Document:

Exhibit
4.2

 

FORM OF WARRANT

NEITHER
THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “SECURITIES ACT”).
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT
BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER
THE SECURITIES ACT OR UNLESS SUCH OFFER, SALE OR TRANSFER IS EXEMPT FROM SUCH
REGISTRATION.

CREATIVE COMPUTER
APPLICATIONS, INC.

COMMON STOCK WARRANT

No. __________ 

CREATIVE COMPUTER APPLICATIONS, INC.,
a California corporation (the “Company”), hereby certifies that
______________________________________, its permissible transferees, designees,
successors and assigns (collectively, the “Holder”), for value received,
is entitled to purchase from the Company at any time commencing on the
effective date (the “Effective Date”), which shall be the date of the
Closing (as defined in Purchase Agreement, dated as of August 16,
2005, by and among the Company and the Purchasers listed on Schedule
1 thereto), and terminating on the second anniversary of such date (the “Termination
Date”) up to _____________ shares (each, a “Share” and collectively
the “Shares”) of the Company’s common stock no par value per Share (the “Common
Stock”), at an exercise price per Share equal to $3.00 (the “Exercise
Price”). The number of Shares purchasable hereunder and the Exercise Price
are subject to adjustment as provided in Section 4 hereof.

1.    Exercise
of Warrant. 

(a)          The purchase right represented by this Common Stock
Warrant (this “Warrant”) is exercisable, in whole or in part, at any
time and from time to time from and after the Effective Date through and including
the Termination Date.

(b)         Upon presentation and surrender of this Warrant,
accompanied by a completed Election to Purchase in the form attached hereto as Exhibit A (the “Election to
Purchase”) duly executed, at the principal office of

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the Company currently located at 26115-A Mureau
Road, Calabasas, California 91302, Attn: 
Chief Financial Officer, (or such other office or agency of the Company
within the United States as the Company may designate to the Holder) together
with a check payable to, or wire transfer to, the Company in the amount of the
Exercise Price multiplied by the number of Shares being purchased, the Company
or the Company’s transfer agent, as the case may be, shall within three (3) business
days deliver to the Holder hereof certificates of fully paid and non-assessable
Common Stock which in the aggregate represent the number of Shares being
purchased. The certificates so delivered shall be in such denominations as may
be requested by the Holder and shall be registered in the name of the Holder or
such other name as shall be designated by the Holder. All or less than all of
the purchase rights represented by this Warrant may be exercised and, in case
of the exercise of less than all, the Company, upon surrender hereof, will at
the Company’s expense deliver to the Holder a new warrant entitling said holder
to purchase the number of Shares represented by this Warrant which have not
been exercised. This Warrant may only be exercised to the extent the Company
has a sufficient number of Shares of Common Stock available for issuance at the
time of any exercise.

2.    Warrant.

(a)          Exchange,
Transfer and Replacement. At any time prior to the exercise hereof, this
Warrant may be exchanged upon presentation and surrender to the Company, alone
or with other warrants of like tenor of different denominations registered in
the name of the same Holder, for another warrant or warrants of like tenor in
the name of such Holder exercisable for the aggregate number of Shares as the
warrant or warrants surrendered.

(b)         Replacement
of Warrant. 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 delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of this Warrant,
the Company, at its expense, will execute and deliver in lieu thereof, a new
Warrant of like tenor.

(c)          Cancellation; Payment of Expenses. Upon the
surrender of this Warrant in connection with any transfer, exchange or
replacement as provided in this Section 2, this Warrant shall be
promptly canceled by the Company. The Holder shall pay all taxes and all other
expenses (including legal expenses, if any, incurred by the Holder or
transferees) and charges payable in connection with the preparation, execution
and delivery of Warrants pursuant to this Section 2.

(d)         Warrant Register. The Company shall maintain,
at its principal executive offices (or at the offices of the transfer agent for
the Warrant

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or such other office or agency of the Company as it
may designate by notice to the holder hereof), a register for this Warrant (the
“Warrant Register”), in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as
the name and address of each transferee and each prior owner of this Warrant.

3.    Rights
and Obligations of Holders of this Warrant. The Holder of this Warrant
shall not, by virtue hereof, be entitled to any rights of a stockholder in the
Company, either at law or in equity; provided, however, that in
the event any certificate representing shares of Common Stock or other
securities is issued to the holder hereof upon exercise of this Warrant, such
holder shall, for all purposes, be deemed to have become the holder of record
of such Common Stock on the date on which this Warrant, together with a duly
executed Election to Purchase, was surrendered and payment of the aggregate
Exercise Price was made, irrespective of the date of delivery of such Common
Stock certificate.

4.    Adjustments.

(a)          Stock
Dividends, Reclassifications, Recapitalizations, Etc. In
the event the Company:  (i) pays a
dividend in Common Stock or makes a distribution in Common Stock, (ii) subdivides
its outstanding Common Stock into a greater number of shares, (iii) combines
its outstanding Common Stock into a smaller number of shares or (iv) increases
or decreases the number of shares of Common Stock outstanding by
reclassification of its Common Stock (including a recapitalization in
connection with a consolidation or merger in which the Company is the
continuing corporation), then (1) the Exercise Price on the record date of
such division or distribution or the effective date of such action shall be
adjusted by multiplying such Exercise Price by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately before
such event and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event, and (2) the number of shares of
Common Stock for which this Warrant may be exercised immediately before such
event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the Exercise Price immediately before such event and the
denominator of which is the Exercise Price immediately after such event.

