Warrant No. ___ Original Issue Date: September 21, 2007
EXHIBIT 4.1
THIS WARRANT (THIS “WARRANT”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), ANY STATE SECURITIES LAW OR THE SECURITIES LAWS OF ANY COUNTRY. NEITHER
THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED
OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
SECURITIES LAWS.
KMA GLOBAL SOLUTIONS INTERNATIONAL, INC.
| Warrant No. ___ | Original Issue Date: September 21, 2007 |
This Warrant is issued in connection with and pursuant to that certain Securities Purchase
Agreement (the “Purchase Agreement”) dated as of September 21, 2007, by and between KMA GLOBAL
SOLUTIONS INTERNATIONAL, INC., a Nevada corporation (the “Company”) and
,
a ___ corporation.
FOR VALUE RECEIVED, , the registered holder hereof, or its permitted
assigns (the “Holder”), is entitled to purchase from the Company, during the period specified in
this Warrant, fully paid and non-assessable shares (subject to adjustment as
hereinafter provided) of Common Stock (the “Warrant Shares”), of the Company at the purchase price
per share provided in Section 1.2 of this Warrant (the “Warrant Exercise Price”), all subject to
the terms and conditions set forth in this Warrant. All terms not otherwise defined herein shall
have the meaning ascribed to them in the Purchase Agreement.
Section 1. Period for Exercise and Exercise Price.
1.1 Period for Exercise. The right to purchase shares of Warrant Shares represented by this
Warrant shall be immediately exercisable, and shall expire at 5:00 p.m., Ontario local time,
September 21, 2009 (the “Expiration Date”). From and after the Expiration Date this Warrant shall
be null and void and of no further force or effect whatsoever.
1.2 Warrant Exercise Price. The Warrant Exercise Price per share of Warrant Shares shall be
$0.30 per share (subject to adjustment as hereinafter provided).
Section 2. Exercise of Warrant.
2.1 Manner of Exercise. The Holder may exercise this Warrant, in whole or in part,
immediately, but not after the Expiration Date, during normal business hours on any business day by
surrendering this Warrant to the Company at the principal office of the Company, accompanied by a
Warrant Exercise Form in substantially the form annexed hereto duly executed by the Holder and by
payment of the Warrant Exercise Price for the number of shares of Warrant Shares for which this
Warrant is then exercisable, either (i) in immediately available funds, (ii) the Company to the
Holder in the appropriate amount, (iii) by authorizing the Company to retain shares of Common Stock
which would otherwise be issuable upon exercise of this Warrant having a fair market value (defined
as the average of the last reported Closing Sale Price of the Common Stock for the thirty (30) days
immediately preceding the date of the Warrant Exercise notice) on the date of delivery equal to the
aggregate Warrant Exercise Price, or (iv) in a combination of (i), (ii) or (iii) above, provided,
however, that in no event shall the Holder be entitled to exercise this Warrant for a number of
Warrant Shares in excess of that number of Warrant Shares which, upon giving effect to such
exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the
Holder and its affiliates to exceed 4.99% of the outstanding shares of the Common Stock following
such exercise. For purposes of the foregoing proviso, the aggregate number of shares of Common
Stock beneficially owned by the Holder and its affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to which determination of such
proviso is being made, but shall exclude the shares of Common Stock which would be issuable upon
(i) exercise of the remaining, unexercised Warrants beneficially owned by the Holder and its
affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other
securities of the Company beneficially owned by the Holder and its affiliates subject to a
limitation on conversion or exercise analogous to the limitation contained herein. Except as set
forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). The Holder may waive the foregoing limitation by written notice to the Company
upon not less than 61 days prior written notice (with such waiver taking effect only upon the
expiration of such 61 day notice period).
2.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have been
effected on the day on which all requirements of Section 2.1 shall have been met with respect to
such exercise. At such time the person in whose name any certificate for shares of Warrant Shares
shall be issuable upon such exercise shall be deemed for all corporate purposes to have become the
Holder of record of such shares, regardless of the actual delivery of certificates evidencing such
shares.
