WARRANT TO PURCHASE COMMON STOCK
Exhibit
99.3
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER THE SECURITIES
LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED. ANY ATTEMPT TO SELL, PLEDGE, HYPOTHECATE OR OTHERWISE
TRANSFER THIS WARRANT OR THE SECURITIES ISSUABLE UPON THE EXERCISE THEREOF
WILL
BE VOID.
Void
after
June
30,
2011
Issued
this [_______], 2007
WARRANT
TO PURCHASE COMMON STOCK
This
Warrant is issued to [Name of
the Investor] (the “Holder”), by Network CN Inc., a
Delaware corporation (the “Company”), pursuant to the terms of
that certain Note and Warrant Purchase Agreement dated as of November 19, 2007
by and among the Borrower and the Holder, among others (the “Purchase
Agreement”). Terms used but not defined herein shall have
the respective meaning set forth in the Purchase Agreement.
1. Purchase
of Common Stock. Subject to the terms and conditions hereinafter
set forth and set forth in the Purchase Agreement, the holder of this Warrant
is
entitled, upon surrender of this Warrant at the principal office of the Company
(or at such other place as the Company shall notify the holder hereof in
writing), to purchase from the Company up to the number of fully paid and
nonassessable Common Stock (as defined below) that equals the Warrant Coverage
Amount.
2. Definitions.
(a) Exercise
Price. The exercise
price for the Common Stock shall be US$[2.5][3.5] per share (such price, as
adjusted from time to time, is herein referred to as the “Exercise
Price”).
(b) Exercise
Period. This Warrant shall be exercisable, in whole or in part,
during the term commencing on the date hereof, and ending on the expiration
of
this Warrant pursuant to Section 12 hereof.
(c) Warrant
Coverage Amount. The term “Warrant Coverage
Amount” shall mean that number of Common Stock which equals
to the quotient obtained by dividing the [First Note Purchase
Price][Second Note Purchase Price][Third Note Purchase Price] (as
defined in the Purchase Agreement) by US$[2.5][3.5], rounded to the nearest
whole Common Stock.
1
(d) The
Common Stock. The term “Common Stock” shall mean
shares of Common Stock of the Company, par value US$0.001 per
share.
3. Method
of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 2 above, the holder may
exercise, in whole or in part, the purchase rights evidenced
hereby. Such exercise shall be effected by:
(i) the
surrender of the Warrant, together with a notice of exercise to the Secretary
of
the Company at its principal offices; and
(ii) the
payment to the Company of an amount equal to the aggregate Exercise Price for
the number of Common Stock being purchased.
4. Net
Exercise. In lieu of exercising this Warrant pursuant to Section 3,
the Holder may elect to receive, without payment by the Holder of any additional
consideration, shares equal to the value of this Warrant (or the portion thereof
being canceled) by surrender of this Warrant at the principal office of the
Company together with notice of such election, in which event the Company shall
issue to the holder hereof a number of Common Stock computed using the following
formula:
|
|
Y
(A - B)
|
|
X
=
|
A
|
Where
|
|
X
--
|
The
number of Common Stock to be issued to the holder of this
Warrant.
|
|
|
Y
--
|
The
number of Common Stock purchasable under this Warrant or, if only
a
portion of the Warrant is being exercised, the portion of the Warrant
being canceled (at the date of such
calculation).
|
|
|
A
--
|
The
fair market value of one Common Stock (at the date of such
calculation).
|
|
|
B
--
|
The
Exercise Price (as adjusted to the date of such
calculations).
|
For
purposes of this Section 4, the fair market value of one Common
Stock shall mean the average of the closing bid and asked prices of Common
Stock
quoted in the over-the-counter market in which the Common Stock is traded or
the
closing price quoted on any exchange on which the Common Stock is listed,
whichever is applicable, as published in the Western Edition of The Wall
Street Journal for the ten (10) trading days prior to the date of
determination of fair market value (or such shorter period of time during which
such stock was traded over-the-counter or on such exchange). If the
Common Stock is not traded on the over-the-counter market or on an exchange,
the
fair market value shall be as determined in good faith by the Company’s Board of
Directors.
