Attached files
| file | filename |
|---|---|
| 8-K - PERPETUAL TECHNOLOGIES, INC. | v174209_8k.htm |
| EX-10.7 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex10-7.htm |
| EX-10.1 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex10-1.htm |
| EX-21.1 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex21-1.htm |
| EX-10.3 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex10-3.htm |
| EX-10.4 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex10-4.htm |
| EX-10.6 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex10-6.htm |
| EX-10.2 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex10-2.htm |
| EX-4.1 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex4-1.htm |
| EX-4.4 - PERPETUAL TECHNOLOGIES, INC. | v174209_ex4-4.htm |
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Exhibit 4.2
|
FORM OF
WARRANT
THE
SALE OF THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS WARRANT
AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED,
SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH TRANSACTION UNDER APPLICABLE SECURITIES LAWS OR UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.
PERPETUAL
TECHNOLOGIES, INC.
COMMON
STOCK PURCHASE WARRANT
|
No.
__________
|
February
12, 2010 (the “Issuance
Date”)
|
PERPETUAL TECHNOLOGIES, INC.,
a Delaware corporation (the “Company”), hereby
certifies that __________________ (the “Investor”) and its
transferees, designees, successors and assigns (collectively, the “Holder”), for value
received, is entitled to purchase from the Company that number of fully-paid,
non-assessable shares (each, a “Share” and
collectively, the “Shares”) of the
Company’s common stock, $.001 par value per Share (the “Common Stock”), as
set forth below, at the exercise price (the “Exercise Price”) as
set forth below. This Warrant shall be exercisable at any time and
from time to time during the five-year period commencing on the closing of a
Financing (as defined below) (the “Effective Date”);
provided, however, this Warrant shall be null, void, and unexercisable if: (i)
no Financing is consummated during the five-year period commencing on the
Issuance Date or (ii) if the Notes automatically convert as provided in Section
6 of the Notes. As used herein, “Financing” means the
first sale (or series of related sales) by the Company of its capital stock, or
debt or equity securities convertible into or exercisable for its capital stock,
in a capital raising transaction occurring after the earlier of the Maturity
Date (as defined in the Note) and the date the Note becomes due pursuant to a
Default (as defined in the Note) as provided in Section 8 of the Note , for
aggregate gross proceeds to the Company of at least $2,000,000. The
Exercise Price equals the price per share of the Common Stock (or Common Stock
equivalent if derivative securities are sold) issued by the Company in a
Financing, provided that if the Financing includes more than one type of
security, the Exercise Price shall be lowest price per share of the Common Stock
or Common Stock equivalent included in the Financing. The number of
Shares purchasable hereunder shall equal eight percent (8%) of the total number
of shares of Common Stock outstanding immediately after the closing of the
Financing, determined on a fully-diluted basis (for purposes of clarity, after
giving effect to the conversion or exercise of all outstanding derivative
securities), multiplied by a fraction, the numerator of which is the principal
amount of the Note purchased pursuant to the Purchase Agreement by the initial
Investor who received this Warranton the Issuance Date, and the denominator of
which is the aggregate principal amount of all of the Notes purchased pursuant
to the Purchase Agreement. The number of Shares purchasable hereunder
and the Exercise Price are subject to adjustment as provided in Section 4
hereof. Within five (5) days after the Effective Date, the Company
shall inform the Holder in writing as to the number of Shares then purchasable
hereunder and the then Exercise Price, which writing shall be accompanied by a
detailed calculation showing how the foregoing were determined.
-1-
Capitalized
terms used and not otherwise defined herein will have the respective meanings
given to such terms in the Note Purchase Agreement, dated as of February 12,
2010, among the Company, the Investor, and certain other investors (the “Other Investors”)
(the “Purchase
Agreement”).
1. Method of Exercise;
Payment.
(a) Cash
Exercise. The purchase rights represented by this Warrant may
be exercised by the Holder, in whole or in part, by the surrender of this
Warrant (with the notice of exercise form (the "Notice of Cash
Exercise") attached hereto as Exhibit A duly
executed) at the principal office of the Company, and by payment to the Company
of an amount equal to the Exercise Price multiplied by the number of the Shares
being purchased, which amount may be paid, at the sole election of the Holder,
by (i) wire transfer or certified check payable to the order of the Company,
(ii) cancellation by the Holder of indebtedness or other obligations of the
Company to the Holder, (iii) any other lawful consideration as the Company shall
determine, or (iii) a combination of (i), (ii) and (iii).
