Document:

ex101.htm

    STOCK
REPURCHASE AGREEMENT

    

    This
Stock Repurchase Agreement (“Agreement”) is entered into as of January 1, 2010
(the “Effective
Date”), by and between LAS VEGAS GAMING, INC., a Nevada corporation (the
“Company”)
and TRIANGLE HOLDINGS VI LLC, an Oregon limited liability company (“Seller”).

    

    RECITALS

    

    A.           Seller
owns 150,000 shares of Series G Convertible Preferred Stock of the Company,
recorded in the name of Seller on the books of the Company (the “Shares”).

    

    B.           Pursuant
to the terms of Shares, Seller is entitled to receive a 12% annual
dividend.  The Company was unable to pay the dividend due January 1,
2010, which amounted to $107,847.12.

    

    C.           As
a result of Seller’s failure to pay the past due dividend, Seller has asked the
Company to repurchase the Shares for the amount of Seller’s initial
investment.

    

    D.           The
Company desires to repurchase the Shares from Seller and Seller desires to sell
the Shares to the Company on the terms and subject to the conditions set forth
in this Agreement.

    

    AGREEMENT

    

    NOW,
THEREFORE, the parties agree as follows:

    

    
      1.           
Sale
and Purchase of Shares.

    

    

    1.1 Sale.  Subject
to the terms and conditions of this Agreement, the Seller hereby sells, assigns,
and transfers all of the Shares to Company (“Repurchase”)
in consideration for the Purchase Price (as defined below).

    

    1.2 Purchase
Price.  Company shall purchase the Shares for $750,000 (the
“Purchase
Price”), payable in the form of, and pursuant to, a promissory note
substantially in the form of Exhibit A hereto (the “Note”).  The
amount of such promissory note shall include, in addition, the amount of the
past due dividend of $107,847.12.

    

    1.3 Closing.  Upon
execution of this Agreement, (i) Seller shall deliver to the Company the
certificate or certificates for the Shares, together with an assignment separate
from certificate in the form attached to this Agreement as Exhibit B and
endorsed in blank, and (ii) Company shall deliver the Note.

    

    
      2.            
Representations
by Seller.

    

    

    2.1 Authorization;
Enforcement.  Seller represents and warrants to the Company
that Seller has the absolute and unrestricted right, power and authority to
sell, transfer and assign the Shares to the Company pursuant to this
Agreement.  This Agreement has been duly authorized and executed by
Seller, and is the valid and binding agreement of Seller, enforceable against it
in accordance with its terms.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    2.2 Consents.  No
consent, approval or authorization of or notice to any third party is necessary
to be obtained or given by or on behalf of Seller in connection with the
Repurchase. Seller further represents and warrants to Company that the
Repurchase does not violate the organizational documents of Seller or any
agreement to which Seller is a party.

    

    2.3 Ownership.  Seller
has and is conveying to the Company good and marketable title to the Shares,
free and clear of any liens, restrictions, claims or other
encumbrances.

    

    2.4 Knowledge of
Seller.  Seller has sufficient knowledge to independently
evaluate, and is fully familiar with, the Company and its financial position,
prospects and valuation. Seller has not relied on, is not relying on, and has
not been influenced by, any representation, information or recommendation
provided by Company, its directors, management, employees, agents or advisors in
determining the sale price or evaluating or reaching Seller’s decision to sell
the Shares.

    

    
      3.           
Miscellaneous.

    

    

    3.1 Governing
Law.  This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Nevada.

    

    3.2 Entire Agreement;
Enforcement of Rights.  This Agreement, including all exhibits
hereto, contains the entire agreement and understanding of the parties relating
to its subject matter and supersedes all prior discussions between them. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the
parties. The failure by either party to enforce any rights under this Agreement
shall not be construed as a waiver of any rights of such party.

    

    3.3 Severability.  Any
provision of this Agreement which is invalid, illegal or unenforceable shall be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof or rendering that
or any other provision of this Agreement invalid, illegal or unenforceable. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.

    

    3.4 Costs.  Each
party shall pay all of its own costs and expenses, including the fees and costs
of its attorneys, consultants, contractors and representatives, incurred in
connection with this Agreement. If any dispute arises out of or relates to this
Agreement, whether or not a suit or other proceeding is commenced, and whether
in mediation, in arbitration, at trial, on appeal, the prevailing party shall be
entitled to recover and be reimbursed for its costs and expenses incurred,
including reasonable attorney fees.

     

     

    
      
         

      

      
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    3.5 Notices.  Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by facsimile or other form
of electronic transmission or 48 hours after being deposited in the U.S. mail,
as certified or registered mail, with postage prepaid, and addressed to the
party to be notified at such party’s address, facsimile number or email address
as set forth below or as subsequently modified by written notice.

    

    3.6 Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns.

    

    3.7 Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original and which together shall constitute one and the same instrument.
Evidence of execution may be provided on a facsimile basis by telecopy or other
electronic means.

    

    3.8 Further
Assurances.  Each of the parties agrees to execute such further
instruments or documents reasonably requested by the other party or as necessary
to carry out the purposes of this Agreement.

    

    

    The
parties have executed this Stock Repurchase Agreement as of the day and year
first set forth above.

    

    

    
      	
              COMPANY:

               

              LAS
      VEGAS GAMING, INC.

               

               

              By:_______________________________

              Name:_____________________________

              Its:_______________________________

               

              Address:___________________________

                 __________________________

              Facsimile:___________________________

               

              Email:    ____________________________

            	
              SELLER:

               

              TRIANGLE
      HOLDINGS VI LLC

               

               

              By:________________________________

              Name:______________________________

              Its:________________________________

               

              Address:____________________________

                 ___________________________

              Facsimile:____________________________

               

              Email:    _____________________________

               

            

    

    

    

    
      
         

      

      
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    EXHIBIT
A

    

    ASSIGNMENT
SEPARATE FROM CERTIFICATE

    

    

    FOR VALUE RECEIVED and pursuant to that
certain Stock Repurchase Agreement between the undersigned (“Seller”) and LAS
VEGAS GAMING, INC. (the “Company”), dated as of January 1, 2010, Seller hereby
sells, assigns and transfers unto Company a total of 150,000 shares of Series G
Convertible Preferred Stock of the Company, recorded in Seller’s name on the
books of Company and does hereby irrevocably constitute and appoint Company as
transfer agent to transfer the said shares on the books of Company with full
power of substitution in the premises.