(b)         Cash
Dividends and Other Distributions. In the event that at any time or from
time to time the Company shall distribute to all holders of Common Stock (i) any
dividend or other distribution of cash, evidences of its indebtedness, shares
of its capital stock or any other properties or securities or (ii) any
options, warrants or other rights to subscribe for or purchase any of the
foregoing (other than in each case, (w) the issuance of any rights under a
shareholder rights plan, (x) any dividend or distribution described in Section 4(a),
(y) any rights, options, warrants or securities described in Section 4(c) and (z) any cash dividends or other cash
distributions from current or retained earnings), then the number of shares of
Common Stock issuable upon the exercise of this Warrant shall be increased to a
number determined by multiplying the number of shares of

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Common Stock issuable upon the exercise of this
Warrant immediately prior to the record date for any such dividend or
distribution by a fraction, the numerator of which shall be such Current Market
Value (as hereinafter defined) per share of Common Stock on the record date for
such dividend or distribution, and the denominator of which shall be such
Current Market Value per share of Common Stock on the record date for such
dividend or distribution less the sum of (x) the amount of cash, if any,
distributed per share of Common Stock and (y) the fair value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be evidenced by a board resolution, a copy of which will be
sent to the Holders upon request) of the portion, if any, of the distribution
applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants, options or
subscription or purchase rights; and the Exercise Price shall be adjusted to a
number determined by dividing the Exercise Price immediately prior to such
record date by the above fraction. Such adjustments shall be made whenever any
distribution is made and shall become effective as of the date of distribution,
retroactive to the record date for any such distribution. No adjustment shall
be made pursuant to this Section 4(b) which shall have the effect
of decreasing the number of shares of Common Stock issuable upon exercise of
this Warrant or increasing the Exercise Price.

(c)          Combination:
Liquidation. (i) In the event of a Combination (as defined below),
each Holder shall have the right to receive upon exercise of the Warrant the
kind and amount of shares of capital stock or other securities or property
which such Holder would have been entitled to receive upon or as a result of
such Combination had such Warrant been exercised immediately prior to such
event (subject to further adjustment in accordance with the terms hereof). Unless
paragraph (ii) is applicable to a Combination, the Company shall
provide that the surviving or acquiring Person (the “Successor Company”)
in such Combination will assume by written instrument the obligations under
this Section 4 and the obligations to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
 “Combination” means an event in
which the Company consolidates with, mergers with or into, or sells all or
substantially all of its assets to another Person, where “Person” means
any individual, corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity; (ii) 
In the event of (x) a Combination where consideration to the holders of
Common Stock in exchange for their shares is payable solely in cash or (y) the
dissolution, liquidation or winding-up of the Company, the Holders shall be
entitled to receive, upon surrender of their Warrant, distributions on an equal
basis with the holders of Common Stock or other securities issuable upon
exercise of the Warrant, as if the Warrant had been exercised immediately prior
to such event, less the Exercise Price. In case of any Combination described in
this Section 4, the surviving or

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acquiring Person and, in the event of any dissolution,
liquidation or winding-up of the Company, the Company, shall deposit promptly
with an agent or trustee for the benefit of the Holders of the funds, if any,
necessary to pay to the Holders the amounts to which they are entitled as
described above. After such funds and the surrendered Warrant are received, the
Company is required to deliver a check in such amount as is appropriate (or, in
the case or consideration other than cash, such other consideration as is
appropriate) to such Person or Persons as it may be directed in writing by the
Holders surrendering such Warrant.

(d)         Notice of Adjustment. Whenever the Exercise
Price or the number of shares of Common Stock and other property, if any,
issuable upon exercise of the Warrant is adjusted, as herein provided, the
Company shall deliver to the holders of the Warrant in accordance with Section 10
a certificate of the Company’s Chief Financial Officer setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which (i) the
Board of Directors determined the fair value of any evidences of indebtedness,
other securities or property or warrants, options or other subscription or
purchase rights and (ii) the Current Market Value of the Common Stock was
determined, if either of such determinations were required), and specifying the
Exercise Price and number of shares of Common Stock issuable upon exercise
of  Warrant after giving effect to such
adjustment.

