THESE SECURITIES
MAY NOT BE OFFERED OR SOLD UNLESS AT THE TIME OF SUCH
OFFER OR SALE, THE
PERS ON MA KING SUCH OFFER OR SALE DELI VERS A PROSPECTUS
MEETING
THE REQUIREMENTS OF SECTION 10 OF THE SECURITIES ACT OF 1933,
AS
AMENDED ("ACT"), FORMING A PART OF A REGISTRATION STATEMENT, OR
POST-EFFECTIVE AMENDMENT THERETO, WHICH IS EFFECTIVE UNDER SAID
ACT,
UNLESS IN THE
OPINION OF COUNSEL TO THE CORPORATION, SUCH OFFER AND SALE IS
EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SAID ACT.
AIRTRAX, INC.
COMMON STOCK PURCHASE WARRANT
Airtrax, Inc. (the "Company"), a New Jersey corporation,
hereby certifies
that, for value received of $.001 per Warrant, Motivated Minds, LLC, an
Arizona
limited liability
company (the "Holder"), whose address is 3116 E. Shea
Boulevard, PMB 191,
Phoenix, Arizona
85028, is entitled,
subject to the terms
set forth below at any
time or from time to
time after
the date hereof and
before the Expiration
Date (as defined
below), to purchase from the Company
256,410 shares (the
"Shares") of Common Stock, $.001 par value, at a price of
$1.56 per Share (the
purchase price per
Share, as adjusted
from time to time
pursuant to the provisions hereunder set forth, is referred to in this Warrant
as the "Purchase Price").
This
Warrant was issued to
the Holder in
connection with the
loan by the
Holder to the Company
evidenced by a Series A Convertible Note (the "Note") in
the principal amount of $400,000.
1. Terms of the
Warrant.
1.1
Time of Exercise.
Subject to the provisions of Sections 1.5, "Transfer
and Assignment,"
and 3.1, "Registration and Legends," this Warrant may be
exercised at any time and from time to time after 9:00 a.m.,
P.S.T., on July 21,
2006 (the "Exercise
Commencement Date"),
but no later than 5:00
p.m., P.S.T.,
July 20, 2011 (the "Expiration Date"), at which point it shall become
void and
all rights under this Warrant shall cease.
1.2 Manner of
Exercise.
1.2.1 Upon compliance
with and subject to
the conditions set
forth in
this Warrant, the
Holder may exercise this Warrant, in whole or in part, upon
surrender of this
Warrant with the form of subscription attached hereto duly
executed to the Company at its corporate office at the address
indicated in this
Warrant, together with
the full Purchase
Price for each Share
to be purchased
(i) in lawful money of the United States, or by certified check,
bank draft or
postal or express money order payable in United States
dollars to the order
of
the Company or (ii) a manner acceptable to the Company.
1.2.2 Upon receipt of this Warrant with the form of subscription duly
executed and
accompanied by payment
of the aggregate
Purchase Price for the
Shares for which this Warrant is then being exercised, the Company shall cause
to be issued
certificates or other evidence of ownership, for the total number
of whole Shares for which this Warrant is being exercised in such
denominations
as are required
for delivery to the
Holder, and the
Company shall
thereupon
deliver such documents to the Holder or its nominee.
<PAGE>
1.2.3 If the Holder
exercises this
Warrant with respect
to fewer than
all of the Shares that may be purchased under this Warrant, the Company shall
execute a new Warrant for the balance of the Shares that may be
purchased upon
exercise of this Warrant and deliver such new Warrant to the
Holder.
1.2.4 The Company
covenants and agrees that it will pay when due and
payable any and all
transfer or issuance
taxes which may be payable in respect
of the issue of this
Warrant, or the issue
of any Shares upon the
exercise of
this Warrant. The
Company shall not, however, be required to pay any tax
which
may be payable in respect of any transfer involved in the issuance or
delivery
of this Warrant or of
the Shares in a name other than that of the Holder at the
time of surrender,
and until the payment
of such tax, the Company shall not be
required to issue such Shares.
