WARRANT AGENT AGREEMENT
Exhibit 4.9
WARRANT AGENT
AGREEMENT (this
“Warrant
Agreement”) dated as of
May __, 2021 (the “Issuance
Date”) between
Xxxxxxxxx.xxx Group, Inc., a company incorporated under the laws of
the State of Nevada (the “Company”),
and Philadelphia Stock
Transfer, Inc., a Pennsylvania
corporation (the “Warrant
Agent”).
WHEREAS, pursuant to the terms of that certain
Underwriting Agreement (“Underwriting
Agreement”), dated May
__, 2021, by and between the Company and Xxxxxx Xxxxxx & Co.
LLC as representative of the underwriters set forth therein, the
Company is engaged in a public offering (the
“Offering”)
of up to 1,818,182 units (the “Units”), consisting of
an aggregate of 1,818,182 shares (the “Shares”)
of common stock, par value $0.0001 per share (the
“Common
Stock”) of the Company
and Warrants (the “Warrants”)
to purchase up to an aggregate of 1,818,182 shares of Common Stock
(the “Warrant
Shares”), including
Shares and Warrants issuable pursuant to the underwriters’
over-allotment option;
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the “Commission”)
a Registration Statement on Form S-1 (File No.
333-249208) (as the same may be
amended from time to time, the “Registration
Statement”), for the
registration under the Securities Act of 1933, as amended (the
“Securities
Act”), of the Units,
Shares, Warrants and Warrant Shares, and such Registration
Statement was declared effective on May __,
2021;
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act,
in accordance with the terms set forth in this Warrant Agreement in
connection with the issuance, registration, transfer, exchange and
exercise of the Warrants;
WHEREAS, the Company desires to provide for the
provisions of the Warrants, the terms upon which they shall be
issued and exercised, and the respective rights, limitation of
rights, and immunities of the Company, the Warrant Agent, and the
holders of the Warrants; and
WHEREAS, all acts and things have been done and performed
which are necessary to make the Warrants the valid, binding and
legal obligations of the Company, and to authorize the execution
and delivery of this Warrant Agreement.
NOW,
THEREFORE, in consideration of
the mutual agreements herein contained, the parties hereto agree as
follows:
1. Appointment of Warrant
Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company with
respect to the Warrants, and the Warrant Agent hereby accepts such
appointment and agrees to perform the same in accordance with the
express terms and conditions set forth in this Warrant Agreement
(and no implied terms or conditions).
2. Warrants.
2.1. Form of
Warrants. The Warrants shall be
registered securities and shall be initially evidenced by a global
Warrant certificate (“Global
Certificate”) in the form
of Annex
A to this Warrant
Agreement, which shall be deposited on behalf of the Company with a
custodian for The Depository Trust Company
(“DTC”) and registered in the name of Cede &
Co., a nominee of DTC. If DTC subsequently ceases to make its
settlement system available for the Warrants, the Company may
instruct the Warrant Agent regarding making arrangements for
book-entry settlement. In the event that the Warrants are not
eligible for, or it is no longer necessary to have the Warrants
available in, registration in the name of Cede & Co., a nominee
of DTC, the Company may instruct the Warrant Agent to provide
written instructions to DTC to deliver to the Warrant Agent for
cancellation the Global Certificate, and the Company shall instruct
the Warrant Agent to deliver to each Holder (as defined below)
separate certificates evidencing Warrants
(“Definitive
Certificates” and,
together with the Global Certificate, “Warrant
Certificates”), in the
form of Annex
C to this Warrant
Agreement. The Warrants represented by the Global Certificate are
referred to as “Global Warrants”.
2.2. Issuance and
Registration of Warrants.
2.2.1. Warrant
Register. The Warrant Agent
shall maintain books (“Warrant
Register”) for the
registration of original issuance and the registration of transfer
of the Warrants. Any Person in whose name ownership of a beneficial
interest in the Warrants evidenced by a Global Certificate is
recorded in the records maintained by DTC or its nominee shall be
deemed the “beneficial owner” thereof, provided that
all such beneficial interests shall be held through a Participant
(as defined below), which shall be the registered holder of such
Warrants.
2.2.2. Issuance of
Warrants. Upon the initial
issuance of the Warrants, the Warrant Agent shall issue the Global
Certificate and deliver the Warrants in the DTC settlement system
in accordance with written instructions delivered to the Warrant
Agent by the Company. Ownership of beneficial interests in the
Warrants shall be shown on, and the transfer of such ownership
shall be effected through, records maintained (i) by DTC and (ii)
by institutions that have accounts with DTC (each, a
“Participant”),
subject to a Holder’s right to elect to receive a Warrant in
certificated form in the form of Annex C to this Warrant Agreement.
Any Holder desiring to elect to receive a Warrant in certificated
form shall make such request in writing delivered to the Warrant
Agent pursuant to Section 2.2.8, and shall surrender to the Warrant
Agent the interest of the Holder on the books of the Participant
evidencing the Warrants which are to be represented by a Definitive
Certificate through the DTC settlement system. Thereupon, the
Warrant Agent shall countersign and deliver to the person entitled
thereto a Warrant Certificate or Warrant Certificates, as the case
may be, as so requested.
2.2.3. Beneficial Owner;
Holder. Prior to due
presentment for registration of transfer of any Warrant, the
Company and the Warrant Agent may deem and treat the person in
whose name that Warrant shall be registered on the Warrant Register
(the “Holder”)
as the absolute owner of such Warrant for purposes of any exercise
thereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the
Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by DTC governing the
exercise of the rights of a holder of a beneficial interest in any
Warrant. The rights of beneficial owners in a Warrant evidenced by
the Global Certificate shall be exercised by the Holder or a
Participant through the DTC system, except to the extent set forth
herein or in the Global Certificate.
2.2.4. Execution.
The Warrant Certificates shall be executed on behalf of the Company
by any authorized officer of the Company (an
“Authorized
Officer”), which need not
be the same authorized signatory for all of the Warrant
Certificates, either manually or by facsimile signature. The
Warrant Certificates shall be countersigned by an authorized
signatory of the Warrant Agent, which need not be the same
signatory for all of the Warrant Certificates, and no Warrant
Certificate shall be valid for any purpose unless so countersigned.
In case any Authorized Officer of the Company that signed any of
the Warrant Certificates ceases to be an Authorized Officer of the
Company before countersignature by the Warrant Agent and issuance
and delivery by the Company, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and
delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer
of the Company; and any Warrant Certificate may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be an Authorized
Officer of the Company authorized to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any
such person was not such an Authorized Officer.
2.2.5. Registration of
Transfer. At any time at or
prior to the Expiration Date (as defined below), a transfer of any
Warrants may be registered and any Warrant Certificate or Warrant
Certificates may be split up, combined or exchanged for another
Warrant Certificate or Warrant Certificates evidencing the same
number of Warrants as the Warrant Certificate or Warrant
Certificates surrendered. Any Holder desiring to register the
transfer of Warrants or to split up, combine or exchange any
Warrant Certificate shall make such request in writing delivered to
the Warrant Agent, and shall surrender to the Warrant Agent the
Warrant Certificate or Warrant Certificates evidencing the Warrants
the transfer of which is to be registered or that is or are to be
split up, combined or exchanged. Thereupon, the Warrant Agent shall
countersign and deliver to the person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so
requested. The Warrant Agent may require reasonable and customary
payment, by the Holder requesting a registration of transfer of
Warrants or a split-up, combination or exchange of a Warrant
Certificate (but, for purposes of clarity, not upon the exercise of
the Warrants and issuance of Warrant Shares to the Holder), of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with such registration of transfer, split-up,
combination or exchange, together with reimbursement to the Warrant
Agent of all reasonable expenses incidental
thereto.
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2.2.6. Loss, Theft and
Mutilation of Warrant Certificates. Upon receipt by the Company and the Warrant
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security in
customary form and amount, and reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto, and
upon surrender to the Warrant Agent and cancellation of the Warrant
Certificate if mutilated, the Warrant Agent shall, on behalf of the
Company, countersign and deliver a new Warrant Certificate of like
tenor to the Holder in lieu of the Warrant Certificate so lost,
stolen, destroyed or mutilated. The Warrant Agent may charge the
Holder an administrative fee for processing the replacement of lost
Warrant Certificates, which shall be charged only once in instances
where a single surety bond obtained covers multiple certificates.
The Warrant Agent may receive compensation from the surety
companies or surety bond agents for administrative services
provided to them.
2.2.7. Proxies.
The Holder of a Warrant may grant proxies or otherwise authorize
any person, including the Participants and beneficial holders that
may own interests through the Participants, to take any action that
a Holder is entitled to take under this Agreement or the
Warrants; provided, however,
that at all times that Warrants are evidenced by a Global
Certificate, exercise of those Warrants shall be effected on their
behalf by Participants through DTC in accordance the procedures
administered by DTC.
