CONSULTING AGREEMENT
Exhibit
10.4
THIS
CONSULTING AGREEMENT (this
“Agreement”) is entered into effective the 28th
day of
July 2008 by and between Xxxxx Xxxxxxx, an individual (“Consultant”), and
TableMAX Holdings, LLC, a California limited liability company (the
“Company”).
WHEREAS,
in
connection with the transactions contemplated by the Unit Exchange Agreement
(the “Unit Exchange Agreement”) dated as of June 27, 2008 by and among CJPG,
Inc., a Nevada corporation (“CJPG”), the Company, and the members of the
Company, and only subject to their consummation, the Company desires to engage
Consultant on a limited basis, and Consultant desires to accept such engagement,
pursuant to the terms and conditions set forth in this Agreement.
NOW,
THEREFORE,
in
consideration of the mutual covenants herein contained, the parties agree as
follows:
1. Services.
The
Company hereby agrees to engage Consultant on a limited basis to provide various
consulting services on behalf of the Company, and Consultant hereby accepts
such
engagement with the Company on the terms and conditions set forth herein.
Consultant shall report directly to and shall perform all activities and
services reasonably requested by the Company’s Chief Executive Officer (the
“Services”). Consultant shall use his best efforts to make himself available to
render such Services to the best of his abilities. The Services shall be
performed in a good professional and workmanlike manner by Consultant, to the
Company’s reasonable satisfaction. Consultant shall not be required to devote
more than five hours during any calendar week nor more than ten hours during
any
calendar month in the performance of his services hereunder. Consultant shall
be
allowed to perform the services required hereunder from his personal home or
office.
2. Term.
The
parties agree that this agreement shall have a term of two years from the date
hereof.
3. Compensation. In
consideration for Consultant entering into this Agreement
with
Company and performing the Services required hereunder:
3.1 Equity
Grants.
Subject
to, and within the first two business days following, the closing of the
transactions contemplated by the Unit Exchange Agreement (the “Closing”), the
Company hereby agrees to cause CJPG to issue to Consultant, or Consultant’s
respective designee, 370,346 shares (“Shares”) of CJPG Common Stock and two
warrants (the “Warrants”), both in the form similar to that attached hereto as
Exhibit A.
(a) The
first
Warrant will grant Consultant the right to purchase up to 1,141,902 shares
of
CJPG Common Stock at an exercise price of $0.405 per share.
(b) The
second Warrant will grant Consultant the right to purchase an aggregate of
1,234,488 shares of CJPG’s common stock, at an exercise price of $0.405 per
share.
The
Shares shall vest and become fully paid on the one year anniversary of this
Agreement (“Anniversary Date”), subject to Consultant’s fulfillment of his
obligations under this Agreement. In the event of Consultant’s breach of this
Agreement prior to the Anniversary Date that remains uncured after the tenth
(10th) day following written notice of such breach from the Company, the Shares
shall be forfeited and subject to cancellation by the Company without further
notice. Upon the Anniversary Date, and assuming no prior forfeiture or uncured
breach as of such date, the Shares shall be deemed to be fully paid,
non-assessable and without restriction other than as set forth in Section 3.2
below. The shares of Common Stock underlying the Warrants (“Warrant Shares”),
when issued and paid for pursuant to the terms of the Warrants, shall be fully
paid and non-assessable upon issuance and subject to the provisions of Section
3.2 below. The parties acknowledge that the Company intends to conduct a
6.172440476
for
one
reverse split shortly after the date of this Agreement. The parties further
acknowledge and agree the Shares and the Warrant Shares and exercise prices
set
forth above are pre-split amounts and shall be proportionately adjusted in
the
event of the reverse split.
