Contract
Exhibit
4.10
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (i) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION
FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.
AN
INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST
RELY
ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS
INVOLVED.
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Warrant
to Purchase
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2,000,000
shares
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Warrant
Number 7/31/06-1
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WARRANT
TO PURCHASE COMMON STOCK
OF
OMNI
U.S.A., INC.
THIS
CERTIFIES that the Potawatomi Business Development Corp. or any subsequent
holder hereof ("Holder") has the right to purchase from Omni U.S.A., Inc.,
a
Nevada corporation (the "Company"), up to 2,000,000 fully paid and nonassessable
shares, of the Company's common stock, $0.004995 par value per share ("Common
Stock"), subject to adjustment as provided herein, at a price equal to the
Exercise Price as defined in Section 3 below, at any time beginning on the
Date
of Issuance (defined below) and ending at 5:00 p.m., San Diego, California
time,
on the date that is five (5) years after the Date of Issuance (the "Exercise
Period").
Holder
agrees with the Company that this Warrant to Purchase Common Stock of the
Company (this "Warrant" or this "Agreement") is issued and all rights hereunder
shall be held subject to all of the conditions, limitations and provisions
set
forth herein.
1.
Date
of Issuance and Term.
This
Warrant shall be deemed to be issued on July 14, 2006 ("Date of Issuance").
The
term of this Warrant is five (5) years from the Date of Issuance.
Notwithstanding
anything to the contrary herein, the applicable portion of this Warrant shall
not be exercisable during any time that, and only to the extent that, the number
of shares of Common Stock to be issued to Holder upon such exercise, when added
to the number of shares of Common Stock, if any, that the Holder otherwise
beneficially owns (outside of this Warrant, and not including any other warrants
having a provision substantially similar to this paragraph) at the time of
such
exercise, would exceed 4.99% of the number of shares of Common Stock then
outstanding, as determined in accordance with Section 13(d) of the Exchange
Act
(the "4.99% Limitation"). The 4.99% Limitation shall be conclusively satisfied
if the applicable Exercise Notice includes a signed representation by the Holder
that the issuance of the shares in such Exercise Notice will not violate the
4.99% Limitation, and the Company shall not be entitled to require additional
documentation of such satisfaction.
1
Notwithstanding
the above, in the event that the Company receives any tender offer or any offer
to enter into a merger with another entity whereby the Company shall not be
the
surviving entity (an "Offer"), then "4.99%" shall be automatically revised
immediately after such offer to read "9.99%" each place it occurs in this
Section 1. Notwithstanding the above, Holder shall retain the option to either
exercise or not exercise its option(s) to acquire Common Stock pursuant to
the
terms hereof after an Offer, and, in the event of a cash exercise following
a
tender offer, the Exercise Price per share that would otherwise be due shall
instead be offset against the tender price per share to be received by the
Holder, provided, however, that in the event a tender offer is not completed,
Holder shall promptly pay to the Company the Exercise Price that would have
been
due at the time the Warrant was exercised.
2.
Exercise.
(a)
Manner of Exercise. During the Exercise Period, this Warrant may be exercised
as
to all or any lesser number of full shares of Common Stock covered hereby (the
"Warrant Shares") upon surrender of this Warrant, with the Exercise Form
attached hereto as Exhibit A (the "Exercise Form") duly completed and executed,
together with the full Exercise Price (as defined below) for each share of
Common Stock as to which this Warrant is exercised, at the office of the
Company, OMNI U.S.A., INC., Attn: Xxxxxx X. Xxxxxxxx, CFO; 0000 Xxxxxxxxxx
Xx.,
Xxxxx 000, Xxxxxxxx, XX 00000; Telephone: (000) 000-0000, Facsimile (000)
000-0000 or at such other office or agency as the Company may designate in
writing, by overnight mail, with an advance copy of the Exercise Form sent
to
the Company and its Transfer Agent by facsimile (such surrender and payment
of
the Exercise Price hereinafter called the "Exercise of this
Warrant").
(b)
Date
of Exercise. The "Date of Exercise" of the Warrant shall be defined as the
date
that the advance copy of the completed and executed Exercise Form is sent by
facsimile to the Company, provided that the original Warrant and Exercise Form
are received by the Company as soon as practicable thereafter. Alternatively,
the Date of Exercise shall be defined as the date the original Exercise Form
is
received by the Company, if Holder has not sent advance notice by facsimile.
