Contract
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.
WARRANT
TO PURCHASE
SHARES OF
COMMON STOCK
OF
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No.:
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Number
of Shares:
___________
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Date of
Issuance: March 13, 2009
FOR VALUE
RECEIVED, the undersigned, FREZER, INC., a Nevada corporation (together with its
successors and assigns, the “Issuer”), hereby
certifies that _______________________________ or his registered assigns
(the “Holder”) is entitled
to subscribe for and purchase, during the Term (as hereinafter defined), up to
____________________________________ (_____________) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set
forth. Capitalized terms used in this Warrant and not otherwise
defined herein shall have the respective meanings specified in Section 9
hereof.
1. Term. The
term of this Warrant shall commence on the Date of Issuance set forth above and
shall expire at 6:00 p.m., Eastern Time, on the earlier of (a) the fifth
anniversary of the Date of Issuance or (b) thirty (30) days after delivery of
audited financial statements of the Issuer for certain fiscal year that shows
that the consolidated net income of the Company and its subsidiaries exceeded
$20 million for such fiscal year and consolidated net income of the Company and
its subsidiaries per share on a fully diluted basis exceeded $.26 per share,
which per share amount shall be subject to proportional downward adjustment for
the issuance of additional fully diluted shares of the Company (such earlier
period being the “Term” and such
expiration date, the “Termination
Date”).
2. Method of Exercise; Payment;
Issuance of New Warrant; Transfer and Exchange.
(a) Time of
Exercise. The purchase rights represented by this Warrant may
be exercised in whole or in part during the Term for such number of shares of
Common Stock set forth above, which number is equal to twenty three percent
(23%) of the number of shares of Common Stock into which the Convertible Note
issued by the Issuer to the Holder on the Date of Issuance pursuant to the
Purchase Agreement may be converted.
(b) Method of
Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder’s election (i) by certified or official bank
check or by wire transfer to an account designated by the Issuer, (ii) by
“cashless exercise” in accordance with Section 2(c), or (iii) by a combination
of the foregoing methods of payment selected by the Holder of this
Warrant.
(c) Cashless
Exercise. Notwithstanding any provision herein to the
contrary, after six months following the Date of Issuance, there is no effective
registration statement covering the Warrant Stock, then in lieu of exercising
this Warrant by payment of cash, the Holder may exercise this Warrant by a
cashless exercise and shall receive the number of shares of Common Stock equal
to an amount (as determined below) by surrender of this Warrant at the principal
office of the Issuer together with the properly endorsed Notice of Exercise in
which event the Issuer shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
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X =
Y - (A)(Y)
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B
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||
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Where
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X
=
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the
number of shares of Common Stock to be issued to the
Holder.
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Y
=
|
the
number of shares of Warrant Stock purchasable upon exercise of all or part
of the Warrant.
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|
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A
=
|
the
Warrant Price.
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|
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B
=
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the
Per Share Market Value of one share of Common
Stock.
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(d) Issuance of Stock
Certificates. In the event of any exercise of this Warrant in
accordance with and subject to the terms and conditions hereof, certificates for
the shares of Warrant Stock so purchased shall be delivered to the Holder hereof
within a reasonable time, not exceeding ten (10) Trading Days after such
exercise (the “Delivery Date”). The
Holder shall deliver this original Warrant, or an indemnification undertaking
with respect to such Warrant in the case of its loss, theft or destruction, at
such time that this Warrant is fully exercised. With respect to
partial exercises of this Warrant, the Issuer shall keep written records for the
Holder of the number of shares of Warrant Stock exercised as of each date of
exercise.
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(e) Transferability of
Warrant. Subject to Section 2(g) hereof, this Warrant may be
transferred by a Holder, in whole or in part, without the consent of the
Issuer. If transferred pursuant to this paragraph, this Warrant may
be transferred on the books of the Issuer by the Holder hereof in person or by
duly authorized attorney, upon surrender of this Warrant at the principal office
of the Issuer, properly endorsed (by the Holder executing an assignment in the
form attached hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is
exchangeable at the principal office of the Issuer for Warrants to purchase the
same aggregate number of shares of Warrant Stock, each new Warrant to represent
the right to purchase such number of shares of Warrant Stock as the Holder
hereof shall designate at the time of such exchange. All Warrants
issued on transfers or exchanges shall be dated the Original Issue Date and
shall be identical with this Warrant, except as to the number of shares of
Warrant Stock issuable pursuant thereto.