    

    Dated:
________________________

    

    SELLER:

     

    TRIANGLE
HOLDINGS VI LLC

    

    

    By:     
_____________________________

    Name: _____________________________

    Title:  
_____________________________

     

     

    
      
         

      

      
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    EXHIBIT
B

    

    SECURED SECOND POSITION
PROMISSORY NOTE

     

    
      

      
        	
                $1,107,847.12

              	
                Las
      Vegas, Nevada

              	
                January
      1, 2010

              

      

       

    

    FOR VALUE
RECEIVED, the undersigned, LAS VEGAS GAMING, INC., a Nevada corporation with its
principal place of business at 3980 Howard Hughes Parkway, Suite 450, Las Vegas,
Nevada 89169 (“Maker”),
hereby unconditionally promises to pay to the order of Triangle Holdings VI LLC,
(“Payee”) at
3121 SW Moody Avenue, Portland, Oregon 97239, in immediately available funds by
wire transfer or cashier’s check, the principal sum of ONE MILLION ONE HUNDRED
SEVEN THOUSAND EIGHT HUNDRED FORTY SEVEN AND 12/100 DOLLARS ($1,107,847.12), or
such lesser amount as may be payable hereunder pursuant to the terms of this
Secured Second Position Promissory Note (this “Note”),
together with accrued interest on the outstanding and unpaid principal balance
as herein specified.

     

    1.           Loans.  The
principal amount of this Note represents (a) the repurchase by Maker of 150,000
shares of Series G Convertible Preferred Stock of Maker currently held by Payee
for the amount of Payee’s initial investment of $750,000, together with the 12%
dividend amounting to $107,847.12 that was due and payable on January 1, 2010,
which Maker is unable to pay, (b) a new loan in the amount of $150,000, to be
made on March 18, 2010, and to be used to lease or purchase materials that will
be used to produce, and that will become a part or component of, Maker’s
products, including PlayerVision 3 software applications incorporated into
Maker’s slot machine products, and (c) a $100,000 loan fee charged by Payee in
connection with making the new loan (the “Loan
Fee”).

     

    2.           Payments. (a) The
entire outstanding principal balance of this Note, together with all accrued and
unpaid interest, shall be due and payable in one payment on the earlier to occur
of (a) the date that that certain loan from IGT, a Nevada corporation, to Maker
in the principal amount of $1,500,000 is repaid in full and (b) the date on
which IGT forecloses on such loan as a result of a default thereunder (such
date, the “Due
Date”). Maker may prepay all or any portion of the principal of this Note
without giving Payee prior written notice of its intention to make such
prepayment and without a prepayment penalty. Any prepayment shall be accompanied
by the payment of all accrued and unpaid interest on the amount of principal
being so prepaid.

     

    (b) All
payments and prepayments of principal or interest on this Note shall be made in
lawful money of the United States of America at the address of Payee indicated
above, or such other place as the holder of this Note shall designate in writing
to Maker.  Each payment under this Note shall be credited as follows:
first, to accrued but unpaid fees (including, without limitation, the Loan Fee);
second, to accrued and unpaid interest; and third, to the unpaid principal
balance of this Note.

     

     

    
      
         

      

      
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    3.           Interest Rate. The
principal balance hereof from time to time outstanding, as well as any interest
not paid when due, shall bear interest at the rate of ten percent (10%) per
annum from the date hereof and continuing until all sums due hereunder are paid
in full.  All accrued interest shall be payable on the Due
Date.

     

    4.           Security. This Note
is executed as of March 18, 2010 to be effective as of January 1, 2010. Maker
hereby grants to Payee, for the benefit of Payee and any affiliate of Payee, a
continuing second priority security interest (except as otherwise noted below)
in and to, and assigns to Payee the following, and each item thereof, whether
now owned or now due, or in which Maker has an interest, or hereafter acquired,
arising, or to become due, or in which Maker obtains an interest, and all
products, proceeds, substitutions, and accessions of or to any of the following
(all of foregoing, together with any other property in which Payee may in the
future be granted a security interest, is referred to herein as the “Collateral”):

     

    
      (a)  
All
accounts and accounts receivable;

       

      (b) 
 All
inventory;

       

      (c)  All
general intangibles (including, without limitation, all intellectual property
and patents for PlayerVision 3 

            
and Nevada Numbers);

       

      (d)  All
equipment; (except for 32 slot machines with respect to which Gaming Arts, LLC
holds a second priority 

            
security and with respect to which Payee will hold a third priority security
interest);

       

      (e)  All
goods;

       

      (f)  
All
fixtures (except the furniture and fixtures at 3980 Howard Hughes Parkway, Suite
450, Las Vegas, Nevada 

         
   with respect to which Gaming Arts, LLC holds a second priority
security and with respect to which Payee will 

         
   hold a third priority security interest);

       

      (g)  
All
chattel paper;

       

      (h) 
 All
rights under letters of credit of which Seller is the beneficiary;

       

      (i)
  All
payment intangibles;

       

       

      
        
           

        

        
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      (j)
  All
supporting obligations;

       

      (k)  All
books, records, and information relating to the Collateral and/or to the
operation of Maker’s business, and all rights 

            
of access to such books, records, and information, and all property in which
such books, records, and information are 

            
stored, recorded, and maintained;

       

      (l)  
All
leasehold interests;

       

      (m)  All
investment property, instruments, documents, deposit accounts, money, policies
and certificates of insurance, deposits, 

              impressed
accounts, compensating balances, cash, or other property;

       

      (n)  All
insurance proceeds, refunds, and premium rebates, including, without limitation,
proceeds of fire and credit insurance, whether 

            
any of such proceeds, refunds, and premium rebates arise out of any of the
foregoing. ((a) through (m)) or otherwise; and

       

      (o)  All
liens, guaranties, rights, remedies, and privileges pertaining to any of the
foregoing ((a) through (n)), including the right 

            
of stoppage in transit.

