Warrants, as evidenced
by Warrant Certificates each in substantially the form of Exhibit 1
hereto.  Each Warrant Certificate shall evidence the right, subject to
the provisions of this Agreement and of the Warrant Certificate, to purchase
that number of Warrant Shares (as defined below) as set forth on the face of the
Warrant Certificate, but not less than one whole Warrant Share.  For
the purposes of this Agreement and the Warrant Certificates, “Warrant Shares” means the
number of shares of Common Stock deliverable upon exercise of a Warrant, as
adjusted from time to time pursuant to the provisions of Section 3
hereof.  Although originally issued as part of a unit consisting of
shares of the Company’s common stock and Warrants, each Warrant is detachable,
and may be transferred separately, from such units and shares of the Company’s
common stock.

     

    1.2           Execution and Delivery of
Warrants.  Each Warrant Certificate shall bear the facsimile
signature of the Chief Executive Officer and Corporate Secretary of the Company,
and shall be countersigned by Warrant Agent.  Except for the
countersignature of Warrant Agent, the Company may adopt and use as the
facsimile signature of any such officer the facsimile signature of any person
who on the date of this Agreement or at any time thereafter shall have been such
officer, whether or not he or she is such officer at the time of issue of any
Warrant Certificate.  The Warrant Certificates shall be issued in
registered form only.  For purposes of this Agreement and the Warrant
Certificates, the term “Registered Holder” shall mean
the Person (as defined below) in whose name or names a particular Warrant
Certificate shall be registered on the books of the Company kept for that
purpose in accordance with the terms of this Agreement.  For purposes
of this Agreement and the Warrant Certificates the term “Person” shall mean an
individual, partnership, corporation, trust, joint stock company, association,
joint venture, or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

     

    
      
        
        

      

      
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    2.           Exercise Price, Duration and Transfer
and Exercise of Warrants

     

    2.1           Exercise
Price.  Each Warrant Certificate shall, when properly
countersigned by Warrant Agent, entitle the Registered Holder thereof, subject
to the provisions of this Agreement and the Warrant Certificate, to purchase
from the Company the number of Warrant Shares stated on the Warrant Certificate,
as such Warrant Shares are constituted on the date the Warrants evidenced
thereby are exercised, at the price of $0.01 per Warrant Share (the “Exercise Price”) payable in
full at the time such Warrants are exercised.  The Exercise Price
shall be adjusted from time to time based on adjustment of the number of shares
that may be purchased upon the exercise of all Warrants issued pursuant to this
Agreement in accordance with Section 3 hereof.

     

    2.2           Duration.  Warrants
may be exercised only from the date of issuance (the “Exercise Date”) through on or
before November 23, 2007 (the “Expiration Date”), unless
extended.  The Company shall advise Warrant Agent of the date of
issuance of the Warrants and shall confirm with Warrant Agent the Exercise Date
and the Expiration Date of the Warrants upon issuance.  Each Warrant
not exercised prior to the Expiration Date shall become void, and all rights of
the Registered Holder thereunder and under this Agreement and the Warrant
Certificate shall cease after the close of business on the relevant Expiration
Date.

     

    2.3           Transfer and
Exercise.

     

    2.3.1                      The
Company shall keep, at the office of Warrant Agent at 350 Indiana Street,
Golden, CO, 80401, a register, in which, subject to such reasonable regulations
as it may prescribe, the Company shall register the Warrants at the time of
issuance thereof and shall transfer Warrants so registered as provided in this
Agreement.  Upon surrender for transfer of any Warrant at such office,
the Company shall execute and Warrant Agent shall countersign and deliver to the
name of the transferees a new Warrant Certificate(s) evidencing Warrants to
purchase a like number of Warrant Shares.  All Warrant Certificates
presented for transfer or exchange shall (if required by the Company) be Duly
Endorsed (as defined below) or be accompanied by a written instrument of
transfer in form satisfactory to the Company and Warrant Agent duly executed by
the Registered Holder or his or her attorney duly authorized.  For
purposes of this Agreement and the Warrant Certificates, the term “Duly Endorsed” shall mean duly
endorsed in blank by the Person or Persons in whose name a Warrant Certificate
is registered or accompanied by a duly executed assignment separate from the
certificate with the signatures thereon guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

     

    
      
        
        

      

      
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    2.3.2                      A
Registered Holder is entitled to exercise his or her Warrants, in whole or in
part, so long as the number of Warrant Shares purchased upon exercise is at
least 100 or, if the total number of Warrant Shares subject to exercise under
the relevant Warrant Certificate is less than 100, such lesser
number.  Such exercise may occur at any time or from time to time,
commencing on the Exercise Date and terminating at 5:00 p.m. Pacific time on the
Expiration Date or, if such day is not a Business Day (as defined below), then
until 5:00 p.m. Pacific time on the next succeeding Business Day, by
presentation and surrender of the Registered Holder’s Warrant Certificates to
the Company at the office of Warrant Agent at 350 Indiana Street, Golden, CO,
80401 with the Exercise Subscription Form set forth on the Warrant Certificate,
duly executed and accompanied by proper payment of the Exercise Price for the
number of Warrant Shares specified in such form, all subject to the terms and
conditions of this Agreement and the Warrant Certificate.  At the
option of the Registered Holder, the Exercise Price may be paid by certified or
official Company check or Company cashier’s check payable to the order of the
Company, or by any combination thereof.  For purposes of this
Agreement and the Warrant Certificates, the term “Business Day” shall mean any
day except a Saturday, Sunday or other day on which commercial banks in
San Francisco County, California are authorized by law to
close.

     

    2.3.3                      Upon
surrender of any Warrants in accordance with the provisions of this Agreement
and the Warrant Certificate, the Company shall transfer to the Registered Holder
thereof appropriate evidence of ownership of any shares of Common Stock to which
the Registered Holder is entitled, registered or otherwise placed in the name
of, or payable to the order of, the Registered Holder, and the Company shall
deliver such evidence of ownership to such Registered Holder.

     

    2.3.4                      If
a Registered Holder exercises fewer than all of the Warrants evidenced by a
Warrant Certificate, such Warrant Certificate shall be surrendered to Warrant
Agent and a new Warrant Certificate of the same tenor evidencing such Registered
Holder’s remaining Warrants shall be issued.  Warrant Agent shall
register such new Warrant Certificate in the name of such Registered Holder and
shall deliver the new Warrant Certificate to such Registered
Holder.

     

    2.3.5                      The
Company shall pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed in respect of, the issue or delivery of
any shares of Common Stock issuable upon the exercise of any
Warrant.  The Company shall not be required, however, to pay any tax
or other charge imposed in connection with any transfer involved in the issue of
a certificate for shares of Common Stock in any name other than that of a
Registered Holder of the Warrant at issue, and in such case the Company shall
not be required to issue or deliver any such stock certificate until such tax or
other charge has been paid or it has been established to the Company’s
reasonable satisfaction that such tax or other charge is not due.

     

    2.3.6                      Each
Person in whose name any such certificate for shares of Common Stock is issued
shall for all purposes be deemed have become the holder of record of Common
Stock represented thereby on the date on which the Warrant was surrendered and
payment of the purchase price and any applicable taxes was made irrespective of
the date of issue or delivery of such certificate except that if the date of
such surrender and payment is a date when the stock transfer books of the
Company for the Common Stock are closed, such Person shall be deemed to have
become the holder of such shares on the next succeeding date on which such stock
transfer books are open.  The Company will not close such stock
transfer books at any one time for a period longer than 20 days.

