THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE
AGREEMENT DATED AS OF DECEMBER 27, 2006, NEITHER THIS WARRANT NOR ANY
OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT
OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR
OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
REGULATION S UNDER SUCH ACT.
Right to Purchase
8,970,000 Shares
of Common Stock,
par value $.001
per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, AJW Offshore, LTD., or
its registered assigns, is entitled to purchase from Cross Atlantic
Commodities, Inc., a Nevada Corporation (the "Company"), at any time or
from time to time during the period specified in Paragraph 2 hereof,
8,970,000 fully paid and nonassessable shares of the Company's Common
Stock, par value $.001 per share (the "Common Stock"), at an exercise
price per share equal to $.30 (the "Exercise Price"). The term
"Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof. The term
"Warrants" means this Warrant and the other warrants issued pursuant to
that certain Securities Purchase Agreement, dated December 27, 2006, by
and among the Company and the Buyers listed on the execution page
thereof (the "Securities Purchase Agreement").
This Warrant is subject to the following terms, provisions, and
conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for
Shares. Subject to the provisions hereof, this Warrant may be
exercised by the holder hereof, in whole or in part, by the surrender
of this Warrant, together with a completed exercise agreement in the
form attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's principal
executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), and upon (i) payment to
the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the
Warrant Shares specified in the Exercise Agreement or (ii) delivery to
the Company of a written notice of an election to effect a "Cashless
Exercise" (as defined in Section 10(c) below) for the Warrant Shares
specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's
designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been surrendered,
the completed Exercise Agreement shall have been delivered, and payment
shall have been made for such shares as set forth above. Certificates
for the Warrant Shares so purchased, representing the aggregate number
of shares specified in the Exercise Agreement, shall be delivered to
the holder hereof within a reasonable time, not exceeding five (5)
2
business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be
requested by the holder hereof and shall be registered in the name of
such holder or such other name as shall be designated by such holder.
If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the
time of delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this
Warrant shall not then have been exercised. In addition to all other
available remedies at law or in equity, if the Company fails to deliver
certificates for the Warrant Shares within five (5) business days after
this Warrant is exercised, then the Company shall pay to the holder in
cash a penalty (the "Penalty") equal to 2% of the number of Warrant
Shares that the holder is entitled to multiplied by the Market Price
(as hereinafter defined) for each day that the Company fails to deliver
certificates for the Warrant Shares. For example, if the holder is
entitled to 100,000 Warrant Shares and the Market Price is $2.00, then
the Company shall pay to the holder $4,000 for each day that the
Company fails to deliver certificates for the Warrant Shares. The
Penalty shall be paid to the holder by the fifth day of the month
following the month in which it has accrued.
Notwithstanding anything in this Warrant to the contrary, in no
event shall the holder of this Warrant be entitled to exercise a number
of Warrants (or portions thereof) in excess of the number of Warrants
(or portions thereof) upon exercise of which the sum of (i) the number
of shares of Common Stock beneficially owned by the holder and its
affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised Warrants
and the unexercised or unconverted portion of any other securities of
the Company (including the Notes (as defined in the Securities Purchase
Agreement)) subject to a limitation on conversion or exercise analogous
to the limitation contained herein) and (ii) the number of shares of
Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is
being made, would result in beneficial ownership by the holder and its
affiliates of more than 4.9% of the outstanding shares of Common Stock.
For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder, except as otherwise provided in clause (i) of the preceding
sentence. Notwithstanding anything to the contrary contained herein,
the limitation on exercise of this Warrant set forth herein may not be
amended without (i) the written consent of the holder hereof and the
Company and (ii) the approval of a majority of shareholders of the
Company.
2. Period of Exercise. This Warrant is exercisable at any time
or from time to time on or after the date on which this Warrant is
issued and delivered pursuant to the terms of the Securities Purchase
Agreement and before 6:00 p.m., New York, New York time on the seventh
(7th) anniversary of the date of issuance (the "Exercise Period").
3
3. Certain Agreements of the Company. The Company hereby
covenants and agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will,
upon issuance in accordance with the terms of this Warrant, be validly
issued, fully paid, and nonassessable and free from all taxes, liens,
and charges with respect to the issue thereof.
(b) Reservation of Shares. During the Exercise Period,
the Company shall at all times have authorized, and reserved for the
purpose of issuance upon exercise of this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant.
(c) Listing. The Company shall promptly secure the
listing of the shares of Common Stock issuable upon exercise of the
Warrant upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant)
and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all shares of Common Stock from time to
time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be
listed on such national securities exchange or automated quotation
system.