    

     

    All terms
used in this Section 3 and not otherwise defined in this Note shall have the
meanings given to them in the Nevada Uniform Commercial Code (the “UCC”). It
is intended that the Collateral include, without limitation, all PlayerVision
assets of Maker.  Maker agrees to execute such financing statements
and to take whatever other actions are requested by Payee to perfect and
continue Payee’s security interest in the Collateral.  Maker
authorizes Payee to file one or more financing statements describing the
Collateral in any and all jurisdictions where, and with any and all governmental
authorities with whom, the Payee deems such filing to be necessary or
appropriate to perfect and establish the priority of the liens granted by this
Note.

     

    5.           Maker’s
Representations. Maker hereby
represents and warrants to Payee that:

     

    
      	
               
      

            	
              (a)

            	
              Maker
      has good and marketable title to the Collateral, subject only to the liens
      or encumbrances disclosed as of the date hereof to Payee by Maker in
      writing.

            

    

     

    
      	
               
      

            	
              (b)

            	
              Maker
      is duly organized and validly existing as a corporation under the laws of
      the state of Nevada, and is in good standing as a corporation and
      qualified to do business in each state in which the nature of its business
      or property so requires.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Maker
      has the corporate power and authority and is duly authorized to execute
      and deliver this Note and perform the obligations under this
      Note.  This Note has been duly executed and delivered by an
      authorized officer of Maker and constitutes a valid and legally binding
      obligation of Maker, enforceable in accordance with its
    terms.

            

    

     

     

    
      
         

      

      
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              (d)

            	
              Maker’s
      execution, delivery, and performance of this Note and compliance with the
      terms, conditions and provisions hereof are not prohibited or restricted
      under the articles of incorporation or bylaws of Maker and do not conflict
      with, violate or constitute a breach of or default under any provision of
      any agreement, contract, lease, deed of trust, indenture, or instrument to
      which Maker is a party or by which Maker or its assets and properties,
      including the Collateral, are bound, or result in the imposition of any
      lien, charge, encumbrance, claim or security interest of any nature
      whatsoever upon any of the
Collateral.

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      security interest granted hereby in and to the Collateral constitutes a
      present, valid, binding and enforceable security interest as collateral
      security for Maker’s obligations under this Note and will be senior and
      prior to any liens, encumbrances, charges, title defects, interests and
      rights of any others with respect to such Collateral, other than the liens
      granted in favor of IGT and Gaming Arts, LLC, which rank senior to Payee’s
      security interest.

            

    

     

    
      	
               
      

            	
              (f)

            	
              There
      are no actions or proceedings pending or, to the knowledge of Maker,
      threatened against Maker that would reasonably be expected to (i) result
      in any material adverse change in Maker’s financial or business condition
      or (ii) materially adversely affect any of Maker’s assets, including the
      Collateral.

            

    

     

    6.           Maker’s
Covenant.  For so long as this Note remains outstanding, Maker
shall not sell, assign or transfer any of the Collateral, or any part thereof or
interest therein, other than in the ordinary course of business.

     

    7.          
Events of
Default. Maker shall be in default hereunder upon the

    happening
of any of the following events or conditions (each such event or condition
hereinafter referred to as an “Event of
Default”):

     

    
      	
              (a)  

            	
              Maker
      shall fail to pay when due any principal of or accrued and unpaid interest
      on this Note on or before three business days after Payee has given Maker
      written notice of such payment
default.

            

    

     

    
      	
              (b)  

            	
              Maker
      shall fail to pay when due any principal of or accrued and unpaid interest
      on any indebtedness of Maker for borrowed money, and such failure to pay
      shall remain unremedied for a period of five business
  days.

            

    

     

    
      	
              (c)  

            	
              Maker
      or any subsidiary of Maker shall breach any of the terms of any agreement
      between Maker or any of its subsidiaries, on the one hand, and Payee or
      any of its affiliates, on the other
hand.

            

    

     

     

     

    
      
         

      

      
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              (d)  

            	
              Maker
      shall commence a voluntary proceeding seeking liquidation, reorganization,
      or other relief with respect to itself or its debts under any bankruptcy,
      insolvency, or other similar law now or hereafter in effect, or seeking
      the appointment of a trustee, receiver, liquidator, custodian, or other
      similar official for it or a substantial part of its property or shall
      consent to any such relief or to the appointment of or taking possession
      by any such official in an involuntary case or other proceeding commenced
      against it or shall make a general assignment for the benefit of creditors
      or shall take any corporate action to authorize any of the
      foregoing.

            

    

     

    
      	
              (e)  

            	
              Any
      involuntary proceeding shall be commenced against Maker seeking
      liquidation, reorganization, or other relief with respect to it or its
      debts under any bankruptcy, insolvency, or other similar law now or
      hereafter in effect, or seeking the appointment of a trustee, receiver,
      liquidator, custodian, or other similar official for it or a substantial
      part of its property, and such involuntary proceeding shall remain
      undismissed and unstayed for a period of ninety (90)
  days.

            

    

     

    
      	
              (f)  

            	
              The
      failure by Maker to timely file with the United States Securities and
      Exchange Commission all reports and other documents required of the Maker
      under the Securities Act of 1933 and the Securities Exchange Act of
      1934.

            

    

     

    
      	
              (g)  

            	
              Any
      condition or event occurs that Payee determines, in its sole and absolute
      discretion, has or is reasonably likely to have a material adverse effect
      on (i) Maker’s business or operations, (ii) the validity or enforceability
      of this Note or the rights and remedies of Payee hereunder or (iii) the
      value of the Collateral.

