WARRANT AGENCY AGREEMENT
EXHIBIT
4.1
THIS
WARRANT AGREEMENT (the “Agreement”), dated as of the __ day of __________, 2007,
is entered into by and between U.S. Dry Cleaning Corporation, a Delaware
corporation, (hereinafter called the “Company”) and Interwest Transfer Company,
Inc., (hereinafter called “Warrant Agent”).
W
I T
N E S S E T H
WHEREAS,
pursuant to a Registration Statement on Form SB-2, Registration Statement No.
333-139689 filed with the Securities and Exchange Commission (the “Commission”)
relating to the Company’s proposed public offering of its securities (the
“Public Offering”), the Company proposes to issue up to 3,000,000 units (the
“Units”), each Unit consisting of one share of the Common Stock of the Company
and one Redeemable Common Stock Purchase Warrant (which is initially exercisable
to purchase one share of Common Stock on the terms and conditions set forth
in
this Agreement (a “Warrant”)). The Warrants are subject to certain limitations
and restrictions as set forth in this Agreement;
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and
the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange and exercise of the Warrants;
NOW
THEREFORE, in consideration of the premises and mutual agreements contained
herein, it is agreed as follows:
SECTION
1. Appointment
of Warrant Agent.
The
Company hereby appoints the Warrant Agent to act as agent for the Company in
connection and accordance with this Agreement, and the Warrant Agent hereby
accepts the appointment.
SECTION
2. Form
of Warrant.
The
text
of the Warrant and the form of election to purchase shares to be printed on
the
reverse thereof shall be substantially as set forth respectively in Exhibit
A
hereto.
The number of shares issuable upon exercise of the Warrants is subject to
adjustment on the occurrence of certain events, as described herein. The
Warrants shall be executed on behalf of the Company by a manual or facsimile
signature of the present or future president, chief executive officer or vice
president of the Company, under its corporate seal affixed or in facsimile,
and
attested to by the secretary or an assistant secretary.
Warrants
shall be dated as of the closing date of the Offering commenced on ___________,
2007 (the “Effective Date”).
-1-
SECTION
3. Countersignature
and Registration.
The
Warrant Agent shall maintain books for the transfer and registration of
Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall
issue and register the Warrants in the names of the respective holders thereof.
The Warrants shall be countersigned manually or by facsimile by the Warrant
Agent (or by any successor to the Warrant Agent then serving under this
Agreement), and shall not be valid for any purpose unless so countersigned.
Warrants may be so countersigned, however, by the Warrant Agent, notwithstanding
that the person whose manual or facsimile signature appears thereon as the
proper officers of the Company have ceased to be such officers at the time
of
such countersignature and delivery.
SECTION
4. Transfers
and Exchanges.
The
Warrant Agent shall not permit the transfer of any Warrant unless authorized
in
writing by the Company. Warrants which have been canceled shall be delivered
upon request by the Warrant Agent to the Company. Warrants may be exchanged
at
the option of the holder thereof, when surrendered at the office of the Warrant
Agent, for another Warrant or Warrants of different denominations, of like
tenor, and representing in the aggregate the right to purchase a like number
of
shares of Common Stock.
SECTION
5. Exercise
of Warrants.
