WARRANT
Exhibit
4.1
THIS
WARRANT (THIS “WARRANT”) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY
STATE SECURITIES LAW OR THE SECURITIES LAWS OF ANY COUNTRY. NEITHER
THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
NOR
ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED,
MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT
IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES
LAWS.
KMA
GLOBAL SOLUTIONS INTERNATIONAL, INC.
Warrant
No.
___ Original
Issue Date:
September 21, 2007
This
Warrant is issued in connection with and pursuant to that certain Securities
Purchase Agreement (the "Purchase Agreement”) dated as of
September 21, 2007, by and between KMA GLOBAL SOLUTIONS INTERNATIONAL,
INC., a Nevada corporation (the “Company”) and
_________________________________, a ____
corporation.
FOR
VALUE RECEIVED, __________________________, the registered holder
hereof, or its permitted assigns (the “Holder”), is entitled to purchase from
the Company, during the period specified in this Warrant, _______________
fully
paid and non-assessable shares (subject to adjustment as hereinafter provided)
of Common Stock (the "Warrant Shares"), of the Company at the
purchase price per share provided in Section 1.2 of this Warrant (the
"Warrant Exercise Price"), all subject to the terms and
conditions set forth in this Warrant. All terms not otherwise defined
herein shall have the meaning ascribed to them in the Purchase
Agreement.
Section
1. Period
for Exercise and Exercise Price.
1.1 Period
for Exercise. The right to purchase shares of Warrant Shares
represented by this Warrant shall be immediately exercisable, and shall expire
at 5:00 p.m., Ontario local time, September 21, 2009 (the "Expiration
Date"). From and after the Expiration Date this Warrant
shall be null and void and of no further force or effect
whatsoever.
1.2 Warrant
Exercise Price. The Warrant Exercise Price per share of
Warrant Shares shall be $0.30 per share (subject to adjustment as hereinafter
provided).
Section
2. Exercise
of Warrant.
2.1 Manner
of Exercise. The Holder may exercise this Warrant, in
whole or in part, immediately, but not after the Expiration Date, during
normal
business hours on any business day by surrendering this Warrant to the Company
at the principal office of the Company, accompanied by a Warrant Exercise
Form
in substantially the form annexed hereto duly executed by the Holder and
by
payment of the Warrant Exercise Price for the number of shares of Warrant
Shares
for which this Warrant is then exercisable, either (i) in immediately available
funds, (ii) the Company to the Holder in the appropriate amount, (iii) by
authorizing the Company to retain shares of Common Stock which would otherwise
be issuable upon exercise of this Warrant having a fair market value (defined
as
the average of the last reported Closing Sale Price of the Common Stock for
the
thirty (30) days immediately preceding the date of the Warrant Exercise notice)
on the date of delivery equal to the aggregate Warrant Exercise Price, or
(iv)
in a combination of (i), (ii) or (iii) above, provided, however, that in
no
event shall the Holder be entitled to exercise this Warrant for a number
of
Warrant Shares in excess of that number of Warrant Shares which, upon giving
effect to such exercise, would cause the aggregate number of shares of Common
Stock beneficially owned by the Holder and its affiliates to exceed 4.99%
of the
outstanding shares of the Common Stock following such exercise. For
purposes of the foregoing proviso, the aggregate number of shares of Common
Stock beneficially owned by the Holder and its affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Warrant with
respect to which determination of such proviso is being made, but shall exclude
the shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised Warrants beneficially owned by the Holder and its
affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by the
Holder
and its affiliates subject to a limitation on conversion or exercise analogous
to the limitation contained herein. Except as set forth in the
preceding sentence, for purposes of this paragraph, beneficial ownership
shall
be calculated in accordance with Section 13(d) of the Securities Exchange
Act of
1934, as amended (the "Exchange Act"). The Holder may waive the
foregoing limitation by written notice to the Company upon not less than
61 days
prior written notice (with such waiver taking effect only upon the expiration
of
such 61 day notice period).
2.2 When
Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected on the day on which all requirements of Section
2.1
shall have been met with respect to such exercise. At such time the
person in whose name any certificate for shares of Warrant Shares shall be
issuable upon such exercise shall be deemed for all corporate purposes to
have
become the Holder of record of such shares, regardless of the actual delivery
of
certificates evidencing such shares.
