Document:

Exhibit 4.2

    Exhibit
      4.2

     

    

      THIS
        WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF,
        HAVE
        NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
        OR
        FILED OR REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
        OR
        WITH THE SECURITIES REGULATORY AUTHORITY OF ANY STATE, BUT ARE BEING ISSUED
        PURSUANT TO CERTAIN EXEMPTIONS THEREUNDER. THIS WARRANT, AND SUCH SHARES
        OF
        COMMON STOCK, HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
        SECURITIES AND EXCHANGE COMMISSION OR BY THE SECURITIES REGULATORY AUTHORITY
        OF
        ANY STATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS
        WARRANT, AND SUCH SHARES OF COMMON STOCK, ARE SUBJECT TO RESTRICTIONS ON
        TRANSFERABILITY AND RESALE, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
        PERMITTED UNDER THE ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
        TO
        REGISTRATION THEREUNDER OR EXEMPTION THEREFROM.

      

      

      This
        Warrant Will Be Void After November 3, 2009

       

      WARRANT

      

      TO
        PURCHASE 72,917 SHARES OF COMMON STOCK OF 

      

        TELANETIX,
        INC.

      

      This
        is
        to certify that for value received, (the “Holder”)
        is
        entitled to purchase, subject to the provisions of this Warrant, from TELANETIX,
        INC., a Delaware corporation (the “Company”),
        at
        any time and from time to time, but not later than November 3, 2009 (the
        “Expiration
        Date”),
        72,917 shares of the Company's common stock, $0.0001 par value (the
“Common
        Stock”)
        at a
        purchase price of One Dollar and Fifty Cents ($1.50) per share. The shares
        of
        the Common Stock deliverable upon such exercise are hereinafter sometimes
        referred to as “Warrant
        Stock,”
and
        the exercise price of a share of Common Stock is hereinafter sometimes referred
        to as the “Exercise
        Price.”
This
        Warrant is being issued by the Company pursuant to the terms of the Securities
        Purchase Agreement dated November 3, 2006 (the “Securities
        Purchase Agreement”)
        between the Company and Holder.

      

      1.
        Exercise
        of Warrant.
        At any
        time on or before the Expiration Date, this Warrant may be exercised at any
        time
        in whole or in part; provided, however, in no event may Holder exercise less
        than Twenty Thousand (20,000) shares in any single exercise. If the date
        on
        which the Holder's right to purchase Common Stock expires is a day on which
        national banks in San Diego, California, are authorized by law to close,
        then
        that right shall expire on the next succeeding day that is not such a day.
        The
        Holder shall exercise all rights to purchase Common Stock by presenting and
        surrendering this Warrant to the Company with the attached Purchase Form,
        duly
        executed, and accompanied by payment (by wire transfer or other good funds)
        of
        the Exercise Price for the number of shares specified in such form. Upon
        receipt
        by the Company of this Warrant, in proper form for exercise, and receipt
        of
        payment of good funds, the Holder shall be deemed to be the holder of record
        of
        the shares of Common Stock issuable upon such exercise.

      

      2.
        Reservation
        of Shares.
        The
        Company hereby agrees that at all times there shall be reserved for issuance
        and
        delivery upon exercise of this Warrant such number of shares of Common Stock
        as
        shall be required for issuance or delivery upon exercise of this
        Warrant.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      3.
        Fractional
        Shares.
        No
        fractional shares or script representing fractional shares shall be issued
        upon
        the exercise of this Warrant. With respect to any fraction of a share called
        for
        upon any exercise hereof, the Company shall pay to the Holder an amount in
        cash
        equal to such fraction multiplied by the current market value of such fractional
        share. If the Common Stock is listed or admitted to unlisted trading privileges,
        then the current market value shall mean the closing price of the Common
        Stock
        on the last business day prior to the exercise if this Warrant. If the Common
        Stock is not listed or admitted to unlisted trading privileges, then the
        current
        market value shall be an amount determined in such reasonable manner as may
        be
        prescribed by the Company's board of directors.