5. Updated
Registry of Shareholders; Certificates for Common Stock. Upon the
exercise of the purchase rights evidenced by this Warrant, the stock register
of
the Company shall be updated and one or more certificates for the number of
Common Stock so purchased shall be issued as soon as
practicable thereafter, and in any event within thirty (30) days of the delivery
of the subscription notice.
2
6. Issuance
of Common Stock. The Company covenants that the Common Stock,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof. During the period within which
the rights represented by this Warrant may be exercised, the Company will at
all
times have authorized and reserved for the purpose of issue upon exercise of
the
purchase rights evidenced by this Warrant, a sufficient number of Common Stock
to provide for the exercise of the rights represented by this
Warrant. In the event that there is an insufficient number of Common
Stock reserved for issuance pursuant to the exercise of this Warrant, the
Company will take appropriate action to authorize an increase in the capital
stock to allow for such issuance or similar issuance acceptable to the
Holder.
7. Adjustment
of Exercise Price and Number of Common Stock. The number of and
kind of securities purchasable upon exercise of this Warrant and the Exercise
Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions,
Combinations and Other Issuances. If the Company shall at any
time prior to the expiration of this Warrant subdivide the Common Stock, by
split-up or otherwise, or combine its Common Stock, or issue additional shares
of its Common Stock as a dividend, the number of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to
the purchase price payable per share, but the aggregate purchase price payable
for the total number of Common Stock purchasable under this Warrant (as
adjusted) shall remain the same. Any adjustment under this
Section 7(a) shall become effective at the close of business on the
date the subdivision or combination becomes effective, or as of the record
date
of such dividend, or in the event that no record date is fixed, upon the making
of such dividend.
(b) Reclassification,
Reorganization and Consolidation. In case of any
reclassification, capital reorganization, or change in the capital stock of
the
Company (other than as a result of a subdivision, combination, or stock dividend
provided for in Section 7(a) above), then the Company shall make
appropriate provision so that the holder of this Warrant shall have the right
at
any time prior to the expiration of this Warrant to purchase, at a total price
equal to that payable upon the exercise of this Warrant, the kind and amount
of
shares of stock and other securities and property receivable in connection
with
such reclassification, reorganization, or change by a holder of the same number
of Common Stock as were purchasable by the holder of this Warrant immediately
prior to such reclassification, reorganization, or change. In any
such case appropriate provisions shall be made with respect to the rights and
interest of the holder of this Warrant so that the provisions hereof shall
thereafter be applicable with respect to any shares of stock or other securities
and property deliverable upon exercise hereof, and appropriate adjustments
shall
be made to the purchase price per share payable hereunder, provided the
aggregate purchase price shall remain the same.
(c) Other
Adjustment Event. If at any time prior to the expiration of this
Warrant, the conversion price of the Notes is adjusted in accordance
with Section 3 of the Notes, the Exercise Price shall be adjusted as
follows:
|
|
Y *
[2.50][3.50]
|
|
X
=
|
1.65
|
3
Where
|
|
X
--
|
The
Exercise Price of this Warrant after the
adjustment.
|
|
|
Y
--
|
The
conversion price of the Notes after the adjustment in accordance
with
Section 3 of the Notes.
|
(d) Notice
of Adjustment. When any adjustment is required to be made in the
number or kind of shares purchasable upon exercise of the Warrant, or in the
Exercise Price, the Company shall promptly notify the holder of such event
and
of the number of Common Stock or other securities or property thereafter
purchasable upon exercise of this Warrant.
8. No
Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
9. Representations
of the Company. The Company represents that all corporate actions
on the part of the Company, its officers, directors and stockholders necessary
for the sale and issuance of this Warrant have been taken.