     

    
      
        
        

      

      
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    3.           Adjustments in Warrant Shares;
Fractional Shares

     

    3.1           Anti-Dilution
Provisions. The number of Warrant Shares which may be purchased upon the
exercise of a Warrant shall be subject to change or adjustment as
follows:

     

    3.1.1                      Stock Dividends –
Subdivisions, Combinations.  In case the Company shall
(i) pay a dividend on the Common Stock in shares of Common Stock (or
securities convertible into, exchangeable for or otherwise entitling the
registered holder to receive Common Stock), (ii) subdivide the outstanding
Common Stock into a greater number of shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares
of Common Stock, the number of shares of Warrant Shares purchasable upon
exercise of any Warrant immediately prior to the record date fixing shareholders
to be affected by such event shall be adjusted so that the Registered Holder
shall thereafter be entitled to receive that kind and number of Warrant shares
or other securities of the Company that the Registered Holder would have owned
or have been entitled to receive after the happening of any of the events
described above, had the Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto.  An
adjustment made pursuant to this Section 3.1.1 shall become effective
(x) immediately after the record date in the case of a dividend and
(y) immediately after the effective date in the case of a subdivision or
combination.  If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to shareholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the number of Warrant Shares
issuable upon exercise of a Warrant then in effect shall be required by reason
of the taking of such record.  No adjustment shall be made under this
Section 3.1.1 unless such adjustment would require an increase or decrease
of at least one percent in the number of shares of Common Stock or other
securities of the Company that the Registered Holder would have owned or have
been entitled to receive had the Warrant been exercised, provided however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment,
and all calculations shall be made to the nearest one-hundredth of a
share.

     

    3.1.2                      Reorganization or
Reclassification.

     

    3.1.2.1                        In
case of any capital reorganization or any reclassification of the capital stock
of the Company (whether pursuant to a merger or consolidation, sale of
substantially all of the assets or otherwise, but excepting (i) the formation of
a holding company owning all of the outstanding Common Stock of the Company
following such formation and (ii) a change in the Company’s jurisdiction of
organization), the successor or purchasing corporation shall have the right to
assume the Warrants, and in such event would execute an agreement with the
Company providing that after such transaction each Warrant would thereafter be
exercisable for the number of shares of stock or other securities or property
receivable upon such capital reorganization or reclassification of capital
stock, as the case may be, by a holder of the number of shares of Common Stock
into which the Warrant was exercisable immediately prior to such capital
reorganization or reclassification of capital stock; and, in any case,
appropriate adjustment shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the Registered
Holder of any Warrant to the end that the provisions set forth herein shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other securities or property thereafter deliverable upon the
exercise of the Warrant.  Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3.  The provisions of
this Section 3.1.2.1 shall similarly apply to successive consolidation,
mergers, sales or conveyances.

     

    
      
        
        

      

      
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    3.1.2.2                      
In the event that such successor corporation does not execute such an agreement
with the Company as provided in Section 3.1.2.1, then as to outstanding
Warrants, whether or not then otherwise exercisable, each Registered Holder
shall be entitled to exercise outstanding Warrants upon the payment of the
Exercise Price during a period of at least 30 days (or until the Expiration
Date, if earlier), which period terminates at least five days prior to
consummation of the transaction.  If Section 3.1.2.1 is not applicable
and Warrants are not exercised in accordance with this Section 3.1.2.2 before
consummation of the transaction then all Warrants not so exercised will be
cancelled and become null and void.

     

    3.1.3                      Notice.  In
the event that the Company shall propose at any time to effect any transaction
of the type described in Subsections 3.1.1 or 3.1.2 or take any similar
extraordinary corporate action affecting the Company’s capital stock (including
but not limited to the transfer of substantially all of our assets) during the
time that Warrants are exercisable or as a result of which the Warrants may
become exercisable, then, in connection with each such event, the Company shall
send notice thereof to all Registered Holders at least 20 days prior to the
earlier of (i) the date on which such event is to become effective, (ii) the
record date for the shareholders affected by such event, or (iii) the first date
on which the Company intends to effect any such transaction, in each case
specifying in reasonable detail what the transaction or event consists of and,
if applicable, the aggregate amount or value of any cash or property proposed to
be distributed, paid, purchased or received by the Company in connection
therewith.

     

    3.1.4                      Adjustment of Exercise
Price.  The Exercise Price per share of Common Stock
purchasable upon exercise of any Warrant shall be subject to adjustment from
time to time as follows:  upon each adjustment of the number of shares
of Common Stock purchasable pursuant to Section 3.1, the Exercise Price shall be
reduced or increased, as the case may be, to a price determined by dividing the
aggregate Exercise Price of all Warrant Shares in effect prior to such
adjustment by the total maximum number of Warrant Shares purchasable upon the
exercise of all Warrants immediately after such adjustment.

     

    3.2           Voluntary Adjustments by the
Company.  The Company may at its option, at any time during the
term of the Warrants, reduce the then current Exercise Price to any amount
deemed appropriate by the Company’s board of directors, approve additional
exercise periods or extend the Expiration Date to any time deemed appropriate by
the Company’s board of directors.  In case of any such adjustment, the
terms of this Agreement shall apply from the date of such adjustment according
to the terms of such adjustment.

     

    
      
        
        

      

      
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    3.3           Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon the exercise of any Warrant.  If any fraction of a share of
Common Stock would be issuable upon the exercise of a Warrant, the Company shall
round down the number of shares of Common Stock to be issued upon exercise of
such Warrant to the nearest lower whole number of shares of Common Stock. The
Company will repay a Warrant holder in cash for any fraction of a share of
Common Stock that would otherwise be issuable.

     

    4.           Other Provisions Relating to the
Rights of Registered Holders of Warrants

     

    4.1           Rights of Registered
Holders.  Prior to the exercise of any Warrant, a Registered
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
of the Company including, without limitation, the right to vote, to receive
dividends or other distributions or to receive any notice of meetings of
shareholders or any notice of any proceedings of the Company, except as may be
specifically provided for herein.  The Company upon request of a
Registered Holder shall provide such Registered Holder with a copy of the
Company’s most recent annual report, including audited financial
statements.

     

    4.2           Assignment or
Transfer.  A Warrant is transferable by the Registered Holder
thereof by surrendering for transfer at the office of Warrant Agent, maintained
for that purpose at 350 Indiana Street, Golden, CO, 80401 , the Warrant
Certificate evidencing the Warrant and the Assignment Form, Duly Endorsed, set
forth on the Warrant Certificate.  Thereupon, one or more new Warrant
Certificates evidencing the transferred Warrants of authorized denominations
will be issued to the designated transferee or transferees, and, if necessary, a
new Warrant Certificate evidencing Warrants not transferred will be issued to
the original Registered Holder.

     

    4.3           Loss of Warrant
Certificates.  Upon receipt by the Company of evidence
satisfactory to it (in the exercise of its reasonable discretion) of the loss,
theft, destruction or mutilation of any Warrant Certificate, upon the posting by
the Registered Holder of a bond acceptable to Warrant Agent, and (in the case of
loss, theft or destruction) upon receipt by the Company of reasonably
satisfactory indemnification, and (in the case of mutilation) the surrender and
cancellation of the mutilated Warrant Certificate, the Company shall execute and
deliver, or shall instruct Warrant Agent to deliver, a new Warrant Certificate
of like tenor and date.  The provisions of this Section 4.3 are
exclusive and shall preclude (to the extent lawful) all other rights or remedies
with respect to the replacement of mutilated, lost, stolen or destroyed Warrant
Certificates.

     

    4.4           Reservation of
Shares.  The Company agrees that at all times there shall be
reserved for issuance and delivery upon exercise of any Warrant such number of
its authorized but unissued shares of Common Stock or other securities of the
Company from time to time issuable upon exercise of the Warrants as will be
sufficient to permit the exercise in full of all the Warrants.  All
such shares shall be duly authorized and, when issued upon such exercise, shall
be validly issued, fully paid, free and clear of all liens, security interests
and charges.

     

    4.5           Securities
Laws.  The exercise of Warrants is prohibited unless the
issuance of the Common Stock has been registered or qualified under laws of the
state(s) where the shares are to be issued and delivered and federal law
unless there are exemptions available from such requirements.  Unless
waived by the Company, the date of exercise shall be deemed to be the date that
all conditions imposed under this Section 4.5, as well as all other
conditions to exercise hereunder, have been satisfied.  The Company
will use its best efforts to register the issuance of the Common Stock under
state and/or federal law, if required, before the Exercise Date.  If
the issuance of the Common Stock is not so registered by the Exercise Date, the
exercise period shall be automatically extended until the Common Stock is
registered.

