WAIVER AND AMENDMENT TO CERTIFICATE OF DESIGNATION OF SERIES A CONVERTIBLE PREFERRED STOCK, WARRANTS AND REGISTRATION RIGHTS AGREEMENT
Exhibit
10.1
WAIVER
AND AMENDMENT
TO
CERTIFICATE
OF DESIGNATION OF SERIES A CONVERTIBLE PREFERRED STOCK,
WARRANTS
AND
REGISTRATION
RIGHTS AGREEMENT
This
Waiver and Amendment to Certificate of Designation of Series A Convertible
Preferred Stock, Warrants and Registration Rights Agreement,
dated
as of March 23, 2007 (this “Waiver
and Amendment”),
is
entered into by and among Impart Media Group, Inc., a Nevada corporation
(the
“Company”)
and
the holders (collectively, the “Series
A Holders”)
of (i)
the issued and outstanding Series A Convertible Preferred Stock, $.001 par
value
per share (the “Series
A Stock”)
of the
Company, and (ii) the common stock purchase warrants issued by the Company
in
connection with the issuance of the Series A Stock (the “Warrants”),
for
the purpose of waiving certain rights of the Series A Holders under (x)
Certificate of Designation of Series A Convertible Preferred Stock, as filed
with the Secretary of State of the State of Nevada on March 2, 2006 (the
“Certificate
of Designation”),
and
(y) that certain Registration Rights Agreement, dated as of March 2, 2006,
by
and between the Company and the Series A Holders, as may be amended, modified
or
supplemented from time to time (the “Registration
Rights Agreement”).
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Registration Rights Agreement.
WHEREAS,
the Company filed a registration statement on Form SB-2 to register the resale
of the shares of common stock, $.001 par value per share (“Common
Stock”),
of
the Company underlying the Series A Stock (and the related warrants) (the
“Registration
Statement”),
which
Registration Statement was declared effective by the Securities and Exchange
Commission (the “Commission”)
on
September 1, 2006;
WHEREAS,
in a letter dated December 13, 2006, the Company advised the Series A Holders,
pursuant to Section 3(c)(vi) of the Registration Rights Agreement, to
discontinue the sale or other disposition of any Registrable Securities under
the Registration Statement until such time as an amendment (the “Amendment”)
to the
Registration Statement has been filed with the Commission;
WHEREAS,
the Company has failed to file the Amendment and, as such, the unavailability
of
the Registration Statement is continuing, resulting in the occurrence of
a
“triggering event” under Sections 8(d)(i) and (vii) of the Certificate of
Designation (a “Section
8(d) Triggering Event”);
WHEREAS,
as a result of the occurrence of the Section 8(d) Triggering Event, the Series
A
Holders are entitled to require the Company to redeem all or a portion of
each
such holder’s shares of Series A Stock;
WHEREAS,
as a result of the occurrence of the Section 8(d) Triggering Event, certain
liquidated damages have accrued and are accruing under Section 7(d) of the
Registration Rights Agreement (the “Liquidated
Damages”);
WHEREAS,
pursuant to the terms of the Certificate of Designations and the Registration
Rights Agreement, the holders of at least seventy-five percent (75%) of the
Series A Stock and pursuant to the terms of the Warrants, the holders of
at
least a majority of the shares of Common Stock underlying the Warrants, have
the
right to effect this Waiver and Amendment on behalf of all of the Series
A
Holders or Warrant holders, as the case may be, with such Waiver and Amendment
being binding upon all such holders as if they were a signatory
hereto;
WHEREAS,
in consideration of the decrease in the conversion price of the Series A
Stock
to $1.00, the decrease in the exercise price of the Warrants to $0.01, and
the
other consideration described herein, the Series A Holders have agreed to
grant
the waivers described herein;
NOW,
THEREFORE, in consideration of the above, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto agree as follows:
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1.
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Registration Rights. |
A.
The
Series A Holders hereby waive (i) any and all breaches of the terms and
conditions of the Registration Rights Agreement arising from the occurrence
of
the Section 8(d) Triggering Event described in the Recitals above through
the
date hereof, and (ii) any Liquidated Damages due and payable to the Series
A
Holders by the Company accrued through the date hereof. The parties acknowledge
that aggregate penalties to date would be approximately $202,000.00.
B.
The
Registration Rights Agreement is hereby amended, such that the definitions
of
“Effectiveness Date” and “Filing Date” in Section 1 thereof shall be deleted in
their entirety and in substitution thereof the following new definitions
of
“Effectiveness Date” and “Filing Date” are hereby added:
“‘Effectiveness
Date’
means
with respect to the Registration Statement the earlier of (A) the thirtieth
(30th) day following the Filing Date (or in the event that the Registration
Statement is reviewed by the Commission, the sixtieth (60th) day following
the
date of the first comment letter from the Commission to the Company) or (B)
the
date which is five (5) Business Days after the date on which the Commission
informs the Company that (i) the Commission will not further review the
Registration Statement or (ii) the Company may request the acceleration of
the
effectiveness of the Registration Statement; provided that,
if the
Effectiveness Date falls on a Saturday, Sunday or any other day which shall
be a
legal holiday or a day on which the Commission is authorized or required
by law
or other government actions to close, the Effectiveness Date shall be the
following Business Day.”
“‘Filing
Date’
means
a
date that is the earlier of (i) fifteen (15) Business Days after the Company
files with the Commission its proxy statement for the Company’s 2007 annual
meeting of shareholders, or (ii) May 15, 2007.”
C.
It
is
understood that (a) the Registrable Securities, as defined in the Registration
Rights Agreement, shall hereafter include all shares of Common Stock issuable
upon conversion of the Series A Stock, including dividends accrued thereon,
as
amended hereby (to the extent the Company elects to pay such dividends in
shares
of Common Stock), and the shares of Common Stock issuable upon exercise of
the
Warrants, as amended hereby, (b) penalties for failure to file a registration
statement and other events set forth in Section 7(d) of the Registration
Rights
Agreement may again accrue based upon the amended definitions of Filing Date
and
Effectiveness Date and (c) any benefits deemed to have been provided to the
Series A Holders hereunder shall not in any way be deemed to limit the potential
recovery of the Series A Holders under the last sentence of Section
7(d).
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2.
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Certificate of Designation. |
A.
The
Series A Holders hereby waive the Section 8(d) Triggering Event described
in the
Recitals above and all rights of redemption and fees, interest, dividends
and
other amounts payable and applicable to the Section 8(d) Triggering Event
under
the Certificate of Designation accrued through the date hereof.
B.
The
Series A Holders hereby consent to an amendment of the Certificate of
Designation to delete Section 2(b) in its entirety.
C.
The
Series A Holders hereby waive their right to receive any accrued but unpaid
dividends on the Series A Stock otherwise payable pursuant to Section 2(a)
of
the Certificate of Designation, up to and including accruals through March
2,
2007, in approximately the sum of $315,000. On the first business day of
July,
2007, holders of record of the Series A Preferred Stock, shall be entitled
to
receive the dividends contemplated by Section 2(a) of the Certificate of
Designation for dividends accrued from March 3, 2007 to the date of payment;
and
regular semi-annual dividends shall continue to accrue and be payable in
accordance with Section 2 thereafter.
D.
The
definition of “Conversion Price” in Section 5(d)(i) of the Certificate of
Designation shall be deleted in its entirety and in substitution thereof
the
following new Section 5(d)(i) is hereby added in order to reduce the “Conversion
Price” of the Series A Stock from $1.55 per share to $1.00 per share:
“The
term
"Conversion Price" shall mean $1.00 per share, subject to adjustment under
Section 5(e) hereof. Notwithstanding any adjustment hereunder, at no time
shall
the Conversion Price be greater than $1.00 per share except if it is adjusted
pursuant to the second sentence of Section 5(e)(i).”
E.