2.2.8. Warrant Certificate
Request. A Holder has the right
to elect at any time or from time to time a Warrant Exchange (as
defined below) pursuant to a Warrant Certificate Request Notice (as
defined below). Upon written notice by a Holder to the Warrant
Agent for the exchange of some or all of such Holder’s Global
Warrants for a Definitive Certificate evidencing the same number of
Warrants, which request shall be in the form attached hereto
as Annex
E (a
“Warrant Certificate
Request Notice” and the
date of delivery of such Warrant Certificate Request Notice by the
Holder, the “Warrant Certificate
Request Notice Date” and
the deemed surrender upon delivery by the Holder of a number of
Global Warrants for the same number of Warrants evidenced by a
Definitive Certificate, a “Warrant
Exchange”), the Warrant
Agent shall promptly effect the Warrant Exchange and shall promptly
issue and deliver to the Holder a Definitive Certificate for such
number of Warrants in the name set forth in the Warrant Certificate
Request Notice. Such Definitive Certificate shall be dated the
original issue date of the Warrants, shall be manually executed by
an authorized signatory of the Company, shall be in the form
attached hereto as Annex C, and shall be reasonably acceptable in
all respects to such Holder. In connection with a Warrant Exchange,
the Company agrees to deliver, or to direct the Warrant Agent to
deliver, the Definitive Certificate to the Holder within three (3)
Business Days of the Warrant Certificate Request Notice pursuant to
the delivery instructions in the Warrant Certificate Request Notice
(“Warrant Certificate
Delivery Date”). If the
Company fails for any reason to deliver to the Holder the
Definitive Certificate subject to the Warrant Certificate Request
Notice by the Warrant Certificate Delivery Date, the Company shall
pay to the Holder, in cash, as liquidated damages and not as a
penalty, for each $1,000 of Warrant Shares evidenced by such
Definitive Certificate (based on the VWAP (as defined in the
Warrants) of the Common Stock on the Warrant Certificate Request
Notice Date), $10 per Business Day for each Business Day after such
Warrant Certificate Delivery Date until such Definitive Certificate
is delivered or, prior to delivery of such Warrant Certificate, the
Holder rescinds such Warrant Exchange. The Company covenants and
agrees that, upon the date of delivery of the Warrant Certificate
Request Notice, the Holder shall be deemed to be the holder of the
Definitive Certificate and, notwithstanding anything to the
contrary set forth herein, the Definitive Certificate shall be
deemed for all purposes to contain all of the terms and conditions
of the Warrants evidenced by such Warrant Certificate and the terms
of this Agreement, other than Sections 3(c) and 9 herein, shall not
apply to the Warrants evidenced by the Definitive Certificate. For
purposes of clarity, if there is a conflict between the express
terms of this Warrant Agreement and a Definitive Warrant in for the
form of Annex C hereto with respect to the terms of the Warrants,
the terms of the Definitive Warrant shall govern and
control.
3. Terms and Exercise of
Warrants.
3.1. Exercise
Price. Each Warrant shall
entitle the Holder, subject to the provisions of the applicable
Warrant Certificate and of this Warrant Agreement, to purchase from
the Company the number of shares of Common Stock stated therein, at
the price of $5.50 per whole share, subject to the subsequent
adjustments provided in Section 4 hereof. The term
“Exercise
Price” as used in this
Warrant Agreement refers to the price per share at which shares of
Common Stock may be purchased at the time a Warrant is
exercised.
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3.2. Duration of
Warrants. Warrants may be
exercised only during the period commencing on the Issuance Date
and terminating at 5:00 P.M., New York City time (the
“close of
business”) on May __,
2026 “Expiration
Date”). Each Warrant not
exercised on or before the Expiration Date shall become void, and
all rights thereunder and all rights in respect thereof under this
Warrant Agreement shall cease at the close of business on the
Expiration Date.
3.3. Exercise of
Warrants.
3.3.1. Exercise and
Payment.
(a) Exercise of the purchase rights
represented by a Warrant may be made, in whole or in part, at any
time or times on or after the Issuance Date and on or before close
of business on the Expiration Date by delivery to the Company or
the Warrant Agent of the Notice of Exercise in the form annexed
as Annex
B hereto (the
“Notice of
Exercise”). Within the
earlier of (i) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period following the date
of exercise as aforesaid, the Holder shall deliver to the Company
the aggregate Exercise Price for the shares specified in the
applicable Notice of Exercise by wire transfer or cashier’s
check drawn on a United States bank unless the cashless exercise
procedure specified in Section 3.3.7 below is specified in the
applicable Notice of Exercise. No ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise form be
required. Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender a Warrant
Certificate to the Company until the Holder has purchased all of
the Warrant Shares available thereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender such
Warrant to the Company for cancellation within three (3) Trading
Days of the date the final Notice of Exercise is delivered to the
Company. Partial exercises of a Warrant resulting in purchases of a
portion of the total number of Warrant Shares available thereunder
shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company
shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise within one (1) Business Day
of receipt of such notice. The Holder and any assignee, by
acceptance of a Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face
thereof.
Notwithstanding
the foregoing in this Section 3.3.1, a holder whose interest in a
Warrant is a beneficial interest in certificate(s) representing
such Warrant held in registered form through DTC (or another
established clearing corporation performing similar functions),
shall effect exercises made pursuant to this Section 3.3.1 by
delivering to DTC (or such other clearing corporation, as
applicable) the appropriate instruction form for exercise,
complying with the procedures to effect exercise that are required
by DTC (or such other clearing corporation, as applicable), subject
to a Holder’s right to elect to receive a Warrant in
certificated form pursuant to the terms of the Warrant Agent
Agreement, in which case this sentence shall not apply. Upon giving
irrevocable instructions to its Participant to exercise Warrants,
solely for purposes for Regulation SHO, the holder whose interest
in the Warrant is a beneficial interest shall be deemed to have
exercised such Warrant, regardless of when the applicable Warrant
Shares are delivered to such holder.
3.3.2. Issuance of Warrant
Shares. (a) The Warrant Agent
shall, on the Trading Day following the receipt of a Notice of
Exercise, advise the Company, the transfer agent and registrar for
the Company’s Common Stock, in respect of (i) the number of
Warrant Shares indicated on the Notice of Exercise as issuable upon
such exercise with respect to such exercised Warrants, (ii) the
instructions of the Holder or Participant, as the case may be,
provided to the Warrant Agent with respect to the delivery of the
Warrant Shares and the number of Warrants that remain outstanding
after such exercise and (iii) such other information as the Company
or such transfer agent and registrar shall reasonably
request.
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The Company shall cause the Warrant Shares
purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its
designee’s balance account with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system
(“DWAC”)
if the Transfer Agent is then a participant in such system and
either (A) there is an effective registration statement permitting
the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via
cashless exercise, and otherwise by physical delivery of a
certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to
the address specified by the Holder in the Notice of Exercise by
the date that is the earlier of (i) two (2) Trading Days and (ii)
the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise
and provided that payment in full of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received by the
Company within one (1) Trading Day thereafter (such date, the
“Warrant Share Delivery
Date”). Upon delivery of
the Notice of Exercise, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received within
the earlier of (i) one (1) Trading Day and (ii) the number of
Trading Days comprising the Standard Settlement Period following
delivery of the Notice of Exercise. If the Company fails for any
reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or
Holder rescinds such exercise. The Company agrees to maintain a
transfer agent that is a participant in the FAST program so long as
this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement
Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the
Common Stock as in effect on the date of delivery of the Notice of
Exercise.
3.3.3. Valid
Issuance. All Warrant Shares
issued by the Company upon the proper exercise of a Warrant in
conformity with this Warrant Agreement shall be validly issued,
fully paid and non-assessable.
3.3.4. No Fractional
Exercise. No fractional Warrant
Shares will be issued upon the exercise of the Warrant. If, by
reason of any adjustment made pursuant to Section 4, a Holder would
be entitled, upon the exercise of such Warrant, to receive a
fractional interest in a share, the Company shall, upon such
exercise, round up or down, as applicable, to the nearest whole
number the number of Warrant Shares to be issued to such
Holder.
3.3.5. No Transfer
Taxes. Issuance of Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be
paid by the Company, and such Warrant Shares shall be issued in the
name of the Holder or in such name or names as may be directed by
the Holder; provided, however,
that in the event Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant
Shares.
3.3.6. [RESERVED]
3.3.7. Restrictive Legend
Events; Cashless Exercise Under Certain
Circumstances.