2.3 Delivery of Stock Certificates. As soon as practicable after each exercise of this
Warrant, and in any event no later than 3 Trading Days after such exercise, the Company at its
expense will issue Warrant Shares via credit to the Holder’s account with DTC for the number of
Warrant Shares to which such Holder is entitled upon such Holder’s submission of the applicable
Warrant Exercise Form or, if the Transfer Agent is not participating in The DTC Fast Automated
Securities Transfer Program and DWAC system, issue and surrender to the address as specified in the
Warrant Exercise Form,, a certificate, registered in the name of the Holder or its designee, for
the number of shares of Common Stock to which the Holder shall be entitled to upon such exercise.
Section 3. Adjustment of Purchase Price and Number of Shares. The Warrant Exercise Price and the
kind of securities issuable upon exercise of the Warrant shall be adjusted from time to time as
follows:
3.1 Subdivision or Combination of Shares (Stock Splits). If the Company at any time effects a
subdivision or combination of the outstanding Common Stock (through a stock split or
otherwise), the number of shares of Warrant Shares shall be increased, in the case of a
subdivision, or the number of shares of Warrant Shares shall be decreased, in the case of a
combination, in the same proportions as the Common Stock is subdivided or combined, in each case
effective automatically upon, and simultaneously with, the effectiveness of the subdivision or
combination which gives rise to the adjustment.
3.2 Stock Dividends. If the Company at any time pays a dividend, or makes any other
distribution, to holders of Common Stock payable in shares of Common Stock, or fixes a record date
for the determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, then the number of shares of Warrant Shares in
effect immediately prior to such action shall be proportionately increased so that the Holder
hereof may receive upon exercise of the Warrant the aggregate number of shares of Common Stock
which he or it would have owned immediately following such action if the Warrant had been exercised
immediately prior to such action. The adjustment shall become effective immediately as of the date
the Company shall take a record of the holders of its Common Stock for the purpose of receiving
such dividend or distribution (or if no such record is taken, as of the effectiveness of such
dividend or distribution).
3.3 Reclassification, Consolidation or Merger. If at any time, as a result of:
(a) a capital reorganization or reclassification (other than a subdivision,
combination or dividend provided for elsewhere in this Section 3), or
(b) a merger or consolidation of the Company with another corporation (whether or not the
Company is the surviving corporation), the Common Stock issuable upon exercise of the Warrants
shall be changed into or exchanged for the same or a different number of shares of any class or
classes of stock of the Company or any other corporation, or other securities convertible into such
shares, then, as a part of such reorganization, reclassification, merger or consolidation,
appropriate adjustments shall be made in the terms of the Warrants (or of any securities into which
the Warrants are exercised or for which the Warrants are exchanged), so that:
(c) the Holders of Warrants or of such substitute securities shall thereafter be entitled to
receive, upon exercise of the Warrants or of such substitute securities, the kind and amount of
shares of stock, other securities, money and property which such Holders would have received at the
time of such capital reorganization, reclassification, merger, or consolidation, if such Holders
had exercised their Warrants immediately prior to such capital reorganization, reclassification,
merger, or consolidation, and
(d) the Warrants or such substitute securities shall thereafter be adjusted on terms as nearly
equivalent as may be practicable to the adjustments theretofore provided in this Section 3.3.
No consolidation or merger in which the Company is not the surviving corporation shall be
consummated unless the surviving corporation shall agree, in writing, to the provisions of this
Section 3.3. The provisions of this Section 3.3 shall similarly apply to successive capital
reorganizations, reclassifications, mergers and consolidations.
3.4 Other Action Affecting Common Stock. If at any time the Company takes any action
affecting its Common Stock, other than an action described in any of Sections 3.1 through 3.3
which, in the opinion of the Board of Directors of the Company (the “Board”), would have an adverse
effect upon the exercise rights of the Warrants, the Warrant Exercise Price or the kind of
securities issuable upon exercise of the Warrants, or both, shall be adjusted in such manner and at
such time as the Board may in good faith determine to be equitable in the circumstances; provided,
however, that the purpose of this Section is to prevent the Company from taking any action which
has the effect of diluting the number of shares of Warrant Shares issuable upon exercise of this
Warrant.