Section
8(h) of the Certificate of Designation (Company Redemption Option) shall
be
amended to (a) increase the period of the Company Redemption Notice (as defined
in the Certificate of Designation) from “ten (10) days’ prior written notice” to
“twenty (20) business days’ prior written notice” of a redemption under Section
8(h) of the Certificate of Designation (with the holder permitted to exercise
its conversion rights at any time in accordance with Section 8(h) of the
Certificate of Designation), (b) reduce the redemption price per share of
Series
A Stock from 200% to 100% of the Liquidation Preference Amount (as defined
in
the Certificate of Designation) plus any accrued but unpaid dividends, and
(c)
change the Company’s Redemption Date (as defined in the Certificate of
Designation) from the “eleventh (11th)
day” to
the “twenty-first (21st)
business day” after the Company has delivered the Company's Redemption Notice.
F.
The
Series A Holders hereby authorize the proper officers of the Company to prepare,
execute and file a certificate of amendment to the Certificate of Designation,
in the form of Exhibit
A
annexed
hereto, to reflect the amendments contemplated in Section 2 of this Amendment
and Waiver.
3. Warrants.
The Series
A
Holders agree to waive and delete on behalf of all Warrant holders Section
4(d)
of the Warrants, providing for “full-ratchet” anti-dilution rights. Immediately
after such deletion, the Company
agrees (a) to decrease the Warrant Price of the Warrants to $0.01 per share
and
(b) to delete the Issuer’s Redemption Option in the Warrants, as set forth in
Section 8 thereof,
for the
benefit of all of the Series A Holders, but not for the benefit of the Placement
Agent. The Company represents and warrants to the Series A Holders that such
amendment of the Warrants of the Series A Holders does not violate any rights
of
the Placement Agent and that the Placement Agent has consented to such
actions. The
Company shall prepare, execute and deliver to each Series A Holder a new
form of
amended Warrant (in exchange for the outstanding Warrant currently held by
such
Series A Holder, and exercisable for the same number of shares of Common
Stock)
in the form of Exhibit
B
annexed
hereto. The Company acknowledges and
represents (after
consultation with counsel) that the holding period of such amended Warrant
shall
be deemed to have commenced as of March 3, 2006 for purposes of Rule 144(d)
of
the Securities Act of 1933, as amended.
4. Representations
and Warranties of the Company.
The
Company represents and warrants to the Series A Holders as
follows:
A.
The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada and has the requisite corporate
power to own, lease and operate its properties and assets and to conduct
its
business as it is now being conducted.
B.
The
Company has the requisite corporate power and authority (including all board
of
directors and shareholder approvals) to enter into and perform this Waiver
and
Amendment, the amendments to the Registration Rights Agreement and the Warrants,
and to file the amendment to the Certificate of Designations with the Secretary
of State of the State of Nevada, contemplated hereby and to issue the shares
of
Common Stock underlying the Series A Stock and the Warrants in accordance
with
the terms hereof.
C.
When
the
Conversion Shares (as defined in the Certificate of Designation) and the
Warrant
Shares (as defined in the Warrants) are issued in accordance with the terms
of
the Certificate of Designation and the Warrants, respectively, as amended
by
this Waiver and Amendment, such shares will be duly authorized by all necessary
corporate action and validly issued and outstanding, fully paid and
nonassessable, and the holders shall be entitled to all rights accorded to
a
holder of Common Stock. The amendments contemplated hereunder will not obligate
the Company to issue any shares of Common Stock , Series A Stock or other
securities to any other Person (other than the Series A Holders) and will
not
result in the adjustment of the exercise, conversion, exchange or reset price
of
any outstanding security of the Company.
D.
The
execution, delivery and performance of this Waiver and Amendment by the Company
does not and will not (i) violate any provision of the Company’s Articles of
Incorporation or Bylaws, (ii) conflict with, or constitute a default (or
an
event which with notice or lapse of time or both would become a default)
under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note,
bond,
license, lease agreement, instrument or obligation to which the Company is
a
party or by which it or its properties or assets are bound, (iii) create
or
impose a lien, mortgage, security interest, charge or encumbrance of any
nature
on any property of the Company under any agreement or any commitment to which
the Company is a party or by which the Company is bound or by which any of
its
respective properties or assets are bound, or (iv) result in a violation
of any
federal, state, local or foreign statute, rule, regulation, order, judgment
or
decree (including Federal and state securities laws and regulations) applicable
to the Company or any of its subsidiaries or by which any property or asset
of
the Company or any of its subsidiaries are bound or affected, except, in
all
cases other than violations pursuant to clauses (i) and (iv) above, for such
conflicts, defaults, terminations, amendments, accelerations, cancellations
and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
E.
The
Company has authorized and has reserved and covenants to continue to reserve,
free of preemptive rights and other similar contractual rights of stockholders,
a number of shares of Common Stock equal to one hundred ten percent (110%)
of
the number of shares of Common Stock as shall from time to time be sufficient
to
effect the conversion of all of the shares of Series A Stock and exercise
of all
of the Warrants then outstanding.
F.
There
is
no action, suit, claim, investigation, arbitration, alternate dispute resolution
proceeding or any other proceeding pending or, to the knowledge of the Company,
threatened against the Company or any subsidiary which questions the validity
of
this Waiver and Amendment or the transactions contemplated hereby or any
action
taken or to be taken pursuant hereto.
G.
Neither
this Waiver and Amendment nor any other documents, certificates or instruments
furnished to the Series A Holders by or on behalf of the Company in connection
with the transactions contemplated by this Waiver and Amendment contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made herein or therein, in the light of the
circumstances under which they were made herein or therein, not
misleading.
5. General.
Except
as set forth in this Waiver and Amendment, there are no other amendments
or
waivers to the Certificate of Designation, the Warrants or the Registration
Rights Agreement, and all of the other terms and provisions of the Certificate
of Designation, the Warrants and the Registration Rights Agreement remain
in
full force and effect.
6. This
Waiver
and Amendment
shall be
binding upon the parties hereto and their respective successors and permitted
assigns and shall inure to the benefit of and be enforce-able by each of
the
parties hereto and its successors and permitted assigns. THIS
WAIVER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE
LAW OF THE STATE OF NEW YORK.
This
Waiver may be executed in any number of counterparts, each of which shall
be an
original, but all of which shall constitute one instrument.
7. The
Company shall pay all actual attorneys' fees and expenses (including
disbursements and out-of-pocket expenses) incurred by the Series A Holders
in
connection with the preparation, negotiation, execution and delivery of this
Waiver and Amendment, and the amendments to the Certificate of Designation,
the
Warrants, and the Registration Rights Agreement, which payment shall not
exceed
$5,000.00.
[Remainder
of page intentionally left blank.]
IN
WITNESS WHEREOF,
each of
the Company and the Series A Holders representing at least seventy-five percent
(75%) of the Series A Stock and a majority of holders of Common Stock underlying
the Warrants has caused this Waiver and Amendment to Certificate of Designation
of Series A Convertible Preferred Stock, Warrants and Registration
Rights Agreement signed in its name effective as of the date first set forth
above.
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IMPART
MEDIA GROUP, INC.
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By:
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/s/
Xxxxxx Xxxxx
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Name:
Xxxxxx Xxxxx
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Title:
President
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ENABLE
GROWTH PARTNERS LP
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| By: | /s/ Xxxxxxx X’Xxxx | |
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Name:
Xxxxxxx X’Xxxx
Title:
Principal and Portfolio Manager
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ENABLE
OPPORTUNITY PARTNERS LP
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| By: | /s/ Xxxxxxx X’Xxxx | |
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Name:
Xxxxxxx X’Xxxx
Title:
Principal and Portfolio Manager
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XXXXXX
DIVERSIFIED STRATEGY MASTER FUND LLCP
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| By: | /s/ Xxxxxxx X’Xxxx | |
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Name:
Xxxxxxx X’Xxxx
Title:
Principal and Portfolio Manager
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GRYPHON
MASTER FUND, L.P.
