NEW GENERATION HOLDINGS, INC. WARRANT TO PURCHASE COMMON STOCK
EXHIBIT
4(vi)
NEW
GENERATION HOLDINGS, INC.
WARRANT
TO PURCHASE
COMMON
STOCK
|
W-200_-
|
______
__, 200__
|
THIS
WARRANT, AND ALL SHARES OF COMMON STOCK ISSUABLE UNDER THIS WARRANT, HAVE
BEEN
AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS
AMENDED ("THE ACT"). SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO
REGISTRATION OR EXEMPTION THEREFROM.
THIS
CERTIFIES THAT, for value received, ______ (the "Investor"), or its permitted
assigns is entitled, subject to the terms and conditions of this Warrant,
at any
time after the Effective Date and before 5:00 P.M. New York City time on
the
Expiration Date, to purchase from New Generation Holdings, Inc., a Delaware
corporation (the "Company"), ______ (______) shares of Common Stock (“Warrant
Stock”), at an initial exercise price per share of Thirty-Five Cents ($0.35),
subject to adjustment as provided in Section 4 hereof.
1. DEFINITIONS:
As
used
in this Warrant, the following terms shall have the following respective
meanings:
“Affiliate”
when
used with respect to any Person, shall mean (a) any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such Person, and (b) any executive officer or director of such
Person
and any executive officer, director or general partner of the other Person
which
controls such Person. For the purposes of this definition, "control" (including
the correlative meanings of the terms "controlling", "controlled by" and
"under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of
the
management and policies of such Person, whether through the ownership of
voting
securities or by contract or otherwise.
"Common
Stock"
shall
mean the Company's Common Stock, par value $0.001.
“Effective
Date"
shall
mean the date first set forth above.
"Expiration
Date"
shall
mean three (3) years from the Effective Date.
"Fair
Market Value"
of a
share of Warrant Stock as of a particular date shall mean:
(a) If
traded
on a securities exchange or the Nasdaq National Market, the Fair Market Value
shall be deemed to be the average of the closing prices of the Common Stock
on
such exchange or market over the five (5) business days ending on the day
immediately prior to the applicable date of valuation;
(b) If
actively traded over-the-counter, the Fair Market Value shall be deemed to
be
the average of the closing bid prices over the 30-day period ending on the
day
immediately prior to the applicable date of valuation; and
(c) If
there
is no active public market, the Fair Market Value shall be the value thereof,
as
agreed upon by the Company and the Holder; provided,
however,
that if
the Company and the Holder cannot agree on such value, such value shall be
determined by an independent valuation firm experienced in valuing businesses
such as the Company and jointly selected in good faith by the Company and
the
Holder. Fees and expenses of the valuation firms shall be paid solely by
the
Company.
"Holder"
shall
mean the Investor or its permitted registered assigns.
"Person"
shall
mean any individual, corporation, partnership, limited liability company,
trust
or other entity or organization, including any governmental authority or
political subdivision thereof.
"Purchase
Price"
shall
mean, for each share of Common Stock, Thirty-Five Cents ($0.35), subject
to
adjustment as provided for herein.
"Registered
Holder"
shall
mean any Holder in whose name this Warrant is registered upon the books and
records maintained by the Company.
"SEC"
shall
mean the United States Securities and Exchange Commission.
"Warrant"
shall
mean this Warrant and any warrant delivered in substitution or exchange therefor
as provided herein.
"Warrant
Stock"
shall
mean the Common Stock and any other securities at any time issued, receivable
or
issuable upon exercise of this Warrant.
2. EXERCISE
OF WARRANT.
2.1 Payment.
Subject
to compliance with the terms and conditions of this Warrant and applicable
securities laws, this Warrant may be exercised, in whole or in part at any
time
or from time to time, from and after the Effective Date and on or before
the
Expiration Date by delivery (including, without limitation, delivery by
facsimile) of the form of Notice of Exercise attached hereto as Exhibit
1
(the
"Notice
of Exercise"),
duly
executed by the Holder, to the Company at its principal office, and as soon
as
practicable after such date, surrendering:
-2-
(a) this
Warrant at the principal office of the Company, and
(b) payment
in cash, by check or by wire transfer of an amount equal to the product obtained
by multiplying the number of shares of Warrant Stock being purchased upon
such
exercise by the then effective Purchase Price (the "Exercise
Amount").
