THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR QUALIFIED UNDER ANY APPLICABLE SECURITIES LAWS. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND QUALIFICATION UNDER SUCH STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/OR
QUALIFICATION IS NOT REQUIRED.
MILK BOTTLE CARDS INC.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
January 31, 2008
CERTIFIES THAT, for value received, _______________, a
_______________ (the “Investor”), or
Investor’s assigns (Investor and Investor’s
assigns being the “Holder”), is entitled to
subscribe for and purchase at any time during the Exercise
Period from Milk Bottle Cards Inc., a Nevada corporation, with
its principal office located
at ________________________________ (the
“Company”), a number of shares of Common Stock
equal to the Share Number at a per share price equal to the
Exercise Price in effect at such time. This Warrant is issued
in conjunction with the shares of the Company’s Common
Stock issued pursuant to the Subscription Agreement dated as
of January 31, 2008, by and between the Company and the
As used herein, the following terms shall have the following
Warrant Price” shall mean the dollar value obtained by
multiplying $1.00 by ________.
Stock” shall mean the common stock of the
Period” shall mean the period commencing on the original
date of issuance of this Warrant and ending on the second
anniversary of the date hereof.
Price” shall mean $1.00 per share of Common
Shares” shall mean any Common Stock acquired upon
exercise of this Warrant.
Number”, at any time, shall mean (i) the Aggregate
Warrant Price minus the aggregate exercise price previously
paid upon exercise of this Warrant, divided by (ii) the
Exercise Price then in effect.
EXERCISE OF WARRANT .
General; Exercise of Warrant .
rights represented by this Warrant may be exercised as a whole
or in part at any time during the Exercise Period, by delivery
of the following to the Company at its address set forth above
(or at such other address as it may designate by notice in
writing to the Holder):
executed Notice of Exercise in the form attached
of the Exercise Price either in cash or by check;
the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so
purchased, registered in the name of the Holder or persons
affiliated with the Holder, if the Holder so designates (and
such designation is in compliance with applicable securities
laws and any stockholders, investor rights or similar
agreement), shall be issued and delivered to the Holder as
promptly as practicable after the rights represented by this
Warrant shall have been so exercised.
person in whose name any certificate or certificates for
Exercise Shares are to be issued upon exercise of this Warrant
shall be deemed to have become the holder of record of such
shares on the date on which this Warrant was surrendered and
payment of the Exercise Price was made, irrespective of the
date of delivery of such certificate or certificates, except
that, if the date of such surrender and payment is a date when
the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such
shares at the close of business on the next succeeding date on
which the stock transfer books are open.
Issue Exercise .
lieu of paying the Exercise Price in cash or by check as
provided in Section 2.1, the Holder may elect a “Net
Issue Exercise” pursuant to which the Holder will
receive Exercise Shares equal to the value (as determined
below) of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the principal
office of the Company together with an executed Notice of
Exercise in the form attached hereto in which event the
Company shall issue to the Holder a number of Exercise Shares
computed using the following formula:
= the number of Exercise Shares to be issued to the
= the number of Exercise Shares purchasable under the Warrant
or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised (at the date of such
= the Fair Market Value of one share of the Company’s
Common Stock (at the date of such exercise); and
= the Exercise Price (as adjusted to the date of such
purposes of the above calculation, “Fair Market
Value” shall be determined as follows:
the Common Stock is listed on any established stock exchange
or a national market system, the Fair Market Value of a share
of Common Stock will be the average closing sales price for
such stock (or the closing bid, if no sales are reported) as
quoted on that system or exchange (or the system or exchange
with the greatest volume of trading in Common Stock), over the
five (5) trading day period ending on the trading day
immediately preceding the day the Warrant is being exercised,
as reported in the Wall Street Journal or any other source the
Company considers reliable.
the Common Stock is not listed on any established stock
exchange or a national market system but is regularly quoted
elsewhere by recognized securities dealers although selling
prices are not reported, the Fair Market Value of a share of
Common Stock will be the average mean between the high bid and
low asked prices for the Common Stock over the five (5)
trading day period ending on the trading day immediately
preceding the day the Warrant is being exercised, as reported
in the Wall Street Journal or any other source the Company
the Common Stock is not traded or quoted as set forth above,
the Fair Market Value will be determined in good faith by the
Board of Directors of the Company.
this Warrant is not exercised in full by a Net Issue Exercise,
then the “Share Number” in effect immediately
after such partial exercise shall be appropriately adjusted to
take into account the effect of the Net Issue
COVENANTS OF THE COMPANY.
Covenants as to Exercise Shares .