The
Company shall not be required to deliver the shares of Common Stock to the
Holder until the requirements of Section 2(a) above are satisfied.
(c)
Cancellation of Warrant. This Warrant shall be canceled upon the Exercise of
this Warrant, and, as soon as practical after the Date of Exercise, Holder
shall
be entitled to receive Common Stock for the number of shares purchased upon
such
Exercise of this Warrant, and if this Warrant is not exercised in full, Holder
shall be entitled to receive a new Warrant (containing terms identical to this
Warrant) representing any unexercised portion of this Warrant in addition to
such Common Stock.
(d)
Holder of Record. Each person in whose name any Warrant for shares of Common
Stock is issued shall, for all purposes, be deemed to be the Holder of record
of
such shares on the Date of Exercise of this Warrant, irrespective of the date
of
delivery of the Common Stock purchased upon the Exercise of this Warrant.
Nothing in this Warrant shall be construed as conferring upon Holder any rights
as a stockholder of the Company.
3.
Payment of Warrant Exercise Price.
The
Exercise Price ("Exercise Price") shall initially equal $0.60 per share (the
"Initial Exercise Price") or the Company, as a result of the provisions of
Section 5 hereto, may calculate an anti-dilution exercise price (the
“Anti-dilution Exercise Price”).
Payment
of the Exercise Price or the Anti-dilution Exercise Price may be made by either
of the following, or a combination thereof, at the election of
Holder:
2
(i)
Cash
Exercise: cash, bank or cashiers check or wire transfer; or
(ii)
Cashless Exercise: surrender of this Warrant at the principal office of the
Company together with notice of cashless election, in which event the Company
shall issue Holder a number of shares of Common Stock computed using the
following formula:
X
= Y
(A-B)/A
where:
X
= the number of shares of Common Stock to be issued to Holder.
Y
= the
number of shares of Common Stock for which this Warrant is being
exercised.
A
= the
Market Price of one (1) share of Common Stock (for purposes of
this
Section 3(ii), where "MARKET PRICE," as of any date, means
the
Volume Weighted Average Price (as defined herein) of the Company's
Common Stock during the ten (10) consecutive trading day period
immediately preceding the date in question.
As
used herein, the "VOLUME WEIGHTED
AVERAGE PRICE" for any security as of any date means the volume weighted
average sale price on the Over the Counter Electronic Bulletin Board (the
"OTC-BB") as reported by, or based upon data reported by, Bloomberg Financial
Markets or an equivalent, reliable reporting service mutually acceptable to
and hereafter designated by holders of a majority in interest of the
Warrants and the Company ("BLOOMBERG") or, if the OTC-BB is not the
principal trading market for such security, the volume weighted average
sale price of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg,
or, if no volume weighted average sale price is reported for such security,
then the last closing trade price of such security as reported by
Bloomberg, or, if no last closing trade price is reported for such security
by Bloomberg, the average of the bid prices of any market makers for such
security that are listed in the "pink sheets" by the National Quotation
Bureau, Inc. If the Volume Weighted Average Price cannot be calculated for
such security on such date in the manner provided above, the volume
weighted average price shall be the fair market value as mutually
determined by the Company and the holders of a majority in interest of the
Warrants being exercised for which the calculation of the volume weighted
average price is required in order to determine the Exercise Price of such
Warrants. "TRADING DAY" shall mean any day on which the Common Sock is traded
for any period on the OTC-BB, or on the principal securities exchange or other
securities market on which the Common Stock is then being
traded.
B
= the
Exercise Price.
For
purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended,
understood and acknowledged that the Common Stock issuable upon exercise of
this
Warrant in a cashless exercise transaction shall be deemed to have been acquired
at the time this Warrant was issued. Moreover, it is intended, understood and
acknowledged that the holding period for the Common Stock issuable upon exercise
of this Warrant in a cashless exercise transaction shall be deemed to have
commenced on the date this Warrant was issued.
4.
Transfer and Registration.
