THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THUS, NOTWITHSTANDING ANY OTHER PROVISIONS CONTAINED HEREIN, NO TRANSFER, HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT IN...
THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR
ANY APPLICABLE STATE SECURITIES LAWS. THUS, NOTWITHSTANDING ANY OTHER PROVISIONS
CONTAINED HEREIN, NO TRANSFER, HYPOTHECATION OR OTHER DISPOSITION OF THIS
WARRANT IN FAVOR OF ANY PERSON OTHER THAN THE HOLDER HEREOF SHALL BE VALID
OR
EFFECTIVE UNLESS AN OPINION OF COUNSEL, SATISFACTORY IN FORM AND SUBSTANCE
TO
THE CORPORATION, IS OBTAINED TO THE EFFECT THAT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
FURTHER, SUCH TRANSFER IS SUBJECT TO THE CONDITIONS SPECIFIED IN SECTION 3
HEREOF.
Number:
_________
WARRANT
Date:
______________ Shares: 300,000
VALUERICH,
INC.
Incorporated
Under the Laws of the State of Delaware
THIS
CERTIFIES THAT, for
value
received, Lane Capital Markets, LLC (whose address is 000 Xxxxxx Xxxxx Xxxx,
Xxxxxxxxx, XX 00000 and whose fax number is (000) 000-0000 or its assigns
is
entitled to subscribe for and purchase, during the Subscription Period as
defined below in this Warrant, Three Hundred Thousand (300,000) fully paid
and
non-assessable shares (subject to adjustment as hereinafter provided) of
the
common stock, par value $0.01 per share (the "Common
Stock"),
of
ValueRich, Inc., a Delaware corporation (the "Corporation"),
at a
per share price equal to $5.60 (160% of the initial offering price of the
Company’s Common Stock pursuant to a Registration Statement on Form SB-2 (File
No.: 333-13551) (the “Registration
Statement”)
declared effective by the Securities and Exchange Commission (the “SEC”)
under
the Securities Act of 1933, as amended (the “Securities
Act”))
(the
"Warrant
Price");
subject,
however,
to the
provisions and upon the terms, conditions and adjustments hereinafter set
forth.
1.
Exercise
Period and Duration.
The
right to exercise this Warrant and subscribe for and purchase shares of Common
Stock represented hereby ("Warrant
Shares")
shall
be five years, commencing on _______ ___, 2007 (the first anniversary date
of
the date that the SEC declares the Registration Statement effective under the
Securities Act (the “Effective
Date”)
and
expiring at 5:00 P.M., New York time, on _______ ___, 2012 (the sixth
anniversary date of the Effective Date) (the "Expiration
Date").
The
period between the date hereof and the Expiration Date shall be the
“Subscription
Period.”
2.
Method
of Exercise; Payment; Issuance of New Warrant.
The
holder hereof may exercise this Warrant, in whole or in part, by the surrender
of this Warrant (with the subscription form attached hereto duly executed)
at
the principal office of the Corporation, and by the payment to the Corporation
of the then applicable Warrant Price for the shares being purchased upon such
exercise at any time during the Subscription Period.
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This
Warrant is not redeemable or otherwise callable by the Corporation at any time
during the Subscription Period.
Payment
of the Warrant Price may be made at the option of the holder by: (i) certified
check or bank check payable to the order of the Company, (ii) wire transfer
to
the account of the Corporation or (iii) a “cashless exercise”, meaning the surrender and cancellation of a
portion of shares of Common Stock then held by the Holder or issuable upon
such
exercise of this Warrant, which shall be valued and credited toward the total
Warrant Price due the Corporation for the exercise of the Warrant based upon
the
Current Market Price (as defined below) of the Common Stock. All shares of
Common Stock issuable upon the exercise of this Warrant pursuant to the terms
hereof shall be validly issued and, upon payment of the Warrant Price, shall
be
fully paid and nonassessable and not subject to any preemptive
rights.
In
the
event of any exercise of this Warrant, the Corporation shall deliver to the
holder hereof, (i) stock certificates for the shares of Common Stock so
purchased, and (ii) a new Warrant representing the number of shares, if any,
with respect to which this Warrant shall not then have been exercised effective
for the duration of the Subscription Period and through the Expiration Date.
Stock certificates for the shares of Common Stock so purchased shall be dated,
and the holder hereof shall be deemed for all purposes to be the holder of
the
shares of Common Stock so purchased as of, the date of such exercise. Such
stock
certificates and new Warrant (as applicable) shall be delivered to the holder
hereof within a reasonable time, not exceeding ten business days, after the
rights represented by this Warrant shall have been so exercised. Each stock
certificate so delivered shall be in such denominations as may be requested
by
the holder hereof and shall be registered in the name of said holder or such
other name (upon compliance with the transfer requirements hereinafter set
forth) as shall be designated by said holder. The Corporation shall pay any
taxes and other expenses and charges payable in connection with the preparation,
execution and delivery of stock certificates and new Warrants except that,
in
case such stock certificates shall be registered in a name or names other than
the holder of this Warrant, funds sufficient to pay all stock transfer taxes
which shall be payable in connection with the execution and delivery of such
stock certificates shall be paid by the holder hereof to the Corporation at
the
time of the delivery of such stock certificates by the Corporation as mentioned
above.
