Contract

THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). THE HOLDER HEREOF, BY PURCHASING THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR (C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS. ————————————— a21, Inc. FORM OF COMMON STOCK PURCHASE WARRANTNumber of shares: ________ Holder: _________Expiration Date: February __, 2007Exercise Price per Share: [$0.45] [$0.225]a21, Inc., a company organized and existing under the laws of the State of Texas(the “Company”), hereby certifies that, for value received,_______________, orits registered assigns (the “Warrant Holder”), is entitled, subject to the termsset forth below, to purchase from the Company _______ shares (the “WarrantShares”) of common stock, $0.001 par value (the “Common Stock”), of the Company(each such share, a “Warrant Share” and all such shares, the “Warrant Shares”)in exchange for (a) one (1) Warrant and (b) [$0.45] [$0.225] per share (asadjusted from time to time as provided in Section 7, per Warrant Share (the”Exercise Price”), at any time and from time to time from and after the datethereof and through and including 5:00 p.m. New York City time on February __,2007 (the “Expiration Date”), and subject to the following terms and conditions: 1. Registration of Warrant. The Company shall register this Warrant uponrecords to be maintained by the Company for that purpose (the “WarrantRegister”), 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 asthe absolute owner hereof for the purpose of any exercise hereof or anydistribution to the Warrant Holder, and for all other purposes, and the Companyshall not be affected by notice to the contrary. 1 2. Investment Representation. The Warrant Holder by accepting this Warrantrepresents that the Warrant Holder is acquiring this Warrant for its own accountor the account of an affiliate for investment purposes and not with the view toany offering or distribution and that the Warrant Holder will not sell orotherwise dispose of this Warrant or the underlying Warrant Shares in violationof applicable securities laws. The Warrant Holder acknowledges that thecertificates representing any Warrant Shares will bear a legend indicating thatthey have not been registered under the 1933 Act and may not be sold by theWarrant Holder except pursuant to an effective registration statement orpursuant to an exemption from registration requirements of the 1933 Act and inaccordance with federal and state securities laws. If this Warrant was acquiredby the Warrant Holder pursuant to the exemption from the registrationrequirements of the 1933 Act afforded by Regulation S thereunder, the WarrantHolder acknowledges and covenants that this Warrant may not be exercised by oron behalf of a Person during the one year distribution compliance period (asdefined in Regulation S) following the date hereof. “Person” means anindividual, 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 andwarrants that this Warrant has been duly authorized and validly issued andwarrants and agrees that all of Common Stock that may be issued upon theexercise of the rights represented by this Warrant will, when issued upon suchexercise, be duly authorized, validly issued, fully paid and nonassessable andfree from all taxes, liens and charges with respect to the issue thereof. TheCompany further warrants and agrees that during the period within which therights represented by this Warrant may be exercised, the Company will at alltimes have authorized and reserved a sufficient number of Common Stock toprovide for the exercise of the rights represented by this Warrant. 4. Registration of Transfers and Exchange of Warrants. a. Subject to compliance with the legend set forth on the face ofthis Warrant, the Company shall register the transfer of any portion of thisWarrant in the Warrant in the Warrant Register, upon surrender of this Warrantwith the Form of Assignment attached hereto duly completed and signed, to theCompany at the office specified in or pursuant to Section 10. Upon any suchregistration or transfer, a new warrant to purchase Common Stock, insubstantially the form of this Warrant (any such new warrant, a “New Warrant”),evidencing the portion of this Warrant so transferred shall be issued to thetransferee and a New Warrant evidencing the remaining portion of this Warrantnot 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 theacceptance of such transferee of all of the rights and obligations of a WarrantHolder of a Warrant. b. This Warrant is exchangeable, upon the surrender hereof by theWarrant Holder to the office of the Company specified in or pursuant to Section10 for one or more New Warrants, evidencing in the aggregate the right topurchase the number of Warrant Shares which may then be purchased hereunder. Anysuch New Warrant will be dated the date of such exchange. 