Contract
THIS
WARRANT AND THE (I) SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK, (II) SERIES
C WARRANTS AND (III) SERIES D WARRANTS 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.
SERIES
J
WARRANT TO PURCHASE
SHARES
OF
SERIES B CONVERTIBLE PRERFERRED STOCK
SERIES
C
WARRANTS TO PURCHASE COMMON STOCK
SERIES
D
WARRANTS TO PURCHASE COMMON STOCK
OF
JPAK
GROUP, INC.
No.:
X-X-07-__
Date
of
Issuance: August 9, 2007
Number
of
Series B Preferred Shares: __________
Number
of
Series C Warrants: ___________
Number
of
Series D Warrants: ___________
FOR
VALUE
RECEIVED, the undersigned, Jpak Group, Inc., a Nevada corporation (together
with
its successors and assigns, the "Issuer"),
hereby certifies that ____________________________ or its registered assigns
is
entitled to subscribe for and purchase, during the Term (as hereinafter
defined), up to (i) _______________________ (_______) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Series B Convertible Preferred Stock of the Issuer
(the “Series
B Preferred Stock”),
(ii)
Series C Warrants to purchase up to __________ shares of Common Stock of the
Issuer and (iii) Series D Warrants to purchase up to __________ shares of Common
Stock of the Issuer, at an exercise price equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. The designation, rights, preferences and other terms
and
provisions of the Series B Convertible Preferred Stock are set forth in the
Certificate of Designation of the Relative Rights and Preferences of the Series
B Convertible Preferred Stock attached hereto as Exhibit
A
(the
“Certificate
of Designation”),
the
terms of the Series C Warrant are set forth in the Series C Warrant attached
hereto as Exhibit
B
(the
“Series
C Warrant”),
and
the terms of the Series D Warrant are set forth in the Series D Warrant attached
hereto as Exhibit
C
(the
“Series
D Warrant”).
Capitalized terms used in this Warrant and not otherwise defined herein shall
have the respective meanings specified in Section 4 hereof.
-1-
1. Term.
The
term of this Warrant shall commence on August 9, 2007 and shall expire at 6:00
p.m., Eastern Time, on the date that is three (3) months following the effective
date of the registration statement providing for the resale of all of the shares
of Common Stock issuable upon conversion of the Series A Convertible Preferred
Stock issued to the Holder on the date hereof (such period being the
"Term").
|
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.
(b) Method
of Exercise.
The
Holder hereof may exercise this Warrant, in whole or in part, by delivering
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 by certified or official bank check or by
wire
transfer to an account designated by the Issuer.
The
Issuer shall file the Certificate of Designation with the Secretary of State
of
the State of Nevada promptly upon the initial exercise of this Warrant by the
Holder.
(c) Issuance
of Securities.
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,
Series C Warrants and Series D Warrants so purchased shall be dated the date
of
such exercise and delivered to the Holder hereof within a reasonable time,
not
exceeding five (5) Trading Days after such exercise, and the Holder hereof
shall
be deemed for all purposes to be the holder of the shares of Warrant Stock,
Series C Warrants and Series D Warrants so purchased as of the date of such
exercise. 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,
Series
C Warrants and Series D Warrants
exercised as of each date of exercise.
(d) Transferability
of Warrant.
Subject
to Section 2(f) 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, Series C
Warrants and Series D Warrants, each new Warrant to represent the right to
purchase such number of shares of Warrant Stock, Series C Warrants and Series
D
Warrants 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, Series C Warrants and Series D Warrants issuable pursuant
thereto.
-2-
(e) Continuing
Rights of Holder.
The
Issuer will, at the time of or at any time after each exercise of this Warrant,
upon the request of the Holder hereof, acknowledge in writing the extent, if
any, of its continuing obligation to afford to such Holder all rights to which
such Holder shall continue to be entitled after such exercise in accordance
with
the terms of this Warrant, provided
that if
any such Holder shall fail to make any such request, the failure shall not
affect the continuing obligation of the Issuer to afford such rights to such
Holder.