1.2.5 The Company
shall, at the time of
any exercise of all or part of
this Warrant, upon the request of the Holder hereof, acknowledge in writing its
continuing obligation
to afford to the
Holder any rights to which the Holder
shall continue
to be entitled after such exercise in accordance with the
provisions of this
Warrant, provided that if the Holder of
this Warrant shall
fail to make any such
request, such
failure shall not affect the continuing
obligations of the Company to afford to the Holder any such
rights.
1.3
Exchange of Warrant. This Warrant may be split-up, combined or
exchanged for
another Warrant or Warrants of like tenor to purchase a like
aggregate number of
Shares. If the
Holder desires to split-up, combine or
exchange this Warrant,
it shall make such
request in writing
delivered to the
Company at its corporate office and shall surrender this Warrant and any
other
Warrants to be so split-up, combined or exchanged, the Company
shall execute and
deliver to the person
entitled thereto a
Warrant or Warrants,
as the case may
be, as so requested.
The Company shall not
be required to effect any split-up,
combination or exchange which will result in the issuance of a
Warrant entitling
the Holder to purchase
upon exercise a fraction of a Share. The Company may
require the
Holder to pay a sum
sufficient
to cover any tax or
governmental
charge that may be
imposed in connection
with any split-up, combination or
exchange of Warrants.
The term "Warrant" as
used herein includes
any Warrants
issued in substitution
for or replacement of
this Warrant, or into
which this
Warrant may be divided or exchanged.
1.4
Holder as Owner. Prior
to due presentment for registration of transfer
of this Warrant, the Company may deem and treat the Holder as the
absolute owner
of this Warrant
(notwithstanding any
notation of
ownership or other
writing
hereon) for the purpose of any exercise hereof and for all other
purposes, and
the Company shall not be affected by any notice to the contrary.
Irrespective of
the date of issue and delivery of certificates for any Shares issuable upon
the
exercise of the
Warrant, each person in whose name any such
certificate
is
issued shall be
deemed to have
become the holder of record of the Shares
represented thereby
on the date on which all or a portion of the Warrant
surrendered in connection with the subscription therefor was surrendered and
payment of the purchase price was tendered. No surrender of all or a portion
of
the Warrant on any date when the stock transfer books of the
Company are closed,
however, shall be
effective to
constitute
the person or persons
entitled to
receive Shares upon
such surrender as the
record holder of such Shares on such
date, but such
person or persons
shall be constituted the record holder or
holders of such Shares at the close of business on the next
succeeding
date on
<PAGE>
which the stock
transfer books are
opened. Each person holding any Shares
received upon exercise of Warrant shall be entitled to receive only
dividends or
distributions payable
to holders of record on or after the
date on which such
person shall be deemed to have become the holder of record of such
Shares.
1.5
Transfer and
Assignment. This
Warrant may not be sold, hypothecated,
exercised, assigned or
transferred except in accordance with and subject to the
provisions of the Securities Act of 1933, as amended (the
"Act").
1.6
Method for Assignment.
Any assignment permitted under this Warrant
shall be made by
surrender of this
Warrant to the
Company at its principal
office with the form
of assignment
attached hereto duly executed and funds
sufficient to pay any transfer tax. In such event, the Company shall, without
charge, execute and deliver a new Warrant in the name of the
assignee designated
in such instrument of
assignment and this
Warrant shall promptly
be canceled.
This Warrant may be divided or combined with other Warrants which
carry the same
rights upon presentation thereof at the corporate office of the
Company together
with a written notice signed by the Holder, specifying the names and
denominations in which such new Warrants are to be issued.
1.7
Rights of Holder.
