Contract
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, 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
UNDER SUCH ACT.
AERO
GROUP INCORPORATED
Warrant
to Purchase ________________ Shares of Common Stock of
AERO
GROUP INCORPORATED
(a
Utah corporation)
THIS
CERTIFIES THAT,
for
value received, __________________ or his registered assigns (the “Holder”),
is
entitled to purchase from Aero Group Incorporated, a Utah corporation (the
“Company”),
at
any time or from time to time during the period specified in Paragraph 2 hereof,
__________________________________ fully paid and nonassessable shares of the
Company=s
Common
Stock, $0.005 par value per share (the “Common
Stock”),
at an
exercise price per share equal to $0.003 (the “Initial
Exercise Price”).
The
term “Warrant Shares,” as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Initial Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof.
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 Transfer Agent during normal business hours on any business day at the
Transfer Agent=s
principal executive offices (or such other office or agency of the Transfer
Agent as it may designate by notice to the Holder hereof), and upon 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. 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 by the Transfer Agent to the Holder hereof within a
reasonable time, not exceeding three (3) 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 Transfer Agent shall, at Company=s
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.
1
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 his 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
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 his 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 the written
consent of the Holder hereof and 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 and before 5:00 p.m., New York City
time on [Five
Years From Issuance Date]
(the
“Exercise
Period”).
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.
2
(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 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 Initial Exercise Price, (in this section, the
AExercise
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
(as
hereinafter defined) 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.
3
(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 (AConvertible
Securities@)
(such
warrants, rights and options to purchase Common Stock or Convertible Securities
are hereinafter referred to as AOptions@)
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 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.
4
(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.
(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.
5
(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 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 if all shareholders of record of the Company=s
Common
Stock, as a result of such consolidation, merger or sale or conveyance, will
exchange their shares for securities of any other corporation. 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.
6
(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
stockholders 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 stockholders 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 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;
7
(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,
re-classification, 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
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.
8
(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 Over-the-Counter Bulletin Board (the AOTC
BB@)
for the
five (5) Trading Days immediately preceding such date as reported by Bloomberg,
or (ii) if the OTC BB 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
Corporation 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, no par value 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, no par
value
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.
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. 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.
9
(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 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 ASecurities
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 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 Aaccredited
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.
10
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, Xxxxxxxxxxxx, 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
receive such notice at the address of such person for purposes of this Paragraph
8, 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.
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 WITH 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.
11
11. 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) 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 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.
[This
Space Intentionally Left Blank]
12
IN
WITNESS WHEREOF,
the
Company has caused this Warrant to be signed by its duly authorized
officer.
| AEROGROUP INCORPORATED | ||
| |
|
|
| By: | /s/ | |
|
Xxxx Xxxxxxx |
||
| Chief Executive Officer | ||
Dated
as
of ______________, 200___
13
FORM
OF EXERCISE AGREEMENT
Dated:
________ __, 200_
To: Aero
Group Incorporated
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
____________ . 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.
14
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.
|
15