3.5 Notice of Adjustments. Whenever the kind or number of securities issuable upon exercise
of the Warrants, or both, shall be adjusted pursuant to Section 3, the Company shall deliver a
certificate signed by its Chief Executive Officer and by its Chief Financial Officer, setting
forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Exercise Price and the kind of securities
issuable upon exercise of the Warrants after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by first class mail postage prepaid) to each Warrant
Holder promptly after each adjustment.
Section 4. Reservation of Stock, etc. The Company covenants and agrees that it will at all
times have authorized, reserve and keep available, solely for issuance and delivery upon the
exercise of this Warrant, the number of shares of Warrant Shares from time to time issuable upon
the exercise of this Warrant. The Company further covenants and agrees that this Warrant is, and
any Warrants issued in substitution for or replacement of this Warrant and all Warrant Shares, will
upon issuance be duly authorized and validly issued and, in the case of Warrant Shares, upon
issuance will be fully paid and non-assessable and free from all preemptive rights of any
stockholder, and from all taxes, liens and charges with respect to the issue thereof (other than
transfer taxes) and, if the Common Stock of the Company is then listed on any national securities
exchanges (as defined in the Exchange Act) or quoted on NASDAQ, shall be, subject to the
restrictions set forth in Section 5, duly listed or quoted thereon, as the case may be. In the
event that the number of authorized but unissued shares of such Common Stock shall not be
sufficient to effect the exercise of this entire Warrant into Warrant Shares, then in addition to
such other remedies as shall be available to the Holder of this Warrant, the Company shall promptly
take such corporate action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
Section 5. Ownership, Transfer and Substitution of Warrants.
5.1 Ownership of Warrants. The Company may treat the person in whose name this Warrant is
registered on the register kept at the principal office of the Company as the owner and Holder
thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing
any transfers made in accordance with the terms of this Warrant.
5.2 Transfer and Exchange of Warrants. Upon the surrender of this Warrant, properly endorsed,
for registration of transfer or for exchange at the principal office of the Company, the Company at
its expense will execute and deliver to the Holder thereof, upon the order of such Holder, a new
Warrant or Warrants of like tenor, in the name of such Holder or as such Holder may direct, for
such number of shares with respect to each such Warrant, the aggregate number of shares in any
event not to exceed the number of shares for which the Warrant so surrendered had not been
exercised.
5.3 Registrations. The holder of this Warrant is entitled to certain registration rights with
respect to the Warrant Shares issuable upon exercise thereof. Said registration rights are set
forth in a Registration Rights Agreement dated as of September 21, 2007, by and between the Holder
and the Company.
5.4 Exemption from Registration. If an opinion of counsel reasonable satisfactory to the
Company provides that registration is not required for the proposed exercise or transfer of this
Warrant or the proposed transfer of the Warrant Shares and that the proposed exercise or transfer
in the absence of registration would require the Company to take any action including executing and
filing forms or other documents with the United States Securities and Exchange Commission (the
“SEC”) or any state securities agency, or delivering to the Holder any form or document in order to
establish the right of the
Holder to effectuate the proposed exercise or transfer, the Company agrees promptly, at its
expense, to take any such action; and provided, further, that the Company will reimburse the Holder
in full for any reasonable expenses (including but not limited to the fees and disbursements of
such counsel, but excluding brokers’ commissions) incurred by the Holder or owner of Warrant Shares
on his, her or its behalf in connection with such exercise or transfer of the Warrant or transfer
of Warrant Shares.
Section 6. No Rights or Liabilities as Shareholder. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof any rights as a shareholder of the Company or as
imposing any liabilities on such holder to purchase any securities or as a shareholder of the
Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Section 7. Miscellaneous.
7.1 Amendment and Waiver. This Warrant may be amended with, and only with, the written
consent of the Company and the Holder. Any waiver of any term, covenant, agreement or condition
contained in this Warrant shall not be deemed a waiver of any other term, covenant, agreement or
condition, and any waiver of any default in any such term, covenant, agreement or condition shall
not be deemed a waiver of any later default thereof or of any default of any other term, covenant,
agreement or condition.
7.2 Representations and Warranties to Survive Closing. All representations, warranties and
covenants contained herein shall survive the execution and delivery of this Warrant and the
issuance of any Warrant Shares upon the exercise hereof.