Subject
to the provisions of this Agreement and the Warrant Certificate in substantially
the form attached hereto, each registered holder of Warrants shall have the
right to purchase from the Company, and the Company shall issue and sell to
such
registered holder, the number of fully paid and nonassessable shares of Common
Stock of the Company specified in the Warrants, upon surrender to the Company
at
the office of the Warrant Agent of such Warrants, with the form of election
to
purchase the Warrants filled out and signed, and upon payment to the Company
of
the Warrant Price, as specified herein. Any Warrant may be exercised in whole
or
in part. In the event of exercise in part, the Warrant Agent shall issue and
deliver to the Warrant Holder another Warrant of like tenor representing the
unexercised number of shares. Payment for the shares upon exercise of Warrants
shall be in cash or by certified check to the order of the Company. Subject
to
the provisions of this Agreement and the Warrant Certificate in substantially
the form attached hereto, Warrants may be exercised for a period of five years
beginning at the Closing of the Offering. No adjustment shall be made for any
dividends on any Common Stock issuable upon exercise of any Warrant. Subject
to
Section 5 hereof, upon surrender of Warrants and payment of the Warrant Price,
the Company shall issue and cause to be delivered with all reasonable dispatch
to, or upon the written order of the registered holder of Warrants exercised,
and in such name or names as the holder shall designate, a certificate or
certificates representing the shares so purchased, together with cash, as
provided in Section 11 hereof, in respect of any fraction of a share of Common
Stock otherwise issuable upon surrender. Such certificate or certificates shall
be deemed to have been issued, and any person so designated to be named therein
shall be deemed to have become a holder of record of such shares, as of the
date
of surrender of the Warrants and the payment of the Warrant Price; provided,
however, that if, at the date of surrender of such Warrants and the payment
of
such Warrant Price, the transfer books for the Common Stock or other class
of
stock purchasable upon the exercise of such Warrants
-2-
shall
be
closed, the certificates for the shares in respect of which such Warrants are
then exercised shall be issuable as of the date of which such books shall be
opened, whether before, on, or after 5:00 p.m., Utah time, on the respective
dates of expiration of the Warrants, and until such date, the Company shall
have
no obligation or duty to deliver any certificate for such shares; provided,
further, however, that the transfer books, unless otherwise required by law
or
applicable rule of any national securities exchange, or bylaw of the Company,
shall not be closed at any one time for a period in excess of 20 days. The
Company, whenever requested by the Warrant Agent, will supply the Warrant Agent
with Warrants duly executed on behalf of the Company for such purpose. The
Company shall pay all taxes and other governmental charges (other than income
tax) that may be imposed in respect of the issue or delivery of the shares
issued upon the exercise of any Warrants. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of the any certificate for shares in any name other than
that of the Warrant holder surrendered in connection with the purchase of such
shares, and in such case neither the Company nor the Warrant Agent shall be
required to issue or deliver any stock certificate until such tax or other
charge has been paid or it has been established to the Company's satisfaction
that no tax or charge is due.
SECTION
6. Call
Provision.
In
the
event that the closing sales price of a share of Common Stock as traded on
the
most senior exchange or quotation medium where the shares are quoted equals
or
exceeds $5.00 (appropriately adjusted for any stock split, reverse stock split,
stock dividend or other reclassification or combination of the Common Stock
occurring after the date hereof) for at least twenty consecutive trading days,
the Company, upon 30 days prior written notice (the “Notice Period”) given to
the Warrant holder, shall have the right to call some or all of the then
outstanding Warrants at a redemption price equal to $0.05 per share of Common
Stock then purchasable pursuant to the outstanding Warrants. Notwithstanding
any
such notice by the Company, the Warrant holder shall have the right to exercise
any Warrants prior to the end of the Notice Period. In connection with any
transfer or exchange of less than all of the Warrants, the Company’s right to
call the Warrants shall apply pro rata to the shares underlying the Warrants
with respect to the transferring holder and the transferee holder of the
Warrants.
SECTION
7. Replacement
of Warrant.
Upon
receipt of evidence reasonably satisfactory to the Company of the ownership
of
and the loss, theft, destruction or mutilation of this Warrant and (in the
case
of loss, theft or destruction) upon delivery of a lost instrument bond (open
penalty) satisfactory to the Company and Warrant Agent, or (in the case of
mutilation) upon surrender and cancellation of the mutilated Warrant, the
Company will execute and the Transfer Agent will countersign and deliver, in
lieu thereof, a new Warrant of like tenor.
-3-
SECTION
8. Reservation
of Common Stock.
