Document:

ex4-1.htm

    Exhibit 4.1

    
 

    THE
SECURITY REPRESENTED HEREBY, AND THE SECURITIES ISSUABLE UPON CONVERSION OR
REDEMPTION HEREOF, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO COUNSEL FOR THIS COMPANY, IS AVAILABLE.

    

    

    IMEDICOR,
INC.

    

    CONVERTIBLE
PROMISSORY NOTE

    MAXIMUM
OF

    $1.5
MILLION DOLLAR BRIDGE FUNDING

    

    

     

    
      	US$_________     	     UNITS
      _____
	January ___,
      2010	 

    

     

    

                                                                                          

    FOR VALUE
RECEIVED, IMedicor, Inc., a corporation duly organized and validly existing
under the laws of the state of Nevada (the “Company”), promises to pay to
____________ the
registered holder of this secured convertible promissory note (“Note”) and its successors and
assigns (the “Holder”),
the ____ number of units as described in section 1 below in the principal sum of
________________________
($______________) (“Loan
Proceeds”) in accordance with the terms hereof, and interest on the
principal sum outstanding in accordance with the terms
hereof.  Accrual of interest on the outstanding principal amount shall
commence on the date hereof and shall continue until payment in full of the
outstanding principal amount has been made or duly provided for, or until the
entire outstanding principal amount of the Note has been converted.

    

    This Note
has been issued in the aggregate principal amount of
_______________.  The Loan Proceeds shall be paid to the Company by
wire simultaneously with the execution of this agreement. This note shall not be
deemed effective until the company is in receipt and fully able to utilize all
loan proceeds.

    

    The
following is a statement of the rights of the Holder of this Note and the terms
and conditions to which this Note is subject, and to which the Holder, by
acceptance of this Note, agrees:

    

    1. This
Promissory Convertible note shall be issued in and available in UNITS as defined
herein. Each UNIT shall be priced at $50,000 (the Company reserves the right to
accept partial units ($25,000). There will only be available 30 full units,
which will be sold on a first come first sold basis. Total bridge funding of
$1.5 Million Dollars to be received by the Company on or before February 15th 2010
or before if all units are sold prior to said date, the company reserves the
right to increase, extend or retract this offer at any time at its sole
discretion. A “UNIT” shall be defined as  and contain the
following:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        	 Common
      Stock        	500,000 shares of
      restricted SEC 144 common stock Certificates
      will be issued within 60 days from the initial investment. (Note: due to
      the SEC requirement of a 6 month holding period, at the date of the
      investment, the 6 month holding period will begin, not at the actual
      issuance of the stock certificate, after the holding period is met
      according to SEC regulations the restrictions can be lifted and the shares
      will be reissued into free trading
stock)

      

                                 

    

    
      	
              Warrants

            	
              1
      Million warrants exercisable within 5 full years from the date of
      investment

            

    

     

    
      	 	Price :	 
	 	First Year
      -  	$.05
	 	Second Year
      - 	$.15
	 	Third Year
      -    	$.30
	 	Fourth Year
      - 	$.50
	 	Fifth Year
      - 	$
  1.00

    

                   

    Warrants
can be exercised in part or whole up to the end of the fifth year. Warrants
shall be issued with the standard terms and conditions contained presently in
all warrants issued by the company.

    

    
      	
              Repayment

            	
              Repayment
      of the bridge in full, by wire transfer to a bank account designated by
      holder at the closing of the next round of funding provided the next round
      of funding is secured at a minimum of $4,000,000 or through cash flows
      capable of sustaining the
repayment.

            

    

    

    2.           Interest.  The
Holder is entitled to receive interest on the outstanding principal amount of
this Note at the rate of Ten Percent (10%) annualized.  Interest shall
be due and payable on the Maturity Date in either cash or stock at the
discretion of the Note holder.

    

    3.           Term – The initial term of this
agreement will be 120 Days from the transfer of funds into the iMedicor account.
The Company will have two consecutive rollover options for 120 days each
(Roll-Over Option Period). In the event of the roll-over option(s) being
exercised the fee for each option period will be an additional 250,000 shares of
stock (restricted as stated above) and 500,000 warrants (with the same pricing
formula as stated above) with 15% annualized interest (an increase of 5% from
the original interest as stated above) for each option period exercised by the
company.

    

    4.           Conversion.  The
noteholder shall have the option, in its sole discretion to :

    

    (a)           Optional Conversion
  At anytime during a roll-over option period, as defined in #
3 above, the Holder may elect to convert the entire amount due and owing, which
for purposes of this conversion shall be deemed to be principle and interest per
unit, into shares of restricted SEC 144 common stock at a conversion rate of
$.05 per share.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Mechanics of
Conversion.  Upon any conversion of the outstanding principal
amount of this Note, (i) such principal amount converted shall be converted and
such converted portion of this Note shall become fully paid and satisfied, (ii)
the Holder shall surrender and deliver the original Note, duly endorsed, to the
Company’s office or such other address which the Company shall designate against
delivery of the certificates representing the new securities of the Company;
(iii) the Company shall promptly deliver a duly executed Note to the Holder in
the principal amount, if any, that remains outstanding after any such
conversion; and (iv) in exchange for all or any portion of the surrendered Note
described in clause (ii) of this Section 4(c), the Company shall provide the
Holder with irrevocable instructions addressed to the Company’s transfer and
exchange agent, as applicable, to issue such number of shares of Common
Stock.

    

    (a)           Issue
Taxes.  The Holder shall pay any and all issue and other taxes
that may be payable with respect to any issue or delivery of shares of Common
Stock on conversion of this Note pursuant hereto; provided, however, that the
Holder shall not be obligated to pay any transfer taxes resulting from any
transfer requested by any holder in connection with any such
conversion.

     

    (b)           Elimination of Fractional
Interests.  No fractional shares of Common Stock shall be
issued upon conversion of this Note, nor shall the Company be required to pay
cash in lieu of fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated and that all issuances of the
Common Stock shall be rounded up to the nearest whole share.

    

    

    5.           Affirmative Covenants of the
Company.  The Company hereby agrees that, so long as the Note
remains outstanding and unpaid, or any other amount is owing to the Holder
hereunder, the Company will:

    

    (a)           Corporate Existence and
Qualification.  Take the necessary steps to preserve its
corporate existence and its right to conduct business in all states in which the
nature of its business requires qualification to do business.

    

    (b)           Books of
Account.  Keep its books of account in accordance with good
accounting practices.

    

    (c)           Insurance.  Maintain
insurance with responsible and reputable insurance companies or associations, as
determined by the Company in its sole but reasonable discretion, in such amounts
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Company operates.

    

    (d)           Preservation of Properties;
Compliance with Law.  Maintain and preserve all of its
properties that are used or that are useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted and comply
with the charter and bylaws or other organizational or governing documents of
the Company, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon the Company or any of its property or to which each the
Company or any of its property is subject.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)          Taxes.  Duly pay
and discharge all taxes or other claims, which might become a lien upon any of
its property except to the extent that any thereof are being in good faith
appropriately contested with adequate reserves provided therefor.

    

    (f)           Reservation of
Shares.  The Company shall at all times have authorized, and
reserved for the purpose of issuance, a sufficient number of shares of Common
Stock and issuable upon conversion of this Note and exercise of the Warrants to
provide for the issuance of all of such shares.  Prior to complete
conversion of this Notes and exercise of the Warrants, the Company shall not
reduce the number of shares of Common Stock reserved for issuance hereunder
without the written consent of the Holder except for a reduction proportionate
to a reverse stock split effected for a business purpose other than affecting
the requirements of this Section, which reverse stock split affects all shares
of Common Stock equally.

    

    (g)           Use of
Proceeds.  The proceeds of the Notes will be used for working
capital purposes.

    

    (h)           Financial
Information.  The company shall maintain its filings with the
Securities and Exchange Commission pursuant to Section 13 or Section 15 of the
Exchange Act.

    6.           Negative Covenants of the
Company.  The Company hereby agrees that, so long as all or any
portion of this Note remains outstanding and unpaid it will not, nor will it
permit any of its subsidiaries, if any, without the consent of
the  Holder (as defined in Section 16 hereof), to:

    

    (a)           Mergers, Acquisitions and Sales of
Assets.   Enter into any merger or consolidation or
liquidate, windup or dissolve itself or sell, transfer or lease or otherwise
dispose of all or any substantial part of its assets or technologies (other than
sales of inventory and obsolescent equipment in the ordinary course of
business); except: (i) if the Company is the surviving corporation and a change
in control has not occurred, (ii) that any subsidiary of the Company may merge
into or consolidate with any other subsidiary which is wholly-owned by the
Company, and (iii) any subsidiary which is wholly-owned by the Company may merge
with or consolidate into the Company provided that the Company is the surviving
corporation.