(a)
Transfer Rights. Subject to the provisions of Section 8 of this Warrant, this
Warrant may be transferred on the books of the Company, in whole or in part,
in
person or by attorney, upon surrender of this Warrant properly completed and
endorsed. This Warrant shall be canceled upon such surrender and, as soon as
practicable thereafter, the person to whom such transfer is made shall be
entitled to receive a new Warrant or Warrants as to the portion of this Warrant
transferred, and Holder shall be entitled to receive a new Warrant as to the
portion hereof retained.
3
(b)
Registrable Securities. The Common Stock issuable upon the exercise of this
Warrant has registration rights pursuant to that certain Registration Rights
Agreements between the Company and Xxxxx Xxxxx, Chief Executive Officer
Potawatomi Business Development Corp. dated July 14, 2006.
5.
Anti-Dilution Adjustments.
(a)
Stock
Dividend. If the Company shall at any time declare a dividend payable in shares
of Common Stock, then Holder, upon Exercise of this Warrant after the record
date for the determination of holders of Common Stock entitled to receive such
dividend, shall be entitled to receive upon Exercise of this Warrant, in
addition to the number of shares of Common Stock as to which this Warrant is
exercised, such additional shares of Common Stock as such Holder would have
received had this Warrant been exercised immediately prior to such record date
and the Exercise Price will be proportionately adjusted.
(b)
Recapitalization or Reclassification. If the Company shall at any time effect
a
recapitalization, reclassification or other similar transaction of such
character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which Holder shall be
entitled to purchase upon Exercise of this Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in
the
case of an increase in the number of shares, proportionally decreased and,
in
the case of decrease in the number of shares, proportionally increased. The
Company shall give Holder the same notice it provides to holders of Common
Stock
of any transaction described in this Section 5(b).
(c)
Distributions. If the Company shall at any time distribute for no consideration
to holders of Common Stock cash, evidences of indebtedness or other securities
or assets (other than cash dividends or distributions payable out of earned
surplus or net profits for the current or preceding years) then, in any such
case, Holder shall be entitled to receive, upon Exercise of this Warrant, with
respect to each share of Common Stock issuable upon such exercise, the amount
of
cash or evidences of indebtedness or other securities or assets which Holder
would have been entitled to receive with respect to each such share of Common
Stock as a result of the happening of such event had this Warrant been exercised
immediately prior to the record date or other date fixing shareholders to be
affected by such event (the "Determination Date").
(d)
Notice of Consolidation or Merger. In the event of a merger, consolidation,
exchange of shares, recapitalization, reorganization, or other similar event,
as
a result of which shares of Common Stock shall be changed into the same or
a
different number of shares of the same or another class or classes of stock
or
securities or other assets of the Company or another entity or there is a sale
of all or substantially all the Company's assets (a "Corporate Change"), then
this Warrant shall be exercisable into such class and type of securities or
other assets as Holder would have received had Holder exercised this Warrant
immediately prior to such Corporate Change; provided, however, that Company
may
not affect any Corporate Change unless it first shall have given thirty (30)
days notice to Holder hereof of any Corporate Change.
(e)
Exercise Price Adjusted. As used in this Warrant, the term "Exercise Price"
shall mean the purchase price per share specified in Section 3 of this Warrant,
until the occurrence of an event stated in subsection (a), (b) or (c) of this
Section 5, and thereafter shall mean said price as adjusted from time to time
in
accordance with the provisions of said subsection. No such adjustment under
this
Section 5 shall be made unless such adjustment would change the Exercise Price
at the time by $.01 or more; provided, however, that all adjustments not so
made
shall be deferred and made when the aggregate thereof would change the Exercise
Price at the time by $.01 or more. No adjustment made pursuant to any provision
of this Section 5 shall have the net effect of increasing the Exercise Price
in
relation to the split adjusted and distribution adjusted price of the Common
Stock. The number of shares of Common Stock subject hereto shall increase
proportionately with each decrease in the Exercise Price.
4
(f)
Adjustments: Additional Shares, Securities or Assets. In the event that at
any
time, as a result of an adjustment made pursuant to this Section 5, Holder
shall, upon Exercise of this Warrant, become entitled to receive shares and/or
other securities or assets (other than Common Stock) then, wherever appropriate,
all references herein to shares of Common Stock shall be deemed to refer to
and
include such shares and/or other securities or assets; and thereafter the number
of such shares and/or other securities or assets shall be subject to adjustment
from time to time in a manner and upon terms as nearly equivalent as practicable
to the provisions of this Section 5.