The
Company has reserved and shall at all times reserve and keep available out
of
its authorized but unissued shares of Common Stock, solely for the purpose
of
issuance upon the exercise of this Warrant, such number of shares of Common
Stock as shall be issuable upon the exercise hereof. The Company covenants
and
agrees that, upon exercise of this Warrant and payment of the purchase price
therefor, all shares of Common Stock issuable upon such exercise shall be duly
and validly issued, fully paid and nonassessable. The Company will keep a copy
of this Agreement on file with the Transfer Agent for the Common Stock and
with
every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized to requisition
from
time to time such Transfer Agent for stock certificates required to honor
outstanding Warrants. The Company will supply such Transfer Agent with duly
executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be required to be paid if the
Company elects not to issue fractional shares under Section 11 hereof. Any
Warrant certificates surrendered in the exercise of the rights thereby evidenced
shall be canceled by the Warrant Agent and shall thereafter be delivered to
the
Company, and the Warrant Agent shall confirm to the Company that the number
of
shares of Common Stock corresponding to such canceled Warrants have been issued
upon the exercise of such Warrants. Promptly after the date of expiration of
the
Warrants, the Warrant Agent shall certify to the Company the total aggregate
amount of Warrants then outstanding.
SECTION
9. Warrant
Price.
The
Warrant price at which Common Stock shall be purchasable shall be $3.50 per
share at any time during the period commencing at the closing date of the
Offering and until five years after to closing date of the Offering. The Company
will confirm the expiration date of each warrant to the Warrant
Agent.
SECTION
10. Protection
Against Dilution.
a. Adjustment
for Subdivisions, Combinations of Dividends.
In
case
the Company shall at any time, or from time to time, after the Effective Date
subdivide or combine the outstanding shares of Common Stock or declare a
dividend payable in Common Stock, the exercise price of the Warrants in effect
immediately prior to the subdivision, combination or record date for such
dividend payable in Common Stock shall forthwith be proportionately increased,
in the case of combination, or decreased, in the case of subdivision or dividend
payable in Common Stock, and each share of Common Stock purchasable upon
exercise of each Warrant shall be change to the number determined by dividing
the then current exercise price by the exercise price as adjusted after the
subdivision, combination or dividend payable in Common Stock. Upon the
occurrence of any subdivision, combination or dividend, the Company will confirm
to the Warrant Agent the adjusted exercise price of each outstanding
warrant.
-4-
b. Adjustment
for Certain Dividends and Distributions.
In
the
event the Company at any time, or from time to time, after the Effective Date
makes or fixes a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in securities
of
the Company other than shares of Common Stock, then and in each such event
provisions shall be made so that each Warrant holder (the "Holder") shall
receive upon exercise of the Warrant, in addition to the number of shares of
Common Stock receivable thereupon, the amount of securities of the Company
which
the Holder would have received had its Warrant been exercised into Common Stock
on the date of such event and had it thereafter, during the period from the
date
of such event to and including the date of exercise, retained such securities
receivable by it as aforesaid during such period, subject to all other
adjustments called for during such period under this Section 10 with respect
to
the rights of the Holder of the Warrant.
c. Adjustment
for Reclassification, Exchange and Substitution.
If
the
Common Stock issuable upon the exercise of the Warrants is changed into the
same
or a different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets, provided for elsewhere in this Section 10),
then and in any such event the Holder shall have the right thereafter, upon
exercise of the Warrant, to receive the kind and amount of stock and other
securities and property receivable upon such recapitalization, reclassification
or other change, in an amount equal to the amount that the Holder would have
been entitled to have had the Holder exercised the Warrant immediately prior
to
such recapitalization, reclassification or change, but only to the extent the
Warrant is actually exercised, all subject to further adjustment as provided
herein.
d. Reorganization,
Mergers, Consolidations of Sales of Assets.
If
at any
time, or from time to time, there is a capital reorganization of the Common
Stock (other than a recapitalization, subdivision, combination, reclassification
or exchange of the Common Stock provided for elsewhere in this Section 10)
or
merger or consolidation of the Company with or into another corporation, or
the
sale of all or substantially all of the Company's properties and assets to
any
other person then, as a part of such reorganization, merger, consolidation
or
sale, provision shall be made so that the Holder of each Warrant shall
thereafter be entitled to receive, upon exercise of each Warrant (and only
to
the extent such Warrant is exercised), the number of shares of stock or other
securities or property of the Company, or of the successor corporation resulting
from such merger or consolidation or sale, to which a Holder of Common Stock,
or
other securities, deliverable upon the exercise of the Warrant would otherwise
have been entitled on such capital reorganization, merger, consolidation, or
sale.
-5-
SECTION
11. Fractional
Interest.