    

    (b)           Loans;  Lend or
advance money, credit or property to (by capital contribution, loan, purchase or
otherwise) any firm, corporation, or other Person except (i) investments in
United States Government obligations, certificates of deposit of any banking
institution with combined capital and surplus of at least $200,000,000; (iii)
accounts receivable arising out of sales in the ordinary course of business; and
(iv) loans to subsidiaries, if any. The Company may enter into an acquisition or
merger deemed beneficial by the board of directors.

    

    (c)           Dividends and
Distributions.  Pay dividends or make any other distribution on
shares of the capital stock of the Company.

    

    (d)           Sales of Receivables; Sale -
Leasebacks.  Sell, discount or otherwise dispose of notes,
accounts receivable or other obligations owing to the Company, with or without
recourse, except for the purpose of collection in the ordinary course of
business; or sell any asset pursuant to an arrangement to thereafter lease such
asset from the purchaser thereof.

    

    (e)           Capital Expenditures; Capitalized
Leases.  Expend in the aggregate for the Company and all its
subsidiaries in excess of $1,000,000 in any fiscal year for Capital Expenditures
(as defined below), including payments made on account of Capitalized Leases (as
defined below).  “Capital Expenditures” shall
mean for any period, the aggregate amount of all payments made by any Person
directly or indirectly for the purpose of acquiring, constructing or maintaining
fixed assets, real property or equipment which, in accordance with generally
accepted accounting principles, would be added as a debit to the fixed asset
account of such Person, including, without limitation, all amounts paid or
payable with respect to Capitalized Lease Obligations and interest which are
required to be capitalized in accordance with generally accepted accounting
principles.  “Capitalized Lease” shall mean
any lease the obligations to pay rent or other amounts under which constitute
Capitalized Lease Obligations.  “Capitalized Lease Obligations”
shall mean as to any Person, the obligations of such Person to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) real
and/or personal property which obligations are required to be classified and
accounted for as a capital lease on a balance sheet of such Person under
generally accepted accounting principles and, for purposes of this Note, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with generally accepted accounting principles.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (f)           Nature of
Business.  Materially alter the nature of the Company’s
business or otherwise engage in any business other than the business engaged in
or proposed to be engaged in on the date of this Note.

    

    (g)           Stock of
Subsidiaries.  Sell or otherwise dispose of any subsidiary, if
any, or permit a subsidiary, if any, to issue any additional shares of its
capital stock except pro rata to its stockholders.

    

    (h)           ERISA.  (i)
Terminate any plan (“Plan”) of a type described in
Section 402l(a) of the Employee Retirement Income Security Act of l974, as
amended from time to time (“ERISA”) in respect of which
the Company is an “employer” as defined in Section 3(5) of ERISA so as to result
in any material liability to the Pension Benefit Guaranty Corporation (the
“PBGC”) established
pursuant to Subtitle A of Title IV of ERISA, (ii) engage in or permit any person
to engage in any “prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1954, as amended) involving any
Plan which would subject the Company to any material tax, penalty or other
liability, (iii) incur or suffer to exist any material “accumulated funding
deficiency” (as defined in Section 302 of ERISA), whether or not waived,
involving any Plan, or (iv) allow or suffer to exist any event or condition,
which presents a material risk of incurring a material liability to the PBGC by
reason of termination of any Plan.

    

    (i)           Accounting
Changes.  Make, or permit any subsidiary to make any change in
their accounting treatment or financial reporting practices except as required
or permitted by generally accepted accounting principles in effect from time to
time.

    

    (j)           Transactions with
Affiliates.  Directly or indirectly, purchase, acquire or lease
any property from, or sell, transfer or lease any property to, or enter into any
other transaction, with any Affiliate (as defined below) except in the ordinary
course of business and at prices and on terms not less favorable to it than
those which would have been obtained in an arm’s-length transaction with a
non-affiliated third party.  “Affiliate” as applied to any
Person, shall mean any other Person directly or indirectly through one or more
intermediaries controlling, controlled by, or under common control with, that
Person.  For the purposes of this definition, “control” (including
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities
or by contract or otherwise.

    

    8.           Events of
Default.  The Note shall become immediately due and payable at
the option of the Holder, without notice or demand, upon any one or more of the
following events or occurrences (“Events of
Default”):

     

    (a)           if
any portion of the Note is not paid when due;

     

    (b)           if
any representation or warranty of the Company made in this Note, the Transaction
Documents (as defined in the Holder Subscription Agreement), or in any
certificate, report or other financial statement or other instrument or document
delivered pursuant hereto, or any notice, certificate, demand or request
delivered to the Holder pursuant to this Note, the Transaction Documents (as
defined in the Holder Subscription Agreement), or any other document proves to
be false or misleading in any material respect as of the time when the same is
made;

     

    (c)           if
the Company consummates a transaction which would cause this Note or any
exercise of any Holder’s rights under this Notes and the Warrants (i) to
constitute a non-exempt prohibited transaction under ERISA, (ii) to violate a
state statute regulating governmental plans or (iii) otherwise to subject the
Company to liability for violation of ERISA or such state statute;

     

    (d)           if
the Company makes an assignment for the benefit of creditors or if the Company
generally does not pay its debts as they become due;

     

    (e)           if
a receiver, liquidator or trustee of the Company is appointed or if the Company
is adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, is filed by or against, consented to, or acquiesced in, by
the Company or if any proceeding for the dissolution or liquidation of the
Company is instituted; however, if such appointment, adjudication, petition or
proceeding is involuntary and is not consented to by the Company, upon the same
not being discharged, stayed or dismissed within 60 days;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.           Holder Not Deemed a
Stockholder.  No Holder, as such, of this Note shall be
entitled (prior to conversion or redemption of this Note into Common Stock, and
only then to the extent of such conversion) to vote or receive dividends or be
deemed the holder of shares of the Company for any purpose, nor shall anything
contained in this Note be construed to confer upon the Holder hereof, as such,
any of the rights at law of a stockholder of the Company prior to the issuance
to the holder of this Note of the shares of Common Stock which the Holder is
then entitled to receive upon the due conversion of all or a portion of this
Note.  Notwithstanding the foregoing, the Company will provide the
Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

    

    10.           Confidential
Information.  The Holder agrees that it will keep confidential
and will not disclose, divulge or use for any purpose, other than to monitor its
investment in the Company, any confidential information obtained from the
Company pursuant to the terms of this Agreement, unless such confidential
information (i) is known or becomes known to the public in general (other than
as a result of a breach of this Section 10 by the Holder), (ii) is or has been
independently developed or conceived by the Holder without use of the Company's
confidential information or (iii) is or has been made known or disclosed to the
Holder by a third party without a breach of any obligation of confidentiality
such third party may have to the Company; provided, however, that the
Holder may disclose confidential information to its attorneys, accountants,
consultants, and other professionals to the extent necessary to obtain their
services in connection with monitoring its investment in the Company or as may
be required by law, provided that the Holder takes reasonable steps to minimize
the extent of any such required disclosure.

    

    11.           Waiver of Demand,
Presentment, Etc.  The Company hereby expressly waives demand
and presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, default and nonpayment, notice of acceleration or intent to
accelerate, bringing of suit and diligence in taking any action to collect
amounts called for hereunder, and all rights of set-off, defenses, deduction or
counterclaim with respect to any amount owing hereunder, and shall be directly
and primarily liable for the payment of all sums owing and to be owing
hereunder, regardless of and without any notice, diligence, act or omission as
or with respect to the collection of any amount called for
hereunder.

    

    12.           Payment.  Except
as otherwise provided for herein, all payments with respect to this Note shall
be made in lawful currency of the United States of America, at the option of the
Holder, (i) at the principal office of the Holder, located at
______________________________, or such other place or places as may be
reasonably specified by the Holder of this Note in a written notice to the
Company at least ten (10) business days before a given payment date, or (ii) by
mailing a good check in the proper amount to the Holder at least two days prior
to the due date of each payment or otherwise transferring funds so as to be
received by the Holder on the due date of each such payment; provided, however, that the
Company shall make payment by wire transfer to an account such Holder may
specify in writing to the Company at least two days prior to the due date of
each payment.  Payment shall be credited first to the accrued interest
then due and payable and the remainder applied to principal.  The
Holder shall keep a record of each payment of principal and interest with
respect thereto.

