Document:

ex411.htm

    Exhibit
      4.11

     

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

    

    METASWARM,
      INC.

    

    COMMON
      STOCK PURCHASE WARRANT

     

    
      	Warrant
              Shares: 2,500,000       	
               Initial
                Exercise Date: January 22, 2008

            

    

     

    THIS
      COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
      received, AIS Funding, LLC, a Delaware limited liability company (the
“Holder”) is entitled, upon the terms and subject to the limitations on
      exercise and the conditions hereinafter set forth, at any time on or after
      the
      date hereof (the “Initial Exercise Date”) and on or prior to the close of
      business on the 10 year anniversary of the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase
      from MetaSwarm, Inc., a Florida corporation (the “Company”), up to
      2,500,000 shares (the “Warrant Shares”) of Common Stock.  The
      number of Warrant Shares is subject to adjustment under Section
      3.  The purchase price of one share of Common Stock under this Warrant
      shall be equal to the Exercise Price, as defined in Section
      2(b).  This Warrant is issued pursuant to the terms of the Purchase
      Agreement and the Holder is entitled to the benefits of Sections 13 and 14
      thereof to the same extent as if such Sections 13 and 14 were recited in their
      entirety in this Warrant.

     

    Section
      1. Definitions.  Capitalized terms used and not otherwise
      defined herein shall have the meanings set forth in that certain Securities
      Purchase and Security Agreement (the “Purchase Agreement”), dated January
      22, 2008, among the Company and the Holder.

     

    “Common
      Stock” means, and includes, (a) the Company’s common stock, no par value, as
      authorized on the date of the Purchase Agreement, (b) any other capital stock
      of
      any class or classes (however designated) of the Company, authorized on or
      after
      such date, the holders of which shall have the rights, without limitation as
      to
      amount, either to all or to a share of the balance of current dividends and
      liquidating dividends after the payment of dividends and distributions on any
      shares entitled to preference, and the holders of which shall ordinarily, in
      the
      absence of contingencies, be entitled to vote for the election of a majority
      of
      directors of the Company (even though the right so to vote has been suspended
      by
      the happening of such a contingency), and (c) any other securities into which
      or
      for which any of the securities described in (a) or (b) may be converted or
      exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
      of assets or otherwise.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Common
      Stock Equivalents” means any warrants, options, subscription or purchase
      rights with respect to shares of Common Stock and the issuance of any securities
      convertible into or exchangeable for shares of Common Stock, or the issuance
      of
      any warrants, options, subscription or purchase rights with respect to such
      convertible or exchangeable securities.

     

    “Net
      Consideration per Share” which may be received by the Company shall be
      determined as follows:

     

    
      	
               

            	
              (1)  The
                “Net Consideration per Share” shall mean the amount equal to the total
                amount of consideration, if any, received by the Company for the
                issuance
                of such Common Stock or Common Stock Equivalents, plus the minimum
                amount
                of consideration, if any, payable to the Company upon exercise, or
                conversion or exchange thereof, divided by the aggregate number of
                shares
                of Common Stock that would be issued if all such Common Stock Equivalents
                were exercised, exchanged or
                converted.

            

    

    

    
      	
               

            	
              (2)  The
                “Net Consideration per Share” which may be received by the Company shall
                be determined in each instance as of the date of issuance of Common
                Stock
                Equivalents without giving effect to any possible future upward price
                adjustments or rate adjustments.

            

    

    

    “Other
      Securities” refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      holders of the Warrants at any time shall be entitled to receive, or shall
      have
      received, on the exercise of the Warrants, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 3 or otherwise, and such term includes, without limitation, Alternate
      Consideration.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Section
      2. Exercise.

     

    a)  Exercise
      of Warrant.  Exercise of the purchase rights represented by this
      Warrant may be made, in whole or in part, at any time or times on or after
      the
      Initial Exercise Date and on or before the Termination Date by delivery to
      the
      Company of a duly executed facsimile copy of the Notice of Exercise Form annexed
      hereto (or such other office or agency of the Company as it may designate by
      notice in writing to the registered Holder at the address of such Holder
      appearing on the books of the Company); and, within 3 Trading Days of the date
      said Notice of Exercise is delivered to the Company, the Company shall have
      received  payment of the aggregate Exercise Price of the shares
      thereby purchased by wire transfer or cashier’s check drawn on a United States
      bank.  Notwithstanding anything herein to the contrary, the Holder
      shall not be required to physically surrender this Warrant to the Company until
      the Holder has purchased all of the Warrant Shares available hereunder and
      the
      Warrant has been exercised in full, in which case, the Holder shall surrender
      this Warrant to the Company for cancellation within 3 Trading Days of the date
      the final Notice of Exercise is delivered to the Company.  Partial
      exercises of this Warrant resulting in purchases of a portion of the total
      number of Warrant Shares available hereunder shall have the effect of lowering
      the outstanding number of Warrant Shares purchasable hereunder in an amount
      equal to the applicable number of Warrant Shares purchased.  The
      Holder and the Company shall maintain records showing the number of Warrant
      Shares purchased and the date of such purchases.  The Company shall
      deliver any objection to any Notice of Exercise Form within 1 Business Day
      of
      receipt of such notice.  In the event of any dispute or discrepancy,
      the records of the Holder shall be controlling and determinative in the absence
      of manifest error. The Holder and any assignee, by acceptance of this Warrant,
      acknowledge and agree that, by reason of the provisions of this paragraph,
      following the purchase of a portion of the Warrant Shares hereunder, the number
      of Warrant Shares available for purchase hereunder at any given time may be
      less
      than the amount stated on the face hereof.