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| By: | /s/ X.X. Xxxx, XX | |
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Name:
X.X. Xxxx, XX
Title:
Authorized Agent
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GSSF
MASTER FUND, LP
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| By: | /s/ X.X. Xxxx, XX | |
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Name:
X.X. Xxxx, XX
Title:
Authorized Agent
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XXXXXX
BAY FUND LP
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| By: | /s/ Xxxx Xxxx | |
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Name:
Xxxx Xxxx
Title:
Portfolio Manager
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Exhibit
A
CERTIFICATE
OF AMENDMENT
TO
CERTIFICATE
OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES
OF
THE
SERIES
A CONVERTIBLE PREFERRED STOCK
OF
IMPART
MEDIA GROUP, INC.
The
undersigned, the Chief Executive Officer of Impart Media Group, Inc. (the
“Company”),
a
corporation organized and existing under the Revised Statutes of the State
of
Nevada (“NRS”), does hereby certify that, pursuant to authority conferred upon
the board of directors of the Company (the “Board of Directors”) by its Articles
of Incorporation, and in order to amend the Certificate of Designation
of
the
Relative Rights and Preferences
of the
Series
A
Convertible Preferred Stock
of the
Company (the “Certificate of Designation”) pursuant to Section 78.1955 of the
NRS, the Board of Directors, by unanimous written consent dated as of March
__,
2007, duly approved and adopted the following resolution (the
“Resolution”):
WHEREAS,
the Certificate of Designation of the Company was filed by the Secretary
of
State of the State of Nevada on March 2, 2006;
WHEREAS,
the
Board
of Directors considers it advisable and hereby desires,
pursuant to such authority, to amend the terms and provisions of the Certificate
of Designation;
WHEREAS,
the
holders of at least seventy-five percent (75%) of the Series A Convertible
Preferred Stock, pursuant to Section
78.1955(3) of the NRS and Section 10 of the Certificate of Designation,
approved
by written consent
the
terms and filing of a Certificate
of Amendment
to the Certificate
of
Designation to
amend
the Certificate
of
Designation; and
NOW,
THEREFORE, BE IT RESOLVED, that the Board
of
Directors hereby
adopts and approves the following amendments to the Certificate of Designation
on the terms and with the provisions herein set forth on Annex
A
attached
to this resolution.
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Name:
Xxxxxx X. Xxxxxxxx
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Title:
Chief Executive Officer
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ATTEST:
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Name:
Xxxxxx X. Xxxxx
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Title:
President
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ANNEX
A
SERIES
A
CONVERTIBLE PREFERRED STOCK
The
powers, designations, preferences and relative, participating, optional
or other
rights of the Series A Convertible Preferred Stock of Company are hereby
amended
as follows:
1.
Section
2(b) is hereby deleted in its entirety.
2.
Section
5(d)(i) is hereby deleted in its entirety and in substitution thereof the
following new Section 5(d)(i) is hereby added:
“The
term
“Conversion Price” shall mean $1.00 per share, subject to adjustment under
Section 5(e) hereof. Notwithstanding any adjustment hereunder, at no time
shall
the Conversion Price be greater than $1.00 per share except if it is adjusted
pursuant to the second sentence of Section 5(e)(i).”
3.
Section
8(h) is hereby deleted in its entirety and in substitution thereof the
following
new Section 5(d)(i) is hereby added:
“Company's
Redemption Option.
At any
time while there is an effective registration statement permitting resale
of the
shares of Common Stock issuable upon conversion of the Series A Preferred
Stock,
the Company may redeem all of the Series A Preferred Stock outstanding
upon
twenty (20) business days’ prior written notice (the “Company's Redemption
Notice”) at a price per share of Series A Preferred Stock equal to one hundred
percent (100%) of the Liquidation Preference Amount plus any accrued but
unpaid
dividends; provided,
that if
a holder has delivered a Conversion Notice to the Company or delivers a
Conversion Notice prior to the Company’s Redemption Date (as defined below), all
of the shares of Series A Preferred Stock designated to be redeemed may
be
converted by such holder; provided further
that if
during the period between delivery of the Company's Redemption Notice and
the
Redemption Date a holder shall become entitled to deliver a Notice of Redemption
at Option of Buyer Upon Major Transaction, then the right of such holder
shall
take precedence over the previously delivered Company Redemption Notice.
The
Company's Redemption Notice shall state the date of redemption which date
shall
be the twenty-first (21st) business day after the Company has delivered
the
Company's Redemption Notice (the “Company’s Redemption Date”), the Company's
Redemption Price and the number of shares to be redeemed by the Company.
The
Company shall not send a Company's Redemption Notice unless it has good
and
clear funds for a minimum of the amount it intends to redeem in a bank
account
controlled by the Company. The Company shall deliver the Company's Redemption
Price to the holder(s) on the Company's Redemption Date, provided,
that if
the holder(s) delivers a Conversion Notice before the Company’s Redemption Date,
then the portion of the Company’s Redemption Price which would be paid to redeem
the shares of Series A Preferred Stock covered by such Conversion Notice
shall
be returned to the Company upon delivery of the Common Stock issuable in
connection with such Conversion Notice to the holder(s). On the Company’s
Redemption Date, the Company shall pay the Company's Redemption Price,
subject
to any adjustment pursuant to the immediately preceding sentence, to the
holder(s) on a pro rata basis, provided,
however, that upon receipt by the Company of the Preferred Stock Certificates
to
be redeemed pursuant to this Section 8(h), the Company shall, on the next
business day following the date of receipt by the Company of such Preferred
Stock Certificates, pay the Company's Redemption Price to the holder(s)
on a pro
rata basis. If the Company fails to pay the Company’s Redemption Price by the
Company’s Redemption Date, the redemption will be declared null and void and the
Company shall lose its right to serve a Company's Redemption Notice in
the
future.”
Exhibit
B
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION
OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
LAWS
IS NOT REQUIRED.
AMENDED
AND RESTATED
WARRANT
TO PURCHASE
SHARES
OF
COMMON STOCK
OF
IMPART
MEDIA GROUP, INC.
Expires
March 2, 2009
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No.:
W-07- __
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Number
of Shares: ___________
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Original
Date of Issuance: March 3, 2006
Date
of
Amended and Restated Warrant: March __, 2007
FOR
VALUE
RECEIVED, subject to the provisions hereinafter set forth, the undersigned,
Impart Media Group, Inc., a Nevada corporation (together with its successors
and
assigns, the "Issuer"),
hereby certifies that _______________________________ or its registered
assigns
(the “Holder”)
is
entitled to subscribe for and purchase, during the Term (as hereinafter
defined), up to ____________________________________ (_____________)
shares
(subject to adjustment as hereinafter provided) of the duly authorized,
validly
issued, fully paid and non-assessable Common Stock of the Issuer, at
an exercise
price per share equal to the Warrant Price then in effect, on the terms
and
conditions hereinafter set forth. Capitalized terms used in this Warrant
and not
otherwise defined herein shall have the respective meanings specified
in Section
8 hereof.
1. Term.
The
term of this Warrant commenced on March 3, 2006 (the “Original
Issue Date”)
and
shall expire at 6:00 p.m., eastern time, on March 2, 2009 (such period
being the
"Term").
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1
-
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2.
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Method
of Exercise; Payment; Issuance of New Warrant; Transfer and
Exchange.
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(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 the
surrender
of this Warrant (with the exercise form attached hereto as Exhibit
A
duly
executed) at the principal office of the Issuer, and by the payment
to the
Issuer of an amount of consideration therefor equal to the Warrant
Price in
effect on the date of such exercise multiplied by the number of shares
of
Warrant Stock with respect to which this Warrant is then being exercised,
payable at such Holder’s election (i) by certified or official bank check or
by
wire
transfer to an account designated by the Issuer,
(ii) by
"cashless exercise" in accordance with the provisions of subsection
(c) of this
Section 2, but only when a registration statement under the Securities
Act
providing for the resale of the Warrant Stock is not then in effect,
or (iii) by
a combination of the foregoing methods of payment selected by the Holder
of this
Warrant.
(c) Cashless
Exercise.