(i) The Company shall use its reasonable best
efforts to maintain the effectiveness of the Registration Statement
and the current status of the prospectus included therein or to
file and maintain the effectiveness of another registration
statement and another current prospectus covering the Warrants and
the Warrant Shares at any time that the Warrants are exercisable.
The Company shall provide to the Warrant Agent and each Holder
prompt written notice of any time that the Company is unable to
deliver the Warrant Shares via DTC transfer or otherwise without
restrictive legend because (A) the Commission has issued a stop
order with respect to the Registration Statement, (B) the
Commission otherwise has suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently,
(C) the Company has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, (D) the
prospectus contained in the Registration Statement is not available
for the issuance of the Warrant Shares to the Holder or (E)
otherwise (each a “Restrictive Legend
Event”). To the extent
that the Warrants cannot be exercised as a result of a Restrictive
Legend Event or a Restrictive Legend Event occurs after a Holder
has exercised Warrants in accordance with the terms of the Warrants
but prior to the delivery of the Warrant Shares, the Company shall,
at the election of the Holder, which shall be given within five (5)
days of receipt of such notice of the Restrictive Legend Event,
either (A) rescind the previously submitted Election to Purchase
and the Company shall return all consideration paid by registered
holder for such shares upon such rescission or (B) treat the
attempted exercise as a cashless exercise as described in paragraph
(ii) below and refund the cash portion of the exercise price to the
Holder.
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(ii) If
a Restrictive Legend Event has occurred, the Warrant shall only be
exercisable on a cashless basis. Notwithstanding anything herein to
the contrary, the Company shall not be required to make any cash
payments or net cash settlement to the Holder in lieu of delivery
of the Warrant Shares. Upon a “cashless exercise”, the
Holder shall be entitled to receive the number of Warrant Shares
equal to the quotient obtained by dividing (A-B) (X) by (A),
where:
(A)
= the last VWAP immediately preceding the date of exercise giving
rise to the applicable “cashless exercise”, as set
forth in the applicable Election to Purchase (to clarify, the
“last VWAP” will be the last VWAP as calculated over an
entire Trading Day such that, in the event that this Warrant is
exercised at a time that the Trading Market is open, the prior
Trading Day’s VWAP shall be used in this
calculation);
(B)
= the Exercise Price of the Warrant, as adjusted as set forth
herein; and
(X)
= the number of Warrant Shares that would be issuable upon exercise
of the Warrant in accordance with the terms of the Warrant if such
exercise were by means of a cash exercise rather than a cashless
exercise.
If the Warrant Shares are issued in such a cashless exercise, the
Company acknowledges and agrees that, in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
registered characteristics of the Warrants being exercised and the
Company agrees not to take any position contrary thereto. Upon
receipt of an Election to Purchase for a cashless exercise, the
Warrant Agent will promptly deliver a copy of the Election to
Purchase to the Company to confirm the number of Warrant Shares
issuable in connection with the cashless exercise. The Company
shall calculate and transmit to the Warrant Agent in a written
notice, and the Warrant Agent shall have no duty, responsibility or
obligation under this section to calculate, the number of Warrant
Shares issuable in connection with any cashless exercise. The
Warrant Agent shall be entitled to rely conclusively on any such
written notice provided by the Company, and the Warrant Agent shall
not be liable for any action taken, suffered or omitted to be taken
by it in accordance with such written instructions or pursuant to
this Warrant Agreement. Notwithstanding anything herein to the
contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this
Section 3.3.7.
3.3.8. Disputes.
In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the number of Warrant Shares
issuable in connection with any exercise, the Company shall
promptly deliver to the Holder the number of Warrant Shares that
are not disputed.
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3.3.9. Compensation for
Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
3.3.10. Beneficial Ownership
Limitation. The Company shall
not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of a Warrant, pursuant to
Section 3 or otherwise, to the extent that after giving effect to
such issuance after exercise as set forth on the applicable Notice
of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons,
“Attribution
Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of such Warrant
with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, non-exercised portion
of such Warrant beneficially owned by the Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or non-converted portion of any other securities
of the Company (including, without limitation, any other Common
Stock Equivalents (as defined in the Definitive Certificate
attached as Annex C hereto)) subject to a limitation on conversion
or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its Affiliates or
Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 3.3.10, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 3.3.10
applies, the determination of whether a Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of a
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether a Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of a Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 3.3.10, in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including such Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
4.99% (or, upon election by a Holder prior to the issuance of any
Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of a Warrant. The
Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 3.3.10,
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 3.3.10 shall continue to
apply. Any increase in the Beneficial Ownership Limitation will not
be effective until the 61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
3.3.10 to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
7
4. Adjustments.
4.1. Adjustment upon
Subdivisions or Combinations.
If the Company, at any time while the Warrants are outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of the Warrants),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of each Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
such Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 4.1 shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
4.2. Adjustment for Other
Distributions.
(a) Subsequent Rights
Offerings. In addition to any
adjustments pursuant to Section 4.1 above, if at any time the
Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of a Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(b) Pro Rata
Distributions. During such time
as the Warrants are outstanding, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”),
at any time after the issuance of the Warrants, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of such Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however,
to the extent that the Holder’s right to participate in any
such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result
of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation).
8
4.3. Reclassification,
Consolidation, Purchase, Combination, Sale or
Conveyance. If, at any time
while the Warrants are outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger
or consolidation of the Company with or into another Person, (ii)
the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for
other securities, cash or property and has been accepted by the
holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon
any subsequent exercise of a Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 3.3.10 on the exercise of a
Warrant), the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the
“Alternate
Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 3.3.10 on the exercise
of a Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in
such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the
“Successor
Entity”) to assume in
writing all of the obligations of the Company under the Warrants in
accordance with the provisions of this Section 4.3 pursuant to
written agreements and shall, upon the written request of such
Holder, deliver to such Holder in exchange for the Warrant a
security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of the Warrants referring
to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under the
Warrants with the same effect as if such Successor Entity had been
named as the Company therein.
9
The Company shall instruct the Warrant Agent in writing, which
includes facsimile and/or email, to mail by first class mail,
postage prepaid, to each Holder, written notice of the execution of
any such amendment, supplement or agreement with the Successor
Entity. Any supplemented or amended agreement entered into by the
successor corporation or transferee shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4.3. The Warrant Agent
shall have no duty, responsibility or obligation to determine the
correctness of any provisions contained in such agreement or such
notice, including but not limited to any provisions relating either
to the kind or amount of securities or other property receivable
upon exercise of warrants or with respect to the method employed
and provided therein for any adjustments, and shall be entitled to
rely conclusively for all purposes upon the provisions contained in
any such agreement. The provisions of this Section 4.3 shall
similarly apply to successive reclassifications, changes,
consolidations, mergers, sales and conveyances of the kind
described above. Notwithstanding the requirement to provide or mail
written notice to a Holder set forth in this Section 4.3, the
Company shall not be required to provide or mail a written notice
to any Holder, and shall not be required to instruct the Warrant
Agent to provide or mail a written notice if the transaction or
transactions resulting in any adjustment described in this Section
4.3 is disclosed publicly via a press release, Current Report on
Form 8-K, other filing with the Commission or other means of public
dissemination.
4.4. Notices to
Holder.
(a) Adjustment to Exercise
Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this Section 4, the
Company shall promptly deliver to the Holder by facsimile or email
a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and
setting forth a brief statement of the facts requiring such
adjustment.
(b) Notice to Allow
Exercise by Holder. If (A) the
Company shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least ten (10) calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein. Notwithstanding the requirement to
provide or mail written notice to a Holder set forth in this
Section 4.4, the Company shall not be required to provide or mail a
written notice to any Holder, and shall not be required to instruct
the Warrant Agent to provide or mail a written notice if the
transaction or transactions described in this Section 4.4 are
disclosed publicly via a press release, Current Report on Form 8-K,
other filing with the Commission or other means of public
dissemination.
4.5. Other
Events. If any event occurs of
the type contemplated by the provisions of Section 4.1 or 4.2 but
not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, Adjustment
Rights, phantom stock rights or other rights with equity features
to all holders of Common Stock for no consideration), then the
Company’s Board of Directors will, at its discretion and in
good faith, make an adjustment in the Exercise Price and the number
of Warrant Shares or designate such additional consideration to be
deemed issuable upon exercise of a Warrant, so as to protect the
rights of the registered Holder. No adjustment to the Exercise
Price will be made pursuant to more than one sub-section of this
Section 4 in connection with a single issuance.
