Document:

Unassociated Document

    THIS
      NOTE
      HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE "ACT").
      NO
      INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT
      APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE
      ACT), OR (iii) AN EXEMPTION FROM REGISTRATION UNDER THE ACT WHERE PAYEE HAS
      FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL THAT AN EXEMPTION FROM
      REGISTRATION UNDER THE ACT IS AVAILABLE.

     

    ASKMENOW,
      INC.

    12%
      SENIOR PROMISSORY NOTE

    

    
      	
              $____________

            	
              ______ 
                __, 2007

            

    

     

    FOR
      VALUE
      RECEIVED, the undersigned, AskMeNow, Inc., a Delaware corporation (the “Company”
or “Payor”),
      having its executive office and principal place of business at 26 Executive
      Park, Suite 250, Irvine, CA 92614, hereby promises to pay to ______________
      (the “Payee”) at Payee's address set forth above (or at such other place as
      Payee may from time to time hereafter direct by notice in writing to Payor),
      the
      principal sum of _______ ($____),
      in such coin or currency of the United States of America as at the time shall
      be
      legal tender for the payment of public and private debts, on the first to occur
      of the following dates: (i): May 29, 2007 (90 days after the date of
      issuance) (the “Maturity
      Date”)
      unless
      extended by the Payor for up to an additional 90 days (the “Extended
      Maturity Date”);
      (ii)
      the date on which the outstanding principal amount of this Note is prepaid
      in
      full as hereinafter permitted (the “Prepayment
      Date”);
      (iii)
      the date on which the Company raises at least Three Million Dollars ($3,000,000)
      in equity financing or a proportionate repayment on such amount less than
      $3,000,000 (the “Funding Date”), and (iv) any other date on which any
      principal amount of, or accrued unpaid interest on, this Note is declared to
      be,
      or becomes, due and payable pursuant to its terms prior to the Maturity Date
      (the "Acceleration
      Date").

     

    This
      Note
      is being issued in connection with a bridge financing (the “Bridge Offering”) by
      the Company on a “best efforts” no minimum basis, up to a maximum of $3,000,000
      of Bridge Offering units (each a “Bridge
      Unit”).
      Each
      Bridge Unit consists of $1.00 principal amount of 12% Promissory Notes and
      Warrants to purchase four (4) shares of Common Stock, to be offered on a “best
      efforts” basis. The Bridge Offering is being made only to Investors who qualify
      as “accredited investors” as such term is defined in Rule 501 of Regulation D
      under the Securities Act of 1933, as amended (the “Securities
      Act”).
      Partial Bridge Units may be sold. 

     

    All
      of
      the proceeds of the Bridge Offering will be used by the Company for general
      corporate purposes, including working capital.

     

    1. Interest
      And Payment.

     

    1.1. The
      principal amount of this Note outstanding from time to time shall bear simple
      interest at the annual rate (the "Note
      Rate")
      of
      twelve (12%) percent from the date hereof through the earliest to occur of
      (i) the Maturity Date; (ii) the Prepayment Date; (iii) the Funding
      Date or (iv) the Acceleration Date. In the event the Company extends the
      Maturity Date, the Note Rate shall increase to fourteen (14%) percent from
      the
      original Maturity Date until the Note is paid.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2. Interest
      accrued on this Note shall be payable not later than, on the earliest to occur
      of (i) the Maturity Date (if not extended); (ii) the Prepayment Date; (iii)
      the
      Funding Date; (iv) the Acceleration Date; or (v) the Extended Maturity
      Date.

     

    1.3. All
      payments made by the Payor on this Note shall be applied first to the payment
      of
      accrued unpaid interest on this Note and then to the reduction of the unpaid
      principal balance of this Note.

     

    1.4. In
      the
      event that the date for the payment of any amount payable under this Note falls
      due on a Saturday, Sunday or public holiday under the laws of the State of
      New
      York, the time for payment of such amount shall be extended to the next
      succeeding business day and interest at the Note Rate shall continue to accrue
      on any principal amount so effected until the payment thereof on such extended
      due date.

     

    2. Replacement
      Of Note.

     

    2.1. In
      the
      event that this Note is mutilated, destroyed, lost or stolen, Payor shall,
      at
      its sole expense, execute, register and deliver a new Note, in exchange and
      substitution for this Note, if mutilated, or in lieu of and substitution for
      this Note, if destroyed, lost or stolen. In the case of destruction, loss or
      theft, Payee shall furnish to Payor indemnity reasonably satisfactory to Payor,
      and in any such case, and in the case of mutilation, Payee shall also furnish
      to
      Payor evidence to its reasonable satisfaction of the mutilation, destruction,
      loss or theft of this Note and of the ownership thereof. Any replacement Note
      so
      issued shall be in the same outstanding principal amount as this Note and dated
      the date to which interest shall have been paid on this Note or, if no interest
      shall have yet been paid, dated the date of this Note.

     

    2.2. Every
      Note issued pursuant to the provisions of Section 2.1 above in substitution
      for
      this Note shall constitute an additional contractual obligation of the Payor,
      whether or not this Note shall be found at any time or be enforceable by
      anyone.

     

    3. Prepayment.
      The
      principal amount of this Note may be prepaid in whole at any time, or in part
      from time to time, without penalty or premium, together with unpaid interest
      thereon accrued through the Maturity Date or the Extended Maturity Date. Each
      partial prepayment of this Note shall first be applied to interest accrued
      through the Maturity Date and the Extended Maturity Date and then to
      principal.

     

    4. Covenants
      of Payor.
      

     

    Payor
      covenants and agrees that, so long as this Note remains outstanding and unpaid,
      in whole or in part: 

     

    4.1. Payor
      will not sell, transfer or dispose of a material part of its assets;

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    4.2. Payor
      will not make any loan to any person who is or becomes a shareholder or
      executive employee of Payor, other than for reasonable advances for expenses
      in
      the ordinary course of business;

     

    4.3. Payor
      will promptly pay and discharge all lawful taxes, assessments and governmental
      charges or levies imposed upon it, its income and profits, or any of its
      property, before the same shall become in default, as well as all lawful claims
      for labor, materials and supplies which, if unpaid, might become a lien or
      charge upon such properties or any part thereof; provided, however, that Payor
      or such subsidiary shall not be required to pay and discharge any such tax,
      assessment, charge, levy or claim so long as the validity thereof shall be
      contested in good faith by appropriate proceedings and Payor or such subsidiary,
      as the case may be, shall set aside on its books adequate reserves with respect
      to any such tax, assessment, charge, levy or claim so contested;

     

    4.4. Payor
      will do or cause to be done all things necessary to preserve and keep in full
      force and effect its corporate existence, rights and franchises and
      substantially comply with all laws applicable to Payor as its counsel may
      advise;

     