(d) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed by it hereunder, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder
of this Warrant in order to protect the exercise privilege of the
holder of this Warrant against dilution or other impairment, consistent
with the tenor and purpose of this Warrant. Without limiting the
generality of the foregoing, the Company (i) will not increase the par
value of any shares of Common Stock receivable upon the exercise of
this Warrant above the Exercise Price then in effect, and (ii) will
take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant.
(e) Successors and Assigns. This Warrant will be binding
upon any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all the Company's assets.
4. Antidilution Provisions. During the Exercise Period, the
Exercise Price and the number of Warrant Shares shall be subject to
adjustment from time to time as provided in this Paragraph 4.
In the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise Price
shall be rounded up to the nearest cent.
(a) Adjustment of Exercise Price and Number of Shares
upon Issuance of Common Stock. Except as otherwise provided in
Paragraphs 4(c) and 4(e) hereof, if and whenever on or after the date
of issuance of this Warrant, the Company issues or sells, or in
accordance with Paragraph 4(b) hereof is deemed to have issued or sold,
any shares of Common Stock for no consideration or for a consideration
per share (before deduction of reasonable expenses or commissions or
underwriting discounts or allowances in connection therewith) less than
the Market Price on the date of issuance (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance, the Exercise Price will be
reduced to a price determined by multiplying the Exercise Price in
effect immediately prior to the Dilutive Issuance by a fraction, (i)
the numerator of which is an amount equal to the sum of (x) the number
of shares of Common Stock actually outstanding immediately prior to the
Dilutive Issuance, plus (y) the quotient of the aggregate
consideration, calculated as set forth in Paragraph 4(b) hereof,
received by the Company upon such Dilutive Issuance divided by the
Market Price in effect immediately prior to the Dilutive Issuance, and
(ii) the denominator of which is the total number of shares of Common
Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.
(b) Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Paragraph
4(a) hereof, the following will be applicable:
(i) Issuance of Rights or Options. If the Company
in any manner issues or grants any warrants, rights or options, whether
or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common
Stock ("Convertible Securities") (such warrants, rights and options to
purchase Common Stock or Convertible Securities are hereinafter
referred to as "Options") and the price per share for which Common
Stock is issuable upon the exercise of such Options is less than the
Market Price on the date of issuance or grant of such Options, then the
maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or
grant of such Options, be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For purposes
of the preceding sentence, the "price per share for which Common Stock
is issuable upon the exercise of such Options" is determined by
dividing (i) the total amount, if any, received or receivable by the
Company as consideration for the issuance or granting of all such
Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options,
plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the
time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further
adjustment to the Exercise Price will be made upon the actual issuance
5
of such Common Stock upon the exercise of such Options or upon the
conversion or exchange of Convertible Securities issuable upon exercise
of such Options.
(ii) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities,
whether or not immediately convertible (other than where the same are
issuable upon the exercise of Options) and the price per share for
which Common Stock is issuable upon such conversion or exchange is less
than the Market Price on the date of issuance, then the maximum total
number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities will, as of the date of the
issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the Company for such price per
share. For the purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance
or sale of all such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon
the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. No further
adjustment to the Exercise Price will be made upon the actual issuance
of such Common Stock upon conversion or exchange of such Convertible
Securities.
(iii) Change in Option Price or Conversion Rate.
If there is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any Options;
(ii) the amount of additional consideration, if any, payable to the
Company upon the conversion or exchange of any Convertible Securities;
or (iii) the rate at which any Convertible Securities are convertible
into or exchangeable for Common Stock (other than under or by reason of
provisions designed to protect against dilution), the Exercise Price in
effect at the time of such change will be readjusted to the Exercise
Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed
additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold.
(iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of shares of
Common Stock issuable upon exercise of any Option or upon conversion or
exchange of any Convertible Securities is not, in fact, issued and the
rights to exercise such Option or to convert or exchange such
Convertible Securities shall have expired or terminated, the Exercise
Price then in effect will be readjusted to the Exercise Price which
would have been in effect at the time of such expiration or termination
had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in
respect of the actual number of shares of Common Stock issued upon
exercise or conversion thereof), never been issued.
6
(v) Calculation of Consideration Received. If any
Common Stock, Options or Convertible Securities are issued, granted or
sold for cash, the consideration received therefor for purposes of this
Warrant will be the amount received by the Company therefor, before
deduction of reasonable commissions, underwriting discounts or
allowances or other reasonable expenses paid or incurred by the Company
in connection with such issuance, grant or sale. In case any Common
Stock, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the amount
of the consideration other than cash received by the Company will be
the fair value of such consideration, except where such consideration
consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date
of receipt. In case any Common Stock, Options or Convertible
Securities are issued in connection with any acquisition, merger or
consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of
such portion of the net assets and business of the non-surviving
corporation as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined in good
faith by the Board of Directors of the Company.