2.2 Net
Issue Exercise Net
Issue Exercise"
.
In lieu
of the payment methods set forth in Section 2.1(b) above, the Holder may
elect
to exchange all or some of the Warrant for shares of Warrant Stock equal
to the
value of the amount of the Warrant being exchanged on the date of exchange.
If
the Holder elects to exchange this Warrant as provided in this Section 2.2,
the
Holder shall tender to the Company the Warrant for the amount being exchanged,
along with written notice of the Holder's election to exchange some or all
of
the Warrant, and the Company shall issue to the Holder the number of shares
of
the Warrant Stock computed using the following formula:
X
=
Y
(A-B)
A
Where:
X
= the
number of shares of Warrant Stock to be issued to the Holder;
Y
= the
total number of shares of Warrant Stock as to which this Warrant is being
exercised;
A
= the
Fair Market Value of one share of Warrant Stock; and
B
= the
Purchase Price of one share of Warrant Stock (as adjusted to the date of
such
calculation).
All
references herein to an "exercise" of the Warrant shall include an exchange
pursuant to this Section 2.2.
2.3 "Easy
Sale" Exercise
In lieu
of the payment methods set forth in Section 2.1 (b) above, when permitted
by law
and applicable regulations (including exchange, Nasdaq and NASD rules and
including that all shares so issued will be deemed to be fully paid,
non-assessable and properly listed or admitted for trading), the Holder may
pay
the Purchase Price through a "same day sale" commitment from the Holder (and
if
applicable a broker-dealer that is a member of the National Association of
Securities Dealers (a "NASD Dealer')), whereby the Holder irrevocably elects
to
exercise this Warrant and to sell a portion of the shares so purchased to
pay
for the Purchase Price and the Holder (or, if applicable, the NASD Dealer)
commits upon sale (or, in the case of the NASD Dealer, upon receipt) of such
shares to forward the Purchase Price directly to the Company.
-3-
2.4 Stock
Certificates; Fractional Shares.
As soon
as practicable on or after any date of exercise of this Warrant pursuant
to this
Section 2, the Company shall issue and deliver to the Person or Persons entitled
to receive the same a certificate or certificates for the number of whole
shares
of Warrant Stock issuable upon such exercise, together with cash in lieu
of any
fraction of a share equal to such fraction of the current Fair Market Value
of
one whole share of Warrant Stock as of the date of exercise of this Warrant.
No
fractional shares or scrip representing fractional shares shall be issued
upon
an exercise of this Warrant.
2.5 Partial
Exercise; Effective Date of Exercise.
In case
of any partial exercise of this Warrant, the Company shall cancel this Warrant
upon surrender hereof and shall execute and deliver a new Warrant of like
tenor
and date for the balance of the shares of Warrant Stock purchasable hereunder.
This Warrant shall be deemed to have been exercised immediately prior to
the
close of business on the date of its surrender for exercise as provided above.
The Person entitled to receive the shares of Warrant Stock issuable upon
exercise of this Warrant shall be treated for all purposes as the holder
of
record of such shares as of the close of business on the date the Holder
is
deemed to have exercised this Warrant.
3. VALID
ISSUANCE; TAXES. All
shares of Warrant Stock issued upon the exercise of this Warrant shall be
validly issued, fully paid and non-assessable; provided that the Company
shall
pay all taxes and other governmental charges that may be imposed in respect
of
the issue or delivery thereof. The Company shall not be required to pay any
tax
or other charge imposed in connection with any transfer involved in the issuance
of any certificate for shares of Warrant Stock in any name other than that
of
the Registered Holder of this Warrant, and in such case the Company shall
not be
required to issue or deliver any stock certificate or security until such
tax or
other charge has been paid, or it has been established to the Company's
reasonable satisfaction that no tax or other charge is due.
4. ADJUSTMENT
OF PURCHASE PRICE AND NUMBER OF SHARES.