    4.5. Payor
      will at all times maintain, preserve, protect and keep its property used or
      useful in the conduct of its business in good repair, working order and
      condition (except for the effects of reasonable wear and tear in the ordinary
      course of business) and will, from time to time, make all necessary and proper
      repairs, renewals, replacements, betterments and improvements
      thereto;

     

    4.6. Payor
      will keep adequately insured, by financially sound reputable insurers, all
      property of a character usually insured by similar corporations and carry such
      other insurance as is usually carried by similar corporations;

     

    4.7. Payor
      will, promptly following the occurrence of an Event of Default or of any
      condition or event which, with the giving of notice or the lapse of time or
      both, would constitute an Event of Default, furnish a statement of Payor's
      Chief
      Executive Officer or Chief Financial Officer to Payee setting forth the details
      of such Event of Default or condition or event and the action which Payor
      intends to take with respect thereto; 

     

    4.8. Payor
      will, and will cause each of its subsidiaries to, at all times maintain books
      of
      account in which all of its financial transactions are duly recorded in
      conformance with generally accepted accounting principles; 

     

    4.9. Payor
      shall not create, incur, assume or suffer to exist any pledge, hypothecation,
      assignment, deposit arrangement, lien (except Permitted Liens and Permitted
      Debt
      as defined in Section 13 of the Note Purchase and Warrant Agreement entered
      into
      between the Payor and Payee), charge, claim, or security interest, mortgage,
      deed of trust, easement or encumbrance, or preference, priority or other
      security agreement or preferential arrangement of any kind or nature whatsoever
      (including any lease or title retention agreement, any financing lease having
      substantially the same economic effect as any of the foregoing, and the filing
      of, or agreement to give, any financing statement perfecting a security interest
      under the Uniform Commercial Code or comparable law of any jurisdiction) with
      respect to the assets of Payor or such subsidiary; and

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    4.10. Payor
      shall not issue any debt, equity or other instrument which would give the holder
      thereof, directly or indirectly, a right in any assets of Payor or such
      subsidiary that are pari passu, senior or superior to any right of the Payee
      in
      or to such assets.

     

    5. Events
      of Default.
      If
      any of
      the following events (each an "Event
      of Default")
      occurs:

     

    5.1. The
      dissolution of Payor or any vote in favor thereof by the board of directors
      and
      shareholders of Payor; 

     

    5.2. Payor
      makes an assignment for the benefit of creditors, or files with a court of
      competent jurisdiction an application for appointment of a receiver or similar
      official with respect to it or any substantial part of its assets, or Payor
      files a petition seeking relief under any provision of the Federal Bankruptcy
      Code or any other federal or state statute now or hereafter in effect affording
      relief to debtors, or any such application or petition is filed against Payor,
      which application or petition is not dismissed or withdrawn within sixty (60)
      days from the date of its filing; 

     

    5.3. Payor
      fails to pay the principal amount, or interest on, or any other amount payable
      under, this Note as and when the same becomes due and payable; 

     

    5.4. Payor
      admits in writing its inability to pay its debts as they mature; 

     

    5.5. Payor
      sells all or substantially all of its assets or merges or is consolidated with
      or into another corporation; other than a merger with or into a publicly traded
      corporation;

     

    5.6. A
      proceeding is commenced to foreclose a security interest or lien in any property
      or assets of Payor as a result of a default in the payment or performance of
      any
      debt (in excess of $50,000 and secured by such property or assets) of Payor
      or
      of any subsidiary of Payor; 

     

    5.7. A
      final
      judgment for the payment of money in excess of $50,000 is entered against Payor
      by a court of competent jurisdiction, and such judgment is not discharged (nor
      the discharge thereof duly provided for) in accordance with its terms, nor
      a
      stay of execution thereof procured, within sixty (60) days after the date such
      judgment is entered, and, within such period (or such longer period during
      which
      execution of such judgment is effectively stayed), an appeal therefrom has
      not
      been prosecuted and the execution thereof caused to be stayed during such
      appeal; 

     

    5.8. An
      attachment or garnishment is levied against the assets or properties of Payor
      or
      any subsidiary of Payor involving an amount in excess of $50,000 and such levy
      is not vacated, bonded or otherwise terminated within sixty (60) days after
      the
      date of its effectiveness; 

     

    5.9. Payor
      defaults in the due observance or performance of any covenant, condition or
      agreement on the part of Payor to be observed or performed pursuant to the
      terms
      of this Note (other than the default specified in Section 5.3 above) and such
      default continues uncured for a period of sixty (60) days then, upon the
      occurrence of any such Event of Default and at any time thereafter, Payee shall
      have the right (at Payee's option) to declare the principal of, accrued unpaid
      interest on, and all other amounts payable under this Note to be forthwith
      due
      and payable, whereupon all such amounts shall be immediately due and payable
      to
      Payee, without presentment, demand, protest or other notice of any kind, all
      of
      which are hereby expressly waived; provided, however, that in case of the
      occurrence of an Event of Default under any of the sections above, such amounts
      shall become immediately due and payable without any such declaration by Payee;
      

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    5.10. Payor
      fails to pay the principal amount, or interest on, or any other amount payable
      under, this Note as and when the same becomes due and payable (as specified
      in
      Section 5.3 above), the Company will pay the Payee a default interest rate
      of
      two (2%) per month on all amounts due and owing under the Note for each month
      or
      part thereof beyond the Maturity Date or the Extended Maturity Date, which
      default interest shall be payable in cash on demand in cash;

     

    5.11. Payor
      creates, incurs, assumes or suffers to exist any pledge, hypothecation,
      assignment, deposit arrangement, lien (except Permitted Liens and Permitted
      Debt), charge, claim, or security interest, mortgage, deed of trust, easement
      or
      encumbrance, or preference, priority or other security agreement or preferential
      arrangement of any kind or nature whatsoever (including any lease or title
      retention agreement, any financing lease having substantially the same economic
      effect as any of the foregoing, and the filing of, or agreement to give, any
      financing statement perfecting a security interest under the Uniform Commercial
      Code or comparable law of any jurisdiction) with respect to the assets of Payor
      or such subsidiary; or 

     

    5.12. If
      Payor
      issues any debt, equity or other instrument which would give the holder thereof,
      directly or indirectly, a right in any assets of Payor or such subsidiary that
      are senior or superior to any right of the Payee in or to such
      assets.

     

    6. Suits
      for Enforcement and Remedies.
      If any
      one or more Events of Default shall occur and be continuing, the Payee may
      proceed to (i) protect and enforce Payee's rights either by suit in equity
      or by action at law, or both, whether for the specific performance of any
      covenant, condition or agreement contained in this Note or in any agreement
      or
      document referred to herein or in aid of the exercise of any power granted
      in
      this Note or in any agreement or document referred to herein, (ii) enforce
      the payment of this Note, or (iii) enforce any other legal or equitable
      right of Payee. No right or remedy herein or in any other agreement or
      instrument conferred upon Payee is intended to be exclusive of any other right
      or remedy, and each and every such right or remedy shall be cumulative and
      shall
      be in addition to every other right and remedy given hereunder or now or
      hereafter existing at law or in equity or by statute or otherwise.