     

    b)  Exercise
      Price.  The exercise price per share of the Common Stock under
      this Warrant shall be $.202, subject to adjustment hereunder (the “Exercise
      Price”).

     

    c)  Cashless
      Exercise.  If at any time after the holding period under Rule 144
      of the Securities Act has been satisfied starting from the date of issuance
      of
      this Warrant, there is no effective Registration Statement registering, or
      no
      current prospectus available for, the resale of the Warrant Shares by the
      Holder, then this Warrant may also be exercised at such time by means of a
      “cashless exercise” in which the Holder shall be entitled to receive a
      certificate for the number of Warrant Shares determined as follows:

     

    
      	
               

            	
              X
                =

            	
              Y
                [(A-B)/A]

            

    

     

    where

    

    
      	
               

            	
              X
                =

            	
              the
                number of Warrant Shares to be issued to the Holder upon such cashless
                exercise;

            

    

     

    
      	
               

            	
              Y
                =

            	
              the
                number of Warrant Shares with respect to which this Warrant is being
                exercised;

            

    

     

    
      	
               

            	
              A
                =

            	
              the
                VWAP on the Trading Day immediately preceding the date of such election;
                and

            

    

    

    
      	
               

            	
              B
                =

            	
              the
                Exercise Price of this Warrant.

            

    

    

    “VWAP”
      means volume weighted average price OTC for the Common Stock.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    Notwithstanding
      anything herein to the contrary, on the Termination Date, this Warrant shall
      be
      automatically exercised via cashless exercise pursuant to this Section
      2(c).

    

    d)  Holder’s
      Restrictions.  The Company shall not effect any exercise of this
      Warrant, and a  Holder shall not have the right to exercise any
      portion of this Warrant, pursuant to Section 2(c) or otherwise, to the extent
      that after giving effect to such issuance after exercise as set forth on the
      applicable Notice of Exercise, such Holder (together with such Holder’s
      Affiliates, and any other person or entity acting as a group together with
      such
      Holder or any of such Holder’s Affiliates), as set forth on the applicable
      Notice of Exercise, would beneficially own in excess of the Beneficial Ownership
      Limitation (as defined below).  For purposes of the foregoing sentence, the
      number of shares of Common Stock beneficially owned by such Holder and its
      Affiliates shall include the number of shares of Common Stock issuable upon
      exercise of this Warrant with respect to which such determination is being
      made,
      but shall exclude the number of shares of Common Stock which would be issuable
      upon (A) exercise of the remaining, nonexercised portion of this Warrant
      beneficially owned by such Holder or any of its Affiliates and (B) exercise
      or
      conversion of the unexercised or nonconverted portion of any other securities
      of
      the Company (including, without limitation, any other  Debentures or
      Warrants) subject to a limitation on conversion or exercise analogous to the
      limitation contained herein beneficially owned by such Holder or any of its
      affiliates.  Except as set forth in the preceding sentence, for purposes of
      this Section 2(d), beneficial ownership shall be calculated in accordance with
      Section 13(d) of the Exchange Act and the rules and regulations promulgated
      thereunder, it being acknowledged by a Holder that the Company is not
      representing to such Holder that such calculation is in compliance with Section
      13(d) of the Exchange Act and such Holder is solely responsible for any
      schedules required to be filed in accordance therewith.   To the
      extent that the limitation contained in this Section 2(d) applies, the
      determination of whether this Warrant is exercisable (in relation to other
      securities owned by such Holder together with any Affiliates) and of which
      a
      portion of this Warrant is exercisable shall be in the sole discretion of a
      Holder, and the submission of a Notice of Exercise shall be deemed to be each
      Holder’s determination of whether this Warrant is exercisable (in relation to
      other securities owned by such Holder together with any Affiliates) and of
      which
      portion of this Warrant is exercisable, in each case subject to such aggregate
      percentage limitation, and the Company shall have no obligation to verify or
      confirm the accuracy of such determination.   In addition, a
      determination as to any group status as contemplated above shall be determined
      in accordance with Section 13(d) of the Exchange Act and the rules and
      regulations promulgated thereunder.  For purposes of this Section
      2(d), in determining the number of outstanding shares of Common Stock, a Holder
      may rely on the number of outstanding shares of Common Stock as reflected in
      (x)
      the Company’s most recent Form 10-QSB or Form 10-KSB or Form 10-SB, as the case
      may be, (y) a more recent public announcement by the Company or (z) any other
      notice by the Company or the Company’s Transfer Agent setting forth the number
      of shares of Common Stock outstanding.  Upon the written or oral request of
      a Holder, the Company shall within two Trading Days confirm orally and in
      writing to such Holder the number of shares of Common Stock then
      outstanding.  In any case, the number of outstanding shares of Common Stock
      shall be determined after giving effect to the conversion or exercise of
      securities of the Company, including this Warrant, by such Holder or its
      Affiliates since the date as of which such number of outstanding shares of
      Common Stock was reported.  The “Beneficial Ownership
      Limitation” shall be 4.99% of the number of shares of the Common Stock
      outstanding immediately after giving effect to the issuance of shares of Common
      Stock issuable upon exercise of this Warrant.  The Beneficial
      Ownership Limitation provisions of this Section 2(d) may be waived by such
      Holder, at the election of such Holder, upon not less than 61 days’ prior notice
      to the Company to change the Beneficial Ownership Limitation to 9.99% of the
      number of shares of the Common Stock outstanding immediately after giving effect
      to the issuance of shares of Common Stock upon exercise of this Warrant, and
      the
      provisions of this Section 2(d) shall continue to apply.  Upon such a
      change by a Holder of the Beneficial Ownership Limitation from such 4.99%
      limitation to such 9.99% limitation, the Beneficial Ownership Limitation may
      not
      be further waived by such Holder.  The provisions of this paragraph
      shall be construed and implemented in a manner otherwise than in strict
      conformity with the terms of this Section 2(d) to correct this paragraph (or
      any
      portion hereof) which may be defective or inconsistent with the intended
      Beneficial Ownership Limitation herein contained or to make changes or
      supplements necessary or desirable to properly give effect to such limitation.
      The limitations contained in this paragraph shall apply to a successor holder
      of
      this Warrant.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    e)  Mechanics
      of Exercise.