The
number of shares of Warrant Stock issuable upon exercise of this Warrant
(or any
shares of stock or other securities or property receivable or issuable upon
exercise of this Warrant) and the Purchase Price are subject to adjustment
upon
occurrence of any of the following events:
4.1 Adjustment
for Stock Splits, Stock Subdivisions or Combinations of Shares.
The
Purchase Price of this Warrant shall be proportionally decreased and the
number
of shares of Warrant Stock issuable upon exercise of this Warrant (or any
shares
of stock or other securities at the time issuable upon exercise of this Warrant)
shall be proportionally increased to reflect any stock split or subdivision
of
the Warrant Stock. The Purchase Price of this Warrant shall be proportionally
increased and the number of shares of Warrant Stock issuable upon exercise
of
this Warrant (or any shares of stock or other securities at the time issuable
upon exercise of this Warrant) shall be proportionally decreased to reflect
any
combination of the Warrant Stock.
-4-
4.2 Reclassification.
If the
Company, by reclassification of securities or otherwise, shall change any
of the
securities as to which purchase rights under this Warrant exist into the
same or
a different number of securities of any other class or classes, this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with
respect
to the securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Purchase
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 4.
4.3 Adjustment
for Capital Reorganization, Merger or Consolidation.
In case
of any reorganization of the capital stock of the Company (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or any merger or consolidation of the Company with
or into
another Person, or the sale of all or substantially all of the assets of
the
Company, then, and in each such case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that the
Holder of this Warrant shall thereafter be entitled to receive upon exercise
of
this Warrant, during the period specified herein and upon payment of the
Purchase Price then in effect, the number of shares of stock or other securities
or property of the successor Person resulting from such reorganization, merger,
consolidation, sale or transfer that a holder of the shares deliverable upon
exercise of this Warrant would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this Warrant had
been
exercised immediately before such reorganization, merger, consolidation,
sale or
transfer, all subject to further adjustment as provided in this Section 4.
The
foregoing provisions of this Section 4.3 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the
stock
or securities of any other Person that are at the time receivable upon the
exercise of this Warrant. If the per-share consideration payable to the Holder
hereof for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration
shall
be determined in good faith by the Company's Board of Directors. In all events,
appropriate adjustment (as determined in good faith by the Company's Board
of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the transaction,
to
the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other property
deliverable after that event-upon exercise of this Warrant.
5. CERTIFICATE
AS TO ADJUSTMENTS5. CERTIFICATE
AS TO ADJUSTMENTS"
.
In each
case of any adjustment in the Purchase Price, or number or type of shares
issuable upon exercise of this Warrant, the Chief Financial Officer or
Controller of the Company shall compute such adjustment in accordance with
the
terms of this Warrant and prepare a certificate setting forth such adjustment
and showing in detail the facts upon which such adjustment is based, including
a
statement of the adjusted Purchase Price. The Company shall promptly send
(by
facsimile and by either first class mail, postage prepaid or overnight delivery)
a copy of each such certificate to the Holder.
-5-
6. LOSS
OR MUTILATION.
Upon
receipt of evidence reasonably satisfactory to the Company of the ownership
of
and the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to it, and (in the case of mutilation) upon surrender
and cancellation of this Warrant, the Company shall execute and deliver in
lieu
thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated
Warrant.
7. RESERVATION
OF WARRANT STOCK. .
The
Company hereby covenants that at all times there shall be reserved for issuance
and delivery upon exercise of this Warrant such number of shares of Warrant
Stock, Common Stock or other shares of capital stock of the Company as are
from
time to time issuable upon exercise of this Warrant and, from time to time,
will
take all steps necessary to amend its Articles of Incorporation to provide
sufficient reserves of shares of Warrant Stock issuable upon exercise of
this
Warrant. All such shares shall be duly authorized, and when issued upon such
exercise, shall be validly issued, fully paid and non-assessable, free and
clear
of all liens, security interests, charges and other encumbrances or restrictions
on sale and free and clear of all preemptive rights, except encumbrances
or
restrictions arising under federal or state securities laws. Issuance of
this
Warrant shall constitute full authority to the Company's officers who are
charged with the duty of executing stock certificates to execute and issue
the
necessary certificates for shares of Warrant Stock upon the exercise of this
Warrant.
