Common use of Method of Exercise Payment Issuance of New Warrant Transfer and Exchange Clause in Contracts

Method of Exercise Payment Issuance of New Warrant Transfer and Exchange. This Warrant may be exercised by Merchandiser, in whole or in part, by the surrender of this Warrant, properly endorsed, at the principal office of the Company at 17830 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxx, XX 00000 (xx at such other location within the State of California or the State of New York as the Company may advise Merchandiser in writing), and by (a) payment to the Company in cash or immediately available funds of the Warrant Price of the Common Units being purchased, and (b) delivery to the Company of a customary investment letter executed by Merchandiser, representing and warranting that the Common Units are being acquired for Merchandiser's own account, for investment purposes only, and not with a view to the distribution, resale or other distribution thereof in violation of applicable securities laws, and acknowledging the issuance and transfer of the Common Units are subject to the requirements of federal and state securities laws. Merchandiser, in lieu of exercising this Warrant for a specified number of Common Units (the "Exercised Units") and paying the aggregate exercise price therefor (the "Exercise Price"), may elect to receive a number of Common Units equal to the number of Exercised Units, minus a number of Common Units having an aggregate "Fair Market Value" (as defined below) equal to the Exercise Price. After any such election, the number of Common Units covered by this Warrant shall be deemed automatically reduced by the number of Exercised Shares. For purposes of this Warrant, "Fair Market Value" means (a) if the Common Units are then publicly traded, the closing sale price of the Common Units on its principal stock exchange or market system (or the average of the closing bid and asked prices, if closing sales prices are not reported) for the ten (10) consecutive trading days immediately prior to the date of any such "net exercise," or (b) in all other cases, as determined by the Managers in their sole, good faith discretion. In the event of any exercise, or any such "net exercise," of less than all of the rights represented by this Warrant, the Company shall issue to Merchandiser a new warrant evidencing the ability of Merchandiser to purchase the balance of the number of Common Units from the Company, and shall deliver such warrant to Merchandiser promptly following such partial exercise. The Company agrees that the Common Units issuable to Merchandiser upon exercise of this Warrant shall be issued to Merchandiser as of the close of business on the date on which all of the above-described conditions to exercise have be satisfied. Merchandiser hereby covenants and agrees that, upon

Method of Exercise Payment Issuance of New Warrant Transfer and Exchange. This Warrant 3.1 The Holder hereof may be exercised by Merchandiserexercise this Warrant, in whole or in part, by delivery to the surrender of this Warrant, properly endorsed, Corporation at the principal its office of the Company at 17830 Xxxxxxx Xxxx.00000 Xxxxxxxxx Xxxxx, Xxxxx 000, XxxxxxXxxxxx Xxxxx, XX 00000 Xxxxxxxx, 00000, Attention: Chief Executive Officer (xx at or such other location within the State of California or the State of New York address as the Company Corporation may advise Merchandiser in writingspecify to Holder from time to time), and by of (a) a written notice of Xxxxxx's election to exercise this Warrant, which notice shall specify the number of shares of Preferred Stock to be purchased, (b) payment to the Company in cash or immediately available funds of the Exercise Price in the manner provided below and (c) this Warrant. Such notice shall be substantially in the form of the subscription form appearing at the end of this Warrant as Exhibit A, duly executed by Holder or its agent or attorney. Payment of the Exercise Price shall be made at the option of Holder by (i) wire transfer to an account in a bank located in the United States designated for such purpose by the Corporation, (ii) certified or official bank check, (iii) cancellation of indebtedness of the Corporation to Holder at the time of exercise, (iv) cancellation as of the date of exercise of a portion of this Warrant (calculated as the net fair market value of such cancelled portion at the time of exercise) or (v) any combination of the foregoing. The net fair market value of any portion of this Warrant cancelled in full or partial payment of the Exercise Price shall be determined by (A) multiplying (i) the number of shares of Preferred Stock for which the portion of this Warrant to be cancelled was exercisable by (ii) the fair value (as determined by mutual agreement between the Corporation and Two Thirds in Interest of the Holders) of a share of Preferred Stock as of the date of cancellation and (B) subtracting from such product the aggregate Exercise Price of the Common Units being purchased, and (b) delivery to shares of Preferred Stock for which the Company portion of a customary investment letter executed by Merchandiser, representing and warranting that the Common Units are being acquired for Merchandiser's own account, for investment purposes only, and not with a view to the distribution, resale or other distribution thereof in violation of applicable securities laws, and acknowledging the issuance and transfer of the Common Units are subject to the requirements of federal and state securities laws. Merchandiser, in lieu of exercising this Warrant for a specified number of Common Units (the "Exercised Units") and paying the aggregate exercise price therefor (the "Exercise Price"), may elect to receive a number of Common Units equal to the number of Exercised Units, minus a number of Common Units having an aggregate "Fair Market Value" (as defined below) equal to the Exercise Price. After any such election, the number of Common Units covered by this Warrant shall be deemed automatically reduced by the number of Exercised Shares. For purposes of this Warrant, "Fair Market Value" means (a) if the Common Units are then publicly traded, the closing sale price of the Common Units on its principal stock exchange or market system (or the average of the closing bid and asked prices, if closing sales prices are not reported) for the ten (10) consecutive trading days immediately prior to the date of any such "net exercise," or (b) in all other cases, as determined by the Managers in their sole, good faith discretioncancelled was exercisable. In the event of any exercise, or any such "net exercise," of less than all exercise of the rights represented by this Warrant, (x) certificates for the Company shares of Preferred Stock so purchased shall issue be dated the date of such exercise and delivered to Merchandiser the Holder hereof within a reasonable time, not exceeding 15 days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the shares of Preferred Stock so purchased as of the date of such exercise, and (y) unless this Warrant has expired pursuant to Section 3 hereof, a new Warrant representing the number of shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder hereof within such time. Any such warrant evidencing shall be dated the ability of Merchandiser date hereof and shall represent the right to purchase the balance of the remaining number of Common Units from shares of Preferred Stock issuable pursuant thereto. By exercising this Warrant, the Company, Holder represents and shall deliver such warrant to Merchandiser promptly following such partial exercise. The Company agrees that the Common Units issuable to Merchandiser upon exercise of this Warrant shall be issued to Merchandiser warrants as of the close date of business on exercise with respect to the date on which all matters set forth in Section 4 of the above-described conditions to exercise have be satisfied. Merchandiser hereby covenants and agrees that, uponSecurities Purchase Agreement.