The Company covenants and agrees that all Exercise Shares that may
be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be validly issued and outstanding,
fully paid and nonassessable, and free from all taxes, liens, and
charges with respect to the issuance thereof. The Company further
covenants and agrees that the Company will, at all times during the
Exercise Period, have authorized and reserved, free from preemptive
rights, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
If at any time during the Exercise Period, the number of authorized
but unissued shares of Common Stock shall not be sufficient to
permit exercise of this Warrant, the Company will take such
corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such
No Impairment .
Except and to the extent as waived or consented to by the Holder,
the Company will not, by amendment of its Articles of Incorporation
or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder
Notices of Record Date .
In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Company shall mail to
the Holder, at least ten (10) days prior to the date specified
herein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend or
REPRESENTATIONS OF HOLDER .
Acquisition of Warrant for Personal Account .
The Holder represents and warrants that it is acquiring the Warrant
and any shares of capital stock issued or issuable upon exercise or
conversion of the Warrant for investment purposes only and not with
a view to or for resale in connection with any distribution or
public offering thereof within the meaning of the Act (as defined
below). The Holder also represents that the entire legal and
beneficial interests of the Warrant and Exercise Shares the Holder
is acquiring is being acquired for, and will be held for, the
account of the Holder only.
Accredited Investor Status .
The Holder represents and warrants that it is an “accredited
investor” as such term is defined in Rule 501 under the
Securities Act of 1933, as amended (the “
The Holder shall provide the Company with such additional
information as the Company may reasonably request with respect to
the Holder’s status as an “accredited
Securities Are Not Registered .
Holder understands that the Warrant and the Exercise Shares
have not been registered under the Act, on the basis that no
distribution or public offering of the stock of the Company is
to be effected, or registered or qualified under any
applicable state securities laws. The Holder realizes that the
basis for the exemption may not be present if, notwithstanding
its representations, the Holder has a present intention of
acquiring the securities for a fixed or determinable period in
the future, selling (in connection with a distribution or
otherwise), granting any participation in, or otherwise
distributing the securities. The Holder has no such present
Holder recognizes that the Warrant and the Exercise Shares
must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such
registration is available.
Holder is aware that neither the Warrant nor the Exercise
Shares may be sold pursuant to Rule 144 adopted under the Act
unless certain conditions are met, including, among other
things, the existence of a public market for the shares, the
availability of certain current public information about the
Company, the resale following the required holding period
under Rule 144 and, pending the effectiveness of the change in
certain aspects of Rule 144, the number of shares being sold
during any three (3) month period not exceeding specified
limitations. For so long as the Warrants are outstanding and
for the one-year period thereafter, the Company will use its
best efforts to satisfy these conditions.
Holder is aware of the Company’s business affairs and
financial condition and has acquired sufficient information
about the Company, at or about the date of this Warrant, that
is deemed to relate to the Company, to reach an informed and
knowledgeable decision regarding its investment in the
Company. The Holder is experienced in making investments of
this type and has such knowledge and background in financial
and business matters that the Holder is capable of evaluating
the merits and risks of this investment and protecting its own
interests. The Holder has had an opportunity to ask questions
of, and receive answers from, the Company and its officers and
employees regarding the business, financial affairs and other
aspects of the Company, and has further had the opportunity to
obtain information (to the extent the Company possesses or can
acquire such information without unreasonable effort or
expense) which the Holder deems necessary to evaluate an
investment in the Company and to verify the accuracy of
information otherwise provided to the Holder.
Disposition of Warrant and Exercise Shares .
for transfers by the Holder to its affiliates in compliance
with all applicable securities laws, the Holder further agrees
not to make any disposition of all or any part of the Warrant
or Exercise Shares in any event unless and until:
Company shall have received a letter secured by the Holder
from the Securities and Exchange Commission stating that no
action will be recommended to the Commission with respect to
the proposed disposition; or
is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is
made in accordance with said registration statement;
Holder shall have shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company,
for the Holder to the effect that such disposition will not
require registration of such Warrant or Exercise Shares under
the Act or any applicable state securities laws.
Holder understands and agrees that all certificates evidencing
the Exercise Shares to be issued to the Holder may bear the
following legend (in addition to any legend required under
applicable state securities laws, the Company’s Bylaws,
or as provided elsewhere in this Warrant):
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
QUALIFIED UNDER ANY APPLICABLE SECURITIES LAWS. THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND QUALIFICATION UNDER
SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
AND/OR QUALIFICATION IS NOT REQUIRED.
ADJUSTMENTS AND NOTICES .
The Exercise Price and the numbe