(f) Compliance with Securities
Laws. The Holder of this Warrant, by acceptance hereof, acknowledges that
this Warrant and the shares of Warrant Stock to be issued upon exercise hereof
are being acquired solely for investment, and that the Holder will not offer,
sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be
issued upon exercise hereof except pursuant to an effective registration
statement, or an exemption from registration, under the Securities Act and any
applicable state securities laws.
3. Stock Fully Paid;
Reservation and Listing of Shares; Covenants.
(a) Stock Fully
Paid. The Issuer represents, warrants, covenants and agrees
that all shares of Warrant Stock which may be issued upon the exercise of this
Warrant or otherwise hereunder will, when issued in accordance with the terms of
this Warrant, be duly authorized, validly issued, fully paid and non-assessable
and free from all taxes, liens and charges created by or through the
Issuer. The Issuer further covenants and agrees that during the
period within which this Warrant may be exercised, the Issuer will at all times
have authorized and reserved for the purpose of the issuance upon exercise of
this Warrant a number of authorized, but unissued, shares of Common Stock equal
to at least the number of shares of Common Stock issuable upon exercise of this
Warrant without regard to any limitations on exercise.
(b) Loss, Theft, Destruction of
Warrants. Upon receipt of evidence satisfactory to the Issuer
of the ownership of and the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon receipt of
indemnity or security satisfactory to the Issuer or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Issuer will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
number of shares of Common Stock.
(c) Payment of Taxes. The
Issuer will pay any documentary stamp taxes attributable to the initial issuance
of the Warrant Stock issuable upon exercise of this Warrant; provided, however, that the
Issuer shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificates
representing Warrant Stock in a name other than that of the Holder in respect to
which such shares are issued.
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4. Adjustment of Warrant
Price. The price at which such shares of Warrant Stock may be
purchased upon exercise of this Warrant shall be subject to adjustment from time
to time as set forth in this Section 4. The Issuer shall give the
Holder notice of any event described below which requires an adjustment pursuant
to this Section 4 in accordance with the notice provisions set forth in Section
5.
(a) Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or
Sale.
In case
the Issuer after the Original Issue Date shall do any of the following (each, a
“Triggering
Event”): (i) consolidate or merge with or into any other Person and the
Issuer shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) permit any other Person to consolidate with or
merge into the Issuer and the Issuer shall be the continuing or surviving Person
but, in connection with such consolidation or merger, any Capital Stock of the
Issuer shall be changed into or exchanged for Securities of any other Person or
cash or any other property, or (iii) transfer all or substantially all of its
properties or assets to any other Person, or (iv) effect a capital
reorganization or reclassification of its Capital Stock, then, and in the case
of each such Triggering Event, proper provision shall be made to the Warrant
Price and the number of shares of Warrant Stock that may be purchased upon
exercise of this Warrant so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder of this Warrant shall be entitled upon the
exercise hereof at any time after the consummation of such Triggering Event, to
the extent this Warrant is not exercised prior to such Triggering Event, to
receive at the Warrant Price in effect at the time immediately prior to the
consummation of such Triggering Event, in lieu of the Common Stock issuable upon
such exercise of this Warrant prior to such Triggering Event, the Securities,
cash and property to which such Holder would have been entitled upon the
consummation of such Triggering Event if such Holder had exercised the rights
represented by this Warrant immediately prior thereto (including the right of a
shareholder to elect the type of consideration it will receive upon a Triggering
Event), subject to adjustments (subsequent to such corporate action) as nearly
equivalent as possible to the adjustments provided for elsewhere in this Section
4. Upon the Holder’s request, the continuing or surviving corporation as a
result of such Triggering Event shall issue to the Holder a new warrant of like
tenor evidencing the right to purchase the adjusted number of shares of Warrant
Stock and the adjusted Warrant Price pursuant to the terms and provisions of
this Section 4(a).