    

    7.  Unconditional
      Obligation; Fees, Waivers, Other.

     

    7.1. The
      obligations to make the payments provided for in this Note are absolute and
      unconditional and not subject to any defense, set-off, counterclaim, rescission,
      recoupment or adjustment whatsoever.

     

    7.2. If,
      following the occurrence of an Event of Default, Payee shall seek to enforce
      the
      collection of any amount of principal of and/or interest on this Note, there
      shall be immediately due and payable from Payor, in addition to the then unpaid
      principal of, and accrued unpaid interest on, this Note, all costs and expenses
      incurred by Payee in connection therewith, including, without limitation,
      reasonable attorneys' fees and disbursements.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    7.3. No
      forbearance, indulgence, delay or failure to exercise any right or remedy with
      respect to this Note shall operate as a waiver or as an acquiescence in any
      default, nor shall any single or partial exercise of any right or remedy
      preclude any other or further exercise thereof or the exercise of any other
      right or remedy.

     

    7.4. This
      Note
      may not be modified or discharged (other than by payment or exchange) except
      by
      a writing duly executed by Payor and Payee. 

     

    7.5. Payor
      hereby expressly waives demand and presentment for payment, notice of
      nonpayment, notice of dishonor, protest, notice of protest, bringing of suit,
      and diligence in taking any action to collect amounts called for hereunder,
      and
      shall be directly and primarily liable for the payment of all sums owing and
      to
      be owing hereon, regardless of and without any notice, diligence, act or
      omission with respect to the collection of any amount called for hereunder
      or in
      connection with any right, lien, interest or property at any and all times
      which
      Payee had or is existing as security for any amount called for hereunder.

     

    8. Restriction
      on Transfer.
      This
      Note has been acquired for investment, and this Note has not been registered
      under the securities laws of the United States of America or any state thereof.
      Accordingly, no interest in this Note may be offered for sale, sold or
      transferred in the absence of registration and qualification of this Note,
      under
      applicable federal and state securities laws or an opinion of counsel of Payee
      reasonably satisfactory to Payor that such registration and qualification are
      not required.

    

    9. Miscellaneous.

     

    9.1. The
      headings of the various paragraphs of this Note are for convenience of reference
      only and shall in no way modify any of the terms or provisions of this
      Note.

     

    9.2. All
      notices required or permitted to be given hereunder shall be in writing and
      shall be deemed to have been duly given when personally delivered or sent by
      registered or certified mail (return receipt requested, postage prepaid),
      facsimile transmission or overnight courier to the address of the intended
      recipient as set forth in the preamble to this Note or at such other address
      as
      the intended recipient shall have hereafter given to the other party hereto
      pursuant to the provisions of this Note.

     

    9.3. This
      Note
      and the obligations of Payor and the rights of Payee shall be governed by and
      construed in accordance with the substantive laws of the State of California
      without giving effect to the choice of laws rules thereof.

     

    9.4. This
      Note
      shall bind Payor and its successors and assigns.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

       

    

    
      	 	 	 
	 	
              ASKMENOW,
                INC.

            
	 
 	 
 	 
 
	 	
              By:  

               

            	
               

              
                

              

              Name:
                Darryl
                Cohen

            
	 	
            	
              Title: CEO

            

    

     

    
      
        
        

      

      
        -7-Unassociated Document

    THE
      SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (“1933 ACT”) OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD
      OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
      THEREFROM UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.

     

    2007-001

    WARRANT
      TO PURCHASE SHARES

    OF
      THE STOCK OF

    ASKMENOW,
      INC..

    (Void
      after Expiration Date - February 28, 2012)

    

    Issue
      Date: __________, 2007

    

    This
      certifies that ______________ or its successors or assigns (“Holder”)
      shall
      be entitled to purchase from AskMeNow,
      Inc.,
      a
      Delaware corporation (“Company”),
      having its principal place of business at 26 Executive Park, Suite 250, Irvine,
      CA 92614, _______________(_______) fully paid and non-assessable shares of
      the
      Company’s common stock, par value $.01 per share (“Common
      Stock”),
      at a
      price per share equal to the Exercise Price (as defined below). 

    

    This
      Warrant is being issued to the Holder in connection with up to a $3,000,000
      loan
      (the “Bridge Loan”) evidenced by 12% senior promissory notes due and payable
      ninety (90) days (unless extended by the Company for up to an additional 90
      days) from the date of issuance (the “Notes”). This Warrant is one of several
      which will be identical except for names and amounts. An aggregate of 12,000,000
      Warrants will be issued by the Company if the full $3,000,000 Bridge Loan is
      completed. The Warrants are being issued on the basis of four (4) warrants
      for
      every $1.00 of Notes issued by the Company. There is no minimum principal amount
      of the Bridge Loan. Capitalized terms used herein and not otherwise defined
      shall have the respective meanings set forth in the Note Purchase and Warrant
      Agreement.

    

    The
      initial exercise price (“Exercise
      Price”)
      of this
      Warrant will be equal to $0.50 per share, subject to adjustment upon the
      occurrence of the events described in Section 2 of this Warrant. 

     

    This
      Warrant shall be immediately exercisable into shares of Common Stock at any
      time, or from time-to-time, up to and including 5:00 p.m. (California time)
      on
      February 28, 2012 (“Expiration
      Date”);
      provided, however, if such date is not a Business Day, then on the Business
      Day
      immediately following such date). This Warrant is exercisable in whole or in
      part upon the surrender to the Company at its principal place of business (or
      at
      such other location as the Company may advise the Holder in writing) of this
      Warrant properly endorsed with a form of subscription in substantially the
      form
      attached hereto duly filled in and signed and, if applicable, upon payment
      in
      cash or by check of the aggregate Exercise Price for the number of shares for
      which this Warrant is being exercised as determined in accordance with the
      provisions hereof. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    1. Exercise;
      Issuance of Certificates; Payment for Shares.

