Document:

EX-10.3 SERIES A WARRANT TO PURCHASE SHARES

 

Exhibit 10.3

THIS WARRANT OR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii)
AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THIS
WARRANT.

SERIES A WARRANT TO PURCHASE SHARES

OF COMMON STOCK (this “WARRANT”)

Warrant No A-     

Cruisestock, Inc., a Texas corporation (the “COMPANY”), hereby certifies that, for value received,
                                        (the “HOLDER”) is the registered holder of a warrant (the “WARRANT”) to subscribe
for and purchase                     shares of the fully paid and nonassessable Common Stock (as
adjusted pursuant to Section 4 hereof, the “WARRANT SHARES”) of the Company, at a price per
share equal to eighty cents ($0.80) (the “WARRANT PRICE,” as adjusted pursuant to Section 4
hereof), subject to the provisions and upon the terms and conditions hereinafter set forth.

As used herein, (a) the term “COMMON STOCK” shall mean the Company’s presently authorized Common
Stock, par value $.001 per share, and any stock into or for which such Common Stock may hereafter
be converted or exchanged, (b) the term “DATE OF GRANT” shall mean February ___, 2007, and (c) the
term “OTHER WARRANTS” shall mean any warrant issued upon transfer or partial exercise of this
Warrant. The term “WARRANT” as used herein shall be deemed to include Other Warrants unless the
context hereof or thereof clearly requires otherwise. The Warrant evidenced by this warrant
certificate is a portion of a series of like warrants (collectively, the “SERIES WARRANTS”)
exercisable for the purchase of up to an aggregate of up to 1,875,000 shares of the Company’s
Common Stock (the “SERIES WARRANT SHARES”), on the Date of Grant, which Series Warrants are
evidenced by certificates of like tenor (the “SERIES WARRANT CERTIFICATES”) that have been issued
pursuant to that certain Securities Purchase and Exchange Agreement of even date herewith (the
“PURCHASE AGREEMENT”).

	1.	 	Term. The purchase right represented by this Warrant is exercisable, in whole or in
part, at any time after the earlier of (a) the date the Registration Statement on Form SB-2
(or an alternative available form if the Company is not eligible to file a Form SB-2) covering
the underlying Warrant Shares is declared effective; or (b) twelve (12) months from the Date
of Grant (the “INITIAL EXERCISE DATE”) and from time to time thereafter
through and including the close of business on the date three (3) years from the Initial
Exercise Date (the “EXPIRATION DATE”).

 

 

	2.	 	Exercise; Expiration; Redemption.

	 	a.	 	Method of Exercise; Payment; Issuance of New Warrant. Subject to Section
1 hereof, the purchase right represented by this Warrant may be exercised by the
holder hereof, in whole or in part and from time to time after the Initial Exercise
Date, by the surrender of this Warrant (with the notice of exercise form attached
hereto as Exhibit A duly executed) at the principal office of the Company and
by the payment to the Company of an amount equal to the then applicable Warrant Price
multiplied by the number of Warrant Shares then being purchased. The person or persons
in whose name(s) any certificate(s) representing shares of Common Stock shall be
issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of
record of, and shall be treated for all purposes as the record holder(s) of, the shares
represented thereby (and such shares shall be deemed to have been issued) immediately
prior to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be delivered to the holder
hereof as soon as possible and in any event within thirty (30) days after such exercise
and, unless this Warrant has been fully exercised, a new Warrant representing the
portion of the Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the holder hereof as soon as possible
and in any event within such thirty (30) day period.
	 
	 	b.	 	Expiration. In the event that any portion of this Warrant is unexercised as of
the Expiration Date, such portion of this Warrant shall automatically expire, and the
Holder shall have no rights with respect to such unexercised portion of this Warrant.
	 
	 	c.	 	Maximum. In no event shall any holder be entitled to exercise any Warrant
Shares to the extent that, after such exercise, the sum of the number of shares of
Common Stock beneficially owned by any holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of the Warrant Shares or any unexercised right held by any holder
subject to a similar limitation), would result in beneficial ownership by any holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock (after
taking into account the shares to be issued to the holder upon such exercise). For
purposes of this Section 2(c), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.
Nothing herein shall preclude the holder from disposing of a sufficient number of other
shares of Common Stock beneficially owned by the holder so as to thereafter permit the
continued exercise of this Warrant.

	3.	 	Stock Fully Paid Reservation of Shares. All Warrant Shares that may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance pursuant to the
terms and conditions herein, be fully paid and non-assessable, and free from all taxes (other
than any taxes determined with respect to, or based upon, the income of the person 

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	 	 	to whom
such shares are issued), liens and charges (other than liens or charges created by actions of
the holder of this Warrant or the person to whom such shares are issued), and pre-emptive
rights with respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have authorized,
and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by
this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant.

	4.	 	Adjustment of Warrant Price and Number of Shares. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:

	 	a.	 	Reclassification or Merger. In case of any reclassification, change or
conversion of securities of the class issuable upon exercise of this Warrant (other
than a change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any merger of
the Company with or into another corporation (other than a merger with another
corporation in which the Company is the acquiring and the surviving corporation and
which does not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to the holder of this
Warrant a new Warrant so that the holder of this Warrant shall have the right to
receive, at a total purchase price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the shares of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of shares of
stock, other securities, money and property receivable upon such reclassification,
change or merger by a holder of the number of shares of Common Stock then purchasable
under this Warrant. Such new Warrant shall provide for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 4. The provisions of this Section 4(a) shall similarly apply to
successive reclassifications, changes, mergers and transfers. Notwithstanding the
foregoing, this Section 4(a) shall not apply to the Reverse Merger (as defined
in the Certificate of Designations, Preferences and Rights of the Series A Convertible
Preferred Stock (the “CERTIFICATE OF DESIGNATIONS”).
	 
	 	b.	 	Subdivision or Combination of Shares. If at any time while this Warrant remains
outstanding and unexpired the Company shall subdivide or combine its outstanding shares
of Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision and increased in the case of a combination, and the number of Warrant
Shares purchasable upon the exercise of the unexercised portion of the Warrant shall be
proportionately increased in the case
of a subdivision and decreased in the case of a combination, effective at the close
of business on the date the subdivision or combination becomes effective.

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	 	c.	 	Stock Dividends. If at any time while this Warrant is outstanding and unexpired
the Company shall pay a dividend with respect to Common Stock payable in Common Stock,
then the Warrant Price shall be adjusted, from and after the date of determination of
stockholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Warrant Price in effect immediately prior to such date of
determination by a fraction (i) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to such dividend, and (ii) the
denominator of which shall be the total number of shares of Common Stock outstanding
immediately after such dividend.
	 
	 	d.	 	Rights Offerings. In case the Company shall, at any time after the Date of
Grant, issue rights, options or warrants to the holders of equity securities of the
Company, entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible or exchangeable into Common Stock) (excluding Exempt Securities,
as such term is defined in Section 4(l) below) at a price per share of Common
Stock (or having a conversion or exchange price per share of Common Stock if a security
convertible or exchangeable into Common Stock) less than the Series A Conversion Price
(as defined in the Certificate of Designations) per share of Common Stock on the record
date for such issuance (or the date of issuance, if there is no record date), the
Warrant Price to be in effect on and after such record date (or issuance date, as the
case may be) shall be reduced, concurrently with such issue, to a price equal to the
consideration received per share in connection with the issuance of such Additional
Shares of Common Stock. In case such purchase or subscription price may be paid in part
or in whole in a form other than cash, the fair value of such consideration shall be
determined by the Board of Directors of the Company in good faith as set forth in a
duly adopted board resolution certified by the Company’s Secretary or Assistant
Secretary. Such adjustment shall be made successively whenever such an issuance occurs;
and in the event that such rights, options, warrants, or convertible or exchangeable
securities are not so issued or expire or cease to be convertible or exchangeable
before they are exercised, converted, or exchanged (as the case may be), then the
Warrant Price shall again be adjusted to be the Warrant Price that would then be in
effect if such issuance had not occurred. Additionally, the Company shall adjust the
number of Warrant Shares issued upon any exercise of this Warrant after the adjustment
required pursuant to this Section 4(e) but prior to the date such subsequent
adjustment is made, in order to equitably reflect the fact that such rights, options,
warrants, or convertible or exchangeable securities were not so issued or expired or
ceased to be convertible or exchangeable before they were exercised, converted, or
exchanged (as the case may be).
	 
