Contract
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
XXXXX.XXX
GROUP, INC.
Warrant No:
[ ]
1. Issuance; Certain
Definitions. This warrant is one of several warrants (the
“Warrants”)
being issued in connection with a Secured Convertible Promissory Note and
Warrant Purchase Agreement dated as of September 22, 2008 between Xxxxx.xxx
Group, Inc., a Delaware corporation (the “Company”) and the
Purchasers set forth therein. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by the Company,
hereby grants [ ]
[ ] or registered assigns (the “Holder”) the right to
purchase at any time until 5:00 P.M., E.S.T., on September 22, 2013 (“Expiration Date”),
[ ] ( ) fully paid and
nonassessable shares of the Company’s common stock, $.0001 par value (the “Common Stock”) at an
exercise price per share (the “Exercise Price”) of
$0.46875 per share, such number of shares of Common Stock and Exercise Price
subject to further adjustment as set forth in Section 6 hereof.
2. Exercise of
Warrants. This Warrant is immediately exercisable in whole or
in part at the Exercise Price per share of Common Stock payable hereunder,
payable in cash or by certified or official bank check. Upon
surrender of this Warrant with the annexed Notice of Exercise Form duly executed
(which Notice of Exercise Form may be submitted either by delivery to the
Company or the Company’s transfer agent or by facsimile transmission as provided
in Section 8 hereof), together with payment of the Exercise Price for the shares
of Common Stock purchased, the Holder shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased.
3. Reservation of
Shares. The Company hereby agrees that at all times during the
term of this Warrant there shall be reserved for issuance upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance upon exercise of this Warrant (the “Warrant Shares” and
together with the shares of Common Stock issuable under all of the Warrants, the
“Applicable Warrant
Shares”).
4. Mutilation or Loss of
Warrant. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) receipt of an Affidavit of Loss by the
Company and reasonably satisfactory indemnification (as determined by the
Company), and (in the case of mutilation) upon surrender and cancellation of
this Warrant, the Company will execute and deliver a new Warrant of like tenor
and date and any such lost, stolen, destroyed or mutilated Warrant shall
thereupon become void.
5. Rights of the
Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth
herein.
6. Adjustments to Exercise
Price and Number of Warrant Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the happening of any of
the following. In case the Company shall (i) pay a dividend in shares
of Common Stock or make a distribution in shares of Common Stock to holders of
its outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock, then the
number of Warrant Shares purchasable upon exercise of this Warrant immediately
prior thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company which
it would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder pursuant to this Section 6, the Holder shall thereafter be entitled to
purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such
event.
7. Transfer, Division and
Combination.
7.1 This
Warrant has not been registered under the Securities Act of 1933, as amended,
(the “Act”) and
has been issued to the Holder for investment and not with a view to the
distribution of either the Warrant or the Warrant Shares. Neither
this Warrant nor any of the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may be sold, transferred, pledged or
hypothecated in the absence of an effective registration statement under the Act
relating to such security or an opinion of counsel satisfactory to the Company
that registration is not required under the Act. As provided in the
Purchase Agreement, each certificate for the Warrant, the Warrant Shares and any
other security issued or issuable upon exercise of this Warrant shall contain a
legend on the face thereof, in form and substance satisfactory to counsel for
the Company, setting forth the restrictions on transfer contained in this
Section.
.
7.2 Subject
to compliance with the applicable provisions of the Purchase Agreement and any
applicable securities laws and the conditions set forth above hereof, 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, 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 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. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
7.3 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 7, 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.
7.4 The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.
7.5 The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
8. Notices. Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered to the addresses and pursuant to the procedure
set forth in the Purchase Agreement.
9. Supplements and Amendments;
Whole Agreement. This Warrant may be amended or supplemented
only by an instrument in writing signed by the Company and the holders
representing a majority in interests of the Applicable Warrant Shares that
remain issuable under the then outstanding Warrants. This Warrant
contains the full understanding of the parties hereto with respect to the
subject matter hereof and thereof and there are no representations, warranties,
agreements or understandings other than expressly contained herein and
therein.
10. Governing
Law. THIS WARRANT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF FLORIDA AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA. MAKER HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN PALM BEACH COUNTY,
FLORIDA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS WARRANT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OF FLORIDA OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. NOTHING IN THIS WARRANT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
11. Counterparts. This
Warrant may be executed in any number of 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.
12. Descriptive
Headings. Descriptive headings of the several Sections of this
Warrant are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, this
Warrant is xxxxxx executed as of [ ] 0,
2008.
XXXXX.XXX
GROUP, INC.
|
By:
|
||
|
Name:
|
|
|
|
Title:
|
||
Acknowledged
by the Company’s Transfer Agent:
Corporate
Stock Transfer, Inc.
|
By:
|
|
|
Name:
|
|
|
Title:
|
NOTICE OF EXERCISE OF
WARRANT
The
undersigned hereby irrevocably elects to exercise the right, represented by the
Warrant Certificate dated as of ______________, 20__, to purchase
___________ shares of the Common Stock of XXXXX.XXX GROUP, INC. at an
Exercise Price of $___________ per share, for an aggregate price of $___________
and tenders herewith payment in accordance with Section 1 of said Common Stock
Purchase Warrant.
Please
deliver the stock certificate to:
Dated:______________________
|
[Name
of Xxxxxx]
|
|
By:
|
Upon
Exercise, please deliver this completed form, the original warrant and the
consideration required for the Exercise Price to the Company’s Transfer Agent at
the following address:
Corporate
Stock Transfer, Inc.
0000
Xxxxxx Xxxxx Xxxxx Xxxxx, Xxxxx 000
Denver,
Colorado 80209
Attn:
Xxxxxxx X. Xxxx