     

    
      	 	
              1.1

            	
              General.
                This Warrant is exercisable in full, or in part for 5,000 or more
                shares,
                in increments of 5,000 shares, except for the final exercise which
                may be
                for the remainder, at the option of the Holder of record at any time
                or
                from time, to time, up to the Expiration Date for all of the shares
                of
                Common Stock (but not for a fraction of a share) which may be purchased
                hereunder. In
                the case of the exercise of less than all of the Warrants represented
                hereby, the Company shall cancel this Warrant Certificate upon the
                surrender hereof and shall execute and deliver a new Warrant Certificate
                or Warrant Certificates of like tenor for the balance of such 
                Warrants. The
                Company agrees that the shares of Common Stock purchased under this
                Warrant shall be and are deemed to be issued to the Holder hereof
                as the
                record owner of such shares as of the close of business on the date
                on
                which the exercise notice (attached hereto as Schedule A or B) is
                delivered to the Company via facsimile; provided, however, that in
                such
                case this Warrant shall be surrendered to the Company within three
                (3)
                business days. Certificates for the shares of Common Stock so purchased,
                together with any other securities or property to which the Holder
                is
                entitled upon such exercise, shall be delivered to the Holder by
                the
                Company at the Company’s expense within a reasonable time after the rights
                represented by this Warrant have been so exercised, and in any event,
                within three business days of such exercise and delivery of the Exercise
                Price. The Company shall, no later than the close of business on
                the first
                business day following the date on which the Company receives the
                exercise
                notice by facsimile transmission issue and deliver to the Company’s
                Transfer Agent irrevocable instructions to issue and deliver or cause
                to
                be delivered to such Holder the number of Warrant Shares exercised
                within
                two business days thereafter by either express mail or hand delivery.
                Each
                Common Stock certificate so delivered shall be in such denominations
                of
                5,000 or more shares of Common Stock, in increments of 5,000, as
                may be
                requested by the Holder hereof and shall be registered on the Company’s
                books in the name designated by such Holder, provided that no Holder
                of
                this Warrant shall be permitted to exercise any warrants to the extent
                that such exercise would cause any Holder to be the beneficial owner
                of 5%
                or more of the then outstanding Company’s Common Stock, at that given
                time. This limitation shall not be deemed to prevent any Holder from
                acquiring more than an aggregate of 5% of the Common Stock, so long
                as
                such Holder does not beneficially own, or have the right to beneficially
                own, 5% or more of the Company’s Common Stock at any given
                time.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	 	
              1.2

            	
              Exercise
                for Cash

            

    

     

    This
      Warrant may be exercised, in whole at any time or in part from time to time,
      commencing on the date hereof and prior to 5:00 P.M., California time, on
      February 28, 2012, by the Holder by the facsimile delivery of the exercise
      notice, as attached hereto, on the date of the exercise and by surrender of
      this
      Warrant within three (3) business days from the exercise day at the address
      set
      forth hereof, together with proper payment of the aggregate
      Exercise Price payable hereunder for the Warrant Shares (“Aggregate
      Warrant Price”),
      or
      the proportionate part thereof if this Warrant is exercised in part. Payment
      for
      the Warrant Shares shall be made by wire, or check payable to the order of
      the
      Company. If this Warrant is exercised in part, this Warrant must be exercised
      for a number of whole shares of the Common Stock, and the Holder is entitled
      to
      receive a new Warrant covering the Warrant Shares which have not been exercised
      and setting forth the proportionate part of the Aggregate Warrant Price
      applicable to such Warrant Shares. Upon such surrender of this Warrant the
      Company will (a) issue a certificate or certificates in the name of the Holder
      for the largest number of whole shares of the Common Stock to which the Holder
      shall be entitled and (b) deliver the other securities and properties receivable
      upon the exercise of this Warrant, or the proportionate part thereof if this
      Warrant is exercised in part, pursuant to the provisions of this
      Warrant.

    

    
      	 	
              1.3

            	
              Cashless
                Exercise

            

    

     

    In
      the
      event the Holder’s Note issued together with this Warrant is not paid on or
      before its Maturity Date, the Holder may pay the Exercise Price through a
      cashless exercise (a “Cashless
      Exercise”),
      as
      hereinafter provided. The Holder may effect a Cashless Exercise by surrendering
      this Warrant to the Company and noting on the Exercise Notice that the Holder
      wishes to effect a Cashless Exercise, upon which the Company shall issue to
      the
      Holder the number of Warrant Shares determined as follows:

    

    X
      = Y x
      (A-B)/A

    where:  

    

    X
      = the
      number of Warrant Shares to be issued to the Holder;

    

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

    

    
      	 	 	 	
              A
                =
                the Market Price (as defined in the Section 2.4 below) as of the
                Exercise
                Date; and

            

    

    

    
      	 	 	 	
              B
                =
                the Exercise Price.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    For
      purposes of Rule 144, it is intended and acknowledged that the Warrant Shares
      issued in a Cashless Exercise transaction shall be deemed to have been acquired
      by the Holder, and the holding period for the Warrant Shares required by Rule
      144 shall be deemed to have been commenced, on the Issue Date. 

     

    
      	 	
              1.4

            	
              
                SHARES
                  TO
                  BE
                  FULLY
                  PAID;
                  RESERVATION
                  OF
                  SHARES. 
                  The Company covenants and agrees that all shares of Common Stock
                  which may
                  be issued upon the exercise of the rights represented by this Warrant
                  will, upon issuance, be duly authorized, validly issued, fully
                  paid and
                  nonassessable and free from all preemptive rights of any shareholder
                  and
                  free of all taxes, liens and charges with respect to the issue
                  thereof.
                  The Company further covenants and agrees that, during the period
                  within
                  which the rights represented by this Warrant may be exercised,
                  the Company
                  will at all times have authorized and reserved, for the purpose
                  of issue
                  or transfer upon exercise of the subscription rights evidenced
                  by this
                  Warrant, a sufficient number of shares of authorized but unissued
                  Common
                  Stock, when and as required to provide for the exercise of the
                  rights
                  represented by this Warrant. The Company will take all such action
                  as may
                  be necessary to assure that such shares of Common Stock may be
                  issued as
                  provided herein without violation of any applicable law or regulation,
                  or
                  of any requirements of any domestic securities exchange upon which
                  the
                  Common Stock or other securities may be listed; provided, however,
                  that
                  the Company shall not be required to effect a registration under
                  federal
                  or state securities laws with respect to such exercise other than
                  as
                  required by Section 7.7 herein. The Company will not take any action
                  which
                  would result in any adjustment of the Exercise Price if the total
                  number
                  of shares of Common Stock issuable after such action upon exercise
                  of all
                  outstanding warrants, together with all shares of Common Stock
                  then
                  outstanding and all shares of Common Stock then issuable upon exercise
                  of
                  all options and upon the conversion of all convertible securities
                  then
                  outstanding, would exceed the total number of shares of Common
                  Stock or
                  Equity Securities then authorized by the Company’s Amended and Restated
                  Articles of Incorporation, as amended (“Company
                  Charter”).