3.2 Acknowledgement.
Consultant hereby acknowledges and agrees that the Shares, the Warrants and
the
Warrant Shares (collectively the “Securities”) shall be subject to the following
provisions:
(i) The
Securities will be issued pursuant to exemptions from registration under the
Securities Act of 1933, as amended (the “Act”), and applicable state securities
laws, will not be registered for resale with the United States Securities and
Exchange Commission (the “SEC”) or any state securities commission and, as such,
will constitute “restricted securities” as defined in the Act and will bear an
appropriate restrictive legend;
(ii) Consultant
may not offer, sell, hypothecate, pledge, transfer, assign or otherwise dispose
of the Securities without (A) first delivering to the Company an opinion of
counsel satisfactory to the Company that any proposed disposition or transfer
may be made lawfully without the registration of the Securities pursuant to
the
Act and applicable state laws, or (B) registration of such Securities with
the
SEC and any appropriate state securities commissions (it being expressly
understood that the Company shall not have any obligation to register the
Securities);
(iii) The
parties agree that the provisions of this Section 3.2 shall survive any
termination of this Agreement.
2
4. Independent
Consultant Relationship. The
relationship between the parties shall be strictly limited to the performance
of
the Services and shall not constitute a joint venture, partnership, or
employer-employee relationship. It is expressly understood and agreed that
Consultant is wholly separate and apart from the Company, and that under no
circumstances are Consultant’s employees or agents to be considered the
Company’s employees or agents. Consultant further agrees that Consultant will be
solely responsible for all taxes and benefits relating to the Services and
any
and all compensation paid pursuant to this Agreement, including, but not limited
to, self-employment tax, income tax, workers compensation, insurance, holidays,
vacations and any other fees or taxes that may be assessed by any local, state
or federal body. Consultant shall have no authority to bind the Company to
any
contract, agreement or other arrangement or make any representation or deliver
any instructions on behalf of the Company except as expressly authorized in
writing by the Company’s Chief Executive Officer or Chief Financial Officer.
Moreover,
neither
Consultant nor any of Consultant’s employees or agents will be entitled to
participate in any benefit plans available to the Company’s officers, directors
or employees.
5. Confidential
Information.
Consultant
shall
maintain the confidentiality of all trade secrets, (whether owned or licensed
by
the Company) and related or other interpretative materials and analyses of
the
Company’s projects, or knowledge of the existence of any material, information,
analyses, projects, proposed joint ventures, mergers, acquisitions, divestitures
and other such anticipated or contemplated business ventures of the Company,
and
other confidential or proprietary information of the Company (“Confidential
Information and Materials”) obtained by Consultant as result of this Agreement
during the term of the Agreement and for two (2) years following termination
of
Consultant’s engagement with the Company.
In
the
event that such Confidential Information and Materials are memorialized on
any
computer hardware, software, CD-ROM, disk, tape, or other media, Company shall
have the right, subject to the rights of third parties under contract,
copyright, or other law, to view, use, and copy for safekeeping or backup
purposes such Confidential Information and Materials. During the period of
confidentiality, Consultant shall make no use of such Confidential Information
and Materials for its own financial or other benefit, and shall not retain
any
originals or copies, or reveal or disclose any Confidential Information and
Materials to any third parties, except as otherwise expressly agreed by the
Company. Consultant shall have no right to use the Company’s corporate logos,
trademarks, service marks, or other intellectual property without prior written
permission of the Company and subject to any limitations or restrictions upon
such use as the Company may require.
Upon
expiration or termination of this Agreement, Consultant shall turn over to
a
designated representative of the Company all property in Consultant’s possession
and custody and belonging to the Company. Consultant shall not retain any copies
or reproductions of correspondence, memoranda, reports, notebooks, drawings,
photographs or other documents relating in any way to the affairs of the Company
and containing Confidential Information and Materials which came into
Consultant’s possession at any time during the term of this
Agreement.
Consultant
acknowledges that it may receive from time to time material nonpublic
information concerning the Company and other parties involved with the Company.
Consultant, on behalf of itself and its affiliates, acknowledges that it is
familiar with the Federal securities laws and regulations outlawing xxxxxxx
xxxxxxx and represents and covenants that it shall act in strict accordance
with
such laws and regulations at all times.
