EXHIBIT 10.1
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NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
REDROLLER HOLDINGS, INC.
WARRANT
Warrant No. ___ Dated: November 13, 2007
RedRoller Holdings, Inc. (f/k/a Aslahan Enterprises, Ltd.), a Delaware
corporation (the "Company"), hereby certifies that, for value received,
[_______________] or its registered assigns (including permitted transferees,
the "Holder"), is entitled to purchase from the Company up to a total of
[___________] shares (as adjusted from time to time as provided in Section 9
hereof) of Common Stock (as defined below) (each such share, a "Warrant Share"
and all such shares, the "Warrant Shares") at an exercise price equal to $1.28
per share (as adjusted from time to time as provided in Section 9 hereof, the
"Exercise Price"), at any time and from time to time from and after the date of
this Warrant (the "Initial Exercise Date") through and including November 13,
2012 (the "Expiration Date"), and subject to the following terms and conditions.
This Warrant is one of a series of similar warrants (the "Warrants") issued
pursuant to one of several Subscription Agreements, dated as of November 13,
2007, by and among the Company and certain other investors (each, a
"Subscription Agreement"), providing for the issuance and sale of shares of
Common Stock and Warrants by the Company to the Holder and such other investors.
1. DEFINITIONS. The capitalized terms used herein and not otherwise
defined shall have the meanings set forth below:
"Affiliate" of any specified Person means any other person or
entity directly or indirectly controlling, controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" means the power to direct the management and policies of
such Person or firm, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.
"Common Stock" means the common stock of the Company, $0.001
par value per share, as constituted on the Original Issue Date.
"Common Stock Equivalents" means any securities of the
Company or its subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time
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convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock.
"Company Offer" means any tender offer (including exchange
offer), as amended from time to time, made by the Company or any of its
subsidiaries for the purchase (including the acquisition pursuant to an exchange
offer) of all or any portion of the outstanding shares of Common Stock, except
as permitted pursuant to Rule 10b-18 promulgated under the Exchange Act (as
defined below).
"Eligible Market" means any of the New York Stock Exchange,
the American Stock Exchange, Nasdaq Stock Market or the Over-the-Counter
Bulletin Board (the "OTCBB").
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Market Price" shall mean (i) if the principal trading market
for such securities is an exchange, the average of the last reported sale prices
per share for the last five previous Trading Days on the OTCBB or other Trading
Market, (ii) if clause (i) is not applicable, the average of the closing bid
price per share for the last five previous Trading Days as set forth by Nasdaq
or (iii) if clauses (i) and (ii) are not applicable, the average of the closing
bid price per share for the last five previous Trading Days as set forth in the
Pink Sheets(R). Notwithstanding the foregoing, if there is no reported sales
price or closing bid price, as the case may be, on any of the ten (10) Trading
Days preceding the event requiring a determination of Market Price hereunder,
then the Market Price shall be determined in good faith by resolution of the
Board of Directors of the Company, based on the best information available to
it.
"Original Issue Date" means November 13, 2007.
"Other Securities" refers to any capital stock (other than
Common Stock) and other securities of the Company or any other Person that the
Holder of this Warrant at any time shall be entitled to receive, or shall have
received, upon the exercise of this Warrant, in lieu of or in addition to Common
Stock, or that 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 9 hereof or otherwise.
"Person" means any court or other federal, state, local or
other governmental authority or other individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
"Registration Statement" shall have the meaning set forth in
the Subscription Agreement.
"Required Holders" shall mean the holders of the then
unexercised Warrants issued pursuant to the Subscription Agreement, which
represent a majority of the Warrant Shares underlying such unexercised warrants.
"Trading Day" means any day on which the Common Stock is
listed or quoted on any Eligible Market.
"Warrant Shares" shall initially mean shares of Common Stock
and in addition may include Other Securities and Distributed Property (as
defined in Section 9(e) hereof) issued or issuable from time to time upon
exercise of this Warrant.