10
4.6. Notices of Changes in
Warrant. Upon every adjustment
of the Exercise Price or the number of Warrant Shares issuable upon
exercise of a Warrant, the Company shall give written notice
thereof to the Warrant Agent, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease,
if any, in the number of Warrant Shares purchasable at such price
upon the exercise of a Warrant, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation
is based. Upon the occurrence of any event specified in Sections
4.1 or 4.2, then, in any such event, the Company shall give written
notice to each Holder, at the last address set forth for such
holder in the Warrant Register, as of the record date or the
effective date of the event. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such
event. The Warrant Agent shall be entitled to rely conclusively on,
and shall be fully protected in relying on, any certificate, notice
or instructions provided by the Company with respect to any
adjustment of the Exercise Price or the number of shares issuable
upon exercise of a Warrant, or any related matter, and the Warrant
Agent shall not be liable for any action taken, suffered or omitted
to be taken by it in accordance with any such certificate, notice
or instructions or pursuant to this Warrant Agreement. The Warrant
Agent shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received written notice thereof from
the Company.
5. Restrictive Legends;
Fractional Warrants. In the
event that a Warrant Certificate surrendered for transfer bears a
restrictive legend, the Warrant Agent shall not register that
transfer until the Warrant Agent has received an opinion of counsel
for the Company stating that such transfer may be made and
indicating whether the Warrants must also bear a restrictive legend
upon that transfer. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result
in the transfer of or delivery of a Warrant Certificate for a
fraction of a Warrant.
6. [RESERVED].
7. Other Provisions
Relating to Rights of Holders of Warrants.
7.1. No Rights as
Stockholder. Except as
otherwise specifically provided herein, a Holder, solely in its
capacity as a holder of Warrants, shall not be entitled to vote or
receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this
Warrant Agreement be construed to confer upon a Holder, solely in
its capacity as the registered holder of Warrants, any of the
rights of a stockholder of the Company or any right to vote, give
or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of share capital,
consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights or rights to
participate in new issues of shares, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which it is then
entitled to receive upon the due exercise of
Warrants.
7.2. Reservation of Common
Stock. The Company shall at all
times reserve and keep available a number of its authorized but
unissued shares of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Warrants issued pursuant to
this Warrant Agreement.
8. Concerning the Warrant
Agent and Other Matters.
8.1. Any
instructions given to the Warrant Agent orally, as permitted by any
provision of this Warrant Agreement, shall be confirmed in writing
by the Company as soon as practicable. The Warrant Agent shall not
be liable or responsible and shall be fully authorized and
protected for acting, or failing to act, in accordance with any
oral instructions which do not conform with the written
confirmation received in accordance with this Section
8.1.
8.2.
(a) Whether or not any Warrants are exercised, for the Warrant
Agent’s services as agent for the Company hereunder, the
Company shall pay to the Warrant Agent such fees as may be
separately agreed between the Company and Warrant Agent and the
Warrant Agent’s out of pocket expenses in connection with
this Warrant Agreement, including, without limitation, the fees and
expenses of the Warrant Agent’s counsel. While the Warrant
Agent endeavors to maintain out-of-pocket charges (both internal
and external) at competitive rates, these charges may not reflect
actual out-of-pocket costs, and may include handling charges to
cover internal processing and use of the Warrant Agent’s
billing systems.
(b)
All amounts owed by the Company to the Warrant Agent under this
Warrant Agreement are due within 30 days of the invoice date.
Delinquent payments are subject to a late payment charge of one and
one-half percent (1.5%) per month commencing 45 days from the
invoice date. The Company agrees to reimburse the Warrant Agent for
any attorney’s fees and any other costs associated with
collecting delinquent payments.
11
(c)
No provision of this Warrant Agreement shall require Warrant Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties under this
Warrant Agreement or in the exercise of its rights.
8.3. As
agent for the Company hereunder the Warrant Agent:
(a) shall
have no duties or obligations other than those specifically set
forth herein or as may subsequently be agreed to in writing by the
Warrant Agent and the Company;
(b) shall
be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value, or
genuineness of the Warrants or any Warrant Shares;
(c) shall
not be obligated to take any legal action hereunder; if, however,
the Warrant Agent determines to take any legal action hereunder,
and where the taking of such action might, in its judgment, subject
or expose it to any expense or liability it shall not be required
to act unless it has been furnished with an indemnity reasonably
satisfactory to it;
(d) may
rely on and shall be fully authorized and protected in acting or
failing to act upon any certificate, instrument, opinion, notice,
letter, telegram, telex, facsimile transmission or other document
or security delivered to the Warrant Agent and believed by it to be
genuine and to have been signed by the proper party or
parties;
(e) shall
not be liable or responsible for any recital or statement contained
in the Registration Statement or any other documents relating
thereto;
(f) shall
not be liable or responsible for any failure on the part of the
Company to comply with any of its covenants and obligations
relating to the Warrants, including without limitation obligations
under applicable securities laws;
(g) may
rely on and shall be fully authorized and protected in acting or
failing to act upon the written, telephonic or oral instructions
with respect to any matter relating to its duties as Warrant Agent
covered by this Warrant Agreement (or supplementing or qualifying
any such actions) of officers of the Company, and is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Company or counsel to
the Company, and may apply to the Company, for advice or
instructions in connection with the Warrant Agent’s duties
hereunder, and the Warrant Agent shall not be liable for any delay
in acting while waiting for those instructions; any applications by
the Warrant Agent for written instructions from the Company may, at
the option of the Agent, set forth in writing any action proposed
to be taken or omitted by the Warrant Agent under this Warrant
Agreement and the date on or after which such action shall be taken
or such omission shall be effective; the Warrant Agent shall not be
liable for any action taken by, or omission of, the Warrant Agent
in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not
be less than five business days after the date such application is
sent to the Company, unless the Company shall have consented in
writing to any earlier date) unless prior to taking any such
action, the Warrant Agent shall have received written instructions
in response to such application specifying the action to be taken
or omitted;
(h) may
consult with counsel satisfactory to the Warrant Agent, including
its in-house counsel, and the advice of such counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered, or omitted by it hereunder in good faith and in
accordance with the advice of such counsel;
(i) may
perform any of its duties hereunder either directly or by or
through nominees, correspondents, designees, or subagents, and it
shall not be liable or responsible for any misconduct or negligence
on the part of any nominee, correspondent, designee, or subagent
appointed with reasonable care by it in connection with this
Warrant Agreement;
(j) is
not authorized, and shall have no obligation, to pay any brokers,
dealers, or soliciting fees to any person and
12
(k) shall
not be required hereunder to comply with the laws or regulations of
any country other than the United States of America or any
political subdivision thereof.
8.4.
(a)
In the absence of gross negligence or willful or illegal misconduct
on its part, the Warrant Agent shall not be liable for any action
taken, suffered, or omitted by it or for any error of judgment made
by it in the performance of its duties under this Warrant
Agreement. Anything in this Warrant Agreement to the contrary
notwithstanding, in no event shall Warrant Agent be liable for
special, indirect, incidental, consequential or punitive losses or
damages of any kind whatsoever (including but not limited to lost
profits), even if the Warrant Agent has been advised of the
possibility of such losses or damages and regardless of the form of
action. Any liability of the Warrant Agent will be limited in the
aggregate to the amount of fees paid by the Company hereunder. The
Warrant Agent shall not be liable for any failures, delays or
losses, arising directly or indirectly out of conditions beyond its
reasonable control including, but not limited to, acts of
government, exchange or market ruling, suspension of trading, work
stoppages or labor disputes, fires, civil disobedience, riots,
rebellions, storms, electrical or mechanical failure, computer
hardware or software failure, communications facilities failures
including telephone failure, war, terrorism, insurrection,
earthquakes, floods, acts of God or similar
occurrences.
(b)
In the event any question or dispute arises with respect to the
proper interpretation of the Warrants or the Warrant Agent’s
duties under this Warrant Agreement or the rights of the Company or
of any Holder, the Warrant Agent shall not be required to act and
shall not be held liable or responsible for its refusal to act
until the question or dispute has been judicially settled (and, if
appropriate, it may file a suit in interpleader or for a
declaratory judgment for such purpose) by final judgment rendered
by a court of competent jurisdiction, binding on all persons
interested in the matter which is no longer subject to review or
appeal, or settled by a written document in form and substance
satisfactory to Warrant Agent and executed by the Company and each
such Holder. In addition, the Warrant Agent may require for such
purpose, but shall not be obligated to require, the execution of
such written settlement by all the Holders and all other persons
that may have an interest in the settlement.
8.5. The Company covenants to indemnify the
Warrant Agent and hold it harmless from and against any loss,
liability, claim or expense (“Loss”)
arising out of or in connection with the Warrant Agent’s
duties under this Warrant Agreement, including the costs and
expenses of defending itself against any Loss, unless such Loss
shall have been determined by a court of competent jurisdiction to
be a result of the Warrant Agent’s gross negligence or
willful misconduct.