(b) Stock Dividends,
Subdivisions and Combinations. If at any time the Issuer
shall:
(i) make
or issue or set a record date for the holders of the Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, shares of Common Stock,
(ii) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or
(iii) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock (including a reverse stock split),
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then (1)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Common Stock for
which this Warrant is exercisable immediately after such
adjustment.
(g) Other Provisions Applicable
to Adjustments under this Section. The following provisions
shall be applicable to the making of adjustments of the number of shares of
Common Stock for which this Warrant is exercisable and the Warrant Price then in
effect provided for in this Section 4:
(i) Computation of
Consideration. In connection with any merger or consolidation
in which the Issuer is the surviving corporation (other than any consolidation
or merger in which the previously outstanding shares of Common Stock of the
Issuer shall be changed to or exchanged for the stock or other securities of
another corporation), the amount of consideration therefore shall be, deemed to
be the fair value, as determined reasonably and in good faith by the Board, and
acceptable to the Holder, of such portion of the assets
and business of the nonsurviving corporation as the Board may determine to be
attributable to such shares of Common Stock or Common Stock Equivalents, as the
case may be. In the event of any consolidation or merger of the
Issuer in which the Issuer is not the surviving corporation or in which the
previously outstanding shares of Common Stock of the Issuer shall be changed
into or exchanged for the stock or other securities of another corporation, or
in the event of any sale of all or substantially all of the assets of the Issuer
for stock or other securities of any corporation, the Issuer shall be deemed to
have issued a number of shares of its Common Stock for stock or securities or
other property of the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated, and for a consideration
equal to the fair market value on the date of such transaction of all such stock
or securities or other property of the other corporation. In the
event any consideration received by the Issuer for any securities consists of
property other than cash, the fair market value thereof at the time of issuance
or as otherwise applicable shall be as determined in good faith by the
Board. In the event Common Stock is issued with other shares or
securities or other assets of the Issuer for consideration which covers both,
the consideration computed as provided in this Section 4(g)(i) shall be
allocated among such securities and assets as determined in good faith by the
Board.
(ii) When Adjustments to Be
Made. The adjustments required by this Section 4 shall be made
whenever and as often as any specified event requiring an adjustment shall
occur, except that any adjustment of the number of shares of Common Stock for
which this Warrant is exercisable that would otherwise be required may be
postponed (except in the case of a subdivision or combination of shares of the
Common Stock, as provided for in Section 4(b)) up to, but not beyond the date of
exercise if such adjustment either by itself or with other adjustments not
previously made adds or subtracts less than one percent (1%) of the shares of
Common Stock for which this Warrant is exercisable immediately prior to the
making of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and not previously made, would result in
a minimum adjustment or on the date of exercise. For the purpose of
any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
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(iii) Fractional
Interests. In computing adjustments under this Section 4,
fractional interests in Common Stock shall be taken into account to the nearest
one one-hundredth (1/100th) of a share.
(iv) When Adjustment Not
Required. If the Issuer shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and before
the distribution to stockholders thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(h) Form of Warrant after
Adjustments. The form of this Warrant need not be changed
because of any adjustments in the Warrant Price or the number and kind of
Securities purchasable upon the exercise of this Warrant.
5. Notice of
Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an “adjustment”), the
Issuer shall cause its Chief Financial Officer to prepare and execute a
certificate setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the Board made any
determination hereunder), and the Warrant Price and Warrant Share Number after
giving effect to such adjustment, and shall cause copies of such certificate to
be delivered to the Holder of this Warrant promptly after each adjustment. Any
dispute between the Issuer and the Holder of this Warrant with respect to the
matters set forth in such certificate may at the option of the Holder of this
Warrant be submitted to a national or regional accounting firm reasonably
acceptable to the Issuer and the Holder (the “Independent
Appraiser”), provided that the
Issuer shall have ten (10) days after receipt of notice from such Holder of its
selection of such firm to object thereto, in which case such Holder shall select
another such firm and the Issuer shall have no such right of objection. The
Independent Appraiser selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty (30) days after submission
to it of such dispute. Such opinion shall be final and binding on the parties
hereto. The reasonable expenses of the Independent Appraiser in making such
determination shall be paid by the Issuer, in the event the Holder's calculation
was correct, or by the Holder, in the event the Issuer’s calculation was
correct, or equally by the Issuer and the Holder in the event that neither the
Issuer's or the Holder's calculation was correct.