Nothing contained in this Warrant shall be construed
as conferring upon the
Holder the right to vote or consent or receive notice as
a stockholder
in respect of any
meetings of
stockholders for the
election of
directors or
any other matter, or as having any rights whatsoever as a
stockholder of the Company. If, however, at any time prior to
the expiration of
this Warrant and prior to its exercise, any of the following shall
occur:
1.7.1 The Company
shall take a record of
the holders of its
shares of
Common Stock
for the purpose of entitling them to receive a dividend or
distribution payable
otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings,
as indicated by
the
accounting treatment
of such dividend or distribution on the books of the
Company; or
1.7.2 The Company
shall offer to the
holders of its Common
Stock any
additional shares of capital stock of the Company or securities
convertible into
or exchangeable for shares of capital stock of the Company, or any
option, right
or warrant to subscribe therefor; or
1.7.3 There
shall be proposed any capital reorganization or
reclassification of
the Common Stock, or a sale of all or substantially all of
the assets of the
Company, or a
consolidation
or merger of the
Company with
another entity; or
1.7.4 There shall be proposed a voluntary or involuntary dissolution,
liquidation or
winding up of the Company; then, in any one or more of said
cases, the
Company shall cause to be mailed to the
Holder, at the earliest
practicable time (and,
in any event, not less
than thirty (30) days before any
record date or other date set for definitive action), written
notice of the date
on which the books of
the Company
shall close or a record shall be taken to
determine the stockholders entitled to such dividend, distribution,
convertible
or exchangeable
securities or subscription rights, or entitled to vote on
such
reorganization,
reclassification,
sale, consolidation,
merger, dissolution,
liquidation or winding
up, as the case may be. Such notice shall also set forth
such facts as shall
indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Purchase Price and the
<PAGE>
kind and amount of the Common Stock and other securities and property
deliverable upon
exercise of this
Warrant. Such notice
shall also specify the
date as of which the holders of the Common Stock of record shall
participate in
said distribution or subscription rights or shall be entitled to
exchange their
Common Stock
for securities or other property deliverable upon such
reorganization,
reclassification,
sale, consolidation,
merger, dissolution,
liquidation or winding
up, as the case may be (on which date, in the event of
voluntary or involuntary dissolution, liquidation or winding up of the
Company,
the right to exercise
this Warrant
shall terminate). Without limiting the
obligation of the Company to provide notice to the holder of
actions hereunder,
it is agreed that
failure of the Company to give notice shall not invalidate
such action of the Company.
1.8
Lost Warrant
Certificate(s).
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,
including a
surety bond if required by the
Company, and upon surrender and cancellation of this Warrant, if
mutilated, the
Company will cause to be executed and delivered 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.
1.9
Covenants of the Company. The Company covenants and agrees as
follows:
1.9.1 At all times it shall reserve and keep available for the exercise
of this Warrant into
Common Stock such
number of authorized
shares of Common
Stock as are
sufficient to permit
the exercise in full
of this Warrant
into
Common Stock; and
1.9.2 All Shares
issued upon
exercise of the Warrant shall be duly
authorized, validly issued and outstanding, fully-paid and
non-assessable.
2. Adjustment
of Purchase Price and Number of Shares Purchasable Upon
Exercise.
2.1
Adjustment of Purchase
Price. The Purchase
Price shall be adjusted to
the price of which the
Company sells its
Common Stock to any third party or
parties in any
transaction, or series
of transactions
taken together, that
exceed One
Million Dollars ($1,000,000). If the transaction(s) involve
securities convertible
into Common Stock,
the sales price of the
Common Stock
will be deemed to be the conversion price of the Common Stock for such
convertible securities. If there are a series of
transactions and the prices of
the Common Stock are
different in the transactions, the lowest price of the
Common Stock
sold in any of the
transactions
shall be deemed the adjusted
Purchase Price.
2.2
Recapitalization. The
number of Shares purchasable on exercise of this
Warrant and the Purchase Price therefor shall be subject to
adjustment from time
to time in the event that the Company shall: (i) pay a dividend in, or make a
distribution of, shares of Common Stock; (ii) subdivide its outstanding
shares
of Common Stock into a greater number of shares; (iii) combine its outstanding
shares of Common Stock
into a smaller
number of shares; or (iv) spin-off a
subsidiary by distributing, as a dividend or otherwise, shares of
the subsidiary
<PAGE>
to its stockholders. In any such case, the total number of shares
purchasable on
exercise of this Warrant immediately prior thereto shall be
adjusted so that the
Holder shall be entitled to receive, at the same aggregate purchase price, the
number of shares of Common Stock that the Holder would have
owned or would have
been entitled to
receive immediately
following the occurrence of any of the
events described above had this Warrant b