      

      4.
        Transfer,
        Assignment or Loss of Warrant.

      

      (a)
          This
        Warrant and the Warrant Stock, have not been filed or registered with the
        United
        States Securities and Exchange Commission or with the securities regulatory
        authority of any state. This Warrant and the Warrant Stock are subject to
        restrictions imposed by federal and state securities laws and regulations
        on
        transferability and resale, and may not be transferred assigned or resold
        except
        as permitted under the Securities Act of 1933, as amended (the “Act”),
        and
        the applicable state securities laws, pursuant to registration thereunder
        or
        exemption therefrom. Upon receipt by the Company of evidence satisfactory
        to it
        that this Warrant has been legally and validly transferred or assigned, the
        Company will, at the request of the Holder, upon presentation and surrender
        hereof to the Company or at the office of its stock transfer agent, if any,
        exchange this Warrant for a replacement Warrant registered in such name or
        names
        as the Holder shall designate. If, at the time of such transfer or assignment,
        this Warrant and the Common Stock issuable upon the exercise hereof have
        not
        been registered under the Act, then each such transferee and assignee shall
        furnish the Company with investment representations and warranties satisfactory
        to the Company, but in any event as comprehensive as the representations
        and
        warranties provided by Holder in the Securities Purchase Agreement. The term
        “Warrant,” as used herein, includes any Warrants issued in substitution for or
        replacement of this Warrant.

      

      (b)
          Upon
        receipt by the Company of evidence satisfactory to it of the loss, theft,
        destruction or mutilation of this Warrant, and in the case of loss, theft
        or
        destruction of reasonably satisfactory indemnification, and upon surrender
        and
        cancellation of this Warrant in the case of mutilation, the Company will
        execute
        and deliver a new Warrant of like tenor and date. Any such new Warrant executed
        and delivered shall constitute an additional contractual obligation on the
        part
        of the Company, whether or not this Warrant so lost, stolen, destroyed or
        mutilated shall be at any time enforceable by anyone.

      

      (c)
          The
        Company may cause any legend required under the Act and applicable state
        securities laws, or advisable in the opinion of its legal counsel, to be
        set
        forth on each Warrant, on each certificate representing Warrant Stock, and
        on
        any other security issued or issuable upon exercise of this Warrant not
        previously distributed to the public or sold to underwriters for distribution
        to
        the public.

      

      5.
        Rights
        of the Holder.
        The
        Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
        in the Company, either at law or equity, and the rights of the Holder as
        the
        holder of this Warrant are limited to those expressed in this
        Warrant.

      

      6.
        Anti-Dilution
        Provisions.
        If the
        Company shall at any time subdivide the outstanding shares of Common Stock,
        or
        shall issue a stock dividend on the outstanding Common Stock, then the Exercise
        Price in effect immediately prior to that subdivision or the issuance of
        that
        dividend shall be proportionately decreased, and if the Company shall at
        any
        time combine the outstanding shares of Common Stock, then the Exercise Price
        in
        effect immediately prior to that combination

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      shall
        be
        proportionately increased, effective at the close of business on the date
        of the
        subdivision, dividend or combination, as the case may be.

      

      7.
        Termination
        of Warrant.
        Unless
        previously exercised in full, this Warrant will expire on the Expiration
        Date.

      

      8.
        Reclassification,
        Reorganization or Merger.
        If any
        recapitalization, reclassification or reorganization of the share capital
        of the
        Company, or any consolidation or merger of the Company with another corporation,
        or the sale of all or substantially all of its shares and/or assets or other
        transaction (including, without limitation, a sale of substantially all of
        its
        assets followed by a liquidation) shall be effected in such a way that holders
        of Common Stock shall be entitled to receive shares, securities or other
        assets
        or property (a “Change”),
        then,
        as a condition of such Change, adequate provisions shall be made by the Company
        whereby the Holder hereof shall thereafter have the right to purchase and
        receive (in lieu of the Common Stock of the Company immediately theretofore
        purchasable and receivable upon the exercise of the rights represented hereby)
        such shares, securities or other assets or property as may be issued or payable
        with respect to or in exchange for the number of outstanding Common Stock
        which
        such Holder would have been entitled to receive had such Holder exercised
        this
        Warrant immediately prior to the consummation of such Change. The Company
        or its
        successor shall promptly issue to Holder a new Warrant for such new securities
        or other property. The new Warrant shall provide for adjustments which shall
        be
        as nearly equivalent as may be practicable to give effect to the adjustments
        provided for in this Section 8 including, without limitation, adjustments
        to the
        Warrant Price and to the number of securities or property issuable upon exercise
        of the new Warrant. The provisions of this Section 8 shall similarly apply
        to
        successive Changes. 