The
Company shall not be required to issue fractions of Common Stock on the exercise
of Warrants. If any fraction of a common share would, except for the provisions
of this Section, be issuable on the exercise of any Warrant (or specified
portions thereof), the Company shall purchase such fraction for an amount in
cash equal to the current market value of such fraction based upon the current
market price of the common share determined in the manner set forth below.
For
purposes of this Section, the current market price on each day shall be the
last
reported sales price, regular way, in either case on any national securities
exchange on which the Common Stock is listed or admitted to trading, or, if
the
Common Stock is not listed or admitted to trading on any such exchange, the
average of the bid and asked prices on such day as reported on NASDAQ, or if
such shares are not then listed on NASDAQ, as furnished by National Quotation
Bureau Incorporated or any similar organization selected from time to time
by
the Company for the purpose. All calculations under this Section shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case
may
be.
SECTION
12. Notices
of Warrant Holders.
Nothing
contained in this Warrant shall be construed as conferring upon any Warrant
Holder hereto the right to vote or to consent or to receive notice as a
shareholder in respect of any meetings of shareholders for the election of
directors or any other matter or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration
of
the Warrant and prior to its exercise, any of the following events shall
occur:
a. The
Company shall fix a record date of the Holders of its shares of Common Stock
for
the purpose of entitling them to receive a dividend or distribution;
or
b. The
Company shall offer to the Holders of its Common Stock any additional shares
of
capital stock of the Company or securities convertible into or exchangeable
for
shares of capital stock of the Company, or any option (except for options to
be
granted to Company's employees pursuant to a stock option plan approved by
the
Company's Board of Directors), right or warrant, to subscribe therefor; or
c. The
Company shall call any of the Warrants for redemption; or
d. A
merger,
consolidation, dissolution, liquidation or winding up of the Company or a sale
of all or substantially all of its property, assets and business as an entirety
shall be proposed;
-6-
The
Company shall give written notice of such event to the Warrant Holder at least
thirty (30) days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the shareholders entitled to
received such dividend, distribution, convertible or exchangeable securities
or
subscription rights, entitled to vote on such proposed dissolution, liquidation,
winding up or sale, or in the case where Warrants have been called for
redemption, the Company shall give written notice of such event to the Warrant
Holder at least thirty (30) days prior to the date fixed as a record date.
Such
notice shall specify such record date, the date of closing the transfer books,
or the redemption date, as the case may be. Failure to give such notice or
any
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividends or the issuance of any
convertible or exchangeable securities, or subscription rights, options or
warrants or any proposed dissolution, liquidation, winding up, sale or
redemption.
All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed to have been duly made when delivered, or mailed
by
U.S. mail, certified mail, postage prepaid, return receipt
requested:
a.
If
to any
Warrant Holder, to the address of such Holder as shown on the books of the
Company; or
b.
If
to the
Company, to the address of the Company on the records of the Warrant
Agent.
c.
If
to the
Warrant Agent, to 0000 Xxxx 0000 Xxxxx, Xxx. 000, Xxxx Xxxx Xxxx, XX
00000.
The
Company shall cause copies of all financial statements and reports, proxy
statements and other documents it shall send to its shareholders to be sent
by
U.S. mail, postage prepaid, on the date of mailing to such shareholder, to
each
registered Warrant Holder at his address appearing on the Warrant register
as of
the record date for the determination of the shareholders entitled to such
documents.
SECTION
13. Disposition
of Proceeds on Exercise of Warrants.
a. The
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently deposit in a special account in a local bank
designated by the Warrant Agent for the benefit of the Company all moneys
received by the Warrant Agent for the purchase of common Stock through the
exercise of such Warrants.
b. The
Warrant Agent shall keep copies of this Agreement available for inspection
by
holders of Warrants during normal business hours.
-7-
SECTION
14. Merger
or Consolidation or Change of Name of Warrant Agent.
Any
corporation or company which may succeed to the business of the Warrant Agent
by
any merger or consolidation or otherwise to which the Warrant Agent shall be
a
party, or any corporation or Company succeeding to the corporate trust business
of the Warrant Agent, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any paper or any further act on the part
of
any of the parties hereto. In case at the time any of the Warrants shall not
have been countersigned, any successor to the Warrant Agent may countersign
such
Warrants either in the name of the predecessor Warrant Agent or in the name
of
the successor Warrant Agent; and in all such cases such Warrant shall have
the
full force provided in the Warrant and in this Agreement.