	 	e.	 	Other Issuances of Securities. In case the Company or any Subsidiary shall, at
any time after the Date of Grant, issue shares of Common Stock, or rights, options,
warrants or convertible or exchangeable securities containing the right to subscribe
for or purchase shares of Common Stock (excluding (i) shares, rights,
options, warrants, or convertible or exchangeable securities issued in any of the
transactions described in Sections 4(a), 4(b), 4(c), or 4(d) above; (ii)
shares issued upon the exercise of such rights, options or warrants or upon
conversion or 

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	 	 	 	exchange of such convertible or exchangeable securities; (iii) this
Warrant and any shares issued upon exercise thereof; and (iv) Exempt Securities (as
defined in Section 4(l) below), at a price per share of Common Stock (determined in
the case of such rights, options, warrants, or convertible or exchangeable
securities by dividing (x) the total amount receivable by the Company in
consideration of the sale and issuance of such rights, options, warrants, or
convertible or exchangeable securities, plus the total minimum consideration payable
to the Company upon exercise, conversion, or exchange thereof by (y) the total
maximum number of shares of Common Stock covered by such rights, options, warrants,
or convertible or exchangeable securities) lower than the Series A Conversion Price
(as defined in Certificate of Designations), then the Warrant Price shall be
reduced, concurrently with such issue, to a price equal to the consideration
received per share in connection with the issuance of such Additional Shares of
Common Stock. For the purposes of such adjustment, the maximum number of shares of
Common Stock which the holder of any such rights, options, warrants or convertible
or exchangeable securities shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of such sale and issuance and the
consideration received by the Company therefore shall be deemed to be the
consideration received by the Company for such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum consideration or premium
stated in such rights, options, warrants, or convertible or exchangeable securities
to be paid for the shares of Common Stock covered thereby. In case the Company shall
sell and issue shares of Common Stock, or rights, options, warrants, or convertible
or exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then, in determining the price per share of
Common Stock and the consideration received by the Company for purposes of the first
sentence of this Section 4(h), the Board of Directors of the Company shall
determine, in good faith, the fair value of said property, and such determination
shall be described in a duly adopted board resolution certified by the Company’s
Secretary or Assistant Secretary. In case the Company shall sell and issue rights,
options, warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock together with one (1) or more other
securities as a part of a unit at a price per unit, then, in determining the price
per share of Common Stock and the consideration received by the Company for purposes
of the first sentence of this Section 4(h), the Board of Directors of the Company
shall determine, in good faith, which determination shall be described in a duly
adopted board resolution certified by the Company’s Secretary or Assistant
Secretary, the fair value of the rights, options, warrants, or convertible or
exchangeable securities then being sold as part of such unit. Such adjustment shall
be made successively whenever such an issuance occurs, and in the event that such
rights, options, warrants, or convertible or exchangeable securities expire or
cease to be convertible or exchangeable before they are exercised, converted, or
exchanged (as the case may be), then the Warrant Price shall again be adjusted to
the Warrant Price that would then be in effect if such sale and issuance had not

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	 	 	 	occurred, but such subsequent adjustment shall not affect the number of Warrant
Shares issued upon any exercise of the Warrant prior to the date such subsequent
adjustment is made.

	 	f.	 	Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the
number of Warrant Shares purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Warrant Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the numerator
of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter
	 
	 	g.	 	Determination of Fair Market Value. For purposes of this Section 4, “FAIR
MARKET VALUE” of a share of Common Stock as of a particular date (the “DETERMINATION
DATE”) shall mean (i) if shares of Common Stock are traded on a national securities
exchange (an “EXCHANGE”), the weighted average of the closing sale price of a share of
the Common Stock of the Company on the last five (5) trading days prior to the
Determination Date reported on such Exchange as reported in The Wall Street Journal
(weighted with respect to the trading volume with respect to each such day); (ii) if
shares of Common Stock are not traded on an Exchange but trade in the over-the-counter
market and such shares are quoted on the National Association of Securities Dealers
Automated Quotations System (“NASDAQ”), the weighted average of the closing sale price
of a share of the Common Stock of the Company on the last five (5) trading days prior
to the Determination Date reported on NASDAQ as reported in The Wall Street Journal
(weighted with respect to the trading volume with respect to each such day); (iii) if
such shares are an issue for which last sale prices are not reported on NASDAQ, the
average of the closing sale price, in each case on the last five (5) trading days (or
if the relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding business day on which there was such a price
or quotation) prior to the Determination Date as reported by the Over the Counter
Bulletin Board (the “OTCBB”), the National Quotation Bureau, Incorporated, or any other
successor organization; (iv) if no closing sales price is reported for the Common Stock
by the OTCBB, National Quotation Bureau, Incorporated or any other successor
organization for such day, the average of the high and low bid and asked price of any
of the market makers for the Common Stock as reported on the OTCBB or in the “pink
sheets” by the Pink Sheets, LLC on the last five (5) trading days; or (v) if no price
can be determined on the basis of the above methods of valuation, then the judgment of
valuation shall be determined in good faith by the Board of Directors of the Company,
which determination shall be described in a duly adopted board resolution certified by
the Company’s Secretary or Assistant Secretary. If the Board of Directors of the
Company is unable to determine any Valuation (as defined below), or if the holders of
at least fifty percent (50%) of all of the
Warrant Shares then issuable hereunder (collectively, the “REQUESTING HOLDERS”)
disagree with the Board’s determination of any Valuation by written notice delivered
to the Company within five (5) business days after the 

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	 	 	 	determination thereof by the
Board of Directors of the Company is communicated to holders of the Warrants
affected thereby, which notice specifies a majority-in-interest of the Requesting
Holders’ determination of such Valuation, then the Company and a
majority-in-interest of the Requesting Holders shall select a mutually acceptable
investment banking firm of national reputation which has not had a material
relationship with the Company or any officer of the Company within the preceding two
(2) years, which shall determine such Valuation. Such investment banking firm’s
determination of such Valuation shall be final, binding and conclusive on the
Company and the holders of all of the Warrants issued hereunder and then
outstanding. Any and all costs and fees of such investment banking firm shall be
borne equally by the Company and the Requesting Holders, however, if the Valuation
is within ninety percent (90%) of either party’s valuation, then the other party
shall pay all of the costs and fees of such investment banking firm. For purposes of
this Section 4(j), the term “VALUATION” shall mean the determination, to be made
initially by the Board of Directors of the Company, of the fair market value per
share of Common Stock pursuant to clause (v) above.