      

      9. Holder
        Representations.
        The
        Company is issuing this Warrant to Holder, and any and all Warrant Stock
        to
        Holder, in reliance upon the representations made by Holder, effective as
        of the
        date of this Warrant, and the date of each exercise of this Warrant, set
        forth
        in Paragraph 3 of the Securities Purchase Agreement and accompanying Investor
        Questionnaire.

      

      10. Miscellaneous.
        The
        provisions of Paragraph 6 (a), (b) and (c) of the Securities Purchase Agreement
        are incorporated herein by reference, with the word “Warrant” substituted for
“Agreement”.

      

      This
        Warrant is dated and effective as of November 3, 2006.                   

      

      TELANETIX,
        INC.

      

      

      By:
        ___________________________________

      Thomas
        A.
        Szabo, Chief Executive Officer

      

      ACKNOWLEDGED
        AND AGREED:

      

      HOLDER:

      

      

      ____________________________________          

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      PURCHASE
        FORM

      

      

      

      

      

      Date:
        ____________________

      

      TO:
        TELANETIX, INC.:

      

      

      The
        undersigned hereby confirms its representations sect forth in Paragraph 11
        of
        the Warrant and irrevocably elects to exercise the Warrant to the extent
        of
        purchasing _________________________ (____________) shares of Common Stock,
        and
        hereby makes payment of _______________ Dollars and _________________ Cents
        ($__________) in payment of the Exercise Price thereof.

      

      

      

      

      INSTRUCTIONS
        FOR ISSUANCE OF STOCK

      

      

      Name:
        ___________________________________________________________

      

      Address:
        _________________________________________________________

      

      City,
        State, Zip: ___________________________________________________

      

      

      

      

      
        	
                 

                Signature:

                 

                ____________________________

                 

                Name
                  _______________________

                 

                Date:
                  _______________________CONFIDENTIAL

    SETTLEMENT
      AND GENERAL RELEASE AGREEMENT

    

    This
      Settlement and General Release Agreement ("AGREEMENT") is entered into by and
      between WILLIAM S. BIDDLE (“BIDDLE”), GERNOT TROLF (“TROLF”); NATIONWIDE
      COMMERCIAL BROKERS, INC. (“NATIONWIDE”), ROBERT LEONARD (“LEONARD”) AND SECURED
      DIVERSIFIED INVESTMENT, LTD. (“SDI”) referred to jointly as the "PARTIES" as of
      the date this AGREEMENT is signed, on the following terms: 

    

    RECITALS

    

    A.
      On or
      about January 13, 2006 Alliance Title Company filed an Interpleader lawsuit
      Case
      Number 06CC02129 in the Orange County Superior Court, Department C11 against
      BIDDLE, TROLF, NATIONWIDE, and SDI along with others and as result deposited
      with the court funds in the amount of $267,000.00

    

    B.
      On or
      about January 20, 2006, BIDDLE, TROLF and NATIONWIDE along with one other
      plaintiff filed a separate lawsuit Case Number 06CC02350 in the Orange County
      Superior Court, Department C11 against SDI and one of its officers Jan Wallace
      along with others for Fraud and Misrepresentation, Negligent Misrepresentation,
      Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing,
      Conversion, Commons Counts, Money had and received and Declaratory Relief.
      On or
      about March 15, 2006 SDI filed a cross-complaint against the Plaintiffs along
      with others for Breach of Contract, Breach of Fiduciary Duty, Negligent
      Supervision, Civil Conspiracy, Intentional Interference with Economic Relations;
      Negligent Interference with Economic Relations; Breach of Oral Agreement, Breach
      of Employment Contract; Breach of Directors/Officers’ Fiduciary Duty; Fraud and
      Intentional Misrepresentation and Declaratory Relief. The complaint and
      cross-complaint shall be referred to as the “ACTION”.