              

            

    

     

    
      	 	
              1.5

            	
              BUY-IN.
                In
                addition to any other rights available to a Holder, if the Company
                fails
                to deliver to the Holder a certificate representing Warrant
                Shares
                by
                the third Trading Day after the date on which delivery of such certificate
                is required by this Warrant, and if after such third Trading Day
                the
                Holder purchases (in an open market transaction or otherwise) shares
                of
                Common Stock to deliver in satisfaction of a sale by the Holder on
                or
                after the Exercise Date of the Warrant
                Shares
                that the Holder anticipated receiving from the Company (a “Buy-In”),
                then the Company shall, within three Trading Days after the Holder’s
                request and in the Holder’s discretion, either (i) pay cash to the Holder
                in an amount equal to the Holder’s total purchase price (including
                brokerage commissions, if any) for the shares of Common Stock so
                purchased
                (the “Buy-In
                Price”),
                at which point the Company’s obligation to deliver such certificate (and
                to issue such Common Stock) shall terminate, or (ii) promptly honor
                its
                obligation to deliver to the Holder a certificate or certificates
                representing such Common Stock and pay cash to the Holder in an amount
                equal to the excess (if any) of the Buy-In Price over the product
                of (A)
                such number of shares of Common Stock, times (B) the Closing Price
                on the
                date of the event giving rise to the Company’s obligation to deliver such
                certificate. Notwithstanding the foregoing, the Company shall have
                no
                liability under this subsection for the Buy-In Price if it has compiled
                with the requirements of subsection 1.1 above and notwithstanding
                it using
                its best efforts to have its transfer agent deliver the Warrant Shares
                to
                the Holders within three trading days of the Holder’s request such Warrant
                Shares are not delivered on a timely
                basis.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.
DETERMINATION
      OR
      ADJUSTMENT
      OF
      EXERCISE
      PRICE
      AND
      NUMBER
      OF
      SHARES .
      The
      Exercise Price and the number of shares purchasable upon the exercise of this
      Warrant shall be subject to adjustment from time to time upon the occurrence
      of
      certain events described in this Section 2. Upon each adjustment of the Exercise
      Price, the Holder of this Warrant shall thereafter be entitled to purchase,
      at
      the Exercise Price resulting from such adjustment, the number of shares obtained
      by multiplying the Exercise Price in effect immediately prior to such adjustment
      by the number of shares purchasable pursuant hereto immediately prior to such
      adjustment, and dividing the product thereof by the Exercise Price resulting
      from such adjustment. 

     

    
      	 	
              2.1

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

            

    

     

    
      	 	
              2.2

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

            

    

     

    
      	 	
              2.2.1

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

            

    

     

    2.2.2 Any
      cash
      paid or payable otherwise than as a cash dividend, or

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              2.2.3

            	
              Stock,
                Common Stock or additional capital stock or other securities or property
                (including cash) by way of spinoff, split-up, reclassification,
                combination of shares or similar corporate rearrangement, (other
                than
                shares of Common Stock issued as a stock split or adjustments in
                respect
                of which shall be covered by the terms of Section 2.1 above), then
                and in
                each such case, the Holder hereof shall, upon the exercise of this
                Warrant, be entitled to receive, in addition to the number of shares
                of
                Common Stock or other capital stock receivable thereupon, and without
                payment of any additional consideration therefor, the amount of stock
                and
                other securities and property (including cash in the cases referred
                to in
                clause (2.2.2) above and this clause (2.2.3)) which such Holder would
                hold
                on the date of such exercise had he been the holder of record of
                such
                Common Stock as of the date on which holders of Common Stock received
                or
                became entitled to receive such shares or all other additional stock
                and
                other securities and property.

            

    

     

    
      	 	
              2.3

            	
              Reorganization,
                Reclassification, Consolidation, Merger or Sale.
                

            

    

     

    
      	
            	2.3.1	
              If
                any recapitalization, reclassification or reorganization of the capital
                stock of the Company, or any consolidation or merger of the Company
                with
                another corporation, or the sale of all or substantially all of its
                assets
                or other transaction shall be effected in such a way that holders
                of
                Common Stock shall be entitled to receive stock, securities, or other
                assets or property (an “Organic
                Change”),
                then, as a condition of such Organic Change, lawful and adequate
                provisions shall be made by the Company whereby the Holder hereof
                shall
                thereafter have the right, upon exercise of this Warrant, to purchase
                and
                receive (in lieu of the shares of the Common Stock of the Company
                immediately theretofore purchasable and receivable upon the exercise
                of
                the rights represented by this Warrant) such shares of stock, securities
                or other assets or property as may be issued or payable with respect
                to or
                in exchange for a number of outstanding shares of such Common Stock
                equal
                to the number of shares of such stock immediately theretofore purchasable
                and receivable upon the exercise of the rights represented by this
                Warrant. In the event of any Organic Change, appropriate provision
                shall
                be made by the Company with respect to the rights and interests of
                the
                Holder of this Warrant to the end that the provisions hereof (including,
                without limitation, provisions for adjustments of the Exercise Price
                and
                of the number of shares purchasable and receivable upon the exercise
                of
                this Warrant) shall thereafter be applicable, in relation to any
                shares of
                stock, securities or assets thereafter deliverable upon the exercise
                hereof. The Company will not effect any such consolidation, merger
                or sale
                unless, prior to the consummation thereof, the successor corporation
                (if
                other than the Company) resulting from such consolidation or the
                corporation purchasing such assets shall assume by written instrument
                executed and mailed or delivered to the Holder hereof at the last
                address
                of such Holder appearing on the books of the Company, the obligation
                to
                deliver to such Holder, upon Holder’s exercise of this Warrant and payment
                of the purchase price in accordance with the terms hereof, such shares
                of
                stock, securities or assets as, in accordance with the foregoing
                provisions, such Holder may be entitled to purchase.
                

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
            	2.3.2	
              No
                adjustment of the Exercise Price, however, shall be made in an amount
                less
                than $.01 per Share, but any such lesser adjustment shall be carried
                forward and shall be made at the time and together with the next
                subsequent adjustment which together with any adjustments so carried
                forward shall amount to $.01 per Share or more. 

            

    

     

    2.4 Dilutive
      Issuances.

    

    (i) Adjustment
      Upon Dilutive Issuance.
      If, at
      any time prior to the Expiration Date, the Company issues or sells any shares
      of
      Common Stock or any equity or equity equivalent securities (including any
      equity, debt or other instrument that is at any time over the life thereof
      convertible into or exchangeable for Common Stock or other securities which
      are
      so convertible or exchangeable) (collectively, “Common
      Stock Equivalents”)
      for
      per share consideration less than the Exercise Price on the date of such
      issuance or sale, (a “Dilutive
      Issuance”)
      (if
      the holder of the Common Stock or Common Stock Equivalent 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 is issued in connection with such
      issuance, be entitled to receive shares of Common Stock at a price per share
      which is less than the Exercise Price, such issuance shall be deemed to have
      occurred for less than the Exercise Price) then the Exercise Price shall be
      adjusted so as to equal the consideration received or receivable by the Company
      (on a per share basis) for the additional shares of Common Stock or Common
      Stock
      Equivalents so issued, sold or deemed issued or sold in such Dilutive Issuance
      (which, in the case of a deemed issuance or sale, shall be calculated in
      accordance with subparagraph (ii) below). Such adjustment shall be made whenever
      such Common Stock or Common Stock Equivalents are issued. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (ii) Effect
      On Exercise Price Of Certain Events.
      For
      purposes of determining the adjusted Exercise Price under subparagraph (i)
      of
      this paragraph (c), the following will be applicable:

     

      (A) Issuance
      of Common Stock Equivalents.
      If the
      Company issues or sells any Common Stock Equivalents, whether or not immediately
      convertible, exercisable or exchangeable, and the price per share for which
      Common Stock is issuable upon such conversion, exercise or exchange is less
      than
      the Exercise Price in effect on the date of issuance or sale of such Common
      Stock Equivalents, then the maximum total number of shares of Common Stock
      issuable upon the conversion, exercise or exchange of all such Common Stock
      Equivalents shall, as of the date of the issuance or sale of such Common Stock
      Equivalents, be deemed to be outstanding and to have been issued and sold by
      the
      Company for such price per share. 