3
The
parties agree that the provisions of this Section 5 shall survive any
termination of this Agreement.
6. Notices.
Any
notice required or permitted under this Agreement shall be personally delivered
or sent by recognized overnight courier or by certified mail, return receipt
requested, postage prepaid, and shall be effective when received (if personally
delivered or sent by recognized overnight courier) or on the third day after
mailing (if sent by certified mail, return receipt requested, postage prepaid)
at the principal place of business of Consultant or the Company, as the case
may
be.
7. Survival
of Certain Provisions.
Those
provisions of this Agreement which by their terms extend beyond the termination
or non-renewal of this Agreement (including all representations, warranties,
and
covenants of the parties) shall remain in full force and effect and survive
such
termination or non-renewal.
8. Severability.
Each
provision of this Agreement shall be considered severable such that if any
one
provision or clause conflicts with existing or future applicable law, or may
not
be given full effect because of such law, this shall not affect any other
provision which can be given effect without the conflicting provision or
clause.
9. Entire
Agreement.
This
Agreement, the exhibits and any addendum hereto contain the entire agreement
and
understanding between the parties, and supersede all prior agreements and
understandings relating to the subject matter hereof. There are no
understandings, conditions, representations or warranties of any kind between
the parties except as expressly set forth herein.
10. Assignability.
Consultant may not assign this Agreement to any third party for whatever purpose
without the express written consent of the Company. The Company may not assign
this Agreement to any third party without the express written consent of
Consultant except by operation of law, or through merger, liquidation,
recapitalization or sale of all or substantially all of the assets of the
Company, provided that the Company may assign this Agreement at any time to
an
affiliate of the Company. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their respective representatives,
successors, and assigns.
11. Headings.
The
headings of the paragraphs and sections of this Agreement are inserted solely
for the convenience of reference. They shall in no way define, limit, extend,
or
aid in the construction of the scope, extent, or intent of this Agreement.
12. Waiver.
The
failure of a party to enforce the provisions of this Agreement shall not be
construed as a waiver of any provision or the right of such party thereafter
to
enforce each and every provision of this Agreement.
13. Amendments.
No
amendments of this Agreement shall be binding upon the Company or Consultant
unless made in writing, signed by the parties hereto, and delivered to the
parties at the addresses provided herein.
4
14. Jurisdiction.
This
Agreement, including the documents, instruments and agreements to be executed
and/or delivered by the parties pursuant hereto, shall be construed, governed
by
and enforced in accordance with the internal laws of the State of Nevada,
without giving effect to the principles of comity or conflicts of laws thereof.
Consultant and the Company agree and consent that any legal action, suit or
proceeding seeking to enforce any provision of this Agreement shall be
instituted and adjudicated solely and exclusively in any state or Federal court
having jurisdiction in Nevada, and Consultant and the Company agree that venue
will be proper in such courts and waive any objection which they may have now
or
hereafter to the venue of any such suit, action or proceeding in such courts,
and each hereby irrevocably consents and agrees to the jurisdiction of said
courts in any such suit, action or proceeding.
15. Counterparts
and Electronic Signatures.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the same
Agreement.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first set forth
above.
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TABLEMAX
HOLDINGS, LLC
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By:
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/s/
Xxxxxxx Xxxxxxx
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Name:
Xxxxxxx Xxxxxxx
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Its:
Chief Executive Officer
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CONSULTANT:
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/s/
Xxxxx Xxxxxxx
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5
EXHIBIT
“A”
NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
AND APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (II) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY
BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY
SUCH SECURITIES.
CJPG,
INC.