2.3 Delivery
of Stock Certificates. As soon as practicable after each
exercise of this Warrant, and in any event no later than 3 Trading Days after
such exercise, the Company at its expense will issue Warrant Shares via credit
to the Holder's account with DTC for the number of Warrant Shares to which
such
Holder is entitled upon such Holder's submission of the applicable Warrant
Exercise Form or, if the Transfer Agent is not participating in The DTC Fast
Automated Securities Transfer Program and DWAC system, issue and surrender
to
the address as specified in the Warrant Exercise Form,, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled to upon such
exercise.
Section
3. Adjustment of Purchase Price and Number of Shares. The
Warrant Exercise Price and the kind of securities issuable upon exercise
of the
Warrant shall be adjusted from time to time as follows:
3.1 Subdivision
or Combination of Shares (Stock Splits). If the Company at
any time effects a subdivision or combination of the outstanding Common Stock
(through a stock split or otherwise), the number of shares of Warrant Shares
shall be increased, in the case of a subdivision, or the number of shares
of
Warrant Shares shall be decreased, in the case of a combination, in the same
proportions as the Common Stock is subdivided or combined, in each case
effective automatically upon, and simultaneously with, the effectiveness
of the
subdivision or combination which gives rise to the adjustment.
3.2 Stock
Dividends. If the Company at any time pays a dividend, or
makes any other distribution, to holders of Common Stock payable in shares
of
Common Stock, or fixes a record date for the determination of holders of
Common
Stock entitled to receive a dividend or other distribution payable in shares
of
Common Stock, then the number of shares of Warrant Shares in effect immediately
prior to such action shall be proportionately increased so that the Holder
hereof may receive upon exercise of the Warrant the aggregate number of shares
of Common Stock which he or it would have owned immediately following such
action if the Warrant had been exercised immediately prior to such
action. The adjustment shall become effective immediately as of the
date the Company shall take a record of the holders of its Common Stock for
the
purpose of receiving such dividend or distribution (or if no such record
is
taken, as of the effectiveness of such dividend or distribution).
3.3 Reclassification,
Consolidation or Merger. If at any time, as a result
of:
(a)
a
capital
reorganization or reclassification (other than a subdivision, combination
or
dividend provided for elsewhere in this Section 3), or
(b) a
merger or consolidation of the Company with another corporation (whether
or not
the Company is the surviving corporation), the Common Stock issuable upon
exercise of the Warrants shall be changed into or exchanged for the same
or a
different number of shares of any class or classes of stock of the Company
or
any other corporation, or other securities convertible into such shares,
then,
as a part of such reorganization, reclassification, merger or consolidation,
appropriate adjustments shall be made in the terms of the Warrants (or of
any
securities into which the Warrants are exercised or for which the Warrants
are
exchanged), so that:
(c) the
Holders of Warrants or of such substitute securities shall thereafter be
entitled to receive, upon exercise of the Warrants or of such substitute
securities, the kind and amount of shares of stock, other securities, money
and
property which such Holders would have received at the time of such capital
reorganization, reclassification, merger, or consolidation, if such Holders
had
exercised their Warrants immediately prior to such capital reorganization,
reclassification, merger, or consolidation, and
(d) the
Warrants or such substitute securities shall thereafter be adjusted on terms
as
nearly equivalent as may be practicable to the adjustments theretofore provided
in this Section 3.3.
No
consolidation or merger in which the Company is not the surviving corporation
shall be consummated unless the surviving corporation shall agree, in writing,
to the provisions of this Section 3.3. The provisions of this Section 3.3
shall
similarly apply to successive capital reorganizations, reclassifications,
mergers and consolidations.
3.4 Other
Action Affecting Common Stock. If at any time the Company
takes any action affecting its Common Stock, other than an action described
in
any of Sections 3.1 through 3.3 which, in the opinion of the Board of Directors
of the Company (the “Board”), would have an adverse effect upon
the exercise rights of the Warrants, the Warrant Exercise Price or the kind
of
securities issuable upon exercise of the Warrants, or both, shall be adjusted
in
such manner and at such time as the Board may in good faith determine to
be
equitable in the circumstances; provided, however, that the purpose of this
Section is to prevent the Company from taking any action which has the effect
of
diluting the number of shares of Warrant Shares issuable upon exercise of
this
Warrant.