     

    i.  Authorization
      of Warrant Shares.  The Company covenants that all Warrant Shares
      which may be issued upon the exercise of the purchase rights represented by
      this
      Warrant will, upon exercise of the purchase rights represented by this Warrant,
      be duly authorized, validly issued, fully paid and nonassessable and free from
      all taxes, liens and charges created by the Company in respect of the issue
      thereof (other than taxes in respect of any transfer occurring contemporaneously
      with such issue).

     

    ii.  Delivery
      of Certificates Upon Exercise.  Certificates for shares purchased
      hereunder shall be transmitted by the transfer agent of the Company to the
      Holder by crediting the account of the Holder’s prime broker with the Depository
      Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)
      system if the Company is a participant in such system, and otherwise by physical
      delivery to the address specified by the Holder in the Notice of Exercise within
      3 Trading Days from the delivery to the Company of the Notice of Exercise Form,
      surrender of this Warrant (if required) and payment of the aggregate Exercise
      Price as set forth above (“Warrant Share Delivery Date”).  This
      Warrant shall be deemed to have been exercised on the date the Exercise Price
      is
      received by the Company.  The Warrant Shares shall be deemed to have
      been issued, and Holder or any other person so designated to be named therein
      shall be deemed to have become a holder of record of such shares for all
      purposes, as of the date the Warrant has been exercised by payment to the
      Company of the Exercise Price (or by cashless exercise, if permitted) and all
      taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(vii)
      prior to the issuance of such shares, have been paid. If the Company fails
      for
      any reason to deliver to the Holder certificates evidencing the Warrant Shares
      subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
      shall pay to such Holder, in cash, as liquidated damages and not as a penalty,
      for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP
      of
      the Common Stock on the date of the applicable Notice of Exercise), $10 per
      Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after
      such liquidated damages begin to accrue) for each Trading Day after such Warrant
      Share Delivery Date until such certificates are delivered.

     

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

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

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

     

    v.  Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.  In addition to any other rights available to the
      Holder, if the Company fails to cause its transfer agent to transmit to the
      Holder a certificate or certificates representing the Warrant Shares pursuant
      to
      an exercise on or before the Warrant Share Delivery Date, and if after such
      date
      the Holder is required by its broker to purchase (in an open market transaction
      or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of
      Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
      Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (1) pay in cash to the Holder the
      amount by which (x) the Holder’s total purchase price (including brokerage
      commissions, if any) for the shares of Common Stock so purchased exceeds (y)
      the
      amount obtained by multiplying (A) the number of Warrant Shares that the Company
      was required to deliver to the Holder in connection with the exercise at issue
      times (B) the price at which the sell order giving rise to such purchase
      obligation was executed, and (2) at the option of the Holder, either reinstate
      the portion of the Warrant and equivalent number of Warrant Shares for which
      such exercise was not honored or deliver to the Holder the number of shares
      of
      Common Stock that would have been issued had the Company timely complied with
      its exercise and delivery obligations hereunder.  For example, if the
      Holder purchases Common Stock having a total purchase price of $11,000 to cover
      a Buy-In with respect to an attempted exercise of shares of Common Stock with
      an
      aggregate sale price giving rise to such purchase obligation of $10,000, under
      clause (1) of the immediately preceding sentence the Company shall be required
      to pay the Holder $1,000. The Holder shall provide the Company written notice
      indicating the amounts payable to the Holder in respect of the Buy-In and,
      upon
      request of the Company, evidence of the amount of such loss.  Nothing
      herein shall limit a Holder’s right to pursue any other remedies available to it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company’s
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant as required pursuant to the terms hereof.

     

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

     

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

     

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

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Section
      3. Certain Adjustments.