25. Exercise of Warrants. a. Upon surrender of this Warrant with the Form of Election toPurchase attached hereto duly completed and signed to the Company, at itsaddress set forth in Section 10, and upon payment and delivery of the ExercisePrice per Warrant Share multiplied by the number of Warrant Shares that theWarrant Holder intends to purchase hereunder, in lawful money of the UnitedStates of America, in cash or by certified or official bank check or checks, tothe Company, all as specified by the Warrant Holder in the Form of Election toPurchase, the Company shall promptly (but in no event later than 7 business daysafter the Date of Exercise [as defined herein]) issue or cause to be issued andcause to be delivered to or upon the written order of the Warrant Holder and insuch name or names as the Warrant Holder may designate (subject to therestrictions on transfer described in the legend set forth on the face of thisWarrant), a certificate for the Warrant Shares issuable upon such exercise, withsuch restrictive legend as required by the 1933 Act. Any person so designated bythe Warrant Holder to receive Warrant Shares shall be deemed to have becomeholder of record of such Warrant Shares as of the Date of Exercise of thisWarrant. b. A “Date of Exercise” means the date on which the Company shallhave received (i) this Warrant (or any New Warrant, as applicable), with theForm of Election to Purchase attached hereto (or attached to such New Warrant)appropriately completed and duly signed, and (ii) payment of the Exercise Pricefor the number of Warrant Shares so indicated by the Warrant Holder to bepurchased. c. This Warrant shall be exercisable at any time and from time totime for such number of Warrant Shares as is indicated in the attached Form ofElection To Purchase. If less than all of the Warrant Shares which may bepurchased under this Warrant are exercised at any time, the Company shall issueor cause to be issued, at its expense, a New Warrant evidencing the right topurchase the remaining number of Warrant Shares for which no exercise has beenevidenced by this Warrant. d. (i) Notwithstanding anything contained herein to the contrary,the holder of this Warrant may, at its election exercised in its solediscretion, exercise this Warrant in whole or in part and, in lieu of making thecash payment otherwise contemplated to be made to the Company upon such exercisein payment of the Aggregate Exercise Price, elect instead to receive upon suchexercise the “Net Number” of shares of Common Stock determined according to thefollowing 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 Warrant is then being exercised. B= the average of the last reported sale prices (as reported by Bloomberg) of the Common Stock on each of 20 trading days immediately preceding the date of the Exercise Notice. 3 C= the Warrant Exercise Price then in effect at the time of such exercise. 6. Call of Warrant(s) by Company. In the event that the RegistrationStatement required to be filed pursuant to Section 9 hereof is then effectiveand the average of the last reported sale price of the Common Stock of theCompany as listed on a nationally public securities market is 200% of theExercise Price for a period of twenty consecutive trading days the Company maycall the Warrant with 10 days notice and pay to the Warrant Holder $0.001 perWarrant. The Warrant Holder may exercise the Warrant prior to the end of theforegoing ten day notice period. The Company’s right to call the Warrant expires30 days after the foregoing condition is satisfied. The provisions of Section5.d. hereof, permitting a Cashless Exercise, shall apply as if restated in thisSection 6. 7. Adjustment of Exercise Price and Number of Shares. The character of theshares of stock or other securities at the time issuable upon exercise of thisWarrant and the Exercise Price therefore, are subject to adjustment upon theoccurrence of the following events: a. Adjustment for Stock Splits, Stock Dividends, Recapitalizations,Etc. The Exercise Price of this Warrant and the number of shares of Common Stockor other securities at the time issuable upon exercise of this Warrant shall beappropriately adjusted to reflect any stock dividend, stock split, combinationof shares, reclassification, recapitalization or other similar event affectingthe number of outstanding shares of stock or securities. b. Adjustment for Reorganization, Consolidation, Merger, Etc. Incase of any consolidation or merger of the Company with or into any othercorporation, entity or person, or any other corporate reorganization, in whichthe