"Weighted Average Price" means, for any security as of any
date, the dollar volume-weighted average price for such security on the OTC
Bulletin Board during the period beginning at
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9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City
time, as reported by Bloomberg through its "Volume at Price" function or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York City time,
and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if
no dollar volume-weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as
reported in the "pink sheets" by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated for
such security on such date on any of the foregoing bases, the Weighted Average
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then such dispute
shall be resolved pursuant to Section 16 with the term "Weighted Average Price"
being substituted for the term "Exercise Price." All such determinations shall
be appropriately adjusted for any share dividend, share split or other similar
transaction during such period.
2. 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 Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
3. REGISTRATION OF TRANSFERS. 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 as Appendix A duly
completed and signed, to the Company at its address specified herein. Upon any
such registration and transfer, a new warrant in substantially the form of a
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 Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations of a holder of a Warrant.
4. EXERCISE AND DURATION OF WARRANT.
(A) This Warrant shall be exercisable by the registered Holder
at any time and from time to time on and after the Initial Exercise Date to and
including the Expiration Date. At 5:00 P.M. New York City time on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value.
(B) A Holder may exercise this Warrant by delivering to the
Company (i) an exercise notice, in the form attached hereto as Appendix B (the
"Exercise Notice"), appropriately completed and duly signed, and (ii) payment of
the Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised (as set forth in Section 4(d) below), and the date such items
are received by the Company is an "Exercise Date." Execution and delivery of the
Exercise Notice shall have the same effect as cancellation of the original
Warrant and issuance of a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.
(C) RESERVED.
(D) The Holder shall pay the Exercise Price (i) in cash, by
certified bank check payable to the order of the Company or by wire transfer of
immediately available funds in accordance with the Company's instructions or
(ii) if on or after the one (1) year anniversary of the Original Issue
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Date (x) there is no effective Registration Statement registering the resale of
the Warrant Shares by the Holder and (y) the Market Price exceeds the Exercise
Price, by means of a "cashless exercise", by presenting and surrendering to the
Company this Warrant, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder
upon such cashless exercise;
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised;
A = the Market Price on the Exercise Date; and
B = the Exercise Price.
(E) If an exercise of this Warrant is to be made in connection
with a registered public offering or sale of the Company, such exercise may, at
the election of the Holder, be conditioned on the consummation of the public
offering or sale of the Company, in which case such exercise shall not be deemed
effective until the consummation of such transaction.
(F) The Company shall not effect any exercise of this Warrant,
and a Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 4 hereof or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the applicable Notice of
Exercise, the Holder (together with the Holder's Affiliates, and any other
person or entity acting as a group together with the Holder or any of the
Holder's Affiliates), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this Section
4(f), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder, it
being acknowledged by the Holder that the Company is not representing to the
Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and the Holder is solely responsible for any schedules required to be filed
in accordance therewith. To the extent that the limitation contained in this
Section 4(f) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder's determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and
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regulations promulgated thereunder. For purposes of this Section 4(f), in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the
Company's most recent periodic or annual report, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the Company's transfer agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by the Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The "Beneficial Ownership
Limitation" shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Beneficial Ownership
Limitation provisions of this Section 4(f) may be waived by the Holder, at the
election of the Holder, upon not less than 61 days' prior notice to the Company
to change the Beneficial Ownership Limitation to 9.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon exercise of this Warrant, and the provisions of
this Section 4(f) shall continue to apply. Upon such a change by a Holder of the
Beneficial Ownership Limitation from such 4.99% limitation to such 9.99%
limitation, the Beneficial Ownership Limitation may not be further waived by the
Holder. The provisions of this paragraph shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this Section 4(f)
to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
5. DELIVERY OF WARRANT SHARES.
(A) Upon exercise of this Warrant, the Company shall within
three Trading Days after receipt of the Exercise Notice attached hereto as
Appendix B, issue or cause to be issued and deliver or cause to be delivered to
the Holder, in such name or names as the Holder may designate, a certificate for
the Warrant Shares issuable upon such exercise bearing (only if such legend is
required by applicable law) the restrictive legend set forth in Section 4(j)(ii)
of the Subscription Agreement. The Holder, or any Person so designated by the
Holder to receive the Warrant Shares, shall be deemed to have become holder of
record of such Warrant Shares as of the Exercise Date.