8.6. Unless terminated earlier by the parties
hereto, this Agreement shall terminate 90 days after the earlier of
the Expiration Date and the date on which no Warrants remain
outstanding (the “Termination
Date”). On the business
day following the Termination Date, the Agent shall deliver to the
Company any entitlements, if any, held by the Warrant Agent under
this Warrant Agreement. The Agent’s right to be reimbursed
for fees, charges and out-of-pocket expenses as provided in this
Section 8 shall survive the termination of this Warrant
Agreement.
8.7. If
any provision of this Warrant Agreement shall be held illegal,
invalid, or unenforceable by any court, this Warrant Agreement
shall be construed and enforced as if such provision had not been
contained herein and shall be deemed an Agreement among the parties
to it to the full extent permitted by applicable law.
8.8. The
Company represents and warrants that (a) it is duly incorporated
and validly existing under the laws of its jurisdiction of
incorporation, (b) the offer and sale of the Warrants and the
execution, delivery and performance of all transactions
contemplated thereby (including this Warrant Agreement) have been
duly authorized by all necessary corporate action and will not
result in a breach of or constitute a default under the articles of
association, bylaws or any similar document of the Company or any
indenture, agreement or instrument to which it is a party or is
bound, (c) this Warrant Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid, binding
and enforceable obligation of the Company, (d) the Warrants will
comply in all material respects with all applicable requirements of
law and (e) to the best of its knowledge, there is no litigation
pending or threatened as of the date hereof in connection with the
offering of the Warrants.
8.9. In
the event of inconsistency between this Warrant Agreement and the
descriptions in the Registration Statement, as they may from time
to time be amended, the terms of this Warrant Agreement shall
control.
13
8.10. Set forth in Annex
D hereto is a list of the
names and specimen signatures of the persons authorized to act for
the Company under this Warrant Agreement (the
“Authorized
Representatives”). The
Company shall, from time to time, certify to you the names and
signatures of any other persons authorized to act for the Company
under this Warrant Agreement.
8.11. Any
notice, statement or demand authorized by this Warrant Agreement to
be given or made by the Warrant Agent or by the holder of any
Warrant to or on the Company, including without limitation, any
Notice of Exercise, shall be delivered by e-mail, hand or sent by
registered or certified mail or overnight courier service,
addressed (until another address is filed in writing by the Company
with the Warrant Agent) as set forth below and if to any holder any
notice, statement or demand shall be given to the last address set
forth for such holder (if any) in the Warrant
Register:
Xxxxxxxxx.Xxx
Group, Inc.
000
Xxxxx Xx. Xxxxx 000
Xxxxxxx, Xxxxx
00000
Attention:
Xxxx Xxxx, Chief Executive Officer
Email:
xxxx@xxxxxxxxx.xxx
with a copy (which shall not constitute notice) to:
Lucosky
Xxxxxxxx LLP
000
Xxxx Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxxxxx, Xxx
Xxxxxx 00000
Attention: Xxxxxx
Xxxxxxx, Esq.
Fax No:
000 000 0000
email: xxxxxxxx@xxxxxx.xxx
Any notice, statement or demand authorized by this Warrant
Agreement to be given or made by the holder of any Warrant or by
the Company to or on the Warrant Agent shall be delivered by
facsimile, hand or sent by registered or certified mail or
overnight courier service, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as
follows:
Philadelphia Stock
Transfer, Inc.
0000
Xxxxxxxxx Xx.
Xxxxxxx, XX
00000
Attn:
[Warrant Department]
Email:
[___________________]
Any notice or other communication or deliveries hereunder shall be
deemed given and effective on the earliest of (i) the time of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email at the email address set
forth in this Section prior to 5:30 p.m. (New York City time) on
any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the
facsimile number or email at the email address set forth in this
Section on a day that is not a Trading Day or later than 5:30 p.m.
(New York City time) on any Trading Day, (iii) the second Trading
Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be
given.
8.12. (a)
This Warrant Agreement shall be governed by and construed in
accordance with the laws of the State of New York. All actions and
proceedings relating to or arising from, directly or indirectly,
this Warrant Agreement may be litigated in courts located within
the Borough of Manhattan in the City and State of New York. The
Company hereby submits to the personal jurisdiction of such courts
and consents that any service of process may be made by certified
or registered mail, return receipt requested, directed to the
Company at its address last specified for notices hereunder. Each
of the parties hereto hereby waives the right to a trial by jury in
any action or proceeding arising out of or relating to this Warrant
Agreement.
14
(b)
This Warrant Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto. This Warrant
Agreement may not be assigned, or otherwise transferred, in whole
or in part, by either party without the prior written consent of
the other party, which the other party will not unreasonably
withhold, condition or delay; except that (i) consent is not
required for an assignment or delegation of duties by Warrant Agent
to any affiliate of Warrant Agent and (ii) any reorganization,
merger, consolidation, sale of assets or other form of business
combination by Warrant Agent or the Company shall not be deemed to
constitute an assignment of this Warrant Agreement.
(c)
No provision of this Warrant Agreement may be amended, modified or
waived, except in a written document signed by both the Company and
the Warrant Agent, and the vote or written consent of Holders of at
least 50.1% of the then outstanding Warrants, provided that
adjustments may be made to the Warrant terms and rights in
accordance with Section 4 without the consent of the Holders.
Notwithstanding the foregoing, the Company and the Warrant Agent
may amend or supplement this Warrant Agreement without the consent
of any Holder for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained
herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the parties
may deem necessary or desirable and that the parties determine, in
good faith, shall not adversely affect the interest of the
Holders.
8.13. Payment of
Taxes. The Company will from
time to time promptly pay all taxes and charges that may be imposed
upon the Company or the Warrant Agent in respect of the issuance or
delivery of Warrant Shares upon the exercise of Warrants, but the
Company may require the Holders to pay any transfer taxes in
respect of the Warrants or such shares. The Warrant Agent may
refrain from registering any transfer of Warrants or any delivery
of any Warrant Shares unless or until the persons requesting the
registration or issuance shall have paid to the Warrant Agent for
the account of the Company the amount of such tax or charge, if
any, or shall have established to the reasonable satisfaction of
the Company and the Warrant Agent that such tax or charge, if any,
has been paid.
8.14. Resignation of Warrant
Agent.
8.14.1. Appointment of
Successor Warrant Agent. The
Warrant Agent, or any successor to it hereafter appointed, may
resign its duties and be discharged from all further duties and
liabilities hereunder after giving thirty (30) days’ notice
in writing to the Company, or such shorter period of time agreed to
by the Company. The Company may terminate the services of the
Warrant Agent, or any successor Warrant Agent, after giving thirty
(30) days’ notice in writing to the Warrant Agent or
successor Warrant Agent, or such shorter period of time as agreed.
If the office of the Warrant Agent becomes vacant by resignation,
termination or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment
within a period of 30 days after it has been notified in writing of
such resignation or incapacity by the Warrant Agent, then the
Warrant Agent or any Holder may apply to any court of competent
jurisdiction for the appointment of a successor Warrant Agent at
the Company’s cost. Pending appointment of a successor to
such Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company.
Any successor Warrant Agent (but not including the initial Warrant
Agent), whether appointed by the Company or by such court, shall be
a person organized and existing under the laws of any state of the
United States of America, in good standing, and authorized under
such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authority. After
appointment, any successor Warrant Agent shall be vested with all
the authority, powers, rights, immunities, duties, and obligations
of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed,
and except for executing and delivering documents as provided in
the sentence that follows, the predecessor Warrant Agent shall have
no further duties, obligations, responsibilities or liabilities
hereunder, but shall be entitled to all rights that survive the
termination of this Warrant Agreement and the resignation or
removal of the Warrant Agent, including but not limited to its
right to indemnity hereunder. If for any reason it becomes
necessary or appropriate or at the request of the Company, the
predecessor Warrant Agent shall execute and deliver, at the expense
of the Company, an instrument transferring to such successor
Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such
successor Warrant Agent all such authority, powers, rights,
immunities, duties, and obligations.
15
8.14.2. Notice of Successor
Warrant Agent. In the event a
successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the transfer
agent for the Common Stock not later than the effective date of any
such appointment.
8.14.3. Merger or
Consolidation of Warrant Agent.
Any person into which the Warrant Agent may be merged or converted
or with which it may be consolidated or any person resulting from
any merger, conversion or consolidation to which the Warrant Agent
shall be a party or any person succeeding to the shareowner
services business of the Warrant Agent or any successor Warrant
Agent shall be the successor Warrant Agent under this Warrant
Agreement, without any further act or deed. For purposes of this
Warrant Agreement, “person” shall mean any individual,
firm, corporation, partnership, limited liability company, joint
venture, association, trust or other entity, and shall include any
successor (by merger or otherwise) thereof or
thereto.
9. Miscellaneous
Provisions.
