NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES 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. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.
HANKERSEN INTERNATIONAL CORP.
WARRANT TO PURCHASE COMMON STOCK
Warrant No. 2008-___ Original Issue Date: June ___, 2008
HANKERSEN INTERNATIONAL CORP., a Delaware corporation (together with
its successors and assigns, the "COMPANY"), hereby certifies that
________________________(the "HOLDER") and its successors, transferees and
assigns, is entitled to purchase from the Company the securities set forth in
Section 2 below and subject to the following terms and conditions:
1. DEFINITIONS. As used in this Warrant, the following terms shall have
the respective definitions set forth in this Section 1.
"AFFILIATE" means any Person that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144.
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
is a federal legal holiday or a day on which banking institutions in the State
of New York are authorized or required by law or other governmental action to
close.
"COMMON STOCK" means the common stock of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FINANCING" means the consummation of one or more equity and/or
convertible debt financings by the Company with aggregate gross proceeds of at
least Two Million Dollars ($2,000,000) (exclusive of amounts under the
Promissory Notes that are converted into Securities in connection with the
Financing.
-1-
"FINANCING BASED CONVERSION PRICE" means the lowest cash purchase price
paid for Securities in a Financing. For purposes of computing the lowest cash
purchase price paid for Securities in a Financing (other than securities issued
in a Variable Rate Transaction, as such term is defined in the Note),
(a) if the Financing consists of (i) shares of common stock, (ii)
securities that are convertible into shares of common stock
"Convertible Securities"), (iii) securities exchangeable for
shares of common stock ("Exchange Securities") or (iv)
securities exercisable for shares of common stock ("Warrant
Securities"), then, except as otherwise provided below, the
Financing Based Conversion Price shall be the lowest of the
purchase price for the common stock, the conversion price of
the Convertible Securities, the exchange price of the Exchange
Securities or the exercise price of the Warrant Securities;
(b) if the Financing consists of (i) Warrant Securities and/or
(ii) Convertible Securities, Exchange Securities or shares of
common stock, then no portion of the gross proceeds in such
Financing shall be allocated to the Warrant Securities and the
purchase price for the Warrant Securities shall be the
exercise price thereof; if the Financing consists of (i)
Convertible Securities or Exchange Securities and (ii) shares
of common stock, then for purposes of determining the
Financing Based Conversion Price, the proceeds of the
Financing shall be allocated to the Convertible Securities and
Exchange Securities and the conversion price and the exchange
price shall be appropriately adjusted downward to reflect the
issuance of the shares of common stock in the Financing and no
portion of the proceeds from the Financing shall be allocable
to the shares of common stock.
"FUNDAMENTAL TRANSACTION" means any of the following that may occur:
(1) the Company effects any merger or consolidation of the Company with or into
another Person, (2) the Company effects any sale of all or substantially all of
its assets in one or a series of related transactions, (3) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of common stock are permitted to tender or exchange their
shares for other securities, cash or property, or (4) the Company effects any
reclassification of the common stock or any compulsory share exchange pursuant
to which the common stock is effectively converted into or exchanged for other
securities, cash or property.
"PERSON" means an 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.
"RULE 144" means Rule 144 promulgated by the Securities and Exchange
Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Securities
and Exchange Commission having substantially the same effect as such Rule.
"SECURITIES" means shares of the Company's common stock.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
-2-
"TRADING DAY" means (i) a day on which the Common Stock is traded on a
Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock
is not listed on a Trading Market (other than the OTC Bulletin Board), a day on
which the Common Stock is traded in the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.
"TRADING MARKET" means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.
"VWAP" means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted
on the Trading Market, the daily volume weighted average price of the Common
Stock for the preceding 20 trading days on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. New York City time to 4:02 p.m. New York City time);
(b) if the OTC Bulletin Board is not a Trading Market, the volume weighted
average price of the Common Stock for the preceding 20 trading days on the OTC
Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC
Bulletin Board and if prices for the Common Stock are then reported in the "Pink
Sheets" published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the bid price per share of the
Common Stock so reported the preceding 20 trading days; or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Purchasers of a majority in
interest of the holders of the Convertible Promissory Notes of even date
herewith in the aggregate amount of $700,000 then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the
Company.
"WARRANT SHARES" means the shares of Common Stock into which this
Warrant is exercised.