     

    
      
        
        

      

      
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    5.           Concerning Warrant Agent and Other
Matters

     

    5.1           Payment of
Taxes.  The Company will from time to time promptly pay to
Warrant Agent, or make provision satisfactory to Warrant Agent for the payment
of, all taxes and charges that may be imposed by the United States or any State
upon the Company or Warrant Agent upon the issuance or delivery of shares of
Common Stock upon the exercise of any Warrant, but the Company shall not be
obligated to pay any transfer taxes in respect of the Warrant or such
shares.

     

    5.2           Resignation, Consolidation
or Merger of Warrant Agent, and Successor Warrant Agent.

     

    5.2.1                      Warrant
Agent may resign its duties and be discharged from all further duties and
liabilities hereunder after giving 30 days’ notice in writing to the Company,
except that such shorter notice may be given as the Company shall, in writing,
accept as sufficient.  If the office of Warrant Agent becomes vacant
by resignation or incapacity to act or otherwise, the Company shall appoint in
writing a new warrant agent.  If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent
or by a Registered Holder, then a Registered Holder may apply to any court of
competent jurisdiction in the State of California, County of San Francisco, for
the appointment of a new warrant agent.  Any new warrant agent
appointed hereunder shall execute, acknowledge and deliver to the former warrant
agent last in office and to the Company an instrument accepting such appointment
hereunder and thereupon such new warrant agent without any further act or deed
shall become vested with all the rights, powers, duties and responsibilities of
Warrant Agent hereunder with like effect as if it had been named as warrant
agent; but if for any reason it becomes necessary or expedient to have the
former warrant agent execute and deliver any further assurance, conveyance, act
or deed, the same shall be done at the expense of the Company and shall be
legally and validly executed and delivered by the former warrant
agent.  Not later than the effective date of any such appointment, the
Company shall file notice thereof with the former warrant agent and each
transfer agent for the Common Stock, and shall forthwith mail notice thereof to
the Registered Holders at their addresses as they appear on the registry
books.  Failure to file or mail such notice, or any defect therein,
shall not affect the legality or validity of the appointment of the successor
warrant agent.

     

    5.2.2                      Any
Person into which Warrant Agent or any new warrant agent may be merged or
converted or with which it may be consolidated or any Person resulting from any
merger, conversion or consolidation to which Warrant Agent, or any new warrant
agent shall be a party, shall be the successor warrant agent under this
Agreement without any further act, provided that such company would be eligible
for appointment as a successor warrant agent under the provisions of
Section 5.2.1.

     

    
      
        
        

      

      
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    5.2.3                      After
the first year of this Agreement, the Company may terminate and replace Warrant
Agent upon 90 days written notice to Warrant Agent, except that such shorter
notice may be given as Warrant Agent shall, in writing, accept as
sufficient.

     

    5.3           Fees and Expenses of Warrant
Agent. The Company agrees that it will (i) pay Warrant Agent
reasonable remuneration for its services as warrant agent hereunder and will
reimburse Warrant Agent upon demand for all expenditures that it may reasonably
incur in the execution of its duties hereunder; and (ii) perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by Warrant Agent for the carrying out or performing by
Warrant Agent of the provisions of this Agreement.

     

    5.4           Additional
Provisions.

     

    5.4.1                      Warrant
Agent may consult with its legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to Warrant Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.

     

    5.4.2                      Whenever
in the performance of its duties under this Agreement, Warrant Agent shall deem
it necessary or desirable that any matter be proved or established by the
Company prior to taking or suffering any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate or instrument
signed by the Chief Executive Officer or President or an Executive Vice
President or Senior Vice President of the Company and delivered to Warrant
Agent; and such certificate or instrument shall be full warrant to Warrant Agent
for any action taken or suffered in good faith by Warrant Agent under the
provisions of this Agreement in reliance upon such certificate or instrument;
but in its discretion Warrant Agent may in lieu thereof accept other evidence of
such matter or may require such further or additional evidence as it may deem
reasonable.

     

    5.4.3                      Warrant
Agent shall be liable hereunder only for its own gross negligence or willful
misconduct.

     

    5.4.4                      Warrant
Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Warrant Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.

     

    5.5           Acceptance of Agency.
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions set forth herein.

     

    5.6           Modification of
Agreement.  Notwithstanding the provisions of Section 6.2,
Warrant Agent may, without the consent or concurrence of any Registered Holder
by supplemental agreement or otherwise, concur with the Company in making any
changes or corrections in this Agreement that they shall have been advised by
counsel are required to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest error herein
contained.

     

    
      
        
        

      

      
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    5.7           Successors.  All
the covenants and provisions of this Agreement by or for the benefit of the
Company shall bind and inure to the benefit of its successors and
assigns.

     

    5.8           Persons Having Rights Under
this Agreement.

     

    5.8.1                      Nothing
in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any Person other than the Company, Warrant Agent and the Registered Holders
any right, remedy or claim under or by reason of this Agreement or of any
covenant, condition, stipulation, promise or agreement hereof and all covenants,
conditions, stipulations, promises and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the Company and Warrant Agent and
their successors and of the Registered Holders.

     

    5.8.2                      The
Company, Warrant Agent and any transfer agent and registrar for the Common Stock
may deem and treat the Person in whose name any Warrant Certificate shall be
registered upon the books of the Company as the absolute owner of such Warrant
Certificate (notwithstanding any notation of ownership or other writing thereon
made by anyone other than the Company or Warrant Agent) for all purposes; and
neither the Company nor Warrant Agent or any transfer agent or registrar of the
Common Stock shall be affected by a notice to the contrary.

     

    6.           Indemnification.

     

    6.1           The
Company shall indemnify and hold Warrant Agent harmless against all losses,
claims, damages, liabilities, costs and expenses (including reasonable fees and
disbursements of legal counsel) which Warrant Agent may incur or become subject
to arising from or out of any claim or liability resulting from actions taken as
Warrant Agent pursuant to this Agreement; provided, however, that indemnity does
not extend to, and Warrant Agent will not be indemnified or held harmless with
respect to, such losses, claims, damages, liabilities, costs and expenses
incurred or suffered by Warrant Agent as a result, or arising out, of Warrant
Agent’s gross negligence, misconduct, bad faith or breach of this
Agreement.  In connection therewith (i) in no case will the
Company be liable with respect to any claim against Warrant Agent unless Warrant
Agent notifies the Company in writing of the assertion of a claim against
Warrant Agent or of any action commenced against Warrant Agent, promptly after
Warrant Agent has notice of any such assertion of a claim or has been served
with the summons or other first legal process giving information as to the
nature and basis of the claim; (ii) the Company will be entitled to
participate at its own expense in the defense of any suit brought to enforce any
such claim and, if the Company so elects, it will assume the defense of any such
suit, in which event the Company will not thereafter be liable for the fees and
expenses of any additional counsel that Warrant Agent may retain so long as the
Company retains counsel reasonably satisfactory to Warrant Agent, in the
exercise of Warrant Agent’s reasonable judgment, to defend such suit; and
(iii) Warrant Agent agrees not to settle any litigation in connection with
any claim or liability with respect to which it may seek indemnification from
the Company without the prior written consent of the Company.  No
indemnification shall be permitted hereunder that would be prohibited pursuant
to the provisions of Part 359 of the Federal Deposit Insurance Corporation’s
regulations.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    6.2           Warrant
Agent will be protected and will incur no liability for or with respect to any
action taken, suffered or omitted by it without gross negligence and in good
faith in connection with its administration of this Agreement in reliance upon
any instrument of assignment or transfer, power of attorney, endorsement,
affidavit letter, notice, direction, consent, certificate, statement or other
paper or document reasonably believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged by the proper person or
persons.