3.5 Notice
of Adjustments. Whenever the kind or number of securities
issuable upon exercise of the Warrants, or both, shall be adjusted pursuant
to
Section 3, the Company shall deliver a certificate signed by its Chief Executive
Officer and by its Chief Financial Officer, 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 Exercise
Price and the kind of securities issuable upon exercise of the Warrants after
giving effect to such adjustment, and shall cause copies of such certificate
to
be mailed (by first class mail postage prepaid) to each Warrant Holder promptly
after each adjustment.
Section
4. Reservation
of Stock, etc. The Company covenants and agrees that it will
at all times have authorized, reserve and keep available, solely for issuance
and delivery upon the exercise of this Warrant, the number of shares of Warrant
Shares from time to time issuable upon the exercise of this
Warrant. The Company further covenants and agrees that this Warrant
is, and any Warrants issued in substitution for or replacement of this Warrant
and all Warrant Shares, will upon issuance be duly authorized and validly
issued
and, in the case of Warrant Shares, upon issuance will be fully paid and
non-assessable and free from all preemptive rights of any
stockholder, and from all taxes, liens and charges with respect to the issue
thereof (other than transfer taxes) and, if the Common Stock of the Company
is
then listed on any national securities exchanges (as defined in the Exchange
Act) or quoted on NASDAQ, shall be, subject to the restrictions set forth
in
Section 5, duly listed or quoted thereon, as the case may be. In the event
that
the number of authorized but unissued shares of such Common Stock shall not
be
sufficient to effect the exercise of this entire Warrant into Warrant Shares,
then in addition to such other remedies as shall be available to the Holder
of
this Warrant, the Company shall promptly take such corporate action as may
be
necessary to increase its authorized but unissued shares of Common Stock
to such
number of shares as shall be sufficient for such purpose.
Section
5. Ownership,
Transfer and Substitution of Warrants.
5.1 Ownership
of Warrants. The Company may treat the person in whose name
this Warrant is registered on the register kept at the principal office of
the
Company as the owner and Holder thereof for all purposes, notwithstanding
any
notice to the contrary, but in all events recognizing any transfers made
in
accordance with the terms of this Warrant.
5.2 Transfer
and Exchange of Warrants. Upon the surrender of this
Warrant, properly endorsed, for registration of transfer or for exchange
at the
principal office of the Company, the Company at its expense will execute
and
deliver to the Holder thereof, upon the order of such Holder, a new Warrant
or
Warrants of like tenor, in the name of such Holder or as such Holder may
direct,
for such number of shares with respect to each such Warrant, the aggregate
number of shares in any event not to exceed the number of shares for which
the
Warrant so surrendered had not been exercised.
5.3 Registrations. The
holder of this Warrant is entitled to certain registration rights with respect
to the Warrant Shares issuable upon exercise thereof. Said
registration rights are set forth in a Registration Rights Agreement dated
as of
September 21, 2007, by and between the Holder and the Company.
5.4 Exemption
from Registration. If an opinion of counsel reasonable
satisfactory to the Company provides that registration is not required for
the
proposed exercise or transfer of this Warrant or the proposed transfer of
the
Warrant Shares and that the proposed exercise or transfer in the absence
of
registration would require the Company to take any action including executing
and filing forms or other documents with the United States
Securities and Exchange Commission (the “SEC”) or any state
securities agency, or delivering to the Holder any form or document in order
to
establish the right of the Holder to effectuate the proposed exercise or
transfer, the Company agrees promptly, at its expense, to take any such action;
and provided, further, that the Company will reimburse the Holder in full
for
any reasonable expenses (including but not limited to the fees and disbursements
of such counsel, but excluding brokers' commissions) incurred by the Holder
or
owner of Warrant Shares on his, her or its behalf in connection with such
exercise or transfer of the Warrant or transfer of Warrant Shares.
Section
6. No
Rights or Liabilities as Shareholder. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof any
rights
as a shareholder of the Company or as imposing any liabilities on such holder
to
purchase any securities or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the
Company.