     

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

     

    b)  Subsequent
      Equity Sales. If the Company or any Subsidiary thereof, as applicable, at
      any time while this Warrant is outstanding, shall sell or grant any option
      to
      purchase, or sell or grant any right to reprice its securities, or otherwise
      dispose of or issue (or announce any offer, sale, grant or any option to
      purchase or other disposition) any Common Stock or Common Stock Equivalents
      entitling any Person to acquire shares of Common Stock but excluding shares
      of
      Common Stock deemed to have been issued by the Issuer (i) upon conversion,
      exercise, or exchange of any warrants or convertible securities which are
      outstanding on the day immediately preceding the Closing and disclosed in
      Section 7.14 of the Purchase Agreement including Schedule 7.14
      thereto,  provided that the terms of any such warrants or convertible
      securities disclosed under said Section 7.14 are not amended, modified or
      changed on or after the Closing; or (iv) upon issuance of the Beijing InfoSure
      Shares, provided that the terms of the Beijing InfoSure Shares are not amended,
      modified or changed on or after the Closing; at Net Consideration per Share
      less
      than the then Exercise Price (such lower Net Consideration per Share, the
“Base Share Price” and such issuances collectively, a “Dilutive
      Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so
      issued shall at any time, whether by operation of purchase price adjustments,
      reset provisions, floating conversion, exercise or exchange prices or otherwise,
      or due to warrants, options or rights per share which are issued in connection
      with such issuance, be entitled to receive shares of Common Stock at Net
      Consideration per Share which is less than the Exercise Price, such issuance
      shall be deemed to have occurred for less than the Exercise Price on such date
      of the Dilutive Issuance), then the Exercise Price shall be reduced and only
      reduced to equal the Base Share Price and the number of Warrant Shares issuable
      hereunder shall be increased such that the aggregate Exercise Price payable
      hereunder, after taking into account the decrease in the Exercise Price, shall
      be equal to the aggregate Exercise Price prior to such
      adjustment.  Such adjustment shall be made whenever such Common Stock
      or Common Stock Equivalents are issued.  The Company shall notify the
      Holder in writing, no later than the Trading Day following the issuance of
      any
      Common Stock or Common Stock Equivalents subject to this Section 3(b),
      indicating therein the applicable issuance price, or applicable reset price,
      exchange price, conversion price and other pricing terms (such notice the
“Dilutive Issuance Notice”).  For purposes of clarification,
      whether or not the Company provides a Dilutive Issuance Notice pursuant to
      this
      Section 3(b), upon the occurrence of any Dilutive Issuance, after the date
      of
      such Dilutive Issuance the Holder is entitled to receive a number of Warrant
      Shares based upon the Base Share Price regardless of whether the Holder
      accurately refers to the Base Share Price in the Notice of
      Exercise.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    c)  Subsequent
      Rights Offerings.  If the Company, at any time while the Warrant
      is outstanding, shall issue rights, options or warrants to all holders of Common
      Stock (and not to the Holder) entitling them to subscribe for or purchase shares
      of Common Stock or Common Stock Equivalents at Net Consideration per Share
      less
      than the VWAP at the record date mentioned below (it being understood that
      if
      such Net Consideration per Share with respect to such issuance is less than
      the
      then applicable Exercise Price, then such issuance shall be subject to Section
      3(b)), then the Exercise Price shall be multiplied by a fraction, of which
      the
      denominator shall be the number of shares of the Common Stock outstanding on
      the
      date of issuance of such rights or warrants plus the number of additional shares
      of Common Stock offered for subscription or purchase, and of which the numerator
      shall be the number of shares of the Common Stock outstanding on the date of
      issuance of such rights or warrants plus the number of shares which the
      aggregate offering price of the total number of shares so offered (assuming
      receipt by the Company in full of all consideration payable upon exercise of
      such rights, options or warrants) would purchase at such VWAP.  Such
      adjustment shall be made whenever such rights or warrants are issued, and shall
      become effective immediately after the record date for the determination of
      stockholders entitled to receive such rights, options or warrants.

     

    d)  Pro
      Rata Distributions.  If the Company, at any time prior to the
      Termination Date, shall distribute to all holders of Common Stock (and not
      to
      Holders of the Warrants) evidences of its indebtedness or assets (including
      cash
      and cash dividends) or rights or warrants to subscribe for or purchase any
      Common Stock Equivalent or other security other than the Common Stock (which
      shall be subject to Section 3(b)), then in each such case the Exercise Price
      shall be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to receive
      such distribution by a fraction of which the denominator shall be the VWAP
      determined as of the record date mentioned above, and of which the numerator
      shall be such VWAP on such record date less the then per share fair market
      value
      at such record date of the portion of such assets or evidence of indebtedness
      so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors in good faith.  In either case
      the adjustments shall be described in a statement provided to the Holder of
      the
      portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock.  Such
      adjustment shall be made whenever any such distribution is made and shall become
      effective immediately after the record date mentioned above.