10. Transfers.
Subject to compliance with the applicable federal and other securities laws
and
the provisions of this Section 10, this Warrant and all rights hereunder are
transferable or assignable, in whole or in part, without charge to the Holder
(except for transfer taxes), to any person or entity upon surrender of this
Warrant properly endorsed or accompanied by written instructions of
transfer.
11. Restrictive
Legend. Each certificate representing the Common Stock shall be
endorsed with the following legend (in addition to any legend required under
applicable state securities laws):
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (AS AMENDED,
THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS
SECURITY MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
(B) AN EXEMPTION OR QUALIFICATION UNDER APPLICABLE SECURITIES LAWS OR
(C) DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED. ANY ATTEMPT
TO TRANSFER, SELL, PLEDGE OR HYPOTHECATE THIS SECURITY IN VIOLATION OF THESE
RESTRICTIONS SHALL BE VOID.
12. Expiration
of Warrant. This Warrant shall expire and shall no longer be
exercisable after 5:00 p.m., New York local time, on June 30,
2011.
13. Notices. Except
as otherwise set forth in this Warrant, any notice required or permitted
pursuant to this Warrant shall be given in writing and shall be given either
personally or by sending it by next-day or second-day courier service, fax,
electronic mail or similar means to the address as shown below (or at such
other
address as such party may designate by fifteen (15) days’ advance written notice
to the other parties to this Warrant given in accordance with this
section):
4
If
to the Company, to:
00X,
Xxxxxxxxx Xxxxxxx Xxxxx,
000
Xxxxxxxxxx Xxxx,
Xxxxxxx,
Xxxx Xxxx
Tel:
(000) 0000-0000
Fax:
(000) 0000-0000
Attention:
Xxxxx Xxx
with
a
copy to:
Xxxxx
Rozynko, LLP
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
Attention:
Xxxxxxxx X. Xxxxxxx
If
to the
Holder, to:
0
Xxxxxxxxxxx Xxxxx, XXXX
Xxxxxx
0, Xxxxxxx
Facsimile
number: x000 0 0000000
Attention:
The Directors
with
a copy to:
c/o
Och-Ziff Capital Management
Group
0
Xxxx 00xx Xx., 00xx
Xxxxx
Xxx
Xxxx, XX
00000
Attention:
Xxxx
Xxxxx, Xxxxx
Xxxxxxx
Fax:
x0-000-000-0000
Where
a
notice is sent by next-day or second-day courier service, service of the notice
shall be deemed to be effected by properly addressing, pre-paying and sending
by
next-day or second-day service through an internationally-recognized courier
a
letter containing the notice, with a confirmation of delivery, and to have
been
effected at the expiration of two (2) days after the letter containing the
same
is sent as aforesaid. Where a notice is sent by fax or electronic mail, service
of the notice shall be deemed to be effected by properly addressing, and sending
such notice through a transmitting organization, with a written confirmation
of
delivery, and to have been effected on the day the same is sent as
aforesaid.
5
14. Governing
Law. This Warrant and all actions arising out of or in connection
with this Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law provisions
of the State of New York or of any other state.
15. Cooperation. The
Company will not, by amendment of
its bylaws or certificate of incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder
by the Company, but will at all times in good faith assist in the carrying
out
of all the provisions of this Warrant and in the taking of all such action
as may be necessary or appropriate in order to protect the rights of the
holder of the Warrant against impairment.
16. Waiver
and Amendment. Any provision
of this Warrant
may be amended, waived or modified only upon the written consent of the
Company and the Holder.
17. Payment
of Taxes. The Company shall
pay all
stamp taxes attributable to the initial issuance of Common Stock issuable upon
any exercise of the Warrant, excluding any tax or taxes which may be
payable because of the transfer involved in the issuance or delivery of any
certificates for Common Stock in a name other than that of the exercising
Holder in respect of which such Common Stock are issued.
6
| “THE COMPANY” | |||
| NETWORK CN INC. | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
| “THE HOLDER” | |||
| [INVESTOR] | |||
| By: | |||
| By: | |||
| By: | |||
| Name: | |||
| Title: | |||
7