9.1. Persons Having Rights
under this Warrant Agreement.
Nothing in this Warrant Agreement expressed and nothing that may be
implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation
other than the parties hereto and the Holders any right, remedy, or
claim under or by reason of this Warrant Agreement or of any
covenant, condition, stipulation, promise, or agreement
hereof.
9.2. Examination of the
Warrant Agreement. A copy of
this Warrant Agreement shall be available at all reasonable times
at the office of the Warrant Agent designated for such purpose for
inspection by any Holder. Prior to such inspection, the Warrant
Agent may require any such holder to provide reasonable evidence of
its interest in the Warrants.
9.3. Counterparts.
This Warrant Agreement may be executed in any number of original,
facsimile or electronic counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
9.4. Effect of
Headings. The Section headings
herein are for convenience only and are not part of this Warrant
Agreement and shall not affect the interpretation
thereof.
10. Certain
Definitions. As used herein,
the following terms shall have the following
meanings:
(i) “Adjustment
Right” means any right
granted with respect to any securities issued in connection with,
or with respect to, any issuance, sale or delivery (or deemed
issuance, sale or delivery in accordance with Section 4) of Common
Stock (other than rights of the type described in Section 4.2 and
4.3 hereof) that could result in a decrease in the net
consideration received by the Company in connection with, or with
respect to, such securities (including, without limitation, any
cash settlement rights, cash adjustment or other similar rights)
but excluding anti-dilution and other similar rights (including
pursuant to Section 4.4 of this Agreement).
(ii) “Trading
Day” means any day on
which the Common Stock is traded on the Trading Market, or, if the
Trading Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities
market in the United States on which the Common Stock is then
traded, provided that “Trading Day” shall not include
any day on which the Common Stock is are scheduled to trade on such
exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of
trading on such exchange or market (or if such exchange or market
does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00 P.M., New
York City time).
(iii) “Trading
Market” means NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market or the New York Stock Exchange (or any
successors to any of the foregoing).
(iv) “VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
on the Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the holders of a majority in interest of the Warrants then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
[SIGNATURE
PAGE FOLLOWS]
16
IN
WITNESS WHEREOF, this Warrant Agent Agreement has been duly
executed by the parties hereto as of the day and year first above
written.
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XXXXXXXXX.XXX
GROUP, INC.
By:_____________________________________
Name:
Xxxx Xxxx
Title:
Chief Executive Officer
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PHILADELPHIA
STOCK TRANSFER,
INC.,
as Warrant Agent
By:_____________________________________
Name:
Title:
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[Signature Page—Warrant Agent Agreement]
17
Annex A - Form of Global
Certificate
Annex B - Election to
Purchase
Annex C - Form of
Certificated Warrant
Annex D - Authorized
Representatives
Annex E - Form of Warrant
Certificate Request Notice
18
ANNEX A
[FORM OF GLOBAL CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
XXXXXXXXX.XXX GROUP, INC.
WARRANT CERTIFICATE
NOT EXERCISABLE AFTER MAY __, 2026
This certifies that the person whose name and
address appears below, or registered assigns, is the registered
owner of the number of Warrants set forth below. Each Warrant
entitles its registered holder to purchase from XXXXXXXXX.XX GROUP,
INC., a Nevada corporation (the “Company”),
at any time prior to 5:00 P.M. (New York City time) on May __,
2026, one share of common stock, par value $0.0001 per share, of
the Company (each, a “Warrant
Share” and collectively,
the “Warrant
Shares”), at an exercise
price of $[6.05] per share, subject to possible adjustments as
provided in the Warrant Agreement (as defined
below).
This
Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the designated office of the Warrant Agent, may
be exchanged for another Warrant Certificate or Warrant
Certificates evidencing the same number of Warrants as the Warrant
Certificate or Warrant Certificates surrendered. A transfer of the
Warrants evidenced hereby may be registered upon surrender of this
Warrant Certificate at the designated office of the Warrant Agent
by the registered holder in person or by a duly authorized
attorney, properly endorsed or accompanied by proper instruments of
transfer, a signature guarantee, and such other and further
documentation as the Warrant Agent may reasonably request and duly
stamped as may be required by the laws of the State of New York and
of the United States of America.
The terms and conditions of the Warrants and the
rights and obligations of the holder of this Warrant Certificate
are set forth in the Warrant Agent Agreement dated as of May __,
2021 (the “Warrant
Agreement”) between the
Company and Philadelphia Stock Transfer, Inc. (the “Warrant
Agent”). A copy of the
Warrant Agreement is available for inspection during business hours
at the office of the Warrant Agent.
This
Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized
signatory of the Warrant Agent.
WITNESS
the facsimile signature of a proper officer of the
Company.
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XXXXXXXXX.XXX GROUP, INC.
By:_____________________________________
Name:
Xxxx Xxxx
Title:
Chief Executive Officer
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19
Dated: May __, 2021
Countersigned:
PHILEDELPHIA STOCK TRANSFER, INC.
as Warrant Agent
By:
__________________________
Name:
__________________________
Title::
__________________________
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PLEASE
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DETACH
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HERE
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Certificate No.:_________ Number of
Warrants:__________
WARRANT CUSIP NO.: [●]
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[Name
& Address of Holder]
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XXXXXXXXX.XXX
GROUP, INC.
Philadelphia
Stock Transfer, Inc., Warrant Agent
By
mail:
___________________________________
By hand
or overnight courier:__________________
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20
ANNEX B
NOTICE OF EXERCISE
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TO:
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XXXXXXXXX.XXX GROUP, INC.
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(1)
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ]
if permitted the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection
2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or
in such other name as is specified below:
_______________________________________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number:
________________________________________________________
________________________________________________________
________________________________________________________
[SIGNATURE OF HOLDER]
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Name of
Investing Entity:
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Signature of Authorized Signatory of Investing
Entity:
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Name of
Authorized Signatory:
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Title
of Authorized Signatory:
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Date:
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21
ANNEX C
[FORM OF CERTIFICATED WARRANT]
COMMON STOCK PURCHASE WARRANT
XXXXXXXXX.XXX GROUP, INC.
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Warrant
Shares: _______
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Initial
Exercise Date: May __, 2021
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Issue
Date: May __, 2021
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THIS COMMON STOCK PURCHASE WARRANT (the
“Warrant”)
certifies that, for value received, _____________ or its assigns
(the “Holder”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after May __, 2021 (the
“Initial Exercise
Date”) and on or prior to
5:00 p.m. (New York City time) on May __, 2026 (the
“Termination
Date”) but not
thereafter, to subscribe for and purchase from Xxxxxxxxx.Xxx Group,
Inc., a Nevada corporation (the “Company”),
up to ______ shares (as subject to adjustment hereunder, the
“Warrant
Shares”) of Common Stock.
The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).
This Warrant shall initially be issued and maintained in the form
of a security held in book-entry form and the Depository Trust
Company or its nominee (“DTC”) shall initially be the sole registered
holder of this Warrant, subject to a Holder’s right to elect
to receive a Warrant in certificated form pursuant to the terms of
the Warrant Agent Agreement, in which case this sentence shall not
apply.
Section
1. Definitions.
In addition to the terms defined elsewhere in this Warrant, the
following terms have the meanings indicated in this Section
1:
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.
“Business
Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.
“Commission”
means the United States Securities and Exchange
Commission.
“Common
Stock” means the common
stock of the Company, par value $0.0001 per share, and any other
class of securities into which such securities may hereafter be
reclassified or changed.
“Common Stock
Equivalents” means any
securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock
“Exchange
Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any
kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.
“Registration
Statement” means the
Company’s registration statement on Form S-1 (File No.
333-249208), as the same may be
amended from time to time.
22
“Restrictive Legend
Event” means any time
that the Company is unable to deliver the Warrant Shares via DTC
transfer or otherwise without restrictive legend because (A) the
Commission has issued a stop order with respect to the Registration
Statement, (B) the Commission otherwise has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily
or permanently, (C) the Company has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or
permanently, (D) the prospectus contained in the Registration
Statement is not available for the issuance of the Warrant Shares
to the Holder or (E) otherwise.
“Rule
144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Securities
Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Trading
Day” means a day on which
the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the
following markets or exchanges on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, or the New York Stock Exchange (or any
successors to any of the foregoing).
“Transfer
Agent” means Philadelphia
Stock Transfer, LLC, with a mailing address of 0000
Xxxxxxxxx Xx., Xxxxxxx, XX 00000 and a
facsimile number of (___) ___-____, and any successor transfer
agent of the Company.
“Warrant Agent
Agreement” means that
certain Warrant Agent Agreement, dated as of the Initial Exercise
Date, between the Company and the Warrant
Agent.
