THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE 1933 ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR (2) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT.
IN ADDITION, A NOTE PURCHASE AGREEMENT DATED AS OF APRIL 13,
2005 (THE "PURCHASE AGREEMENT"), A COPY OF WHICH MAY BE OBTAINED
FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE, CONTAINS
CERTAIN ADDITIONAL AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO
THIS WARRANT.
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VILLAGEEDOCS
COMMON STOCK PURCHASE WARRANT "B"
Number of Shares: 8,000,000
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Holder: Barron Partners LP
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c/o Barron Capital Advisors LLC
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Original Issue Date: April 13,
2005
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Managing Partner
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Attn: Andrew Barron Worden
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730 Fifth Avenue, 9th Floor
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Expiration Date: April 13,
2010
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New York NY 10019
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tel 212-659-7790
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Exercise Price per Share: $0.25
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fax 646-607-2223
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VillageEDOCS, Inc, a company organized and existing under the laws
of the State of California (the "
Company
"), hereby certifies that, for value received,
BARRON PARTNERS LP,
or its registered assigns (the "
Warrant Holder
"), is entitled to purchase from the Company up to Eight Million
(8,000,000) shares of common stock, no par value (the "
Common Stock
") (subject to the terms set forth below and except as provided in
Section 5f and the "
Warrant Shares
", at a price of Twenty Five Cents ($0.25) per Warrant Share,as
adjusted from time to time as provided in Section 7, the "
Exercise Price
"), at any time and from time to time from and after the date
thereof and through and including 5:00 p.m. New York City time on
April 13, 2010 (or eighteen months of effectiveness of a
Registration Statement after the original issue date hereof (such
eighteen months to be extended by one month for each month or
portion of a month during which a Registration Statement's
effectiveness has lapsed or been suspended, whichever is
longer)(the "Expiration Date"), and subject to the following terms
and conditions:
1.
Registration of Warrant. The Company shall register this
Warrant upon records to be maintained by the Company for that
purpose (the " Warrant Register "), in the name of
the record Warrant Holder hereof from time to time. The
Company may deem and treat the registered Warrant Holder of this
Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Warrant Holder, and for
all other purposes, and the Company shall not be affected by notice
to the contrary.
2.
Investment Representation. The Warrant Holder by
accepting this Warrant represents that the Warrant Holder is
acquiring this Warrant for its own account or the account of an
affiliate for investment purposes and not with the view to any
offering or distribution and that the Warrant Holder will not sell
or otherwise dispose of this Warrant or the underlying Warrant
Shares in violation of applicable securities laws. The
Warrant Holder acknowledges that the certificates representing any
Warrant Shares will bear a legend indicating that they have not
been registered under the United States Securities Act of 1933, as
amended (the " 1933 Act ") and may not be sold by the
Warrant Holder except pursuant to an effective registration
statement or pursuant to an exemption from registration
requirements of the 1933 Act and in accordance with federal and
state securities laws. If this Warrant was acquired by the
Warrant Holder pursuant to the exemption from the registration
requirements of the 1933 Act afforded by Regulation S thereunder,
the Warrant Holder acknowledges and covenants that this Warrant may
not be exercised by or on behalf of a Person during the one year
distribution compliance period (as defined in Regulation S)
following the date hereof. " Person " means an
individual, partnership, firm, limited liability company, trust,
joint venture, association, corporation, or any other legal
entity.
3.
Validity of Warrant and Issue of Shares. The Company
represents and warrants that this Warrant has been duly authorized
and validly issued and warrants and agrees that all Common Stock
that may be issued upon the exercise of this Warrant will, when
issued upon such exercise, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof. The Company
further warrants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company
will at all times have authorized and reserved a sufficient number
of Common Stock to provide for the exercise of this Warrant.
4.
Registration of Transfers and Exchange of Warrants.
a. Subject
to compliance with the legend set forth on the face of this
Warrant, the Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this
Warrant with the Form of Assignment attached hereto duly completed
and signed, to the Company at the office specified in or pursuant
to Section 9. Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this
Warrant (any such new warrant, a " New Warrant "),
evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued
to the transferring Warrant Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of
such transferee of all of the rights and obligations of a Warrant
Holder of a Warrant.
b . This
Warrant is exchangeable, upon the surrender hereof by the Warrant
Holder to the office of the Company specified in or pursuant to
Section 9 for one or more New Warrants, evidencing in the aggregate
the right to purchase the number of Warrant Shares which may then
be purchased hereunder. Any such New Warrant will be dated
the date of such exchange.
5.
Exercise of Warrants.
a. Upon
surrender of this Warrant with the Form of Election to Purchase
attached hereto duly completed and signed to the Company, at its
address set forth in Section 9, and upon payment and delivery of
the Exercise Price multiplied by the number of Warrant Shares that
the Warrant Holder intends to purchase hereunder, in lawful money
of the United States of America, in cash or by certified or
official bank check or checks, to the Company, all as specified by
the Warrant Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 7 business days after
the Date of Exercise (as defined herein)) issue or cause to be
issued and cause to be delivered to or upon the written order
of the Warrant Holder and in such name or names as the Warrant
Holder may designate (subject to the restrictions on transfer
described in the legend set forth on the face of this Warrant), a
certificate for the Warrant Shares issuable upon such exercise,
with such restrictive legend as required by the 1933 Act. Any
person so designated by the Warrant Holder to receive Warrant
Shares shall be deemed to have become holder of record of such
Warrant Shares as of the Date of Exercise of this Warrant.
b. A "Date
of Exercise" means the date on which the Company shall have
received (i) this Warrant (or any New Warrant, as applicable), with
the Form of Election to Purchase attached hereto (or attached to
such New Warrant) appropriately completed and duly signed, and (ii)
payment of the Exercise Price for the number of Warrant Shares so
indicated by the Warrant Holder to be purchased.
c. This Warrant
shall be exercisable at any time and from time to time for such
number of Warrant Shares as is indicated in the attached Form of
Election To Purchase. If less than all of the Warrant Shares
which may be purchased under this Warrant are exercised at any
time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares for which no exercise has been
evidenced by this Warrant.
d . (i)
Notwithstanding anything contained herein to the
contrary, the holder of this Warrant may, at its election exercised
in its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such
exercise the " Net Number " of shares of Common Stock
determined according to the following formula (a " Cashless
Exercise "):
Net Number = (A x (B - C))/B
(ii) For purposes of the
foregoing formula:
A= the total number shares with respect to which this