1. WARRANT SHARES; EXERCISE OF WARRANT. Any time and from time to time
from and after the consummation of the Financing by the Company and through and
including the fourth anniversary of the consummation of the Financing (the
"FINANCING EXPIRATION DATE"), the Holder shall be entitled to purchase the
number of shares of common stock equal to ____________ Dollars
($_______________) DIVIDED BY the Financing Based Conversion Price at an
exercise price equal to the Financing Based Conversion price. If the Financing
has not occurred within 12 months of the date hereof, any time and from time to
time from and after such date and through and including the fourth anniversary
of the date hereof (the "NON FINANCING EXPIRATION DATE" and collectively with
the Financing Expiration Date, the "EXPIRATION DATE"), the Holder shall be
entitled to purchase the number of shares of common stock equal to
______________ Dollars ($_____________)[fifty percent of initial principal
amount of Note] DIVIDED BY $0.228 at an exercise price equal to $0.228, subject
to adjustment as set forth herein (the "Non Financing Based Conversion Price") .
-3-
2. EXPIRATION. At 6:30 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. The Company may not call or redeem any portion of this Warrant
without the prior written consent of the affected Holder. Not withstanding the
foregoing, this Warrant shall be void on the Expiration Date. The Company shall
cause the acquiror in any Fundamental Transaction to assume all obligations of
the Company set forth in this Warrant.
3. 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 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.
4. 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 duly completed and signed,
to the Company at its address specified herein. 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 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.
5. DELIVERY OF WARRANT SHARES.
(a) The Holder shall not be required to physically surrender
this Warrant unless the aggregate Warrant Shares represented by this Warrant are
being exercised. To effect exercises hereunder, the Holder shall duly execute
and deliver to the Company at its address for notice set forth herein (or such
to such other address as the Company may designate by notice in writing to the
Holder), an Exercise Notice in the form of ANNEX A hereto, along with a Warrant
Shares Exercise Log in the form of ANNEX B hereto, and shall pay the Exercise
Price, if applicable, multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder. The Company shall promptly (but in no event later
than three Trading Days after the Date of Exercise (as defined herein)) issue
and deliver to the Holder, a certificate for the Warrant Shares issuable upon
such exercise. The Company shall, upon request of the Holder and subsequent to
the date on which a registration statement covering the resale of the Warrant
Shares has been declared effective by the Securities and Exchange Commission,
use its reasonable best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established
clearing corporation performing similar functions, if available, PROVIDED, that,
the Company may, but will not be required to change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust Corporation. A "DATE OF EXERCISE" for purposes of this Warrant,
means the date on which the Holder shall have delivered to the Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) if such Holder is not utilizing the cashless
exercise provisions set forth in this Warrant, payment of the Exercise Price for
the number of Warrant Shares so indicated by the Holder to be purchased.
(b) If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise. If the Company fails for any reason to deliver to the
-4-
Holder certificates evidencing the Warrant Shares subject to a Notice of
Exercise by the 5th Trading Day after the Date of Exercise, the Company shall
pay to such Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the
Common Stock on the date of the applicable Notice of Exercise), $5.00 per
Trading Day (increasing to $10.00 per Trading Day on the 45th Trading Day after
such liquidated damages begin to accrue) for each Trading Day after such Date of
Exercise until such certificates are delivered.
(c) The Company's obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Xxxxxx's right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company's failure to timely deliver certificates representing
Warrant Shares upon exercise of the Warrant as required pursuant to the terms
hereof. In addition to any other rights available to the Holder, if the Company
fails to cause its transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an exercise on or
before the 5th Trading Day after the Date of Exercise, and if after such date
the Holder is required by its broker to purchase (in an open market transaction
or otherwise) or the Holder's brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a "Buy-In"),
then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
-5-
6. CHARGES, TAXES AND EXPENSES. Issuance and delivery of Warrant Shares
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 which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants 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, or in lieu of and 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 (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company's
obligation to issue the New Warrant.
8. RESERVATION OF WARRANT SHARES. The Company covenants that during the
term that this Warrant is exercisable, the Company will at all times reserve and
keep available out of the aggregate of its authorized but unissued and otherwise
unreserved securities, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
Persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). 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 and fully paid and nonassessable.
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 AND SPLITS. If, at any time while this
Warrant is outstanding, (i) a stock dividend is paid on the Securities or
distribution is otherwise made on any class of capital stock that is payable in
such Securities, (ii) there is a subdivision of the outstanding Securities into
a larger number of shares, or (iii) there is a combination of outstanding
Securities into a smaller number of shares, then in each such case the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of the Securities outstanding immediately before such event and
of which the denominator shall be the number of shares of the Securities
outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination. Simultaneously with any adjustment to the Exercise
Price pursuant to this paragraph, 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 adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment.
