Contract
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES
ACT
OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.
May
25,
2006
XXXXXXXX.XXX,
INCORPORATED
Warrant
for the Purchase of Shares of Common Stock
For
value
received, this Warrant is hereby issued by Xxxxxxxx.xxx, Incorporated, a Nevada
corporation (the “Company”), to _______________(the “Holder”). Subject to the
provisions of this Warrant, the Company hereby grants to Holder the right to
purchase from the Company ________________(__________) fully paid and
non-assessable shares of Common Stock, at a price of $1.79 per share (the
“Exercise Price”).
The
term
“Common Stock” means the Common Stock, par value $0.001 per share, of the
Company. The number of shares of Common Stock to be received upon the exercise
of this Warrant may be adjusted from time to time as hereinafter set forth.
The
shares of Common Stock deliverable upon such exercise, and as adjusted from
time
to time, are hereinafter referred to as “Warrant Stock.”
The
Holder agrees with the Company that this Warrant is issued, and all the rights
hereunder shall be held, subject to all of the conditions, limitations and
provisions set forth herein.
1
1. Exercise
of Warrant.
(a)
Subject to the terms and conditions set forth herein, this Warrant may be
exercised in whole or in part, pursuant to the procedures provided below, at
any
time on or before the earlier of (i) 5:00 p.m., Eastern time, on May 25, 2011
(the “Expiration Date”) or, if such day is a day on which banking institutions
in New York are authorized by law to close, then on the next succeeding day
that
shall not be such a day. To exercise this Warrant the Holder shall present
and
surrender this Warrant to the Company at its principal office, with the Warrant
Exercise Form attached hereto duly executed by the Holder and accompanied by
payment in cash, wire transfer or by check, payable to the order of the Company,
of the aggregate Exercise Price for the total aggregate number of shares for
which this Warrant is exercised. Upon receipt by the Company of this Warrant,
together with the executed Warrant Exercise Form and payment of the Exercise
Price for the shares to be acquired, in proper form for exercise, and subject
to
the Holder’s compliance with all requirements of this Warrant for the exercise
hereof, the Holder shall be deemed to be the holder of record of the shares
of
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered
to
the Holder; provided,
however,
that no
exercise of this Warrant shall be effective, and the Company shall have no
obligation to issue any Common Stock to the Holder upon any attempted exercise
of this Warrant, unless the Holder shall have first delivered to the Company,
in
form and substance reasonably satisfactory to the Company, appropriate
representations so as to provide the Company reasonable assurances that the
securities issuable upon exercise may be issued without violation of the
registration requirements of the Securities Act and applicable state securities
laws, including without limitation representations that the Holder is familiar
with the Company and its business and financial condition and has had an
opportunity to ask questions and receive documents relating thereto to his
reasonable satisfaction.
(b)
if
the
resale of the Warrant Shares by the holder is not then registered pursuant
to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), delivery to the Company of a written notice of an
election to effect a “Cashless Exercise” (as defined herein) for the Warrant
Shares specified in the Exercise Agreement. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by
the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, 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.
2. Reservation
of Shares.
The
Company will at all times reserve for issuance and delivery upon exercise of
this Warrant all shares of Common Stock from time to time receivable 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 and free of all preemptive rights.
3. Fractional
Shares.
No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant, but the Company shall pay the Holder an amount
equal to the Fair Market Value (as defined below) of such fractional share
of
Common Stock in lieu of each fraction of a share otherwise called for upon
any
exercise of this Warrant.
4. Redemption
at Option of Company.
This
Warrant is subject to redemption, at the option of the Company at any time
prior
to its exercise by the Holder, for $________.
5. Registration
Rights. The
Holder shall have certain piggyback registration rights with respect to the
registration of the Warrant Shares as provided in that certain Registration
Rights Agreement by and between the Company and the parties
thereto.
6. Assignment
or Loss of Warrant.
Subject
to the transfer restrictions herein (including Section 9), upon surrender of
this Warrant to the Company or at the office of its stock transfer agent, if
any, with the Assignment Form annexed hereto duly executed and funds sufficient
to pay any transfer tax, the Company shall, without charge, execute and deliver
a new Warrant in the name of the assignee named in such instrument of assignment
and this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and of reasonably satisfactory indemnification
by
the Holder, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver a replacement Warrant of like tenor and
date.
7. Rights
of the Holder.
The
Holder shall not, by virtue hereof, be entitled to any rights of a stockholder
in the Company, either at law or in equity, and the rights of the Holder are
limited to those expressed in this Warrant.
8. Adjustments.
8.1 Adjustment
for Recapitalization.
If the
Company shall at any time after the date hereof subdivide its outstanding shares
of Common Stock by recapitalization, reclassification or split-up thereof,
the
number of shares of Common Stock subject to this Warrant immediately prior
to
such subdivision shall be proportionately increased, and if the Company shall
at
any time after the date hereof combine the outstanding shares of Common Stock
by
recapitalization, reclassification or combination thereof, the number of shares
of Common Stock subject to this Warrant immediately prior to such combination
shall be proportionately decreased. Any such adjustment and adjustment to the
Exercise Price pursuant to this Section 8.1 shall be effective at the close
of business on the effective date of such subdivision or
combination.