	 	h.	 	Subsequent Changes. If, at any time after any adjustment of the Warrant Price
shall have been made hereunder as the result of any issuance, sale or grant of any
rights, options, warrants or convertible or exchangeable securities, any of such
rights, options or warrants or the rights of conversion or exchange associated with
such convertible or exchangeable securities shall expire by their terms or any of such
rights, options, warrants or convertible or exchangeable securities shall be
repurchased by the Company or a Subsidiary for a consideration per underlying share of
Common Stock not exceeding the amount of such consideration received by the Company in
connection with the issuance, sale or grant of such rights, options, warrants or
convertible or exchangeable securities, the Warrant Price then in effect shall
forthwith be increased to the Warrant Price that would have been in effect if such
expiring right, option or warrant or rights of conversion or exchange or such
repurchased rights, options, warrants or convertible or exchangeable securities had
never been issued. Similarly, if at any time after any such adjustment of the Warrant
Price shall have been made pursuant to Section 4(h) above (i) any additional aggregate
consideration is received or becomes receivable by the Company in connection with the
issuance or exercise of such rights, options, warrants or convertible or exchangeable
securities; or (ii) there is a reduction in the conversion or exchange ratio applicable
to such convertible or exchangeable securities so that fewer shares of Common Stock
will be issuable upon the conversion or exchange thereof or there is a decrease in the
number of shares of Common Stock issuable upon exercise of such rights, options or
warrants (except where such reduction or decrease results from a combination of shares
described in Section 4(c) above), the Warrant Price then in effect shall be forthwith
readjusted to the Warrant Price that would have been in effect had such changes taken
place at the time that such rights, options, warrants or convertible
or exchangeable securities were initially issued, granted or sold. In no event shall
any readjustment under this Section 4(k) affect the validity of any Warrant Shares
issued upon any exercise of this Warrant prior to such readjustment.

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	 	i.	 	Excluded Transactions. Notwithstanding the foregoing, Sections 4(d)
or 4(e) above shall not apply to: (i) the Company’s offering of up to 1,500,000
shares of Series A Convertible Preferred Stock, with related Series A Warrants and
Series B Warrants pursuant to the Securities Purchase and Share Exchange Agreement of
even date herewith (the “OFFERING”); (ii) shares of Common Stock issued or deemed
issued to employees or directors of, or consultants to, the Company or any of its
subsidiaries for services rendered pursuant to a plan, agreement, or arrangement
approved by the Board of Directors of the Company; (iii) the issuance of securities
pursuant to the conversion or exercise of convertible or exercisable securities
outstanding on the date hereof; (iv) shares of Common Stock issued in connection with
any stock split or stock dividend; (v) the issuance of Series A Convertible Preferred
Stock, Series A Warrants or Series B Warrants in connection with the Offering; (vi) the
issuance of shares of Common Stock upon conversion or exercise, as applicable, of the
Series A Convertible Preferred Stock, Series A Warrants or Series B Warrants in
connection with the Offering, in each case, provided the issuance is pursuant to the
terms of such option or convertible security; (vii) warrants issued to Midtown Partners
& Co., LLC, as placement agent in connection with Offering, and shares of Common Stock
issued in connection with the exercise thereof; (viii) shares of Common Stock issued or
issuable in connection with a bona fide joint venture or business acquisition of or by
the Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock, or otherwise; provided that any such issuance is approved by the Board of
Directors; (ix) the Reverse Merger (as defined in the Certificate of Designations of
the Series A Convertible Preferred Stock); and (x) Series A Warrants and Series B
Warrants issued pursuant to Section 2 of the Investor Rights Agreement of even
date herewith (the “INVESTOR RIGHTS AGREEMENT”)(collectively, the “EXEMPT SECURITIES”).

	5.	 	Notice of Adjustments. Whenever the Warrant Price or the number of Warrant Shares
purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall
deliver to the holder of this Warrant a certificate signed by its chief financial officer
setting forth, in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Warrant Price and the
number of Warrant Shares purchasable hereunder after giving effect to such adjustment
	 
	6.	 	Fractional Shares. No fractional shares of Common Stock will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company shall make a
cash payment therefor based on the fair market value (as determined in accordance with Section
4(j) above) of a share of Common Stock on the date of exercise, or round up to the next whole
number of shares, at the Company’s option.
	 
	7.	 	Compliance with Securities Act and Investor Rights Agreement; Disposition of Warrant or
Warrant Shares.

	 	a.	 	Compliance with Securities Act. The holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued 

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	 	 	 	upon
exercise hereof are being acquired for investment and that such holder will not offer,
sell or otherwise dispose of this Warrant, or any shares of Common Stock to be issued
upon exercise hereof except under circumstances which will not result in a violation of
the Securities Act. Upon exercise of this Warrant, the holder hereof shall confirm in
writing, by executing the form attached as Schedule 1 to Exhibit A hereto, that the
shares of Common Stock so purchased are being acquired for investment and not with a
view toward distribution or resale. This Warrant and all shares of Common Stock issued
upon exercise of this Warrant (unless registered under the Securities Act) shall be
stamped or imprinted with a legend in substantially the following form:

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR THE HOLDER,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A
NO-ACTION LETTER(S) FROM THE APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING
WITH THE PROVISIONS OF SECTION 8 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED DIRECTLY
OR INDIRECTLY.”

In addition, in connection with the issuance of this Warrant, the holder specifically represents to
the Company by acceptance of this Warrant as follows:

	1.	 	The holder is aware of the Company’s business affairs and financial condition, and has
acquired information about the Company sufficient to reach an informed and knowledgeable
decision to acquire this Warrant. The holder is acquiring this Warrant for its own account for
investment purposes only and not with a view to, or for the resale in connection with, any
“distribution” thereof for purposes of the Securities Act.
	 
	2.	 	The holder understands that this Warrant and the Warrant Shares have not been registered
under the Securities Act in reliance upon a specific exemption there from, which exemption
depends upon, among other things, the bona fide nature of the holder’s investment intent as
expressed herein. In this connection, the holder understands that, in the view of the SEC, the
statutory basis for such exemption may be unavailable if the holder’s representation was
predicated solely upon a present intention to hold the Warrant and the Warrant Shares for the
minimum capital gains period specified under applicable tax laws, for a deferred sale, for or
until an increase or decrease in the market price of the Warrant and the Warrant Shares, or
for a period of one (1) year or any other fixed period in the future.
	 
	3.	 	The holder further understands that this Warrant and the Warrant Shares must be held
indefinitely unless subsequently registered under the Securities Act and any applicable state
securities laws, or unless exemptions from registration are otherwise available.
	 
	4.	 	The holder is aware of the provisions of Rule 144 and 144A, promulgated under the Securities
Act, which, in substance, permit limited public resale of “restricted securities” 

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	 	 	acquired,
directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions, if applicable,
including, among other things: the availability of certain public information about the
Company, the resale occurring not less than one (1) year after the party has purchased and
paid for the securities to be sold; the sale being made through a broker in an unsolicited
“broker’s transaction” or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended) and the amount of securities
being sold during any three (3)month period not exceeding the specified limitations stated
therein.

	5.	 	The holder further understands that at the time it wishes to sell this Warrant and the
Warrant Shares there may be no public market upon which to make such a sale, and that, even if
such a public market then exists, the Company may not be satisfying the current public
information requirements of Rule 144 and 144A, and that, in such event, the holder may be
precluded from selling this Warrant and the Warrant Shares under Rule 144 and 144A even if the
one (1)-year minimum holding period has been satisfied.