     

    6.3           Notwithstanding
anything to the contrary herein, in no event will either party be liable to the
other for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the party has
been advised of the likelihood of such loss or damage and regardless of the form
of action.

     

    7.           General
Provisions.

     

    7.1           Notices.  Unless
otherwise specifically permitted by this Agreement, all notices or other
communications required or permitted under this Agreement between Warrant Agent
and the Company shall be in writing, and shall be personally delivered or sent
by registered or certified mail, postage prepaid, return receipt requested, or
sent by facsimile, provided that the facsimile cover sheet contains a notation
of the date and time of transmission, and shall be deemed
received:  (i) if personally delivered, upon the date of delivery
to the address of the person to receive such notice, (ii) if mailed in
accordance with the provisions of this Section 7.1, two (2) Business
Days after the date placed in the United States mail, (iii) if mailed other
than in accordance with the provisions of this Section 7.1 or mailed from
outside the United States, upon the date of delivery to the address of the
person to receive such notice or (iv) if given by facsimile, when sent with
confirmation of receipt.  Notices shall be given at the following
addresses:

     

    
      	
              If
      to the Company:

               

              Belvedere SoCal

              One Maritime Plaza, Suite
      825

              San Francisco,
      CA  94111

              Attention:  Jae
      Lim

              Facsimile:  (415)
      434-9918

            	
              With
      a copy to:

               

              Reitner, Stuart &
      Moore

              1319 Marsh Street

              San Luis Obispo, Ca
      93401

              Attention:  John
      Stuart, Esq.

              Facsimile:  (805)
      545-8599

            
	 	 
	
              If
      to Warrant Agent:

              Computershare,
      Inc.

              350
      Indiana Street, Suite 800

              Golden,
      CO  080401

               

              Attention:  Corporate
      Actions

              Facsimile:
      303-262-0609

               

            	 
      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    7.2           Complete Agreement;
Modifications.  This Agreement, together with its exhibits,
(i) constitute the parties’ entire agreement, including all terms,
conditions, definitions, warranties, representations and covenants, with respect
to the subject matter hereof, (ii) merge all prior discussions and
negotiations between the parties as to the subject matter hereof, and
(iii) supersede and replace all terms, conditions, definitions, warranties,
representations, covenants, agreements, promises and understandings, whether
oral or written, with respect to the subject matter hereof.  Any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by a
majority in interest of all Registered Holders and the Company, or in the case
of a waiver, by the party against whom the waiver is to be
effective.  No failure or delay by either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies by law.  Any amendment, alteration or modification
requiring the signature of more than one party may be signed in
counterparts.

     

    7.3           Further
Actions.  Each party agrees to perform any further acts and
execute and deliver any further documents reasonably necessary to carry out the
provisions of this Agreement.

     

    7.4           Assignment.  No
party may assign its rights under this Agreement without the prior written
consent of the other parties hereto.

     

    7.5           Successors and
Assigns.  Except as explicitly provided herein to the contrary,
this Agreement shall be binding upon and inure to the benefit of the parties,
their respective successors and permitted assigns.

     

    7.6           Severability.  If
any portion of this Agreement shall be held by a court of competent jurisdiction
to be invalid, void or otherwise unenforceable, the remaining provisions shall
remain enforceable to the fullest extent permitted by law if enforcement would
not frustrate the overall intent of the parties (as such intent is manifested by
all provisions of this Agreement, including such invalid, void or otherwise
unenforceable portion).

     

    7.7           Extension Not a
Waiver.  No delay or omission in the exercise of any power,
remedy or right herein provided or otherwise available to any party shall impair
or affect the right of such party thereafter to exercise the
same.  Any extension of time or other indulgence granted to a party
hereunder shall not otherwise alter or affect any power, remedy or right of any
other party, or the obligations of the party to whom such extension or
indulgence is granted, except as specifically waived.

     

    7.8           Time of
Essence.  Time is of the essence of each and every term,
condition, obligation and provision hereof.

     

    7.9           No Third Party
Beneficiaries.  Subject to Section 5.8, this Agreement and
each and every provision hereof is for the exclusive benefit of the parties
hereto and not for the benefit of any third party.

     

    7.10          Attorneys’
Fees.  Should any litigation (including any proceedings in a
bankruptcy court) or arbitration be commenced between the parties hereto or
their representatives concerning any provision of this Agreement or the rights
and duties of any person or entity hereunder, the party or parties prevailing in
such litigation or arbitration shall be entitled, in addition to such other
relief as may be granted, to the attorneys’ fees and court or arbitration costs
incurred by reason of such litigation or arbitration, including attorneys’ and
experts’ fees incurred in preparation for or investigation of any matter
relating to such litigation or arbitration.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7.11         Headings.  The
headings in this Agreement are inserted only as a matter of convenience, and in
no way define, limit or extend or interpret the scope of this Agreement or of
any particular provision hereof.

     

    7.12         References.  A
reference to a particular section of this Agreement shall be deemed to include
references to all subordinate sections, if any.

     

    7.13         Counterparts.  This
Agreement may be signed in multiple counterparts with the same force and effect
as if all original signatures appeared on one copy; and in the event this
Agreement is signed in counterparts, each counterpart shall be deemed an
original and all of the counterparts shall be deemed to be one
agreement.

     

    7.14         Applicable
Law.  This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California.  Any action on this
Agreement may only be brought in a court of competent jurisdiction in the County
of San Francisco, State of California and the parties consent to such exclusive
jurisdiction.

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.

     

    
      	

              Belvedere
      SoCal

            	 	
              Computershare Trust Company,
      N.A. and Computershare, Inc., 

              on behalf of both
      entities

               

            
	By:	
              /s/  Alison Davis

            	 	
              By:  

            	/s/ Kellie Gwinn
	Its:	
              Chief Executive
      Officer                                                                

            	 	
              Its:

            	Vice
      President

    

    
 

    
      
         

      

      
        12 

        
          

        

      

      
         

      

    

    EXHIBIT
1

    

    No. W.____                      Definitive
Warrant Certificate to Purchase Warrant Shares as herein described.

    

    BELVEDERE
SOCAL

    COMMON
STOCK PURCHASE WARRANT

    

    Exercisable
only between November 23, 2007 and November 23, 2017

    Void
After November 23, 2017

    

    Capitalized
terms used but not defined herein have the meaning assigned to them in the
Warrant Agreement dated as of November 20, 2007 between Belvedere SoCal (the
“Company”) and
Computershare, Inc.  (the “Warrant
Agreement”).

     

    This
certifies that ___________________________________________ (the “Registered Holder”), will be
entitled to purchase, at any time on or after November 23, 2007 and on or before
November 23, 2017, Warrant Shares, with each Warrant Share consisting of one
share of fully paid Common Stock, no par value, of the Company, as such Common
Stock is constituted at the date of this Warrant Certificate (but the shares
included in a Warrant Share may be adjusted from time to time as stated below),
at the price of $0.01 per Warrant Share, by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed, at the
office of Warrant Agent, in 350 Indiana Street, Golden, CO, 80401, and by paying
in full, as provided in the Warrant Agreement, the Exercise Price for the
Warrant Shares as to which this Warrant Certificate is exercised, and upon
compliance with and subject to the conditions set forth herein and in the
Warrant Agreement.  No such purchase may consist of a number of
Warrant Shares less than 100; provided, however, that if the total number of
Warrant Shares set forth on this Warrant Certificate is less than 100, then such
purchase must be for such total number.  Each Warrant is detachable,
and may be transferred separately, from any shares of the Company’s common stock
owned by the Registered Holder.

