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WARRANT TO PURCHASE UP TO 1,000,000 SHARES OF COMMON STOCK
OF
xXXXXXXXXXX.XXX, INC.
Void after 5:00 p.m., New York Time on June 30, 2011
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THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"),
AND ARE BEING OFFERED AND SOLD PURSUANT
TO RULE 506 OF REGULATION D
FOR VALUE RECEIVED, xXxxxxxxxxx.xxx, Inc., a Nevada
corporation (the "Company"), grants the following rights to Xxxxxxxxxxx Xxxxx,
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000, and/or his assigns ("Holder"):
ARTICLE 1. DEFINITIONS.
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As used herein, the following terms shall have the following meanings, unless
the context shall otherwise require:
(a) "Common Stock" shall mean the common stock, par value $0.001 per share,
of the Company.
(b) "Corporate Office" shall mean the office of the Company (or its
successor) at which its principal business shall be administered.
(c) "Closing" shall mean the date the Company receives funds from the
related Convertible Debenture.
(d) "Exercise Date" shall mean any date upon which the Holder shall give
the Company a Notice of Exercise.
(e) "Exercise Price" shall mean the price to be paid to the Company for
each share of Common Stock to be purchased upon exercise of this Warrant in
accordance with the terms hereof which, Exercise Price shall be $3.00 per share.
(f) "Expiration Date" shall mean 5:00 p.m. (New York time) on June 30,
2011.
(g) "SEC" shall mean the United States Securities and Exchange Commission.
(h) ""Underlying Shares" shall mean the shares of the Common Stock issuable
upon exercise of the Warrant.
ARTICLE 2. EXERCISE AND AGREEMENTS.
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2.1 Exercise of Warrant. This Warrant shall entitle Holder to purchase up
to One Million (1,000,000) shares of Common Stock (the "Shares") at the Exercise
Price. This Warrant shall be exercisable at any time and from time to time prior
to the Expiration Date (the "Exercise Period"). This Warrant and the right to
purchase Shares hereunder shall expire and become void at the Expiration Date.
2.2 Manner of Exercise.
(a) Holder may exercise this Warrant at any time, starting at the time of
closing and from time to time during the Exercise Period, in whole or in part
(but not in denominations of fewer than 1,000 Shares, except upon an exercise of
this Warrant with respect to the remaining balance of Shares purchasable
hereunder at the time of exercise), by delivering to the Company: (i) a duly
executed Notice of Exercise in substantially the form attached as Appendix 1
hereto, and (ii) a bank cashier's or certified check payable to the Company for
the aggregate Exercise Price of the Shares being purchased.
(b) From time to time upon exercise of this Warrant, in whole or part, in
accordance with its terms, the Company will instruct its transfer agent to
deliver stock certificates to the Holder representing the number of Shares being
purchased pursuant to such Notice of Exercise, subject to adjustment as
described herein.
(c) Promptly following any exercise of this Warrant, if the Warrant has not
been fully exercised and has not expired, the Company will deliver to the Holder
a new Warrant for the balance of the Shares covered hereby.
2.3 Termination. All rights of the Holder in this Warrant, to the extent
they have not been exercised, shall terminate on the Expiration Date.
2.4 No Rights Prior to Exercise. Prior to its exercise pursuant to Section
2.2 above, this Warrant shall not entitle the Holder to any voting or other
rights as holder of Shares.
2.5 Adjustments. In case of any reclassification, capital reorganization,
stock dividend or other change of outstanding shares of Common Stock, or in case
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of any consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification, capital
reorganization, stock dividend or other change of outstanding shares or Common
Stock), or in case of any sale or conveyance to another corporation of the
property of the Company as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction), the Company shall
cause effective provision to be made so that the Holder shall have the right
thereafter, by exercising this Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash) receivable upon
such reclassification, capital reorganization, stock dividend or other change,
consolidation, merger, sale or conveyance as the Holder would have been entitled
to receive had the Holder exercised this Warrant in full immediately before such
reclassification, capital reorganization, stock dividend or other change,
consolidation, merger, sale or conveyance. Any such provision shall include
provision for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2.5. The foregoing
provisions shall similarly apply to successive reclassifications, capital
reorganizations, stock dividends and other changes of outstanding shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.
2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise
of this Warrant and the number of Shares to be issued shall be rounded up to the
nearest whole Share. If a fractional Share interest arises upon any exercise of
the Warrant, the Company shall eliminate such fractional Share interest by
issuing Holder an additional full Share.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
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3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(a) All Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, be duly authorized, validly
issued, fully-paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws, and not subject to any pre-emptive rights.