(e)          Notice of Certain Transactions. In the event
that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
non-cash dividend or distribution to the holders of its Common Stock, (b) to
offer the holders of its Common Stock rights to subscribe for or to purchase
any securities convertible into shares of Common Stock or shares of stock of
any class or any other securities, rights or options, (c) to effect any
capital reorganization, reclassification, consolidation or merger affecting the
class of Common Stock, as a whole, or (d) to effect the voluntary or involuntary
dissolution, liquidation or winding-up of the Company, the Company shall,
within the time limits specified below, send to each Holder a notice of such
proposed action or offer. Such notice shall be mailed to the Holders at their
addresses as they appear in the Warrant Register (as defined in Section 2(d)),
which shall specify the record date for the purposes of such dividend,
distribution or rights, or the date such issuance or event is to take place and
the date of participation therein by the holders of Common Stock, if any such
date is to be fixed, and shall briefly indicate the effect of such action on
the Common Stock and on the number and kind of any other shares of stock and on
other property, if any, and the number of shares of Common Stock and other
property, if any, issuable upon exercise of each Warrant and the Exercise Price
after giving effect to any adjustment pursuant to Section 4 which
will be required as a result of such action. Such notice shall be given as
promptly as possible and (x) in the case of any action covered by clause (a) or
(b) above, at least ten (10) days prior to the record date

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for determining holders of the Common Stock for
purposes of such action or (y) in the case of any other such action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Common Stock, whichever
shall be the earlier.

(f)          Current Market Value.  “Current Market
Value” per share of Common Stock or any other security at any date means (i) if
the security is not registered under the Securities Exchange Act of 1934 and/or
traded on a national securities exchange, quotation system or bulletin board,
as amended (the “Exchange Act”), (a) the value of the security,
determined in good faith by the Board of Directors of the Company and certified
in a board resolution, based on the most recently completed arm’s-length
transaction between the Company and a Person other than an affiliate of the
Company or between any two such Persons and the closing of which occurs on such
date or shall have occurred within the six-month period preceding such date, or
(b) if no such transaction shall have occurred within the six-month
period, the value of the security as determined by an independent financial
expert or an agreed upon financial valuation model or (ii) if the security
is registered under the Exchange Act and/or traded on a national securities
exchange, quotation system or bulletin board, the average of the daily closing
bid prices (or  the equivalent in an
over-the-counter market) for each day on which the Common Stock is traded for
any period on the principal securities exchange or other securities market on
which the common Stock is being traded (each, a “Trading Day”) during
the period commencing thirty (30) days before such date and ending on the date
one day prior to such date.

5.    Registration
Rights. The Holder is entitled to the benefit of such registration rights
in respect of the Shares as are set forth in the Registration Rights Agreement
dated as of August 16, 2005 by and between the Company and the Holder.

6.    Fractional
Shares. In lieu of issuance of a fractional share upon any exercise
hereunder, the Company will pay the cash value of that fractional share,
calculated on the basis of the Exercise Price.

7.    Legends.
Prior to issuance of the shares of Common Stock underlying this Warrant, all
such certificates representing such shares shall bear a restrictive legend to
the effect that the Shares represented by such certificate have not been
registered under the 1933 Act, and that the Shares may not be sold or
transferred in the absence of such registration or an exemption therefrom, such
legend to be substantially in the form of the bold-face language appearing at
the top of Page 1 of this Warrant.

8.    Disposition
of Warrants or Shares. The Holder of this Warrant, each transferee hereof
and any holder and transferee of any Shares, by his or its acceptance thereof,
agrees that no public distribution of Warrants or Shares will be made in
violation of the provisions of the 1933 Act. Furthermore, it shall be a
condition to the transfer of this Warrant that any transferee

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thereof deliver to the Company his or its written agreement to accept
and be bound by all of the terms and conditions contained in this Warrant.

9.    Merger
or Consolidation. The Company will not merge or consolidate with or into
any other corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company),
or such transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement reasonably satisfactory in form and substance to the
Holder, the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.

10.  Notices.
Except as otherwise specified herein to the contrary, all notices, requests,
demands and other communications required or desired to be given hereunder
shall only be effective if given in writing by certified or registered U.S.
mail with return receipt requested and postage prepaid; by private overnight
delivery service (e.g. Federal Express); by facsimile transmission (if no
original documents or instruments must accompany the notice); or by personal
delivery. Any such notice shall be deemed to have been given (a) on the
business day immediately following the mailing thereof, if mailed by certified
or registered U.S. mail as specified above; (b) on the business day
immediately following deposit with a private overnight delivery service if sent
by said service; (c) upon receipt of confirmation of transmission if sent
by facsimile transmission; or (d) upon personal delivery of the notice. All
such notices shall be sent to the following addresses (or to such other address
or addresses as a party may have advised the other in the manner provided in
this Section 10):

if to
the Company:

Creative Computer Applications, Inc.

26115-A Mureau Road

Calabasas, CA  91302

Attention:  Steven M. Besbeck

Facsimile: 818-880-4398

with
copy to:

Sheppard Mullin Richter & Hampton, LLP

800 Anacapa Street

Santa Barbara, CA 93101

Attention:  Joseph E. Nida, Esq.

Facsimile: (805) 568-1955

If to the Holder:

____________________

____________________

____________________

____________________

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with a copy to:

Jay Weil, Esq.

27 Viewpoint Road

Wayne, New Jersey 0747-__________

Facsimile: 212-688-7273

Notwithstanding
the time of effectiveness of notices set forth in this Section, an Election to
Purchase shall not be deemed effectively given until it has been duly completed
and submitted to the Company together with this original Warrant and payment of
the Exercise Price in a manner set forth in this Section.