(f) Compliance
with Securities Laws.
(i) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
and
the shares of Warrant Stock, Series C Warrants and Series D Warrants to be
issued upon exercise hereof are being acquired solely for the Holder's own
account and not as a nominee for any other party, and for investment, and that
the Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Warrant Stock, Series C Warrants and Series D Warrants 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.
(ii) This
Warrant and all certificates representing shares of Warrant Stock, Series C
Warrants and Series D Warrants issued upon exercise hereof shall be stamped
or
imprinted with a legend in substantially the following form:
THIS
WARRANT AND THE SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK,
SERIES
C WARRANTS AND SERIES D WARRANTS 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.
-3-
(g) Accredited
Investor Status.
In no
event may the Holder exercise this Warrant in whole or in part unless the Holder
is an “accredited investor” as defined in Regulation D under the Securities Act.
3. Securities
Fully Paid; Reservation and Listing; Covenants.
(a) Securities
Fully Paid.
The
Issuer represents, warrants, covenants and agrees that all shares of Warrant
Stock,
Series
C Warrants and Series D Warrants
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 preferred stock to be designated as Series B Preferred Stock equal
to
at least one hundred (100%) percent of the number of shares of Series B
Preferred Stock issuable upon exercise of this Warrant.
(b) Reservation.
If any
shares of Series B Preferred Stock required to be reserved for issuance upon
exercise of this Warrant or as otherwise provided hereunder require registration
or qualification with any Governmental Authority under any federal or state
law
before such shares may be so issued, the Issuer will in good faith use its
best
efforts as expeditiously as possible at its expense to cause such shares to
be
duly registered or qualified.
(c) Covenants.
The
Issuer shall not by any action including, without limitation, amending the
Articles of Incorporation or the by-laws of the Issuer, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or
sale of securities or any other 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
actions as may be necessary or appropriate to protect the rights of the Holder
hereof. Without limiting the generality of the foregoing, the Issuer will (i)
not amend or modify any provision of the Articles of Incorporation or by-laws
of
the Issuer in any manner that would adversely affect the rights of the Holders
of the Warrants, (ii) take all such action as may be reasonably necessary in
order that the Issuer may validly and legally issue fully paid and nonassessable
shares of Series B Preferred Stock, free and clear of any liens, claims,
encumbrances and restrictions (other than as provided herein) upon the exercise
of this Warrant, and (iii) use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be reasonably necessary to enable the Issuer to
perform its obligations under this Warrant.
(d) 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 Series B
Preferred Stock, Series C Warrants and Series D Warrants.
-4-
(e) 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.
4. Definitions.
For the
purposes of this Warrant, the following terms have the following
meanings:
"Articles
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.
“Board"
shall
mean the Board of Directors of the Issuer.
"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.
"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.
"Issuer"
means
Jpak Group, 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.
"Original
Issue Date"
means
August 9, 2007.
"OTC
Bulletin Board"
means
the over-the-counter electronic bulletin board.
-5-
"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.
"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.
"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 Series J Warrants issued upon conversion of certain convertible notes
purchased by the initial Holders pursuant to that certain Note Purchase
Agreement, dated as of May 17, 2007, by and among Jpak Group Co., Ltd., Grand
International Industrial Limited and the initial Holders (the “Note
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 hereof.
"Warrant
Price"
means
$1.00.
"Warrant
Share Number"
means
at any time the aggregate number of shares of Warrant Stock, Series C Warrants
and Series D Warrants 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.
-6-
"Warrant
Stock"
means
the shares of Series B Preferred Stock issuable upon exercise of any Warrant
or
Warrants.
5. 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 6 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.
6. 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 agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 6 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 Note 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.
7. 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) upon hand
delivery by 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:
Jpak
Group, Inc.
c/o
Qingdao Renmin Printing Co., Ltd.
Xx.
00,
Xxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxx Xxxxxxxx
Postal
Code 266401
P.R.
China
Attention:
Xx. Xxxxx Xxxx
Tel.