7.3 Severability. In the event that any court or any governmental authority or agency
declares all or any part of any Section of this Warrant to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any other Section of this Warrant, and in
the event that only a portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such Section.
7.4 Binding Effect; No Third Party Beneficiaries. All provisions of this Warrant shall be
binding upon and inure to the benefit of the parties and their respective heirs, legatees,
executors, administrators, legal representatives, successors, and permitted transferees and
assigns. No person other than the holder of this Warrant and the Company shall have any legal or
equitable right, remedy or claim under or in respect of, this Warrant.
7.5 Notices. Any notices, consents, waivers or other communications required or permitted to
be given under the terms of this Warrant must be in writing and will be deemed to have been
delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one Trading Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
| If to the Company: | ||||||||
| KMA Global Solutions International, Inc. | ||||||||
| 0000X Xxxxxxx Xxxx | ||||||||
| Mississauga, Ontario, Canada L4Z 2A9 | ||||||||
| Telephone: | 000-000-0000 | |||||||
| Facsimile: | 000-000-0000 | |||||||
| Attention: | Xxxxxxx X. Xxxx | |||||||
| With a copy to (which shall not constitute notice): | ||||||||
| Xxxxx, Xxxxxxxx, Xxxxxxx, Xxxxxxxx & Xxxxxxxxx, P.C. | ||||||||
| Suite 1000, 000 Xxxxxxxx Xxxxxx | ||||||||
| Nashville, TN 37201 | ||||||||
| Telephone: | (000) 000-0000 | |||||||
| Facsimile: | (000) 000-0000 | |||||||
| Attention: | Xxxx X. Xxxxx | |||||||
| If to the Holder: | ||||||||
| c/o Incendia Management Group Inc. | ||||||||
| 000 Xxxxxxxxx Xxxxxx, Xxxxx 000 | ||||||||
| Toronto, Ontario M1H 3E9 | ||||||||
| Telephone: | 000-000-0000 | |||||||
| Facsimile: | 000-000-0000 | |||||||
| Attention: | Xxxxxx Xxxxxx | |||||||
| If to the Transfer Agent: | ||||||||
| American Registrar & Transfer Co. | ||||||||
| 000 Xxxx 000 Xxxxx | ||||||||
| Salt Lake City, UT 84111 | ||||||||
| Telephone: | 000-000-0000 | |||||||
| Facsimile: | 000-000-0000 | |||||||
| Attention: | Xxxxxxx Xxx or Xxxxx Xxxx | |||||||
or at such other address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party three (3) Trading
Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time, date, and recipient
facsimile number or (C) provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
7.6 Taxes, Costs and Expenses. The Company covenants and agrees that it will pay when due and
payable any and all federal, state and local taxes (other than income taxes) and any other costs
and expenses which may be payable in respect of the preparation, issuance, delivery, exercise,
surrender or transfer of this Warrant pursuant to the terms of this Warrant or the issuance of any
shares of Warrant Shares as a result thereof. If any suit or action is instituted or attorneys
employed to enforce this Warrant or any part thereof, the non-prevailing party in such suit or
action promises and agrees to pay all costs and expenses associated therewith, including reasonable
attorneys’ fees and court costs.
7.7 Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of Nevada
shall govern all issues concerning the relative rights of the Company and its shareholders.
All other questions concerning the construction, validity, enforcement and interpretation of this
Warrant shall be governed by the internal laws of the State of Nevada, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of Nevada or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in the City of Las Vegas, for the adjudication of any dispute hereunder
or under the other Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the address for such notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
7.8 Loss of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) of indemnification in form and substance acceptable to the Company in its reasonable
discretion, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
7.9 Entire Agreement. This Warrant, the Purchase Agreement and the Registration Rights
Agreement of even date herewith represent the entire agreement and understanding between the
parties concerning the subject matter hereof and supercede all prior and contemporaneous
agreements, understandings, representations and warranties with respect thereto.
7.10 Headings. The headings used herein are used for convenience only and are not to be
considered in construing or interpreting this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.
| KMA GLOBAL SOLUTIONS INTERNATIONAL, INC. |
||||
| By: | ||||
| Xxxxxxx X. Xxxx | ||||
| Chief Executive Officer | ||||