(b) Net Issue Exercise. In
lieu of exercising this Warrant pursuant to Section l(a) hereof, the Holder may
elect to receive, without the payment of any additional consideration, a number
of Shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with the Notice of Cashless Exercise annexed
hereto as Exhibit
C duly executed (the “Notice of Cashless Exercise,” together with the
Notice of Cash Exercise, the “Exercise Notice”). In such event, the
Company shall issue to the Holder a number of fully paid, non-assessable Shares
computed using the following formula:
X = Y (A-B)
A
|
Where
X
|
=
|
the
number of Shares to be issued to the Holder.
|
|
|
Y
|
=
|
the
number of Shares subject to this Warrant in respect of which the net issue
election is made (i.e., the right
to exercise is being surrendered) pursuant to this Section
1(b).
|
-2-
|
A
|
=
|
the
Current Market Value of one share of Common Stock (at the date of the net
issue election is made).
|
|
|
B
|
=
|
the
Exercise Price in effect at the time the net issue election is made
pursuant to this Section
1(b).
|
(c) Current Market
Value. Current Market Value is defined below. The
Board of Directors of the Company shall promptly respond in writing to an
inquiry by the Holder as to the Current Market Value.
(d) Stock
Certificates. In the event of any exercise of the rights
represented by this Warrant, as promptly as practicable on or after the date of
exercise and in any event within three (3) Business Days thereafter (the
“Delivery Date”), the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of Shares issuable upon such exercise. In the event this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of Shares for
which this Warrant may then be exercised.
(e) Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise. In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Shares pursuant to an exercise on or before the Delivery Date,
and if after such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Shares which the Holder anticipated
receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount 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 (A) the
number of Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Shares for which such exercise was not honored 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 (1) 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, together with applicable confirmations
and other evidence reasonably requested by the Company. 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 certificates representing shares of Common Stock upon
exercise of this Warrant as required pursuant to the terms
hereof
-3-
(f) Taxes. The
issuance of the Shares upon the exercise of this Warrant, and the delivery of
certificates or other instruments representing such Shares, shall be made
without charge by the Company to the Holder for any tax or other charge in
respect of such issuance.
2. Warrant.
(a) Exchange, Transfer and
Replacement. At any time prior to the exercise hereof, this
Warrant may be exchanged upon presentation and surrender to the Company, alone
or with other warrants of like tenor of different denominations registered in
the name of the same Holder, for another warrant or warrants of like tenor in
the name of the Holder exercisable for the aggregate number of Shares as the
warrant or warrants surrendered.
(b) Replacement of
Warrant. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft, or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver in lieu thereof,
a new Warrant of like tenor.
(c) Cancellation; Payment of
Expenses. Upon the surrender of this Warrant in connection
with any transfer, exchange or replacement as provided in this Section 2, this
Warrant shall be promptly canceled by the Company.
(d) Warrant
Register. The Company shall maintain, at its principal
executive offices (or at the offices of the transfer agent for the Warrant or
such other office or agency of the Company as it may designate by notice to the
Holder), a register for this Warrant (the “Warrant Register”) in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each transferee
and each prior owner of this Warrant.
3. Rights and Obligations of
Holders of this Warrant. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or in equity; provided, however, that in the
event any certificate representing Shares or other securities is issued upon
exercise of this Warrant, the recipient of such certificate shall, for all
purposes, be deemed to have become the holder of record of such securities (and
such securities will be deemed to have been issued) on the date on which this
Warrant, together with a duly executed Election to Purchase or Notice of
Cashless Exercise, as applicable, was surrendered and payment of the aggregate
Exercise Price, if applicable, was made, irrespective of the date of delivery of
such certificate.
-4-
4. Adjustments.
(a) Stock Dividends,
Reclassifications, Recapitalizations, Etc. In the event that,
on or after the Effective Date, the Company: (i) pays a dividend
in Common Stock or makes a distribution in Common Stock, (ii) subdivides
its outstanding Common Stock into a greater number of shares,
(iii) combines its outstanding Common Stock into a smaller number of shares
or (iv) increases or decreases the number of shares of Common Stock
outstanding by reclassification of its Common Stock (including a
recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (1) the Exercise Price on the
record date of such division or distribution or the effective date of such
action shall be adjusted by multiplying such Exercise Price by a fraction, the
numerator of which is the number of shares of Common Stock actually issued and
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock actually issued and outstanding immediately
after such event, and (2) the number of shares of Common Stock for which
this Warrant may be exercised immediately before such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the Exercise
Price immediately before such event and the denominator of which is the Exercise
Price immediately after such event.