     

    The
Warrants evidenced by this Warrant Certificate may not be exercised unless
Warrant Agent has countersigned this Warrant Certificate.  Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the Registered Holder a new Warrant
Certificate evidencing the Warrants not exercised.  Upon certain
events provided for in the Warrant Agreement (which provisions are set forth on
the back of this Warrant Certificate) the shares of Common Stock included in a
Warrant Share and the Exercise Price may be adjusted as therein
provided.  The term “Warrant Share” refers to such shares as so
adjusted from time to time.  No fractional shares will be issued upon
the exercise of rights to purchase hereunder.  If any fraction of a
share of Common Stock would be issuable upon the exercise of any of the Warrants
evidenced hereby, the Company shall round the number of shares of Common Stock
to be issued on such exercise to the nearest lower whole number of shares of
Common Stock.

     

    This
Warrant Certificate is issued under and in accordance with the Warrant Agreement
and is subject to the terms and provisions contained therein.  The
Registered Holder of this Warrant Certificate consents to all of such terms and
provisions by acceptance of this Warrant Certificate.  Copies of the
Warrant Agreement are on file at the above-mentioned office of Warrant
Agent.

     

    This
Warrant Certificate is transferable by the Registered Holder upon surrender of
this Warrant Certificate for transfer at the office of Warrant Agent maintained
for that purpose in Glendale, California, Duly Endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and Warrant
Agent, duly executed by the Registered Holder or such Registered Holder’s
attorney duly authorized in writing.  Upon such surrender and
compliance (if applicable), one or more new Warrant Certificates of authorized
denominations will be issued to the designated transferee or
transferee.  The Company and Warrant Agent and all transfer agents and
registrars for the Common Stock may deem and treat the Registered Holder as the
absolute owner of this Warrant Certificate for all purposes, and neither the
Company, Warrant Agent nor any such transfer agent or registrar shall be
affected by any notice to the contrary.

     

    This
Warrant Certificate shall not entitle the Registered Holder to any of the rights
of a shareholder of the Company including, without limitation, the right to
vote, to receive dividends and other distributions, to exercise any preemptive
right, or to receive any notice of, or to attend, meetings of shareholders or
any other proceedings of the Company.  This Warrant Certificate shall
be void and all rights represented hereby shall cease unless exercised on or
before November 23, 2017 and otherwise in accordance with the terms of the
Warrant Agreement.

     

    
      	
              Dated
      as of  November 23, 2007

            	
              Belvedere
      SoCal

               

            
	 	

              By:

            	 
	 	 	

              Alison Davis, President

            
	 	 	 
	 	By:	
               

            
	 	 	

              Alison
      Davis, Secretary

            

    

     

    
      	
              Countersigned:

               

              Computershare
      Inc.

              Warrant
      Agent

               

            	 
      
	By: 	 	 
	 	

              Authorized
      Signature

            	 

    

    
      
        
          FORM OF
WARRANT CERTIFICATE

        

         

      

      
         

        
          

        

      

      
         

      

    

    [REVERSE
SIDE OF WARRANT CERTIFICATE]

    

    The text
of Section 3 of the Warrant Agreement is set forth below.

     

    3.           Adjustments in Warrant Shares;
Fractional Shares

     

    3.1           Anti-Dilution
Provisions. The number of Warrant Shares which may be purchased upon the
exercise of a Warrant shall be subject to change or adjustment as
follows:

     

    3.1.1           Stock Dividends –
Subdivisions, Combinations.  In case the Company shall
(i) pay a dividend on the Common Stock in shares of Common Stock (or
securities convertible into, exchangeable for or otherwise entitling the
registered holder to receive Common Stock), (ii) subdivide the outstanding
Common Stock into a greater number of shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares
of Common Stock, the number of shares of Warrant Shares purchasable upon
exercise of any Warrant immediately prior to the record date fixing shareholders
to be affected by such event shall be adjusted so that the Registered Holder
shall thereafter be entitled to receive that kind and number of Warrant shares
or other securities of the Company that the Registered Holder would have owned
or have been entitled to receive after the happening of any of the events
described above, had the Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto.  An
adjustment made pursuant to this Section 3.1.1 shall become effective
(x) immediately after the record date in the case of a dividend and
(y) immediately after the effective date in the case of a subdivision or
combination.  If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to shareholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the number of Warrant Shares
issuable upon exercise of a Warrant then in effect shall be required by reason
of the taking of such record.  No adjustment shall be made under this
Section 3.1.1 unless such adjustment would require an increase or decrease
of at least one percent in the number of shares of Common Stock or other
securities of the Company that the Registered Holder would have owned or have
been entitled to receive had the Warrant been exercised, provided however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment,
and all calculations shall be made to the nearest one-hundredth of a
share.

     

    3.1.2           Reorganization or
Reclassification.

     

    3.1.2.1           In
case of any capital reorganization or any reclassification of the capital stock
of the Company (whether pursuant to a merger or consolidation, sale of
substantially all of the assets or otherwise, but excepting (i) the formation of
a holding company owning all of the outstanding Common Stock of the Company
following such formation and (ii) a change in the Company’s jurisdiction of
organization), the successor or purchasing corporation shall have the right to
assume the Warrants, and in such event would execute an agreement with the
Company providing that after such transaction each Warrant would thereafter be
exercisable for the number of shares of stock or other securities or property
receivable upon such capital reorganization or reclassification of capital
stock, as the case may be, by a holder of the number of shares of Common Stock
into which the Warrant was exercisable immediately prior to such capital
reorganization or reclassification of capital stock; and, in any case,
appropriate adjustment shall be made in the application of the provisions herein
set forth with respect to the rights and interests thereafter of the Registered
Holder of any Warrant to the end that the provisions set forth herein shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other securities or property thereafter deliverable upon the
exercise of the Warrant.  Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3.  The provisions of
this Section 3.1.2.1 shall similarly apply to successive consolidation,
mergers, sales or conveyances.

     

    3.1.2.2           In
the event that such successor corporation does not execute such an agreement
with the Company as provided in Section 3.1.2.1, then as to outstanding
Warrants, whether or not then otherwise exercisable, each Registered Holder
shall be entitled to exercise outstanding Warrants upon the payment of the
Exercise Price during a period of at least 30 days (or until the Expiration
Date, if earlier), which period terminates at least five days prior to
consummation of the transaction.  If Section 3.1.2.1 is not applicable
and Warrants are not exercised in accordance with this Section 3.1.2.2 before
consummation of the transaction then all Warrants not so exercised will be
cancelled and become null and void.

     

    3.1.3           Notice.  In
the event that the Company shall propose at any time to effect any transaction
of the type described in Subsections 3.1.1 or 3.1.2 or take any similar
extraordinary corporate action affecting the Company’s capital stock (including
but not limited to the transfer of substantially all of our assets) during the
time that Warrants are exercisable or as a result of which the Warrants may
become exercisable, then, in connection with each such event, the Company shall
send notice thereof to all Registered Holders at least 20 days prior to the
earlier of (i) the date on which such event is to become effective, (ii) the
record date for the shareholders affected by such event, or (iii) the first date
on which the Company intends to effect any such transaction, in each case
specifying in reasonable detail what the transaction or event consists of and,
if applicable, the aggregate amount or value of any cash or property proposed to
be distributed, paid, purchased or received by the Company in connection
therewith.

     

    3.1.4           Adjustment of Exercise
Price.  The Exercise Price per share of Common Stock
purchasable upon exercise of any Warrant shall be subject to adjustment from
time to time as follows:  upon each adjustment of the number of shares
of Common Stock purchasable pursuant to Section 3.1, the Exercise Price shall be
reduced or increased, as the case may be, to a price determined by dividing the
aggregate Exercise Price of all Warrant Shares in effect prior to such
adjustment by the total maximum number of Warrant Shares purchasable upon the
exercise of all Warrants immediately after such adjustment.

     

    3.2           Voluntary Adjustments by the
Company.  The Company may at its option, at any time during the
term of the Warrants, reduce the then current Exercise Price to any amount
deemed appropriate by the Company’s board of directors, approve additional
exercise periods or extend the Expiration Date to any time deemed appropriate by
the Company’s board of directors.  In case of any such adjustment, the
terms of this Agreement shall apply from the date of such adjustment according
to the terms of such adjustment.