6.
Fractional Interests.
No
fractional shares or scrip representing fractional shares shall be issuable
upon
the Exercise of this Warrant, but on Exercise of this Warrant, Holder may
purchase only a whole number of shares of Common Stock. If, on Exercise of
this
Warrant, Holder would be entitled to a fractional share of Common Stock or
a
right to acquire a fractional share of Common Stock, such fractional share
shall
be disregarded and the number of shares of Common Stock issuable upon exercise
shall be the next higher number of shares.
7.
Reservation of Shares.
From
and
after May 1, 2006, the Company shall at all times reserve for issuance such
number of authorized and unissued shares of Common Stock (or other securities
substituted therefore as herein above provided) as shall be sufficient for
the
Exercise of this Warrant and payment of the Exercise Price. If at any time
the
number of shares of Common Stock authorized and reserved for issuance is below
the number of shares sufficient for the Exercise of this Warrant and payment
of
the Exercise Price (based on the Exercise Price in effect from time to time),
the Company will promptly take all corporate action necessary to authorize
and
reserve a sufficient number of shares, including, without limitation, calling
a
special meeting of stockholders to authorize additional shares to meet the
Company's obligations under this Section 7, in the case of an insufficient
number of authorized shares, and using its best efforts to obtain stockholder
approval of an increase in such authorized number of shares. The Company
covenants and agrees that upon the Exercise of this Warrant, all shares of
Common Stock issuable upon such exercise shall be duly and validly issued,
fully
paid, nonassessable and not subject to preemptive rights, rights of first
refusal or similar rights of any person or entity.
8.
Restrictions on Transfer.
(a)
Registration or Exemption Required. This Warrant has been issued in a
transaction exempt from the registration requirements of the Act by virtue
of
Regulation D and exempt from state registration under applicable state laws.
The
Warrant and the Common Stock issuable upon the Exercise of this Warrant may
not
be pledged, transferred, sold or assigned except pursuant to an effective
registration statement or an exemption to the registration requirements of
the
Act and applicable state laws.
(b)
Assignment. If Holder can provide the Company with reasonably satisfactory
evidence that the conditions of (a) above regarding registration or exemption
have been satisfied, Holder may sell, transfer, assign, pledge or otherwise
dispose of this Warrant, in whole or in part. Holder shall deliver a written
notice to Company, substantially in the form of the Assignment attached hereto
as Exhibit B, indicating the person or persons to whom the Warrant shall be
assigned and the respective number of warrants to be assigned to each assignee.
The Company shall effect the assignment within ten (10) days, and shall deliver
to the assignee(s) designated by Holder a Warrant or Warrants of like tenor
and
terms for the appropriate number of shares.
5
9.
Benefits of this Warrant.
Nothing
in this Warrant shall be construed to confer upon any person other than the
Company and Holder any legal or equitable right, remedy or claim under this
Warrant and this Warrant shall be for the sole and exclusive benefit of the
Company and Holder.
10.
Arbitration; Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California applicable to agreements made in and wholly to be performed
in that jurisdiction, except for matters arising under the Act or the Securities
Exchange Act of 1934, which matters shall be construed and interpreted in
accordance with such laws. Any controversy or claim arising out of or related
to
this Agreement or the breach thereof, shall be settled by binding arbitration
in
San Diego, California in accordance with the Expedited Procedures (Rules 53-57)
of the Commercial Arbitration Rules of the American Arbitration Association
("AAA"). A proceeding shall be commenced upon written demand by Company or
any
Lender to the other. The arbitrator(s) shall enter a judgment by default against
any party, which fails or refuses to appear in any properly noticed arbitration
proceeding. The proceeding shall be conducted by one (1) arbitrator, unless
the
amount alleged to be in dispute exceeds two hundred fifty thousand dollars
($250,000), in which case three (3) arbitrators shall preside. The arbitrator(s)
will be chosen by the parties from a list provided by the AAA, and if they
are
unable to agree within ten (10) days, the AAA shall select the arbitrator(s).
The arbitrators must be experts in securities law and financial transactions.