     

    e)  Fundamental
      Transaction. If, at any time while this Warrant is outstanding, (A) the
      Company effects any merger or consolidation of the Company with or into another
      Person, (B) the Company effects any sale of all or substantially all of its
      assets in one or a series of related transactions, (C) any tender offer or
      exchange offer (whether by the Company or another Person) is completed pursuant
      to which holders of Common Stock are permitted to tender or exchange their
      shares for other securities, cash or property, or (D) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange pursuant
      to which the Common Stock is effectively converted into or exchanged for other
      securities, cash or property (each “Fundamental Transaction”), then, upon
      any subsequent exercise of this Warrant, the Holder shall have the right to
      receive, for each Warrant Share that would have been issuable upon such exercise
      immediately prior to the occurrence of such Fundamental Transaction, the number
      of shares of capital stock or Common Stock (each being, Other Securities),
      as
      applicable, of the successor or acquiring corporation or of the Company, if
      it
      is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such merger,
      consolidation or disposition of assets by a Holder of the number of shares
      of
      Common Stock for which this Warrant is exercisable immediately prior to such
      event. For purposes of any such exercise, the determination of the Exercise
      Price shall be appropriately adjusted to apply to such Alternate Consideration
      based on the amount of Alternate Consideration issuable in respect of one share
      of Common Stock in such Fundamental Transaction, and the Company shall apportion
      the Exercise Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration.  If holders of Common Stock are given any choice as to
      the securities, cash or property to be received in a Fundamental Transaction,
      then the Holder shall be given the same choice as to the Alternate Consideration
      it receives upon any exercise of this Warrant following such Fundamental
      Transaction.  To the extent necessary to effectuate the foregoing
      provisions, any successor to the Company or surviving entity in such Fundamental
      Transaction shall issue to the Holder a new warrant consistent with the
      foregoing provisions and evidencing the Holder’s right to exercise such warrant
      into Alternate Consideration. The terms of any agreement pursuant to which
      a
      Fundamental Transaction is effected shall include terms requiring any such
      successor or surviving entity to comply with the provisions of this Section
      3(e)
      and insuring that this Warrant (or any such replacement security) will be
      similarly adjusted upon any subsequent transaction analogous to a Fundamental
      Transaction. Notwithstanding anything to the contrary, in the event of a
      Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3
      transaction” as defined in Rule 13e-3 under the Securities Exchange Act of 1934,
      as amended, or (3) a Fundamental Transaction involving a person or entity not
      traded on a national securities exchange, the Nasdaq Global Select Market,
      the
      Nasdaq Global Market, the Nasdaq Capital Market, the Company or any successor
      entity shall pay at the Holder’s option, exercisable at any time concurrently
      with or within 30 days after the consummation of the Fundamental Transaction,
      an
      amount of cash equal to the value of this Warrant as determined in accordance
      with the Black-Scholes option pricing formula using an expected volatility
      equal
      to the 100 day historical price volatility obtained from the HVT function on
      Bloomberg L.P. as of the trading day immediately prior to the public
      announcement of the Fundamental Transaction. 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

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

     

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

     

    h)  Notice
      to Holder.

     

    i.  Adjustment
      to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any
      provision of this Section 3, the Company shall promptly mail to the Holder
      a
      notice setting forth the Exercise Price after such adjustment and setting forth
      a brief statement of the facts requiring such adjustment. If the Company issues
      any Common Stock or Common Stock Equivalents  for no Net Consideration
      per Share, the Company shall be deemed to have issued Common Stock or Common
      Stock Equivalents at the lowest possible conversion or exercise price at which
      such securities may be converted or exercised.

     

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

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    Section
      4. Transfer of Warrant.

     

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

     

    b)  New
      Warrants. This Warrant may be divided or combined with other Warrants upon
      presentation hereof at the aforesaid office of the Company, together with a
      written notice specifying the names and denominations in which new Warrants
      are
      to be issued, signed by the Holder or its agent or attorney.  Subject
      to compliance with Section 4(a), as to any transfer which may be involved in
      such division or combination, the Company shall execute and deliver a new
      Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
      combined in accordance with such notice.

     

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

     

    d)  Transfer
      Restrictions. If, at the time of the surrender of this Warrant in connection
      with any transfer of this Warrant, the transfer of this Warrant shall not be
      registered pursuant to an effective registration statement under the Securities
      Act and under applicable state securities or blue sky laws, the Company may
      require, as a condition of allowing such transfer, that (i) the Holder or
      transferee of this Warrant, as the case may be, furnish to the Company a written
      opinion of counsel (which opinion shall be in form, substance and scope
      customary for opinions of counsel in comparable transactions) to the effect
      that
      such transfer may be made without registration under the Securities Act and
      under applicable state securities or blue sky laws, and (ii) the Holder or
      transferee execute and deliver to the Company an investment letter in form
      and
      substance acceptable to the Company, and (iii) the transferee be an “accredited
      investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a “qualified institutional buyer” as
      defined in Rule 144A(a) promulgated under the Securities Act.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Section
      5. Miscellaneous.

     

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

     

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

     

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

     

    d)  Authorized
      Shares.

     

    The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant.  The Company further covenants
      that its issuance of this Warrant shall constitute full authority to its
      officers who are charged with the duty of executing stock certificates to
      execute and issue the necessary certificates for the Warrant Shares upon the
      exercise of the purchase rights under this Warrant.  The Company will
      take all such reasonable action as may be necessary to assure that such Warrant
      Shares may be issued as provided herein without violation of any applicable
      law
      or regulation, or of any requirements of the Trading Market upon which the
      Common Stock may be listed.