(b) Cash Dividends and Other
Distributions. In the event the Company shall, at any time or
from time to time on or after the Effective Date, distribute to all holders of
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the resulting or surviving
entity and the Common Stock is not changed or exchanged) cash, evidences of
indebtedness of the Company or another issuer, securities of the Company or
another issuer, or other assets (excluding dividends or other distributions of
Common Stock for which adjustment is made under Section 4(a)), or rights or
warrants to subscribe for or purchase securities of the Company (excluding those
in respect of which adjustments in the Exercise Price is made pursuant to
Section 4(d)), then in each such case the Exercise Price in effect thereafter
shall be determined by multiplying the Exercise Price in effect immediately
prior thereto by a fraction, the numerator of which shall be (x) the total
number of shares of Common Stock actually issued and outstanding on the business
day immediately prior to the date of such distribution multiplied by the Current
Market Value per share of Common Stock on such business day, less (y) the Fair
Market Value on such business day of said assets or evidences of indebtedness so
distributed or of such rights or warrants, and the denominator of which shall be
the total number of shares of Common Stock actually issued and outstanding on
such business day multiplied by such Current Market Value on such business
day. Such adjustment shall be made and shall be effective whenever
any such distribution is made.
-5-
(c) Additional
Stock.
(i) If on
or after the Effective Date, the Company shall issue any Additional Stock (as
defined below) at an exercise or conversion price less than the then current
Exercise Price or for a consideration per share less than the Exercise Price in
effect immediately prior to the issuance of such Additional Stock, the Exercise
Price shall automatically and forthwith be adjusted to a price equal to the
price paid per share for such Additional Stock.
(ii)
“Additional
Stock” shall mean any shares of Common Stock issued by the Company other
than:
(A) shares
of Common Stock issued pursuant to a transaction described in subsection (a) of
this Section 4;
(B) shares
of Common Stock issued pursuant to the exercise or conversion of derivative
securities outstanding on the Effective Date;
(C) shares
of Common Stock issued pursuant to the exercise of options granted under a stock
option plan approved by the stockholders and Board of Directors of the
Company;
(D) shares
of Common Stock issued pursuant to a restricted stock purchase plan approved by
the stockholders and Board of Directors of the Company (but only to the extent
that, at the time of issuance, the aggregate number of then issued and
outstanding shares of Common Stock granted pursuant to such plan (including the
shares issued pursuant to such grant) plus the aggregate number of shares of
Common Stock issuable upon the exercise of then outstanding options covered by
Section 4(c)(ii)(C), shall not exceed 15% of the number of shares of Common
Stock then actually issued and outstanding); and
(E) shares
of Common Stock issued or issuable (I) in a bona fide, firmly underwritten
public offering under the Securities Act of 1933, as amended (the “Securities Act”), or
(II) upon exercise of warrants or rights granted to underwriters in
connection with such a public offering.
(d) Options, Warrants,
etc. In case the Company shall, at any time or from time to
time on or after the Effective Date, issue or sell any options, warrants,
rights, or other securities, including debt, convertible into or exercisable or
exchangeable for Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock (whether or not the right to exercise, convert, or
exchange any such securities is immediately exercisable, but excluding (1)
securities issued in transactions described in Section 4(b) and (2) options
granted on or after the Effective Date pursuant to a stock option plan approved
by the stockholders and Board of Directors of the Company, if such options would
otherwise be included in this Section 4(d) (but only to the extent that, at the
time of grant, the aggregate number of shares of Common Stock issuable upon
exercise of the options covered by the grant and then outstanding options
otherwise excluded hereby, plus the number of issued and outstanding shares
granted pursuant to a restricted stock purchase plan described in Section
4(c)(ii)(D), shall not exceed 15% of the number of shares of Common Stock then
actually issued and outstanding) for a consideration per share of Common Stock
(the “Exchange
Price”) initially payable and thereafter deliverable upon conversion,
exercise or exchange of such securities (determined as provided in Section 4(h)
below) less than the then current Exercise Price, then the Exercise Price shall
be immediately reset to equal such lower Exchange Price. If the
provisions of any securities convertible into, or exercisable or exchangeable
for, Common Stock or options, warrants or other rights to acquire Common Stock
are amended after the Effective Date so as to reduce the applicable conversion
price, exchange price or exercise price, such amendment shall be deemed to be a
new issuance of such securities.