(b) The Company is a corporation duly organized and validly existing under
the laws of the State of Nevada, and has the full power and authority to issue
this Warrant and to comply with the terms hereof. The execution, delivery and
performance by the Company of its obligations under this Warrant, including,
without limitation, the issuance of the Shares upon any exercise of the Warrant
have been duly authorized by all necessary corporate action. This Warrant has
been duly executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or similar laws affecting enforceability of creditors' rights generally and
except as the availability of the remedy of specific enforcement, injunctive
relief or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
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(c) The Company is not subject to or bound by any provision of any
certificate or articles of incorporation or by-laws, mortgage, deed of trust,
lease, note, bond, indenture, other instrument or agreement, license, permit,
trust, custodianship, other restriction or any applicable provision of any law,
statute, rule, regulation, judgment, order, writ, injunction or decree of any
court, governmental body, administrative agency or arbitrator which could
prevent or be violated by or under which there would be a default (or right of
termination) as a result of the execution, delivery and performance by the
Company of this Warrant.
(d) The Company is subject to the reporting requirements of Section 13 or
Section 15d of the Securities Exchange Act of 1934, as amended. The Company is
eligible to issue the Warrants and the Underlying Shares pursuant to Rule 506 of
Regulation D promulgated under the Securities Act.
ARTICLE 4. PIGGY BACK REGISTRATION
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If the Company files a registration statement on Form S-1, Form SB-2 or
Form S-3, or such other form of registration statement in which the underlying
shares may be included, then the Company will include in such registration
statement the underlying shares issuable upon conversion of any then outstanding
Debentures so as to permit the public resale thereof. All costs and expenses of
registration shall be borne by the Company. These covenants exclude the Form
SB-2 underwritten by Xxxxx & Company, Inc.
ARTICLE 5. MISCELLANEOUS.
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5.1 Transfer. This Warrant may not be transferred or assigned, in whole or
in part, at any time, except in compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without
limitation, the delivery of an investment representation letter and a legal
opinion reasonably satisfactory to the Company), provided that this Warrant may
not be transferred or assigned such that either the Holder or any transferee
will, following such transfer or assignment, hold a Warrant for the right to
purchase fewer than 1,000 Shares.
5.2 Transfer Procedure. Subject to the provisions of Section 5.1, Holder
may transfer or assign this Warrant by giving the Company notice setting forth
the name, address and taxpayer identification number of the transferee or
assignee, if applicable (the "Transferee") and surrendering this Warrant to the
Company for reissuance to the Transferee (and the Holder, in the event of a
transfer or assignment of this Warrant in part). (Each of the persons or
entities in whose name any such new Warrant shall be issued are herein referred
to as a Holder").
5.3 Loss, Theft, Destruction or Mutilation. If this Warrant shall become
mutilated or defaced or be destroyed, lost or stolen, the Company shall execute
and deliver a new Warrant in exchange for and upon surrender and cancellation of
such mutilated or defaced Warrant or, in lieu of and in substitution for such
Warrant so destroyed, lost or stolen, upon the Holder filing with the Company
evidence satisfactory to it that such Warrant has been so mutilated, defaced,
destroyed, lost or stolen. However, the Company shall be entitled, as a
condition to the execution and delivery of such new Warrant, to demand indemnity
satisfactory to it and payment of the expenses and charges incurred in
connection with the delivery of such new Warrant. Any Warrant so surrendered to
the Company shall be canceled.
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5.4 Notices. All notices and other communications from the Company to the
Holder or vice versa shall be deemed delivered and effective when given
personally, by facsimile transmission and confirmed in writing or mailed by
first-class registered or certified mail, postage prepaid at such address and/or
facsimile number as may have been furnished to the Company or the Holder, as the
case may be, in writing by the Company or the Holder from time to time.
5.5 Waiver. This Warrant and any term hereof may be changed, waived, or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
5.6 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
principles regarding conflicts of law.
Dated: xXXXXXXXXXX.XXX, INC.
Attest: ____________________ By:
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Name: Xxxx Xxxxxx
Title: President
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APPENDIX 1
NOTICE OF EXERCISE
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1. The undersigned hereby elects to purchase __________ shares of the
Common Stock of xXxxxxxxxxx.xxx, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as are specified below:
3. The undersigned represents it is acquiring the shares solely for its own
account and not with a view toward the resale or distribution thereof except in
compliance with applicable securities laws.
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(Signature)
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(Date)
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