“Warrant
Agent” means the Transfer
Agent and any successor warrant agent of the
Company.
“Warrants”
means this Warrant and other Common Stock Purchase Warrants issued
by the Company pursuant to the Registration
Statement.
Section
2. Exercise.
a)
Exercise of the purchase rights represented by this Warrant may be
made, in whole or in part, at any time or times on or after the
Issuance Date and on or before close of business on the Termination
Date by delivery to the Company or the Warrant Agent of a duly
executed facsimile copy (or email attachment) of the Notice of
Exercise in the form annexed hereto (the “Notice of
Exercise”). Within the earlier of (i) two (2) Trading Days
and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i)) following the
date of exercise as aforesaid, the Holder shall deliver the
aggregate Exercise Price for the shares specified in the applicable
Notice of Exercise to the Company by wire transfer or
cashier’s check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is
specified in the applicable Notice of Exercise. No ink-original
Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any
Notice of Exercise form be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Trading Day of receipt of such notice. The
Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase
hereunder at any given time may be less than the amount stated on
the face hereof.
23
Notwithstanding the
foregoing in this Section 2(a), a holder whose interest in this
Warrant is a beneficial interest in certificate(s) representing
this Warrant held in book-entry form through DTC (or another
established clearing corporation performing similar functions),
shall effect exercises made pursuant to this Section 2(a) by
delivering to DTC (or such other clearing corporation, as
applicable) the appropriate instruction form for exercise,
complying with the procedures to effect exercise that are required
by DTC (or such other clearing corporation, as applicable), subject
to a Holder’s right to elect to receive a Warrant in
certificated form pursuant to the terms of the Warrant Agent
Agreement, in which case this sentence shall not
apply.
b) Exercise
Price. The exercise price per
share of the Common Stock under this Warrant shall
be $[6.05], subject to adjustment hereunder (the
“Exercise
Price”).
c) Cashless
Exercise. If at the time of
exercise hereof there is no effective registration statement
registering, or the prospectus contained therein is not available
for the issuance of the Warrant Shares to the Holder, then this
Warrant shall only be exercised, in whole or in part, at such time
by means of a “cashless exercise” in which the Holder
shall be entitled to receive a number of Warrant Shares equal to
the quotient (if such quotient would be a positive number) obtained
by dividing [(A-B) (X)] by (A), where:
(A)
= the last VWAP immediately preceding the time of delivery of the
Notice of Exercise giving rise to the applicable “cashless
exercise”, as set forth in the applicable Notice of Exercise
(to clarify, the “last VWAP” will be the last VWAP as
calculated over an entire Trading Day such that, in the event that
this Warrant is exercised at a time that the Trading Market is
open, the prior Trading Day’s VWAP shall be used in this
calculation);
(B)
= the Exercise Price of this Warrant, as adjusted hereunder;
and
(X)
= the number of Warrant Shares that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
registered characteristics of the Warrants being exercised. The
Company agrees not to take any position contrary to this Section
2(c).
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on
OTCQB or OTCQX and if prices for the Common Stock are then reported
on the Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the holders of a majority in interest of the Warrants then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
Notwithstanding
anything herein to the contrary, on the Termination Date, this
Warrant shall be automatically exercised via cashless exercise
pursuant to this Section 2(c). Furthermore, if a Restrictive
Legend Event has occurred, the Warrant shall only be exercisable on
a cashless basis. Notwithstanding anything herein to the contrary,
the Company shall not be required to make any cash payments or net
cash settlement to the Holder in lieu of delivery of the Warrant
Shares.
24
d) Mechanics of
Exercise.
i. Delivery of Warrant
Shares Upon Exercise. The
Company shall cause the Warrant Shares purchased hereunder to be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”)
if the Transfer Agent is then a participant in such system and
either (A) there is an effective registration statement permitting
the issuance of the Warrant Shares to or resale of the Warrant
Shares by Holder or (B) this Warrant is being exercised via
cashless exercise, and otherwise by physical delivery of a
certificate, registered in the Company’s share register in
the name of the Holder or its designee, for the number of Warrant
Shares to which the Holder is entitled pursuant to such exercise to
the address specified by the Holder in the Notice of Exercise by
the date that is earlier of (i) two (2) Trading Days after the
delivery to the Company of the Notice of Exercise and (ii) the
number of Trading Days comprising the Standard Settlement Period
after the delivery to the Company of the Notice of Exercise and
provided that payment in full of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received by the
Company one (1) Trading Day thereafter (such date, the
“Warrant Share Delivery
Date”). Upon delivery of
the Notice of Exercise, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the Warrant
Shares, provided that payment of the aggregate Exercise Price
(other than in the case of a cashless exercise) is received within
the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period following
the delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the
applicable Notice of Exercise), $10 per Trading Day (increasing to
$20 per Trading Day on the fifth Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such Warrant Shares are delivered or
Holder rescinds such exercise. The Company agrees to maintain a
transfer agent that is a participant in the FAST program so long as
this Warrant remains outstanding and exercisable. As used herein,
“Standard Settlement
Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the
Common Stock as in effect on the date of delivery of the Notice of
Exercise.
ii. Delivery of New
Warrants Upon Exercise. If this
Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the Warrant Shares, deliver
to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
iii. Rescission
Rights. If the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
Date, then the Holder will have the right to rescind such
exercise.
25
iv. Compensation for
Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise. In addition to any
other rights available to the Holder, if the Company fails to cause
the Transfer Agent to transmit to the Holder the Warrant Shares in
accordance with the provisions of Section 2(d)(i) above pursuant to
an exercise on or before the Warrant Share Delivery Date, and if
after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if
any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.
v. No Fractional Shares
or Scrip. No fractional shares
or scrip representing fractional shares shall be issued upon the
exercise of this Warrant. As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise,
the Company shall, at its election, either pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole
share.
vi. Charges, Taxes and
Expenses. Issuance of Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such Warrant Shares, all of which taxes and expenses shall be
paid by the Company, and such Warrant Shares shall be issued in the
name of the Holder or in such name or names as may be directed by
the Holder; provided, however,
that in the event Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto. The Company shall pay
all Transfer Agent fees required for same-day processing of any
Notice of Exercise and all fees to the Depository Trust Company (or
another established clearing corporation performing similar
functions) required for same-day electronic delivery of the Warrant
Shares.
vii. Closing of
Books. The Company will not
close its stockholder books or records in any manner which prevents
the timely exercise of this Warrant, pursuant to the terms
hereof.
26
e) Holder’s
Exercise Limitations. The
Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that after giving
effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution
Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder
and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be
issuable upon (i) exercise of the remaining, non-exercised portion
of this Warrant beneficially owned by the Holder or any of its
Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or non-converted portion of any other securities
of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial Ownership
Limitation” shall be
4.99% (or, upon election by a Holder prior to the issuance of any
Warrants, 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The
Holder, upon notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(e),
provided that the Beneficial Ownership Limitation in no event
exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(e) shall continue to
apply. Any increase in the Beneficial Ownership Limitation will not
be effective until the 61st day
after such notice is delivered to the Company. The provisions of
this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section
2(e) to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
27
Section
3. Certain
Adjustments.
(a) Stock Dividends and
Splits. If the Company, at any
time while this Warrant is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event, and the number of shares
issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination
or re-classification.
(b) Subsequent Rights
Offerings. In addition to any
adjustments pursuant to Section 3(a) above, if at any time the
Company grants, issues or sells any Common Stock Equivalents or
rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(c) Pro Rata
Distributions. During such time
as this Warrant is outstanding, if the Company shall declare or
make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”),
at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however,
to the extent that the Holder’s right to participate in any
such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result
of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation).
28
(d) Fundamental
Transaction. If, at any time
while this Warrant is outstanding, (i) the Company, directly or
indirectly, in one or more related transactions effects any merger
or consolidation of the Company with or into another Person, (ii)
the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase
offer, tender offer or exchange offer (whether by the Company or
another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for
other securities, cash or property and has been accepted by the
holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon
any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been
issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the
“Alternate
Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor
Entity”) to assume in
writing all of the obligations of the Company under this Warrant in
accordance with the provisions of this Section 3(d) pursuant to
written agreements and shall, upon the written request of such
Holder, deliver to such Holder in exchange for this Warrant a
security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant, which
is exercisable for a corresponding number of shares of capital
stock of such Successor Entity (or its parent entity) equivalent to
the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such exercise price being for
the purpose of protecting the economic value of this Warrant
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant referring
to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been
named as the Company herein.
(e) Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.
(f) Notice to
Holder.
i. Adjustment to Exercise
Price. Whenever the Exercise
Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly deliver to the Holder by facsimile or email
a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and
setting forth a brief statement of the facts requiring such
adjustment.