Company shall not be the continuing or surviving entity of suchconsolidation, merger or reorganization (any such transaction being hereinafterreferred to as a “Reorganization”), then, in each case, the holder of thisWarrant, on exercise hereof at any time after the consummation or effective dateof such Reorganization (the “Effective Date”), shall receive, in lieu of theshares of stock or other securities at any time issuable upon the exercise ofthe Warrant issuable on such exercise prior to the Effective Date, the stock andother securities and property (including cash) to which such holder would havebeen entitled upon the Effective Date if such holder had exercised this Warrantimmediately prior thereto (all subject to further adjustment as provided in thisWarrant). c. Full Ratchet Anti Dilution for Additional Financings. In case ofany additional financings of the Company in which the Company shall issue CommonStock, warrants or other securities convertible into Common Stock at a purchaseor an exercise price, as the case may be, less than the Exercise Price, theExercise Price shall equal the price determined by multiplying the ExercisePrice by a fraction, the denominator of which shall be the number of shares ofCommon Stock outstanding after giving effect to such financings, and thenumerator of which shall be the number of shares of Common Stock outstandingimmediately prior to such financings. Additional financings for the purposeshereof shall not include shares of Common Stock, warrants or other securitiesconvertible into Common Stock issued to officers, directors, employees of andconsultants to the Company and/or its subsidiaries pursuant to stock option,stock purchase or similar plans, or shares of Common Stock issued in connectionwith any event for which adjustment is required to be made pursuant to anotherprovision of this Warrant. 4 d. Certificate as to Adjustments. In case of any adjustment orreadjustment in the price or kind of securities issuable on the exercise of thisWarrant, the Company will promptly give written notice thereof to the holder ofthis Warrant in the form of a certificate, certified and confirmed by the Boardof Directors of the Company, setting forth such adjustment or readjustment andshowing in reasonable detail the facts upon which such adjustment orreadjustment is based. 8. Fractional Shares. The Company shall not be required to issue or causeto be issued fractional Warrant Shares on the exercise of this Warrant. Thenumber of full Warrant Shares that shall be issuable upon the exercise of thisWarrant shall be computed on the basis of the aggregate number of WarrantsShares purchasable on exercise of this Warrant so presented. If any fraction ofa Warrant Share would, except for the provisions of this Section 8, be issuableon the exercise of this Warrant, the Company shall, at its option, (i) pay anamount in cash equal to the Exercise Price multiplied by such fraction or (ii)round the number of Warrant Shares issuable, up to the next whole number. 9. Registration of Registrable Securities. The Company shall prepare andfile within one hundred and sixty five (165) days following the date hereof (the”Filing Date”) a registration statement (the “Registration Statement”) coveringthe resale of the Common Stock into which this Warrant is exchangeable (the”Registrable Securities”). The Company shall use its best efforts to cause theRegistration Statement to be declared effective by the Securities ExchangeCommission (“SEC”) on the earlier of (i) 180 days following the issuance of thisWarrant, (ii) ten (10) days following the receipt of a “No Review” or similarletter from the SEC, or (iii) the first day following the day the SEC determinesthe Registration Statement eligible to be declared effective (the “RequiredEffectiveness Date”). The Required Effectiveness Date shall automatically beextended for all purposes of this Agreement until thirty (30) days after theCompany is required to file its Form 10-KSB including applicable extension ifthe SEC determines that the Company’s current financial statements cannot beused for purposes of the Registration Statement (or a determination having acomparable effect). Nothing contained herein shall be deemed to limit the numberof Registrable Securities to be registered by the Company hereunder. As aresult, should the Registration Statement not relate to the maximum number ofRegistrable Securities acquired by (or potentially acquirable by) the Lender,the Company shall be required to promptly file a separate registration statement(utilizing Rule 462 promulgated under the Securities Exchange Act of 1934, asamended, where applicable) relating to such Registrable Securities which thenremain unregistered. The provisions of this Agreement shall relate to any suchseparate registration statement as if it were an amendment to the RegistrationStatement. 