(B) This Warrant is exercisable, either in its entirety or,
from time to time, for a portion of the number of Warrant Shares. Upon surrender
of this Warrant following one or more partial exercises, 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.
6. CHARGES, TAXES AND EXPENSES. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrant in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7. REPLACEMENT OF WARRANT. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof,
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or in lieu of and in substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction and customary and reasonable indemnity, if requested.
8. RESERVATION OF WARRANT SHARES. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares that are then issuable and deliverable
upon the exercise of this entire Warrant, free from all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be
subject to any pre-emptive rights or similar rights (taking into account the
adjustments and restrictions of Section 9 hereof). The Company covenants that
all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued, fully paid and nonassessable. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed or
quoted, as the case may be.
9. CERTAIN ADJUSTMENTS. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.
(A) STOCK DIVIDENDS. If the Company, at any time while this
Warrant is outstanding, pays a dividend on its Common Stock payable in
additional shares of Common Stock or otherwise makes a distribution on any class
of capital stock that is payable in shares of Common Stock, then in each such
case the Exercise Price shall be multiplied by a fraction, (i) the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to the opening of business on the day after the record date for the
determination of stockholders entitle to receive such dividend or distribution
and (ii) the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this
Section 9(a) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
(B) STOCK SPLITS. If the Company, at any time while this
Warrant is outstanding, (i) subdivides outstanding shares of Common Stock into a
larger number of shares, or (ii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment pursuant to this Section 9(b) shall
become effective immediately after the effective date of such subdivision or
combination.
(C) RECLASSIFICATIONS. A reclassification of the Common Stock
(other than any such reclassification in connection with a merger or
consolidation to which Section 9(f) applies) into shares of any other class of
stock shall be deemed:
(I) a distribution by the Company to the holders of its
Common Stock of such shares of such other class of stock for the purposes and
within the meaning of this Section 9; and
(II) if the outstanding shares of Common Stock shall be
changed into a larger or smaller number of shares of Common Stock as part of
such reclassification, such change shall be
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deemed a subdivision or combination, as the case may be, of the outstanding
shares of Common Stock for the purposes and within the meaning of Section 9(b)
hereof.
(D) SELF-TENDER OFFERS. In the event, at any time or from time
to time after the Original Issue Date while the Warrants remain outstanding and
unexpired, in whole or in part, a Company Offer shall be made and expire, then
and in each such event the Exercise Price in effect immediately prior to close
of business on the date of the last time (the "Expiration Time") tenders could
have been made pursuant to such Company Offer shall be decreased by multiplying
such Exercise Price by a fraction (not to be greater than 1):
(I) the numerator of which shall be equal to (A) the
product of (1) the Market Price per share of the Common Stock on the date of the
Expiration Time and (2) the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time less (B) the fair market
value (as determined in good faith by the Board of Directors of the Company) of
the aggregate consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the Company Offer) of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares deemed
so accepted, up to any maximum amount provided for in connection with such
Company Offer, being referred to as the "Purchased Shares"); and
(II) the denominator of which shall be equal to the
product of (A) the Market Price per share of the Common Stock on the date of the
Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less the number of
Purchased Shares.
Any adjustment under this Section 9(d) shall become effective
immediately prior to the opening of business on the day after the Expiration
Time.
(E) OTHER DISTRIBUTIONS. If the Company, at any time while
this Warrant is outstanding, distributes to holders of Common Stock (i)
evidences of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by Section 9(a) hereof), (iii) rights or warrants to
subscribe for or purchase any security or (iv) any other asset (in each case,
"Distributed Property"), then in each such case the Exercise Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution (and the Exercise Price thereafter
applicable) shall be adjusted (effective on and after such record date) to equal
the product of such Exercise Price multiplied by a fraction, (A) the numerator
of which shall be Market Price on such record date less the then fair market
value per share of the Distributed Property distributed in respect of one
outstanding share of Common Stock, which, if the Distributed Property is other
than cash or marketable securities, shall be as determined in good faith by the
Board of Directors of the Company, and (B) the denominator of which shall be the
Market Price on such record date.