-6-
(b) FUNDAMENTAL TRANSACTIONS. If, at any time while this
Warrant is outstanding there is a Fundamental Transaction, then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of
Warrant Shares then issuable upon exercise in full of this Warrant (the
"ALTERNATE CONSIDERATION"). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of the Securities in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of the Securities are given any choice
as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. At the Holder's option and request, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant substantially in the form of this Warrant and
consistent with the foregoing provisions and evidencing the Holder's right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (b) and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
(c) SUBSEQUENT EQUITY SALES OR RIGHTS OFFERING
(i) If the Company or any Subsidiary thereof, as applicable,
at any time while this Warrant is outstanding, shall sell or grant any
option to purchase, or sell or grant any right to reprice, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option
to purchase or other disposition) any Common Stock or Common Stock
Equivalents entitling any Person to acquire shares of Common Stock, at
an effective price per share less than the then Exercise Price (such
lower price, the "BASE SHARE PRICE" and such issuances collectively, a
"DILUTIVE ISSUANCE") (if the holder of the Common Stock or Common Stock
Equivalents so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options
or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per
share which is less than the Exercise Price (as in effect from time to
time), such issuance shall be deemed to have occurred for less than the
Exercise Price on such date of the Dilutive Issuance), then the
Exercise Price shall be reduced in accordance with the following
formula:
-7-
O + N x P
----------
E' = E x M
----------
O + N
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock
outstanding on the record date.
N = the number of shares of additional Common
Stock issued pursuant to such rights,
options or warrants.
P = the price per share of the additional shares
of Common Stock.
M = the VWAP per share of Common Stock on the
record date.
(ii) If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of
Common Stock (and not to Holders) entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the VWAP
at the record date mentioned below, then the Exercise Price shall be
adjusted in accordance with the formula:
O + N x P
----------
E' = E x M
----------
O + N
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock
outstanding on the record date.
N = the number of shares of additional Common
Stock issued pursuant to such rights,
options or warrants.
P = the price per share of the additional shares
of Common Stock.
M = the VWAP per share of Common Stock on the
record date.
-8-
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive the rights, options or warrants. If at the end of
the period during which such rights, options or warrants are
exercisable, not all rights, options or warrants shall have been
exercised, the applicable Exercise Price shall be promptly readjusted
to what it would have been if "N" in the above formula had been the
number of shares actually issued.
(d) 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.
(e) NOTICE OF ADJUSTMENTS. Upon the occurrence of each
adjustment pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare
a certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's Transfer Agent.
(f) NOTICE OF CORPORATE EVENTS. Upon the (i) declaration of a
dividend or any other distribution of cash, securities or other property in
respect of the Securities, (ii) authorization or approval of any agreement
contemplating or soliciting stockholder approval for any Fundamental Transaction
or (iii) authorization of a 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 (but
only to the extent such disclosure would not result in the dissemination of
material, non-public information to the Holder) at least 10 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 insure 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.
(g) ADDITIONAL RIGHTS GRANTED IN FINANCING. If any
anti-dilution rights are granted to holders of convertible securities issued in
the Financing that are superior to rights granted in this Section 9, then the
Holder shall be granted, without payment of additional consideration, such
additional rights with respect to this Warrant.
10. PAYMENT OF EXERCISE PRICE.
(a) The Holder shall pay the Exercise Price (a) in immediately
available funds, or (b) electing a net exercise as described in Section 10 (b)
below.
-9-
(b) NET EXERCISE. If there is not an effective registration
statement covering the resale of the Warrant Shares, then the Holder may notify
the Company in an Exercise Notice of its election to utilize a net exercise, 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.
Y = the number of Warrant Shares with
respect to which this Warrant is being
exercised.
A = the VWAP as of the date of the
exercise of the Warrant.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a net exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have commenced, on the date
this Warrant was originally issued.
11. LIMITATIONS ON EXERCISE. Notwithstanding anything to the contrary
contained herein, the number of Warrant Shares that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall
be limited to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of common stock then beneficially
owned by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder's for purposes of
Section 13(d) of the Exchange Act, does not exceed 9.99% of the total number of
issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. This
provision shall not restrict the number of shares of common stock which a Holder
may receive or beneficially own in order to determine the amount of securities
or other consideration that such Holder may receive in the event of a
Fundamental Transaction as contemplated in Section 9 of this Warrant.
12. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by the applicable Trading Market on the date of
exercise.
13. NOTICES. Any and all notices or other communications or deliveries
hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
-10-
the facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Business Day, (ii) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Business Day
or later than 6:30 p.m. (New York City time) on any Business Day, (iii) the
second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The addresses for such
communications shall be:
(i) If to the Company: Hankersen International Corp
3rd Floor
A Tower of Xxxxxx Xxx
Xx. 00 Xxxxxx Xxxx Xxxx
Xx Xxxx Xxxx, Xx'xx Xxxxx
With a copy to: Xxxxxx Xxxxxxxx, Esq.
