Contract
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.
FREEDOM
FINANCIAL HOLDINGS, INC.
WARRANT
Warrant
No. [ ] Original
Issue Date: [*] ,
2007
Freedom
Financial Holdings, Inc., a Maryland corporation (the
"Company"), hereby certifies that, as partial compensation for
placement agent services, Alaron Financial Services Inc. or its registered
assigns (the "Holder"), is entitled to purchase from the
Company up to a total of [•] shares of Common Stock (each such
share, a "Warrant Share" and all such shares, the
"Warrant Shares"), at any time and from time to time from
and
after one (1) year from the effective date of the Registration Statement
(defined below) and through and including 5 years from the effective date of
the
Registration Statement (the "Expiration Date"), 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 that is a federal legal holiday
in
the United States or a day on which banking institutions in the State of
Illinois are authorized or required by law or other government action to
close.
"Common
Stock"
means
the common stock of the Company, $.001 par value per share, and any securities
into which such common stock may hereafter be reclassified.
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"Exercise
Price" means
$2.50, subject to adjustment in accordance with Section 10.
"Fundamental
Transaction"
means
any of the following: (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.
“Illinois
Courts”
means
the state and federal courts sitting in the City of Chicago,
Illinois.
“Original
Issue Date”
means
the Original Issue Date first set forth on the first page of this
Warrant.
"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.
“Registration
Expenses” means
all
registration filing fees, reasonable professional fees and other reasonable
expenses of the Company’s compliance with federal, state and other securities
laws (including fees and disbursements of counsel for the underwriters in
connection with state or other securities law qualifications and registrations),
printing expenses, messenger, telephone and delivery expenses; reasonable fees
and disbursements of counsel for the Company and reasonable fees and
disbursements for counsel for the Holder or any such holders of the Securities
(as defined in section 4(a)(i)).
“Registration
Statement”
means
the Registration Statement on Form SB-2 initially filed with the Commission
on
February 8, 2007, including any and all amendments thereto.
"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
Act"
means
the Securities Act of 1933, as amended.
"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 National Market, the NASDAQ SmallCap Market or OTC Bulletin Board on
which the Common Stock is listed or quoted for trading on the date in
question.
"Warrant
Shares" means
the
shares of Common Stock issuable upon exercise of this Warrant.
2. Registration
of Warrant.
The
Company shall register this Warrant upon records to be maintained by the Company
for that purpose (the "Warrant
Register"),
in the
name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for
the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
3. Registration
of Transfers.
The
Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto 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.
4. Registration
Rights.
(a)
For
a
period not exceeding seven (7) years from the date of commencement of sales
in
the Company’s initial public offering of securities registered pursuant to the
Securities Act, to the extent the Warrant Shares have not already been
registered in the Registration Statement and continue to be salable, whenever
the Company proposes to register any of its securities under the Securities
Act,
whether
for its own account or for the account of another stockholder (except for the
registration of securities to be offered pursuant to an employee benefit plan
on
Form S-8, pursuant to a registration made on Form S-4 or any successor forms
then in effect) at any time, and the registration form to be used may be used
for the registration of the Securities (a “Piggyback
Registration”),
it
will so notify in writing the Holder and any such holders of the Securities
no
later than forty-five (45) days prior to the anticipated filing date. The
Company will include in the Piggyback Registration all Securities with respect
to which the Company has received written requests for inclusion within fifteen
(15) business days after the applicable holder’s receipt of the Company’s
notice. The Holder or any such holders of the Securities may withdraw all or
any
part of the Securities from a Piggyback Registration at any time before ten
(10)
business days prior to the effective date of the Piggyback Registration. In
any
Piggyback Registration, the Company, the Holder or any such holders of the
Securities and any Person who hereafter becomes entitled to register its
securities in a registration initiated by the Company must sell their securities
on the same terms and conditions. The Company shall pay or reimburse to the
Holder or any such holders of the Securities included in a Piggyback
Registration all Registration Expenses of those holders in connection with
any
Piggyback Registration.