     

    3.3           Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon the exercise of any Warrant.  If any fraction of a share of
Common Stock would be issuable upon the exercise of a Warrant, the Company shall
round down the number of shares of Common Stock to be issued upon exercise of
such Warrant to the nearest lower whole number of shares of Common Stock. The
Company will repay a Warrant holder in cash for any fraction of a share of
Common Stock that would otherwise be issuable.

     

    
      
        
          REVERSE
SIDE OF WARRANT CERTIFICATE

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXERCISE
SUBSCRIPTION FORM

    

    To
Be Executed by the Registered Holder

    Desiring
to Exercise the Warrants of

    Belvedere
SoCal

    

    

    Capitalized
terms used but not defined herein shall have the meaning assigned to them in the
within Warrant Certificate and in the Warrant Agreement between Belvedere SoCal
(the “Company”) and Computershare, Inc, and its subsidiary, Computershare Trust
Company, N.A. dated as of November 23, 2007.

     

    The
undersigned Registered Holder hereby exercises _________ Warrants evidencing the
right to purchase shares of the Common Stock covered by the within Warrant
Certificate, according to the conditions thereof.

     

    The
undersigned Registered Holder herewith makes payment in full of the Exercise
Price on such shares of $___________________ by certified or official bank check
or bank cashier’s check payable to the order of the Company, or by any
combination thereof.

     

    Check the
box below if the Registered Holder is exercising fewer than all of the Warrants
evidenced by the within Warrant Certificate:

     

     o The Undersigned
Registered Holder has hereby exercised fewer than all the Warrants evidenced by
the within Warrant Certificate and, therefore, requests that a new Warrant
Certificate evidencing the remaining Warrants evidenced by the within Warrant
Certificate be issued in the name of and delivered to the Registered
Holder.

     

    NOTE:  EXERCISE
MAY BE MADE FOR A MINIMUM OF THE LESSER OF 100 SHARES OR THE FULL NUMBER OF
SHARES AS TO WHICH EXERCISE MAY BE MADE UNDER THIS WARRANT
CERTIFICATE.

     

    
      	
              Dated:

            	
               

            	
              Registered
      Holder Signature  

            	 
	 
      	 
      	
              Name: 
      

            	 
      
	 
      	 
      	
              Title
      (if any)  

            	 
      
	 
      	 
      	
              Address: 
      

            	 
      
	 
      	 
      	 
      	 
      

    

    

     

    

    

    
      
        
          EXERCISE
FORM

        

         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT
FORM

    

    To Be
Executed by the Registered Holder Desiring to Effect a Transfer of the Warrants
of

    Belvedere
SoCal

    

    The
following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.

     

    
      	
              TEN
      COM

              TEN ENT

              JT TEN 

            	
              –

              –

              –

            	
              as
      tenants in common

              as
      tenants by the entireties

              as
      joint tenants with right

              of
      survivorship and not

              as
      tenants in common

            	
              UNIF
      GIFT MIN ACT  –     

            	
              __________Custodian
      __________

              (Cust)                         
           (Minor)

              under
      the Uniform Gifts to Minors

              Act
      ______________________

                                    (State)

            

    

    

    Additional
abbreviations may also be used, though not in the above list.

    

    FOR VALUE
RECEIVED, in accordance with the Warrant Agreement between Belvedere SoCal and
Computershare, Inc, and its subsidiary, Computershare Trust Company, N.A. dated
as of November 23, 2007., and the Securities Act of 1933, as amended, if
applicable, the undersigned hereby sells, assigns and transfers unto the person
named below the right to purchase ____________ Warrant Shares evidenced by the
within Warrant Certificate, and does hereby irrevocably constitute and
appoint__________________________, as attorney to transfer the said right on the
books of the Company with full power of substitution.

     

    
      	
              Transferee
      Name     

            	
               

            	 
	
              Address    
      

            	
               

            	 
	 	 	 

    

    

    
      	
              Dated:

            	
              _______________

            	
              Registered
      Holder Signature  

            	 
	 
      	 
      	
              Name: 
      

            	 
      
	 
      	 
      	
              Title
      (if any)  

            	 
      
	 
      	 
      	
              Address: 
      

            	 
      
	 
      	 
      	 
      	 
      

    

     

    
      
        

      

    

    NOTICE:  The
signature to this assignment must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without alteration
or enlargement or any change whatsoever.

     

    Signature(s) Guaranteed

    

    By:
__________________________________________

     

    
      	

              Pursuant
      to Rule 17Ad-15 of the Securities Exchange Act of 1934, an eligible
      guarantor institution (banks, stockbrokers, savings and loan associations
      and credit unions with membership in an approved signature guarantee
      medallion program) must guarantee the signature(s).

            	 

    

     

    

    

    ASSIGNMENT FORM<PAGE>

EXHIBIT 10.1

                              TERMINATION AGREEMENT

         THIS TERMINATION AGREEMENT (this "Agreement") is entered into as of the
19th day of November 2008, by and between Ivivi Technologies, Inc., a New Jersey
corporation ("Ivivi"), and Allergan Sales, LLC, a Delaware limited liability
company and successor in interest to Inamed Medical Products Corporation, and
its wholly-owned subsidiary, Allergan USA, Inc., a Delaware corporation
(collectively, "Allergan").

                              W I T N E S S E T H:

         WHEREAS, Ivivi and Inamed Medical Products Corporation previously
entered into an Exclusive Distribution Agreement, dated as of November 9, 2006,
pursuant to which, among other things, Ivivi granted Allergan certain rights to
distribute and sell the pulsed electromagnetic field generating device commonly
known as SofPulse(R) (the "Distribution Agreement"); and

         WHEREAS, each of Ivivi and Allergan desires to terminate the
Distribution Agreement, upon and subject to the terms and conditions specified
herein.

         NOW, THEREFORE, in consideration of the conditions and mutual covenants
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:

         1. TERMINATION OF DISTRIBUTION AGREEMENT. Effective as of the date of
this Agreement, the Distribution Agreement is hereby terminated in all respects
and except as set forth in the immediately succeeding sentence, the Distribution
Agreement shall be null and void and of no effect whatsoever, and no party to
the Distribution Agreement shall have any further right, liability, or
obligation thereunder. Notwithstanding the termination of the Distribution
Agreement, the provisions of Article 1 (Definitions) of the Distribution
Agreement shall survive the termination of the Distribution Agreement solely for
purposes of this Agreement; the provisions of Article 12 (Confidential
Information) and Section 16.13 (Press Releases and Announcements) of the
Distribution Agreement shall survive the termination of the Distribution in
accordance with Section 4 of this Agreement; the provisions of Section 7.3
(Technical Support) of the Distribution Agreement shall survive the termination
of the Distribution Agreement until the first anniversary of the date hereof;
Article 8 (Product Warranties) of the Distribution Agreement shall survive the
termination of the Distribution Agreement; and the provisions of certain
sections of Article 14 (Indemnification; Insurance Requirements) of the
Distribution Agreement shall survive the termination of the Distribution
Agreement in accordance with Section 6 of this Agreement. Capitalized terms
used, but not defined herein, shall have the meanings ascribed to them in the
Distribution Agreement.

         2. REPURCHASE OF INVENTORY.

                  (a) Allergan hereby agrees to provide the Product in its
possession to Ivivi, estimated and identified on SCHEDULE A attached hereto
(collectively, the "INVENTORY") in Irvine, California, which Product was
initially delivered to Allergan by Ivivi. Promptly following the execution and
delivery of this Agreement, Allergan shall return to Ivivi the Inventory in
exchange for $450,000 (the "INVENTORY REPURCHASE PRICE") payable in immediately
available funds, as more specifically set forth in this Section 2.