Notwithstanding any provisions herein to the contrary, if, the Per
Share Market
Value of one share of Common Stock is greater than the Warrant Price
(at the
date of calculation as set forth below), in lieu of exercising this
Warrant by
payment of cash, the Holder may exercise this Warrant by a cashless
exercise and
shall receive the number of shares of Common Stock equal to an amount
(as
determined below) by surrender of this Warrant at the principal office
of the
Issuer together with the properly endorsed Notice of Exercise in which
event the
Issuer shall issue to the Holder a number of shares of Common Stock
computed
using the following formula:
X
= Y -
(A)(Y)
B
| Where |
X
= the
number of shares of Common Stock to be issued to the
Holder.
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Y
=
|
the
number of shares of Common Stock purchasable upon exercise
of all of the
Warrant or, if only a portion of the Warrant is being exercised,
the
portion of the Warrant being exercised.
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A
=
|
the
Warrant Price.
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B
=
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the
Per Share Market Value of one share of Common
Stock.
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(d) Issuance
of Stock Certificates.
In the
event of any exercise of this Warrant in accordance with and subject
to the
terms and conditions hereof, (i) certificates for the shares of Warrant
Stock so
purchased shall be delivered to the Holder hereof within a reasonable
time, not
exceeding three (3) Trading Days after such exercise (the “Delivery
Date”)
or, at
the request of the Holder (provided that a registration statement under
the
Securities Act providing for the resale of the Warrant Stock is then
in effect),
issued and delivered to the Depository Trust Company (“DTC”)
account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
System (“DWAC”)
within
a reasonable time, not exceeding three (3) Trading Days after such
exercise
(provided, however that the Issuer or its transfer agent shall only
be obligated
to issue and deliver the shares to the DTC on the Holder’s behalf via DWAC or
certificates free of restrictive legends if such exercise is in connection
with
a sale (as evidenced by documentation furnished to and reasonably satisfactory
to the Issuer) and the registration statement providing for the resale
of the
Warrant Stock is effective, and the Holder hereof shall be deemed for
all
purposes to be the holder of the shares of Warrant Stock so purchased
as of the
date of such exercise and (ii) unless this Warrant has expired, a new
Warrant
representing the number of shares of Warrant Stock, if any, with respect
to
which this Warrant shall not then have been exercised (less any amount
thereof
which shall have been canceled in payment or partial payment of the
Warrant
Price as hereinabove provided) shall also be issued to the Holder hereof
at the
Issuer's expense within such time.
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(e) Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.
In
addition to any other rights available to the Holder, if the Issuer
fails to
cause its transfer agent to transmit to the Holder a certificate or
certificates
representing the Warrant Stock pursuant to an exercise on or before
the Delivery
Date, and if after such date the Holder is required by its broker to
purchase
(in an open market transaction or otherwise) shares of Common Stock
to deliver
in satisfaction of a sale by the Holder of the Warrant Stock which
the Holder
anticipated receiving upon such exercise (a “Buy-In”),
then
the Issuer shall (1) pay in cash to the Holder the amount by which
(x) the
Holder’s total purchase price (including brokerage commissions, if any) for
the
shares of Common Stock so purchased exceeds (y) the amount obtained
by
multiplying (A) the number of shares of Warrant Stock that the Issuer
was
required to deliver to the Holder in connection with the exercise at
issue times
(B) the price at which the sell order giving rise to such purchase
obligation
was executed, and (2) at the option of the Holder, either reinstate
the portion
of the Warrant and equivalent number of shares of Warrant Stock for
which such
exercise was not honored or deliver to the Holder the number of shares
of Common
Stock that would have been issued had the Issuer timely complied with
its
exercise and delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a
Buy-In with respect to an attempted exercise of shares of Common Stock
with an
aggregate sale price giving rise to such purchase obligation of $10,000,
under
clause (1) of the immediately preceding sentence the Issuer shall be
required to
pay the Holder $1,000. The Holder shall provide the Issuer written
notice
indicating the amounts payable to the Holder in respect of the Buy-In,
together
with applicable confirmations and other evidence reasonably requested
by the
Issuer. Nothing herein shall limit a Holder’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
Issuer’s failure to timely deliver certificates representing shares of Common
Stock upon exercise of this Warrant as required pursuant to the terms
hereof.
(f) Transferability
of Warrant.
Subject
to Section 2(h) hereof, this Warrant, and the rights evidenced hereby,
may be
transferred by a Holder, in whole or in part, without the consent of
the Issuer.
If transferred pursuant to this paragraph, this Warrant may be transferred
on
the books of the Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of
the Issuer,
properly endorsed (by the Holder executing an assignment in the form
attached
hereto) and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. This Warrant is exchangeable at
the principal
office of the Issuer for Warrants to purchase the same aggregate number
of
shares of Warrant Stock, each new Warrant to represent the right to
purchase
such number of shares of Warrant Stock as the Holder hereof shall designate
at
the time of such exchange. All Warrants issued on transfers or exchanges
shall
be dated the Original Issue Date and shall be identical with this Warrant
except
as to the number of shares of Warrant Stock issuable pursuant
thereto.
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(g) 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.
(h) Compliance
with Securities Laws.
(i) The
Holder of this Warrant, by acceptance hereof, acknowledges that this
Warrant and
the shares of Warrant Stock to be issued upon exercise hereof are being
acquired
solely for 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 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) Except
as
provided in paragraph (iii) below, this Warrant and all certificates
representing shares of Warrant Stock issued upon exercise hereof shall
be
stamped or imprinted with a legend in substantially the following
form:
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION
OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
LAWS
IS NOT REQUIRED.
(iii) The
Issuer agrees to reissue this Warrant or certificates representing
any of the
Warrant Stock, without the legend set forth above if at such time,
prior to
making any transfer of any such securities, the Holder shall give written
notice
to the Issuer describing the manner and terms of such transfer. Such
proposed
transfer will not be effected until: either (i) the Issuer has received
an
opinion of counsel reasonably satisfactory to the Issuer, to the effect
that the
registration of such securities under the Securities Act is not required
in
connection with such proposed transfer (which condition shall be satisfied
by
the receipt of an executed Notice of Effectiveness of Registration
Statement
contemplated by the Purchase Agreement), (ii) a registration statement
under the
Securities Act covering such proposed disposition has been filed by
the Issuer
with the Securities and Exchange Commission and has become effective
under the
Securities Act, (iii) the Issuer has received other evidence reasonably
satisfactory to the Issuer that such registration and qualification
under the
Securities Act and state securities laws are not required, or (iv)
the Holder
provides the Issuer with reasonable assurances that such security can
be sold
pursuant to Rule 144 under the Securities Act. The Issuer will respond
to any
such notice from a holder within three (3) business days and, to the
extent the
above conditions are satisfied, will cause its transfer agent to remove
the
legend set forth above. In the case of any proposed transfer under
this Section
2(h), the Issuer will use reasonable efforts to comply with any such
applicable
state securities or "blue sky" laws, but shall in no event be required,
(x) to
qualify to do business in any state where it is not then qualified,
(y) to take
any action that would subject it to tax or to the general service of
process in
any state where it is not then subject, or (z) to comply with state
securities
or “blue sky” laws of any state for which registration by coordination is
unavailable to the Issuer. The restrictions on transfer contained in
this
Section 2(h) shall be in addition to, and not by way of limitation
of, any other
restrictions on transfer contained in any other section of this Warrant.
Whenever
a
certificate representing the Warrant Stock is required to be issued
to a the
Holder without a legend, in lieu of delivering physical certificates
representing the Warrant Stock, provided the Issuer’s transfer agent is
participating in the DTC Fast Automated Securities Transfer program,
the Issuer
shall use its reasonable best efforts to cause its transfer agent to
electronically transmit the Warrant Stock to the Holder by crediting
the account
of the Holder's Prime Broker with DTC through its DWAC system (to the
extent not
inconsistent with any provisions of this Warrant or the Purchase
Agreement).
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(iv) 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.
Stock
Fully Paid; Reservation and Listing of Shares; Covenants.
(a) Stock
Fully Paid.
The
Issuer represents, warrants, covenants and agrees that all shares of
Warrant
Stock which may be issued upon the exercise of this Warrant or otherwise
hereunder will, when issued in accordance with the terms of this Warrant,
be
duly authorized, validly issued, fully paid and nonassessable 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 issuance upon exercise of this Warrant a number of authorized
but
unissued shares of Common Stock equal to at least one hundred ten percent
(110%)
of the aggregate number of shares of Common Stock to provide for the
exercise of
this Warrant.