(b)
In
respect of the Registration Statement, or in the event of a registration
pursuant to the provisions of this Section 4, the Company shall use its best
efforts to cause the Warrant Shares so registered to be registered or qualified
for sale under the securities or blue sky laws of such jurisdictions as the
Holder or such holders may reasonably request; provided, however, that the
Company shall not be required to qualify to do business in any state by reason
of this Section 4(b) in which it is not otherwise required to qualify to do
business and provided further, that the Company has no obligation to qualify
the
Warrant Shares where such qualification would cause any unreasonable delay
or
expenditure by the Company.
(c)
The
Company shall keep effective the Registration Statement and any registration
or
qualification contemplated by this Section 4, and shall from time to time amend
or supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document and communication for such period of
time as shall be required to permit the Holder or such holders to complete
the
offer and sale of the Warrant Shares covered thereby.
(d)
In
the event of a registration pursuant to the provisions of this Section 4, the
Company shall furnish to the Holder and to each such holder such reasonable
number of copies of the registration statement and of each amendment and
supplement thereto (in each case, including all exhibits), such reasonable
number of copies of each prospectus contained in such registration statement
and
each supplement or amendment thereto (including each preliminary prospectus),
all of which shall conform to the requirements of the Securities Act and the
rules and regulations thereunder, and such other documents as the Holder or
such
holders may reasonably request in order to facilitate the disposition of the
Warrant Shares included in such registration.
(e)
In
the event of a registration pursuant to the provisions of this Section 4, the
Company shall furnish the Holder and each holder of any Warrant Shares so
registered with an opinion of its counsel to the effect that (i) the
registration statement has become effective under the Securities Act and no
order suspending the effectiveness of the registration statement preventing
or
suspending the use of the registration statement, preventing or suspending
the
use of the registration statement, any preliminary prospectus, any final
prospectus, or any amendment or supplement thereto has been issued, nor to
such
counsel’s actual knowledge has the Securities and Exchange Commission or any
securities or blue sky authority of any jurisdiction instituted or threatened
to
institute any proceedings with respect to such an order and (ii) the
registration statement and each prospectus forming a part thereof (including
each preliminary prospectus), and any amendment or supplement thereto, complies
as to form with the Act and the rules and regulations thereunder. Such counsel
shall also provide a Blue Sky Memorandum setting forth the jurisdictions in
which the Warrant Shares have been registered or qualified for
sale.
(f)
The
Company agrees that until all the Warrant Shares have been sold under a
registration statement or pursuant to Rule 144 under the Securities Act, it
shall keep current in filing all reports, statements and other materials
required to be filed with the Commission to permit holders of the Warrant Shares
to sell such securities under Rule 144.
(g)
The
Holder and any holders who propose to register their Warrant Shares under the
Securities Act shall execute and deliver to the Company a selling stockholder
questionnaire on a form to be provided by the Company.
(h)
The
Company shall not be required by the terms hereof to file a registration
statement if, in the opinion of counsel to the holders of the Warrant and
Warrant Shares and counsel for the Company (or, should they not agree, in the
opinion of another counsel experienced in securities law matters acceptable
to
counsel for the holders of the Warrants and Warrant Shares and the Company),
the
proposed public offering or other transfer as to which such registration
statement is requested to be filed is exempt from applicable federal and state
securities laws, rules, regulations and would result in unaffiliated purchasers
or transferees obtaining securities that are not restricted securities as that
term is defined in Rule 144 under the Securities Act.
5. Transfer,
Exercise and Duration of Warrants.
(a) This
Warrant may not be sold during the offering, or sold, transferred, assigned,
pledged, or hypothecated, or be the subject of any hedging, short sale,
derivative, put, or call transaction that would result in the effective economic
disposition of the securities by any person for a period of 180 days immediately
following the date of effectiveness or commencement of sales of the public
offering, except as provided in Section 2710(g)(2) of the NASD Rules of Fair
Practice.
(b) This
Warrant shall be exercisable by the registered Holder at any time and from
time
to time on or after one year from the effective date of the Registration
Statement through and including the Expiration Date. At 6:30 p.m., Eastern
Standard 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.
6. Delivery
of Warrant Shares.