(vi) Exceptions to Adjustment of Exercise Price.
No adjustment to the Exercise Price will be made (i) upon the exercise
of any warrants, options or convertible securities granted, issued and
outstanding on the date of issuance of this Warrant; (ii) upon the
grant or exercise of any stock or options which may hereafter be
granted or exercised under any employee benefit plan, stock option plan
or restricted stock plan of the Company now existing or to be
implemented in the future, so long as the issuance of such stock or
options is approved by a majority of the independent members of the
Board of Directors of the Company or a majority of the members of a
committee of independent directors established for such purpose; or
(iii) upon the exercise of the Warrants.
(c) Subdivision or Combination of Common Stock. If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise) the
shares of Common Stock acquirable hereunder into a greater number of
shares, then, after the date of record for effecting such subdivision,
the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced. If the Company at any time combines (by
reverse stock split, recapitalization, reorganization, reclassification
or otherwise) the shares of Common Stock acquirable hereunder into a
smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to
such combination will be proportionately increased.
(d) Adjustment in Number of Shares. Upon each adjustment
of the Exercise Price pursuant to the provisions of this Paragraph 4,
the number of shares of Common Stock issuable upon exercise of this
Warrant shall be adjusted by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of
shares of Common Stock issuable upon exercise of this Warrant
7
immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
(e) Consolidation, Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into any
other corporation, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection
with a plan of complete liquidation of the Company, then as a condition
of such consolidation, merger or sale or conveyance, adequate provision
will be made whereby the holder of this Warrant will have the right to
acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of
this Warrant, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number of
shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of this Warrant had such consolidation, merger
or sale or conveyance not taken place. In any such case, the Company
will make appropriate provision to insure that the provisions of this
Paragraph 4 hereof will thereafter be applicable as nearly as may be in
relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the
consummation thereof, the successor corporation (if other than the
Company) assumes by written instrument the obligations under this
Paragraph 4 and the obligations to deliver to the holder of this
Warrant such shares of stock, securities or assets as, in accordance
with the foregoing provisions, the holder may be entitled to acquire.
(f) Distribution of Assets. In case the Company shall
declare or make any distribution of its assets (including cash) to
holders of Common Stock as a partial liquidating dividend, by way of
return of capital or otherwise, then, after the date of record for
determining shareholders entitled to such distribution, but prior to
the date of distribution, the holder of this Warrant shall be entitled
upon exercise of this Warrant for the purchase of any or all of the
shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been
the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such distribution.
(g) Notice of Adjustment. Upon the occurrence of any
event which requires any adjustment of the Exercise Price, then, and in
each such case, the Company shall give notice thereof to the holder of
this Warrant, which notice shall state the Exercise Price resulting
from such adjustment and the increase or decrease in the number of
Warrant Shares purchasable at such price upon exercise, setting forth
in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the
Chief Financial Officer of the Company.
(h) Minimum Adjustment of Exercise Price. No adjustment
of the Exercise Price shall be made in an amount of less than 1% of the
Exercise Price in effect at the time such adjustment is otherwise
required to be made, but any such lesser adjustment shall be carried
8
forward and shall be made at the time and together with the next
subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than 1% of such Exercise Price.
(i) No Fractional Shares. No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but the
Company shall pay a cash adjustment in respect of any fractional share
which would otherwise be issuable in an amount equal to the same
fraction of the Market Price of a share of Common Stock on the date of
such exercise.
(j) Other Notices. In case at any time:
(i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out
of retained earnings) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of stock
of any class or other rights;
(iii) there shall be any capital reorganization of
the Company, or reclassification of the Common Stock, or consolidation
or merger of the Company with or into, or sale of all or substantially
all its assets to, another corporation or entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company; then, in each
such case, the Company shall give to the holder of this Warrant (a)
notice of the date on which the books of the Company shall close or a
record shall be taken for determining the holders of Common Stock
entitled to receive any such dividend, distribution, or subscription
rights or for determining the holders of Common Stock entitled to vote
in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up and (b) in the
case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, notice of the
date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled
to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up, as the case may
be. Such notice shall be given at least 30 days prior to the record
date or the date on which the Company's books are closed in respect
thereto. Failure to give any such notice or any defect therein shall
not affect the validity of the proceedings referred to in clauses (i),
(ii), (iii) and (iv) above.