	6.	 	The holder further understands that, in the event that all of the requirements of Rule 144
and 144A are not satisfied, registration under the Securities Act, compliance with Regulation
A, or some other registration exemption will be required; and that, notwithstanding the fact
that Rule 144 and 144A are not exclusive, the Staff of the SEC has expressed its opinion that
persons proposing to sell private placement securities other than in a registered offering and
otherwise than pursuant to Rule 144 and 144A will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or sales, and
that such persons and their respective brokers who participate in such transactions do so at
their own risk.

	 	b.	 	Compliance with Investor Rights Agreement. The holder of this Warrant, by
acceptance hereof, understands and agrees that this Warrant is subject to, and the
transfer of the Warrant Shares may be prohibited by, the Investor Rights Agreement, and
holder hereby specifically understands and agrees as follows:

THIS WARRANT, AND THE SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES EVIDENCED HEREBY,
ARE SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND CONDITIONS OF THAT CERTAIN
INVESTOR RIGHTS AGREEMENT, OF EVEN DATE HEREWITH, BY AND AMONG THE HOLDER, THE COMPANY, AND CERTAIN
HOLDERS OF STOCK OF THE COMPANY, AND, BY ACCEPTING ANY INTEREST HEREIN, THE PERSON ACCEPTING SUCH
INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BE BOUND BY ALL OF THE PROVISIONS OF SUCH AGREEMENT.
COPIES OF THE INVESTOR RIGHTS
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY’S SECRETARY.

	 	c.	 	Exchange. This Warrant may be exchanged, without payment of any service charge,
for one (1) or more new Warrants of like tenor exercisable for the same aggregate
number of shares of Common Stock upon surrender to the Company by the registered holder
hereof in person or by legal representative or by attorney 

10

 

	 	 	 	duly authorized in writing
and, upon issuance of the new Warrant or Warrants, the surrendered Warrant shall be
cancelled and disposed of by the Company.

	 	d.	 	Disposition of Warrant or Warrant Shares. With respect to any offer, sale or
other disposition of this Warrant, or any Warrant Shares acquired pursuant to the
exercise of this Warrant prior to registration of such Warrant or Warrant Shares, the
holder hereof and each subsequent holder of this Warrant agrees to give written notice
to the Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder’s counsel, if reasonably requested by the Company, to
the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Securities Act as then in effect or any
federal or state law then in effect) of this Warrant or such Warrant Shares and
indicating whether or not under the Securities Act certificates for this Warrant or
such Warrant Shares to be sold or otherwise disposed of require any restrictive legend
as to applicable restrictions on transferability in order to ensure compliance with
applicable laws. Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly as practicable, shall
notify such holder that such holder may sell or otherwise dispose of this Warrant or
such Warrant Shares, all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this Section 8(d) that the
opinion of counsel for the holder is not reasonably satisfactory to the Company, the
Company shall so notify the holder promptly after such determination has been made and
neither this Warrant nor any Warrant Shares shall be sold or otherwise disposed of
until such disagreement has been resolved. The foregoing notwithstanding, this Warrant
or such Warrant Shares may (i) as to such federal laws, be offered, sold or otherwise
disposed of in accordance with Rule 144 and 144A under the Securities Act, provided
that the Company shall have been furnished with such information as the Company may
reasonably request to provide a reasonable assurance that the provisions of Rule 144
and 144A have been satisfied and (ii) be offered, sold, distributed or otherwise
transferred to Affiliates of the Holder without regard to this Section 8(d), but only
if the Company is in receipt of an opinion of counsel as to the permissibility of such
transfer under federal and state securities laws and an investor representation letter
from the transferee, in form and substance reasonably satisfactory to the Company. Each
certificate representing this Warrant or the Warrant Shares thus transferred (except a
transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with such laws, unless, in the aforesaid
opinion of counsel for the holder, such legend is not required in order to ensure
compliance with such laws. The Company may issue stop transfer instructions to its
transfer agent or, if
acting as its own transfer agent, the Company may stop transfer on its corporate
books, in connection with such restrictions. As used herein, “AFFILIATE OF THE
HOLDER” shall mean (x) any owner, shareholder, partner or member of the Holder, and
(y) any other Person that directly or indirectly, through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
Holder.

11

 

	9.	 	Rights as Stockholders; Information. No holder of this Warrant, as such, shall be
entitled to vote or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the holder of this Warrant, as such, any
of the rights of a stockholder of the Company or any right to vote for the election of the
directors or upon any matter submitted to stockholders at any meeting thereof, or to receive
notice of meetings, until this Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise hereof shall have become deliverable, as provided herein. The
foregoing notwithstanding, the Company will transmit to the holder of this Warrant such
information, documents and reports as are generally distributed to the holders of any class or
series of the securities of the Company concurrently with the distribution thereof to the
stockholders.
	 
	10.	 	Additional Rights. In the event that the Company undertakes to (i) sell, lease,
exchange, convey or otherwise dispose of all or substantially all of its property or business;
or (ii) merge into or consolidate with any other corporation (other than a wholly-owned
Subsidiary), or effect any transaction (including a merger or other reorganization) or series
of related transactions, in which more than fifty percent (50%) of the voting power of the
Company is disposed of, the Company will use its best efforts to provide at least thirty (30)
days notice to the holder of the terms and conditions of the proposed transaction. The Company
shall cooperate with the holder in consummating the sale of this Warrant in connection with
any such transaction.
	 
	11.	 	Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the party against
which enforcement of the same is sought
	 
	12.	 	Notices. Unless otherwise specifically provided herein, all communications under this
Warrant shall be in writing and shall be deemed to have been duly given (i) on the date of
service if served personally on the party to whom notice is to be given; (ii) on the day of
transmission if sent by facsimile transmission to the number shown on the books of the
Company, and telephonic confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the day after delivery to Federal Express or similar overnight courier;
or (iv) on the fifth day after mailing, if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid, and properly addressed, return
receipt requested, to each such holder at its address as shown on the books of the Company or
to the Company at the address indicated therefor on the signature page of this Warrant. Any
party hereto may change its address for purposes of this Section 14 by giving the other party
written notice of the new address in the manner set forth herein.
	 
	13.	 	Binding Effect on Successors. This Warrant shall be binding upon any corporation
succeeding the Company by merger, consolidation or acquisition of all or substantially all of
the Company’s assets, and all of the obligations of the Company relating to the Common Stock
issuable upon the exercise or conversion of this Warrant shall survive the exercise,
conversion and termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the 

12

 

	 	 	holder hereof. The
Company will, at the time of the exercise or conversion of this Warrant, in whole or in part,
upon request of the holder hereof but at the Company’s expense, acknowledge in writing its
continuing obligation to the holder hereof in respect of any rights to which the holder hereof
shall continue to be entitled after such exercise or conversion in accordance with this
Warrant; provided, however, that the failure of the holder hereof to make any such request
shall not affect the continuing obligation of the Company to the holder hereof in respect of
such rights.

	14.	 	Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that,
upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate and, in the case of any
loss, theft or destruction, upon receipt of an executed lost securities bond or indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender
and cancellation of such Warrant or stock certificate, the Company will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.
	 
	15.	 	Descriptive Headings. The descriptive headings of the several paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this Warrant.
	 
	16.	 	Governing Law. This Warrant shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of Florida.
	 
	17.	 	Remedies. In case any one (1) or more of the covenants and agreements contained in
this Warrant shall have been breached, the holders hereof (in the case of a breach by the
Company), or the Company (in the case of a breach by a holder), may proceed to protect and
enforce their or its rights either by suit in equity and/or by action at law, including, but
not limited to, an action for damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained in this Warrant.
	 
	18.	 	Acceptance. Receipt of this Warrant by the holder hereof shall constitute acceptance
of and agreement to the foregoing terms and conditions.
	 
	19.	 	No Impairment of Rights. The Company will not, by amendment of its Certificate of
Incorporation or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against impairment.

13

 

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

CRUISESTOCK, INC.

                                                            

                                        , Chief Executive Officer

Dated: February ___, 2007

14

 

NOTICE TO FLORIDA RESIDENTS:

WHERE SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA (EXCLUDING CERTAIN INSTITUTIONAL PURCHASERS
DESCRIBED IN SECTION 517.061(7) OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT) (THE “ACT”),
ANY SUCH SALE MADE PURSUANT TO SECTION 517.061(11) OF THE ACT SHALL BE VOIDABLE BY THE PURCHASER
EITHER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
ISSUER, OR AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY
OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

15

 

EXHIBIT A

NOTICE OF EXERCISE

To:                                                            

1. The undersigned hereby elects to purchase           shares of Common Stock of pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

2. Please issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name or names as are specified below:

                                                            

(Name)

                                                            

                                                            

(Address)

3. The undersigned represents that the aforesaid shares are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of distributing or reselling
such shares. In support thereof, the undersigned has executed an Investment Representation
Statement attached hereto as Schedule 1

                                                            

(Signature)

                                                            

(Date)

16EX-10.4 SERIES B WARRNAT TO PURCHASE SHARES

 

Exhibit 10.4

THIS WARRANT OR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO,
(ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7
OF THIS WARRANT.