8. RESTRICTIONS
ON TRANSFER.
The
Holder, by acceptance hereof, agrees that, absent an effective registration
statement filed with the SEC under the Securities Act of 1933, as amended
(the
"Securities Act"), covering the disposition or sale of this Warrant or the
Warrant Stock issued or issuable upon exercise hereof, as the case may be,
and
registration or qualification under applicable state securities laws, such
Holder will not sell, transfer, pledge, or hypothecate any or all such Warrants
or Warrant Stock, as the case may be, unless either (a) the Company has received
an opinion of counsel, in form and substance reasonably satisfactory to the
Company, to the effect that such registration is not required in connection
with
such disposition or (b) the sale of such securities is made pursuant to SEC
Rule
144.
9. COMPLIANCE
WITH SECURITIES LAWS.
By
acceptance of this Warrant, the Holder hereby represents, warrants and
covenants: (a) that any shares of stock purchased upon exercise of the Warrant
shall be acquired for investment only and not with a view to, or for sale
in
connection with, any distribution thereof; (b) that the Holder has had such
opportunity as such Holder has deemed adequate to obtain from representatives
of
the Company such information as is necessary to permit the Holder to evaluate
the merits and risks of its investment in the Company; (c) that the Holder
is
able to bear the economic risk of holding such shares as may be acquired
pursuant to the exercise of this Warrant for an indefinite period; (d) that
the
Holder understands that the shares of stock acquired pursuant to the exercise
of
this Warrant will not be registered under the Securities Act (unless otherwise
required pursuant to exercise by the Holder of the registration rights, if
any,
previously granted to the Registered Holder) and will be "restricted securities"
within the meaning of SEC Rule 144 and that the exemption from registration
under Rule 144 will not be available for at least one year from the date
of
exercise of this Warrant, subject to any special treatment by the SEC for
exercise of this Warrant pursuant to Section 2.2, and even then will not
be
available unless a public market then exists for the stock, adequate information
concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; (e) that all stock certificates
representing shares of stock issued to the Holder upon exercise of this Warrant
or upon conversion of such shares may have affixed thereto a legend
substantially in the following form:
-6-
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE
AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PREMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT OT REGSITRATION OR EXEMPTION
THEREFROM.
10. NO
RIGHTS OR LIABILTIES AS STOCKHOLDERS.
This
Warrant shall not entitle the Holder to any voting rights or other rights
as a
stockholder of the Company. In the absence of affirmative action by such
Holder
to purchase Warrant Stock by exercise of this Warrant, no provisions of this
Warrant, and no enumeration herein of the rights or privileges of the Holder
hereof shall cause such Holder hereof to be a stockholder of the Company
for any
purpose.
11. NOTICE.
All
notices and other communications from the Company to the Registered Holder
shall
be sent to the Registered Holder at the address for such Registered Holder
set
forth on the Company's books and records.
12. HEADINGS;
SECTION REFERENCE.
The
headings in this Warrant are for purposes of convenience in reference only,
and
shall not be deemed to constitute a part hereof. All Section references herein
are references, to Sections of this Warrant unless specified
otherwise.
13. LAW
GOVERNING.
This
Warrant shall be construed and enforced in accordance with, and governed
by, the
internal laws of the State of New York, without regard to its conflict of
laws
rules. The Company and by acceptance hereof, the Investor hereby consent
to the
jurisdiction of any state or federal court located within the County of Nassau,
State of New York, and irrevocably agree that all actions or proceedings
relating to this Warrant shall be litigated in such courts, and the Company
and
the Investor waive any objection which it may have based on improper venue
or
forum non-conveniens
to the
conduct of any proceeding in any such court.
14. NO
IMPAIRMENT.