     

      (B) Change
      in Conversion Rate.
      If,
      following an adjustment to the Exercise Price upon the issuance of Common Stock
      Equivalents pursuant to a Dilutive Issuance, there is a change at any time
      in
      (y) the amount of additional consideration, if any, payable to the Company
      upon
      the conversion, exercise or exchange of any Common Stock Equivalents; or (z)
      the
      rate at which any Common Stock Equivalents are convertible into or exercisable
      or exchangeable for Common Stock (in each such case, other than under or by
      reason of provisions designed to protect against dilution), then in any such
      case, the Exercise Price in effect at the time of such change shall be
      readjusted to the Exercise Price which would have been in effect at such time
      had such Common Stock Equivalents still outstanding provided for such changed
      additional consideration or changed conversion, exercise or exchange rate,
      as
      the case may be, at the time initially issued or sold.

     

    (C) Calculation
      of Consideration Received.
      If any
      Common Stock or Common Stock Equivalents are issued or sold for cash, the
      consideration received therefor will be the amount received by the Company
      therefor. In case any Common Stock or Common Stock Equivalents are issued or
      sold for a consideration part or all of which shall be other than cash,
      including in the case of a strategic or similar arrangement in which the other
      entity will provide services to the Company, purchase services from the Company
      or otherwise provide intangible consideration to the Company, the amount of
      the
      consideration other than cash received by the Company (including the net present
      value of the consideration other than cash expected by the Company for the
      provided or purchased services) shall be the fair market value of such
      consideration, except where such consideration consists of publicly traded
      securities, in which case the amount of consideration received by the Company
      will be the Market Price thereof on the date of receipt. The term “Market
      Price”
means,
      as of a particular date, the average of the high and low price of the Common
      Stock for the ten (10) consecutive Trading Days occurring immediately prior
      to
      (but not including) any given date, as reported in the Principal Market. In
      case
      any Common Stock or Common Stock Equivalents are issued in connection with any
      merger or consolidation in which the Company is the surviving corporation,
      the
      amount of consideration therefor will be deemed to be the fair market value
      of
      such portion of the net assets and business of the non-surviving corporation
      as
      is attributable to such Common Stock or Common Stock Equivalents. The
      independent members of the Company’s Board of Directors shall calculate
      reasonably and in good faith, using standard commercial valuation methods
      appropriate for valuing such assets, the fair market value of any consideration
      other than cash or securities.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (D) Issuances
      Without Consideration Pursuant to Existing Securities.
      If the
      Company issues (or becomes obligated to issue) shares of Common Stock pursuant
      to any anti-dilution or similar adjustments (other than as a result of stock
      splits, stock dividends and the like) contained in any Common Stock Equivalents
      outstanding as of the date hereof, then all shares of Common Stock so issued
      shall be deemed to have been issued for no consideration. 

     

    (iii) Exceptions
      To Adjustment Of Exercise Price.
      Notwithstanding the foregoing, no adjustment to the Exercise Price shall be
      made
      pursuant to this paragraph (c) upon the issuance of any Excluded Securities.
      For
      purposes hereof, “Excluded
      Securities”
means
      (A) securities purchased under the Bridge Loan; (B) securities issued upon
      exercise of the Warrants; (C) shares of Common Stock issuable or issued to
      (x)
      employees or directors from time to time either directly or upon the exercise
      of
      options, in such case granted or to be granted in the discretion of the Board
      of
      Directors, as approved by the independent members of the Board, pursuant to
      one
      or more stock option plans or stock purchase plans in
      effect
      as of the Closing Date or subsequently approved by the independent members
      of
      the Board of Directors and by the Company’s stockholders, or (y) to consultants
      or vendors, provided such issuances are approved by the independent members
      of
      the Board of Directors or by the Company’s stockholders; and (D) shares of
      Common Stock issued in connection with any Common Stock Equivalents outstanding
      on the date hereof. 

     

    (iv) Adjustments;
      Additional Shares, Securities or Assets.
      In the
      event that at any time, as a result of an adjustment made pursuant to this
      Section
      2.4,
      each
      Holder shall, upon conversion of such Holder’s Warrants, become entitled to
      receive securities or assets (other than Common Stock) then, wherever
      appropriate, all references herein to shares of Common Stock shall be deemed
      to
      refer to and include such shares and/or other securities or assets; and
      thereafter the number of such shares and/or other securities or assets shall
      be
      subject to adjustment from time to time in a manner and upon terms as nearly
      equivalent as practicable to the provisions of this Section
      2.4.

     

    2.5 Certain
      Events. If
      any
      change in the outstanding Common Stock of the Company or any other event occurs
      as to which the other provisions of this Section 2 are not strictly applicable
      or if strictly applicable would not fairly protect the purchase rights of the
      Holder of the Warrant in accordance with such provisions, then the Board of
      Directors of the Company shall make an adjustment in the number and class of
      shares available under the Warrant, the Exercise Price or the application of
      such provisions, so as to protect such purchase rights as aforesaid. The
      adjustment shall be such as will give the Holder of the Warrant upon exercise
      for the same aggregate Exercise Price the total number, and kind of shares
      as he
      would have owned had the Warrant been exercised prior to the event and had
      he
      continued to hold such shares until after the event requiring
      adjustment.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    2.6 Notices
      of Change.

     

    
      	
            	2.6.1	
              Upon
                any determination or adjustment in the number or class of shares
                subject
                to this Warrant and of the Exercise Price, the Company shall give
                written
                notice thereof to the Holder, setting forth in reasonable detail
                and
                certifying the calculation of such determination or
                adjustment.

            

    

     

    
      	
            	2.6.2	
              The
                Company shall give written notice to the Holder at least 20 business
                days
                prior to the date on which the Company closes its books or takes
                a record
                for determining rights to receive any dividends or
                distributions.

            

    

     

    
      	
            	2.6.3	
              The
                Company shall also give written notice to the Holder at least 20
                days
                prior to the date on which an Organic Change shall take
                place.