    

    13.           Assignment.  The
rights and obligations of the Company and the Holder of this Note shall be
binding upon, and inure to the benefit of, the permitted successors, assigns,
heirs, administrators and transferees of the parties
hereto.  Notwithstanding the foregoing, the Holder may not assign,
pledge or otherwise transfer this Note without the prior written consent of the
Company.  Interest and principal are payable only to the registered
Holder of this Note in the Note Register.

    

    14.           Waiver and
Amendment.  Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Company and the Holder.

    

    15.           Notices.  Any
notice, request or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
or mailed by registered or certified mail, postage prepaid, or delivered by
facsimile transmission, to the Company at the address or facsimile number set
forth herein or to the Holder at its address or facsimile number set forth in
the records of the Company.  Any party hereto may by notice so given
change its address for future notice hereunder.  Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above and shall be deemed to have
been received when delivered or, if notice is given by facsimile transmission,
when delivered with confirmation of receipt.

    

    16.           Governing Law;
Jurisdiction.  This Note, and all matters arising directly or
indirectly here from, shall be governed by and construed in accordance with the
internal laws of the State of New York, notwithstanding the choice of law or
conflicts of law principles thereof.  Each of the parties hereto
hereby (i) irrevocably consents and submits to the sole exclusive jurisdiction
of the United States District Court for the Eastern District of New York, (and
of the appropriate appellate courts therefrom) in connection with any suit,
action or other proceeding arising out of or relating to this Note, (ii)
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient forum,
and (iii) agrees that service of any summons, complaint, notice or other process
relating to such suit, action or other proceeding may be effected in the manner
provided by Section 17.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

    18.           Headings.  Section
headings in this Note are for convenience only, and shall not be used in the
construction of this Note.

    

    IN WITNESS WHEREOF, the
Company has caused this Note to be issued as of the date first above
written.

    

    

    iMedicor,
INC.

    

    

    

    

    By:  _________________________

    Name:  Fred
Zolla

    Title:
CEO

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    INVESTOR
QUESTIONNAIRE

    

    (ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)

    

    

    To:           iMedicor,
Inc.

     

    

    This
Investor Questionnaire (“Questionnaire”) must be completed by each potential
investor in connection with the Promissory Note Bridge Funding as detailed in
the attached document dated January ___, 2010.

     

    The
Securities are being offered and sold by iMedicor, Inc. (the "Company") without
registration under the Securities Act of 1933, as amended (the "Act"), and the
securities laws of certain states, in reliance on the exemptions contained in
Section 4(2) of the Act and Regulation D promulgated thereunder and in reliance
on similar exemptions under applicable state laws.  The Company must
determine that a potential investor meets certain suitability requirements
before offering or selling Securities to such investor.  The purpose
of this Questionnaire is to assure the Company that each investor will meet the
applicable suitability requirements.  The information supplied by you
will be used in determining whether you meet such criteria, and reliance upon
the private offering exemptions from registration is based in part on the
information herein supplied.

     

    This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security.  Your answers will be kept strictly confidential
except to the extent requested by the Securities and Exchange Commission or
state securities regulators.  By signing this Questionnaire, you will
be authorizing the Company to provide a completed copy of this Questionnaire to
such parties as the Company deems appropriate in order to ensure that the offer
and sale of the Securities will not result in a violation of the Act or the
securities laws of any state and that you otherwise satisfy the suitability
standards applicable to purchasers of the Securities.  All potential
investors must answer all applicable questions and complete, date and sign this
Questionnaire.  Please print or type your responses and attach
additional sheets of paper if necessary to complete your answers to any
item.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    A.           BACKGROUND
INFORMATION

    

    Name:                                                                                                                                           
  
            
  

    

    Business
Address:                                                                                                                     
 
                           

    (Number and Street) 

                                                                                                                                                             
  

    (City)                                           (State)                                                             (Zip
Code)

    

    Telephone
Number: _____________________________

    

    If an
individual:

    Age:­­­­­­­­
­__________                                Citizenship:
____________

    

    If a
corporation, partnership, limited liability company, trust or other
entity:

    Type of
entity:                                                                                                                                          

    State of
formation:______________________                                                        Date
of formation: ____________________

    

    Social
Security or Taxpayer Identification
No.                                                                                                                                          

    

    B.           STATUS AS ACCREDITED
INVESTOR

    

    The
undersigned is an "accredited investor" as such term is defined in Regulation D
under the Act, as at the time of the sale of the Securities the undersigned
falls within one or more of the following categories (Please initial one or more,
as applicable): 1

    

    ____  (1)                      a
bank as defined in
Section 3(a)(2) of the Act, or a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Act whether acting in its
individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined
in Section 2(13) of the Act; an investment company registered
under the Investment Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of that Act; a Small Business Investment
Company licensed by the U.S.  Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958; a
plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
such Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with the
investment decisions made solely by persons that are accredited
investors;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ____  (2)                      a
private business development
company as defined in Section 202(a)(22) of the Investment Advisers Act
of 1940;

    

    ____  (3)                      an
organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, corporation, Massachusetts or
similar business trust,
or partnership, not
formed for the specific purpose of acquiring the Securities offered, with total
assets in excess of $5,000,000;

    

    ____  (4)                      a
natural person whose
individual net worth, or joint net worth with that person's spouse, at the time
of such person's purchase of the Securities exceeds $1,000,000;

    

    ____  (5)                      a
natural person who had
an individual income in excess of $200,000 in each of the two most recent years
or joint income with that person's spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same income level in the
current year;

    

    ____  (6)                      a
trust, with total assets
in excess of $5,000,000, not formed for the specific purpose of acquiring the
Securities offered, whose purchase is directed by a sophisticated person as
described in Rule 506(b)(2)(ii) of Regulation D; and

    

    ____  (7)                      an
entity in which all of the equity owners are accredited investors (as defined
above).

    

    IN
WITNESS WHEREOF, the undersigned has executed this Questionnaire this ____ day
of __________, 2006, and declares under oath that it is truthful and
correct.

    

     

    
 

                                                                                                   
                                                                                              
    
           

    Print
Name  

    
 

    By:                                                                                            
    
                                                                         

    Signature

    

    Title:                                                                                                                                                                       

    (required
for any purchaser that is a corporation, partnership, trust or other
entity)

    

    

    

      

    

      
      1 As
used in this Questionnaire, the term “net worth” means the excess of total
assets over total liabilities.  In computing net worth for the purpose
of subsection (4), the principal residence of the investor must be valued at
cost, including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances.  In
determining income, the investor should add to the investor’s adjusted gross
income any amounts attributable to tax exempt income received, losses claimed as
a limited partner in any limited partnership, contributions to an IRA or KEOGH
retirement plan, alimony payments, and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross
income.ex4-2.htm

    Exhibit 4.2

     

     

    
      THIS   WARRANT
AND THE  SHARES  OF  COMMON   STOCK
ISSUABLE   UPON  EXERCISE  HEREOF  HAVE  NOT  BEEN  REGISTERED  UNDER
THE  SECURITIES  ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY
STATE  SECURITIES  LAWS  AND  MAY  NOT  BE  SOLD,
TRANSFERRED  OR  OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND UNDER  APPLICABLE STATE SECURITIES LAWS
OR VEMICS, INC. SHALL HAVE  RECEIVED AN OPINION OF COUNSEL THAT
REGISTRATION OF SUCH SECURITIES
UNDER  THE  SECURITIES  ACT  AND  UNDER
THE  PROVISIONS  OF  APPLICABLE STATE SECURITIES
LAWS IS NOT REQUIRED.

    

     

    WARRANT
TO PURCHASE

     

    SHARES OF
COMMON STOCK

     

    OF

     

    VEMICS,
INC.

     

    Expires
________, ______

     

    

     

    
      	No.    	                                                                                                 
      Number of. Shares:
	Date of
      Issuance:	 

    

                                                                      

     

    
      FOR  VALUE  RECEIVED,
subject  to the provisions hereinafter set forth,
the  undersigned, Vemics
Inc.,  a  Nevada  corporation
(together  with  its successors and  assigns, the
"Issuer"), hereby
certifies  that  _______________  or  its
registered  assigns is
entitled  to  subscribe  for
and  purchase, during
the  period  specified  in this Warrant, up to
_____________ (______________)  shares (subject to adjustment as
hereinafter provided) of the duly authorized, validly issued, fully paid and
non- assessable
Common  Stock  of  the  Issuer, at an
exercise  price per share equal  to the Warrant Price then
in effect, subject,  however, to the
provisions  and  upon the terms and conditions
hereinafter  set  forth. Capitalized terms used in this
Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 9 hereof.