<PAGE>

                  (b) Within five (5) business days of the date of this
Agreement, Ivivi shall pay the Inventory Repurchase Price in immediately
available funds by wire transfer to the bank account designated in writing by
Allergan. Within 20 business days of the date of this Agreement, Allergan shall
ship the Inventory from Irvine, California (the "ALLERGAN SHIPPING POINT") to
the location designated in writing by Ivivi (the "IVIVI DESTINATION POINT").
Ivivi shall pay the reasonable and customary costs of such shipping and the risk
of loss for the Inventory shall pass to Ivivi when the Inventory leaves the
Allergan Shipping Point. The parties shall cooperate to obtain commercially
reasonable rates for such shipping costs. All Inventory delivered by Allergan to
Ivivi shall be suitably packed for surface or air shipment, in Ivivi's sole
discretion, marked for shipment to the Ivivi Destination Point.

         3. THIRD-PARTY DISTRIBUTORS. Ivivi hereby agrees that during the period
commencing on the date hereof and ending on the 180th day immediately following
the date hereof, Ivivi shall not enter into a distribution agreement with any
third-party distributor for the distribution by such distributor of the Product
in the Field in the United States.

         4. CONFIDENTIAL INFORMATION; RELEASE OF ESCROW DEPOSIT.

                  (a) Notwithstanding anything contained herein to the contrary,
the provisions of Article 12 (Confidential Information) and Section 16.13 (Press
Releases and Announcements) of the Distribution Agreement shall survive the
termination of the Distribution Agreement until the fifth anniversary of the
date hereof, and each of Ivivi and Allergan, on behalf of themselves and their
respective directors, officers, affiliates, employees, and agents, hereby ratify
and adopt and agree to continue to comply with provisions contained in Article
12 (Confidential Information) and Section 16.13 (Press Releases and
Announcements) of the Distribution Agreement, as though such provisions were
fully incorporated herein. Promptly following the execution and delivery of this
Agreement, each of Ivivi and Allergan shall deliver to the other party or
destroy all Confidential Information of the other party, including, without
limitation, materials, samples and documents of the other party, subject to
either party retaining a copy of the other party's Confidential Information
solely as may be required by law.

                  (b) Promptly following the execution and delivery of this
Agreement, the Escrow Deposit shall be released to Ivivi and the parties hereto
shall execute any and all documents, consents and instruments and take any and
all actions and do any and all things reasonably necessary and appropriate to
effectuate such release.

         5. INTELLECTUAL PROPERTY.

                  (a) The parties hereto hereby acknowledge and agree that
without limiting or restricting in any way any of Ivivi's right, title and
interest in and to any of its Intellectual Property whatsoever, the Product, the
Patents and the Ivivi Intellectual Property, including all derivatives,
Improvements and documentation thereof, that were solely conceived, fixed in a
tangible medium of expression or otherwise developed, invented or reduced to
practice by Ivivi or its Affiliates during the term of the Distribution
Agreement are the proprietary property of Ivivi or its licensors, and exclusive
title to such property shall remain with Ivivi or its licensors, after
termination of the Distribution Agreement.

                  (b) The parties hereto hereby acknowledge and agree that
without limiting or restricting in any way any of Allergan's right, title and
interest in and to any of its Intellectual Property whatsoever, Allergan shall
retain sole title to, and ownership of, all Allergan products, Allergan's
Intellectual Property and improvements thereon, all derivative works of Allergan
products, Allergan's Intellectual Property and improvements and all proprietary
rights therein, that were solely conceived, fixed in a tangible medium of
expression or otherwise developed, invented or reduced to practice by Allergan
or its Affiliates during and after termination of the Distribution Agreement.
The parties agree that Allergan shall retain sole ownership of information
regarding customers, distributors, sublicensees and subdistributors of the
Product acquired under the Distribution Agreement, which information shall be

                                      -2-
<PAGE>

treated as confidential pursuant to Article 12 of the Distribution Agreement
(which shall survive the termination of the Distribution Agreement in accordance
with Section 4). The parties further agree that works that were created,
marketed or bundled with the Product by Allergan, during the term of the
Agreement, which works do not infringe the Patents, are the proprietary property
of Allergan or its licensors, and exclusive title to such property shall remain
with Allergan or its licensors, after termination of the Distribution Agreement.

                  (c) The parties hereto hereby acknowledge and agree that from
and after the date hereof, Ivivi shall not use any of (i) Allergan's name,
subject to Section 16.13, (ii) Allergan's marks or (iii) sales and/or
promotional materials conceived or developed by Allergan or its Affiliates or
agents in connection with the Distribution Agreement.

         6. INDEMNIFICATION. Notwithstanding anything to the contrary contained
herein, the provisions of Sections 14.1, 14.3, 14.4, 14.6, 14.7 and 14.8 of the
Distribution Agreement shall survive the termination of the Distribution
Agreement; PROVIDED, HOWEVER, that Ivivi's obligation to indemnify, defend and
hold harmless the Allergan Indemnified Parties for any claims, losses, damages,
liabilities, causes of action, suits, costs and expenses incurred by the
Allergan Indemnified Parties under Section 14.1 of the Distribution Agreement
shall be limited solely to third-party claims arising out of or related to
matters expressly set forth in clauses (ii) through (v) of Section 14.1 of the
Distribution Agreement that relate to Product sold or promoted by Allergan in
accordance with the Distribution Agreement prior to the termination thereof.
Each of Ivivi and Allergan hereby ratify and adopt and agree to continue to
comply with the provisions of Sections 14.1, 14.3, 14.4, 14.6, 14.7 and 14.8 of
the Distribution Agreement, as modified by this Section 6, as though such
provisions were fully incorporated herein.

         7. REPRESENTATIONS AND WARRANTIES.

                  (a) Ivivi hereby represents and warrants to Allergan that: (i)
Ivivi is a corporation duly organized, validly existing and in good standing
under the laws of the state of its formation; (ii) Ivivi has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement; (iii) the execution, delivery and performance by Ivivi of
this Agreement and the consummation by Ivivi of the transactions contemplated
hereby has been duly authorized by all necessary action of Ivivi; and (iv) this
Agreement constitutes valid and binding obligations of Ivivi, enforceable
against Ivivi in accordance with its terms, except as may be limited by
bankruptcy, insolvency, moratorium, reorganization and other laws affecting the
enforcement of creditors' rights generally, and by general principles of equity.

                  (b) Allergan hereby represents and warrants to Ivivi that: (i)
Allergan is a corporation duly organized, validly existing and in good standing
under the laws of the state of its formation; (ii) Allergan has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement; (iii) the execution, delivery and performance by Allergan
of this Agreement and the consummation by Allergan of the transactions
contemplated hereby has been duly authorized by all necessary action of
Allergan; and (iv) this Agreement constitutes valid and binding obligations of
Allergan, enforceable against Allergan in accordance with its terms, except as
may be limited by bankruptcy, insolvency, moratorium, reorganization and other
laws affecting the enforcement of creditors' rights generally, and by general
principles of equity.

         8. MUTUAL RELEASE.

                                      -3-
<PAGE>

                  (a) In consideration of the conditions and mutual covenants
set forth herein, and other good and valuable consideration, Ivivi hereby
releases and discharges Allergan and its agents, employees, officers, directors,
shareholders, subsidiaries, affiliates, partners, independent contractors,
predecessors, successors, administrators, assigns and legal representatives and
any other parties claiming by, through, or under Allergan, whether or not named
herein (collectively, "ALLERGAN PARTIES"), from any and all actions, charges,
complaints, controversies, demands, causes of action, suits, rights, judgments
and/or claims whatsoever, both in law and in equity, for debts, sums of money,
commissions, fees and costs, attorneys fees, losses, penalties, damages,
arising, directly or indirectly, out of any promise, agreement, offer letter,
contract, understanding, tort, or applicable law (whether statutory, common law,
regulatory or otherwise, local, state, federal or otherwise), whether arising
from the Distribution Agreement or by reason of any other matter, cause or thing
whatsoever from the beginning of time through and including the date of this
Agreement (collectively, "CLAIMS"), whether now existing or not, known or
unknown, and without regard to whether such liability may be direct, indirect or
contingent upon the happening of some event or liability. In furtherance of, but
without limiting, the foregoing, Ivivi waives the right, and covenants not to,
sue, institute, or cooperate in the institution, commencement, filing, or
prosecution of any Claims against the Allergan Parties.