            

    

    

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

    

    

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

    

    

      5. NO
        VOTING
        OR
        DIVIDEND
        RIGHTS;
        LIMITATION
        OF
        LIABILITY.
        Nothing
        contained in this Warrant shall be construed as conferring upon the Holder
        hereof the right to vote as a shareholder of the Company. No dividends or
        interest shall be payable or accrued in respect of this Warrant, the interest
        represented hereby, or the shares purchasable hereunder until, and only to
        the
        extent that, this Warrant shall have been exercised, subject to the Holder’s
        rights under Section 2 of this Warrant. The Holder of this Warrant shall
        receive
        all notices as if a shareholder of the Company. No provisions hereof, in
        the
        absence of affirmative action by the Holder to purchase shares of Common
        Stock,
        and no mere enumeration herein of the rights or privileges of the Holder
        hereof,
        shall give rise to any liability of such Holder for the Exercise Price or
        as a
        shareholder of the Company, whether such liability is asserted by the Company
        or
        by its creditors.

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

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

    

     

    7. Further
      Representations, Warranties and Covenants of the Company.

     

    
      	 	
              7.1

            	
              Articles
                and Bylaws.
                The Company has made available to Holder true, complete and correct
                copies
                of the Company Charter and Bylaws, as amended, through the date
                hereof.

            

    

     

    
      	 	
              7.2

            	
              Due
                Authority.
                The execution and delivery by the Company of this Warrant and the
                performance of all obligations of the Company hereunder, including
                the
                issuance to Holder of the right to acquire the shares of Common Stock,
                have been duly authorized by all necessary corporate action on the
                part of
                the Company, and the Warrant is not inconsistent with the Company
                Charter
                or Bylaws and constitutes a legal, valid and binding agreement of
                the
                Company, enforceable in accordance with its
                terms.

            

    

     

    
      	 	
              7.3

            	
              Consents
                and Approvals.
                No
                consent or approval of, giving of notice to, registration with, or
                taking
                of any other action in respect of any state, federal or other governmental
                authority or agency is required with respect to the execution, delivery
                and performance by the Company of its obligations under this Warrant,
                except for any filing required by applicable federal and state securities
                laws, which filing will be effective by the time required
                thereby.

            

    

     

    
      	 	
              7.4

            	
              Issued
                Securities.
                All issued and outstanding shares of capital stock of the Company
                have
                been duly authorized and validly issued and are fully paid and
                nonassessable. All outstanding shares of capital stock were issued
                in full
                compliance with all federal and state securities laws.
                

            

    

     

    
      	 	
              7.5

            	
              Exempt
                Transaction.
                Subject to the accuracy of the Holders representations in Section
                8
                hereof, the issuance of the Common Stock upon exercise of this Warrant
                will constitute a transaction exempt from (i) the registration
                requirements of Section 5 of the Securities Act of 1933, as amended
                (“1933
                Act”),
                in reliance upon Section 4(2) thereof, or upon the applicable exemption
                under Regulation D, and (ii) the qualification requirements of the
                applicable state securities laws.

            

    

     

    
      	 	
              7.6

            	
              Compliance
                with Rule 144.
                At
                the written request of the Holder, who proposes to sell Common Stock
                issuable upon the exercise of the Warrant in compliance with Rule
                144
                promulgated by the Securities and Exchange Commission, the Company
                shall
                furnish to the Holder, within five (5) days after receipt of such
                request,
                a written statement confirming the Company’s compliance with the filing
                requirements of the Securities and Exchange Commission as set forth
                in
                such Rule, as such Rule may be amended from time to
                time.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	 	
              7.7

            	
              Registration.
                The Company hereby grants to the Holder in respect of the Warrant
                Shares,
                and any securities of the Company into which the Warrant Shares are
                convertible, “piggy-back” registration rights. For a two-year period
                commencing with the issuance of the final Note under the Bridge Loan
                if
                the Company shall file a registration statement other than on Form
                S-4,
                S-8, or their successor forms, it shall provide the Holder with at
                least
                ten (10) days prior notice of its filing such registration statement
                and
                the opportunity for the Holder to register its Shares, subject to
                any
                limitations issued by an underwriter in an underwritten public offering,
                all as set forth in the Registration Rights Agreement entered into
                between
                the Holder and the Company on the date
                hereof.

            

    

     

    8.  Representations
      and Covenants of the Holder.

     

    
      	 	
              8.1

            	
              This
                Warrant has been entered into by the Company in reliance upon the
                following representations and covenants of the
                Holder:

            

    

     

    
      	 	
              8.1.1

            	
              Investment
                Purpose.
                The Warrant or the Common Stock issuable upon exercise of the Warrant
                will
                be acquired for investment and not with a view to the sale or distribution
                of any part thereof, and the Holder has no present intention of selling
                or
                engaging in any public distribution of the same except pursuant to
                a
                registration or exemption.

            

    

     

    
      	 	
              8.1.2

            	
              Private
                Issue. The
                Holder understands (i) that the Warrant and the Common Stock issuable
                upon
                exercise of this Warrant are not registered under the 1933 Act or
                qualified under applicable state securities laws on the ground that
                the
                issuance contemplated by this Warrant will be exempt from the registration
                and qualifications requirements thereof, and (ii) that the Company’s
                reliance on such exemption is predicated on the representations set
                forth
                in this Section 8.

            

    

     

    
      	 	
              8.1.3

            	
              Disposition
                of Holders Rights.
                In
                no event will the Holder make a disposition of the Warrant or the
                Common
                Stock issuable upon exercise of the Warrant unless and until (i)
                it shall
                have notified the Company of the proposed disposition, and (ii) if
                requested by the Company, it shall have furnished the Company with
                an
                opinion of counsel (which counsel may either be inside or outside
                counsel
                to the Holder) satisfactory to the Company and its counsel to the
                effect
                that (A) appropriate action necessary for compliance with the 1933
                Act has
                been taken, or (B) an exemption from the registration requirements
                of the
                1933 Act is available. Notwithstanding the foregoing, the restrictions
                imposed upon the transferability of any of its rights to acquire
                Common
                Stock issuable on the exercise of such rights do not apply to transfers
                from the beneficial owner of any of the aforementioned securities
                to its
                nominee or from such nominee to its beneficial owner, and shall terminate
                as to any particular share of stock when (1) such security shall
                have been
                effectively registered under the 1933 Act and sold by the Holder
                thereof
                in accordance with such registration or (2) such security shall have
                been
                sold without registration in compliance with Rule 144 under the 1933
                Act,
                or (3) a letter shall have been issued to the Holder at its request
                by the
                staff of the Securities and Exchange Commission or a ruling shall
                have
                been issued to the Holder at its request by such Commission stating
                that
                no action shall be recommended by such staff or taken by such Commission,
                as the case may be, if such security is transferred without registration
                under the 1933 Act in accordance with the conditions set forth in
                such
                letter or ruling and such letter or ruling specifies that no subsequent
                restrictions on transfer are required. Whenever the restrictions
                imposed
                hereunder shall terminate, as hereinabove provided, the Holder or
                holder
                of a share of stock then outstanding as to which such restrictions
                have
                terminated shall be entitled to receive from the Company, without
                expense
                to such Holder, one or more new certificates for the Warrant or for
                such
                shares of stock not bearing any restrictive
                legend.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              8.1.4

            	
              Financial
                Risk.
                The Holder has such knowledge and experience in financial and business
                matters as to be capable of evaluating the merits and risks of its
                investment, and has the ability to bear the economic risks of its
                investment.