WARRANT
TO PURCHASE COMMON STOCK
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Warrant
No. [_________]
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Original
Issue Date:
[ ],
2008
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CJPG,
Inc., a Nevada corporation (the “Company”),
hereby certifies that, for value received,
[ ] or
its permitted registered assigns (the “Holder”),
is
entitled to purchase from the Company up to a total of
[ ]
shares of common stock, $0.001 par value (the “Common
Stock”),
of
the Company (each such share, a “Warrant
Share”
and
all
such shares, the “Warrant
Shares”)
at an
exercise price per share equal to $[ ] (as
adjusted from time to time as provided in Section 9 herein, the “Exercise
Price”),
at
any time and from time to time from on or after the date hereof (the “Trigger
Date”) and through and including 5:00 P.M., prevailing Pacific time, on
[ ],
2011 (the “Expiration
Date”),
and
subject to the following terms and conditions:
1.
Definitions.
In
addition to the terms defined elsewhere in this Warrant (this “Warrant”),
capitalized terms that are not otherwise defined herein have the meanings given
to such terms in that certain Securities Purchase Agreement, dated [ ],
2008, by
and among the Company and the Purchasers identified therein (the “Purchase
Agreement”).
2. Registration
of Warrants.
The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant
Register”),
in
the name of the record Holder (which shall include the initial Holder or, as
the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
6
3.
Registration
of Transfers.
Subject
to the restrictions on transfer set forth in Section 4.1 of the Purchase
Agreement and compliance with all applicable securities laws, the Company shall
register the transfer of all or any portion of this Warrant in the Warrant
Register, upon (i) surrender of this Warrant, with the Form of Assignment
attached as Schedule
2
hereto
duly completed and signed, to the Company’s transfer agent or to the Company at
its address specified herein (ii) delivery, at the request of the Company,
of an
opinion of counsel reasonably satisfactory to the Company to the effect that
the
transfer of such portion of this Warrant may be made pursuant to an available
exemption from the registration requirements of the Securities Act and all
applicable state securities or blue sky laws and (iii) delivery by the
transferee of a written statement to the Company certifying that the transferee
is an “accredited investor” as defined in Rule 501(a) under the Securities Act
and making the representations and certifications set forth in Section 3.2(b),
(c) and (d) of the Purchase Agreement, to the Company at its address specified
in the Purchase Agreement. Upon any such registration or transfer, a new warrant
to purchase Common Stock in substantially the form of this Warrant (any such
new
warrant, a “New
Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a Holder
of a Warrant.
4.
Exercise
and Duration of Warrants.
(a)
All
or
any part of this Warrant shall be exercisable by the registered Holder at any
time and from time to time on or after the Trigger Date and through and
including 5:00 P.M. prevailing Pacific time on the Expiration Date. At 5:00
P.M., prevailing Pacific time, on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value
and
this Warrant shall be terminated and no longer outstanding.
(b) The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Schedule 1 hereto (the “Exercise
Notice”),
appropriately completed and duly signed, (ii) payment of the Exercise Price
for
the number of Warrant Shares as to which this Warrant is being exercised (which
may take the form of a “cashless exercise” if so indicated in the Exercise
Notice and if a “cashless exercise” may occur at such time pursuant to Section
10 below), and the date such items are delivered to the Company (as determined
in accordance with the notice provisions hereof) is an “Exercise
Date.”
The
delivery by (or on behalf of) the Holder of the Exercise Notice and the
applicable Exercise Price as provided above shall constitute the Holder’s
certification to the Company that its representations contained in Section
3.2(b), (c) and (d) of the Purchase Agreement are true and correct as of the
Exercise Date as if remade in their entirety (or, in the case of any transferee
Holder that is not a party to the Purchase Agreement, such transferee Holder’s
certification to the Company that such representations are true and correct
as
to such assignee Holder as of the Exercise Date). The Holder shall not be
required to deliver the original Warrant in order to effect an exercise
hereunder. Execution and delivery of the Exercise Notice shall have the same
effect as cancellation of the original Warrant and issuance of a New Warrant
evidencing the right to purchase the remaining number of Warrant
Shares.
5.
Delivery
of Warrant Shares.