            

    

     

    8.           Remedies.  (a)
Maker shall promptly notify Payee upon becoming aware of the occurrence of an
Event of Default hereunder. Upon the occurrence of any Event of Default set
forth in clauses (a), (b) or (c) above, the entire unpaid principal balance of
and accrued interest on this Note shall immediately become due and payable with
no action required by the holder hereof. Upon the occurrence of any other Event
of Default, the holder hereof may, at its option, declare the entire unpaid
principal balance of and accrued interest on this Note immediately due and
payable without notice, demand or presentment, all of which are hereby waived,
and upon such declaration the same shall become and shall be immediately due and
payable.  Upon the occurrence of any Event of Default hereunder, Payee
shall have (a) all rights and remedies provided to a secured party with respect
to the Collateral under the UCC and (b) all rights or remedies available to
Payee at law or in equity.

     

     

    
      
         

      

      
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    (b)    
If Payee or any other holder hereof expends any effort in any attempt to enforce
payment of all or any part or installment of any sum due the holder hereunder,
or if this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceedings, all reasonable collection costs and
fees incurred by the holder, including reasonable attorneys’ fees, shall be
added to the principal amount of this Note.

     

    9.           GOVERNING LAW; VENUE.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEVADA AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
NOTE AGAINST MAKER OR ANY OTHER PARTY LIABLE FOR PAYMENT OF ANY SUMS OF MONEY
PAYABLE ON THIS NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN CLARK
COUNTY, NEVADA.  MAKER AND EACH SUCH OTHER PARTY HEREBY IRREVOCABLY
(A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND (B) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO BRING ANY ACTION OR PROCEEDING
AGAINST MAKER OR ANY OTHER PARTY LIABLE HEREUNDER OR WITH RESPECT TO ANY
COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER JURISDICTION.

     

    10.           Waivers. Maker and
each surety, guarantor, endorser, and other party ever liable for payment of any
sum s of money payable on this Note jointly and severally waive notice,
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace, and all other formalities of
any kind, and consent to all extensions without notice for any period or periods
of time and partial payments, before or after maturity, and any impairment of
any collateral securing this Note, all without prejudice to Payee or any other
holder hereof.  Payee and any other such holder shall similarly have
the right to deal in any way, at any time, with one or more of the foregoing
parties without notice to any other party, and to grant any such party any
extensions of time for payment of any of said indebtedness, or to release or
substitute part or all of the collateral securing this Note, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party
hereunder.

     

    11.           Full
Recourse.  The liability of Maker for amounts owing hereunder
shall not be limited to the Collateral.  Maker shall remain fully
liable for indefeasible repayment in full of the full amount of this Note,
including all accrued and unpaid interest, fees, and expenses, and,
specifically, any remaining amounts owing in the event that sale or other
liquidation of the Collateral is deficient to satisfy the full amount owing
hereunder.

     

     

    
      
         

      

      
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    12.           Miscellaneous.

     

    
      	
               
      

            	
              (a)

            	
              This
      Note shall be binding upon Maker and shall inure to the benefit of Payee
      and its successors, assigns, heirs, and legal
    representatives.

            

    

     

    
      	
               
      

            	
              (b)

            	
              No
      failure or delay by Payee to insist upon the strict performance of any
      term, condition, covenant or agreement of this Note, or to exercise any
      right, power or remedy hereunder shall constitute a waiver of any such
      term, condition, covenant, agreement, right, power or
    remedy.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Time
      is of the essence.

            

    

     

                   
IN WITNESS WHEREOF, this Note has been executed effective the date and
place first written above.

    

    

    LAS
VEGAS GAMING, INC.

     

    By:        
____________________________

     

    Name:    ____________________________

    Title:     
____________________________

    

     

     

     

    
 

    
      
         

      

      
        - 11
-NEUMEDIA,
INC.

     

    WARRANT
TO PURCHASE COMMON STOCK

     

    THE OFFER
AND SALE OF THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR QUALIFIED
UNDER STATE SECURITIES LAWS, AND THEREFORE SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND EFFECTIVE QUALIFICATION
THEREOF UNDER APPLICABLE STATE SECURITIES LAWS, OR IF SUCH SALE, TRANSFER,
ASSIGNMENT, HYPOTHECATION OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND THE QUALIFICATION REQUIREMENTS OF THE RELEVANT STATE
SECURITIES LAWS.

     

    FOR VALUE
RECEIVED, ______________________
(the “Holder”)
is entitled to purchase, from time to time, from NeuMedia, Inc., a Delaware
corporation (the “Company”), fully paid
and non-assessable shares of common stock of the Company, par value $0.0001 per
share (each, a “Share” and
collectively, the “Shares”), commencing
on the date set forth on the signature page hereof (the “Commencement Date”),
on the terms and conditions set forth herein.

     

    1.           Number of Shares; Vesting;
Strike Price and Expiration Date.

     

    (a)           This
Warrant may be exercised for ____________
Shares.

     

    (b)           The
right to exercise this Warrant shall fully vest on the Commencement
Date.

     

    (c)           As
used herein, the “Strike Price” means
$0.25 per Share, as such prices may be adjusted from time to time pursuant to
the terms hereof.

     

    (d)           All
purchase rights represented by this Warrant shall terminate at 5:00 p.m. PDT on
the fifth anniversary of the Commencement Date (the “Expiration
Date”).  To the extent that this Warrant has not been exercised
before the Expiration Date, this Warrant shall become null and void and all
rights hereunder and all rights in respect hereof shall cease as of the
Expiration Date.

     

    2.           Exercise and
Payment.

     

    (a)         Exercise.  This
Warrant may be exercised in whole or in part, from time to time, by the Holder
by surrender of this Warrant (and the Notice of Exercise annexed hereto duly
completed and executed by the Holder) to the Company at the principal executive
office of the Company, together with payment in the amount obtained by
multiplying the Strike Price then in effect by the number of Shares to be
purchased (as designated in the Notice of Exercise).  Payment must be
by wire transfer of immediately available funds.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b)           Net Issue Exercise.
In lieu of exercising this Warrant in accordance with Section 2(a), the Holder
may elect a net issue exercise in accordance with this Section
2(b).  In the event the Holder elects a net issue exercise pursuant to
this Section 2(b), the Company shall deliver Shares in exchange for this
Warrant, with the amount of the number of Shares determined in accordance with
this Section 2(b).  The Holder may elect a net issue exercise by
surrendering this Warrant (and the Notice of Exercise annexed hereto duly
completed and executed by the Holder) to the Company at the principal executive
office of the Company.