The
Company will not, by amendment of its Articles of Incorporation or bylaws,
or
through reorganization, consolidation, merger, dissolution, issue or sale
of
securities, sale of assets or any other voluntary action, avoid or seek to
avoid
the observance or performance of any of the terms of this Warrant, but will
at
all times in good faith assist in the carrying out of all such terms and
in the
taking of all such action as may be necessary or appropriate in order to
protect
the rights of the Registered Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, the Company: (a) will not increase
the
par value of any shares of stock issuable upon the exercise of this Warrant
above the amount payable therefor upon such exercise and (b) will take all
such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Warrant Stock upon
exercise of this Warrant.
16. SEVERABILITY.
If any
term, provision, covenant or restriction of this Warrant is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this Warrant shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
17. COUNTERPARTS.
For the
convenience of the parties, any number of counterparts of this Warrant may
be
executed by the parties hereto and each such executed counterpart shall be,
and
shall be deemed to be, an original instrument.
18. NO
INCONSISTENT AGREEMENTS.
The
Company will not on or after the date of this Warrant enter into any agreement
with respect to its securities which is inconsistent with the rights granted
to
the Holder or otherwise conflicts with the provisions hereof.
19. SATURDAYS,
SUNDAYS AND HOLIDAYS.
If the
Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration
Date shall automatically be extended until 5:00 P.M. the next business
day.
[The
signature page follows.]
-7-
IN
WITNESS WHEREOF,
the
Company has executed this Warrant as of __________.
| NEW GENERATION HOLDINGS, INC. | ||
| |
|
|
| By: | ||
|
|
||
|
Name:
Title:
|
||
[Signature
Page to Warrant]
-8-
EXHIBIT
1
NOTICE
OF EXERCISE
(To
be executed upon exercise of Warrant)
NEW
GENERATION HOLDINGS, INC.
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of NEW
GENERATION HOLDINGS, INC. as
provided for therein, and (check the applicable box):
| 1. |
Tenders
herewith payment of the exercise price in full in the form of cash
or a
certified or official bank check in same-day funds in the amount
of
$_______ for __________ such
securities.
|
| 2. |
Elects
the Net Issue Exercise option pursuant to Section 2.2 of the Warrant,
and
accordingly requests delivery of a net of _________ of such securities,
according to the following
calculation:
|
| X |
=
Y
(A-B) (
)= (
)
[(
) -
(
)]
|
| A (_______) |
Where:
X
= the
number of shares of Warrant Stock to be issued to the Holder;
Y
= the
total number of shares of Warrant Stock as to which this Warrant is being
exercised;
A
= the
Fair Market Value of one share of the Warrant Stock; and
B
= the
Purchase Price of one share of Warrant Stock.
| 3. |
Elects
the Easy Sale Exercise option pursuant to Section 2.3 of the Warrant,
and
accordingly requests delivery of a net of ________ of such
securities.
|
Please
issue a certificate or certificates for such securities in the name of, and
pay
any cash for any fractional share to (please print name, address and social
security number):
Name: ______________________________________
Address: ______________________________________
Signature: ______________________________________
Note:
The
above signature should correspond exactly with the name on the first page
of
this Warrant Certificate or with the name of the assignee appearing in the
assignment form below.
If
said
number of shares shall not be all the shares purchasable under the within
Warrant Certificate, a new Warrant Certificate is to be issued in the name
of
said undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher whole number of shares.
EXHIBIT
2
ASSIGNMENT
(To
be executed only upon assignment of Warrant or a portion
thereof)
WARRANT
NO.___
For
value
received, the undersigned hereby sells, assigns and transfers unto
____________________ the
within Warrant or a portion thereof, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Secretary and/or
Treasurer of the Company as attorney, to transfer said Warrant or such portion
thereof on the books of the within-named Company with respect to the number
of
shares of Warrants Stock set forth below, with full power of substitution
in the
premises:
And
if
said number of shares of Warrant Stock shall not be all the shares of Warrant
Stock represented by the Warrant, a new Warrant is to be issued in the name
of
said undersigned for the balance remaining of the shares of Warrant Stock
registered represented by said Xxxxxxx.
Dated: ______________________________________
Signature: ______________________________________
Notice:
The signature to the foregoing Assignment must correspond to the name as
written
upon the face of this security in every particular, without alteration or
any
change whatsoever; signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program)
pursuant to SEC Rule 17Ad-15.