No.:
(000) 0000 0000
Fax
No.:
(000) 0000 0000
-7-
with
copies (which copies
shall
not
constitute notice)
to: Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
Attention:
Xxxxxx X. Xxxxxxxx
Tel
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
If
to any
Holder: At
the
address of such Holder set forth in the Note Purchase Agreement.
with
copies (which copies
shall
not
constitute notice)
to: Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxxxxxx X. Xxxxxxx
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
Any
party
hereto may from time to time change its address for notices by giving written
notice of such changed address to the other party hereto.
8. Warrant
Agent.
The
Issuer may, by written notice to each Holder of this Warrant, appoint an agent
having an office in New York, New York for the purpose of issuing shares of
Warrant Stock, Series C Warrants and Series D Warrants on the exercise of this
Warrant pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant
pursuant to subsection (d) of Section 2 hereof or replacing this Warrant
pursuant to subsection (d) of Section 3 hereof, 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.
9. 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.
10. 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, Series C Warrants
and
Series D Warrants issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock, Series C Warrants and Series D
Warrants.
-8-
11. 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.
12. 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.
13. Demand
Registration Rights.
(a) The
Majority Holders may make a written request to the Issuer (a “Demand
Notice”)
for
registration under the Securities Ac (a “Demand
Registration”),
pursuant to this Section 13 of all of its shares of Common Stock issuable upon
conversion of the Warrant Stock issuable upon exercise of this Warrant and
the
shares of Common Stock issuable upon exercise of the Series C Warrants and
the
Series D Warrants issuable upon exercise of this Warrant (the “Registrable
Securities”);
provided,
however,
that
the Issuer shall not be obligated to effect more than one Demand Registration
pursuant to this Section 13 (which registration shall be made on Form SB-2,
or a
successor form thereto, if available for use by the Issuer); and provided,
further,
in
the
event the SEC does not permit the Issuer to register all of the Registrable
Securities in such initial registration statement, the Issuer shall use its
commercially reasonable efforts to file subsequent registration statements
to
register the Registrable Securities that were not registered in the initial
registration statement as promptly as possible and in a manner permitted by
the
SEC.
The
Issuer shall use its reasonable best efforts to file a registration statement
under the Securities Act providing for the resale of all of the Registrable
Securities within thirty (30) days following delivery of the Demand Notice
(the
“Filing
Date”)
and
have it declared effective within one hundred twenty (120) days following
delivery of the Demand Notice (the “Effectiveness
Date”).
The
Issuer agrees to use its reasonable best efforts to keep any such registration
statement continuously effective for resale of the Registrable Securities for
so
long as the Majority Holders shall request, but in no event shall the Issuer
be
required to maintain the effectiveness of such registration statement later
than
the date that the Registrable Securities may be offered for resale to the public
pursuant to Rule 144(k) (the “Effectiveness
Period”).
(b) The
Majority
Holders may, at any time prior to the effective date of the registration
statement relating to such registration, revoke such request by providing a
written notice to the Issuer revoking such request. If the Majority Holders
shall revoke any demand for registration or such Demand Registration otherwise
fails to become effective as a result of any action or inaction by such Majority
Holders, the Majority Holders shall either pay all out-of-pocket registration
expenses with respect to such revoked demand or count such revoked demand as
one
completed demand for registration pursuant to this Section 13, subject to the
provisions of Section 13(a) above.
-9-
(c) A
Demand
Registration requested pursuant to this Section 13 will not be deemed to have
been effected unless the registration statement relating thereto has become
effective under the Securities Act and remained effective for a period of ninety
(90) days following the effective date of such registration
statement.