SERIES B WARRANT TO PURCHASE SHARES

OF COMMON STOCK (this “WARRANT”)

Warrant No B-                    

Cruisestock, Inc., a Texas corporation (the “COMPANY”), hereby certifies that, for value received,
                     (the “HOLDER”) is the registered holder of a warrant (the “WARRANT”) to subscribe
for and purchase                                 shares of the fully paid and nonassessable Common Stock (as
adjusted pursuant to Section 4 hereof, the “WARRANT SHARES”) of the Company, at a price per
share equal to one dollar and sixty cents ($1.60) (the “WARRANT PRICE,” as adjusted pursuant to
Section 4 hereof), subject to the provisions and upon the terms and conditions hereinafter
set forth.

As used herein, (a) the term “COMMON STOCK” shall mean the Company’s presently authorized Common
Stock, par value $.001 per share, and any stock into or for which such Common Stock may hereafter
be converted or exchanged, (b) the term “DATE OF GRANT” shall mean January ___, 2007, and (c) the
term “OTHER WARRANTS” shall mean any warrant issued upon transfer or partial exercise of this
Warrant. The term “WARRANT” as used herein shall be deemed to include Other Warrants unless the
context hereof or thereof clearly requires otherwise. The Warrant evidenced by this warrant
certificate is a portion of a series of like warrants (collectively, the “SERIES WARRANTS”)
exercisable for the purchase of up to an aggregate of up to 1,875,000 shares of the Company’s
Common Stock (the “SERIES WARRANT SHARES”), on the Date of Grant, which Series Warrants are
evidenced by certificates of like tenor (the “SERIES WARRANT CERTIFICATES”) that have been issued
pursuant to that certain Securities Purchase and Exchange Agreement of even date herewith (the
“PURCHASE AGREEMENT”).

	1.	 	Term. The purchase right represented by this Warrant is exercisable, in whole or in
part, at any time after the earlier of (a) the date the Registration Statement on Form SB-2
(or an alternative available form if the Company is not eligible to file a Form SB-2) covering
the underlying Warrant Shares is declared effective; or (b) twelve (12) months from the Date
of Grant (the “INITIAL EXERCISE DATE”) and from time to time thereafter through and including
the close of business on the date five (5) years from the Initial Exercise Date (the
“EXPIRATION DATE”).

 

 

	2.	 	Exercise; Expiration; Redemption.

	 	a.	 	Method of Exercise; Payment; Issuance of New Warrant. Subject to Section
1 hereof, the purchase right represented by this Warrant may be exercised by the
holder hereof, in whole or in part and from time to time after the Initial Exercise
Date, by the surrender of this Warrant (with the notice of exercise form attached
hereto as Exhibit A duly executed) at the principal office of the Company and
by the payment to the Company of an amount equal to the then applicable Warrant Price
multiplied by the number of Warrant Shares then being purchased. The person or persons
in whose name(s) any certificate(s) representing shares of Common Stock shall be
issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of
record of, and shall be treated for all purposes as the record holder(s) of, the shares
represented thereby (and such shares shall be deemed to have been issued) immediately
prior to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be delivered to the holder
hereof as soon as possible and in any event within thirty (30) days after such exercise
and, unless this Warrant has been fully exercised, a new Warrant representing the
portion of the Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the holder hereof as soon as possible
and in any event within such thirty (30) day period.
	 
	 	b.	 	Expiration. In the event that any portion of this Warrant is unexercised as of
the Expiration Date, such portion of this Warrant shall automatically expire, and the
Holder shall have no rights with respect to such unexercised portion of this Warrant.
	 
	 	c.	 	Maximum. In no event shall any holder be entitled to exercise any Warrant
Shares to the extent that, after such exercise, the sum of the number of shares of
Common Stock beneficially owned by any holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of the Warrant Shares or any unexercised right held by any holder
subject to a similar limitation), would result in beneficial ownership by any holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock (after
taking into account the shares to be issued to the holder upon such exercise). For
purposes of this Section 2(c), beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.
Nothing herein shall preclude the holder from disposing of a sufficient number
of other shares of Common Stock beneficially owned by the holder so as to thereafter permit the
continued exercise of this Warrant.

	3.	 	Stock Fully Paid Reservation of Shares. All Warrant Shares that may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance pursuant to the
terms and conditions herein, be fully paid and non-assessable, and free from all taxes (other
than any taxes determined with respect to, or based upon, the income of the person

 

 

	 	 	to whom such shares are issued), liens and charges (other than liens or charges created by
actions of the holder of this Warrant or the person to whom such shares are issued), and
pre-emptive rights with respect to the issue thereof. During the period within which the
rights represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issue upon exercise of the purchase rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented by this Warrant.

	4.	 	Adjustment of Warrant Price and Number of Shares. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:

	 	a.	 	Reclassification or Merger. In case of any reclassification, change or
conversion of securities of the class issuable upon exercise of this Warrant (other
than a change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any merger of
the Company with or into another corporation (other than a merger with another
corporation in which the Company is the acquiring and the surviving corporation and
which does not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall duly execute and deliver to the holder of this
Warrant a new Warrant so that the holder of this Warrant shall have the right to
receive, at a total purchase price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the shares of Common Stock
theretofore issuable upon exercise of this Warrant, the kind and amount of shares of
stock, other securities, money and property receivable upon such reclassification,
change or merger by a holder of the number of shares of Common Stock then purchasable
under this Warrant. Such new Warrant shall provide for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 4. The provisions of this Section 4(a) shall similarly apply to
successive reclassifications, changes, mergers and transfers. Notwithstanding the
foregoing, this Section 4(a) shall not apply to the Reverse Merger (as defined
in the Certificate of Designations, Preferences and Rights of the Series A Convertible
Preferred Stock (the “CERTIFICATE OF DESIGNATIONS”).
	 
	 	b.	 	Subdivision or Combination of Shares. If at any time while this Warrant remains
outstanding and unexpired the Company shall subdivide or combine its outstanding shares
of Common Stock, the Warrant Price shall be proportionately decreased in the case of a
subdivision and increased in the case of a combination, effective at the close of
business on the date the subdivision or combination becomes effective.
	 
	 	c.	 	Stock Dividends. If at any time while this Warrant is outstanding and unexpired
the Company shall pay a dividend with respect to Common Stock payable in Common Stock,
then the Warrant Price shall be adjusted, from and after the date

 

 

	 	 	 	of determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Warrant Price in effect immediately
prior to such date of determination by a fraction (i) the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior to such
dividend, and (ii) the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend.
	 