Whenever
the number of shares of Common Stock purchasable upon the exercise of this
Warrant is adjusted, as provided in this Section 8.1, the Exercise Price
shall be adjusted to the nearest cent by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise
immediately prior to such adjustment, and (y) the denominator of which shall
be
the number of shares of Common Stock so purchasable immediately
thereafter.
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8.2 Adjustment
for Reorganization, Consolidation, Merger, Etc.
In case
of any reorganization of the Company after the date hereof or in case after
such
date the Company shall consolidate with or merge into another corporation or
convey all or substantially all of its assets to another corporation, then,
and
in each such case, the Holder of this Warrant upon the exercise thereof as
provided in Section 1 at any time after the consummation of such reorganization,
consolidation, merger or conveyance, shall be entitled to receive, in lieu
of
the securities and property receivable upon the exercise of this Warrant prior
to such consummation, the securities or property to which such Holder would
have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall
be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.
8.3 Certificate
as to Adjustments.
The
adjustments provided in this Section 8 shall be interpreted and applied by
the Company in such a fashion so as to reasonably preserve the applicability
and
benefits of this Warrant (but not to increase or diminish the benefits
hereunder). In each case of an adjustment in the number of shares of Common
Stock receivable on the exercise of the Warrant, the Company at its expense
will
promptly compute such adjustment in accordance with the terms of the Warrant
and
prepare a certificate executed by two executive officers of the Company setting
forth such adjustment and showing in detail the facts upon which such adjustment
is based. The Company will forthwith mail a copy of each such certificate to
each Holder.
8.4 Notices
of Record Date, Etc.
In the
event that:
(a) the
Company authorizes the granting to Common Stock holders of any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or
any other securities; or
(b) the
Company authorizes any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of
all
or substantially all of the assets of the Company to another corporation or
entity; or
(a) the
Company authorizes any voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then,
and
in each such case, the Company shall mail or cause to be mailed to the holder
of
this Warrant at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such right,
and
stating the amount and character of such right, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time, if any
is
to be fixed, as to which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up. Such notice shall be mailed
at least twenty (20) days prior to the date therein specified.
8.5 No
Impairment.
The
Company will not, by any voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by
the
Company, but will at all times in good faith assist in the carrying out of
all
the provisions of this Section 10 and in the taking of all such action as may
be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against impairment.
9. Transfer
to Comply with the Securities Act.
This
Warrant and any Warrant Stock may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (a) to a person who,
in
the opinion of counsel to the Company, is a person to whom this Warrant or
the
Warrant Stock may legally be transferred without registration and without the
delivery of a current prospectus under the Securities Act with respect thereto
and then only against receipt of an agreement of such person to comply with
the
provisions of this Section 9 with respect to any resale or other
disposition of such securities; or (b) to any person upon delivery of a
prospectus then meeting the requirements of the Securities Act relating to
such
securities and the offering thereof for such sale or disposition, and thereafter
to all successive assignees.
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10. Legend.
Unless
the shares of Warrant Stock have been registered under the Securities Act,
upon
exercise of any of the Warrants and the issuance of any of the shares of Warrant
Stock, all certificates representing shares shall bear on the face thereof
substantially the following legend:
The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be sold, offered for sale,
assigned, transferred or otherwise disposed of, unless registered pursuant
to
the provisions of that Act or unless an opinion of counsel to the Corporation
is
obtained stating that such disposition is in compliance with an available
exemption from such registration.
11. Notices.
All
notices required hereunder shall be in writing and shall be deemed given when
telegraphed, delivered personally or within two days after mailing when mailed
by certified or registered mail, return receipt requested, to the Company or
the
Holder, as the case may be, for whom such notice is intended, if to the Holder,
at the address of such party shown on the books of the Company, or if to the
Company, at the address set forth on the signature page hereof, Attn: President,
or at such other address of which the Company or the Holder has been advised
by
notice hereunder.
12. Applicable
Law.
The
Warrant is issued under and shall for all purposes be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflict of laws provisions of such State.
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed on its behalf,
in its corporate name, by its duly authorized officer, all as of the day and
year first above written.
XXXXXXXX.XXX,
INCORPORATED
By:
/s/
Xxxx Xxxxxxxx
Name:
Xxxx Xxxxxxxx
Title:
Chief Executive Officer and President
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WARRANT
EXERCISE FORM
The
undersigned hereby irrevocably elects to (i) exercise the within Warrant to
purchase __________ shares of the Common Stock of Xxxxxxxx.xxx, Incorporated,
a
Nevada corporation, pursuant to the provisions of Section 1 of the attached
Warrant, and hereby makes payment of $__________ in payment therefore. The
undersigned’s execution of this form constitutes the undersigned’s agreement to
all the terms of the Warrant and to comply therewith.
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ASSIGNMENT
FORM
FOR
VALUE
RECEIVED_____________________________ (“Assignor”) hereby sells, assigns and
transfers unto _______________________________ (“Assignee”) all of Assignor’s
right, title and interest in, to and under this Warrant issued by Xxxxxxxx.xxx,
Incorporated dated ______________.
DATED:_______________________________
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ASSIGNEE:
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