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6.
Fractional
Shares. No fractional shares of Warrant Stock will be issued
in connection with any exercise hereof, but in lieu of such fractional shares,
the Issuer shall round the number of shares to be issued upon exercise up to the
nearest whole number of shares.
7.
Definitions. For
the purposes of this Warrant, the following terms have the following
meanings:
“Board” shall mean the
Board of Directors of the Issuer.
“Certificate of
Incorporation” means the Articles of Incorporation of the Issuer as in
effect on the Original Issue Date, and as hereafter from time to time amended,
modified, supplemented or restated in accordance with the terms hereof and
thereof and pursuant to applicable law.
“Capital Stock” means
and includes (i) any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including,
without limitation, shares of preferred or preference stock, (ii) all
partnership interests (whether general or limited) in any Person which is a
partnership, (iii) all membership interests or limited liability company
interests in any limited liability company, and (iv) all equity or ownership
interests in any Person of any other type.
“Common
Stock” means the Common Stock, $0.001 par value per share, of
the Issuer and any other Capital Stock into which such stock may hereafter be
changed.
“Convertible Note”
means the note issued pursuant to the Purchase Agreement, which are convertible
into the Issuer’s Common Stock at the initial rate of one share of Common Stock
for each $0.1597 in principal amount and/or accrued interest on the Note
converted.
“Governmental
Authority” means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.
“Holders” mean the
Persons who shall from time to time own any Warrant. The term
“Holder” means one of the Holders.
“Independent
Appraiser” means a nationally recognized or major regional investment
banking firm or firm of independent certified public accountants of recognized
standing (which may be the firm that regularly examines the financial statements
of the Issuer) that is regularly engaged in the business of appraising the
Capital Stock or assets of corporations or other entities as going concerns, and
which is not affiliated with either the Issuer or the Holder of any
Warrant.
“Issuer” means Frezer,
Inc., a Nevada corporation, and its successors.
“Majority Holders”
means at any time the Holders of Warrants exercisable for a majority of the
shares of Warrant Stock issuable under the Warrants at the time
outstanding.
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“Original Issue Date”
means March __, 2009.
“OTC Bulletin Board”
means the over-the-counter electronic bulletin board.
“Outstanding Common
Stock” means, at any given time, the aggregate amount of outstanding
shares of Common Stock, assuming full exercise, conversion or exchange (as
applicable) of all options, warrants and other Securities which are convertible
into or exercisable or exchangeable for, and any right to subscribe for, shares
of Common Stock that are outstanding at such time.
“Person” means an
individual, corporation, limited liability company, partnership, joint stock
company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.
“Per Share Market
Value” means on any particular date (a) the average closing price per
share of the Company’s Common Stock during the last ten (10) Trading Days prior
to the exercise date on the OTC Bulletin Board or another registered national
stock exchange on which the Common Stock is then listed, or if there is no
closing price on such date, then the closing bid price during such 10 Trading
Day period, or if there is no closing bid price, then the average
closing price during such 10 Trading Day period on such exchange or quotation
system, or (b) if the Common Stock is not listed then on the OTC Bulletin Board
or any registered national stock exchange, the average closing price during the
last ten (10) Trading Days for a share of Common Stock in the over-the-counter
market, as reported by the OTC Bulletin Board or in the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date, or if
there is no closing price during such period, then the
closing bid price during such period, or (c) if the Common Stock is
not then reported by the OTC Bulletin Board or the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of
reporting prices), then the average of the “Pink Sheet” quotes for the five (5)
Trading Days preceding such date of determination, or (d) if the Common Stock is
not then publicly traded the fair market value of a share of Common Stock as
determined by an Independent Appraiser selected in good faith by the Majority
Holders; provided, however, that the
Issuer, after receipt of the determination by such Independent Appraiser, shall
have the right to select an additional Independent Appraiser, in which case, the
fair market value shall be equal to the average of the determinations by each
such Independent Appraiser; and provided, further, that all
determinations of the Per Share Market Value shall be appropriately adjusted for
any stock dividends, stock splits or other similar transactions during such
period. The determination of fair market value by an Independent
Appraiser shall be based upon the fair market value of the Issuer determined on
a going concern basis as between a willing buyer and a willing seller and taking
into account all relevant factors determinative of value, and shall be final and
binding on all parties. In determining the fair market value of any
shares of Common Stock, no consideration shall be given to any restrictions on
transfer of the Common Stock imposed by agreement or by federal or state
securities laws, or to the existence or absence of, or any limitations on,
voting rights.