	 	d.	 	Rights Offerings. In case the Company shall, at any time after the Date of
Grant, issue rights, options or warrants to the holders of equity securities of the
Company, entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible or exchangeable into Common Stock) (excluding Exempt Securities,
as such term is defined in Section 4(l) below) at a price per share of Common
Stock (or having a conversion or exchange price per share of Common Stock if a security
convertible or exchangeable into Common Stock) less than the Series A Conversion Price
(as defined in the Certificate of Designations) per share of Common Stock on the record
date for such issuance (or the date of issuance, if there is no record date), the
Warrant Price to be in effect on and after such record date (or issuance date, as the
case may be) shall be reduced, concurrently with such issue, to a price equal to the
consideration received per share in connection with the issuance of such Additional
Shares of Common Stock. In case such purchase or subscription price may be paid in part
or in whole in a form other than cash, the fair value of such consideration shall be
determined by the Board of Directors of the Company in good faith as set forth in a
duly adopted board resolution certified by the Company’s Secretary or Assistant
Secretary. Such adjustment shall be made successively whenever such an issuance occurs;
and in the event that such rights, options, warrants, or convertible or exchangeable
securities are not so issued or expire or cease to be convertible or exchangeable
before they are exercised, converted, or exchanged (as the case may be), then the
Warrant Price shall again be adjusted to be the Warrant Price that would then be in
effect if such issuance had not occurred. Additionally, the Company shall adjust the
number of Warrant Shares issued upon any exercise of this Warrant after the adjustment
required pursuant to this Section 4(e) but prior to the date such subsequent
adjustment is made, in order to equitably reflect the fact that such rights, options,
warrants, or convertible or exchangeable securities were not so issued or expired or
ceased to be convertible or exchangeable before they were exercised, converted, or
exchanged (as the case may be).
	 
	 	e.	 	Other Issuances of Securities. In case the Company or any Subsidiary shall, at
any time after the Date of Grant, issue shares of Common Stock, or rights, options,
warrants or convertible or exchangeable securities containing the right to subscribe
for or purchase shares of Common Stock (excluding (i) shares, rights, options,
warrants, or convertible or exchangeable securities issued in any of the transactions
described in Sections 4(a), 4(b), 4(c), or 4(d) above; (ii) shares issued upon
the exercise of such rights, options or warrants or upon conversion or exchange of such
convertible or exchangeable securities; (iii) this Warrant and any shares issued upon
exercise thereof; and (iv) Exempt Securities (as defined in Section 4(l) below), at a
price per share of Common Stock (determined in the case

 

 

	 	 	 	of such rights, options, warrants, or convertible or exchangeable securities by
dividing (x) the total amount receivable by the Company in consideration of the sale
and issuance of such rights, options, warrants, or convertible or exchangeable
securities, plus the total minimum consideration payable to the Company upon
exercise, conversion, or exchange thereof by (y) the total maximum number of shares
of Common Stock covered by such rights, options, warrants, or convertible or
exchangeable securities) lower than the Series A Conversion Price (as defined in
Certificate of Designations), then the Warrant Price shall be reduced, concurrently
with such issue, to a price equal to the consideration received per share in
connection with the issuance of such Additional Shares of Common Stock. For the
purposes of such adjustment, the maximum number of shares of Common Stock which the
holder of any such rights, options, warrants or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of such sale and issuance and the
consideration received by the Company therefore shall be deemed to be the
consideration received by the Company for such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum consideration or premium
stated in such rights, options, warrants, or convertible or exchangeable securities
to be paid for the shares of Common Stock covered thereby. In case the Company shall
sell and issue shares of Common Stock, or rights, options, warrants, or convertible
or exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock for a consideration consisting, in whole or in part, of property
other than cash or its equivalent, then, in determining the price per share of
Common Stock and the consideration received by the Company for purposes of the first
sentence of this Section 4(h), the Board of Directors of the Company shall
determine, in good faith, the fair value of said property, and such determination
shall be described in a duly adopted board resolution certified by the Company’s
Secretary or Assistant Secretary. In case the Company shall sell and issue rights,
options, warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock together with one (1) or more other
securities as a part of a unit at a price per unit, then, in determining the price
per share of Common Stock and the consideration received by the Company for purposes
of the first sentence of this Section 4(h), the Board of Directors of the Company
shall determine, in good faith, which determination shall be described in a duly
adopted board resolution certified by the Company’s Secretary or Assistant
Secretary, the fair value of the rights, options, warrants, or convertible or
exchangeable securities then being sold as part of such unit. Such adjustment shall
be made successively whenever such an issuance occurs, and in the event that such
rights, options, warrants, or convertible or exchangeable securities expire or cease
to be convertible or exchangeable before they are exercised, converted, or exchanged
(as the case may be), then the Warrant Price shall again be adjusted to the Warrant
Price that would then be in effect if such sale and issuance had not occurred, but
such subsequent adjustment shall not affect the number of Warrant Shares issued upon
any exercise of the Warrant prior to the date such subsequent adjustment is made.

 

 

	 	f.	 	Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the
number of Warrant Shares purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Warrant Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the numerator
of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter
	 
	 	g.	 	Determination of Fair Market Value. For purposes of this Section 4,
“FAIR MARKET VALUE” of a share of Common Stock as of a particular date (the
“DETERMINATION DATE”) shall mean (i) if shares of Common Stock are traded on a national
securities exchange (an “EXCHANGE”), the weighted average of the closing sale price of
a share of the Common Stock of the Company on the last five (5) trading days prior to
the Determination Date reported on such Exchange as reported in The Wall Street Journal
(weighted with respect to the trading volume with respect to each
such day); (ii) if shares of Common Stock are not traded on an Exchange but trade in the over-the-counter
market and such shares are quoted on the National Association of Securities Dealers
Automated Quotations System (“NASDAQ”), the weighted average of the closing sale price
of a share of the Common Stock of the Company on the last five (5) trading days prior
to the Determination Date reported on NASDAQ as reported in The Wall Street Journal
(weighted with respect to the trading volume with respect to each such day); (iii) if
such shares are an issue for which last sale prices are not reported on NASDAQ, the
average of the closing sale price, in each case on the last five (5) trading days (or
if the relevant price or quotation did not exist on any of such days, the relevant
price or quotation on the next preceding business day on which there was such a price
or quotation) prior to the Determination Date as reported by the Over the Counter
Bulletin Board (the “OTCBB”), the National Quotation Bureau, Incorporated, or any other
successor organization; (iv) if no closing sales price is reported for the Common Stock
by the OTCBB, National Quotation Bureau, Incorporated or any other successor
organization for such day, the average of the high and low bid and asked price of any
of the market makers for the Common Stock as reported on the OTCBB or in the “pink
sheets” by the Pink Sheets, LLC on the last five (5) trading days; or (v) if no price
can be determined on the basis of the above methods of valuation, then the judgment of
valuation shall be determined in good faith by the Board of Directors of the Company,
which determination shall be described in a duly adopted board resolution certified by
the Company’s Secretary or Assistant Secretary. If the Board of Directors of the
Company is unable to determine any Valuation (as defined below), or if the holders of
at least fifty percent (50%) of all of the Warrant Shares then issuable hereunder
(collectively, the “REQUESTING HOLDERS”) disagree with the Board’s determination of any
Valuation by written notice delivered to the Company within five (5) business days
after the determination thereof by the Board of Directors of the Company is
communicated to holders of the Warrants affected thereby, which notice specifies a
majority-in-interest of the Requesting Holders’ determination of such Valuation, then
the Company and a majority-in-interest of the Requesting Holders shall select a

 

 

	 	 	 	mutually acceptable investment banking firm of national reputation which has not had
a material relationship with the Company or any officer of the Company within the
preceding two (2) years, which shall determine such Valuation. Such investment
banking firm’s determination of such Valuation shall be final, binding and
conclusive on the Company and the holders of all of the Warrants issued hereunder
and then outstanding. Any and all costs and fees of such investment banking firm
shall be borne equally by the Company and the Requesting Holders, however, if the
Valuation is within ninety percent (90%) of either party’s valuation, then the other
party shall pay all of the costs and fees of such investment banking firm. For
purposes of this Section 4(g), the term “VALUATION” shall mean the
determination, to be made initially by the Board of Directors of the Company, of the
fair market value per share of Common Stock pursuant to clause (v) above.
	 