SECTION
15. Duties
of Warrant Agent.
The
Warrant Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
Warrant Holders, by their acceptance thereof, shall be bound:
a. The
statements of fact and recitals contained herein and in the Warrants shall
be
taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as described
pertaining to the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the
Warrants except as herein expressly provided.
b. The
Warrant Agent shall not be responsible for any failure of the Company to comply
with any of the covenants contained in this Agreement or in the Warrants to
be
complied with by the Company.
c. The
Warrant Agent may consult at any time with counsel satisfactory to it (who
may
be counsel for the Company) and the Warrant Agent shall incur no liability
or
responsibility to the Company or to any holder of any Warrant in respect of
any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel.
d. The
Warrant Agent shall incur no liability or responsibility to the Company or
to
any holder of any Warrant for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
e. The
Company agrees to pay to the Warrant Agent reasonable compensation for all
services rendered by the Warrant Agent in the execution of this Agreement,
to
reimburse the Warrant Agent for all expenses, taxes and governmental charges
and
other charges of any kind and nature incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent
in
the execution of this Agreement except as a result of the Warrant Agent's gross
negligence, willful misconduct, or bad faith.
-8-
f. The
Warrant Agent shall be under no obligation to institute any action, suit or
legal proceeding or to take any other action likely to involve expense unless
the Company or one or more registered holders of Warrants shall furnish the
Warrant Agent with reasonable security and indemnity acceptable to Warrant
Agent
for any costs and expenses which may be incurred, but this provision shall
not
affect the power of the Warrant Agent to take such action as the Warrant Agent
may consider proper, whether with or without any such security or indemnity.
All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants
or
the production thereof any trial or other proceeding relating thereto, and
any
such action, suit or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the registered holders of the Warrants, as their respective
rights or interests may appear.
g. The
Warrant Agent and any shareholder, director, officer, partner or employee of
the
Warrant Agent may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which
the
Company may be interested, or contract with or lend money to or otherwise act
as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
h. The
Warrant Agent shall act hereunder solely as agent and not in a ministerial
capacity, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own gross
negligence, willful misconduct or bad faith.
i. The
Warrant Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees, and the Warrant Agent shall not be answerable
or
accountable for any act, default, neglect or misconduct, provided reasonable
care had been exercised in the selection and continued employment
thereof.
j. Any
request, direction, election, order or demand of the Company shall be
sufficiently evidenced by an instrument signed in the name of the Company by
its
President or a Vice President or its Secretary or an Assistant Secretary or
its
Treasurer or an Assistant Treasurer (unless other evidence in respect thereof
be
herein specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Warrant Agent by a copy thereof certified by the
Secretary or an Assistant Secretary of the Company.
-9-
SECTION
16. Change
of Warrant Agent.
The
Warrant Agent may resign and be discharged from its duties under this Agreement
by giving to the Company notice in writing, and to the holders of the Warrants
notice by mailing such notice to holders at the addresses appearing on the
Warrant register, of such resignation, specifying a date when such resignation
shall take effect. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company and by like mailing of notice to the holders
of
the Warrants. If the Warrant Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period of
30
days after the removal or after it has been notified in writing of the
resignation or incapacity by the resigning or incapacitated Warrant Agent,
the
registered holder of any Warrant may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. After
appointment, the successor warrant agent shall be vested with the same powers,
right, duties and responsibilities as if it had been originally named as Warrant
Agent without further act or deed; but the former Warrant Agent shall deliver
and transfer to the successor warrant agent all canceled Warrants, records
and
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Failure to file
or
mail any notice provided for in this Section, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the
Warrant Agent or the appointment of the successor warrant agent, as the case
may
be.
SECTION
17. Change
of Transfer Agent.
Forthwith
upon the appointment of any Transfer Agent for the Common Stock or of any
subsequent transfer agent for Common Stock or other shares of the Company's
capital stock issuable upon the exercise of the rights of purchase represented
by the Warrants, the Company will file with the Warrant Agent a statement
setting forth the name and address of such Transfer Agent.