     

    If in the
Notice of Exercise the Holder elects a net issue exercise, then the Company
shall issue to the Holder a number of Shares computed using the following
formula:

     

    X = Y (A-B)

                A

     

    
      
        
          	 
      	
                  Where

                	
                  X

                	
                  =

                	
                  the
      number of Shares to be issued to the Holder.

                
	 
      	 
      	
                  Y

                	
                  =

                	
                  the
      number of Shares then purchasable under this Warrant designated
      in

                
	 
      	 
      	 
      	 
      	
                  the
      Notice of Exercise.

                
	 
      	 
      	
                  A

                	
                  =

                	
                  the then current Fair Value of
      the Shares.

                
	 
      	 
      	
                  B

                	
                  =

                	
                  the
      then current Strike
Price.

                

        

      

    

     

    As used
in this Warrant, "Fair Value"
shall mean, on any date specified herein (i) in the case of cash, the dollar
amount thereof, (ii) in the case of a security listed on a national securities
exchange, the Current Market Price, and (iii) in all other cases, the fair value
thereof (as of a date which is within 20 days of the date as of which the
determination is to be made) determined in good faith by a majority of the
disinterested members of the Board of Directors of the Company; provided,
however, that if the Initial Holder (defined below) does not agree with a
majority of the disinterested members of the Board of Directors’ determination
of Fair Value, the Fair Value shall be determined in good faith, by an
independent investment banking firm selected jointly by the Company and the
Initial Holder or, if that selection cannot be made within ten days, by an
independent investment banking firm selected by the American Arbitration
Association in accordance with its rules, and provided further, that the Initial
Holder shall pay the fees and expenses of any third parties incurred in
connection with determining the Fair Value in the event the independent
investment banking firm’s determination of Fair Value is equal to or less than
the Fair Value as determined by a majority of the disinterested members of the
Board of Directors, and the Company shall pay such fees and expenses in the
event the independent investment banking firm’s determination of Fair Value is
greater than the Fair Value as determined by a majority of the disinterested
members of the Board of Directors. As used in this Section 2(b), “Current Market Price”
shall mean, the volume-weighted average closing price of the Shares for the five
trading days immediately preceding the date as of which the determination is to
be made. As used in this Warrant,
the “Initial
Holder” shall mean ________________,
who, for the avoidance of doubt, is also referred to in this Warrant as, a
“Holder.”

    

    (c)           Automatic Net Issuance
Immediately Prior to Expiration.  Notwithstanding anything
herein to the contrary, if immediately prior to the Expiration Date the net
issue exercise of this Warrant pursuant to Section 2(b) would result in Shares
being due to the Holder, then to the extent not previously exercised by the
Holder, this Warrant shall be deemed automatically exercised immediately prior
to 5:00 p.m. PDT on the Expiration Date by the Holder via a net issue exercise
pursuant to Section 2(b) for the maximum number of Shares then purchasable under
this Warrant; provided, that the Holder must deliver a Notice of Exercise
(accompanied by this Warrant certificate) to the Company within two months of
the Expiration Date and, in the event such Notice of Exercise (accompanied by
this Warrant certificate) is not delivered within two months of the Expiration
Date, the automatic exercise of this Warrant pursuant to this Section 2(c) will
not occur and this Warrant shall be null and void.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3.           Delivery of
Certificates.  In the event the Holder exercises this Warrant
for Shares pursuant to Section 2(a), or pursuant to Section 2(b) or Section 2(c)
and the Company elects to deliver Shares, this Warrant shall be deemed to have
been exercised and the Holder shall be deemed to have become the holder of
record of such Shares as of the date of the surrender of this Warrant
certificate to the Company, and in the case of an exercise pursuant to Section
2(a), payment of the Strike Price to the Company.  Within a reasonable
period of time after exercise, in whole or in part, of this Warrant pursuant to
Section 2(a), or Section 2(b) or Section 2(c) where the Company elects to
deliver Shares, the Company shall issue in the name of and deliver to the Holder
a certificate for the number of fully paid and non-assessable Shares that the
Holder shall have requested in the Notice of Exercise, or the number of Shares
calculated pursuant to Section 2(b) in the event the Holder elects a net issue
exercise in the Notice of Exercise and the Company elects to deliver Shares, up
to the maximum then available hereunder. If this Warrant is exercised in part,
the Company shall deliver to the Holder a new Warrant for the unexercised
portion of this Warrant at the time of delivery of such certificate for the
Shares.

     

    4.           No Fractional
Shares.  No fractional Shares or scrip representing fractional
Shares will be issued upon exercise of this Warrant.  If upon any
exercise of this Warrant a fraction of a Share results, the Company will pay the
Holder the difference between the cash value of the fractional Share and the
portion of the Strike Price allocable to the fractional Share.

     

    5.           Charges, Taxes and
Expenses.  The Holder shall pay all taxes or other incidental
charges, if any, in connection with (i) the transfer from the Company to the
Holder of the Shares purchased pursuant to the exercise hereof, and (ii) the
transfer from the Initial Holder to a Permitted Transferee (or any other
transfer by the Initial Holder or a Holder to which the Company consents in
writing) of all or any portion of this Warrant in accordance with Section 14(g)
of this Warrant.

     

    6.           Loss, Theft, Destruction or
Mutilation of Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft or destruction of this Warrant,
of indemnity or security reasonably satisfactory to the Company, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor, dated as of such date as the
foregoing conditions have been satisfied in the event of loss, theft or
destruction, or the surrender date in the event of mutilation, in lieu of this
Warrant.