The arbitrators shall assess costs and expenses of the arbitration, including
all attorneys' and experts' fees, as the arbitrators believe is appropriate
in
light of the merits of the parties' respective positions in the issues in
dispute. Each party submits irrevocably to the jurisdiction of any state court
sitting in San Diego, California or to the United States District Court sitting
in San Diego, CA for purposes of enforcement of any discovery order, judgment
or
award in connection with such arbitration. The award of the arbitrator(s) shall
be final and binding upon the parties and may be enforced in any court having
jurisdiction. The arbitration shall be held in such place as set by the
arbitrator(s) in accordance with Rule 55. With respect to any arbitration
proceeding in accordance with this section, the prevailing party's reasonable
attorney's fees and expenses shall be borne by the non-prevailing
party.
Although
the parties, as expressed above, agree that all claims, including claims that
are equitable in nature, for example specific performance, shall initially
be
prosecuted in the binding arbitration procedure outlined above, if the
arbitration panel dismisses or otherwise fails to entertain any or all of the
equitable claims asserted by reason of the fact that it lacks jurisdiction,
power and/or authority to consider such claims and/or direct the remedy
requested, then, in only that event, will the parties have the right to initiate
litigation respecting such equitable claims or remedies. The forum for such
equitable relief shall be in either a state or federal court sitting in San
Diego, California. Each party waives any right to a trial by jury, assuming
such
right exists in an equitable proceeding, and irrevocably submits to the
jurisdiction of said California court. California law shall govern both the
proceeding as well as the interpretation and construction of this Agreement
and
the transaction as a whole.
11.
Loss
of Warrant.
Upon
receipt by the Company of evidence of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction) of indemnity
or
security reasonably satisfactory to the Company, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
12.
Notice or Demands.
Notices
or demands pursuant to this Warrant to be given or made by Holder to or on
the
Company shall be sufficiently given or made if sent by certified or registered
mail, return receipt requested, postage prepaid, and addressed, until another
address is designated in writing by the Company, to the address set forth in
Section 2(a) above. Notices or demands pursuant to this Warrant to be given
or
made by the Company to or on Holder shall be sufficiently given or made if
sent
by certified or registered mail, return receipt requested, postage prepaid,
and
addressed, to the address of Holder set forth in the Company's records, until
another address is designated in writing by Holder.
6
IN
WITNESS WHEREOF, the undersigned has executed this Warrant as of the 14th day
of
July 2006.
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OMNI
U.S.A., INC.
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By:
/S/ XXXXXX X.
XXXXXXXX
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XXXXXX
X. XXXXXXXX, CFO
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7
EXHIBIT
A
EXERCISE
FORM FOR WARRANT
TO:
OMNI
U.S.A., INC.
The
undersigned hereby irrevocably exercises the right to purchase ____________
of
the shares of Common Stock (the "Common Stock") of Omni U.S.A. Inc., a Nevada
corporation (the "Company"), evidenced by the attached warrant (the "Warrant"),
and herewith makes payment of the exercise price with respect to such shares
in
full, all in accordance with the conditions and provisions of said
Warrant.
1.
The
undersigned agrees not to offer, sell, transfer or otherwise dispose of any
of
the Common Stock obtained on exercise of the Warrant, except in accordance
with
the provisions of Section 8(a) of the Warrant.
2.
The
undersigned requests that stock certificates for such shares be issued free
of
any restrictive legend, if appropriate, and a warrant representing any
unexercised portion hereof be issued, pursuant to the Warrant in the name of
the
undersigned and delivered to the undersigned at the address set forth
below:
Dated:
Signature
Print
Name
Address
NOTICE
The
signature to the foregoing Exercise Form must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration
or
enlargement or any change whatsoever.
8
EXHIBIT
B
ASSIGNMENT
(To
be
executed by the registered holder desiring to transfer the Warrant)
FOR
VALUE
RECEIVED, the undersigned holder of the attached warrant (the "Warrant") hereby
sells, assigns and transfers unto the person or persons below named the right
to
purchase _______ shares of the Common Stock of Omni U.S.A., Inc., evidenced
by
the attached Warrant and does hereby irrevocably constitute and appoint
______________________ attorney to transfer the said Warrant on the books of
the
Company, with full power of substitution in the premises.
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Dated:
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Signature |
Fill in for new registration of Warrant:
Name
Address
Please print name and address of assignee (including zip code number)
NOTICE
The
signature to the foregoing Assignment must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration
or
enlargement or any change whatsoever.
9