11.  Governing
Law. This Warrant shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts made and to be
performed in the State of California.

12.  Successors
and Assigns. This Warrant shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

13.  Headings.
The headings of various sections of this Warrant have been inserted for
reference only and shall not affect the meaning or construction of any of the
provisions hereof.

14.  Severability.
If any provision of this Warrant is held to be unenforceable under applicable
law, such provision shall be excluded from this Warrant, and the balance hereof
shall be interpreted as if such provision were so excluded.

15.  Modification
and Waiver. This Warrant and any provision hereof may be amended, waived,
discharged or terminated only by an instrument in writing signed by the Company
and the Holder.

16.  Specific
Enforcement. The Company and the Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which either of them may be entitled
by law or equity.

17.  Assignment.
Subject  to prior written approval by the
Company, this Warrant may be transferred or assigned, in whole or in part, at
any time and from time to time by the then Holder by submitting this Warrant to
the Company together with a duly executed Assignment in substantially the form
and substance of the Form of Assignment which accompanies this Warrant, as
Exhibit B hereto, and,
upon the Company’s receipt hereof, and in any event, within three (3) business
days thereafter, the Company shall issue a warrant to the Holder to evidence
that portion of this Warrant, if any as shall not have been so transferred or
assigned.

(signature page immediately
follows)

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, manually or by facsimile, by one of its officers thereunto duly
authorized.

	
   Date: __________, 2005

  	
   

  	
  CREATIVE COMPUTER APPLICATIONS,
  INC.

   

  By:____________________________________

  
	
   

  	
   

  	
  Name: Steven M. Besbeck

  
	
   

  	
   

  	
  Title:   President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  

 

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EXHIBIT A

TO

WARRANT CERTIFICATE

ELECTION TO PURCHASE

To
Be Executed by the Holder

in Order to Exercise the Warrant

The undersigned Holder hereby elects to purchase _______  Shares pursuant to the attached Warrant, and requests
that certificates for securities be issued in the name of:

__________________________________________________________

(Please type or print name and address)

__________________________________________________________

__________________________________________________________

__________________________________________________________

(Social Security or Tax Identification Number)

and delivered

to:____________________________________________________________________________________________

______________________________________________________________________________________________

(Please type or print name and address if different from above)

If such number of Shares being purchased hereby shall not be all the
Shares that may be purchased pursuant to the attached Warrant, a new Warrant
for the balance of such Shares shall be registered in the name of, and
delivered to, the Holder at the address set forth below.

In full payment of the purchase price with respect to the Shares
purchased and transfer taxes, if any, the undersigned hereby tenders payment of
$__________ by check, money order or wire transfer payable in United States
currency to the order of Creative Computer Applications, Inc.

	
  

  	
   

  	
  HOLDER: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:_____________________________________

  
	
   

  	
   

  	
            Name:

  
	
   

  	
   

  	
            Title:

  
	
   

  	
   

  	
            Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Dated:_______________________

  	
   

  	
   

  

 

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EXHIBIT B

TO

WARRANT

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and
transfers unto _____________ the right represented by the within Warrant to
purchase ______ shares of Common Stock of Creative Computer Applications, Inc.,
a California corporation, to which the within Warrant relates, and appoints ____________________
Attorney to transfer such right on the books of Creative Computer Applications
Inc., a California Corporation, with full power of substitution of premises.

	
   Dated:

  	
   

  	
  By:_______________________________ 

  
	
   

  	
   

  	
            Name:

  
	
   

  	
   

  	
            Title:

  
	
   

  	
   

  	
            (signature
  must conform to name
          of holder as specified on the
  fact
          of the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  

 

Signed
in the presence of :

 

Dated:

 11Exhibit
4.3

 

FORM OF
WARRANT

NEITHER
THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “SECURITIES ACT”).
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT
BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER
THE SECURITIES ACT OR UNLESS SUCH OFFER, SALE OR TRANSFER IS EXEMPT FROM SUCH
REGISTRATION.

ASPYRA, INC.

COMMON STOCK WARRANT

No. __________  

ASPYRA, INC., a California
corporation (the “Company”), hereby certifies that
______________________________________, its permissible transferees, designees,
successors and assigns (collectively, the “Holder”), for value received,
is entitled to purchase from the Company at any time commencing on the
effective date (the “Effective Date”), which shall be the date of the
Closing (as defined in Purchase Agreement, dated as of May ___,
2006, by and among the Company and the Purchasers listed on Schedule 1 thereto), and
terminating on the third anniversary of such date (the “Termination Date”)
up to _____________ shares (each, a “Share” and collectively the “Shares”)
of the Company’s common stock no par value per Share (the “Common Stock”),
at an exercise price per Share equal to THREE DOLLARS ($3.00)
(the “Exercise Price”). The number of Shares purchasable hereunder and
the Exercise Price are subject to adjustment as provided in Section 4
hereof. The term of this Warrant is three (3) years.