     

    7.           Saturdays, Sundays,
Holidays, Etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a
Saturday or a Sunday or a holiday observed by The New York Stock Exchange (the
“NYSE”), then
such action may be taken or such right may be exercised on the next succeeding
weekday which is not a holiday observed by the NYSE.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    8.           Adjustment of Strike Price
and Number of Shares.  The number of and kind of securities
purchasable upon exercise of this Warrant and the Strike Price shall be subject
to adjustment from time to time as follows:

     

    (a)           Subdivisions and
Combinations.  If the Company shall at any time after the date
hereof, but prior to the expiration of this Warrant, subdivide its outstanding
securities as to which purchase rights under this Warrant exist, by split-up or
otherwise, or combine its outstanding securities as to which purchase rights
under this Warrant exist, the number of Shares as to which this Warrant is
exercisable as of the date of such subdivision or combination shall forthwith be
proportionately increased in the case of a subdivision or proportionately
decreased in the case of a combination.  Appropriate corresponding
adjustments shall also be made to the Strike Price, so that the aggregate
purchase price payable for the total number of Shares purchasable under this
Warrant as of such date shall remain the same.

     

    (b)           Reclassification,
Etc.  Except as specifically provided for in Section 8(c)
below, if at any time after the date hereof there shall be a change,
reorganization or reclassification of the Shares into which this Warrant is
exercisable into the same or a different number of a different type or class of
securities, then the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon payment of
the Strike Price then in effect, the number of shares of other securities or
property resulting from such change, reorganization or reclassification that
would have been received by the Holder for the Shares subject to this Warrant
had this Warrant been exercised immediately prior to the time of the
reclassification.

     

    (c)           Consolidation, Merger or
Sale.  If the Company shall do any of the following (each, a
“Triggering
Event”): (i) consolidate with or merge into any other entity and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) permit any other entity to consolidate with or
merge into the Company and the Company shall be the continuing or surviving
entity but, in connection with such consolidation or merger, the capital stock
of the Company shall be changed into or exchanged for securities of any other
entity or cash or any other property, or (iii) transfer all or substantially all
of its properties or assets to any other person or entity, then, and in the case
of each such Triggering Event, proper provision shall be made so that, upon the
basis and the terms and in the manner provided in this Warrant, the Holder of
this Warrant shall be entitled upon the exercise hereof at any time after the
consummation of such Triggering Event but prior to the Expiration Date, and to
the extent this Warrant is not exercised prior to such Triggering Event, to
receive at the Strike Price in effect at the time immediately prior to the
consummation of such Triggering Event (subject to adjustments (subsequent to
such Triggering Event) as nearly equivalent as possible to the adjustments
provided for elsewhere in this Section 8), in lieu of the Shares issuable upon
exercise of this Warrant prior to such Triggering Event, the securities, cash
and/or property to which such Holder would have been entitled upon the
consummation of such Triggering Event if such Holder had exercised the rights
represented by this Warrant immediately prior thereto (and the Company shall
select the form of consideration, to the extent applicable, received by the
Holder upon exercise of this Warrant subsequent to such Triggering Event),
subject to adjustments (subsequent to such Triggering Event) as nearly
equivalent as possible to the adjustments provided for elsewhere in this Section
8.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (d)         Extraordinary
Distributions. Except as specifically provided for in Section 8(c) above,
if the Company shall distribute to all holders of its Shares: (i) any shares of
capital stock of the Company, evidence of indebtedness, or other securities or
rights convertible into shares of capital stock of the Company (but excluding
Ordinary Dividends) without receiving payment of any consideration in exchange
therefor, or (ii) cash (but excluding Ordinary Dividends), then, in each such
case:

     

    (i)           the
Strike Price in effect immediately prior to the close of business on the record
date fixed for the determination of holders of any class of securities entitled
to receive such distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such Strike
Price by a fraction

     

    (x) the
numerator of which shall be the Fair Value of a Share in effect on such record
date or, if the Shares trade on an ex-distribution basis, on the date prior to
the commencement of ex-distribution trading, less the Fair Value of such
distribution applicable to one Share, and

     

    (y) the
denominator of which shall be the Fair Value of a Share in effect on such record
date or, if the Shares trade on an ex-distribution basis, on the date prior to
the commencement of ex-distribution trading;

     

    and

     

    (ii)          this
Warrant shall thereafter evidence the right to receive, at the adjusted Strike
Price, that number of Shares (calculated to the nearest Share) obtained by
dividing:

     

    (x) the
product of the aggregate number of Shares covered by this Warrant immediately
prior to such adjustment and the Strike Price in effect immediately prior to
such adjustment of the Strike Price by,

     

    (y) the
Strike Price in effect immediately after such adjustment of the Strike
Price.

     

    As used
herein “Ordinary Dividends” shall mean all quarterly dividends, whether paid in
cash, shares of capital stock of the Company or other securities, or any
combination of the foregoing, except extraordinary or special
dividends.

     

    9.           Notices of Adjustments,
Etc.  Whenever the Strike Price or number of Shares purchasable
hereunder shall be adjusted pursuant to Section 8 hereof, within five business
days of the event requiring the adjustment, the Company shall deliver to the
Holder (in accordance with Section 14(c)) a certificate setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Strike
Price and number of shares purchasable hereunder after giving effect to such
adjustment.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    10.          No Rights as
Stockholder.  Prior to exercise of this Warrant, the Holder
shall not be entitled to any rights as a stockholder of the Company with respect
to the Shares, including (without limitation) the right to vote such Shares,
receive distributions thereon, or be notified of stockholder meetings, and the
Holder shall not be entitled to any notice or other communication concerning the
business or affairs of the Company.

     

    11.          Shares Fully Paid,
Reservation and Listing of Shares; Covenants.

     

    (a)           Shares Fully
Paid.  The Company covenants and agrees that all Shares which
may be issued upon the exercise of this Warrant or otherwise hereunder will,
upon issuance, be duly authorized, validly issued, fully paid and
non-assessable.  The Company further covenants and agrees that during
the period within which this Warrant may be exercised, the Company will at all
times have authorized and reserved for the purpose of the issue upon exercise of
this Warrant a number of Shares equal to 100% of the aggregate number of Shares
exercisable hereunder to provide for the exercise of this Warrant.

     

    (b)           Covenants.  The
Company shall not by any action including, without limitation, amending the
Articles of Incorporation or the Bylaws of the Company, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant.