(F) FUNDAMENTAL TRANSACTIONS. If, at any time while this
Warrant is outstanding, (i) the Company effects any merger or consolidation of
the Company with or into another Person, (ii) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions or (iii) there shall occur any merger of another Person into the
Company whereby the Common Stock is cancelled, converted or reclassified into or
exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then, as a condition to the consummation of such
Fundamental Transaction, the Company shall (or, in the case of any Fundamental
Transaction in which the Company is not the surviving entity, the Company shall
take all reasonable steps to cause such other Person to) execute and deliver to
each Holder of Warrants a written instrument providing that:
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(I) so long as any Warrant remains outstanding on such terms and
subject to such conditions as shall be nearly equivalent as may be
practicable to the provisions set forth in this Warrant, each Warrant, upon
the exercise thereof at any time on or after the consummation of such
Fundamental Transaction, shall be exercisable into, in lieu of Common Stock
issuable upon such exercise prior to such consummation, the securities or
other property (the "Substituted Property") that would have been received
in connection with such Fundamental Transaction by a holder of the number
of shares of Common Stock into which such Warrant was exercisable
immediately prior to such Fundamental Transaction, assuming such holder of
Common Stock:
(A) is not a Person with which the Company consolidated or
into which the Company merged or which merged into the Company or
to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an Affiliate of a Constituent Person;
and
(B) failed to exercise such Holder's rights of election, if
any, as to the kind or amount of securities, cash and other
property receivable in connection with such Fundamental
Transaction (PROVIDED, HOWEVER, that if the kind or amount of
securities, cash or other property receivable in connection with
such Fundamental Transaction is not the same for each share of
Common Stock held immediately prior to such Fundamental
Transaction by a Person other than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election
shall not have been exercised (a "Non-Electing Share"), then, for
the purposes of this Section 9(f), the kind and amount of
securities, cash and other property receivable in connection with
such Fundamental Transaction by each Non-Electing Share shall be
deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares); and
(II) the rights and obligations of the Company (or, in the event of a
transaction in which the Company is not the surviving Person, such other
Person) and the Holders in respect of Substituted Property shall be as
nearly equivalent as may be practicable to the rights and obligations of
the Company and Holders in respect of Common Stock hereunder.
Such written instrument shall provide for adjustments that,
for events subsequent to the effective date of such written instrument, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
Section 9 hereof. The above provisions of this Section 9(f) shall similarly
apply to successive Fundamental Transactions. Notwithstanding the foregoing, in
the event of a Dilutive Fundamental Transaction, at the request of the Holder
delivered before the 90th day after the effective date of such Dilutive
Fundamental Transaction, the Company (or successor entity) shall purchase this
Warrant from the Holder by paying to the Holder, within five business days after
such request, cash in an amount equal to the value of the remaining unexercised
portion of this Warrant on the effective date of such Dilutive Fundamental
Transaction, which value shall be determined by use of the Black-Scholes option
pricing model, where the volatility input shall not be greater than 50%. For
purposes of this section, a "Dilutive Fundamental Transaction" is a Fundamental
Transaction in which the aggregate proceeds to the Holder, had the Holder
exercised the then-unexercised portion of this Warrant in full immediately prior
to the effective date of such Fundamental Transaction, is less than the
aggregate Exercise Price of the Warrant with respect to the then-unexercised
portion of this Warrant immediately prior to the effectiveness of such
Fundamental Transaction.
(G) ADJUSTMENT OF EXERCISE PRICE. Simultaneously with any
adjustment to the Exercise Price pursuant to paragraphs (a) through (e) of this
Section 9, the number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased
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number of Warrant Shares shall be the same as the aggregate Exercise Price
payable for the Warrant Shares immediately prior to such adjustment.
(H) CALCULATIONS. All calculations under this Section 9 shall
be made to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the Company, and the
disposition of any such shares shall be considered an issue or sale of Common
Stock.