    

    
       

      
        
          	
                  1.  

                	
                  Term.  The  right to  subscribe for
      and purchase shares of Warrant
      Stock  represented  hereby shall
      commence  on  the  date  of  issuance  set  forth
      above and shall expire at 5:00 p.m., eastern time, on the
      Third  (3rd) anniversary of such date of issuance (such period
      being
the  "Term").

                

        

         

        
          
            	
                    2.  

                  	
                    Method of Exercise Payment; Issuance of New
      Warrant; Transfer and
Exchange.

                  

          

           

          
            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              Time of
      Exercise.   The Holder hereof may exercise this
      Warrant, in whole or in part, at any time or from time to time during the
      Term.

            

    

     

    
      	
              (b)  

            	
              Method of
      Exercise.  The Holder hereof may exercise this Warrant,
      in whole or in  part, by
      the surrender of this Warrant (with the exercise form attached hereto duly
      executed) at  the principle of the Issuer, and by the payment to
      the Issuer of an amount of
      consideration  therefore  equal  to  the  Warrant  Price  in  effect  on  the  date  of  such  exercise  multiplied  by  the
      number of shares of Warrant Stock with respect to which this Warrant is
      then being exercised,  payable by certified  or
      official  bank  check   or by wire
      transfer  to
      an  account  designated  by
      the  Issuer.

            

    

     

    
      	
              (c)  

            	
              Issuance   of   Stock   Certificates.  In
      the event  of  any
      exercise  of  the  rights  represented
      by this Warrant in accordance with and subject to the terms and conditions
      hereof, (i)  certificates for the shares of Warrant Stock so
      purchased shall be dated the date of such
      exercise  and  delivered  to  the  Holder  hereof  within  a  reasonable  time,  not  exceeding  three  (3)  Trading  Days  after  such  exercise,  and  (ii)
      unless  this  Warrant  has  expired,
      a new Warrant  representing  the number of shares of
      Warrant Stock, if any, with respect to which this Warrant shall not
      then  have been exercised shall also be issued to the Holder
      hereof at the Issuer's expense within
  such  time.

            

    

     

    
      	
              (d)  

            	
              Transferability of
      Warrant.  Subject to
      compliance with applicable law, this Warrant may be transferred by a
      Holder without the consent of the Issuer.  If transferred
      pursuant  to this paragraph and subject to the provisions of
      subsection (e) of this Section 2, this
      Warrant  may  be  transferred  on  the  books  of  the  Issuer  by  the  Holder  hereof  in  person  or  by  duly  authorized
      attorney, upon surrender of this Warrant at the principal office of the
      Issuer, properly  endorsed (by the Holder executing an
      assignment in the form attached hereto) and upon
      payment  of  any  necessary  transfer  tax  or  other  governmental  charge  imposed  upon  such  transfer.   This
      Warrant is exchangeable at the principal office of the Issuer for Warrants
      for the purchase of the     same aggregate number
      of shares of Warrant Stock, each new Warrant to represent the right to
      purchase such number of shares of Warrant Stock as the Holder hereof shall
      designate at the time of such
      exchange.   All  Warrants  issued  on  transfers  or  exchanges  shall  be  dated  the  Original  Issue
      Date and shall be identical with this Warrant except as to the number of
      shares of Warrant   Stock issuable pursuant
      hereto.

            

    

     

    
      
        	
                (e)  

              	
                Representation of
      Holder.  The holder of this Warrant, by the acceptance
      hereof,  represents  that  it  is  acquiring  this  Warrant  and  the  Warrant  Shares  for  its  own  account  for  investment
      only and not with a view towards, or for resale in connection with, the
      public sale
      or  distribution  of  this   Warrant  or  the  Warrant  Shares,  except  pursuant  to  sales  registered  or  exempted  under  the  Securities  Act;  provided,
      however,  that  by  making  the  representations  herein,  the  holder  does  not  agree  to
      hold  this  Warrant  or  any  of  the  Warrant  Shares  for  any  minimum
      or other specific term and reserves the right to dispose of this Warrant
      and the
      Warrant  Shares  at  any  time  in  accordance  with  or  pursuant  to  a  registration  statement  or  an  exemption  under  the  Securities  Act.
      The  holder  of  this  Warrant  further  represents,  by  acceptance  hereof,  that,  as  of  this  date,  such  holder  is  an
      “accredited  investor”  as  such  term  is  defined  in  Rule  501(a)(1)
      of Regulation D promulgated by the Securities and Exchange Commission
      under
      the  Securities  Act  (an  “Accredited  Investor”).   Upon
      exercise  of  this  Warrant,  the  holder
      shall,  if  requested by the Issuer, confirm in
      writing, in a form satisfactory to the Issuer, that the
      Warrant  Shares so purchased are being acquired solely for the
      holder’s own account and not as a nominee  for any other party,
      for investment and not with a view toward distribution or resale and that
      such   holder is an Accredited Investor. If such holder
      cannot make such representations because they  would be
      factually incorrect, it shall be a condition to such holder’s exercise of
      this Warrant
      that  the  Issuer  receive  such  other  representations  as  the  Issuer  considers  reasonably  necessary  to  assure
      the Issuer that the issuance of its securities upon exercise of this
      Warrant shall not violate  any United States or state securities
      laws.

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              3.  

            	
              Stock Fully Paid and
      Non-Assessable

            

    

     

    
      	
              (a)  

            	
              Stock Fully Paid. The Issuer
      represents, warrants, covenants and agrees that all shares  of
      Warrant Stock  which may be
      issued  upon  the exercise of  this Warrant
      or otherwise  hereunder will, upon issuance, be duly authorized,
      validly issued, fully paid and
      non-assessable  and  free  from  all
      taxes, liens  and charges created  by  or
      through  Issuer. The  Issuer
      further  covenants and agrees that during the period within
      which this Warrant may be exercised,  the  Issuer will
      at all times have authorized and reserved for the purpose of the issue
      upon exercise of this Warrant a sufficient number of shares of Common
      Stock to provide for the exercise of
    this  Warrant.

            

    

     

    
      	
              (b)  

            	
              Reservation. If any shares of
      Common Stock required to be reserved for issuance upon exercise of this
      Warrant or as otherwise provided hereunder require registration or
      qualification with any governmental authority under any federal or state
      law before such shares may be so issued, the Issuer will in good faith use
      its reasonable best efforts at its expense to cause such shares to be duly
      registered or qualified. If the Issuer  shall list any shares of
      Common Stock on any securities exchange or cause any shares of Common
      Stock to be quoted  on Nasdaq  or any interdealer
      quotation system or other market, it will, at its expense, list or cause
      to be quoted thereon, maintain and increase when necessary such listing or
      quotation, of, all shares of Warrant Stock from time to time issued upon
      exercise of this Warrant or  as otherwise
      provided  hereunder, and, to the extent  permissible
      under the  applicable securities  exchange rules, all
      unissued shares of Warrant Stock which are at any time issuable hereunder,
      so long as any shares of Common Stock shall be so listed or quoted. The
      Issuer will also so list on each securities exchange or cause to be quoted
      on Nasdaq or any interdealer quotation system or other market, and will
      maintain such listing or quotation of, any other securities which the
      Holder of this Warrant shall be entitled to receive upon the exercise of
      this Warrant if at the time any securities of the same class shall be
      listed on such securities exchange or caused to be quoted on such other
      market by the Issuer.

            

    

     

    
      	
              (c)  

            	
              Loss, Theft, Destruction of
      Warrants. Upon  receipt  of
      evidence  reasonably satisfactory to the Issuer of the ownership
      of and the loss, theft, destruction or mutilation of any Warrant and, in
      the case of  any such
      loss,  theft  or  destruction, upon
      receipt  of indemnity or security reasonably
      satisfactory  to the Issuer  or,
      in  the  case  of  any  such  mutilation,
      upon  surrender and cancellation of such Warrant, the Issuer
      will make and deliver, in lieu of such lost,  stolen, destroyed
      or mutilated Warrant, a new Warrant of like tenor and representing the
      right to  purchase the same number of shares of Common
      Stock.

            

    

     

    
      	
              4.  