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(b) Reservation.
If any
shares of Common 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. If the Issuer shall list any shares of
Common
Stock on any securities exchange or market it will, at its expense,
list
thereon, and maintain and increase when necessary such listing, of,
all shares
of Warrant Stock from time to time issued upon exercise of this Warrant
or as
otherwise provided hereunder (provided that such Warrant Stock has
been
registered pursuant to a registration statement under the Securities
Act then in
effect), and, to the extent permissible under the applicable securities
exchange
rules, all unissued shares of Warrant Stock which are at any time issuable
hereunder, so long as any shares of Common Stock shall be so listed.
The Issuer
will also so list on each securities exchange or market, and will maintain
such
listing of, any other securities which the Holder of this Warrant shall
be
entitled to receive upon the exercise of this Warrant if at the time
any
securities of the same class shall be listed on such securities exchange
or
market by the Issuer.
(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 against dilution (to the extent specifically provided herein)
or
impairment. Without limiting the generality of the foregoing, the Issuer
will
(i) not permit the par value, if any, of its Common Stock to exceed
the then
effective Warrant Price, (ii) 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, (iii) 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 Common Stock, free and
clear of any
liens, claims, encumbrances and restrictions (other than as provided
herein)
upon the exercise of this Warrant, and (iv) 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 Common
Stock.
(e) Payment
of Taxes.
The
Issuer will pay any documentary stamp taxes attributable to the initial
issuance
of Warrant Stock issuable upon exercise of the 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
for Warrant Stock in a name other than that of the Holder in respect
of which
such shares are issued.
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4. Adjustment
of Warrant Price.
The
price at which such shares of Warrant Stock may be purchased upon exercise
of
this Warrant and the Warrant Share Number shall be subject to adjustment
from
time to time as set forth in this Section 4. The Issuer shall give
the Holder
notice of any event described below which requires an adjustment pursuant
to
this Section 4 in accordance with the notice provisions set forth in
Section
5.
(a) Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or Sale.
(i)
In case the Issuer after the Original Issue Date shall do any of the
following (each, a "Triggering
Event"):
(a)
consolidate or merge with or into any other Person and the Issuer shall
not be
the continuing or surviving corporation of such consolidation or merger,
or (b)
permit any other Person to consolidate with or merge into the Issuer
and the
Issuer shall be the continuing or surviving Person but, in connection
with such
consolidation or merger, any Capital Stock of the Issuer shall be changed
into
or exchanged for Securities of any other Person or cash or any other
property,
or (c) transfer all or substantially all of its properties or assets
to any
other Person, or (d) effect a capital reorganization or reclassification
of its
Capital Stock, then, and as a condition to such Triggering Event, proper
and
adequate provision shall be made so that, upon the basis and the terms
and in
the manner provided in this Warrant, the Holder of this Warrant shall
be
entitled upon the exercise hereof at any time after the consummation
of such
Triggering Event, to the extent this Warrant is not exercised prior
to such
Triggering Event, to receive at the Warrant Price in effect at the
time
immediately prior to the consummation of such Triggering Event in lieu
of the
Common Stock issuable upon such exercise of this Warrant prior to such
Triggering Event, the Securities, cash and property to which such Holder
would
have been entitled upon the consummation of such Triggering Event if
such Holder
had exercised the rights represented by this Warrant immediately prior
thereto
(including the right of a shareholder to elect the type of consideration
it will
receive upon a Triggering Event), subject to adjustments (subsequent
to such
corporate action) as nearly equivalent as possible to the adjustments
provided
for elsewhere in this Section 4. Notwithstanding the foregoing to the
contrary,
this Section 4(a)(i) shall only apply if the surviving entity pursuant
to any
such Triggering Event is a public company that is
registered pursuant to the Securities Exchange Act of 1934, as amended,
and its
common stock is listed or quoted on a national exchange or the OTC
Bulletin
Board. In the event that the
surviving entity pursuant to any such Triggering Event is not a public
company
that is
registered pursuant to the Securities Exchange Act of 1934, as amended,
or its
common stock is not listed or quoted on a national exchange or the
OTC Bulletin
Board, then the Holder shall have the right to demand that the Issuer
pay to the
Holder an amount equal to the value of this Warrant according to the
Black-Scholes formula.
(ii)
Notwithstanding
anything contained in this Warrant to the contrary and so long as the
surviving
entity pursuant to any Triggering Event is a public company that is
registered pursuant to the Securities Exchange Act of 1934, as amended,
and its
common stock is listed or quoted on a national exchange or the OTC
Bulletin
Board,
a
Triggering Event shall not be deemed to have occurred if, prior to
the
consummation thereof, each Person (other than the Issuer) which may
be required
to deliver any Securities, cash or property upon the exercise of this
Warrant as
provided herein shall assume, by written instrument delivered to, and
reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of
the Issuer
under this Warrant (and if the Issuer shall survive the consummation
of such
Triggering Event, such assumption shall be in addition to, and shall
not release
the Issuer from, any continuing obligations of the Issuer under this
Warrant)
and (B) the obligation to deliver to such Holder such Securities, cash
or
property as, in accordance with the foregoing provisions of this subsection
(a),
such Holder shall be entitled to receive, and such Person shall have
similarly
delivered to such Holder an opinion of counsel for such Person, which
counsel
shall be reasonably satisfactory to such Holder, or in the alternative,
a
written acknowledgement executed by the President or Chief Financial
Officer of
the Issuer, stating that this Warrant shall thereafter continue in
full force
and effect and the terms hereof (including, without limitation, all
of the
provisions of this subsection (a)) shall be applicable to the Securities,
cash
or property which such Person may be required to deliver upon any exercise
of
this Warrant or the exercise of any rights pursuant hereto.
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(b) Stock
Dividends, Subdivisions and Combinations.
If at
any time the Issuer shall:
(i) make
or
issue or set a record date for the holders of the Common Stock for
the purpose
of entitling them to receive a dividend payable in, or other distribution
of,
shares of Common Stock,
(ii) subdivide
its outstanding shares of Common Stock into a larger number of shares
of Common
Stock, or
(iii) combine
its outstanding shares of Common Stock into a smaller number of shares
of Common
Stock,
then
(1)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted
to equal
the number of shares of Common Stock which a record holder of the same
number of
shares of Common Stock for which this Warrant is exercisable immediately
prior
to the occurrence of such event would own or be entitled to receive
after the
happening of such event, and (2) the Warrant Price then in effect shall
be
adjusted to equal (A) the Warrant Price then in effect multiplied by
the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares of Common
Stock for
which this Warrant is exercisable immediately after such
adjustment.
(c) Certain
Other Distributions.
If at
any time the Issuer shall make or issue or set a record date for the
holders of
the Common Stock for the purpose of entitling them to receive any divi-dend
or
other distribution of:
(i) cash
(other than a cash dividend payable out of earnings or earned surplus
legally
available for the payment of dividends under the laws of the jurisdiction
of
incorporation of the Issuer),
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(ii) any
evidences of its indebtedness, any shares of stock of any class or
any other
securities or property of any nature whatsoever (other than cash, Common
Stock
Equivalents or Additional Shares of Common Stock), or
(iii) any
warrants or other rights to subscribe for or purchase any evidences
of its
indebtedness, any shares of stock of any class or any other securities
or
property of any nature whatsoever (other than cash, Common Stock Equivalents
or
Additional Shares of Common Stock),
then
(1)
the number of shares of Common Stock for which this Warrant is exercisable
shall
be adjusted to equal the product of the number of shares of Common
Stock for
which this Warrant is exercisable immediately prior to such adjustment
multiplied by a fraction (A) the numerator of which shall be the Per
Share
Market Value of Common Stock at the date of taking such record and
(B) the
denominator of which shall be such Per Share Market Value minus the
amount
allocable to one share of Common Stock of any such cash so distributable
and of
the fair value (as determined in good faith by the Board of Directors
of the
Issuer and supported by an opinion from an investment banking firm
of recognized
national standing acceptable to (but not affiliated with) the Holder)
of any and
all such evidences of indebtedness, shares of stock, other securities
or
property or warrants or other subscription or purchase rights so distributable,
and (2) the Warrant Price then in effect shall be adjusted to equal
(A) the
Warrant Price then in effect multiplied by the number of shares of
Common Stock
for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this
Warrant is
exercisable immediately after such adjustment. A reclassification of
the Common
Stock (other than a change in par value, or from par value to no par
value or
from no par value to par value) into shares of Common Stock and shares
of any
other class of stock shall be deemed a distribution by the Issuer to
the holders
of its Common Stock of such shares of such other class of stock within
the
meaning of this Section 4(c) and, if the outstanding shares of Common
Stock
shall be changed into a larger or smaller number of shares of Common
Stock as a
part of such reclassification, such change shall be deemed a subdivision
or
combination, as the case may be, of the outstanding shares of Common
Stock
within the meaning of Section 4(b).