(I) ADJUSTMENTS. Notwithstanding any provision of this Section
9, no adjustment of the Exercise Price shall be required if such adjustment is
less than $0.01; PROVIDED, HOWEVER, that any adjustments that by reason of this
Section 9(i) are not required to be made shall be carried forward and taken into
account for purposes of any subsequent adjustment.
(J) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in
the Exercise Price pursuant to this Section 9, the number of Warrant Shares
purchasable hereunder shall be adjusted, to the nearest whole share, to the
product obtained by multiplying the number of Warrant Shares purchasable
immediately prior to such adjustment by a fraction, (i) the numerator of which
shall be the Exercise Price immediately prior to such adjustment, and (ii) the
denominator of which shall be the Exercise Price immediately thereafter.
(K) ADJUSTMENT OF EXERCISE PRICE. Simultaneously with any
adjustment to the Exercise Price pursuant to paragraphs (a) through (e) of this
Section 9, the number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased number of Warrant Shares shall be the same as the aggregate Exercise
Price payable for the Warrant Shares immediately prior to such adjustment.
(L) NOTICE OF ADJUSTMENTS. Upon the occurrence of each
adjustment pursuant to this Section 9, the Company will promptly deliver to the
Holder a certificate executed by the Company's Chief Financial Officer setting
forth, in reasonable detail, the event requiring such adjustment and the method
by which such adjustment was calculated, the adjusted Exercise Price and the
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable). The Company will retain at its office
copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by the Holder or any
prospective purchaser of the Warrant designated by the Holder.
(M) NOTICE OF CORPORATE EVENTS. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including, without limitation, any granting of
rights or warrants to subscribe for or purchase any capital stock of the Company
or any subsidiary of the Company, (ii) authorizes, approves, enters into any
agreement contemplating, or solicits stockholder approval for, any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such transaction
at least 15 calendar days prior to the applicable record or effective date on
which a Person would need to hold Common Stock in order to participate in or
vote with respect to such transaction, and the Company will take all steps
reasonably necessary in order to ensure that the Holder is given the practical
opportunity to exercise this Warrant prior to such time so as to participate in
or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice.
9
10. FRACTIONAL SHARES. The Company shall not be required to issue or cause
to be issued fractional Warrant Shares on the exercise of this Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon exercise of this Warrant, the Company shall make a cash payment to
the Holder equal to (a) such fraction multiplied by (b) the Market Price on the
Exercise Date of one full Warrant Share.
11. RESTRICTED SECURITIES. The Holder represents and warrants that it (i)
understands that the Warrant and the Warrant Shares have not been registered
under the Securities Act and (ii) understands the restrictions set forth on the
legend printed on the face of this Warrant.
12. LISTING ON SECURITIES EXCHANGES. In furtherance and not in limitation
of any other provision of this Warrant, if the Company at any time shall list
any Common Stock on any Eligible Market, the Company will, at its expense,
simultaneously list the Warrant Shares (and maintain such listing) on such
Eligible Market, upon official notice of issuance following the exercise of this
Warrant; and the Company will so list, register and maintain such listing on any
Eligible Market any Other Securities, if and at the time that any securities of
like class or similar type shall be listed on such Eligible Market by the
Company.
13. REMEDIES. The Company stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. NOTICES. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be mailed by certified mail, return receipt requested, or by a
nationally recognized courier service or delivered (in person or by facsimile),
against receipt to the party to whom such notice or other communication is to be
given. The address for such notices or communications shall be as set forth in
the Subscription Agreement entered into by the Holder and the Company. Any
notice or other communication given by means permitted by this Section 14 shall
be deemed given at the time of receipt thereof.
15. WARRANT AGENT. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any Person into which any new warrant agent may be merged, any
Person resulting from any consolidation to which any new warrant agent shall be
a party or any Person to which any new warrant agent transfers substantially all
of its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed (by first class mail, postage prepaid) to the Holder at the Holder's
last address as shown on the Warrant Register.
16. MISCELLANEOUS.
(A) This Warrant may be assigned by the Holder. This Warrant
may not be assigned by the Company, except to a successor in the
event of a Fundamental Transaction. This Warrant shall be binding
on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to
any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant.