            	
              Adjustment of Warrant
      Price and Warrant Share Number.  The number of shares of
      Common Stock for which this Warrant is exercisable, and the price at which
      such shares may  be purchased upon exercise of this Warrant,
      shall be subject to adjustment from time to time as   set
      forth in this Section 4. The Issuer shall give the Holder notice of any
      event described below  which requires an adjustment pursuant to
      this Section 4 in accordance with Section
5.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)  

            	
              Recapitalization,
      Reorganization, Reclassification, Consolidation or
      Merger

            

    

    
       

      
        	
                (i)  

              	
                In   case
      the  Issuer   after the  Original
      Issue  Date   shall
      do  any  of
      the  following  (each,  a
      "Triggering  Event"):  (a)  consolidate  with
      or merge  into  any  other
      Person  and  the Issuer  shall not
      be  the  continuing  or  surviving
      corporation of such consolidation or merger, or  (b) permit any
      other Person to consolidate with or merge into
      the  Issuer  and  the  Issuer  shall  be  the  continuing
      or
      surviving  Person  but,  in  connection
      with such consolidation or merger, any Capital Stock of the Issuer shall
      be changed into or
      exchanged  for  Securities  of any
      other  Person  or  cash or
      any  other  property,  or  (c)
      transfer all or substantially all of its properties or assets to any other
      Person, or (d)
      effect  a  capital  reorganization  or  reclassification
      of  its Capital Stock,  then,  and in
      the  case  of each such Triggering Event, proper
      provision shall be made so that, upon the basis and the terms and in the
      manner provided in this Warrant, the Holder of this Warrant shall
      be  entitled  (x) upon   the exercise
      hereof at any time after the   consummation
      of  such Triggering  Event, to the extent this Warrant
      is not  exercised  prior to such Triggering
      Event,  to receive at the Event in lieu of the Common Stock
      issuable upon such  exercise of this Warrant prior to such
      Triggering Event, the Securities, cash and property to which such Holder
      would have been
      entitled   upon   the   consummation
      of such Triggering Event if such  Holder  had
      exercised  the  rights
      represented  by  this  Warrant  immediately
      prior thereto, subject to adjustments (subsequent to such corporate
      action) as     nearly equivalent as possible to
      the adjustments provided for elsewhere in this Section 4
      or  (y)  to  sell  this  Warrant  (or,  at
      such  Holder's election,  a portion  hereof)
      concurrently  with  the  Triggering  Event  to  the  Person  continuing  after  or  surviving  such
      Triggering  Event,  or  to
      the  Issuer  (if Issuer  is the
      continuing  or
      surviving  Person)  at  a  sales  price  equal
      to the amount of cash, property and/or Securities to which a holder of the
      number
      of  shares  of  Common  Stock  which  would  otherwise  have  been  delivered  upon  the   exercise  of  this
      Warrant
      would  have  been  entitled  upon  the  effective  date  or
      closing  of any such
      Triggering  Event  (the  "Event  Consideration"),
      less  the  amount  or  portion
      of  such  Event  Consideration  having  a
      fair value equal to
      the  aggregate  Warrant  Price applicable to
      this Warrant or the portion hereof so
sold.

              

      

      
        

         

        
          	(ii) 
	Notwithstanding
      anything  contained  in this Warrant to
      the  contrary, the  Issuer  may
      effect  any Triggering  Event  if, prior to
      the consummation  thereof, each  Person
      (other  than the  Issuer)
      which  may  be  required  to  deliver  any  Securities,  cash
      or  property  upon  the  exercise  of  this
      Warrant
      as  provided  herein  shall  assume,
      by  written
      instrument  delivered  to,  and  reasonably  satisfactory  to,  the  Holder  of  this  Warrant,
      (A)  the
      obligations  of  the  Issuer  under  this
      Warrant  (and  if  the
      Issuer  shall  survive  the  consummation  of  such
      Triggering  Event,  such  assumption
      shall  be
      in  addition  to,  and  shall  not  release  the  Issuer  from,  any  continuing  obligations  of  the  Issuer  under  this
      Warrant) and (B) the obligation to deliver to such Holder such shares of
      Securities, cash or  property  as, in
      accordance  with  the  foregoing  provisions  of  this  subsection  (a),  such  Holder
      shall be entitled to receive, and such Person shall have similarly
      delivered to such  Holder  an
      opinion  of  counsel  for
      such  Person,  which  counsel  shall  be  reasonably
      satisfactory to such Holder, stating that this Warrant shall thereafter
      continue in full force  and effect and the terms hereof
      (including, without limitation, all of the provisions of
      this  subsection (a)) shall be applicable to the Securities,
      cash or property which such Person  may be required to deliver
      upon any exercise of this Warrant or the exercise of any
      rights  pursuant hereto.

        

         

      

    

    
      	
              (iii)  

            	
              If  with
      respect  to  any Triggering
      Event,  the  Holder of this Warrant has exercised its
      right as provided in clause (y) of subparagraph (i) of this subsection (a)
      to sell this Warrant or a portion thereof, the Issuer agrees that as a
      condition to the  consummation of any such Triggering Event the
      Issuer shall secure such right of Holder to sell this Warrant to the
      Person continuing after or surviving such Triggering Event
      and  the Issuer shall not effect any such Triggering Event
      unless upon or prior to the consummation
      thereof  the  amounts  of  cash,  property  and/or  Securities  required
      under such clause (y) are delivered to the Holder of this Warrant. The
      obligation of the Issuer  to secure such right of
      the  Holder to  sell this
      Warrant  shall  be  subject
      to  such Holder’s cooperation with the Issuer, including,
      without limitation, the giving of customary representations and warranties
      to the purchaser in connection with any such sale. Prior notice of any
      Triggering Event shall be given to the Holder of this Warrant in
      accordance with Section 14 hereof.

            

    

     

    
      	
              (b)  

            	
              Stock Dividends,
      Subdivisions and Combinations.  If at any time the Issuer
      shall:

            

    

     

    
      	
              (i)  

            	
              take  a  record  of  the  holders  of  its  Common  Stock  for  the  purpose  of  entitling
      them to receive a dividend payable in, or other distribution of,
      Additional Shares of Common Stock,

            

    

     

    
      	
              (ii)  

            	
              subdivide
      its outstanding shares of Common Stock into a larger number
      of  shares of Common Stock,
or

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (iii)  

            	
              combine
      its outstanding shares of Common Stock into a smaller number
      of  shares of Common
Stock

            

    

     

    then   (1)  the
number of shares of Common Stock for which this
Warrant  is  exercisable immediately  after the
occurrence of any such event shall be adjusted to equal the
number  of  shares of Common Stock which a record holder of
the same number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant
is   exercisable immediately prior to the adjustment divided by
(B)  the  number of shares of Common Stock for which this
Warrant is exercisable immediately after such adjustment.

     

    
      	
              (c)  

            	
              Certain  Other  Distributions.   If
      at any time the Issuer shall take a record of the holders of its Common
      Stock for the purpose of entitling them to receive any dividend or
      other  distribution of:

            

    

     

    
      	
              (i)  

            	
              cash
      (other than a cash dividend payable out of earnings or earned
      surplus  legally  available  for  the  payment
      of dividends under the laws of the jurisdiction of incorporation of the
      Issuer)

            

    

     

    
      	
              (ii)  

            	
              any
      evidences of its indebtedness, any shares of stock of any class or
      any  other securities or property of any nature whatsoever
      (other than cash), or

            

    

     

    
      	
              (iii)  

            	
              any
      warrants or other rights to subscribe for or purchase any evidences
      of  its  indebtedness,  any  shares
      of stock of any class or any other securities or property
      of  any nature whatsoever (other than
  cash),

            

    

     

    
      	 	
              then
      (1) the number of shares of Common Stock for which this Warrant is
      exercisable shall be adjusted to equal the product of the number of shares
      of Common Stock for which this Warrant is exercisable immediately prior to
      such adjustment multiplied by a fraction (A) the numerator of which shall
      be the Per Share Market Value of Common Stock at the date of taking such
      record and (B) the denominator of which shall be such Per  Share
      Market Value  minus the  amount allocable to one share
      of Common Stock of any such cash so distributable and of the fair value
      (as  determined  in  good faith by the Board
      of Directors of the Issuer) of  any and all such evidences
      of  indebtedness,  shares  of  stock,
      other securities or property  or warrants or
      other  subscription or purchase rights so distributable, and (2)
      the Warrant Price then in effect shall be adjusted  to
      equal  (A) the  Warrant Price then  in
      effect  multiplied by the number  of  shares
      of Common Stock for which this Warrant is exercisable
      immediately  prior  to the adjustment
      divided  by  (B) the number
      of  shares  of Common Stock for which this Warrant is
      exercisable immediately  after such  adjustment. A
      reclassification of the
      Common  Stock  (other  than a change in par
      value, or from par value to no par value or from no par value to par
      value) into shares of Common Stock and shares of any other class of stock
      shall be deemed a distribution by the Issuer to the holders of its Common
      Stock of such shares of such other class of stock within
      the  meaning of  this
      Section  4(c)  and, if the outstanding shares of
      Common  Stock shall be  changed into a larger or
      smaller number of shares of Common Stock as a part of such
      reclassification, such change shall be deemed a subdivision or
      combination, as the case may be of the outstanding shares of Common Stock
      within the meaning of Section 4(b).