3.
Transferability.
This
Warrant may not be sold, transferred, assigned or hypothecated before the
one
year anniversary date of the Effective Date, except to officers or partners
of
the Lane Capital Markets, LLC and members of the selling group participating
in
the Company’s initial public offering and/or their officers or partners.
This
Warrant may be transferred, in whole or in part, commencing on the first
anniversary date of the Effective Date, on the books of the Corporation by
the
holder hereof in person or by duly authorized attorney, upon surrender of
the
Warrant at the principal office of the Corporation, properly endorsed 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
Corporation for (i) Warrants for the purchase of the same aggregate number
of
shares of Common Stock, each new Warrant to represent the right to purchase
such
number of shares of Common Stock as the holder hereof shall designate at
the
time of such exchange, or (ii) the same number of Warrant Shares, as
appropriate. All Warrants issued on transfers or exchanges shall be dated
the
date hereof and shall be identical with this Warrant except as to the number
of
shares of Common Stock issuable pursuant hereto.
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4.
Certain
Adjustments. The
following adjustments shall take effect to the extent that such adjustments
do
not result in a Warrant Price lower than the then applicable par value of the
Common Stock:
(a) Adjustment
for Stock Splits and Combinations.
If the
Corporation at any time or from time to time after the date hereof effects
a
subdivision of its outstanding shares of Common Stock, the Warrant Price then
in
effect immediately before the subdivision shall be proportionately decreased,
and conversely, if the Corporation at any time or from time to time after the
date hereof combines the outstanding shares of Common Stock into a smaller
number of shares, the Warrant Price then in effect immediately before the
combination shall be proportionately increased. Any adjustment under this
subsection 4(a) shall become effective at the close of business on the date
the
subdivision or combination becomes effective.
(b) Adjustment
for Certain Dividends and Distributions.
If the
Corporation at any time or from time to time after the date hereof makes or
issues, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Warrant Price then
in
effect shall be decreased as of the time of such issuance or, in the event
such
record date is fixed, as of the close of business on such record date, by
multiplying the Warrant Price then in effect by a fraction (i) the numerator
of
which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on
such
record date, and (ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time
of
such issuance or the close of business on such record date plus the number
of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date is fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor,
the Warrant Price shall be recomputed accordingly as of the close of business
on
such record date and thereafter the Warrant Price shall be adjusted pursuant
to
this subsection 4(b) as of the time of actual payment of such dividends or
distributions.
(c) Adjustments
for Other Dividends and Distributions.
In the
event the Corporation at any time or from time to time after the date hereof
makes or issues, or fixes a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable
in
securities of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holder of this Warrant
shall
receive, in addition to the number of shares of Warrant Shares receivable
thereupon, the amount of securities of the Corporation which such holder would
have received had this Warrant been exercised for shares of Warrant Shares
on
the date of such event and had such holder thereafter, during the period from
the date of such event to and including the exercise date, retained such
securities receivable by such holder as aforesaid during such period, subject
to
all other adjustments called for during such period under this Section 4 with
respect to the rights of the holder of this Warrant.
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11
(d) Adjustment
for Reclassification, Exchange and Substitution.
In the
event that at any time or from time to time after the date hereof, the Common
Stock issuable upon the exercise of this Warrant is changed into the same or
a
different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets, provided for elsewhere in this Section 4),
then
and in any such event the holder of this Warrant shall have the right thereafter
to exercise this Warrant for the kind and amount of stock and other securities
and property receivable upon such recapitalization, reclassification or other
change, by holders of the maximum number of shares of Common Stock into which
this Warrant could have been exercised immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein.
(e) Reorganizations,
Mergers, Consolidations or Sales of Assets.
If at
any time or from time to time after the date hereof there is a capital
reorganization of the Common Stock (other than a recapitalization, subdivision,
combination, reclassification or exchange of shares provided for elsewhere
in
this Section 4) or a merger or consolidation of the Corporation with or into
another corporation, or the sale of all or substantially all of the
Corporation's properties and assets to any other person or entity, then, as
a
part of such reorganization, merger, consolidation or sale, provision shall
be
made so that the holder of this Warrant shall thereafter be entitled to receive
upon exercise of this Warrant the number of shares of stock or other securities
or property of the Corporation, or of the successor corporation resulting from
such merger or consolidation or sale, for which a holder of the number of shares
of Common Stock deliverable upon exercise would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 4 with respect to the rights of the holder of this Warrant after
the reorganization, merger, consolidation or sale to the end that the provisions
of this Section 4 (including adjustment of the Warrant Price then in effect
and
the number of shares purchasable upon exercise of this Warrant) shall be
applicable after that event and be as nearly equivalent as may be
practicable.