29
ii. Notice to Allow
Exercise by Holder. If (A) the
Company shall declare a dividend (or any other distribution in
whatever form) on the Common Stock, (B) the Company shall declare a
special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least ten (10) calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The
Holder shall remain entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date
of the event triggering such notice except as may otherwise be
expressly set forth herein. Notwithstanding the requirement to
provide or mail written notice to a Holder set forth in this
Section 3, the Company shall not be required to provide or mail a
written notice to any Holder, and shall not be required to instruct
the Warrant Agent to provide or mail a written notice if the
transaction or transactions resulting in any adjustment described
in this Section 3 is disclosed publicly via a press release,
Current Report on Form 8-K, other filing with the Commission or
other means of public dissemination.
Section
4. Transfer of
Warrant.
(a) Transferability.
This Warrant and all rights hereunder are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of
the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached
hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making
of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and
this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days
of the date the Holder delivers an assignment form to the Company
assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.
(b) New
Warrants. If this Warrant is
not held in global form through DTC (or any successor depository),
this Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section
4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice. All Warrants issued on
transfers or exchanges shall be dated the original Initial Exercise
Date of this Warrant and shall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant
thereto.
(c) Warrant
Register. The Warrant Agent
shall register this Warrant, upon records to be maintained by the
Warrant Agent for that purpose (the “Warrant
Register”), in the name
of the record Holder hereof from time to time. The Company and the
Warrant Agent may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the
contrary.
30
Section
5. Miscellaneous.
(a) No Rights as
Stockholder Until Exercise.
This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to
the exercise hereof as set forth in Section 2(d)(i), except as
expressly set forth in Section 3.
(b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and
dated as of such cancellation, in lieu of such Warrant or stock
certificate.
(c) Saturdays, Sundays,
Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then,
such action may be taken or such right may be exercised on the next
succeeding Business Day.
(d) Authorized
Shares.
(i) The
Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of issuing the necessary
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which
the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of
the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
(ii) Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation 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 of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable Warrant Shares upon the
exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations
under this Warrant.
(iii) Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.
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(e) Governing
Law. All questions concerning
the construction, validity, enforcement and interpretation of this
Warrant shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principles of conflict of laws thereof. Each party
agrees that all legal Proceedings concerning the interpretation,
enforcement and defense of this Warrant shall be commenced in the
state and federal courts sitting in the City of New York, Borough
of Manhattan (the “New York
Courts”). Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the
enforcement of any provision hereunder), 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
such New York Courts, or such New York Courts are improper or
inconvenient venue for such Proceeding. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal Proceeding
arising out of or relating to this Warrant. If any party shall
commence an action or Proceeding to enforce any provisions of this
Warrant, then the prevailing party in such action or Proceeding
shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or
Proceeding.
(f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale
imposed by state and federal securities laws.
(g) Nonwaiver and
Expenses. No course of dealing
or any delay or failure to exercise any right hereunder on the part
of Holder shall operate as a waiver of such right or otherwise
prejudice the Holder’s rights, powers or remedies. Without
limiting any other provision of this Warrant, if the Company
willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate
Proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
(h) Notices.
Any and all notices or other communications or deliveries to be
provided by the Holders hereunder including, without limitation,
any Notice of Exercise, shall be in writing and delivered
personally, by facsimile or by email, or sent by a nationally
recognized overnight courier service, addressed to the Company, at
Xxxxxxxxx.Xxx Group, Inc., 000 Xxxxx Xx. Xxxxx 000, Xxxxxxx,
Xxxxx 00000, Attention: Xxxx Xxxx,
Xx., Chief Executive Officer, email address: xxxx@xxxxxxxxx.xxx, or
such other facsimile number, email address or address as the
Company may specify for such purposes by notice to the Holders. Any
and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile
number or address of such Holder appearing on the books of the
Warrant Agent. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of
(i) the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email at the
email address set forth in this Section prior to 5:30 p.m. (New
York City time) on any date, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email at the email address
set forth in this Section on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (iii)
the second Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be
given. Notwithstanding any other provision of this Warrant, where
this Warrant provides for notice of any event to the Holder, if
this Warrant is held in global form by DTC (or any successor
depositary), such notice shall be sufficiently given if given to
DTC (or any successor depositary) pursuant to the procedures of DTC
(or such successor depositary), subject to a Holder’s right
to elect to receive a Warrant in certificated form pursuant to the
terms of the Warrant Agent Agreement, in which case this sentence
shall not apply.
(i) Warrant Agent
Agreement. If this Warrant
is held in global form through DTC (or any successor depositary),
this Warrant is issued subject to the Warrant Agent Agreement. To
the extent any provision of this Warrant conflicts with the express
provisions of the Warrant Agent Agreement, the provisions of the
Warrant Agent Agreement shall govern and be
controlling.
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(j) Limitation of
Liability. No provision hereof,
in the absence of any affirmative action by the Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any
liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the
Company.
(k) Remedies.
The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company
agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive and not to assert the
defense in any action for specific performance that a remedy at law
would be adequate.
(l) Successors and
Assigns. Subject to applicable
securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon
the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or
holder of Warrant Shares.
(m) Amendment. This
Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company, on the one hand, and
either: (i) the Holder or the beneficial owner of this Warrant, on
the other hand, or (ii) the vote or written consent of Holders of
at least 50.1% of the then outstanding Warrants issued pursuant to
the Warrant Agent Agreement, on the other hand, provided that
adjustments may be made to the terms and rights of this Warrant in
accordance with Section 3 of this Warrant without the consent of
any Holder or beneficial owner of the Warrants.
(n) Severability.
Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
(o) Headings.
The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of
this Warrant.
********************
(Signature Page Follows)
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.
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XXXXXXXXX.XXX
GROUP, INC.
By:_____________________________________
Name:
Xxxx Xxxx
Title:
Chief Executive Officer
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NOTICE OF EXERCISE
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TO:
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XXXXXXXXX.XXX GROUP, INC.
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(1)
The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ]
if permitted the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection
2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or
in such other name as is specified below:
_______________________________________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number:
________________________________________________________
________________________________________________________
________________________________________________________
[SIGNATURE OF HOLDER]
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Name of
Investing Entity:
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Signature of Authorized Signatory of Investing
Entity:
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Name of
Authorized Signatory:
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Title
of Authorized Signatory:
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Date:
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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply
required information. Do not use this form to purchase
shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
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Name:
________________________________________________________________________
(Please
Print)
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Address:
________________________________________________________________________
(Please
Print)
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Phone
Number:
__________________________________________________________
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Email
Address:
__________________________________________________________
Dated:
_____________________ __, ______
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Holder’s
Signature: ________________________________________________
Holder’s
Address: ________________________________________________
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ANNEX D
AUTHORIZED REPRESENTATIVES
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Name: Xxxx Xxxx
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Title: Chief Executive
Officer
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Signature:_________________________
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Name: Xxxxx
Xxxxxxxx
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Title: Chief Operating
Officer
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Signature:_________________________
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Name: Xxxx Xxxxxxx
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Title: Chief Financial
Officer
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Signature:_________________________
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ANNEX E
Form of Warrant Certificate Request Notice
WARRANT CERTIFICATE REQUEST NOTICE
To:
Philadelphia Stock Transfer, LLC, as Warrant Agent for
Xxxxxxxxx.Xxx Group, Inc. (the “Company”)
The
undersigned Holder of Common Stock Purchase Warrants
(“Warrants”) in the form of Global Warrants issued by
the Company hereby elects to receive a Definitive Certificate
evidencing the Warrants held by the Holder as specified
below:
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1.
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Name of
Holder of Warrants in form of Global Warrants:
____________________________________
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2.
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Name of
Holder in Definitive Certificate (if different from name of Holder
of Warrants in form of Global Warrants):
__________________________________________________________________________________
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3.
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Number
of Warrants in name of Holder in form of Global Warrants:
___________________________
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4.
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Number
of Warrants for which Definitive Certificate shall be issued:
__________________________
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5.
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Number
of Warrants in name of Holder in form of Global Warrants after
issuance of Definitive
Certificate,
if any:
___________________________________________________________________
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6.
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Definitive
Certificate shall be delivered to the following
address:
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The
undersigned hereby acknowledges and agrees that, in connection with
this Warrant Exchange and the issuance of the Definitive
Certificate, the Holder is deemed to have surrendered the number of
Warrants in form of Global Warrants in the name of the Holder equal
to the number of Warrants evidenced by the Definitive
Certificate.
[SIGNATURE OF HOLDER]
Name
of Investing Entity:
____________________________________________________
Signature of Authorized
Signatory of Investing Entity:
____________________________________________________
Name
of Authorized Signatory:
____________________________________________________
Title
of Authorized Signatory:
Date:
____________________________________________________
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