1.    Method
of Exercise; Payment.

(a)          Cash
Exercise. The purchase rights represented by this Warrant may be exercised
by the Holder, in whole or in part, at any time, or from time to time, by the
surrender of this Warrant (with the notice of exercise form (the “Notice of
Exercise”) attached hereto as Exhibit A
duly executed) at the principal office of the Company, and by payment to the
Company of an amount equal to the Exer­cise Price multiplied by the number of
the Shares being purchased, which amount may be paid, at the election of the
Holder, by (i) wire transfer or certified check payable to the order of
the Company, (ii) cancellation by the Holder of indebtedness or other
obligations of the Company to the Holder or (iii) a combination of (i) and
(ii).

 1
 

 

The person or persons in
whose name(s) any certificate(s) repre­senting Shares shall be
issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the
record holder(s) of, the Shares represented thereby (and such Shares shall
be deemed to have been issued) immediately prior to the close of business on
the date or dates upon which this Warrant is exercised.

(b)         Net
Issue Exercise. In lieu of exercising this warrant pursuant to Section l(a) hereof,
the Holder may elect to receive a number of Shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
Notice of Exercise in which alternative No. 1 is initiated by the Holder. In
such event, the Company shall issue to the Holder a number of Shares computed
using the following formula:

	
                                         X = Y(A-B)

  	
   

  
	
   

  	
   

  	
  A

  	
   

  	
   

  
	
  Where X

  	
   

  	
  =

  	
   

  	
  the number of Shares to be issued to the Holder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Y

  	
   

  	
  =

  	
   

  	
  the number of Shares subject to this Warrant or, if
  only a portion of this Warrant is being exercised, the portion of the Warrant
  being canceled (at the time of such calculation).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  =

  	
   

  	
  the fair market value of one share of the Company’s
  Common Stock (at the date of such calculation).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  =

  	
   

  	
  the Exercise Price (as adjusted to the date of such
  calculation).

  

 

(c)          Fair
Market Value. For purposes of this Section 1, the fair market value of
the Company’s Common Stock shall mean:

(i)                  The
average of the closing bid and asked prices of the Company’s Common Stock
quoted on the Nasdaq Stock Market or in the Over-The-Counter Market
Summary or the closing price quoted on any exchange on which the Common Stock
is listed, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the ten (10) trading days prior to the date of
determination of fair market value;

(ii) If the
Company’s Common Stock is not traded on the Nasdaq Stock Market or
Over-The-Counter or on an exchange, the fair market value of the Common Stock
per share shall be agreed upon by the parties hereto. If parties cannot agree
on the fair market value within five (5) business days of delivery of the

 2
 

 

Notice of Exercise, the
Board of Directors in good faith shall determine the fair market value of the
Common Stock; provided, however, that the fair market value of the Common Stock
shall be no greater than the price at which the Company last sold its Common
Stock or the exercise price of its last granted options, whichever occurs
later.

(d)         Stock
Certificates. In the event of any exercise of the rights represented by
this Warrant, as promptly as practicable on or after the date of exercise and
in any event within ten (10) days thereafter, the Company at its expense
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of Shares issuable upon such
exercise. In the event this Warrant is exercised in part, the Company at its
expense will execute and deliver a new Warrant of like tenor exercisable for
the number of Shares for which this Warrant may then be exercised.

(e)          Taxes.
The issuance of the Shares upon the exercise of this Warrant, and the delivery
of certificates or other instruments representing such Shares, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance.

2.    Warrant.

(a) Exchange,
Transfer and Replacement. At any time prior to the exercise hereof, this
Warrant may be exchanged upon presentation and surrender to the Company, alone
or with other warrants of like tenor of different denominations registered in
the name of the same Holder, for another warrant or warrants of like tenor in
the name of such Holder exercisable for the aggregate number of Shares as the
warrant or warrants surrendered.

(b)                Replacement
of Warrant. 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 delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of this Warrant,
the Company, at its expense, will execute and deliver in lieu thereof, a new
Warrant of like tenor.

(a) Cancellation; Payment of Expenses. Upon the surrender
of this Warrant in connection with any transfer, exchange or replacement as
provided in this Section 2, this Warrant shall be promptly canceled
by the Company. The Holder shall pay all taxes and all other expenses
(including legal expenses, if any, incurred by the Holder or transferees) and
charges payable in connection with the preparation, execution and delivery of
Warrants pursuant to this Section 2.

(b)                Warrant Register. The Company shall
maintain, at its principal executive offices (or at the offices of the transfer
agent for the Warrant

 3
 

 

or such other office or
agency of the Company as it may designate by notice to the holder hereof), a
register for this Warrant (the “Warrant Register”), in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.

3.    Rights
and Obligations of Holders of this Warrant. The Holder of this Warrant
shall not, by virtue hereof, be entitled to any rights of a stockholder in the
Company, either at law or in equity; provided, however, that in
the event any certificate representing shares of Common Stock or other
securities is issued to the holder hereof upon exercise of this Warrant, such
holder shall, for all purposes, be deemed to have become the holder of record
of such Common Stock on the date on which this Warrant, together with a duly
executed Election to Purchase, was surrendered and payment of the aggregate
Exercise Price was made, irrespective of the date of delivery of such Common
Stock certificate.