5. Procedural
Items.
(a) Record
Date.
In the
event of (i) the Corporation setting a record date for the purpose of any
dividend or other distribution, or (ii) any capital reorganization of the
Corporation, any reclassification or recapitalization of the capital stock
of
the Corporation, any merger or consolidation of the Corporation with or into
any
other corporation, or any transfer of all or substantially all of the assets
of
the Corporation to any other person or entity or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation
shall
mail to the holder hereof at least ten (10) days prior to the record date
specified therein, a notice specifying (1) the record date for purposes of
such
dividend or distribution and a description of such dividend or distribution,
(2)
the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective, and (3) the date, if any, that is to be fixed, as to when
the
holders of record of Common Stock shall be entitled to exchange their shares
of
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up.
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(b) Fractional
Shares.
No
fractional shares of Common Stock shall be issued upon exercise of this Warrant.
In lieu of any fractional share to which the holder would otherwise be entitled,
the Corporation shall pay cash equal to the product of such fraction multiplied
by the fair market value of one share of Common Stock on the date of exercise,
as reasonably determined in good faith by the Board.
(c) Reservation
of Shares.
The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
exercise of this Warrant into the Common Stock issuable hereunder, such number
of its shares of Common Stock as shall be sufficient to effect the full exercise
of this Warrant; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the full exercise of this
Warrant, the Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares
of
Common Stock to such number of shares as shall be sufficient for such
purposes.
6.
No
Dilution or Impairment.
The
Corporation will not, by amendment of its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary 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 in
order to protect the rights of the holders of this Warrant against dilution
or
impairment. Without limiting the generality of the foregoing, the Corporation
(a) will not increase the par value of the shares of Common Stock above the
amount payable therefor on such exercise, (b) will take all such action as
may
be necessary or appropriate in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common Stock on the
exercise of this Warrant and (c) will not transfer all or substantially all
of
its properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Corporation (if the Corporation is not the
surviving person), unless such other person shall expressly assume in writing
and become bound by all the terms of this Warrant.
7.
Shares
to be Fully Paid; Reservation of Shares.
The
Corporation covenants and agrees that all Common Stock issued upon exercise
of
this Warrant will, upon issuance, be fully paid and nonassessable and free
from
preemptive rights and all taxes, liens and charges with respect to the issuance
thereof. Furthermore, and without limiting the generality of the foregoing,
the
Corporation covenants and agrees that it will from time to time take all such
action as may be required to assure that the par value per share of Common
Stock
is at all times equal to or less than the effective Warrant Price.
8.
Notices.
All
notices and other communications hereunder shall be in writing or by telex,
telegram or telecopy, and shall be deemed to have been duly made when delivered
in person or sent by telex, telegram, telecopy, same day or overnight courier,
or 72 hours after having been deposited in the United States first class or
registered or certified mail return receipt requested, postage prepaid. Notices
shall be sent:
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11
If
to the
holder of the Warrant:
to
the
name, address and fax number
set
forth
on the first page of this warrant
If
to the
Corporation:
ValueRich,
Inc.
0000
Xxxxx Xxxxx Xxxxxxx, Xxxxx X
Xxxx
Xxxx
Xxxxx, XX 00000
Fax:
(____)_______________
Attn: Treasurer
9.
Governing
Law.
This
Warrant shall be construed in accordance with and governed by the laws of the
State of Delaware without regard to the principles of conflicts of
laws.
10.
Remedies.
The
Corporation stipulates that the remedies at law of the holder of this Warrant
in
the event of any default by the Corporation in the performance of or compliance
with any of the terms of this Warrant are not and will not be adequate, and
that
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.
11.
Registration.
The
warrants in the Series shall be numbered and shall be registered in a warrant
register as they are issued. The Corporation shall be entitled to treat the
registered holder of any warrant in the Series on the warrant register as the
owner in fact thereof for all purposes and shall not be bound to recognize
any
equitable or other claim to or interest in such warrant on the part of any
other
person, and shall not be liable for any registration or transfer of warrants
which are registered or to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with the actual knowledge that a fiduciary
or
nominee is committing a breach of trust in requesting such registration of
transfer, or with knowledge of such facts that its participation therein amounts
to bad faith.
12.
Miscellaneous.
(a)
Amendments.
This
Warrant and any provision hereof may be amended only by an instrument in writing
signed by the holder of this Warrant and the Corporation, except the Corporation
may waive any of its rights for the benefit of the holder by notice in writing
to the holder of this Warrant, including, without limitation, extension of
the
date of termination or lowering of the exercise price.