(a) To
effect
exercises hereunder, the Holder shall not be required to physically surrender
this Warrant unless the aggregate Warrant Shares represented by this Warrant
is
being exercised. Upon delivery of the Exercise Notice (in the form attached
hereto) to the Company (with the attached Warrant Shares Exercise Log) at its
address for notice set forth herein and upon payment of the Exercise Price
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"
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) 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
6(a), then the Holder will have the right to rescind such exercise.
(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.
7. 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.
8. 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.
9. Reservation
of Warrant Shares.
The
Company covenants that it will at all times reserve and keep available out
of
the aggregate of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares 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
10). 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.
10. 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
10.
(a) Stock
Dividends and Splits.
If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class
of
capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction
of
which the numerator shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be the number
of shares of Common Stock 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.
(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 Common
Stock 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 Common Stock 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, either (1) 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,
or (2) purchase the Warrant from the Holder for a purchase price, payable
in
cash within five Trading Days after such request (or, if later, on the effective
date of the Fundamental Transaction), equal to the Black Scholes value of
the
remaining unexercised portion of this Warrant on the date of such request.
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) Number
of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant to this
Section 10, 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.
(d) Calculations.
All
calculations under this Section 10 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 10, 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.
If the
Company (i) declares a dividend or any other distribution of cash, securities
or
other property in respect of its Common Stock, including without limitation
any
granting of rights or warrants to subscribe for or purchase any capital stock
of
the Company, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of
the
affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction (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.
11. Payment
of Exercise Price.
The
Holder shall pay the Exercise Price by delivery of the immediately available
funds.
12. 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 9.999% 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
10
of this Warrant. This restriction may not be waived.
13. 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.
14. Notices.
Any and
all notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice
or
communication is delivered via facsimile at the facsimile number specified
in
this Section prior to 6:30 p.m., (Eastern Standard Time, on a Trading Day),
(ii)
the next Trading 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 Trading Day or later than 6:30 p.m., Eastern
Standard Time, on any Trading Day, (iii) the Trading 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, 0000
Xxxxxxxxxxx Xxx, Xxxxx X, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxxxxx,
and to Xxxxxxxxx Law Group PC at 00000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxxxxxx 00000 (or such other address as the Company shall indicate
in
writing in accordance with this Section), or (ii) if to the Holder, to the
addresses appearing on the Warrant Register or such other address as the Holder
may provide to the Company in accordance with this Section.
15. 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.
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.
(b) All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of Illinois, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the Illinois Courts. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the Illinois
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any Illinois Court, or
that
such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant
and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any
way
any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Warrant or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(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 by being
a
Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.
(f) This
Warrant (together with the other agreements and documents being delivered
pursuant to or in connection with this Warrant) constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof, and supersedes
all prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
(g) The
failure of the Company or the Holder to at any time enforce any of the
provisions of this Warrant shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way affect the validity of this Warrant or
any
provision hereof or the right of the Company or any Holder to thereafter enforce
each and every provision of this Warrant. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Warrant
shall
be effective unless set forth in a written instrument executed by the party
or
parties against whom or which enforcement of such waiver is sought; and no
waiver of any such breach, non-compliance or non-fulfillment shall be construed
or deemed to be a waiver of any other or subsequent breach, non-compliance
or
non-fulfillment.
[REMAINDER
OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its
authorized officer as of the date first indicated above.
| FREEDOM FINANCIAL HOLDINGS, INC. | ||
| |
|
|
| Date: | By: | |
|
|
||
| Title | ||
EXERCISE
NOTICE
FREEDOM
FINANCIAL HOLDINGS, INC.
WARRANT
DATED FEBRUARY __, 2007
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 shall pay the sum of $____________ to the Company in accordance
with the terms of the Warrant.
|
|
(3)
|
Pursuant
to this Exercise Notice, the Company shall deliver to the holder
_______________ Warrant Shares in accordance with the terms of the
Warrant.
|
|
(4)
|
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)
|
Warrant
Shares Exercise Log
|
Date
|
Number
of Warrant Shares Available to be Exercised
|
Number
of Warrant Shares Exercised
|
Number
of Warrant Shares Remaining to be Exercised
|
freedom
financial holdings, Inc.
WARRANT
DATED February __, 2007
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:
__________________________