This Warrant may be amended only in writing signed by the Company
and the Holder and their successors and assigns.
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(B) The Company will not, by amendment of its governing
documents 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 of this Warrant,
but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the
Holder against impairment. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any
Warrant Shares above the amount payable therefor upon exercise
thereof, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on
the exercise of this Warrant, free from all taxes, liens, claims
and encumbrances and (iii) will not close its shareholder books
or records in any manner that interferes with the timely exercise
of this Warrant.
(C) This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of New York
without regard to conflicts of laws principles thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of
the state and Federal courts sitting in the City of New York,
Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect
to the enforcement of the Subscription Agreement), and hereby
irrevocably waives, and agrees not to assert any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for
notices to it under this Warrant and agrees that such service
shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.
(D) Neither party shall be deemed in default of any
provision of this Warrant, to the extent that performance of its
obligations or attempts to cure a breach hereof are delayed or
prevented by any event reasonably beyond the control of such
party, including, without limitation, war, hostilities, acts of
terrorism, revolution, riot, civil commotion, national emergency,
strike, lockout, unavailability of supplies, epidemic, fire,
flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation,
ordinance, or other act or order of any court, government or
governmental agency, provided that such party gives the other
party written notice thereof promptly upon discovery thereof and
uses reasonable best efforts to cure or mitigate the delay or
failure to perform.
(E) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to
limit or affect any of the provisions hereof.
(F) In case any one or more of the provisions of this
Warrant shall be deemed invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and
provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to
agree upon a valid and enforceable provision that shall be a
commercially reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this
Warrant.
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The Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.
REDROLLER HOLDINGS, INC.
By:
-----------------------------
Name:
Title:
12
APPENDIX A TO WARRANT
FORM OF ASSIGNMENT
(to be completed and signed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________________ the right represented by the
within Warrant to purchase _____________ shares of Common Stock of RedRoller
Holdings, Inc. (f/k/a Aslahan Enterprises, Ltd.), a Delaware corporation, to
which the within warrant relates and appoints __________________________
attorney to transfer said right on the books of RedRoller Holdings, Inc. with
full power of substitution in the premises.
Dated:
------------------------ ------------------------------------
(Signature must conform in all
respects to name of Holder as
specified on face of the Warrant)
Address of Transferee:
APPENDIX B TO WARRANT
FORM OF EXERCISE NOTICE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)
To: REDROLLER HOLDINGS, INC.
The undersigned is the Holder of Warrant No. _________ (the "Warrant") issued by
REDROLLER HOLDINGS, INC. (f/k/a Aslahan Enterprises, Ltd.) a Delaware
corporation (the "Company"). Capitalized terms used herein and not otherwise
defined have the respective meanings set forth in the Warrant.
1. The Warrant is currently exercisable to purchase a total of _________
Warrant Shares.
2. The undersigned Holder hereby exercises its right to purchase __________
Warrant Shares pursuant to the Warrant
3. The Holder intends that payment of the Exercise Price shall be made as
(check one):
Cash Exercise _______
Cashless Exercise _______
4. If the Holder has elected a Cash Exercise, the Holder shall pay the sum of
$________ to the Company in accordance with the terms of the Warrant.
5. If the Holder has elected a Cashless Exercise, a certificate shall be
issued to the Holder for the number of shares equal to the whole number
portion of the product of the calculation set forth below, which is
________. The Company shall pay a cash adjustment in respect of the
fractional portion of the product of the calculation set forth below in an
amount equal to the product of the fractional portion of such product and
the Market Price on the Exercise Day, which product is __________.
X = Y[(A-B)/A]
X = the number of Warrant Shares to be issued to the Holder.
Number of Warrant Shares being exercised: ("Y").
-------------- -
Market Price on the Exercise Day: ("A").
-------------- -
Exercise Price: ("B")
-------------- -
6. Pursuant to this exercise, the Company shall deliver to the Holder Warrant
Shares in accordance with the terms of the Warrant.
7. Following this exercise, the Warrant shall be exercisable to purchase a
total of __________ Warrant Shares.
Dated: NAME OF HOLDER:
------------------------
(PRINT)
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