	 	h.	 	Subsequent Changes. If, at any time after any adjustment of the Warrant Price
shall have been made hereunder as the result of any issuance, sale or grant of any
rights, options, warrants or convertible or exchangeable securities, any of such
rights, options or warrants or the rights of conversion or exchange associated with
such convertible or exchangeable securities shall expire by their terms or any of such
rights, options, warrants or convertible or exchangeable securities shall be
repurchased by the Company or a Subsidiary for a consideration per underlying share of
Common Stock not exceeding the amount of such consideration received by the Company in
connection with the issuance, sale or grant of such rights, options, warrants or
convertible or exchangeable securities, the Warrant Price then in effect shall
forthwith be increased to the Warrant Price that would have been in effect if such
expiring right, option or warrant or rights of conversion or exchange or such
repurchased rights, options, warrants or convertible or exchangeable securities had
never been issued. Similarly, if at any time after any such adjustment of the Warrant
Price shall have been made pursuant to Section 4(e) above (i) any additional
aggregate consideration is received or becomes receivable by the Company in connection
with the issuance or exercise of such rights, options, warrants or convertible or
exchangeable securities; or (ii) there is a reduction in the conversion or exchange
ratio applicable to such convertible or exchangeable securities so that fewer shares of
Common Stock will be issuable upon the conversion or exchange thereof or there is a
decrease in the number of shares of Common Stock issuable upon exercise of such rights,
options or warrants (except where such reduction or decrease results from a combination
of shares described in Section 4(b) above), the Warrant Price then in effect
shall be forthwith readjusted to the Warrant Price that would have been in effect had
such changes taken place at the time that such rights, options, warrants or convertible
or exchangeable securities were initially issued, granted or sold. In no event shall
any readjustment under this Section 4(h) affect the validity of any Warrant
Shares issued upon any exercise of this Warrant prior to such readjustment.
	 
	 	i.	 	Excluded Transactions. Notwithstanding the foregoing, Sections 4(d)
or 4(e) above shall not apply to: (i) the Company’s offering of up to 1,500,000
shares of Series A Convertible Preferred Stock, with related Series A Warrants and
Series

 

 

	 	 	 	B Warrants pursuant to the Securities Purchase and Share Exchange Agreement of even
date herewith (the “OFFERING”); (ii) shares of Common Stock issued or deemed issued
to employees or directors of, or consultants to, the Company or any of its
subsidiaries for services rendered pursuant to a plan, agreement, or arrangement
approved by the Board of Directors of the Company; (iii) the issuance of securities
pursuant to the conversion or exercise of convertible or exercisable securities
outstanding on the date hereof; (iv) shares of Common Stock issued in connection
with any stock split or stock dividend; (v) the issuance of Series A Convertible
Preferred Stock, Series A Warrants or Series B Warrants in connection with the
Offering; (vi) the issuance of shares of Common Stock upon conversion or exercise,
as applicable, of the Series A Convertible Preferred Stock, Series A Warrants or
Series B Warrants in connection with the Offering, in each case, provided the
issuance is pursuant to the terms of such option or convertible security; (vii)
warrants issued to Midtown Partners & Co., LLC, as placement agent in connection
with Offering, and shares of Common Stock issued in connection with the exercise
thereof; (viii) shares of Common Stock issued or issuable in connection with a bona
fide joint venture or business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock, or otherwise; provided
that any such issuance is approved by the Board of Directors; (ix) the Reverse
Merger (as defined in the Certificate of Designations of the Series A Convertible
Preferred Stock); and (x) Series A Warrants and Series B Warrants issued pursuant to
Section 2 of the Investor Rights Agreement of even date herewith (the
“INVESTOR RIGHTS AGREEMENT”)(collectively, the “EXEMPT SECURITIES”).

	5.	 	Notice of Adjustments. Whenever the Warrant Price or the number of Warrant Shares
purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company
shall deliver to the holder of this Warrant a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the Warrant Price and
the number of Warrant Shares purchasable hereunder after giving effect to such adjustment
	 
	6.	 	Fractional Shares. No fractional shares of Common Stock will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares the Company shall make a
cash payment therefor based on the fair market value (as determined in accordance with
Section 4(f) above) of a share of Common Stock on the date of exercise, or round up to
the next whole number of shares, at the Company’s option.

	7.	 	Compliance with Securities Act and Investor Rights Agreement; Disposition of Warrant or
Warrant Shares.

	 	a.	 	Compliance with Securities Act. The holder of this Warrant, by acceptance
hereof, agrees that this Warrant and the shares of Common Stock to be issued upon
exercise hereof are being acquired for investment purposes only and that such holder
will not offer, sell or otherwise dispose of this Warrant, or any shares of Common
Stock to be issued upon exercise hereof, except under circumstances

 

 

	 	 	 	which will not result in a violation of the Securities Act. Upon exercise of this
Warrant, the holder hereof shall confirm in writing, by executing the form attached
as Schedule 1 to Exhibit A hereto, that the shares of Common Stock
so purchased are being acquired for investment and not with a view toward
distribution or resale. This Warrant and all shares of Common Stock issued upon
exercise of this Warrant (unless registered under the Securities Act) shall be
stamped or imprinted with a legend in substantially the following form:

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN
OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE
ISSUED DIRECTLY OR INDIRECTLY.”

	b.	 	Representations. In addition, in connection with the issuance of this Warrant,
the holder specifically represents to the Company by acceptance of this Warrant as
follows:

     (i) The holder is aware of the Company’s business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant. The holder is
acquiring this Warrant for its own account for investment purposes only and not
with a view to, or for the resale in connection with, any “distribution” thereof
for purposes of the Securities Act.

     (ii) The holder understands that this Warrant and the Warrant Shares have not
been registered under the Securities Act in reliance upon a specific exemption
there from, which exemption depends upon, among other things, the bona fide nature
of the holder’s investment intent as expressed herein. In this connection, the
holder understands that, in the view of the SEC, the statutory basis for such
exemption may be unavailable if the holder’s representation was predicated solely
upon a present intention to hold the Warrant and the Warrant Shares for the minimum
capital gains period specified under applicable tax laws, for a deferred sale, for
or until an increase or decrease in the market price of the Warrant and the Warrant
Shares, or for a period of one (1) year or any other fixed period in the future.

     (iii) The holder further understands that this Warrant and the Warrant Shares
must be held indefinitely unless subsequently registered under the Securities Act
and any applicable state securities laws, or unless exemptions from registration
are otherwise available.

 

 

     (iv) The holder is aware of the provisions of Rule 144 and 144A, promulgated
under the Securities Act, which, in substance, permit limited public resale of
“restricted securities” acquired, directly or indirectly, from the issuer thereof
(or from an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other things:
the availability of certain public information about the Company, the resale
occurring not less than one (1) year after the party has purchased and paid for the
securities to be sold; the sale being made through a broker in an unsolicited
“broker’s transaction” or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934, as amended) and the
amount of securities being sold during any three (3) month period not exceeding the
specified limitations stated therein.

     (v) The holder further understands that at the time it wishes to sell this
Warrant and the Warrant Shares there may be no public market upon which to make
such a sale, and that, even if such a public market then exists, the Company may
not be satisfying the current public information requirements of Rule 144 and 144A,
and that, in such event, the holder may be precluded from selling this Warrant and
the Warrant Shares under Rule 144 and 144A even if the one (1)-year minimum holding
period has been satisfied.