(d) Issuance
of Common Stock Equivalents.
If at
any time the Issuer shall take a record of the holders of its Common
Stock for
the purpose of entitling them to receive a distribution of, or shall
in any
manner (whether directly or by assumption in a merger in which the
Issuer is the
surviving corporation) issue or sell, any Common Stock Equivalents,
whether or
not the rights to exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable upon such
conversion
or exchange shall be less than the Warrant Price in effect immediately
prior to
the time of such issue or sale, or if, after any such issuance of Common
Stock
Equivalents, the price per share for which Additional Shares of Common
Stock may
be issuable thereafter is amended or adjusted, and such price as so
amended
shall be less than the Warrant Price in effect at the time of such
amendment or
adjustment, then the Warrant Price then in effect shall be adjusted
as provided
in Section 4(c). No further adjustments of the number of shares of
Common Stock
for which this Warrant is exercisable and the Warrant Price then in
effect shall
be made upon the actual issue of such Common Stock upon conversion
or exchange
of such Common Stock Equivalents.
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(e) Other
Provisions Applicable to Adjustments under this Section.
The
following provisions shall be ap-plicable to the making of adjustments
of the
number of shares of Common Stock for which this Warrant is exercisable
and the
Warrant Price then in effect provided for in this Section 4:
(i) Computation
of Consideration.
To the
extent that any Additional Shares of Common Stock or any Common Stock
Equivalents (or any warrants or other rights therefor) shall be issued
for cash
consideration, the consideration received by the Issuer therefor shall
be the
amount of the cash received by the Issuer therefor, or, if such Additional
Shares of Common Stock or Common Stock Equivalents are offered by the
Issuer for
subscription, the subscription price, or, if such Additional Shares
of Common
Stock or Common Stock Equivalents are sold to underwriters or dealers
for public
offering without a subscription offering, the initial public offering
price (in
any such case subtracting any amounts paid or receivable for accrued
interest or
accrued dividends and without taking into account any compensation,
discounts or
expenses paid or incurred by the Issuer for and in the underwriting
of, or
otherwise in connection with, the issuance thereof). In connection
with any
merger or consolidation in which the Issuer is the surviving corporation
(other
than any consolidation or merger in which the previously outstanding
shares of
Common Stock of the Issuer shall be changed to or exchanged for the
stock or
other securities of another corporation), the amount of consideration
therefore
shall be, deemed to be the fair value of such portion of the assets
and business
of the nonsurviving corporation as the Board may determine to be attributable
to
such shares of Common Stock or Common Stock Equivalents, as the case
may be.
Such determination of the fair value of such consideration shall be
made by an
Independent Appraiser. The consideration for any Additional Shares
of Common
Stock issuable pursuant to the terms of any Common Stock Equivalents
shall be
the consideration received by the Issuer for issuing such Common Stock
Equivalents, plus the additional consideration, if any, payable to
the Issuer
upon the exercise of the right of conversion or exchange in such Common
Stock
Equivalents. In the event of any consolidation or merger of the Issuer
in which
the Issuer is not the surviving corporation or in which the previously
outstanding shares of Common Stock of the Issuer shall be changed into
or
exchanged for the stock or other securities of another corporation,
or in the
event of any sale of all or substantially all of the assets of the
Issuer for
stock or other securities of any corporation, the Issuer shall be deemed
to have
issued a number of shares of its Common Stock for stock or securities
or other
property of the other corporation computed on the basis of the actual
exchange
ratio on which the transaction was predicated, and for a consideration
equal to
the fair market value on the date of such transaction of all such stock
or
securities or other property of the other corporation. In the event
any
consideration received by the Issuer for any securities consists of
property
other than cash, the fair market value thereof at the time of issuance
or as
otherwise applicable shall be as determined in good faith by the Board.
In the
event Common Stock is issued with other shares or securities or other
assets of
the Issuer for consideration which covers both, the consideration computed
as
provided in this Section 4(e)(i) shall be allocated among such securities
and
assets as determined in good faith by the Board.
(ii) When
Adjustments to Be Made.
The
adjustments required by this Section 4 shall be made whenever and as
often as
any specified event requiring an adjustment shall occur, except that
any
adjustment of the number of shares of Common Stock for which this Warrant
is
exercisable that would otherwise be required may be postponed (except
in the
case of a subdivision or combination of shares of the Common Stock,
as provided
for in Section 4(b)) up to, but not beyond the date of exercise if
such
adjustment either by itself or with other adjustments not previously
made adds
or subtracts less than one percent (1%) of the shares of Common Stock
for which
this Warrant is exercisable immediately prior to the making of such
adjustment.
Any adjustment representing a change of less than such minimum amount
(except as
aforesaid) which is postponed shall be carried forward and made as
soon as such
adjustment, together with other adjustments required by this Section
4 and not
previously made, would result in a minimum adjustment or on the date
of
exercise. For the purpose of any adjustment, any specified event shall
be deemed
to have occurred at the close of business on the date of its
occurrence.
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(iii) Fractional
Interests.
In
computing ad-justments under this Section 4, fractional interests in
Common
Stock shall be taken into account to the near-est one one-hundredth
(1/100th)
of a
share.
(iv) When
Adjustment Not Required.
If the
Issuer shall take a record of the holders of its Common Stock for the
purpose of
entitling them to receive a dividend or distribution or subscription
or purchase
rights and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend,
distribution,
subscription or purchase rights, then thereafter no adjustment shall
be required
by reason of the taking of such record and any such adjustment previously
made
in respect thereof shall be rescinded and annulled.
(f) Form
of Warrant after Adjustments.
The
form of this Warrant need not be changed because of any adjustments
in the
Warrant Price or the number and kind of Securities purchasable upon
the exercise
of this Warrant.
(g) Escrow
of Warrant Stock.
If
after any property becomes distributable pursuant to this Section 4
by reason of
the taking of any record of the holders of Common Stock, but prior
to the
occurrence of the event for which such record is taken, and the Holder
exer-cises this Warrant, any shares of Common Stock issuable upon exercise
by
reason of such adjustment shall be deemed the last shares of Common
Stock for
which this Warrant is exercised (notwithstanding any other provision
to the
contrary herein) and such shares or other property shall be held in
escrow for
the Holder by the Issuer to be issued to the Holder upon and to the
extent that
the event actually takes place, upon payment of the current Warrant
Price.
Notwithstanding any other provision to the contrary herein, if the
event for
which such record was taken fails to occur or is rescinded, then such
escrowed
shares shall be cancelled by the Issuer and escrowed property
returned.
5. Notice
of Adjustments.
Whenever the Warrant Price or Warrant Share Number shall be adjusted
pursuant to
Section 4 hereof (for purposes of this Section 5, each an "adjustment"),
the
Issuer shall cause its Chief Financial Officer to prepare and execute
a
certificate setting forth, in reasonable detail, the event requiring
the
adjustment, the amount of the adjustment, the method by which such
adjustment
was calculated (including a description of the basis on which the Board
made any
determination hereunder), and the Warrant Price and Warrant Share Number
after
giving effect to such adjustment, and shall cause copies of such certificate
to
be delivered to the Holder of this Warrant promptly after each adjustment.