     

    12.          Restricted
Securities.  The Holder understands that this Warrant and the
Shares purchasable hereunder constitute “restricted securities” under the
federal securities laws inasmuch as they are, or will be, acquired from the
Company in transactions not involving a public offering and accordingly may not,
under such laws and applicable regulations, be resold without registration under
the Act, or an applicable exemption from such registration. The Holder hereby
acknowledges that the securities legend on Exhibit A to the Notice of Exercise
attached hereto will be placed on any Shares issued to the Holder upon exercise
of this Warrant.

     

    13.          Certification of Investment
Purpose.  Unless a current registration statement under the Act
shall be in effect with respect to the securities to be issued upon exercise of
this Warrant, in which case the Holder may be asked to provide a modified
version of the written certification attached hereto, the Holder covenants and
agrees that, at the time of exercise hereof, it will deliver to the Company a
written certification in substantially the form of Exhibit A to the Notice of
Exercise attached hereto, executed by the Holder, which certifies to the Company
that the Holder is an “accredited investor” as that term is defined in Rule 501
of Regulation D promulgated under the Act, that the securities acquired by such
Holder upon exercise hereof are for the account of such Holder and acquired for
investment purposes only and that such securities are not acquired with a view
to, or for sale or resale in connection with, any distribution
thereof.

     

    14.          Miscellaneous.

     

    (a)           Construction.  Unless
the context indicates otherwise, the term “Warrant” shall
include any and all warrants outstanding pursuant to this Agreement, including
those evidenced by a certificate upon exchange or substitution pursuant to the
terms hereof.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (b)           Restrictions.  By
receipt of this Warrant, the Holder makes the same representations and
warranties with respect to the acquisition of this Warrant as the Holder is
required to make upon the exercise of this Warrant and acquisition of the Shares
purchasable hereunder as set forth in the Form of Investment Letter attached as
Exhibit A to the Notice of Exercise, the forms of which are attached hereto as
Exhibit
A.

     

    (c)           Notices.  Unless
otherwise provided, any notice required or permitted under this Warrant shall be
given in writing and shall be deemed effectively given upon personal delivery to
the party to be notified or three days following deposit with the United States
Post Office, by registered or certified mail, postage prepaid and addressed to
the party to be notified (or one day following timely deposit with a reputable
overnight courier with next day delivery instructions), or upon confirmation of
receipt by the sender of any notice by facsimile transmission, at the address
indicated below or at such other address as such party may designate by ten
days’ advance written notice to the other party.

     

    
      	
               
      

            	
              To
      Holder:

            	
              ________________________________

            

    

    
      ________________________________

    

    
      ________________________________

    

    
      ________________________________

    

     

    
      	
               
      

            	
              To
      the Company:

            	
              NeuMedia,
      Inc.

            

    

    2000
Avenue of the Stars, Suite 410

    Los
Angeles, California 90067-5075

    Attention:  Chief
Financial Officer

     

    
      	
               
      

            	
              With
      a copy to:

            	
              Manatt,
      Phelps & Phillips, LLP

            

    

    11355
West Olympic Boulevard

    Los
Angeles, California 90064

    Attention:  Richard
J. Maire, Esq.

    Facsimile:
(310) 312-4224

     

    (d)           Governing Law. Any dispute in the
meaning, effect or validity of this Warrant shall be resolved in accordance with
the laws of the State of Delaware without regard to the conflict of laws
provisions thereof.

     

    (e)           Attorneys’
Fees.  In the event that any suit or action is instituted under
or in relation to this Warrant, including without limitation to enforce any
provision in this Warrant, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Warrant, including, without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

     

    (f)           Entire
Agreement.  This Warrant and the exhibits hereto constitute the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof, and supersede all prior and contemporaneous agreements
and understandings, whether oral or written, between the parties hereto with
respect to the subject matter hereof.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (g)          Binding Effect; and
Assignment.

     

    (i)           This
Warrant and the various rights and obligations arising hereunder shall inure to
the benefit of and be binding upon the Company and its successors and assigns,
and the Holder and its successors and permitted assigns.

     

    (ii)           The
Holder may not sell, assign or otherwise transfer this Warrant or its rights or
obligations hereunder without the express written consent of the Company, which
consent may be withheld, delayed or conditioned in the sole and absolute
discretion of the Company.

     

    (iii)           Notwithstanding anything herein to the
contrary, the Initial Holder, and only the Initial Holder with respect to
(1) and (2) below, may assign or transfer this Warrant, without the consent of
the Company, following at least
ten business days prior written notice by the Initial Holder to the Company,
which written notice shall be accompanied by a legal opinion reasonably
satisfactory to the Company issued by legal counsel to the Initial Holder
reasonably acceptable to the Company, to the effect that such transfer or
assignment may be effected without registration or qualification under any U.S.
federal and state laws and applicable foreign laws then in effect: (1) in
whole or in part to any Affiliate of the Initial Holder and any of such
Affiliate’s respective stockholders, partners, limited partners, members or
other equity owners; or (2) in whole, and not in part, to any one unrelated
third party (each of (1) and (2), a “Permitted Transferee”).  Any
Permitted Transferee shall be deemed to be a Holder for all purposes hereunder
and in no event shall a Permitted Transferee be deemed to be the “Initial
Holder” or have the power or authority to exercise any of the rights granted to
the Initial Holder.  As used in this Section 14(g)(iii), “Affiliate”
shall mean, with respect to any person or entity, a person or entity that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or under common control with such person or entity.

     

    (iv)           Subject
to the provisions of Section 14, this Warrant and all rights hereunder are
transferable upon surrender of this Warrant certificate with a properly executed
assignment (in the form of Exhibit B hereto) at
the principal executive office of the Company. The assignment of a Warrant to a
transferee hereof shall be deemed to be the acceptance by such transferee of all
of the rights and obligations of a “Holder” of this Warrant.

     

    (h)         Waiver;
Consent.  This Warrant may not be changed, amended, terminated,
augmented, rescinded or discharged (other than by performance), in whole or in
part, except by a writing executed by the parties hereto, and no waiver of any
of the provisions or conditions of this Warrant or any of the rights of a party
hereto shall be effective or binding unless such waiver shall be in writing and
signed by the party claimed to have given or consented thereto.