    

    C.
      On or
      about March 10, 2006, WILLIAM S. BIDDLE, GERNOT TROLF AND ROBERT LEONARD along
      with others, filed a lawsuit against SDI for declaratory relief
      under

    Corporation
      Code Section 2115, Case Number 06CC03959, filed in the Orange County Superior
      Court, Department C11.

    

    D. SDI
      and
      Jan Wallace expressly deny any liability and fraud with respect to any claims
      in
      the ACTION, or with respect to any other matters relating to it. However, in
      order to fully and forever resolve these matters, and with the understanding
      that this AGREEMENT does not constitute an admission by any party of any
      wrongdoing or of any lack of merit relating to any claims referred to herein,
      BIDDLE, TROLF, NATIONWIDE AND SDI enter into this AGREEMENT.

    

    A
      G R E E M E N T

    

    1. In
      consideration for the promises set forth herein, the parties agree as
      follows:

    

    a. The
      parties agree that upon execution by BIDDLE, TROLF and NATIONWIDE and their
      attorney of this AGREEMENT and upon execution of a request for 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    dismissal
      in the above mentioned lawsuits, the PARTIES shall filed with the Orange County
      Superior Court an order of disbursement as follows: $45,000 to WILLAM S. BIDDLE,
      $42,000 to GERNOT TROLF, $45,000 to NATIONWIDE and $45,000 to SDI. The payments
      shall be in one lump sum with no payroll or other taxes deducted and all such
      payments shall be reported on a form 1099.

     

    b.
       In
      further consideration of this AGREEMENT, ROBERT LEONARD the majority owner
      of
      NATIONWIDE will also file a request for dismissal in Case Number 06CC03959,
      currently pending in the Orange County Superior Court, Department
      C11.

    

    c. SDI
      makes
      no representations or warranties regarding the tax effect of the settlement
      proceeds as directed by this AGREEMENT. Further, BIDDLE, TROLF and NATIONWIDE
      agrees to defend and/or indemnify SDI with respect to any liability created
      by
      BIDDLE, TROLF and NATIONWIDE’S payment or non-payment of taxes with respect to
      the settlement sum.

    

    2. BIDDLE,
      TROLF, NATIONWIDE, as the first party, and SDI as a second party, on their
      own
      behalf and on behalf of their respective dependents, successors, heirs,
      executors, administrators and assigns, and each of them, hereby fully and
      forever releases and discharges each other, as well as NATIOWIDE AND SDI’s
      parent, subsidiary or affiliated companies or organizations, any as well as
      their agents, officers, directors, stockholders, employees, successors, assigns,
      insurers and attorneys, and each of them, of and from any and all claims,
      rights, actions, causes of action, obligations, debts, interest, damages,
      charges, losses, debts, penalties, forfeitures, liabilities, costs, attorneys'
      fees, and demands of any nature, whether arising in law or in equity, arising
      out of or relating to any acts or omissions that took place prior to the date
      of
      this AGREEMENT, including without limitation, any matters relating in any way
      to
      the ACTION and/or any matters relating to or contained in or which could have
      been contained in the ACTION and/or any claims under other Federal or State
      statute, law or regulation. 

    

    3. It
      is the
      intention of the parties hereto that this AGREEMENT shall be effective as a
      full
      and final accord and satisfaction and release of each and every released matter,
      including all unknown and/or unsuspected claims. Accordingly, the parties hereby
      waive and relinquish any and all rights or benefits that any party may have
      under the provisions of Section 1542 of the California Civil Code, which reads
      as follows:

    

    "A
      general release does not extend to claims which the creditor does not know
      or
      suspect to exist in its favor at the time of executing the release, which if
      known by him must have materially affected his settlement with the
      debtor."