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(b)
Descriptive
Headings.
The
descriptive headings of the several Sections of this Warrant are inserted for
purposes of reference only, and shall not affect the meaning or construction
of
any of the provisions hereof.
13.
Definitions.
For the
purposes of this Warrant the following terms have the following
meanings:
"Affiliate"
shall
mean any entity controlling, controlled by or under common control with another
entity. For the purposes of this definition, "control"
shall
have the meaning presently specified for that word in Rule 405 promulgated
by
the SEC under the Securities Act. With respect to any Person who is a limited
partnership, “Affiliate”
shall
also mean any general or limited partner of such limited partnership, or any
Person which is a general partner in a general or limited partnership which
is a
general partner of such limited partnership.
“Current
Market Price”
shall
mean, in respect of any share of Common Stock on any date herein specified,
(1) if
there
shall not then be a public market for the Common Stock, the higher of
(a)
the
book value per share of Common Stock at such date, and
(b)
the
price per share of Common Stock in the most recent closing of a private
placement of Common Stock to unrelated third parties purchasing at least
$200,000 in such private placement, or
|
(2)
|
if
there shall then be a public market for the Common Stock, the higher
of
(x) the book value per share of Common Stock at such date, and (y)
the
average of the daily market prices for the five (5) consecutive trading
days immediately before such date. The daily market price for each
such
trading day shall be (i) the closing bid price on such day on the
principal stock exchange (including Nasdaq) on which such Common
Stock is
then listed or admitted to trading, or quoted, as applicable, (ii)
if no
sale takes place on such day on any such exchange, the last reported
closing bid price on such day as officially quoted on any such exchange
(including Nasdaq), (iii) if the Common Stock is not then listed
or
admitted to trading on any stock exchange, the last reported closing
bid
price on such day in the over-the-counter market, as furnished by
the
National Association of Securities Dealers Automatic Quotation System
or
the National Quotation Bureau, Inc., (iv) if neither such corporation
at
the time is engaged in the business of reporting such prices, as
furnished
by any similar firm then engaged in such business, or (v) if there
is no
such firm, as furnished by any member of the NASD selected mutually
by the
holder of this Warrant and the Company or, if they cannot agree upon
such
selection, as selected by two such members of the NASD, one of which
shall
be selected by holder of this Warrant and one of which shall be selected
by the Company.
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"Person"
shall
mean an individual, a corporation, a partnership, a limited liability company,
a
trust, an unincorporated organization or a government organization or an agency
or political subdivision thereof.
"Securities
Act"
shall
mean the Securities Act of 1933, as amended, as amended prior to or after the
date hereof, or any federal statute or statutes which shall be enacted to take
the place of such Act, together with all rules and regulations promulgated
thereunder.
"Securities
and Exchange Commission"
shall
mean the United States Securities and Exchange Commission or any successor
to
the functions of such agency.
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IN
WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
effective as of the date first above written.
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VALUERICH,
INC.
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||
| |
|
|
| By: | ||
|
Xxxxxx
Xxxxxxxx
|
||
|
President,
Chief Executive Officer and Chairman of the Board
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EXHIBIT
A
SUBSCRIPTION
FORM
[To
be
executed only upon exercise of Warrant]
ValueRich,
Inc.
0000
Xxxxx Xxxxx Xxxxxxx, Xxxxx X
Xxxx
Xxxx
Xxxxx, XX 00000
Attn:
Xxxxxx Xxxxxxxx, President and Chief Executive Officer
Fax:
(____)_______________
1. The
undersigned registered owner hereby elects to purchase
shares
of the Common Stock of ValueRich, Inc., a Delaware corporation (the “Company”),
pursuant to the terms of the attached Warrant, and tenders herewith payment
of
the purchase price of such shares in full.
2. The
undersigned registered owner hereby elects to convert the attached Warrant
into
Common Stock of the Company through “cashless exercise” in the manner specified
in the Warrant. This conversion is exercised with respect to
_____________________ of the Shares covered by the Warrant.
3. Please
issue a certificate or certificates representing said shares in the name of
the
undersigned or in such other name as is specified below:
___________________________________
(Name
of
Registered Owner)
___________________________________
(Signature
of Registered Owner)
___________________________________
(Street
Address)
___________________________________
(City)
(State) (Zip Code)
and,
if
such shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, please deliver a new Warrant of like
tenor
and date for the balance of the shares of Common Stock issuable hereunder to
the
undersigned.
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of 11
| NOTICE: |
The
signature on this subscription must correspond with the name as written
upon the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatsoever, and if the Warrant
representing the shares or any Warrant Certificate representing Warrants
not exercised is to be registered in a name other than that in which
this
Warrant is registered, the signature of the holder hereof must be
guaranteed.
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