Upon
exercise of this Warrant, the Company shall promptly (but in no event later
than
three Trading Days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate (provided that, if the Registration
Statement is not effective and the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder
or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise Date
an
opinion of counsel reasonably satisfactory to the Company to the effect that
the
issuance of such Warrant Shares in such other name may be made pursuant to
an
available exemption from the registration requirements of the Securities Act
and
all applicable state securities or blue sky laws), a certificate for the Warrant
Shares issuable upon such exercise, free of restrictive legends, unless a
registration statement covering the resale of the Warrant Shares and naming
the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to
Rule
144 under the Securities Act. The Holder, or any Person permissibly so
designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise Date.
If
the Warrant Shares are to be issued free of all restrictive legends, the Company
shall, upon the written request of the Holder, use its best efforts to deliver,
or cause to be delivered, Warrant Shares hereunder electronically through The
Depository Trust Company or another established clearing corporation performing
similar functions, if available; provided, that, the Company may, but will
not
be required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through such a clearing
corporation.
7
6.
Charges,
Taxes and Expenses.
Issuance and delivery of certificates for shares of Common Stock upon exercise
of this Warrant shall be made without charge to the Holder for any issue or
transfer tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall
be
paid by the Company; provided,
however,
that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the registration of any certificates for Warrant
Shares or Warrants in a name other than that of the Holder or an Affiliate
thereof. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7.
Replacement
of Warrant.
If this
Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction (in such case) and, in each case, a customary and
reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested
as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant.
8.
Reservation
of Warrant Shares.
The
Company covenants that it will at all times reserve and keep available out
of
the aggregate of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which
are then issuable and deliverable upon the exercise of this entire Warrant,
free
from preemptive rights or any other contingent purchase rights of persons other
than the Holder (taking into account the adjustments and restrictions of
Section
9).
The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid
and
nonassessable. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Shares
may be listed.
9.
Certain
Adjustments.
The
Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this
Section
9.
8
(a) Stock
Dividends and Splits.
If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class
of
capital stock that is payable in shares of Common Stock, (ii) subdivides its
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines its outstanding shares of Common Stock into a smaller number of shares,
then in each such case the Exercise Price shall be multiplied by a fraction,
the
numerator of which shall be the number of shares of Common Stock outstanding
immediately before such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.
(b) Fundamental
Transactions.
If, at
any time while this Warrant is outstanding (i) the Company effects any merger
or
consolidation of the Company with or into another Person, in which the Company
is not the survivor, (ii) the Company effects any sale of all or substantially
all of its assets or a majority of its Common Stock is acquired by a third
party, in each case, in one or a series of related transactions, (iii) any
tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which all or substantially all of the holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (iv) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares of Common
Stock covered by Section 9(a) above) (in any such case, a “Fundamental
Transaction”),
then
the Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant without regard to any limitations on exercise contained herein
(the “Alternate
Consideration”).
The
Company shall not effect any such Fundamental Transaction unless prior to or
simultaneously with the consummation thereof, any successor to the Company,
surviving entity or the corporation purchasing or otherwise acquiring such
assets or other appropriate corporation or entity shall assume the obligation
to
deliver to the Holder, such Alternate Consideration as, in accordance with
the
foregoing provisions, the Holder may be entitled to purchase and/or receive
(as
the case may be), and the other obligations under this Warrant. The provisions
of this paragraph (c) shall similarly apply to subsequent transactions analogous
to a Fundamental Transaction.
(c)
Number
of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
(a) of this Section, the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for
the increased or decreased number of Warrant Shares shall be the same as the
aggregate Exercise Price in effect immediately prior to such adjustment.
(d)
Calculations.
All
calculations under this Section
9
shall be
made to the nearest cent or the nearest 1/100th
of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of
the
Company, and the sale or issuance of any such shares shall be considered an
issue or sale of Common Stock.
9
(e)
Notice
of Adjustments.