4.    Adjustments.

(a)          Stock
Dividends, Reclassifications, Recapitalizations, Etc. In
the event the Company:  (i) pays a
dividend in Common Stock or makes a distribution in Common Stock, (ii) subdivides
its outstanding Common Stock into a greater number of shares, (iii) combines
its outstanding Common Stock into a smaller number of shares or (iv) increases
or decreases the number of shares of Common Stock outstanding by
reclassification of its Common Stock (including a recapitalization in connection
with a consolidation or merger in which the Company is the continuing
corporation), then (1) the Exercise Price on the record date of such
division or distribution or the effective date of such action shall be adjusted
by multiplying such Exercise Price by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and
the denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and (2) the number of shares of Common Stock
for which this Warrant may be exercised immediately before such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is
the Exercise Price immediately before such event and the denominator of which
is the Exercise Price immediately after such event.

(b)         Cash
Dividends and Other Distributions. In the event that at any time or from
time to time the Company shall distribute to all holders of Common Stock (i) any
dividend or other distribution of cash, evidences of its indebtedness, shares
of its capital stock or any other properties or securities or (ii) any
options, warrants or other rights to subscribe for or purchase any of the
foregoing (other than in each case, (w) the issuance of any rights under a
shareholder rights plan, (x) any dividend or distribution described in Section 4(a),
(y) any rights, options, warrants or securities described in Section 4(c)
and (z) any cash dividends or other cash distributions from current or
retained earnings), then the number of shares of Common Stock issuable upon the
exercise of this Warrant shall be increased to a number determined by
multiplying the number of shares of

 4
 

 

Common Stock issuable
upon the exercise of this Warrant immediately prior to the record date for any
such dividend or distribution by a fraction, the numerator of which shall be
such Current Market Value (as hereinafter defined) per share of Common Stock on
the record date for such dividend or distribution, and the denominator of which
shall be such Current Market Value per share of Common Stock on the record date
for such dividend or distribution less the sum of (x) the amount of cash,
if any, distributed per share of Common Stock and (y) the fair value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be evidenced by a board resolution, a copy of which will be
sent to the Holders upon request) of the portion, if any, of the distribution
applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants, options or
subscription or purchase rights; and the Exercise Price shall be adjusted to a
number determined by dividing the Exercise Price immediately prior to such
record date by the above fraction. Such adjustments shall be made whenever any
distribution is made and shall become effective as of the date of distribution,
retroactive to the record date for any such distribution. No adjustment shall
be made pursuant to this Section 4(b) which shall have the effect
of decreasing the number of shares of Common Stock issuable upon exercise of
this Warrant or increasing the Exercise Price.

(c)          Combination:
Liquidation. (i) In the event of a Combination (as defined below),
each Holder shall have the right to receive upon exercise of the Warrant the
kind and amount of shares of capital stock or other securities or property
which such Holder would have been entitled to receive upon or as a result of
such Combination had such Warrant been exercised immediately prior to such
event (subject to further adjustment in accordance with the terms hereof). Unless
paragraph (ii) is applicable to a Combination, the Company shall
provide that the surviving or acquiring Person (the “Successor Company”)
in such Combination will assume by written instrument the obligations under
this Section 4 and the obligations to deliver to the Holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to acquire.  “Combination” means an event in which
the Company consolidates with, mergers with or into, or sells all or
substantially all of its assets to another Person, where “Person” means
any individual, corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity; (ii) 
In the event of (x) a Combination where consideration to the holders of
Common Stock in exchange for their shares is payable solely in cash or (y) the
dissolution, liquidation or winding-up of the Company, the Holders shall be
entitled to receive, upon surrender of their Warrant, distributions on an equal
basis with the holders of Common Stock or other securities issuable upon
exercise of the Warrant, as if the Warrant had been exercised immediately prior
to such event, less the Exercise Price. In case of any Combination described in
this Section 4, the surviving or

 5
 

 

acquiring Person and, in
the event of any dissolution, liquidation or winding-up of the Company, the
Company, shall deposit promptly with an agent or trustee for the benefit of the
Holders of the funds, if any, necessary to pay to the Holders the amounts to
which they are entitled as described above. After such funds and the
surrendered Warrant are received, the Company is required to deliver a check in
such amount as is appropriate (or, in the case or consideration other than
cash, such other consideration as is appropriate) to such Person or Persons as
it may be directed in writing by the Holders surrendering such Warrant.

(d)         Notice of Adjustment. Whenever the Exercise
Price or the number of shares of Common Stock and other property, if any,
issuable upon exercise of the Warrant is adjusted, as herein provided, the
Company shall deliver to the holders of the Warrant in accordance with Section 10
a certificate of the Company’s Chief Financial Officer setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which (i) the
Board of Directors determined the fair value of any evidences of indebtedness,
other securities or property or warrants, options or other subscription or purchase
rights and (ii) the Current Market Value of the Common Stock was
determined, if either of such determinations were required), and specifying the
Exercise Price and number of shares of Common Stock issuable upon exercise
of  Warrant after giving effect to such
adjustment.