            

    

     

    
      	
              (d)  

            	
              Other  Provisions  applicable  to  Adjustments  under  this  Section.    The  following
       provisions
      shall be applicable to the making of adjustments of the number of shares
      of Common   Stock for which this Warrant is exercisable and
      the Warrant Price then in effect provided for in  this Section
      4:

            

    

     

    
      	
              (i)  

            	
              When Adjustments to Be
      Made.  The adjustments required by this Section
      4  shall
      be  made  whenever  and  as  often  as  any  specified  event  requiring  an  adjustment  shall  occur,
      except  that  any  adjustment  of  the  number  of  shares  of  Common  Stock  for  which  this  Warrant  is  exercisable  that  would  otherwise  be  required  may  be  postponed  (except
      in the case of a subdivision or combination of shares of the Common Stock,
      as     provided for in Section 4(b) up to, but
      not beyond the date of exercise if such adjustment  either by
      itself or with other adjustments not previously made adds or subtracts
      less than  one percent (1%) of the shares of Common Stock for
      which this Warrant is
      exercisable  immediately  prior  to  the  making  of  such  adjustment.  Any
      adjustment  representing a change of less than such minimum
      amount (except as aforesaid) which is postponed shall  be
      carried forward and made as soon as such adjustment, together with other
      adjustments  required by this Section 4 and
      not  previously made, would result in a
      minimum  adjustment or on the date of exercise. For the purpose
      of any adjustment, any specified
      event  shall  be  deemed  to  have  occurred  at
      the close of business on the date of  its
      occurrence.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (ii)  

            	
              Fractional   Interests.  In
      computing adjustments under this Section 4, fractional interests in Common
      Stock shall be taken into account to the nearest
      one-tenth   (1/10th)
      of a share.

            

    

     

    
      	
              (iii) 

            	
              
                When  Adjustment
      Not Required. If  the Issuer shall take a record of the holders
      of its Common Stock for the purpose of entitling them to receive a
      dividend or distribution or subscription or purchase rights and shall,
      thereafter and before the distribution to stockholders  thereof,
      legally  abandon its plan to pay or deliver  such
      dividend, distribution, subscription or purchase rights, then thereafter
      no adjustment shall be
      required  by  reason  of  the  taking
      of such record and any such adjustment previously  made in
      respect thereof shall be rescinded and
  annulled.

              

            

    

     

    
      	
              (e)  

            	
              Form  of  Warrant  after  Adjustments.  The  form  of  this  Warrant  need  not  be
       changed
      because of any adjustments in the Warrant Price or the number and kind of
      Securities  purchasable upon the exercise of this
      Warrant.

            

    

     

    
      	 5. 
      
	
              Notice
      of Adjustments.
      Whenever  the  Warrant  Price or Warrant
      Share Number shall be adjusted pursuant to Section 4 hereof (for
      purposes   of this Section 5, each an
      “adjustment"),  the Issuer shall cause  its
      Chief  Financial Officer  to prepare  and
      execute  a certificate setting  forth, in reasonable
      detail, the  event  requiring
      the  adjustment, the amount  of  the
      adjustment, the method by which such adjustment was calculated (including
      a description of  the  basis on which
      the  Board made any
      determination  hereunder),  and  the  Warrant  Price
      and  Warrant  Share
      Number  after  giving effect  to
      such  adjustment,  and  shall cause a
      copy  of  such certificate  to  be
      delivered  to the  Holder  of this Warrant
      promptly  after  each  adjustment. For
      purposes of this Section 5, all calculations which have been determined in
      accordance with Section 4 hereof shall be final and conclusive on the
      Holder, absent manifest error.

            

    

     

    
      	
              6.  

            	
              Fractional  Shares.  No  fractional  shares  of  Warrant  Stock  will  be  issued  in
       connection
      with any exercise hereof, but in lieu of such fractional shares, the
      Issuer shall make a  cash payment therefore equal in amount to
      the product of the applicable fraction multiplied by the  Per
      Share Market Value then in effect.

            

    

     

    
      	
              7.  

            	
              Registration  Rights.
      If at any time after the Issuer’s  initial public offering and
      prior to the expiration of this Warrant, the Issuer proposes to file a
      registration statement under  the Securities Act with respect to
      an underwritten offering of Common Stock (except on Form S- 4 or Form S-8
      or  any successor forms thereto) for its own  account,
      then  the Issuer  shall give written notice of such
      proposed filing to the holders of this Warrant or of the Warrant Shares as
      far in advance of the anticipated filing date as is practicable (the
      "Piggyback  Notice").
      The  Piggyback  Notice  shall offer
      such  holders  the  opportunity
      to  register such amount  of  Warrant Shares
      as each such holder may request (a "Piggyback Registration"); subject in
      all events to the  agreement of the  underwriter or
      underwriters of the offering  contemplated  by such
      registration statement  that such Warrant  Shares can
      be included in such  registration
      statement  without  adversely  affecting
      such offering. Any  reduction  in the number
      of  securities  to be so offered  shall be
      (i) first, pro-rata among all security holders who are exercising
      "piggyback" registration rights,  based  on the
      number  of registrable securities originally
      proposed  to be  sold by each  of them, and
      (ii) second, pro-rata among all security holders who are exercising
      "demand"  registration  rights
      pursuant  to  a  registration  rights  agreement  with  the
      Issuer,  based on the  number of registrable
      securities originally proposed to be sold by each of
  them

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              8.  

            	
              Redemption.   The  Issuer  may,  at
      its option,  redeem up to one hundred percent  (100%)  of  this  Warrant  upon  the  occurrence  of
      a Market Value Event  upon thirty (30) days written notice to
      the Holder of this Warrant pursuant to Section 13 (the “Redemption
      Notice”).   The rights and privileges granted pursuant to
      this Warrant with respect to the shares of
      Warrant     Stock  subject  to  the  Redemption  Notice  (the  "Redeemed  Warrant  Shares")  shall  expire  on  the  30th
      day after the date of the Redemption Notice (the “Termination Date”) if
      this Warrant is not  exercised with respect to such Redeemed
      Warrant Shares prior to such Termination Date.  In
      the    event this Warrant is not exercised with
      respect to the Redeemed Warrant Shares, the Issuer
      shall   remit to the Holder of this Warrant (i) $.10 per
      Redeemed Warrant Share and (ii) a new Warrant  representing the
      number of shares of Warrant Stock, if any, which shall not have been
      subject to
      the   Redemption   Notice   upon   the   Holder   tendering   to   the   Issuer   the   applicable   Warrant  certificate.

            

    

     

    
      	
              9.  

            	
              Definitions.  For  the  purposes  of  this  Warrant,  the  following  terms  have  the
       following
      meanings:

            

    

     

    
      	 	
              “Board" shall mean the
      Board of Directors of the Issuer.

            

    

     

    
      	 	
              "Capital Stock" means and
      includes (i) any and all shares, interests, participations  or
      other equivalents of or interests in (however designated) corporate stock,
      including,  without limitation, shares of preferred or
      preference stock, (ii) all partnership interests  (whether
      general or limited) in any Person which is a partnership, (iii) all
      membership  interests or limited liability company interests in
      any limited liability company, and (iv)    all equity
      or ownership interests in any Person of any other
  type.

            

    

     

    
      	 	
              "Certificate of
      Incorporation" means the Certificate of Incorporation of the Issuer
      as in effect on the Original Issue Date, and as hereafter from time to
      time amended, modified, supplemented or restated in accordance with the
      terms hereof and thereof and pursuant to applicable
  law.