-6-
(e) Notice of
Adjustment. Whenever the Exercise Price or the number of
shares of Common Stock and other property, if any, issuable upon exercise of
this Warrant is adjusted, as herein provided, the Company shall deliver to the
Holder in accordance with Section 9 a certificate of the Company’s Chief
Financial Officer setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated (including a
description of the basis on which (i) the Board of Directors determined the Fair
Market Value of any evidences of indebtedness, other securities or property or
warrants, options or other subscription or purchase rights and (ii) the Current
Market Value of the Common Stock was determined, if either of such
determinations were required), and specifying the Exercise Price and number of
shares of Common Stock issuable upon exercise of this Warrant after giving
effect to such adjustment.
(f) Current Market
Value. “Current Market Value”
per share of Common Stock or any other security at any date means (i) if the
security is not registered under the Securities Exchange Act of 1934 and/or
traded on a national securities exchange, quotation system or bulletin board, as
amended (the “Exchange
Act”), (A) the value of the security, determined in good faith by the
Board of Directors of the Company and certified in a board resolution, based on
the most recently completed arm’s-length transaction between the Company and a
Person that is not an affiliate of the Company, or between any two such Persons,
and the closing of which occurs on such date or shall have occurred within the
six-month period preceding such date, or (B) if no such transaction shall have
occurred within the six-month period, the value of the security as determined by
an Independent Financial Expert or an agreed upon financial valuation model, or
(ii) if the security is registered under the Exchange Act and/or traded on a
national securities exchange, quotation system or bulletin board, the average of
the daily closing bid prices (or the equivalent in an over-the-counter market)
for each day on which the Common Stock or other security is traded for any
period on the principal securities exchange or other securities market on which
the Common Stock or other security is being traded during the period commencing
thirty (30) days before such date and ending on the date one day prior to such
date. “Person” means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
-7-
(g) “Fair Market Value”
means the amount, reasonably determined by the Company’s Board of Directors,
which a willing buyer, under no compulsion to buy, would pay a willing seller,
under no compulsion to sell, in an arm’s-length transaction, with no
consideration given for accounting treatment, minority investment discounts, or
discounts related to illiquidity or restrictions on transferability; provided,
however, if requested by the Holder, the Company (at its sole expense) shall
retain an Independent Financial Expert (chosen by the Company and reasonably
acceptable to the Holder) to render an opinion as to Fair Market Value, in which
case the determination of such Independent Financial Expert shall
govern. As used herein, “Independent Financial
Expert” shall mean a nationally recognized investment banking firm which
does not (and whose directors, officers, employees and affiliates do not) have a
direct or indirect financial interest in the Company or any of its subsidiaries,
and which has not been, and, at the time it is called upon to give independent
financial advice, does not provide any advice or opinions to the Company or any
of its subsidiaries, except as an Independent Financial Expert.
(h) Computations. For
purposes of any computation respecting consideration received pursuant to
Sections 4(c) and (d) above, the following shall apply:
(i) in
the case of the issuance of Common Stock for cash, the consideration shall be
the amount of such cash, provided that in no case shall any deduction be made
for any commissions, discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(ii) in
the case of the issuance of Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the
Fair Market Value thereof; and
(iii) in
the case of the issuance of securities convertible into or exchangeable for
Common Stock, the aggregate consideration received therefor shall be deemed to
be the consideration received by the Company for the issuance of such securities
plus the additional minimum consideration, if any, to be received by the Company
upon the conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in Sections 4(h)(i) and (ii)
above.
(i) All
calculations under this Section 4 shall be made to the nearest cent or to the
nearest one-hundredth of a Share, as the case may be.
(j) In
the event that at any time, as a result of an adjustment made pursuant to
Section 4(a), the Holder thereafter shall become entitled to receive any
securities of the Company, other than shares of Common Stock, thereafter the
number of such other securities so receivable upon exercise of this Warrant
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Shares
contained in Sections 4(a) to (i), inclusive.
-8-
(k) Irrespective
of any adjustments in the Exercise Price or the number or kind of securities
purchasable upon exercise of this Warrant, this Warrant may continue to express
the same price and number and kind of securities as were stated prior to such
adjustment.
(l) Upon
the termination, cancellation, or expiration of all of the securities
convertible into or exercisable or exchangeable for Common Stock referenced in
Section 4(d), the Exercise Price then in effect hereunder shall forthwith be
adjusted to the Exercise Price which would have been in effect at the time of
such termination, cancellation, or expiration had such rights, warrants, or
securities never been issued.