(e)          Notice of Certain Transactions. In the event
that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
non-cash dividend or distribution to the holders of its Common Stock, (b) to
offer the holders of its Common Stock rights to subscribe for or to purchase
any securities convertible into shares of Common Stock or shares of stock of
any class or any other securities, rights or options, (c) to effect any
capital reorganization, reclassification, consolidation or merger affecting the
class of Common Stock, as a whole, or (d) to effect the voluntary or
involuntary dissolution, liquidation or winding-up of the Company, the Company
shall, within the time limits specified below, send to each Holder a notice of
such proposed action or offer. Such notice shall be mailed to the Holders at
their addresses as they appear in the Warrant Register (as defined in Section 2(d)),
which shall specify the record date for the purposes of such dividend,
distribution or rights, or the date such issuance or event is to take place and
the date of participation therein by the holders of Common Stock, if any such
date is to be fixed, and shall briefly indicate the effect of such action on
the Common Stock and on the number and kind of any other shares of stock and on
other property, if any, and the number of shares of Common Stock and other
property, if any, issuable upon exercise of each Warrant and the Exercise Price
after giving effect to any adjustment pursuant to Section 4 which
will be required as a result of such action. Such notice shall be given as
promptly as possible and (x) in the case of any action covered by clause (a) or
(b) above, at least ten (10) days prior to the record date

 6
 

 

for determining holders
of the Common Stock for purposes of such action or (y) in the case of any
other such action, at least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
Common Stock, whichever shall be the earlier.

(f)          Current Market Value.  “Current Market
Value” per share of Common Stock or any other security at any date means (i) if
the security is not registered under the Securities Exchange Act of 1934 and/or
traded on a national securities exchange, quotation system or bulletin board,
as amended (the “Exchange Act”), (a) the value of the security,
determined in good faith by the Board of Directors of the Company and certified
in a board resolution, based on the most recently completed arm’s-length
transaction between the Company and a Person other than an affiliate of the
Company or between any two such Persons and the closing of which occurs on such
date or shall have occurred within the six-month period preceding such date, or
(b) if no such transaction shall have occurred within the six-month
period, the value of the security as determined by an independent financial
expert or an agreed upon financial valuation model or (ii) if the security
is registered under the Exchange Act and/or traded on a national securities
exchange, quotation system or bulletin board, the average of the daily closing
bid prices (or  the equivalent in an
over-the-counter market) for each day on which the Common Stock is traded for
any period on the principal securities exchange or other securities market on
which the common Stock is being traded (each, a “Trading Day”) during
the period commencing thirty (30) days before such date and ending on the date
one day prior to such date.

5.    Registration
Rights. The Holder is entitled to the benefit of such registration rights
in respect of the Shares as are set forth in the Registration Rights Agreement
dated as of May ___, 2006 by and between
the Company and the Holder.

6.    Fractional
Shares. In lieu of issuance of a fractional share upon any exercise
hereunder, the Company will pay the cash value of that fractional share,
calculated on the basis of the Exercise Price.

7.    Legends.
Prior to issuance of the shares of Common Stock underlying this Warrant, all
such certificates representing such shares shall bear a restrictive legend to
the effect that the Shares represented by such certificate have not been
registered under the 1933 Act, and that the Shares may not be sold or
transferred in the absence of such registration or an exemption therefrom, such
legend to be substantially in the form of the bold-face language appearing at
the top of Page 1 of this Warrant.

8.    Disposition
of Warrants or Shares. The Holder of this Warrant, each transferee hereof
and any holder and transferee of any Shares, by his or its acceptance thereof,
agrees that no public distribution of Warrants or Shares will be made in
violation of the provisions of the 1933 Act. Furthermore, it shall be a
condition to the transfer of this Warrant that any transferee

 7
 

 

thereof deliver to the
Company his or its written agreement to accept and be bound by all of the terms
and conditions contained in this Warrant.

9.    Merger
or Consolidation. The Company will not merge or consolidate with or into
any other corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company),
or such transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement reasonably satisfactory in form and substance to the
Holder, the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.

10.  Notices.
Except as otherwise specified herein to the contrary, all notices, requests,
demands and other communications required or desired to be given hereunder
shall only be effective if given in writing by certified or registered U.S.
mail with return receipt requested and postage prepaid; by private overnight
delivery service (e.g. Federal Express); by facsimile transmission (if no
original documents or instruments must accompany the notice); or by personal
delivery. Any such notice shall be deemed to have been given (a) on the
business day immediately following the mailing thereof, if mailed by certified
or registered U.S. mail as specified above; (b) on the business day
immediately following deposit with a private overnight delivery service if sent
by said service; (c) upon receipt of confirmation of transmission if sent
by facsimile transmission; or (d) upon personal delivery of the notice. All
such notices shall be sent to the following addresses (or to such other address
or addresses as a party may have advised the other in the manner provided in
this Section 10):

if to
the Company:

Aspyra, Inc.