(d) The
Issuer and the Holder agree that the Holder will suffer damages if the
registration statement is not filed on or prior to the Filing Date and not
declared effective by the SEC on or prior to the Effectiveness Date. The Issuer
and the Holder further agree that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, if (A) the registration
statement is not filed on or prior to the Filing Date, or (B) the registration
statement is not declared effective by the SEC on or prior to the Effectiveness
Date, or (C) the registration statement is filed with and declared effective
by
the SEC but thereafter ceases to be effective at any time prior to the
expiration of the Effectiveness Period, without being succeeded by a subsequent
registration statement filed with and declared effective by the SEC, or (D)
following the date that the shares of Common Stock initially commence trading
or
quotation, trading in the Common Stock shall be suspended or if the Common
Stock
is no longer quoted on or delisted from the principal exchange on which the
Common Stock is then traded for any reason for more than five (5) Business
Days
in the aggregate (any such failure or breach being referred to as an
"Event,"
and
for purposes of clauses (A) and (B) the date on which such Event occurs, or
for
purposes of clause (C) after more than thirty (30) days, or for purposes of
clause (D) the date on which such five (5) business day period is exceeded,
being referred to as "Event
Date"),
the
Issuer shall pay an amount as liquidated damages to the Holder, payable in
cash,
equal to two percent (2.0%) of the aggregate Warrant Price paid pursuant to
the
exercise of this Warrant for each calendar month or portion thereof thereafter
from the Event Date until the applicable Event is cured; provided,
however,
that in
no event shall the amount of liquidated damages payable at any time and from
time to time to any Holder pursuant to this Section 13(d) exceed an aggregate
of
ten percent (10%) of the aggregate Warrant Price paid pursuant to the exercise
of this Warrant. The Issuer shall not be liable for liquidated damages as to
any
Registrable Securities which are not permitted by the SEC to be included in
a
registration statement because of its application of Rule 415. In such case,
the
liquidated damages shall be calculated to only apply to the percentage of
Registrable Securities which are permitted by the SEC to be included in the
registration statement. Liquidated damages payable by the Issuer pursuant to
this Section 13(d) shall be payable on the first (1st)
business day of each thirty (30) day period following the Event Date.
Notwithstanding anything to the contrary contained herein, in no event shall
any
liquidated damages be payable with respect to the Series C Warrants and Series
D
Warrants or the shares of Common Stock issuable upon exercise of the Series
C
Warrants and Series D Warrants.
(e) The
Issuer and the Holder agree that, with respect to the demand registration rights
contained in this Section 13, each party shall be entitled to all of the
applicable rights and benefits, and subject to all of the applicable
obligations, as set forth in the Registration Rights Agreement dated as of
August 9, 2007 by and among the Issuer and the purchasers named
therein.
(f) The
rights contained in this Section 13 shall survive the expiration or termination
of this Warrant.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-10-
IN
WITNESS WHEREOF, the Issuer has executed this Series J Warrant as of the day
and
year first above written.
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JPAK
GROUP, INC.
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By:
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Name:
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Title:
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-11-
EXERCISE
FORM
SERIES
J
WARRANT
JPAK
GROUP, INC.
The
undersigned _______________, pursuant to the provisions of the within Warrant,
hereby elects to purchase (i) _____ shares of Series B Preferred Stock, (ii)
_____ Series C Warrants and (iii) ______ Series D Warrants of Jpak Group, Inc.
covered by the within Warrant.
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Dated:
_________________
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Signature
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___________________________
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Address
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_____________________
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_____________________
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The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.
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
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___________________________
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Address
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_____________________
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_____________________
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PARTIAL
ASSIGNMENT
FOR
VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase (i) _____ shares of Series B Preferred
Stock, (ii) _____ Series C Warrants and (iii) ______ Series D Warrants 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.
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Dated:
_________________
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Signature
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___________________________
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Address
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_____________________
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_____________________
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-12-
FOR
USE
BY THE ISSUER ONLY:
This
Warrant No. W-___ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Warrant Stock, Series C Warrants and Series D
Warrants issued therefor in the name of _______________, Warrant No. W-_____
issued for (i) _____ shares of Series B Preferred Stock, (ii) _____ Series
C
Warrants and (iii) ______ Series D Warrants in the name of
_______________.
-13-
EXHIBIT
A
Certificate
of Designation of the Series B Convertible Preferred Stock
-14-
EXHIBIT
B
Form
of Series C Warrant
-15-
EXHIBIT
C
Form
of Series D Warrant
-16-