     

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

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

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

     

    e)  Jurisdiction.
      All questions concerning the construction, validity, enforcement and
      interpretation of this Warrant shall be determined in accordance with the
      provisions of the Purchase Agreement.

     

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

     

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

     

    h)  Notices.  Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered in accordance with the notice
      provisions of the Purchase Agreement.

     

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

     

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

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

    

    ********************

     

     

     

     

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

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

     

    

     

    
      	 	
              METASWARM
                INC.

            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

    

     

     

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    

    NOTICE
      OF EXERCISE

    

    TO:           METASWARM
      INC.

    

    The
      Undersigned is the Holder of Warrant No. ______ (the “Warrant”) issued by
      MetaSwarm, Inc., a Florida corporation (the “Company”).  Capitalized
      terms used herein and not otherwise defined have the respective meanings set
      forth in the Warrant.

    

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

     

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

     

    [  ]
      in lawful money of the United States; or

     

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

     

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

     

    _______________________________

    

    

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

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

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

    

    [SIGNATURE
      OF HOLDER]

    

    Name
      of
      Investing Entity:
      ________________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity: 
_________________________________________________

    Name
      of
      Authorized Signatory:
 ___________________________________________________________________

    Title
      of
      Authorized Signatory:
 ____________________________________________________________________

    Date:
      _______________________________________________________________________________________

    

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information.

    Do
      not
      use this form to exercise the warrant.)

    

    

    

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

     

    

    _______________________________________________
      whose address is

    

    _______________________________________________________________.

    

    

    

    _______________________________________________________________

    

    Dated:  ______________,
      _______

    

    

    Holder’s
      Signature:                                         _____________________________

    

    Holder’s
      Address:                                           _____________________________

    

    _____________________________

    

    

    

    Signature
      Guaranteed:  ___________________________________________

    

    

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

    

    16exv10w1

 

Exhibit 10.1

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

          This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment”), dated as
of January 24, 2008, among M.D.C. HOLDINGS, INC., a Delaware corporation (the “Borrower”), the
Lenders that are identified on the signature pages hereto and JPMORGAN CHASE BANK, N.A., as
Administrative Agent (the “Administrative Agent”).

RECITALS

          WHEREAS, the Borrower, the Lenders identified on the signature pages hereto, certain other
Lenders and Administrative Agent are parties to that certain Second Amended and Restated Credit
Agreement dated as of March 22, 2006 (as amended by the First Amendment to Second Amended and
Restated Credit Agreement dated October 24, 2007 and as it may be amended, renewed and restated
from time to time, the “Credit Agreement”) (all capitalized terms not defined herein shall have the
meanings given such terms in the Credit Agreement);

          WHEREAS, the Borrower and the Lenders desire to amend the Credit Agreement for the purposes
hereinafter set forth;

          NOW, THEREFORE, for good and valuable consideration, the parties hereto hereby agree as
follows:

     1. Definitions.

     (a) The following definition is added to Article I of the Credit Agreement:

     “Unrestricted Cash” means cash and Cash Equivalents of the Borrower and
Guarantors that are free and clear of all Liens and not subject to any restrictions (other
than with respect to costs of liquidating certain Cash Equivalents prior to maturity) on the
use thereof to pay Indebtedness and other obligations of the applicable Person.

     (b) The definition of “Leverage Ratio” in Article I of the Credit Agreement is hereby amended
and restated in its entirety as follows:

     “Leverage Ratio” means (a) solely for purposes of Section 2.11, at any date,
the ratio (expressed as a percentage) of (i) Consolidated Indebtedness to (ii) the sum of
Consolidated Indebtedness and Adjusted Consolidated Tangible Net Worth, and (b) for all
other purposes, at any date, the ratio (expressed as a percentage) of (i) (A) Consolidated
Indebtedness less (B) Unrestricted Cash of the Borrower and the Guarantors in excess of
$50,000,000 but not to exceed $500,000,000 to (ii) (A) the sum of Consolidated Indebtedness
and Adjusted Consolidated Tangible Net Worth less (B) Unrestricted Cash of the Borrower and
the Guarantors in excess of $50,000,000 but not to exceed $500,000,000.

     2. Consolidated Tangible Net Worth Test. Section 9.1 of the Credit Agreement is hereby
amended and restated in its entirety as follows:

 

 