(k) Certain Events. If any event occurs of the type
contemplated by the adjustment provisions of this Paragraph 4 but not
expressly provided for by such provisions, the Company will give notice
of such event as provided in Paragraph 4(g) hereof, and the Company's
9
Board of Directors will make an appropriate adjustment in the Exercise
Price and the number of shares of Common Stock acquirable upon exercise
of this Warrant so that the rights of the holder shall be neither
enhanced nor diminished by such event.
(l) Certain Definitions.
(i) "Common Stock Deemed Outstanding" shall mean
the number of shares of Common Stock actually outstanding (not
including shares of Common Stock held in the treasury of the Company),
plus (x) pursuant to Paragraph 4(b)(i) hereof, the maximum total number
of shares of Common Stock issuable upon the exercise of Options, as of
the date of such issuance or grant of such Options, if any, and (y)
pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of
shares of Common Stock issuable upon conversion or exchange of
Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.
(ii) "Market Price," as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock
on the OTCBB for the five (5) Trading Days immediately preceding such
date as reported by Bloomberg, or (ii) if the OTCBB is not the
principal trading market for the shares of Common Stock, the average of
the last reported sale prices on the principal trading market for the
Common Stock during the same period as reported by Bloomberg, or (iii)
if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of
the Company or, at the option of a majority-in-interest of the holders
of the outstanding Warrants by (b) an independent investment bank of
nationally recognized standing in the valuation of businesses similar
to the business of the corporation. The manner of determining the
Market Price of the Common Stock set forth in the foregoing definition
shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.
(iii) "Common Stock," for purposes of this
Paragraph 4, includes the Common Stock, par value $.001 per share, and
any additional class of stock of the Company having no preference as to
dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only shares of
Common Stock, par value $.001 per share, in respect of which this
Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character
referred to in Paragraph 4(e) hereof, the stock or other securities or
property provided for in such Paragraph.
5. Issue Tax. The issuance of certificates for Warrant Shares
upon the exercise of this Warrant shall be made without charge to the
holder of this Warrant or such shares for any issuance tax or other
costs in respect thereof, provided that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name
other than the holder of this Warrant.
10
6. No Rights or Liabilities as a Shareholder. This Warrant
shall not entitle the holder hereof to any voting rights or other
rights as a shareholder of the Company. No provision of this Warrant,
in the absence of affirmative action by the holder hereof to purchase
Warrant Shares, and no mere enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability of
such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of
the Company.
7. Transfer, Exchange, and Replacement of Warrant.
(a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part,
upon surrender of this Warrant, together with a properly executed
assignment in the form attached hereto, at the office or agency of the
Company referred to in Paragraph 7(e) below, provided, however, that
any transfer or assignment shall be subject to the conditions set forth
in Paragraph 7(f) hereof and to the applicable provisions of the
Securities Purchase Agreement. Until due presentment for registration
of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all
purposes, and the Company shall not be affected by any notice to the
contrary.
(b) Warrant Exchangeable for Different Denominations.
This Warrant is exchangeable, upon the surrender hereof by the holder
hereof at the office or agency of the Company referred to in Paragraph
7(e) below, for new Warrants of like tenor representing in the
aggregate the right to purchase the number of shares of Common Stock
which may be purchased hereunder, each of such new Warrants to
represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.
(c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant and, in the case of any such loss, theft,
or destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company, or, in the case of any
such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the
surrender of this Warrant in connection with any transfer, exchange, or
replacement as provided in this Paragraph 7, this Warrant shall be
promptly canceled by the Company. The Company shall pay all taxes
(other than securities transfer taxes) and all other expenses (other
than legal expenses, if any, incurred by the holder or transferees) and
charges payable in connection with the preparation, execution, and
delivery of Warrants pursuant to this Paragraph 7.
(e) Register. The Company shall maintain, at its
principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), a register
11
for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as
well as the name and address of each transferee and each prior owner of
this Warrant.
(f) Exercise or Transfer Without Registration. If, at
the time of the surrender of this Warrant in connection with any
exercise, transfer, or exchange of this Warrant, this Warrant (or, in
the case of any exercise, the Warrant Shares issuable hereunder), shall
not be registered under the Securities Act of 1933, as amended (the
"Securities Act") and under applicable state securities or blue sky
laws, the Company may require, as a condition of allowing such
exercise, transfer, or exchange, (i) that the holder or transferee of
this Warrant, as the case may be, furnish to the Company a written
opinion of counsel, which opinion and counsel are acceptable to the
Company, to the effect that such exercise, transfer, or exchange may be
made without registration under said Securities Act and under
applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act; provided that no such opinion,
letter or status as an "accredited investor" shall be required in
connection with a transfer pursuant to Rule 144 under the Securities
Act. The first holder of this Warrant, by taking and holding the same,
represents to the Company that such holder is acquiring this Warrant
for investment and not with a view to the distribution thereof.