XxXxxxxxxx Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
or (ii) if to the Holder, to the address or facsimile number appearing on the
Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section.
14. WARRANT AGENT. The Company shall serve as warrant agent under this
Warrant. Upon 10 days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or 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.
15. RESTRICTIONS. So long as Holder continues to holds the Warrant,
such Holder will not, nor will it knowingly through its Affiliates engage in any
"short sale" of Common Stock as such term is defined in Rule 200(a) of
Regulation SHO promulgated under the Exchange Act (a "Short Sale"), except on
those days (each a "Permitted Day") on which the aggregate short position with
respect to the Common Stock of such Holder prior to giving effect to any Short
Sales by such Holder on such Permitted Day does not exceed such Xxxxxx's
Permitted Share Position (as defined below) on such Permitted Day; PROVIDED,
however, that an Holder will only be entitled to engage in transactions that
constitute Short Sales on a Permitted Day to the extent that following such
transaction, the aggregate short position with respect to the Common Stock of
such Holder does not exceed such Holder's Permitted Share Position. For purposes
of this paragraph, an Xxxxxx's "Permitted Share Position" means, with respect to
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any date of determination, the number of shares of Common Stock beneficially
owned by such Holder plus the maximum number of Warrant Shares then issuable
(including as to portions of Warrants not yet exercised and without regard to
any exercise caps or other exercise restrictions applicable to the Warrants) to
such Holder.
16. MISCELLANEOUS.
(a) 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. The foregoing sentence shall be subject to the restrictions on waivers
and amendments set forth in Section 11 of this Warrant.
(b) This Warrant shall be governed by and be construed in
accordance with the laws of the State of New York without regard to the
conflicts of law rules of such state. Each of the Company and Holder hereby
irrevocably and unconditionally submits, for itself and its property, to the
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in respect of actions brought
against it as a defendant, in any action, suit or proceeding arising out of or
relating to this Note, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action, suit or proceeding may be heard and
determined in such courts. Each of the parties hereto agrees that a final
judgment in any such action, suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The Company and Holder hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
action, suit or proceeding arising out of or relating to this Note, or in any
court referred to above. Each of the parties hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action, suit proceeding in any such court and waives any
other right to which it may be entitled on account of its place of residence or
domicile.
(c) 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.
(d) In case any one or more of the provisions of this Warrant
shall be 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 which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
(e) Prior to exercise of this Warrant, the Holder hereof shall
not, by reason of being a Holder, be entitled to any rights of a stockholder
with respect to the Warrant Shares.
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[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
HANKERSEN INTERNATIONAL CORP.
By: ________________________________
Name: Xxxxxxxxx Xxxx
Title: President
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ANNEX A
EXERCISE NOTICE
HANKERSEN INTERNATIONAL CORP.
WARRANT DATED APRIL 24, 2008
The undersigned Holder hereby irrevocably elects to purchase _____________
shares of common stock pursuant to the above referenced Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.
(1) The undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the Warrant.
(2) The Holder intends that payment of the Exercise Price shall be made as
(check one):
____"Cash Exercise" under Section 10
____
____"Net Exercise" under Section 10
(3) 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.
(4) Pursuant to this Exercise Notice, the Company shall deliver to the holder
_______________ Warrant Shares in accordance with the terms of the Warrant.
(5) By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder will not beneficially own in excess of the number of
shares of Common Stock (determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934) permitted to be owned under Section 11 of
this Warrant to which this notice relates.
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)
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ANNEX B
WARRANT SHARES EXERCISE LOG
----------------------------- ----------------------------- ---------------------------------- ---------------------
Date Number of Warrant Shares Number of Warrant Shares Number of Warrant
Available to be Exercised Exercised Shares Remaining to
be Exercised
----------------------------- ----------------------------- ---------------------------------- ---------------------
----------------------------- ----------------------------- ---------------------------------- ---------------------
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ANNEX C
HANKERSEN INTERNATIONAL CORP
WARRANT DATED APRIL 23, 2008
WARRANT NO. [ ]
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
above-captioned Warrant to purchase ____________ shares of common stock to which
such Warrant relates and appoints ________________ attorney to transfer said
right on the books of the Company with full power of substitution in the
premises.
Dated: _______________, ____
---------------------------------------
(Signature must conform in all
respects to name of holder as specified
on the face of the Warrant)
---------------------------------------
Address of Transferee
---------------------------------------
---------------------------------------
In the presence of:
--------------------------
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