     

    (i)          Company
Determinations.  Any determination, selection or adjustment to
the Strike Price or the number of Shares to be issued upon exercise of the
Warrant to be made by the Company hereunder shall be made by majority of the
disinterested directors of the Board of Directors of the Company.

     

    [Remainder
of the Page is Intentionally Left Blank]

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Warrant effective as of
the date set forth below.

     

    
      
        
          
            
              
                
                  	
                          DATED:  ________,
      2010

                        	
                          COMPANY

                        
	 
      	 
      
	 
      	
                          NeuMedia,
      Inc.,

                        
	 
      	
                          a
      Delaware corporation

                        
	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      
	 
      	 
      
	 
      	
                          HOLDER

                        
	 
      	 
      
	 
      	
                          __________________________________

                        
	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      

                

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    NOTICE OF
EXERCISE

     

    To:      NeuMedia,
Inc.

     

    [EXERCISE
PURSUANT TO SECTION 2(a)][The Holder hereby elects to purchase _____________
Shares of the Company pursuant to the terms of the attached Warrant, and tenders
herewith payment of the Strike Price pursuant to the terms of the
Warrant.]

     

    [NET
ISSUE EXERCISE PURSUANT TO SECTION 2(b)][The Holder hereby elects to surrender
_____________ of the Shares of the Company underlying the attached Warrant
pursuant to the terms of the attached Warrant, and hereby agrees to accept in
exchange therefor Shares in the amount calculated pursuant to the terms of the
Warrant.]

     

    Defined
terms used herein and not defined herein shall have the meaning ascribed to them
in the Warrant.

     

    Attached
as Exhibit A is
an investment representation letter addressed to the Company and executed by the
Holder as required by Section 13 of the Warrant.

     

    Please
issue a new Warrant for the unexercised portion of the attached Warrant, if any,
in the name of the Holder.

     

    
      
        
          
            
              
                
                  
                    	
                            Dated:

                          	 	
                             

                          	
                            HOLDER

                          
	 
      	 
      
	 
      	
                            

                              __________________________________

                            

                          
	 
      	 
      
	 
      	 
      
	 
      	
                            Name:

                          	 
      
	 
      	
                            Title:

                          	 
      

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    Exhibit
A

     

    To:         NeuMedia,
Inc.

     

    In
connection with the purchase by the Holder of _________ Shares of the Company,
upon exercise of that certain Warrant dated as of ________ ___, 2010, the Holder
hereby represents and warrants as follows:

     

    The
Holder is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Act.  The Shares to be received by
the Holder upon exercise of the Warrant are being acquired for its own account,
not as a nominee or agent, and not with a view to resale (except to the extent
exempt from the registration requirements of the Act and the qualification
requirements of the relevant state securities laws) or distribution of any part
thereof, and the Holder has no present intention of selling, granting any
participation in, or otherwise distributing the same.  The Holder
believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Shares.

     

    The
Holder understands that the Shares are characterized as “restricted securities”
under the federal securities laws inasmuch as they are being acquired from the
Company in transactions not involving a public offering, and that under such
laws and applicable regulations such securities may be resold without
registration under the Act, only in certain limited circumstances.  In
this connection, the Holder represents and warrants that it is familiar with
Rule 144 of the Act, as presently in effect, and understands the resale
limitations imposed by Rule 144 and by the Act.

     

    The
Holder understands the instruments evidencing the Shares may bear the following
legend:

     

    THE OFFER
AND SALE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR QUALIFIED
UNDER STATE SECURITIES LAWS, AND THEREFORE SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND EFFECTIVE QUALIFICATION
THEREOF UNDER APPLICABLE STATE SECURITIES LAWS, OR IF SUCH SALE, TRANSFER,
ASSIGNMENT, HYPOTHECATION OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND THE QUALIFICATION REQUIREMENTS OF THE RELEVANT STATE
SECURITIES LAWS.

     

    Defined
terms used herein and not defined herein shall have the meaning ascribed to them
in the Warrant.

     

    
      
        
          
            
              
                
                  	
                          Dated:

                        	 	
                           

                        	
                          HOLDER

                        
	 
      	 
      
	 
      	
                          

                            __________________________________

                          

                        
	 
      	 
      
	 
      	 
      
	 
      	
                          Name:

                        	 
      
	 
      	
                          Title:

                        	 
      

                

              

            

          

        

      

    

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    ASSIGNMENT
FORM

     

    FOR VALUE
RECEIVED, _________________________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant with
respect to the number of Shares of the Company underlying the attached Warrant
covered thereby and designated below, unto:

     

    
      
        
          
            
              	
                      Name of “Assignee”

                    	 	
                      Address

                    	 	
                      No. of Shares

                    
	 
      	 	 
      	 	 
      
	 
      	 	 
      	 	 
      

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	 
      	
                          Dated: 

                        	 
      	 
      	 
      
	 
      	 
      	
                          Signature: 

                        	 
      
	 
      	 
      	
                          Name:

                        	 
      
	 
      	 
      	
                          Title:

                        	 
      
	 
      	 
      	 
      	
                          (if
      applicable)

                        

                

              

            

          

        

      

    

     

    Assignee hereby agrees to be subject to
and bound by all of the provisions of the attached Warrant as the “Holder.” The
Assignee understands and hereby acknowledges that as a Holder of the Warrant the
Assignee is not entitled to those rights afforded solely to the Initial Holder
of the Warrant. The Assignee makes the same representations and warranties with
respect to the acquisition of the Warrant as the Holder is required to make upon
the exercise of a Warrant and acquisition of the Shares purchasable thereunder
as set forth in the Form of Investment Letter attached as Exhibit A to the
Notice of Exercise, the form of which is attached as Exhibit A to the
attached Warrant.

     

    
      
        
          
            
              
                
                  	 
      	
                          Dated: 

                        	 
      	 
      	 
      
	 
      	 
      	
                          Signature: 

                        	 
      
	 
      	 
      	
                          Name:

                        	 
      
	 
      	 
      	
                          Title:

                        	 
      
	 
      	 
      	 
      	
                          (if
      applicable)

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        B-1

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