            

    

     

    
      	 	
              8.1.5

            	
              Risk
                of No Registration.
                The Holder understands that if the Company does not file reports
                pursuant
                to Section 15(d) and/or Section 12(g), of the Securities Exchange
                Act of
                1934 (“1934
                Act”),
                or if a registration statement covering the securities under the
                1933 Act
                is not in effect when it desires to sell (i) the Warrant, or (ii)
                the
                Common Stock issuable upon exercise of the Warrant, it may be required
                to
                hold such securities for an indefinite period. The Holder also understands
                that any sale of the Warrant or the Common Stock issuable upon exercise
                of
                the Warrant which might be made by it in reliance upon Rule 144 under
                the
                1933 Act may be made only in accordance with the terms and conditions
                of
                that Rule.

            

    

     

    
      	 	
              8.1.6

            	
              Accredited
                Investor. The
                Holder is an “accredited investor” within the meaning of Regulation D
                promulgated under the 1933 Act. 

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

      9. MODIFICATION
        AND
        WAIVER.
        This
        Warrant and any provision hereof may be changed, waived, discharged or
        terminated only by an instrument in writing signed by (a) the party against
        which enforcement of the same is sought or (b) the Company and the holders
        of at
        least a majority of the number of shares into which the Warrants are exercisable
        (without regard to any limitation contained herein on such exercise), it
        being
        understood that upon the satisfaction of the conditions described in (a)
        and (b)
        above, each Warrant (including any Warrant held by the Holder who did not
        execute the agreement specified in (b) above) shall be deemed to incorporate
        any
        amendment, modification, change or waiver effected thereby as of the effective
        date thereof. Notwithstanding the foregoing, no modification to this Section
        9
        will be effective against any Holder without his consent.

    

     

    10. Transfer
      of this Warrant.
      The
      Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant,
      in whole or in part, as long as such sale or other disposition is made pursuant
      to an effective registration statement or an exemption from the registration
      requirements of the Securities Act. Upon such transfer or other disposition
      (other than a pledge), the Holder shall deliver this Warrant to the Company
      together with a written notice to the Company, substantially in the form of
      the
      Transfer Notice attached hereto as Exhibit B (the “Transfer
      Notice”),
      indicating the person or persons to whom this Warrant shall be transferred
      and,
      if less than all of this Warrant is transferred, the number of Warrant Shares
      to
      be covered by the part of this Warrant to be transferred to each such person.
      Within three (3) Business Days of receiving a Transfer Notice and the original
      of this Warrant, the Company shall deliver to the each transferee designated
      by
      the Holder another Warrant(s) of like tenor and terms for the appropriate number
      of Warrant Shares and, if less than all this Warrant is transferred, shall
      deliver to the Holder another Warrant for the remaining number of Warrant
      Shares. 

    

      11. NOTICES.
        Any
        notice required or permitted hereunder shall be given in writing (unless
        otherwise specified herein) and shall be deemed effectively given upon (i)
        personal delivery, against written receipt thereof, (ii) delivery via facsimile
        or e-mail as set forth below (iii) two business days after deposit with Federal
        Express or another nationally recognized overnight courier service, or (iv)
        five
        business days after being forwarded, postage paid, via certified or registered
        mail, return receipt requested, addressed to each of the other parties thereunto
        entitled at the following addresses, or at such other addresses as a party
        may
        designate by ten days advance written notice.

    

    

      12. BINDING
        EFFECT
        ON
        SUCCESSORS;
        BENEFIT.
        As
        provided in Section 2.3 above, this Warrant shall be binding upon any
        corporation succeeding the Company by merger, consolidation or acquisition
        of
        all or substantially all of the Company’s assets. All of the obligations of the
        Company relating to the Common Stock issuable upon the exercise of this Warrant
        shall survive the exercise and termination of this Warrant. All of the covenants
        and agreements of the Company shall inure to the benefit of the successors
        and
        assigns of the Holder hereof. This Warrant shall be for the sole and exclusive
        benefit of the Holder and nothing in this Warrant shall be construed to confer
        upon any person other than the Holder any legal or equitable right, remedy
        or
        claim hereunder.

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

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

    

    

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

    

    

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

    

     

    In
      Witness Whereof, the
      Company has caused this Warrant to be duly executed by its officers, thereunto
      duly authorized this 28th
      day of
      February 2007.

     

    
      	 	 	 
	 	
              AskMeNow,
                Inc.,
                

            
	 	
              a
                Delaware corporation

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                Darryl Cohen

              Title:
                President and CEO

            
	 	 
	 	
              Address:

              AskMeNow,
                Inc. 

              26
                Executive Park, Suite 250

              Irvine,
                CA 92614

            
	 	 

              

              Phone: (949)
                861-2590   

              Fax:
                (949) 861-2591

              
                E-mail:
                  dcohen@askmenow.com 

              

            

    

    
       

      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

     

    SUBSCRIPTION
      FORM

     

    Date:
      _________________, _______

     

    AskMeNow,
      Inc. - Attn: Chief Executive Officer

     

    Ladies
      and Gentlemen:

     

    The
      undersigned hereby elects to exercise the Warrant issued to it by AskMeNow,
      Inc.
      (“Company”)
      and
      dated February 28, 2007, (“Warrant”)
      and to
      purchase thereunder ________________________________ shares of the Common Stock
      of the Company (“Shares”)
      at a
      purchase price of fifty cents ($.50) per Share or an aggregate purchase price
      of
      __________________ ________________ Dollars ($__________) (“Exercise
      Price”).

     

    Pursuant
      to the terms of the Warrant, the undersigned has delivered the Exercise Price
      herewith in full in cash or by certified check or wire transfer.

     

    Very
      truly yours,

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT

    

    To
      Be
      Executed by the Holder

    in
      Order
      to Assign Warrants

    

    FOR
      VALUE
      RECEIVED, ______________________________________________________ hereby sells,
      assigns and transfers unto

    

    PLEASE
      INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

    

    ______________________________________

    

    ______________________________________

    

    ______________________________________

    [please
      print or type name and address]

    

    _____________________of
      the Warrants represented by this Warrant Certificate, and hereby irrevocably
      constitutes and appoints _________________________________________ Attorney
      to
      transfer this Warrant Certificate on the books of the Company, with full power
      of substitution in the premises.

    

      
        	
                Dated:

              	___________________	
                x

              	_____________________________________
	 	 	 	
                Signature
                  Guaranteed

              

      

    

    

    THE
      SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
      NAME
      AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
      WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
      GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
      AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
      MIDWEST STOCK EXCHANGE.

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