Any
dispute between the Issuer and the Holder of this Warrant with respect
to the
matters set forth in such certificate may at the option of the Holder
of this
Warrant be submitted to a national or regional accounting firm reasonably
acceptable to the Issuer and the Holder, provided
that the
Issuer shall have ten (10) days after receipt of notice from such Holder
of its
selection of such firm to object thereto, in which case such Holder
shall select
another such firm and the Issuer shall have no such right of objection.
The firm
selected by the Holder of this Warrant as provided in the preceding
sentence
shall be instructed to deliver a written opinion as to such matters
to the
Issuer and such Holder within thirty (30) days after submission to
it of such
dispute. Such opinion shall be final and binding on the parties hereto.
The
costs and expenses of the initial accounting firm shall be paid equally
by the
Issuer and the Holder and, in the case of an objection by the Issuer,
the costs
and expenses of the subsequent accounting firm shall be paid in full
by the
Issuer.
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11
-
6. Fractional
Shares.
No
fractional shares of Warrant Stock will be issued in connection with
any
exercise hereof, but in lieu of such fractional shares, the Issuer
shall round
the number of shares to be issued upon exercise up to the nearest whole
number
of shares.
7. Ownership
Cap and Certain Exercise Restrictions.
(a)
Notwithstanding anything to the contrary set forth in this Warrant,
at no time
may a Holder of this Warrant exercise any portion of this Warrant if
the number
of shares of Common Stock to be issued pursuant to such exercise would
exceed,
when aggregated with all other shares of Common Stock owned by such
Holder at
such time, the number of shares of Common Stock which would result
in such
Holder beneficially owning (as determined in accordance with Section
13(d) of
the Exchange Act and the rules thereunder) in excess of 4.9% of the
then issued
and outstanding shares of Common Stock; provided,
however,
that
upon a holder of this Warrant providing the Issuer with sixty-one (61)
days
notice (pursuant to Section 13 hereof) (the "Waiver
Notice")
that
such Holder would like to waive this Section 7(a) with regard to any
or all
shares of Common Stock issuable upon exercise of this Warrant, this
Section 7(a)
will be of no force or effect with regard to all or a portion of the
Warrant
referenced in the Waiver Notice; provided,
further,
that
this provision shall be of no further force or effect during the sixty-one
(61)
days immediately preceding the expiration of the term of this
Warrant.
(b) The
Holder may not exercise the Warrant hereunder to the extent such exercise
would
result in the Holder beneficially owning (as determined in accordance
with
Section 13(d) of the Exchange Act and the rules thereunder) in excess
of 9.9% of
the then issued and outstanding shares of Common Stock, including shares
issuable upon exercise of the Warrant held by the Holder after application
of
this Section; provided,
however,
that
upon a holder of this Warrant providing the Issuer with a Waiver Notice
that
such holder would like to waive this Section 7(b) with regard to any
or all
shares of Common Stock issuable upon exercise of this Warrant, this
Section 7(b)
shall be of no force or effect with regard to those shares of Warrant
Stock
referenced in the Waiver Notice; provided,
further,
that
this provision shall be of no further force or effect during the sixty-one
(61)
days immediately preceding the expiration of the term of this
Warrant.
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12
-
8. Definitions.
For the
purposes of this Warrant, the following terms have the following
meanings:
"Additional
Shares of Common Stock"
means
all shares of Common Stock issued by the Issuer after the Original
Issue Date,
and all shares of Other Common, if any, issued by the Issuer after
the Original
Issue Date, except: (i) securities issued (other than for cash) in
connection
with a merger, acquisition, or consolidation, (ii) securities issued
pursuant to
a bona fide firm underwritten public offering of the Issuer’s securities of at
least $20,000,000 in which the price per share is at least $4.00 (subject
to
appropriate adjustment in the event of any stock dividend, stock split,
stock
distribution or combination with respect to the Common Stock), (iii)
securities
issued pursuant to the conversion or exercise of convertible or exercisable
securities issued or outstanding on or prior to the date hereof or
issued
pursuant to the Purchase Agreement, (iv) the Warrant Stock, (v) securities
issued in connection with bona fide strategic license agreements or
other
partnering arrangements so long as such issuances are not for the purpose
of
raising capital, (vi) Common Stock issued or the issuance or grants
of options
to purchase Common Stock pursuant to the Issuer’s stock option plans and
employee stock purchase plans as they exist on the date hereof or hereafter
adopted by the Board and approved by the Majority Holders, (vii) any
warrants
issued to the placement agent and its designees for the transactions
contemplated by the Purchase Agreement and (viii) the payment of any
dividends
in shares of Common Stock pursuant to the Preferred Stock issued pursuant
to the
Purchase Agreement.
"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, $.001 par value per share, of the Issuer and any
other Capital
Stock into which such stock may hereafter be changed.
"Common
Stock Equivalent"
means
any Convertible Security or warrant, option or other right to subscribe
for or
purchase any Additional Shares of Common Stock or any Convertible
Security.
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13
-
"Convertible
Securities"
means
evidences of Indebtedness, shares of Capital Stock or other Securities
which are
or may be at any time convertible into or exchangeable for Additional
Shares of
Common Stock. The term "Convertible Security" means one of the Convertible
Securities.
"Governmental
Authority"
means
any governmental, regulatory or self-regulatory entity, department,
body,
official, authority, commission, board, agency or instrumentality,
whether
federal, state or local, and whether domestic or foreign.
"Holders"
mean
the Persons who shall from time to time own any Warrant. The term "Holder"
means
one of the Holders.
"Independent
Appraiser"
means a
nationally recognized or major regional investment banking firm or
firm of
independent certified public accountants of recognized standing (which
may be
the firm that regularly examines the financial statements of the Issuer)
that is
regularly engaged in the business of appraising the Capital Stock or
assets of
corporations or other entities as going concerns, and which is not
affiliated
with either the Issuer or the Holder of any Warrant.
"Issuer"
means
Impart Media 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
March 2, 2006.
"OTC
Bulletin Board"
means
the over-the-counter electronic bulletin board.
"Other
Common"
means
any other Capital Stock of the Issuer of any class which shall be authorized
at
any time after the date of this Warrant (other than Common Stock) and
which
shall have the right to participate in the distribution of earnings
and assets
of the Issuer without limitation as to amount.
“Outstanding
Common Stock”
means,
at any given time, the aggregate amount of outstanding shares of Common
Stock,
assuming full exercise, conversion or exchange (as applicable) of all
options,
warrants and other Securities which are convertible into or exercisable
or
exchangeable for, and any right to subscribe for, shares of Common
Stock that
are outstanding at such time.
"Person"
means
an individual, corporation, limited liability company, partnership,
joint stock
company, trust, unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.
-
14
-
"Per
Share Market Value"
means
on any particular date (a) the last closing bid price per share of
the Common
Stock on such date on the OTC
Bulletin Board or
another registered national stock exchange on which the Common Stock
is then
listed, or if there is no such price on such date, then the closing
bid price on
such exchange or quotation system on the date nearest preceding such
date, or
(b) if the Common Stock is not listed then on the OTC Bulletin Board
or any
registered national stock exchange, the last closing bid price for
a share of
Common Stock in the over-the-counter market, as reported by the OTC
Bulletin
Board or in the National Quotation Bureau Incorporated or similar organization
or agency succeeding to its functions of reporting prices) at the close
of
business on such date, or (c) if the Common Stock is not then reported
by the
OTC Bulletin Board or the National Quotation Bureau Incorporated (or
similar
organization or agency succeeding to its functions of reporting prices),
then
the average of the "Pink Sheet" quotes for the five (5) Trading Days
preceding
such date of determination, or (d) if the Common Stock is not then
publicly
traded the fair market value of a share of Common Stock as determined
by the
agreement of the Board and the Majority Holders, provided,
however,
if the
Board and the Majority Holders cannot agree on the fair market value
of a share
of the Common Stock, the fair market value shall be determined by an
Independent
Appraiser selected in good faith by the Majority Holders; provided,
however,
that
the Issuer, after receipt of the determination by such Independent
Appraiser,
shall have the right to select an additional Independent Appraiser,
in which
case, the fair market value shall be equal to the average of the determinations
by each such Independent Appraiser; and provided,
further
that all
determinations of the Per Share Market Value shall be appropriately
adjusted for
any stock dividends, stock splits or other similar transactions during
such
period. The determination of fair market value by an Independent Appraiser
shall
be based upon the fair market value of the Issuer determined on a going
concern
basis as between a willing buyer and a willing seller and taking into
account
all relevant factors determinative of value, and shall be final and
binding on
all parties. In determining the fair market value of any shares of
Common Stock,
no consideration shall be given to any restrictions on transfer of
the Common
Stock imposed by agreement or by federal or state securities laws,
or to the
existence or absence of, or any limitations on, voting rights.