                  (b) Subject to Section 6 of this Agreement, in consideration
of the conditions and mutual covenants set forth herein, and other good and
valuable consideration, Allergan hereby releases and discharges Ivivi and its
agents, employees, officers, directors, shareholders, subsidiaries, affiliates,
partners, independent contractors, predecessors, successors, administrators,
assigns and legal representatives and any other parties claiming by, through, or
under Allergan, whether or not named herein (collectively, "IVIVI PARTIES"),
from any and all Claims, whether now existing or not, known or unknown, and
without regard to whether such liability may be direct, indirect or contingent
upon the happening of some event or liability. In furtherance of, but without
limiting, the foregoing, Allergan waives the right, and covenants not to, sue,
institute, or cooperate in the institution, commencement, filing, or prosecution
of any Claims against the Ivivi Parties.

                  (c) Notwithstanding anything contained herein to the contrary,
the release and discharge by each of the parties hereto pursuant to this Section
8, does not constitute a release or discharge of Claims arising out of or
relating to the parties' undertakings in this Agreement or a breach by either
party of this Agreement or a release or discharge of Claims arising out of or
relating to the parties' undertakings in those provisions of the Distribution
Agreement that survive the termination thereof or a breach by either party of
such provisions.

         9. ENTIRE AGREEMENT; AMENDMENT. This Agreement, including Schedule A
hereto, constitutes the entire agreement among the parties with respect to the
matters set forth herein, and merges all prior discussions between or among the
parties and supercedes any prior agreement (whether written or oral) with
respect to the subject matter herein. This Agreement may not be modified or
amended except in writing, signed by both parties.

         10. GOVERNING LAW. This Agreement shall be governed by, and interpreted
and construed in accordance with the laws of the State of California, without
reference to rules of conflicts or choice of laws.

         11. JURISDICTION AND VENUE. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of California
located in the County of Orange and the United States District Court for the
Southern District of California for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto (i) irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying of venue in
such court and (ii) irrevocably waives, and agrees not to assert, by way of

                                      -4-
<PAGE>

motion, as a defense, or otherwise, in any such suit, action or proceeding, any
claim that it is not subject personally to the jurisdiction of the above named
court, that its property is exempt or immune from attachment or execution
(except as protected by applicable law), that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court, and hereby waives and agrees not to seek
any review by any court of any other jurisdiction which may be called upon to
grant an enforcement of the judgment of any such court. Each of the parties
hereto agrees that its, his or her submission to jurisdiction and its, his or
her consent to service of process by mail is made for the express benefit of the
other parties hereto. Final judgment against any party hereto in any such
action, suit or proceeding may be enforced in other jurisdictions by suit,
action or proceeding on the judgment, or in any other manner provided by or
pursuant to the laws of such other jurisdiction.

         12. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram, facsimile or telex, or by registered or certified mail (postage
prepaid, return receipt requested), to the other party at the following address
(or at such other address for which such party gives notice hereunder):

                 If to Allergan:    Allergan Sales, LLC
                                    2525 Dupont Drive
                                    Irvine, CA  92612
                                    Attn:  General Counsel
                                    Facsimile No.:  (714) 246-2470

                                    WITH A COPY TO:
                                    Allergan, Inc.
                                    2525 Dupont Drive
                                    Irvine, CA  92612
                                    Attn:  General Counsel
                                    Facsimile No.:  (714) 246-6987

                 If to Ivivi:       Ivivi Technologies, Inc.
                                    135 Chestnut Ridge Road
                                    Montvale, NJ  07645
                                    Attn:  President and Chief Executive Officer
                                    Facsimile No.:  (201) 476-9601

                                    WITH A COPY TO:
                                    Lowenstein Sandler PC
                                    65 Livingston Avenue
                                    Roseland, New Jersey 07068
                                    Attn:  Steven M. Skolnick, Esq.
                                    Facsimile No.:  (973) 597-2477

         13. COUNTERPARTS; FACSIMILE. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which,
taken together, shall constitute one instrument. For purposes hereof, a
facsimile copy of this Agreement, including the signature pages hereto, shall be
deemed to be an original.

                                      -5-
<PAGE>

         14. NO WAIVER; AMENDMENT. No waiver of any term or condition of this
Agreement shall be valid or binding on any party unless agreed to in writing by
the party to be charged. The failure of either party to enforce at any time any
of the provisions of the Agreement, or the failure to require at any time
performance by the other party of any of the provisions of this Agreement, shall
in no way be construed to be a present or future waiver of such provisions, nor
in any way affect the validity of either party to enforce each and every such
provision thereafter. This Agreement may not be amended or modified except by
the written agreement of the parties. All purchase orders are subject to the
terms and conditions of this Agreement, and any attempt by such purchase order
to alter or modify the terms and conditions of this Agreement shall be void.

         15. PARTIAL INVALIDITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid by
a court of competent jurisdiction, then the remaining provisions shall remain,
nevertheless, in full force and effect. The parties agree to renegotiate in good
faith, or instruct the court to rewrite, any term held invalid and to be bound
by the mutually agreed substitute provision in order to give the most
approximate effect intended by the parties.

         16. HEADINGS; NO STRICT CONSTRUCTION. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Any article, section, recital,
exhibit, schedule and party references are to this Agreement unless otherwise
stated. No party, nor its counsel, shall be deemed the drafter of this Agreement
for purposes of construing the provisions of this Agreement, and all provisions
of this Agreement shall be construed in accordance with their fair meaning, and
not strictly for or against any party.

         17. ASSIGNMENT. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective permitted successors and assigns
and is not intended to confer upon any other person or entity any rights or
remedies hereunder; provided, however, that no party may assign this Agreement
without the prior written consent of the other party. Notwithstanding the
foregoing, Allergan may assign this Agreement, without the prior written consent
of Ivivi, to an Affiliate or affiliate (as such term is defined under the
federal securities laws). Prior to and promptly after any assignment not
requiring consent of the other party, the assigning party shall give the other
party notice of the assignment.

         18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties to this
Agreement any rights or remedies under or by reason of this Agreement.

         19. FURTHER ASSURANCES. The parties hereto shall execute any and all
documents, consents and instruments and take any and all actions and do any and
all things reasonably necessary and appropriate to effectuate the purposes and
intent of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -6-
<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Termination
Agreement as of the date first written above.

                            IVIVI TECHNOLOGIES, INC.

                            By: /s/ ALAN V. GALLANTAR
                                ------------------------------
                              Name: Alan V. Gallantar
                              Title: Chief Financial Officer

                            ALLERGAN SALES, LLC

                            By: /s/ ROBERT E. GRANT
                                ------------------------------
                              Name: Robert E. Grant
                              Title: Vice President

                            ALLERGAN USA, INC.

                            By: /s/ ROBERT E. GRANT
                                ------------------------------
                              Name: Robert E. Grant
                              Title: Vice President

                                      -7-
<PAGE>

                                   SCHEDULE A
                                   ----------

                                    INVENTORY

<TABLE>
<S>     <C>

Comp           Stor
Code    Plnt   Loc.   Material Group   Val Class   Material Number       Material Description             Total Quantity

129     2200          INVENTORY          7920                       22
                                                   SOFPULSE              SOFPULSE, 1 COIL, 5-PACK             1,562
                                                   SOFPULSE/DUO          SOFPULSE DUO, 2 COILS, 5-PACK        2,360
129     2200          SAMPLES            7920                       22
                                                   S-SOFPULSE            SOFPULSE, 1 COIL (SAMPLE)              990
                                                                         SOFPULSE DUO, 2 COILS (SAMPLE)
                                                   S-SOFPULSE/DUO                                             1,177
129     2300          INVENTORY          7920                       22
                                                   SOFPULSE              SOFPULSE, 1 COIL, 5-PACK                 3
</TABLE>

                                      -8-

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