SECTION
18. Supplements
and Amendments.
The
Company and the Warrant Agent may, from time to time, supplement or amend this
Agreement without the approval of any holders of Warrants in order to cure
any
ambiguity or to correct or supplement any provisions contained herein which
may
be defective or inconsistent with any other provisions in regard to matters
or
questions arising thereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrants and which shall not adversely affect the interests of the
holders of Warrants.
SECTION
19. Successors.
All
the
covenants, agreements, representations and warranties contained in this
Agreement shall bind the parties hereto and their respective heirs, executors,
administrators, distributes, successors and assigns.
-10-
SECTION
20. Change;
Waiver.
Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
SECTION
21. Headings.
The
section headings in this Agreement are inserted for the purpose of convenience
only and shall have no substantive effect.
SECTION
22. Law
Governing.
This
Agreement shall for all purposes be construed and enforced in accordance with,
and governed by, the internal laws of the State of Utah, without giving effect
to principles of conflict of laws.
The
parties hereto have caused this Agreement to be signed as of the date first
above written.
U.S. DRY CLEANING CORPORATION | INTERWEST TRANSFER COMPANY |
By:
___________________________________________
|
By:
___________________________________________
|
Name:
Xxxxxx X. Xxx
|
Name:
Xxxx Xxxxxx
|
Title:
Chief Executive Officer
|
Title:
President
|
-11-
EXHIBIT
A
[FORM
OF
FACE OF WARRANT CERTIFICATE]
______Warrants
VOID
AFTER _____ , 2012
WARRANT
CERTIFICATE FOR PURCHASE
OF
COMMON
STOCK
U.S.
DRY
CLEANING CORPORATION
This
certifies that FOR VALUE RECEIVED ______or registered assigns (the “Registered
Holder”) is the owner of the number of Warrants (“Warrants”) specified above.
Each Warrant represented hereby initially entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in this Warrant
Certificate and the Warrant Agreement (as hereinafter defined), one fully paid
and nonassessable share of common stock, par value $0.001 per share (“Common
Stock”), of U.S. DRY CLEANING CORPORATION, a Delaware corporation (the
“Company”), at any time prior to the Expiration Date (as hereinafter defined),
unless the Warrants are earlier redeemed, upon the presentation and surrender
of
this Warrant Certificate with the Subscription Form on the reverse hereof duly
executed, at the corporate office of Interwest Transfer Company, Inc., the
warrant agent, or its successor (the “Warrant Agent”),
accompanied by payment of $3.50 (the “Exercise Price”) per share of Common Stock
in lawful money of the United States of America in cash or by official bank
or
certified check made payable to U.S. DRY CLEANING CORPORATION, Special
Account.
This
Warrant Certificate and each Warrant represented hereby are issued pursuant
to
and are subject in all respects to the terms and conditions set forth in the
Warrant Agreement (the “Warrant Agreement”), dated ______, 2007 by and among the
Company and the Warrant Agent.
In
the
event of certain contingencies provided for in the Warrant Agreement, the
Exercise Price and the number of shares of Common Stock subject to purchase
upon
the exercise of each Warrant represented hereby are subject to modification
or
adjustment. Each Warrant represented hereby is exercisable at the option of
the
Registered Holder, but no fractional shares of Common Stock will be issued.
In
the case of the exercise of less than all the Warrants represented hereby,
the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute, and cause the Warrant Agent to countersign and deliver, a new
Warrant Certificate of like tenor for the balance of such Warrants.
The
term
“Expiration Date” shall mean 5:00 P.M. (Utah time) on ______, 2012. If such date
shall in the State of Utah be a holiday or a day on which banks are authorized
to close, then the Expiration Date shall mean 5:00 P.M. (Utah time) the next
following day which in the State of Utah is not a holiday or a day on which
banks are authorized to close.
-12-
The
Company has covenanted and agreed that it will file a registration statement
registering the shares underlying the Warrants and will use its commercially
reasonable best efforts to cause the same to become effective and to keep such
registration statement current, or to file a new registration statement
registering the same if the Company’s Board of Directors, upon advice of
counsel, deems necessary while any of the Warrants are outstanding.