Section
7. Miscellaneous.
7.1 Amendment
and Waiver. This Warrant may be amended with, and only with,
the written consent of the Company and the Holder. Any waiver of any
term, covenant, agreement or condition contained in this Warrant shall not
be
deemed a waiver of any other term, covenant, agreement or condition, and
any
waiver of any default in any such term, covenant, agreement or condition
shall
not be deemed a waiver of any later default thereof or of any default of
any
other term, covenant, agreement or condition.
7.2 Representations
and Warranties to Survive Closing. All representations,
warranties and covenants contained herein shall survive the execution and
delivery of this Warrant and the issuance of any Warrant Shares upon the
exercise hereof.
7.3 Severability. In
the event that any court or any governmental authority or agency declares
all or
any part of any Section of this Warrant to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any other Section
of
this Warrant, and in the event that only a portion of any Section is so declared
to be unlawful or invalid, such unlawfulness or invalidity shall not serve
to
invalidate the balance of such Section.
7.4 Binding
Effect; No Third Party Beneficiaries. All provisions of this
Warrant shall be binding upon and inure to the benefit of the parties and
their
respective heirs, legatees, executors, administrators, legal representatives,
successors, and permitted transferees and assigns. No person other
than the holder of this Warrant and the Company shall have any legal or
equitable right, remedy or claim under or in respect of, this
Warrant.
7.5 Notices. Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Warrant must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one Trading Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive
the
same. The addresses and facsimile numbers for such communications
shall be:
If
to the
Company:
KMA
Global Solutions International, Inc.
0000X
Xxxxxxx Xxxx
Mississauga,
Ontario, Canada L4Z 2A9
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx
X. Xxxx
With
a
copy to (which shall not constitute notice):
Xxxxx,
Xxxxxxxx, Xxxxxxx, Xxxxxxxx & Xxxxxxxxx, P.C.
Suite
1000, 000 Xxxxxxxx Xxxxxx
Nashville,
TN 37201
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxx
X. Xxxxx
If
to the
Holder:
___________________
c/o
Incendia Management Group Inc.
000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Toronto,
Ontario M1H 3E9
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx
Xxxxxx
If
to the
Transfer Agent:
American
Registrar & Transfer Co.
000
Xxxx
000 Xxxxx
Salt
Lake
City, UT 84111
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxx
Xxx or Xxxxx
Xxxx
or
at
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party three (3) Trading Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the
time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above,
respectively.
7.6 Taxes,
Costs and Expenses. The Company covenants and agrees that it will pay
when due and payable any and all federal, state and local taxes (other than
income taxes) and any other costs and expenses which may be payable in respect
of the preparation, issuance, delivery, exercise, surrender or transfer of
this
Warrant pursuant to the terms of this Warrant or the issuance of any shares
of
Warrant Shares as a result thereof. If any suit or action
is instituted or attorneys employed to enforce this Warrant or any part thereof,
the non-prevailing party in such suit or action promises and agrees to pay
all
costs and expenses associated therewith, including reasonable attorneys’ fees
and court costs.
7.7
Governing Law; Jurisdiction; Jury Trial. The corporate laws
of the State of Nevada shall govern all issues concerning the relative rights
of
the Company and its shareholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall
be
governed by the internal laws of the State of Nevada, without giving effect
to
any choice of law or conflict of law provision or rule (whether of the State
of
Nevada or any other jurisdictions) that would cause the application of the
laws
of any jurisdictions other than the State of Nevada. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of Las Vegas, for the adjudication of
any
dispute hereunder or under the other Transaction Documents or in connection
herewith or therewith, or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
7.8 Loss
of Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation
of
this Warrant, and (in the case of loss, theft or destruction) of indemnification
in form and substance acceptable to the Company in its reasonable discretion,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver a new Warrant of like tenor and
date.
7.9 Entire
Agreement. This Warrant, the Purchase Agreement and the Registration
Rights Agreement of even date herewith represent the entire agreement and
understanding between the parties concerning the subject matter hereof and
supercede all prior and contemporaneous agreements, understandings,
representations and warranties with respect thereto.
7.10 Headings.
The headings used herein are used for convenience only and are not to be
considered in construing or interpreting this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated
above.
KMA
GLOBAL SOLUTIONS INTERNATIONAL, INC.
By: /s/
Xxxxxxx X.
Xxxx
Xxxxxxx
X.
Xxxx
Chief
Executive Officer