    

    In
      connection with this waiver, each party hereto acknowledges that facts in
      addition to or different from those presently known may later be discovered
      which relate to the subject matter of this AGREEMENT. The parties also recognize
      the possibility that, in the future, damages that are not currently known may
      be
      suffered in relation to matters released in this AGREEMENT. Notwithstanding
      these possibilities, it is each party's intention to fully, finally and forever
      settle and release all released matters, disputes and differences, whether
      known
      or unknown, suspected or unsuspected, that have existed; now exist, or may
      exist. It is the intention of the parties hereto that this AGREEMENT shall
      be
      effective as a full and final accord and satisfaction and release of each

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    and
      every
      released matter, including all unknown and/or unsuspected claims. In connection
      with this waiver, each party hereto acknowledges that facts in addition to
      or
      different from those presently known may later be discovered which relate to
      the
      subject matter of this AGREEMENT. The parties also recognize the possibility
      that, in the future, damages that are not currently known may be suffered in
      relation to matters released in this AGREEMENT. Notwithstanding these
      possibilities, it is each party's intention to fully, finally and forever settle
      and release all released matters, disputes and differences, whether known or
      unknown, suspected or unsuspected, that have existed; now exist, or may exist.
      Nothing in this AGREEMENT constitutes, or should or shall be deemed to
      constitute, any admission of any act, fact or liability, with respect to any
      matters released herein.

    

    4. BIDDLE
      and TROLF represents that they does not desire reemployment by SDI and hereby
      expressly waives any and all rights which they may have had to such reemployment
      or to reinstatement with SDI. Further, BIDDLE and TROLF agrees and promises
      that
      they will not at any time seek employment or reemployment with SDI and/or any
      other party or entity released herein.

    

    5.  The
      contents and the existence of this AGREEMENT, and the parties' discussions
      pertaining to it, are and shall remain confidential, and neither party will
      communicate or allow communication in any manner (written or oral) to anyone
      with respect thereto, except that this AGREEMENT may be disclosed as required
      to
      the parties' attorneys, insurers, accountants and/or governmental taxing
      authorities, or otherwise may be disclosed as compelled by law. If any party
      beach is clause of the AGREEMENT other party may seek all rights and remedies
      under the law including but not limited to attorney’s fees and
      costs.

     

    6.  The
      parties hereto, and each of them, shall forever refrain and forbear from
      commencing, instituting, or prosecuting any lawsuit, action or other proceedings
      against any of the other parties hereto. Such forbearance from commencing,
      instituting or prosecuting any lawsuit, action or other proceeding by one such
      party against the other shall include not only such other parties, but their
      officers, directors, representatives, assigns, agents, attorneys, heirs,
      employees, partners and personal representatives as well, and such forbearance
      shall apply to any cause relating to, based upon or arising out of any and
      all
      claims, debts, liabilities, demands, obligations, costs, expenses, actions
      or
      causes of action, released and discharged hereunder, except those necessary
      to
      enforce the terms of this agreement.

     

    7.   Each
      party agrees to bear its/her own costs, expenses and attorneys' fees incurred
      in
      connection with the ACTION and this AGREEMENT.

    

    8. Each
      party hereto expressly warrants and represents that it/she is fully authorized
      to enter into this AGREEMENT and each of its terms, and that it/she has not
      assigned to any other party or person any claims released herein.

    

    9. BIDDLE,
      TROLF AND NATIONWIDE warrants that they has not filed any other lawsuits,
      charges, complaints, petitions, or other accusatory pleading against SDI with
      any governmental agency or in any court, on behalf of themselves or any other
      entity they represent, based upon, arising out of or related in any way to
      any
      events occurring prior to the execution of this 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Agreement,
      including, without limiting the generality of the foregoing ACTION. BIDDLE,
      TROLF AND NATIONWIDE further agrees that they will not hereafter file, cause
      to
      be filed, or otherwise voluntarily participate in the filing, investigation,
      and/or prosecution of any other such charges, complaints, petitions or
      accusatory pleading brought by any other party in any court currently pending
      or
      not or with any governmental agency in which SDI, its officers, directors,
      shareholder or any affiliated company is named as a party. 