“Preferred
Stock”
means
the Series A Convertible Preferred Stock issued by the Issuer to the
Purchasers
pursuant to the Purchase Agreement.
"Purchase
Agreement"
means
the Series A Convertible Preferred Stock Purchase Agreement dated as
of March 2,
2006 among the Issuer and the Purchasers.
"Purchasers"
means
the purchasers of the Preferred Stock and
the
Warrants issued by the Issuer pursuant to the Purchase Agreement.
“Registration
Statement”
means
a
registration statement under the Securities Act providing for the resale
of the
Warrant Stock.
"Securities"
means
any debt or equity securities of the Issuer, whether now or hereafter
authorized, any instrument convertible into or exchangeable for Securities
or a
Security, and any option, warrant or other right to purchase or acquire
any
Security. "Security" means one of the Securities.
-
15
-
"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.
"Waiver
and Amendment
" means
the Waiver and Amendment to Certificate of Designation of Series A
Convertible
Preferred Stock, Warrants and Registration Rights Agreement, dated
as of the
date hereof, by and among the Issuer and the Purchasers signatories
thereto.
"Warrants"
means
the Warrants issued and sold pursuant to the Purchase Agreement, including,
without limitation, this Warrant, and any other warrants of like tenor
issued in
substitution or exchange for any thereof pursuant to the provisions
of Section
2(c), 2(d) or 2(e) hereof or of any of such other Warrants.
"Warrant
Price"
means,
initially, $0.01 per share, as such price may be adjusted from time
to time as
shall result from the adjustments specified in this Warrant, including
Section 4
hereto.
"Warrant
Share Number"
means
at any time the aggregate number of shares of Warrant Stock which may
at such
time be purchased upon exercise of this Warrant, after giving effect
to all
prior adjustments and increases to such number made or required to
be made under
the terms hereof.
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16
-
"Warrant
Stock"
means
Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
issuable pursuant to any Warrant or Warrants.
10. Other
Notices.
In case
at any time:
|
(A)
|
the
Issuer shall make any distributions to the holders of Common
Stock;
or
|
|
(B)
|
the
Issuer shall authorize the granting to all holders of its
Common Stock of
rights to subscribe for or purchase any shares of Capital
Stock of any
class or other rights; or
|
|
(C)
|
there
shall be any reclassification of the Capital Stock of the
Issuer;
or
|
|
(D)
|
there
shall be any capital reorganization by the Issuer;
or
|
|
(E)
|
there
shall be any (i) consolidation or merger involving the Issuer
or (ii)
sale, transfer or other disposition of all or substantially
all of the
Issuer's property, assets or business (except a merger or
other
reorganization in which the Issuer shall be the surviving
corporation and
its shares of Capital Stock shall continue to be outstanding
and unchanged
and except a consolidation, merger, sale, transfer or other
disposition
involving a wholly-owned Subsidiary);
or
|
|
(F)
|
there
shall be a voluntary or involuntary dissolution, liquidation
or winding-up
of the Issuer or any partial liquidation of the Issuer or
distribution to
holders of Common Stock;
|
then,
in
each of such cases, the Issuer shall give written notice to the Holder
of the
date on which (i) the books of the Issuer shall close or a record shall
be taken
for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take
place.
Such notice also shall specify the date as of which the holders of
Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common
Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution,
liquidation
or winding-up, as the case may be. Such notice shall be given at least
twenty
(20) days prior to the action in question and not less than ten (10)
days prior
to the record date or the date on which the Issuer's transfer books
are closed
in respect thereto. This Warrant entitles the Holder to receive copies
of all
financial and other information distributed or required to be distributed
to the
holders of the Common Stock.
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17
-
11. 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 11 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.
12. 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 12 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, 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.
13. 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:
|
Impart
Media Group, Inc.
|
0000
Xxxxx Xxxxxxxxx Xxx
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
Chief Executive Officer
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
-
18
-
with
copies (which copies
shall
not
constitute notice)
|
to:
|
Xxxxx
Xxxxxxx Xxxxxxx & Xxxxx LLP
|
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxx
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
|
If
to any Holder:
|
At
the address of such Holder set forth on Exhibit
A
to
this Agreement, with copies to Holder’s counsel as set forth on
Exhibit
A
or
as specified in writing by such Holder with copies
to:
|
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.
14. 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 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.
15. 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.
16. Successors
and Assigns.
This
Warrant and the rights evidenced hereby shall inure to the benefit
of and be
binding upon the successors and assigns of the Issuer, the Holder hereof
and (to
the extent provided herein) the Holders of Warrant Stock issued pursuant
hereto,
and shall be enforceable by any such Holder or Holder of Warrant
Stock.
-
19
-
17. 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.
18. Registration
Rights.
The
initial Holder of this Warrant is entitled to the benefit of certain
registration rights with respect to the shares of Common Stock issuable
upon the
exercise of this Warrant pursuant to that certain Registration Rights
Agreement,
dated as of March 2, 2006, by and among the Company and Persons listed
on
Schedule I thereto, as amended by that certain Waiver and Amendment,
dated as of
March 23, 2007 (the “Registration
Rights Agreement”)
and
the registration rights with respect to the shares of Common Stock
issuable upon
the exercise of this Warrant by any subsequent Holder may only be assigned
in
accordance with the terms and provisions of the Registrations Rights
Agreement.
19. 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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-
20
-
IN
WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year
first above written.
|
IMPART
MEDIA GROUP, INC.
|
||
|
By:
|
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
||
|
Title:
Chief Financial Officer
|
||
-
21
-
EXHIBIT
A to the
WARRANT
TO PURCHASE SHARES OF COMMON STOCK OF
IMPART
MEDIA GROUP, INC.
| Names and Addresses |
Number
|
|
of
Holder
|
and
Warrants Purchased
|
Counsel
to Enable Capital Management:
Xxxxxxxxxx
Xxxxxxx PC
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxx
Tel.
No.:
(000) 000-0000
Fax
No.:
(000) 000-0000
-
22
-
EXERCISE
FORM
WARRANT
IMPART
MEDIA GROUP, INC.
The
undersigned _______________, pursuant to the provisions of the within
Warrant,
hereby elects to purchase _____ shares of Common Stock of Impart Media
Group,
Inc. covered by the within Warrant.
|
Dated:
|
Signature
|
||||
|
|
|
||||
|
Address
|
|||||
Number
of
shares of Common Stock beneficially owned or deemed beneficially owned
by the
Holder on the date of Exercise: _________________________
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.
|
Dated:
|
Signature
|
||||
|
|
|
||||
|
Address
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PARTIAL
ASSIGNMENT
FOR
VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant
Stock
evidenced by the within Warrant together with all rights therein, and
does
irrevocably constitute and appoint ___________________, attorney, to
transfer
that part of the said Warrant on the books of the within named
corporation.
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Dated:
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Signature
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Address
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FOR
USE
BY THE ISSUER ONLY:
This
Warrant No. W-___ canceled (or transferred or exchanged) this _____
day of
___________, _____, shares of Common Stock issued therefor in the name
of
_______________, Warrant No. W-_____ issued for ____ shares of Common
Stock in
the name of _______________.
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