            

    

     

    
      	 	
              "Common Stock" means the
      Common Stock, par value $.001 per share, of the  Issuer and any
      other Capital Stock into which such stock may hereafter be
      changed.

            

    

     

    
      	 	
              "Governmental Authority"
      means any governmental, regulatory or self-regulatory  entity,
      department, body, official, authority, commission, board, agency
      or    instrumentality, whether federal, state or
      local, and whether domestic or
foreign.

            

    

     

    
      	 	
              "Holders" mean the
      Persons who shall from time to time own any
      Warrant.  The  term "Holder" means one of the
      Holders.

            

    

     

    
      	 	
              "Issuer" means Vemics,
      Inc., a Delaware corporation, and its
  successors.

            

    

     

    
      	 	
              "Majority Holders" means
      at any time the Holders of Warrants exercisable for a  majority
      of the shares of Warrant Stock issuable under the Warrants at the
      time  outstanding.

            

    

     

    
      	 	
              “Market Value Event”
      means, at any time after 270 days following the
      Issuer’s  initial public offering, the Per Share Market Value of
      the Common Stock has been equal    to or greater than
      200% of the then current Warrant Price for a period of ten
      (10)  consecutive Trading Days immediately prior to the date of
      the applicable
Redemption  Notice.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              "Nasdaq" means the Nasdaq
      National Market or the Nasdaq SmallCap
Market.

            

    

     

    
      	 	
              "Original Issue Date"
      means ______________.

            

    

     

    
      	 	
              "OTC Bulletin Board"
      means the over-the-counter electronic bulletin
  board.

            

    

     

    
      	 	
              "Person" means an
      individual, corporation, limited liability company,
      partnership,  joint stock company, trust, unincorporated
      organization, joint venture, Governmental  Authority or other
      entity of whatever nature.

            

    

     

    
      	 	
              "Per Share Market Value"
      means on any particular date (a) the closing sale price  per
      share of the Common Stock on such date on a national securities exchange
      or Nasdaq,  or if there is no such price on such date, then the
      closing sale price on such exchange or  quotation system on the
      date nearest preceding such date, or (b) if the Common Stock
      is   not listed then on a national securities exchange or
      Nasdaq, the average of the closing bid  and asking prices for a
      share of Common Stock in the relevant interdealer
      quotation   system or other over-the-counter market, as
      reported by the OTC Bulletin Board or in the  National Quotation
      Bureau Incorporated or similar organization or agency succeeding
      to   its functions of reporting prices) at the close of
      business on such date, or if there are no  such prices on such
      date, then the average of the closing bid and ask prices on
      such    market on the date nearest preceding such date
      or (c) if the Common Stock is not then  reported by the OTC
      Bulletin Board or the National Quotation Bureau Incorporated
      (or  similar organization or agency succeeding to its functions
      of reporting prices), then the  average of the "Pink Sheet"
      closing bid and ask prices on such date, or if there are
      no     such prices on such date, then the average
      of the closing bid and ask prices on the “Pink  Sheets” on the
      date nearest preceding such date, or (d) if the Common Stock is not
      then  publicly traded the fair market value of a share of Common
      Stock as determined in good  faith by the Board, provided that
      such fair market value shall not, in any event, be
      less    than the price per share of the Common Stock
      paid in connection with the then most    recent
      issuance of Common Stock by the Issuer. All determinations of the Per
      Share  Market Value shall be appropriately adjusted for any
      stock dividends, stock splits or other  similar transactions
      during such period.

            

    

     

    
      	 	
              "Securities" means any
      debt or equity securities of the Issuer, whether now
      or  hereafter authorized, any instrument convertible into or
      exchangeable for Securities or a  Security, and any option,
      warrant or other right to purchase or acquire any
      Security.   "Security" means one of the
      Securities.

            

    

     

    
      	 	
              "Securities Act" means
      the Securities Act of 1933, as amended, or any similar  federal
      statute then in effect.

            

    

     

    
      	 	
              "Subscription
      Agreement" means the
      Subscription Agreement dated as of  ___________ __, 2009 among
      the Issuer and the investors a party
  thereto.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              "Subsidiary" means any
      corporation at least 50% of whose outstanding Voting  Stock
      shall at the time be owned directly or indirectly by the Issuer or by one
      or more of  its Subsidiaries, or by the Issuer and one or more
      of its Subsidiaries.

            

    

     

    
      	 	
              "Term" has the meaning
      specified in Section 1 hereof.

            

    

     

    
      	 	
              "Trading Day" means (a) a
      day on which the Common Stock is traded on Nasdaq,  or (b) if
      the Common Stock is not listed on Nasdaq, a day on which the Common Stock
      is  traded on any registered national stock exchange, or (c) if
      the Common Stock is not traded on any registered national stock exchange,
      a day on which the Common Stock is  traded on the OTC Bulletin
      Board, or (d) if the Common Stock is not traded on the
      OTC  Bulletin Board, a day on which the Common Stock is quoted
      in the over-the-counter  market as reported by the National
      Quotation Bureau Incorporated (or any similar  organization or
      agency succeeding its functions of reporting prices); provided, however,  that
      in the event that the Common Stock is not listed or quoted as set forth in
      (a), (b) and  (c) hereof, then Trading Day shall mean any day
      except Saturday, Sunday and any day  which shall be a legal
      holiday or a day on which banking institutions in the State of
      New  York are authorized or required by law or other government
      action to close.

            

    

     

    
      	 	
              "Voting Stock" means, as
      applied to the Capital Stock of any corporation, Capital  Stock
      of any class or classes (however designated) having ordinary voting power
      for the  election of a majority of the members of the Board of
      Directors (or other governing body)  of such corporation, other
      than Capital Stock having such power only by reason of
      the  happening of a
contingency.

            

    

     

    
      	 	
              "Warrants" means the
      Warrants issued and sold pursuant to the
      Subscription  Agreement, including, without limitation, this
      Warrant, and any other warrants of like  tenor issued in
      substitution or exchange for any thereof pursuant to the provisions
      of  Section 2(c), 2(d) or 2(e) hereof or of any of such other
      Warrants.

            

    

     

    
      	 	
              "Warrant Price" initially
      means U.S. $0.05 until the first anniversary or the Warrant, $0.15 from
      the first anniversary to the second anniversary of the Warrant, $0.30 from
      the second anniversary to the third anniversary of the Warrant, $0.50 from
      the third anniversary to the fourth anniversary of the Warrant and $1.00
      from the fourth anniversary to until the expiration of the
      Warrant.   Such prices may be adjusted from  time
      to time as shall result from the adjustments specified in this Warrant,
      including  Section 4
hereto.

            

    

     

    
      	 	
              "Warrant Share Number"
      means at any time the aggregate number of shares of  Warrant
      Stock which may at such time be purchased upon exercise of this Warrant,
      after  giving effect to all prior adjustments and increases to
      such number made or required to be  made under the terms
      hereof.

            

    

     

    
      	 	
              "Warrant Stock" means
      Common Stock issuable upon exercise of any Warrant or Warrants or
      otherwise issuable pursuant to any Warrant or
  Warrants.

            

    

     

    
      	
              10.  

            	
              Other
      Notices.  In case at any
time:

            

    

     

    
      	
              (a)  

            	
              the
      Issuer shall make any distributions to the holders of
      Common  Stock; or

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)  

            	
              the
      Issuer shall authorize the granting to all holders of its
      Common  Stock  of rights  to
      subscribe  for  or  purchase any shares of
      Capital  Stock of any class or of any Common Stock Equivalents
      or other  rights; or

            

    

     

    
      	
              (c)  

            	
              there  shall  be  any  reclassification  of  the  Capital  Stock  of  the  Issuer;
      or

            

    

     

    
      	
              (d)  

            	
              there
      shall be any capital reorganization by the Issuer;
  or

            

    

     

    
    

     

    
      	 (e)  
      	there
      shall be any (i) consolidation or merger involving the Issuer
      or  (ii) sale, transfer or other disposition of all or
      substantially all of  the Issuer's  property,
      assets  or
      business  (except  for  a
      merger  or  other  reorganization  in  which  the  Issuer  shall  be  the
      surviving  corporation and  its  shares
      of  Capital  Stock  shall  continue  to  be
      outstanding  and  unchanged  and  except  a
      consolidation,  merger,  sale, transfer or other
      disposition involving a wholly-owned  Subsidiary);
      or

    

     

    
      	
              (f)  

            	
              there
      shall be a voluntary or involuntary dissolution, liquidation
      or  winding-up of the Issuer or any partial liquidation of the
      Issuer or  distribution to holders of Common
    Stock;