    

    10. This
      AGREEMENT contains the entire agreement between the parties hereto with respect
      to all matters addressed herein, and fully supersedes any and all prior or
      contemporaneous agreements, understandings or representations, oral or written,
      implied or express, pertaining to the subject matter hereof. This AGREEMENT
      may
      only be subsequently modified by a writing signed by all parties
      hereto.

     

    11. Each
      party agrees to do all things necessary to carry out and effectuate the terms
      of
      this AGREEMENT, and expressly promises not to do or fail to do anything,
      directly or indirectly, which will interfere with any other party's realization
      of the benefits hereof.

     

    12. This
      AGREEMENT, including the releases herein, shall be binding upon and inure to
      the
      benefit of each of the parties to this AGREEMENT and to each of their successors
      in interest, including heirs and assigns.

     

    13. Each
      of
      the parties hereto has been represented by counsel in the negotiating and
      drafting of this AGREEMENT. Accordingly, the rules of construction of contracts
      relating to resolution of ambiguities against the drafting parties shall be
      inapplicable to this AGREEMENT.

     

    14. Any
      construction, interpretation and performance of this AGREEMENT shall be governed
      by the laws of the State of California, both substantive and procedural. Both
      parties accede to the jurisdiction of the Los Angeles County Superior Court
      for
      any actions to enforce, or for breach of, any term of this
      AGREEMENT.

    

    15. If
      for
      any reason any provision contained in this AGREEMENT is later deemed
      unenforceable, the remainder of this AGREEMENT shall nonetheless remain binding
      and enforceable on all parties hereto.

    

    16. In
      the
      event of any action brought to enforce any provision of this AGREEMENT, or
      for
      breach of any provision of this AGREEMENT, the prevailing party therein shall
      be
      entitled to an award of its/her costs and reasonable attorneys' fees incurred
      therein, in 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    addition
      to any other relief.

     

    17. This
      AGREEMENT may be executed in multiple originals or counterparts, each of which
      shall be deemed an original or the equivalent thereof.

    
 

    

    WHEREFORE,
      each party hereto, by the signatures below, certifies that this AGREEMENT has
      been read in its entirety, that any questions regarding the meaning or effect
      of
      any terms have been answered to their satisfaction, that each party enters
      into
      this AGREEMENT with the intent to be fully and forever bound by all of its
      terms, as of the date set forth opposite their signature below.

    

    

    

    Dated:
      _________________  ___________________________________

    WILLIAM
      S. BIDDLE

    

    Dated:
      _________________  ___________________________________

    GERNOT
      TROLF

    

    

    Dated:
      _________________  ___________________________________

    ROBERT
      LEONARD

    DIRECTOR

    NATIONWIDE
      COMMERCIAL 

    BROKERS,
      INC.

    

    Dated:
      _________________  ___________________________________

    ROBERT
      LEONARD

    

    

    

    APPROVED
      AS TO FORM AND CONTENT:

    LAW
      OFFICES OF ROBERT COVIELLO

    

    

    _______________________________________

    ROBERT
      COVIELLO

    ATTORNEY
      FOR WILLIAM S. BIDDLE, GERNOT TROLF

    NATIONWIDE
      COMMERICAL BROKERS, INC. and

    ROBERT
      LEONARD

     

    

    

    Dated:
      __________________  
      By:_____________________________________

    JAN
      WALLACE

    CEO

    SECURED
      DIVERSIFIED INVESTMENT, LTD.

    

    

    

    APPROVED
      AS TO FORM AND CONTENT:

    

    

    

    By:____________________________

      CLAIRE
      C.
      AMBROSIO

    ATTORNEY
      FOR SECURED 

    DIVERIFIED
      INVESTMENT,LTD.

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