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“Purchase Agreement”
means the Securities Purchase Agreement dated as of March __, 2009, among the
Issuer and the Purchasers.
“Purchasers” means the
purchasers of the Company’s Convertible Note and Warrants pursuant to the
Purchase Agreement.
“Securities” means any
debt or equity securities of the Issuer, whether now or hereafter authorized,
any instrument convertible into or exchangeable for Securities or a Security,
and any option, warrant or other right to purchase or acquire any
Security. “Security” means one of the Securities.
“Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute then in
effect.
“Subsidiary” means any
corporation at least 50% of whose outstanding Voting Stock shall at the time be
owned directly or indirectly by the Issuer or by one or more of its
Subsidiaries, or by the Issuer and one or more of its Subsidiaries.
“Term” has the meaning
specified in Section 1 hereof.
“Trading Day” means
(a) a day on which the Common Stock is traded on the OTC Bulletin Board, or (b)
if the Common Stock is not traded on the OTC Bulletin Board, a day on which the
Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a) or (b)
hereof, then Trading Day shall mean any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.
“Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.
“Voting Stock” means,
as applied to the Capital Stock of any corporation, Capital Stock of any class
or classes (however designated) having ordinary voting power for the election of
a majority of the members of the Board of Directors (or other governing body) of
such corporation, other than Capital Stock having such power only by reason of
the happening of a contingency.
“Warrants” means the
Warrants issued and sold pursuant to the Purchase Agreement, including, without
limitation, this Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section 2
hereof or of any of such other Warrants.
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“Warrant Price”
initially means $0.1916, as such price may be adjusted from time to time as
shall result from the adjustments specified in this Warrant, including Section 4
hereto.
“Warrant Share Number”
means at any time the aggregate number of shares of Warrant Stock which may at
such time be purchased upon exercise of this Warrant, after giving effect to all
prior adjustments and increases to such number made or required to be made under
the terms hereof.
“Warrant Stock” means
Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
issuable pursuant to any Warrant or Warrants.
8. Other
Notices. In case at any time:
(a) the
Issuer shall make any distributions to the holders of Common Stock;
or
(b) the
Issuer shall authorize the granting to all holders of its Common Stock of rights
to subscribe for or purchase any shares of Capital Stock of any class or other
rights; or
(c) there
shall be any reclassification of the Capital Stock of the Issuer;
or
(d) there
shall be any capital reorganization by the Issuer; or
(e) there
shall be any (i) consolidation or merger involving the Issuer or (ii) sale,
transfer or other disposition of all or substantially all of the Issuer’s
property, assets or business (except a merger or other reorganization in which
the Issuer shall be the surviving corporation and its shares of Capital Stock
shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or
(f)
there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Issuer or any partial liquidation of the Issuer
or distribution to holders of Common Stock;
then, in
each of such cases, the Issuer shall give written notice to the Holder of the
date on which (i) the books of the Issuer shall close or a record shall be taken
for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take
place. Such notice also shall specify the date as of which the
holders of Common Stock of record shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their
certificates for Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be. Such
notice shall be given at least twenty (20) days prior to the action in question
and not less than ten (10) days prior to the record date or the date on which
the Issuer’s transfer books are closed in respect thereto. This
Warrant entitles the Holder to receive copies of all financial and other
information distributed or required to be distributed to the holders of the
Common Stock.
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9. Amendment and
Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such
amendment or waiver shall reduce the Warrant Share Number, increase the Warrant
Price, shorten the period during which this Warrant may be exercised or modify
any provision of this Section 9 without the consent of the Holder of this
Warrant. No consideration shall be offered or paid to any person to
amend or consent to a waiver or modification of any provision of this Warrant
unless the same consideration is also offered to all holders of the
Warrants.