            

    

     

    
      	 	
              then,
      in each of such cases, the Issuer shall give written notice to the Holder
      of the date on which (i) the books of the Issuer shall close or a record
      shall be taken for such dividend, distribution or subscription rights or
      (ii) such reorganization, reclassification, consolidation, merger,
      disposition, dissolution, liquidation or winding-up, as the case may be,
      shall take place. Such notice also shall specify the date as of which the
      holders of Common  Stock of record shall participate in such
      dividend, distribution or subscription rights, or shall be entitled to
      exchange their certificates for Common Stock for securities or other
      property deliverable upon such reorganization, reclassification,
      consolidation, merger, disposition, dissolution, liquidation or
      winding-up, as the case may be. Such notice shall be given at least twenty
      (20) days prior to the action in question and not less than twenty (20)
      days prior to the record date or the date on which the Issuer’s transfer
      books are closed in respect thereto.
      Except  as  otherwise specifically provided herein, no
      holder, as such, of this Warrant shall be entitled to vote or receive
      dividends or be deemed the holder of shares of the Issuer for any purpose,
      nor shall anything contained in this  Warrant
      be  construed
      to  confer  upon  the
      holder  hereof, as such, any of the rights of  a
      stockholder of the Issuer or any right to vote, give or withhold consent
      to any corporate action (whether
      any  reorganization,  issue  of stock,
      reclassification of  stock, consolidation, merger, conveyance or
      otherwise), receive notice of meetings, receive dividends or subscription
      rights, or  otherwise, prior to the issuance to the holder of
      this Warrant of the Warrant Shares which he or she  is
      then  entitled  to
      receive  upon  the  due  exercise  of  this
      Warrant. In addition, nothing contained in this Warrant shall be construed
      as imposing any liabilities on such holder to purchase any securities
      (upon exercise of this Warrant or otherwise) or as a stockholder of the
      Issuer, whether such liabilities are asserted by the Issuer or by
      creditors of the Issuer.  Notwithstanding this Section 10, the
      Issuer will provide the holder of this Warrant with copies of the same
      notices and other information given to the stockholders of the Issuer
      generally, contemporaneously with the giving thereof to the
      stockholders.

            

    

     

    
      	
              11.  

            	
              Amendment
      and Waiver. Any term, covenant, agreement  or
      condition  in this Warrant may be amended, or
      compliance  therewith  may  be waived
      (either  generally  or in a particular instance and
      either retroactively or prospectively), by a written instrument or
      written  instruments  executed  by  the
      Issuer  and  the
      Majority  Holders;  provided,  however,  that  no
      such  amendment or waiver shall reduce
      the  Warrant  Share
      Number,  increase  the  Warrant  Price,
      shorten the period during which this Warrant may be exercised or modify
      any provision of this Section 11 without the consent of the Holder of this
      Warrant

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              12.  

            	
              Governing
      Law. THIS WARRANT SHALL
      BE GOVERNED BY
      AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE  STATE  OF  NEW  YORK,  WITHOUT
      GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.

            

    

     

    
      	
              13.  

            	
              Notices.   Any  and  all  notices  or  other  communications  or  deliveries  required  or
       permitted
      to be provided hereunder shall be in writing and shall be deemed given and
      effective  on  the  earlier  of  (i)  the  date  of  transmission,  if  such  notice  or  communication  is  delivered  via  facsimile
      at the facsimile telephone number specified for notice prior to 5:00 p.m.,
      eastern
      time,  on  a  Trading  Day,  (ii)  the  Trading  Day  after  the  date  of  transmission,  if  such  notice  or  communication
      is delivered via facsimile at the facsimile telephone number specified for
      notice  later than 5:00 p.m., eastern time, on any date and
      earlier than 11:59 p.m., eastern time, on
      such  date,  (iii)  the  Trading  Day  following  the  date  of  mailing,  if  sent  by  nationally  recognized  overnight
      courier service or (iv) actual receipt by the party to whom such notice is
      required to
      be     given.  The  addresses  for  such  communications  shall  be  with  respect  to  the  Holder  of  this  Warrant
      or of Warrant Stock issued pursuant hereto, addressed to such Holder at
      its last known address or facsimile number appearing on the books of the
      Issuer maintained for such purposes,  or with respect to the
      Issuer, addressed to:

            

    

     

    
      	 	
              Vemics,
      Inc

            

    

    
      	 	
              523
      Avalon Gardens Drive

            

    

    
      	 	
              Nanuet,
      NY  10954

            

    

    
      	 	
              Attention:  Chief
      Executive Officer

            

    

    
      	 	
              845-371-7380

            

    

    
      	 	
              845-215-0110

            

    

     

    
      	 	
              With
      a Courtesy Copy to:

            

    

     

     

     

    Any party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other party
hereto

     

    
      	
              14.  

            	
              Warrant
      Agent.  The Issuer may, by written notice to each Holder
      of this Warrant,  appoint
      an agent having an office in New York, New York for the purpose of issuing
      shares
      of   Warrant  Stock  on  the  exercise  of  this  Warrant  pursuant  to  subsection  (b)  of  Section  2  hereof,  exchanging
      this Warrant pursuant to subsection (d) of Section 2 hereof or replacing
      this Warrant  pursuant to subsection (d) of Section 3 hereof, or
      any of the foregoing, and thereafter any
      such  issuance,  exchange  or  replacement,  as  the  case  may  be,  shall  be  made  at  such  office  by  such  agent.

            

    

     

    
      	
              15.  

            	
              Successors and
      Assigns.  This Warrant and the rights evidenced hereby
      shall inure  to the
      benefit of and be binding upon the successors and assigns of the Issuer,
      the Holder hereof
      and  (to  the  extent  provided  herein)  the  Holders  of  Warrant  Stock  issued  pursuant  hereto,  and  shall
      be enforceable by any such Holder or Holder of Warrant
    Stock.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              16.  

            	
              Modification  and  Severability.  If,  in  any  action  before  any  court  or  agency
       legally
      empowered to enforce any provision contained herein, any provision hereof
      is found to  be unenforceable, then such provision shall be
      deemed modified to the extent necessary to make  it enforceable
      by such court or agency.  If any such provision is not
      enforceable as set forth in the  preceding sentence, the
      unenforceability of such provision shall not affect the other provisions
      of  this  Warrant,  but  this  Warrant  shall  be  construed  as  if
      such  unenforceable  provision  had  never  been
      contained herein.

            

    

     

    
      	
              17.  

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

            

    

     

    

     

    IN  WITNESS  WHEREOF,  the  Issuer  has  executed  this  Warrant  as  of  the  Date  of  Issuance.

     

    

     

    
 

     

    

     

    

    _______________________________________________________________________

    Fred
Zolla                                                                                                Date

    CEO

    Vemics,
Inc

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    PAGE
INTENTIONALLY LEFT BLANK

    

    

    

    

    

    

    _________________________________________

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    WARRANT
EXERCISE FORM

    

    VEMICS,
INC.

    

    

    The  undersigned  _________________________,  pursuant  to  the  provisions  of  the  within  Warrant,  hereby  elects  to  purchase  _____________  shares  of  Common  Stock  of  Vemics,  Inc.
covered by  the  within  Warrant.

    

    

    Dated:                                                                Signature:

    

    

    Address

    ASSIGNMENT

    

    FOR   VALUE   RECEIVED,   __________________________   hereby   sells,   assigns   and   transfers   unto
__________________________ the within Warrant and all rights evidenced thereby
and does irrevocably constitute and appoint __________________________,
attorney, to transfer the said Warrant on the books of the within named
corporation.

    

    

    Dated:                                                                Signature:

    

    

    Address:

    
 

    PARTIAL
ASSIGNMENT

    

    FOR   VALUE   RECEIVED,   __________________________   hereby   sells,   assigns   and   transfers   unto  __________________________  the  right  to  purchase  ________________  shares  of  Warrant  Stock  evidenced  by  the
within Warrant together with all rights therein, and does irrevocably constitute
and
appoint  __________________________,  attorney,  to  transfer  that  part  of  the  said  Warrant  on  the  books  of  the  within
named corporation.

    

    

    Dated:                                                                Signature:

    

    

    Address:

    

    

    FOR USE
BY THE ISSUER ONLY

    

    This
Warrant No. 070109-0 cancelled (or transferred or exchanged) this ________ day
of

    

    ________,
_____, shares of Common Stock Issued therefore in the name
­­­­_________________.

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