Upon
the occurrence of each adjustment pursuant to this Section
9,
the
Company at its expense will, at the written request of the Holder, promptly
compute such adjustment, in good faith, in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, including
a
statement of the adjusted Exercise Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate
to
the Holder and to the Company’s transfer agent.
(f)
Notice
of Corporate Events.
If,
while this Warrant is outstanding, the Company (i) declares a dividend or any
other distribution of cash, securities or other property in respect of its
Common Stock, including, without limitation, any granting of rights or warrants
to subscribe for or purchase any capital stock of the Company, (ii) authorizes
or approves, enters into any agreement contemplating or solicits stockholder
approval for any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then,
except if such notice and the contents thereof shall be deemed to constitute
material non-public information, the Company shall deliver to the Holder a
notice describing the material terms and conditions of such transaction at
least
ten (10) Trading Days prior to the applicable record or effective date on which
a Person would need to hold Common Stock in order to participate in or vote
with
respect to such transaction, and the Company will take all steps reasonably
necessary in order to insure that the Holder is given the practical opportunity
to exercise this Warrant prior to such time so as to participate in or vote
with
respect to such transaction; provided,
however,
that
the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.
10.
Payment
of Exercise Price.
The
Holder shall pay the Exercise Price in immediately available funds; provided,
however,
that
if, on any Exercise Date the shares issuable upon exercise of this Warrant
are
not freely resalable without restriction under the Securities Act, the Holder
may, in its sole discretion, satisfy its obligation to pay the Exercise Price
through a “cashless exercise”, in which event the Company shall issue to the
Holder the number of Warrant Shares determined as follows:
X
= Y
[(A-B)/A]
where:
X
= the
number of Warrant Shares to be issued to the Holder.
Y
= the
total number of Warrant Shares with respect to which this Warrant is being
exercised.
A
= the
average of the Closing Sale Prices of the shares of Common Stock (as reported
by
Bloomberg Financial Markets) for the five Trading Days ending on the date
immediately preceding the Exercise Date.
B
= the
Exercise Price then in effect for the applicable Warrant Shares at the time
of
such exercise.
10
For
purposes of this Warrant, “Closing
Sale Price”
means,
for any security as of any date, the last trade price for such security on
the
principal securities exchange or trading market for such security, as reported
by Bloomberg Financial Markets, or, if such exchange or trading market begins
to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00:00 p.m., New York
Time,
as reported by Bloomberg Financial Markets, or if the foregoing do not apply,
the last trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or, if no last trade price is reported for such security by Bloomberg
Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC. If the Closing Sale Price cannot be calculated
for a
security on a particular date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then the Company
shall, within two business days submit via facsimile (a) the disputed
determination of the Warrant Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant. The Company shall cause at its expense the
investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the
results no later than ten business days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced,
on
the date this Warrant was originally issued pursuant to the Purchase Agreement
(provided that the Commission continues to take the position that such treatment
is proper at the time of such exercise).
11.
No
Fractional Shares.
No
fractional Warrant Shares will be issued in connection with any exercise of
this
Warrant. In lieu of any fractional shares which would otherwise be issuable,
the
number of Warrant Shares to be issued shall be rounded up to the next whole
number.
12.
Notices.
Any and
all notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice
or
communication is delivered via facsimile at the facsimile number specified
in
the Purchase Agreement prior to 5:00 p.m. (prevailing Pacific time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice
or
communication is delivered via facsimile at the facsimile number specified
in
the Purchase Agreement on a day that is not a Trading Day or later than 5:00
p.m. (prevailing Pacific time) on any Trading Day, (iii) the Trading Day
following the date of mailing, if sent by nationally recognized overnight
courier service specifying next business day delivery, or (iv) upon actual
receipt by the party to whom such notice is required to be given, if by hand
delivery. The address and facsimile number of a party for such notices or
communications shall be as set forth in the Purchase Agreement unless changed
by
such party by two Trading Days’ prior notice to the other party in accordance
with this Section 12.
11
13.
Warrant
Agent.
The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or
any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.
14.