10. Notice. All notices and other communications hereunder shall be inwriting and shall be deemed to have been given (i) on the date they aredelivered if delivered in person; (ii) on the date initially received ifdelivered by facsimile transmission followed by registered or certified mailconfirmation; (iii) on the date delivered by an overnight courier service; or(iv) on the third business day after it is mailed by registered or certifiedmail, return receipt requested with postage and other fees prepaid as follows: 5 If to the Company: a21, Inc. Attention: President 7660 Centurion Parkway Jacksonville, FL 32256 Direct Dial: Facsimile: If to the Warrant Holder: To the address in this Warrant or to the address provided to the Company by an Investor with a copy to: 11. Miscellaneous. a. This Warrant shall be binding on and inure to the benefit of theparties hereto and their respective successors and permitted assigns. ThisWarrant may be amended only in writing and signed by the Company and the WarrantHolder. b. Nothing in this Warrant shall be construed to give to any personor corporation other than the Company and the Warrant Holder any legal orequitable right, remedy or cause of action under this Warrant; this Warrantshall be for the sole and exclusive benefit of the Company and the WarrantHolder. c. This Warrant shall be governed by, construed and enforced inaccordance with the internal laws of the State of New York without regard to theprinciples of conflicts of law thereof. d. The headings herein are for convenience only, do not constitute apart of this Warrant and shall not be deemed to limit or affect any of theprovisions hereof. e. In case any one or more of the provisions of this Warrant shallbe invalid or unenforceable in any respect, the validity and enforceability ofthe remaining terms and provisions of this Warrant shall not in any way beaffected or impaired thereby and the parties will attempt in good faith to agreeupon a valid and enforceable provision which shall be a commercially reasonablysubstitute therefore, and upon so agreeing, shall incorporate such substituteprovision in this Warrant. f. The Warrant Holder shall not, by virtue hereof, be entitled toany voting or other rights of a shareholder of the Company, either at law orequity, and the rights of the Warrant Holder are limited to those expressed inthis Warrant. 6 IN WITNESS WHEREOF, the Company has caused this Warrant to be dulyexecuted by the authorized officer as of the date first above stated. a21, Inc. By: ——————————————– Name: Thomas Butta Title: President FORM OF ELECTION TO PURCHASE(To be executed by the Warrant Holder to exercise the right to purchase sharesof Common Stock under the foregoing Warrant)To: a21, Inc.:In accordance with the Warrant enclosed with this Form of Election to Purchase,the undersigned hereby irrevocably elects to purchase ______________ shares ofCommon Stock (“Common Stock”), $0.001 par value, of a21, Inc. and encloses onewarrant and [$0.45] [$0.225] for each Warrant Share being purchased or anaggregate of $________________ in cash or certified or official bank check orchecks, which sum represents the aggregate Exercise Price (as defined in theWarrant) together with any applicable taxes payable by the undersigned pursuantto the Warrant.The undersigned requests that certificates for the shares of Common Stockissuable upon this exercise be issued in the name of:_______________________________________________________________________________________________________________(Please print name and address)_____________________________________(Please insert Social Security or Tax Identification Number)If the number of shares of Common Stock issuable upon this exercise shall not beall of the shares of Common Stock which the undersigned is entitled to purchasein accordance with the enclosed Warrant, the undersigned requests that a NewWarrant (as defined in the Warrant) evidencing the right to purchase the sharesof Common Stock not issuable pursuant to the exercise evidenced hereby be issuedin the name of and delivered to:_______________________________________________________________________________________________________________(Please print name and address)Dated:______________________________ Name of Warrant Holder: (Print)_________________________________ (By:)___________________________________ (Name:)_________________________________ (Title:)________________________________ Signature must conform in all respects to name of Warrant Holder as specified on the face of the Warrant