     9.1 Consolidated Tangible Net Worth Test. Consolidated Tangible Net Worth
shall not be less than (i) $1,055,020,000 plus (ii) fifty percent (50%) of
consolidated net income of Borrower and the Guarantors earned after December 31, 2007
(excluding any quarter in which there is a loss but applying consolidated net income of
Borrower and the Guarantors thereafter first to such loss before determining fifty percent
(50%) of such amount for purposes of this calculation) plus (iii) fifty percent
(50%) of the net proceeds or other consideration received by Borrower for capital stock
issued by Borrower after December 31, 2007, minus (iv) the lesser of (A) the aggregate
amount paid by Borrower after December 31, 2007 to repurchase its common stock and (B)
$300,000,000, (the foregoing covenant, as adjusted as provided in the next succeeding
sentence, is herein referred to as the “Consolidated Tangible Net Worth Test”).
Notwithstanding the foregoing, in the event that Borrower shall at any time engage in an
Acquisition for a purchase price equaling or exceeding $100,000,000, Borrower may
irrevocably elect, by notice to the Administrative Agent given prior to the last day of the
fiscal quarter in which such Acquisition occurs, to adjust minimum Consolidated Tangible Net
Worth for the Consolidated Tangible Net Worth Test to the following amount: (i) 80% of the
Consolidated Tangible Net Worth immediately following the closing of such Acquisition, plus
(ii) an amount equal to 50% of the consolidated net income of Borrower and Guarantors earned
after the closing of such Acquisition (excluding any quarter in which there is a loss but
applying net income thereafter first to such loss before determining 50% of such amount for
purposes of this calculation), plus (iii) 50% of the net proceeds or other consideration
received by Borrower for any capital stock issued after the closing of such Acquisition,
minus (iv) the lesser of (A) the aggregate amount paid by Borrower after the closing of such
Acquisition to repurchase its common stock and (B) the amount (but not less than zero)
obtained by subtracting from $300,000,000 the aggregate amount (if any) paid by Borrower to
repurchase its common stock after December 31, 2007 and prior to such Acquisition. Borrower
may make the election under the preceding sentence only if it makes the corresponding
election under Section 9.3 at the same time. Borrower’s compliance with the Consolidated
Tangible Net Worth Test shall be measured on a quarterly basis, based on the financial
statements delivered to Administrative Agent pursuant to Section 7.1. Borrower’s failure to
satisfy the Consolidated Tangible Net Worth Test shall not constitute an Event of Default or
an Unmatured Event of Default; provided, however, that if Borrower fails to
satisfy the Consolidated Tangible Net Worth Test at the end of any fiscal quarter, then the
Term Out Period shall commence on the first day following such fiscal quarter as provided in
Section 2.22.

     3. Consolidated Tangible Net Worth Floor. Section 9.3 of the Credit Agreement is
hereby amended and restated in its entirety as follows:

     9.3 Consolidated Tangible Net Worth Floor. Consolidated Tangible Net Worth
shall not be less than (i) $850,000,000, plus (ii) an amount equal to 50% of the quarterly
consolidated net income of Borrower and Guarantors earned after December 31, 2007 (excluding
any quarter in which there is a loss but applying consolidated net income thereafter first
to such loss before determining 50% of such amount for purposes of this calculation), plus
(iii) 50% of the net proceeds or other consideration received by Borrower for any capital
stock issued after December 31, 2007. Notwithstanding the

2

 

foregoing, in the event that Borrower shall at any time engage in an Acquisition for a
purchase price equaling or exceeding $100,000,000, Borrower may irrevocably elect, by notice
to the Administrative Agent given prior to the last day of the fiscal quarter in which such
Acquisition occurs, to adjust the minimum Consolidated Tangible Net Worth for this covenant
to the following amount: (i) 50% of Consolidated Tangible Net Worth immediately following
the closing of such Acquisition, (ii) an amount equal to 50% of the consolidated net income
of Borrower and Guarantors earned after the closing of such Acquisition (excluding any
quarter in which there is a loss but applying net income thereafter first to such loss
before determining 50% of such amount for purposes of this calculation) and (iii) 50% of the
net proceeds or other consideration received by Borrower for any capital stock issued after
the closing of such Acquisition. Borrower may make the election under the preceding
sentence only if it makes the corresponding election under Section 9.1 at the same time.
Borrower’s compliance with the foregoing covenant shall be measured on a quarterly basis,
based on the financial statements delivered to Administrative Agent pursuant to Section 7.1.

     4. Compliance Certificate. The form of Compliance Certificate attached as Exhibit
F to the Credit Agreement is hereby amended to conform to the changes in Sections 9.1 and 9.3
provided for above.

     5. Conditions Precedent. This Amendment shall be effective as of the date (“Amendment
Effective Date”) upon which the following conditions are satisfied:

     (a) The Administrative Agent shall have received from the Borrower and the Required Lenders a
counterpart of this Amendment signed on behalf of each such party.

     (b) The Administrative Agent shall have received from the Guarantors the Consent and Agreement
substantially in the form attached hereto as Exhibit A.

     (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization or
formation, existence and good standing of the Borrower, the authorization of this Amendment and any
other legal matters relating to the Borrower, the Agreement or this Amendment, all in form and
substance satisfactory to the Administrative Agent and its counsel.

     (d) The Administrative Agent shall have received all fees and other amounts due and payable on
or prior to the Amendment Effective Date, including reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

           The Administrative Agent shall notify the Borrower and the Lenders of the Amendment Effective
Date, and such notice shall be conclusive and binding.

     6. Representations and Warranties. The Borrower hereby represents and warrants that
as of the date hereof:

     (a) The representations and warranties of the Borrower in the Credit Agreement are true
and correct in all material respects.

3

 

     (b) There exists no Event of Default or Unmatured Event of Default.