Miscellaneous.
(a) The
Holder, solely in such Person's capacity as a holder of this Warrant, shall
not
be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance
to
the Holder of the Warrant Shares which such Person is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 14(a), the Company shall
provide the Holder with copies of the same notices and other information given
to the shareholders of the Company, contemporaneously with the giving thereof
to
the shareholders.
(b) Subject
to the restrictions on transfer set forth on the first page hereof and in
Section 4.1 of the Purchase Agreement, and compliance with applicable securities
laws, this Warrant may be assigned by the Holder. This Warrant may not be
assigned by the Company except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder, or their successors and
assigns.
(c) GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED
BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT
TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), 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 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 VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR 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. THE COMPANY HEREBY WAIVES
ALL
RIGHTS TO A TRIAL BY JURY.
12
(d)
The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions hereof.
(e)
In
case
any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon
a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
(f)
Except
as
otherwise set forth herein, prior to exercise of this Warrant, the Holder hereof
shall not, by reason of by being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE
PAGE FOLLOWS]
13
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its
authorized officer as of the date first indicated above.
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CJPG,
INC.
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By:
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Name:
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Title:
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14
SCHEDULE
1
FORM
OF
EXERCISE NOTICE
(To
be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)
Ladies
and Gentlemen:
(1) The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
CJPG, Inc. a Nevada corporation (the “Company”). Capitalized terms used herein
and not otherwise defined herein have the respective meanings set forth in
the
Warrant.
(2) The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.
(3) The
Holder intends that payment of the Exercise Price shall be made as (check
one):
o Cash
Exercise
o “Cashless
Exercise” under Section 10
(4) If
the
Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in
immediately available funds to the Company in accordance with the terms of
the
Warrant.
(5) Pursuant
to this Exercise Notice, the Company shall deliver to the Holder _____________
Warrant Shares in accordance with the terms of the Warrant.
Dated:_______________,
_____
Name
of
Holder: ___________________________
By:__________________________________
Name:
_______________________________
Title:
_______________________________
(Signature
must conform in all respects to name of Holder as specified on the face of
the
Warrant)
SCHEDULE
2
CJPG,
INC.
FORM
OF
ASSIGNMENT
[To
be
completed and signed only upon transfer of Warrant]
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
(the
“Transferee” the right represented by the within Warrant to purchase
shares
of Common Stock of CJPG, Inc. (the “Company”) to which the within Warrant
relates and appoints
attorney
to transfer said right on the books of the Company with full power of
substitution in the premises. In connection therewith, the undersigned
represents, warrants, covenants and agrees to and with the Company
that:
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(a)
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the
offer and sale of the Warrant contemplated hereby is being made in
compliance with Section 4(1) of the United States Securities Act
of 1933,
as amended (the “Securities Act”) or another valid exemption from the
registration requirements of Section 5 of the Securities Act and
in
compliance with all applicable securities laws of the states of the
United
States;
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(b)
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the
undersigned has not offered to sell the Warrant by any form of general
solicitation or general advertising, including, but not limited to,
any
advertisement, article, notice or other communication published in
any
newspaper, magazine or similar media or broadcast over television
or
radio, and any seminar or meeting whose attendees have been invited
by any
general solicitation or general
advertising;
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(c)
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the
undersigned has read the Transferee’s investment letter included herewith,
and to its actual knowledge, the statements made therein are true
and
correct; and
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(d)
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the
undersigned understands that the Company may condition the transfer
of the
Warrant contemplated hereby upon the delivery to the Company by the
undersigned or the Transferee, as the case may be, of a written opinion
of
counsel (which opinion shall be in form, substance and scope customary
for
opinions of counsel in comparable transactions) to the effect that
such
transfer may be made without registration under the Securities Act
and
under applicable securities laws of the states of the United
States.
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Dated: ,
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(Signature
must conform in all respects to name of holder as specified on the
face of
the Warrant)
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Address
of Transferee
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In
the presence of:
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