Notwithstanding the foregoing, in no event shall such underlying shares be
issued, and any Warrant shall not be exercisable, if a registration statement
covering the shares underlying the Warrants are not then effective or if such
exercise would result in the opinion of the Company's Board of Directors, upon
advice of counsel, in the violation of any law. If the Warrant is not
exercisable pursuant to the terms set forth herein, under no circumstances
will
the Company be contingently or otherwise liable for any cash or other form
of
payment to the Registered Holder.
This
Warrant Certificate is exchangeable, upon the surrender hereof by the Registered
Holder at the business office of the Warrant Agent, for a new Warrant
Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at
the
time of such surrender.
Prior
to
the exercise of any Warrant represented hereby, the Registered Holder shall
not
be entitled to any rights of a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided in the Warrant Agreement.
In
the
event that the closing sales price of a share of Common Stock of the Company
as
traded on the most senior exchange or quotation medium where the shares are
quoted equals or exceeds $5.00 (appropriately adjusted for any stock split,
reverse stock split, stock dividend or other reclassification or combination
of
the Common Stock occurring after the date hereof) for at least twenty
consecutive trading days, the Company, upon 30 days prior written notice (the
“Notice Period”) given to the Registered Holder, shall have the right to call
some or all of the then outstanding Warrants at a redemption price equal to
$0.05 per share of Common Stock then purchasable pursuant to the outstanding
Warrants. Notwithstanding any such notice by the Company, the Registered Holder
shall have the right to exercise any Warrants prior to the end of the Notice
Period.
Prior
to
due presentment for registration of transfer hereof, the Company and the Warrant
Agent may deem and treat the Registered Holder as the absolute owner hereof
and
of each Warrant represented hereby (notwithstanding any notations of ownership
or writing hereon made by anyone other than a duly authorized officer of the
Company or the Warrant Agent) for all purposes and shall not be affected by
any
notice to the contrary.
-13-
This
Warrant Certificate shall be governed by and construed in accordance with the
laws of the State of Delaware.
This
Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN
WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile, by an officer of the Company thereunto
duly
authorized and a facsimile of its corporate seal to be imprinted
hereon.
U.S.
DRY CLEANING CORPORATION
|
|
Dated:
_________________________
|
By:
___________________________________
|
Name:
|
|
Title:
|
Countersigned:
Interwest
Transfer Company, Inc.
as
Warrant Agent
By:
______________________________
Authorized
Officer
-14-
[FORM
OF
REVERSE OF WARRANT CERTIFICATE]
SUBSCRIPTION
FORM
To
Be
Executed by the Registered Holder
in
Order
to Exercise Warrants
The
undersigned Registered Holder hereby irrevocably elects to exercise
______Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in the name of
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
___________________________
___________________________
___________________________
___________________________
[please
print or type name and address]
and
be
delivered to
[please
print or type name and address]
and
if
such number of Warrants shall not be all the Warrants evidenced by this Warrant
Certificate, that a new Warrant Certificate for the balance of such Warrants
be
registered in the name of, and delivered to, the Registered Holder at the
address stated below.
By
signing below, the undersigned Registered Holder is exercising this Warrant
as
result of being solicited by Marino Capital Partners, Inc. and is designating
Marino Capital Partners, Inc. to receive compensation for such exercise in
accordance to, and to the extent permitted by, NASD Rule
2710(f)(2)(K)(iv).
Dated:_______________
X
___________________________
___________________________
___________________________
___________________________
Address
___________________________
Taxpayer
Identification Number
___________________________
Signature
Guaranteed
___________________________
-15-
ASSIGNMENT
To
Be
Executed by the Registered Holder
in
Order
to Assign Warrants
FOR
VALUE
RECEIVED, ______hereby sells, assigns and transfers unto
PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
____________________________
____________________________
____________________________
____________________________
[please
print or type name and address]
______of
the Warrants represented by this Warrant Certificate, and hereby irrevocably
constitutes and appoints ________________________Attorney to transfer this
Warrant Certificate on the books of the Company, with full power of substitution
in the premises.
Dated:
____________
X
___________________________________
Signature Guaranteed
THE
SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME
AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
-16-