8. Notices. All notices, requests, and other communications
required or permitted to be given or delivered hereunder to the holder
of this Warrant shall be in writing, and shall be personally delivered,
or shall be sent by certified or registered mail or by recognized
overnight mail courier, postage prepaid and addressed, to such holder
at the address shown for such holder on the books of the Company, or at
such other address as shall have been furnished to the Company by
notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder
to the Company shall be in writing, and shall be personally delivered,
or shall be sent by certified or registered mail or by recognized
overnight mail courier, postage prepaid and addressed, to the office of
the Company at 0000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attention:
Chief Executive Officer, or at such other address as shall have been
furnished to the holder of this Warrant by notice from the Company.
Any such notice, request, or other communication may be sent by
facsimile, but shall in such case be subsequently confirmed by a
writing personally delivered or sent by certified or registered mail or
by recognized overnight mail courier as provided above. All notices,
requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to re-
ceive such notice at the address of such person for purposes of this
Paragraph 9, or, if mailed by registered or certified mail or with a
recognized overnight mail courier upon deposit with the United States
Post Office or such overnight mail courier, if postage is prepaid and
the mailing is properly addressed, as the case may be.
12
9. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE
PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES
FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST
CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY
OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE
ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.
10. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof
may only be amended by an instrument in writing signed by the Company
and the holder hereof.
(b) Descriptive Headings. The descriptive headings of
the several paragraphs of this Warrant are inserted for purposes of
reference only, and shall not affect the meaning or construction of any
of the provisions hereof.
(c) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, this Warrant may be exercised by
presentation and surrender of this Warrant to the Company at its
principal executive offices with a written notice of the holder's
intention to effect a cashless exercise, including a calculation of the
number of shares of Common Stock to be issued upon such exercise in
accordance with the terms hereof (a "Cashless Exercise"). In the event
of a Cashless Exercise, in lieu of paying the Exercise Price in cash,
the holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares to
which it would otherwise be entitled by a fraction, the numerator of
which shall be the difference between the then current Market Price per
share of the Common Stock and the Exercise Price, and the denominator
of which shall be the then current Market Price per share of Common
Stock. For example, if the holder is exercising 100,000 Warrants with
a per Warrant exercise price of $0.75 per share through a cashless
exercise when the Common Stock's current Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will
receive 62,500 shares of Common Stock.
(d) Remedies. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to the
holder, by vitiating the intent and purpose of the transaction
13
contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Warrant will
be inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Warrant, that the holder shall
be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach
of this Warrant and to enforce specifically the terms and provisions
thereof, without the necessity of showing economic loss and without any
bond or other security being required.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
CROSS ATLANTIC COMMODITIES, INC.
By: ____________________________
Xxxxxxx Enemaerke
Chief Executive Officer and President
Dated as of December 27, 2006
14
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 200_
To: ______________________
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock
covered by such Warrant, and makes payment herewith in full therefor at
the price per share provided by such Warrant in cash or by certified or
official bank check in the amount of, or by surrender of securities
issued by the Company (including a portion of the Warrant) having a
market value (in the case of a portion of this Warrant, determined in
accordance with Section 10(c) of the Warrant) equal to $_________.
Please issue a certificate or certificates for such shares of Common
Stock in the name of and pay any cash for any fractional share to:
Name:_____________________
Signature:
Address:__________________
______________________
Note:The above signature should
correspond exactly with the name on
the face of the within Warrant, if
applicable.
and, if said number of shares of Common Stock shall not be all the
shares purchasable under the within Warrant, a new Warrant is to be
issued in the name of said undersigned covering the balance of the
shares purchasable thereunder less any fraction of a share paid in
cash.
17
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant,
with respect to the number of shares of Common Stock covered thereby
set forth hereinbelow, to:
Name of Assignee Address No of Shares
---------------- ------- ------------
, and hereby irrevocably constitutes and appoints _____________________
as agent and attorney-in-fact to transfer said Warrant on the books of
the within-named corporation, with full power of substitution in the
premises.
Dated: ________ __, 200_
In the presence of: ______________________________
Name:______________________________
Signature:_________________________
Title of Signing Officer or Agent
(if any):
__________________________
Address: __________________________
__________________________
Note: The above signature should
correspond exactly with the name on
the face of the within Warrant, if
applicable.
PHL_A #1956552 v1 7