26115-A Mureau Road

Calabasas, CA  91302

Attention:  Steven M. Besbeck

Facsimile: 818-880-4398

with
copy to:

Sheppard Mullin Richter & Hampton, LLP

800 Anacapa Street

Santa Barbara, CA 93101

Attention:  Joseph E. Nida, Esq.

Facsimile: (805) 568-1955

If to the Holder:

____________________

____________________

____________________

____________________

 8
 

 

with a copy to:

Jay Weil, Esq.

27 Viewpoint Road

Wayne, New Jersey 0747

Facsimile: 212-688-7273

Notwithstanding
the time of effectiveness of notices set forth in this Section, an Election to
Purchase shall not be deemed effectively given until it has been duly completed
and submitted to the Company together with this original Warrant and payment of
the Exercise Price in a manner set forth in this Section.

11.  Limitation
on Exercise. Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon
any exercise of this Warrant (or otherwise in respect hereof) shall be limited
to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned
by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 9.999% of the
total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder.
Each delivery of an Exercise Notice hereunder will constitute a representation
by the Holder that it has evaluated the limitation set forth in this paragraph
and determined that issuance of the full number of Warrant Shares requested in
such Exercise Notice is permitted under this paragraph. This provision shall
not restrict the number of shares of Common Stock which a Holder
may receive or beneficially own in order to determine the amount of
securities or other consideration that such Holder may receive in the
event of a merger or other business combination or reclassification involving
the Company. This restriction may not be waived without the consent of the
Holder.

12.  Governing
Law. This Warrant shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts made and to be
performed in the State of California.

13.  Successors
and Assigns. This Warrant shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

14.  Headings.
The headings of various sections of this Warrant have been inserted for
reference only and shall not affect the meaning or construction of any of the
provisions hereof.

15.  Severability.
If any provision of this Warrant is held to be unenforceable under applicable
law, such provision shall be excluded from this Warrant, and the balance hereof
shall be interpreted as if such provision were so excluded.

 9
 

 

16.  Modification
and Waiver. This Warrant and any provision hereof may be amended, waived,
discharged or terminated only by an instrument in writing signed by the Company
and the Holder.

17.  Specific
Enforcement. The Company and the Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which either of them may be
entitled by law or equity.

18.  Assignment.
Subject  to prior written approval by the
Company, this Warrant may be transferred or assigned, in whole or in part, at
any time and from time to time by the then Holder by submitting this Warrant to
the Company together with a duly executed Assignment in substantially the form
and substance of the Form of Assignment which accompanies this Warrant, as
Exhibit B hereto, and,
upon the Company’s receipt hereof, and in any event, within three (3) business
days thereafter, the Company shall issue a warrant to the Holder to evidence
that portion of this Warrant, if any as shall not have been so transferred or
assigned.

(signature page immediately
follows)

 10
 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, manually or by facsimile, by one of its officers thereunto duly
authorized.

	
   Date: __________, 2006

  	
   

  	
  ASPYRA, INC.

   

  By:____________________________________

  
	
   

  	
   

  	
  Name: Steven M. Besbeck

  
	
   

  	
   

  	
  Title:   President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  

 

 11
 

 

EXHIBIT A

TO

WARRANT CERTIFICATE

ELECTION TO PURCHASE

To
Be Executed by the Holder

in Order to Exercise the Warrant

The undersigned Holder hereby elects to purchase _______  Shares pursuant to the attached Warrant, and
requests that certificates for securities be issued in the name of:

__________________________________________________________

(Please type or print name and address)

__________________________________________________________

__________________________________________________________

__________________________________________________________

(Social Security or Tax Identification Number)

and delivered

to:____________________________________________________________________________________________

______________________________________________________________________________________________

(Please type or print name and address if different from above)

If such number of Shares being purchased hereby shall not be all the
Shares that may be purchased pursuant to the attached Warrant, a new Warrant
for the balance of such Shares shall be registered in the name of, and
delivered to, the Holder at the address set forth below.

In full payment of the purchase price with respect to the Shares
purchased and transfer taxes, if any, the undersigned hereby tenders payment of
$__________ by check, money order or wire transfer payable in United States
currency to the order of ASPYRA, INC.

	
  

  	
   

  	
  HOLDER: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:_____________________________________

  
	
   

  	
   

  	
            Name:

  
	
   

  	
   

  	
            Title:

  
	
   

  	
   

  	
            Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   Dated:_______________________

  	
   

  	
   

  

 

 12
 

 

EXHIBIT B

TO

WARRANT

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and
transfers unto _____________ the right represented by the within Warrant to
purchase ______ shares of Common Stock of Aspyra, Inc., a California
corporation, to which the within Warrant relates, and appoints
____________________ Attorney to transfer such right on the books of Aspyra, Inc.,
a California Corporation, with full power of substitution of premises.

	
   Dated:

  	
   

  	
  By:_______________________________ 

  
	
   

  	
   

  	
            Name:

  
	
   

  	
   

  	
            Title:

  
	
   

  	
   

  	
            (signature
  must conform to name
          of holder as specified on the
  fact
          of the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  

 

Signed
in the presence of :

 

Dated:

 

 13

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