     (vi) The holder further understands that, in the event that all of the
requirements of Rule 144 and 144A are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration exemption
will be required; and that, notwithstanding the fact that Rule 144 and 144A are not
exclusive, the Staff of the SEC has expressed its opinion that persons proposing to
sell private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 and 144A will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in such
transactions do so at their own risk.

	c.	 	Compliance with Investor Rights Agreement. The holder of this Warrant, by
acceptance hereof, understands and agrees that this Warrant is subject to, and the
transfer of the Warrant Shares may be prohibited by, the Investor Rights Agreement, and
holder hereby specifically understands and agrees as follows:

THIS WARRANT, AND THE SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES
EVIDENCED HEREBY, ARE SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND
CONDITIONS OF THAT CERTAIN INVESTOR RIGHTS AGREEMENT, OF EVEN DATE HEREWITH, BY AND
AMONG THE HOLDER, THE COMPANY, AND CERTAIN HOLDERS OF STOCK OF THE COMPANY, AND, BY
ACCEPTING ANY INTEREST HEREIN, THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO
AGREE TO AND SHALL BE BOUND BY ALL OF THE PROVISIONS OF SUCH AGREEMENT. COPIES OF
THE INVESTOR RIGHTS AGREEMENT MAY

 

 

BE OBTAINED UPON WRITTEN REQUEST TO THE COMPANY’S SECRETARY.

	d.	 	Exchange. This Warrant may be exchanged, without payment of any service charge,
for one (1) or more new Warrants of like tenor exercisable for the same aggregate
number of shares of Common Stock upon surrender to the Company by the registered holder
hereof in person or by legal representative or by attorney duly authorized in writing
and, upon issuance of the new Warrant or Warrants, the surrendered Warrant shall be
cancelled and disposed of by the Company.

	e.	 	Disposition of Warrant or Warrant Shares. With respect to any offer, sale or
other disposition of this Warrant, or any Warrant Shares acquired pursuant to the
exercise of this Warrant prior to registration of such Warrant or Warrant Shares, the
holder hereof and each subsequent holder of this Warrant agrees to give written notice
to the Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder’s counsel, if reasonably requested by the Company, to
the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Securities Act as then in effect or any
federal or state law then in effect) of this Warrant or such Warrant Shares and
indicating whether or not under the Securities Act certificates for this Warrant or
such Warrant Shares to be sold or otherwise disposed of require any restrictive legend
as to applicable restrictions on transferability in order to ensure compliance with
applicable laws. Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly as practicable, shall
notify such holder that such holder may sell or otherwise dispose of this Warrant or
such Warrant Shares, all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this Section 7(e) that
the opinion of counsel for the holder is not reasonably satisfactory to the Company,
the Company shall so notify the holder promptly after such determination has been made
and neither this Warrant nor any Warrant Shares shall be sold or otherwise disposed of
until such disagreement has been resolved. The foregoing notwithstanding, this Warrant
or such Warrant Shares may (i) as to such federal laws, be offered, sold or otherwise
disposed of in accordance with Rule 144 and 144A under the Securities Act, provided
that the Company shall have been furnished with such information as the Company may
reasonably request to provide a reasonable assurance that the provisions of Rule 144
and 144A have been satisfied and (ii) be offered, sold, distributed or otherwise
transferred to Affiliates of the Holder without regard to this Section 7(e),
but only if the Company is in receipt of an opinion of counsel as to the permissibility
of such transfer under federal and state securities laws and an investor representation
letter from the transferee, in form and substance reasonably satisfactory to the
Company. Each certificate representing this Warrant or the Warrant Shares thus
transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with such
laws, unless, in the aforesaid opinion of counsel for the holder, such legend is not
required in order to ensure compliance with such laws. The Company may issue stop
transfer instructions to its transfer agent or, if

 

 

acting as its own transfer agent, the Company may stop transfer on its corporate
books, in connection with such restrictions. As used herein, “AFFILIATE OF THE
HOLDER” shall mean (x) any owner, shareholder, partner or member of the Holder, and
(y) any other Person that directly or indirectly, through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
Holder.

	9.	 	Rights as Stockholders; Information. No holder of this Warrant, as such, shall be
entitled to vote or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the holder of this Warrant, as such, any
of the rights of a stockholder of the Company or any right to vote for the election of the
directors or upon any matter submitted to stockholders at any meeting thereof, or to receive
notice of meetings, until this Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise hereof shall have become deliverable, as provided herein.

	10.	 	Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the party against
which enforcement of the same is sought

	11.	 	Notices. Unless otherwise specifically provided herein, all communications under this
Warrant shall be in writing and shall be deemed to have been duly given (i) on the date of
service if served personally on the party to whom notice is to be given; (ii) on the day of
transmission if sent by facsimile transmission to the number shown on the books of the
Company, and telephonic confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the day after delivery to Federal Express or similar overnight courier;
or (iv) on the fifth day after mailing, if mailed to the party to whom notice is to be given,
by first class mail, registered or certified, postage prepaid, and properly addressed, return
receipt requested, to each such holder at its address as shown on the books of the Company or
to the Company at the address indicated therefor on the signature page of this Warrant. Any
party hereto may change its address for purposes of this Section by giving the other party
written notice of the new address in the manner set forth herein.

	12.	 	Binding Effect on Successors. This Warrant shall be binding upon any corporation
succeeding the Company by merger, consolidation or acquisition of all or substantially all of
the Company’s assets, and all of the obligations of the Company relating to the Common Stock
issuable upon the exercise or conversion of this Warrant shall survive the exercise,
conversion and termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the holder hereof. The
Company will, at the time of the exercise or conversion of this Warrant, in whole or in part,
upon request of the holder hereof but at the Company’s expense, acknowledge in writing its
continuing obligation to the holder hereof in respect of any rights to which the holder hereof
shall continue to be entitled after such exercise or conversion in accordance with this
Warrant; provided, however, that the failure of the

 

 

	 	 	holder hereof to make any such request shall not affect the continuing obligation of the
Company to the holder hereof in respect of such rights.

	13.	 	Lost Warrants or Stock Certificates. The Company covenants to the holder hereof that,
upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate and, in the case of any
loss, theft or destruction, upon receipt of an executed lost securities bond or indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender
and cancellation of such Warrant or stock certificate, the Company will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.

	14.	 	Descriptive Headings. The descriptive headings of the several paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this Warrant.

	15.	 	Governing Law. This Warrant shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of Florida.

	16.	 	Remedies. In case any one (1) or more of the covenants and agreements contained in
this Warrant shall have been breached, the holders hereof (in the case of a breach by the
Company), or the Company (in the case of a breach by a holder), may proceed to protect and
enforce their or its rights either by suit in equity and/or by action at law, including, but
not limited to, an action for damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained in this Warrant.

	17.	 	Acceptance. Receipt of this Warrant by the holder hereof shall constitute acceptance
of and agreement to the foregoing terms and conditions.

	18.	 	No Impairment of Rights. The Company will not, by amendment of its Certificate of
Incorporation or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant against impairment.

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

	 	 	 	 	 	 	 
	CRUISESTOCK, INC.	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	Dated: January   , 2007	 	 

 

 

NOTICE TO FLORIDA RESIDENTS:

WHERE SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA (EXCLUDING CERTAIN INSTITUTIONAL PURCHASERS
DESCRIBED IN SECTION 517.061(7) OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT) (THE “ACT”),
ANY SUCH SALE MADE PURSUANT TO SECTION 517.061(11) OF THE ACT SHALL BE VOIDABLE BY THE PURCHASER
EITHER WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
ISSUER, OR AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE AVAILABILITY
OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

 

 

EXHIBIT A

NOTICE OF EXERCISE

To:                                        

1. The undersigned hereby elects to purchase     shares of Common Stock of pursuant to the terms of
the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

2. Please issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name or names as are specified below:

                                                            

(Name)

                                                            

                                                            

(Address)

3. The undersigned represents that the aforesaid shares are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of distributing or reselling
such shares. In support thereof, the undersigned has executed an Investment Representation
Statement attached hereto as Schedule 1

                                                            

(Signature)

                                                            

(Date)

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