10. Governing Law;
Jurisdiction. This Warrant shall be governed by and construed
in accordance with the internal laws of the State of New York, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction. This
Warrant shall not be interpreted or construed with any presumption against the
party causing this Warrant to be drafted. The Issuer and the Holder
agree that venue for any dispute arising under this Warrant will lie exclusively
in the state or federal courts located in New York County, New York, and the
parties irrevocably waive any right to raise forum non conveniens or any other
argument that New York is not the proper venue. The Issuer and the
Holder irrevocably consent to personal jurisdiction in the state and federal
courts of the state of New York. The Issuer and the Holder consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Warrant and agree that such service shall constitute good and sufficient service
of process and notice thereof. Nothing in this Section 10 shall
affect or limit any right to serve process in any other manner permitted by
law. The Issuer and the Holder hereby agree that the prevailing party
in any suit, action or proceeding arising out of or relating to this Warrant or
the Purchase Agreement, shall be entitled to reimbursement for reasonable legal
fees from the non-prevailing party. The parties hereby waive all
rights to a trial by jury.
11. Notices. Any
notice, demand, request, waiver or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) immediately
upon hand delivery, telecopy or facsimile at the address or number designated
below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:
|
If
to the Issuer:
|
Address:
Xx.
00-0 Xxxxxx Xxxxxx
Xxxxxx
Xxxxxxxx Xxxxxx Xxxx
Liaoning
Province, PRC, 116011
Attn:
Xxxxxx Xxx
Telephone:
0000-00000000
Fax: 0000-00000000
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11
|
with
copies (which copies
shall
not constitute notice)
to:
|
Guzov
Ofsink, LLC
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx
Xxxx, Esq.
Tel.
No.: (000) 000-0000, ext. 107
Fax
No.: (000) 000-0000
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|
If
to any Holder:
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At
the address of such Holder set forth on Exhibit C to the Purchase
Agreement, with copies to Holder’s counsel as specified in writing by such
Holder
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Any party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other
party hereto.
12. Warrant
Agent. The Issuer may, by written notice to the Holder of this
Warrant, appoint an agent for the purpose of issuing shares of Warrant Stock on
the exercise of this Warrant, exchanging this Warrant or replacing this Warrant,
or any of the foregoing, and thereafter any such issuance, exchange or
replacement, as the case may be, shall be made at such office by such
agent.
13. Remedies. The
Issuer stipulates that the remedies at law of the Holder of this Warrant in the
event of any default or threatened default by the Issuer in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, 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. Successors and
Assigns. This Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors and assigns of the
Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.
15. Modification and
Severability. If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision
hereof is found to be unenforceable, then such provision shall be deemed
modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the
other provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
16. Headings. The
headings of the Sections of this Warrant are for convenience of reference only
and shall not, for any purpose, be deemed a part of this
Warrant.
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IN
WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
first above written.
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By:
|
|
|
Name:
Xxxxxx Xxx
|
|
|
Title:
President and Chief Executive
Officer
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|
13
EXERCISE
FORM
WARRANT
The
undersigned _______________, pursuant to the provisions of the within Warrant,
hereby elects to purchase _____ shares of Common Stock of
________________________________ covered by the within Warrant.
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Dated:
_________________
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Signature
|
|
|
Address
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||
Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: _________________________
The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.
The
undersigned intends that payment of the Warrant Price shall be made as (check
one):
Cash
Exercise_______
Cashless
Exercise_______
If the
Holder has elected a Cash Exercise, the Holder shall pay the sum of $________ by
certified or official bank check (or via wire transfer) to the Issuer in
accordance with the terms of the Warrant.
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 Per Share Market Value, which product
is ____________.
X = Y -
(A)(Y)
B
Where:
The
number of shares of Common Stock to be issued to the Holder
__________________(“X”).
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The
number of shares of Common Stock purchasable upon exercise of all of the Warrant
or, if only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised ___________________________ (“Y”).
The
Warrant Price ______________ (“A”).
The Per
Share Market Value of one share of Common Stock _______________________
(“B”).
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ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.
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Dated:
_________________
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Signature
|
|
|
Address
|
||
PARTIAL
ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named
corporation.
|
Dated:
_________________
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Signature
|
|
|
Address
|
||
FOR USE
BY THE ISSUER ONLY:
This
Warrant No. W-___ canceled (or transferred or exchanged) this _____
day of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common
Stock in the name of _______________.
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