     7. Ratification. The Credit Agreement, as amended hereby, is hereby ratified and
remains in full force and effect.

     8. Counterparts. This Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one agreement and any of the parties hereto may execute this
Amendment by signing any such counterpart.

     9. Choice of Law. This Amendment and the other Loan Documents shall be construed in
accordance with the internal laws (but without regard to the conflict of laws provisions other than
Section 5-1401 of the New York General Obligations Law ) of the State of New York, but giving
effect to federal laws applicable to national banks.

4

 

          IN WITNESS WHEREOF, the Borrower and the undersigned Lenders have caused this Amendment to be
duly executed as of the date first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Borrower:	 	 
	 
	 	 	 	 	 	 
	 	 	M.D.C. HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John J. Heaney	 	 
	 

	 	 	 	 	 	 
	 	 	Name: John J. Heaney	 	 
	 	 	Title: Senior Vice President & Treasurer	 	 

5

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Lenders:	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,	 	 
	 	 	As Lender and Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Vanessa Chiu	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Vanessa Chiu	 	 
	 	 	Its: Vice President	 	 

6

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CITICORP NORTH AMERICA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ R. Tucker Borden	 	 
	 

	 	 	 	 	 	 
	 	 	Name: R. Tucker Borden	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	SUNTRUST BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ W. John Wendler	 	 
	 

	 	 	 	 	 	 
	 	 	Name: W. John Wendler	 	 
	 	 	Title: Senior Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND plc	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ William McGinty	 	 
	 

	 	 	 	 	 	 
	 	 	Name: William McGinty	 	 
	 	 	Title: Senior Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sandra A. Sauer	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Sandra A. Sauer	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Mark W. Lariviere	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Mark W. Lariviere	 	 
	 	 	Title: Senior Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	GUARANTY BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dan M. Killian	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Dan M. Killian	 	 
	 	 	Title: Senior Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	WASHINGTON MUTUAL BANK, FA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John L. Thomas	 	 
	 

	 	 	 	 	 	 
	 	 	Name: John L. Thomas	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CALIFORNIA BANK & TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kirk K. Monroe	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Kirk K. Monroe	 	 
	 	 	Title: Senior Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	COMERICA BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Adam Sheets	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Adam Sheets	 	 
	 	 	Title: Assistant Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	REGIONS BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel McClurkin	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Daniel McClurkin	 	 
	 	 	Title: Assistant Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CALYON NEW YORK BRANCH	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Samuel L. Hill	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Samuel L. Hill	 	 
	 	 	Title: Managing Director and Regional Head	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert L. Nelson	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robert L. Nelson	 	 
	 	 	Title: Managing Director	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Meredith H. Houseworth	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Meredith H. Houseworth	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	MIZUHO CORPORATE BANK, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Noel Purcell	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Noel Purcell	 	 
	 	 	Title: Authorized Signatory	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	NATIXIS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Marie-Edith Dugeny	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Marie-Edith Dugeny	 	 
	 	 	Title: Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Timothee Delpont	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Timothee Delpont	 	 
	 	 	Title: Associate	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Luis Donoso	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Luis Donoso	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	RBC CENTURA BANK, a North Carolina banking corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Maria Ziegler	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Maria Ziegler	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CITY NATIONAL BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Xavier Barrera	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Xavier Barrera	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	COMPASS BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John C. Lozano	 	 
	 

	 	 	 	 	 	 
	 	 	Name: John C. Lozano	 	 
	 	 	Title: Vice President	 	 

 

 

SIGNATURE PAGE TO M.D.C. HOLDINGS, INC.

SECOND AMENDMENT TO SECOND AMENDED AND RETATED CREDIT

AGREEMENT

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	FIFTH THIRD BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Brian J. Blomeke	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Brian J. Blomeke	 	 
	 	 	Title: Vice President	 	 

 

 

Exhibit A

CONSENT AND AGREEMENT OF GUARANTORS

     THIS CONSENT AND AGREEMENT OF GUARANTORS (“Consent”) is executed and delivered as of
___, 2008, by the undersigned (the “Guarantors”), in favor of the “Lenders” under that
certain Second Amended and Restated Credit Agreement dated March 22, 2006, among M.D.C. Holdings,
Inc., the Lenders from time to time parties thereto and JPMorgan Chase Bank, N.A., in its capacity
as Administrative Agent. Such Second Amended and Restated Credit Agreement, as it has been and may
be amended, modified or supplemented from time to time, is hereinafter referred to as the “Credit
Agreement.” Unless otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.

WITNESSETH:

     WHEREAS, the Guarantors have executed and delivered a Second Amended and Restated Guaranty
dated March 22, 2006 in favor of the Lenders under the Credit Agreement (the “Guaranty”); and

     WHEREAS, the Borrower, the Administrative Agent and the Required Lenders have entered into
that certain Second Amendment to Second Amended and Restated Credit Agreement of even date herewith
amending the Credit Agreement (the “Amendment”); and

     WHEREAS, it is a condition to the Amendment that the Guarantors shall have executed this
Consent;

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Guarantors hereby consent to the Amendment and agree that the Guaranty
continues in full force and effect with respect to the undersigned Guarantors.

     IN WITNESS WHEREOF, this Consent has been duly executed by the Guarantors as of the day and
year first set forth above.

[Guarantors]

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