NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL
SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES .
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Right to Purchase ____________ shares of Common Stock of
IdeaEdge, Inc. (subject to adjustment as provided herein)
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COMMON STOCK PURCHASE WARRANT
No. 2008-A-001
Issue Date: June 5, 2008
IDEAEDGE, INC., a Colorado corporation (the “Company”),
hereby certifies that, for value received, WHALEHAVEN CAPITAL FUND
LIMITED, c/o FWS Capital Ltd., 3 rd Floor, 14
Par-Laville Road, Hamilton, Bermuda HM08, Fax: (441) 295-5262, or
its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company at any time
commencing on the Issue Date and until 5:00 p.m., E.S.T on the
sixty-sixth (66 th ) month after the Issue Date (the
“Expiration Date”), up to ____________ fully paid and
nonassessable shares of Common Stock at a per share purchase price
of $0.50. The aforedescribed purchase price per share, as
adjusted from time to time as herein provided, is referred to
herein as the "Purchase Price." The number and character of
such shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein. The Company may reduce the
Purchase Price for some or all of the Warrants (as defined in the
Subscription Agreement), temporarily or permanently, provided such
reduction is made as to all outstanding Warrants (as defined in the
Subscription Agreement) for all Holders of such Warrants.
Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Subscription Agreement
(the “ Subscription Agreement ”), dated as of
June 5, 2008, entered into by the Company and the subscribers
identified on the signature page thereto. This Warrant is
being issued to Holder in reliance upon the representations,
warranties and covenants made by Holder in the Subscription
Agreement.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a)
The term “Company” shall mean IdeaEdge, Inc., a
Colorado corporation, and any corporation which shall succeed or
assume the obligations of IdeaEdge, Inc. hereunder.
(b)
The term “Common Stock” includes (i) the Company's
Common Stock, $0.001 par value per share, as authorized on the date
of the Subscription Agreement, and (ii) any other securities into
which or for which any of the securities described in (i) may
be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c)
The term “Other Securities” refers to any stock (other
than Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the holder of the Warrant at
any time shall be entitled to receive, or shall have received, on
the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
(d)
The term “Warrant Shares” shall mean the Common Stock
issuable upon exercise of this Warrant.
1.
Exercise of Warrant .
1.1.
Number of Shares Issuable upon Exercise . From and
after the Issue Date through and including the Expiration Date, the
Holder hereof shall be entitled to receive, upon exercise of this
Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the
Company, subject to adjustment pursuant to Section 4.
1.2.
Full Exercise . This Warrant may be exercised in full
by the Holder hereof by delivery of an original or facsimile copy
of the form of subscription attached as Exhibit A hereto (the
“Subscription Form”) duly executed by such Holder and
delivery within two days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the
order of the Company, in the amount obtained by multiplying the
number of shares of Common Stock for which this Warrant is then
exercisable by the Purchase Price then in effect. The
original Warrant is not required to be surrendered to the Company
until it has been fully exercised.
1.3.
Partial Exercise . This Warrant may be exercised in
part (but not for a fractional share) by delivery of a Subscription
Form in the manner and at the place provided in subsection 1.2
except that the amount payable by the Holder on such partial
exercise shall be the amount obtained by multiplying (a) the
number of whole shares of Common Stock designated by the Holder in
the Subscription Form by (b) the Purchase Price then in
effect. On any such partial exercise, provided the Holder has
surrendered the original Warrant, the Company, at its expense, will
forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of shares
of Common Stock for which such Warrant may still be exercised for
the balance of.
1.4.
Reserved.
1.5.
Company Acknowledgment . The Company will, at the time of
the exercise of the Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to such
Holder any rights to which such Holder shall continue to be
entitled after such exercise in accordance with the provisions of
this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.
1.6.
Delivery of Stock Certificates, etc. on Exercise . The
Company agrees that, provided the purchase price listed in the
Subscription Form is received by the Company as specified in
Section 1.2, the shares of Common Stock purchased upon exercise of
this Warrant shall be deemed to be issued to the Holder hereof as
the record owner of such shares as of the close of business on the
date on which delivery of a Subscription Form shall have occurred
and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part,
and in any event within seven (7) business
days thereafter (“Warrant Share Delivery Date”), the
Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder hereof, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or
certificates for the number of duly and validly issued, fully paid
and non-assessable shares of Common Stock (or Other Securities) to
which such Holder shall be entitled on such exercise, plus, in lieu
of any fractional share to which such Holder would otherwise be
entitled, the number of shares of Common Stock to be issued will be
rounded up to the nearest whole share of Common Stock, together
with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such
exercise pursuant to Section 1 or otherwise. The Company
understands that a delay in the delivery of the Warrant Shares
after the Warrant Share Delivery Date could result in economic loss
to the Holder. As compensation to the Holder for such loss,
the Company agrees to pay (as liquidated damages and not as a
penalty) to such Holder for late issuance of Warrant Shares upon
exercise of this Warrant the proportionate amount of $100 per
business day after the Warrant Share Delivery Date for each $10,000
of aggregate Purchase Price of Warrant Shares for which this
Warrant is exercised which are not timely delivered. The
Company shall pay any payments incurred under this Section in
immediately available funds upon demand. Furthermore, in
addition to any other remedies which may be available to the
Holder, in the event that the Company fails for any reason to
effect delivery of the Warrant Shares by the Warrant Share Delivery
Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company,
whereupon the Company and the Holder shall each be restored to
their respective positions immediately prior to the exercise of the
relevant portion of this Warrant, except that the liquidated
damages described above shall be payable through the date notice of
revocation or rescission is given to the Company.
1.7
Buy-In . In addition to any other rights available to
the Holder, if the Company fails to deliver to the Holder the
Warrant Shares as required pursuant to this Warrant, within seven
(7) business days after the Warrant Share Delivery Date and the
Holder or a broker on the Holder’s behalf, purchases (in an
open market transaction or otherwise) shares of common stock to
deliver in satisfaction of a sale by such Holder of the Warrant
Shares which the Holder was entitled to receive from the Company (a
" Buy-In "), then the Company shall pay in cash to the
Holder (in addition to any remedies available to or elected by the
Holder) the amount by which (A) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of common
stock so purchased exceeds (B) the aggregate Purchase Price of the
Warrant Shares required to have been
delivered together with interest thereon at a rate of 15% per
annum, accruing until such amount and any accrued interest thereon
is paid in full (which amount shall be paid as liquidated damages
and not as a penalty). For example, if a Holder purchases
shares of Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to $10,000 of Purchase Price of Warrant
Shares to have been received upon exercise of this Warrant, the
Company shall be required to pay the Holder $ 1,000, plus interest. The
Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In.
2.
Intentionally Deleted .
3.
Adjustment for Reorganization, Consolidation, Merger,
etc.
3.1.
Fundamental Transaction . If, at any time while
this Warrant is outstanding, (A) the Company effects any
merger or consolidation of the Company with or into
another entity, (B) the Company effects any sale of all or
substantially all of its assets in one or
a series of related transactions, (C)
any tender offer
or exchange offer (whether by the Company or another
entity) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange
their shares for other securities, cash or property,
(D) the Company consummates a stock purchase agreement or other
business combination (including, without limitation, a
reorganization, recapitalization, or spin-off) with one or more
persons or entities whereby such other persons or entities acquire
more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by such other persons or
entities making or party to, or associated or affiliated with the
other persons or entities making or party to, such stock purchase
agreement or other business combination), (E) any "person" or
"group" (as these terms are used for purposes of Sections 13(d) and
14(d) of the 1934 Act) is or shall become the "beneficial owner"
(as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of 50% of the aggregate Common Stock of the
Company, or (F) the Company effects any
reclassification of the Common Stock or any
compulsory share exchange pursuant to which the
Common Stock is effectively converted into or
exchanged for other securities, cash or property (in
any such case, a "Fundamental Transaction"), then, upon
any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option
of the Holder, (a) upon exercise of this Warrant, the number
of shares of Common Stock of the successor or acquiring corporation
or of the Company, if it is the
surviving corporation, and any additional consideration
(the "Alternate Consideration") receivable upon or as
a result of such reorganization, reclassification,
merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such event or
(b) if the Company is acquired in (1) a transaction
where the consideration paid to the holders of the Common Stock
consists solely of cash, (2) a “Rule 13e-3 transaction”
as defined in Rule 13e-3 under the 1934 Act, or (3) a transaction
involving a person or entity not traded on a national securities
exchange, the Nasdaq Global Select Market, the Nasdaq Global Market
or the Nasdaq Capital Market, cash equa