(m) If
an adjustment has been made under Section 4(d) upon the issuance of any
securities convertible into or exercisable or exchangeable for Common Stock,
then the subsequent issuance of Common Stock upon the actual exercise of such
securities shall be excluded from the adjustment provisions hereof.
(n) For
so long as this Warrant shall be outstanding, the Company shall not issue any
Additional Stock for no consideration.
5. Fractional
Shares. In lieu of issuance of a fractional Share upon any
exercise hereunder, the Company will issue an additional whole Share in lieu of
that fractional share, calculated on the basis of the Exercise
Price.
6. Compliance with Securities
Laws.
(a) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the Shares to be issued upon exercise hereof are being acquired solely for the
Holder's own account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell or otherwise dispose of
this Warrant or any Shares to be issued upon exercise hereof except pursuant to
an effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws
(b) Legends. Except
as otherwise provided herein or in the Purchase Agreement, all such certificates
representing the Shares shall bear a restrictive legend to the effect that the
Shares represented by such certificate have not been registered under the
Securities Act and that the Shares may not be sold or transferred in the absence
of such registration or an exemption therefrom, such legend to be substantially
in the form of the bold-face language appearing at the top of Page 1 of this
Warrant.
-9-
(c) The
Company agrees to reissue this Warrant or certificates representing any of the
Shares, without the legend set forth above if at such time, prior to making any
transfer of any such securities, the Holder shall give written notice to the
Company describing the manner and terms of such transfer. Such
proposed transfer will not be effected until: (a) either (i) the Company has
received an opinion of counsel reasonably satisfactory to the Company, to the
effect that the registration of such securities under the Securities Act is not
required in connection with such proposed transfer, (ii) a registration
statement under the Securities Act covering such proposed disposition has been
filed by the Company with the Securities and Exchange Commission and has become
effective under the Securities Act and the Holder has represented that the
Shares have been or will be sold, (iii) the Company has received other evidence
reasonably satisfactory to the Company that such registration and qualification
under the Securities Act and state securities laws are not required, or (iv) the
Holder provides the Company with reasonable assurances that such security can be
sold pursuant to Rule 144 under the Securities Act; and (b) either (i) the
Company has received an opinion of counsel reasonably satisfactory to the
Company, to the effect that registration or qualification under the securities
or "blue sky" laws of any state is not required in connection with such proposed
disposition, or (ii) compliance with applicable state securities or "blue sky"
laws has been effected or a valid exemption exists with respect
thereto. The Company will respond to any such notice from a holder
within three (3) business days. In the case of any proposed transfer
under this Section 6(c), the Company will use reasonable efforts to comply with
any such applicable state securities or "blue sky" laws, but shall in no event
be required, (x) to qualify to do business in any state where it is not then
qualified, (y) to take any action that would subject it to tax or to the general
service of process in any state where it is not then subject, or (z) to comply
with state securities or “blue sky” laws of any state for which registration by
coordination is unavailable to the Company. The restrictions on
transfer contained in this Section 6(c) shall be in addition to, and not by way
of limitation of, any other restrictions on transfer contained in any other
section of this Warrant.
(d) Accredited Investor
Status. In no event may the Holder exercise this Warrant in
whole or in part unless the Holder is an “accredited investor” as defined in
Regulation D under the Securities Act.
7. Disposition of Warrant or
Shares. The Holder agrees that no public distribution of this
Warrant or the Shares will be made in violation of the provisions of the
Securities Act. Furthermore, it shall be a condition to the transfer
of this Warrant that any transferee thereof deliver to the Company his or its
written agreement to accept and be bound by all of the terms and conditions
contained in this Warrant.
-10-
8. Reorganization,
Reclassification, Consolidation, Merger or Sale of Assets. In case of any
capital reorganization or reclassification or other change of outstanding Common
Stock (other than as a result of a subdivision or combination), or in case of
any consolidation or merger of the Company with or into another Person (other
than a consolidation or merger in which the Company is the resulting or
surviving Person and which does not result in any reclassification, conversion,
cancellation or change of outstanding Common Stock), or in case of any sale or
other disposition to another Person of all or substantially all of the assets of
the Company (any of the foregoing, a “Transaction”), the
Company, or such successor or purchasing Person, as the case may be, shall
execute and deliver to the Holder, at least five Business Days prior to
effecting any Transaction, a certificate that the Holder shall have the right
thereafter to exercise this Warrant into the kind and amount of units or other
securities (of the Company or another issuer, as the case may be) or property or
cash receivable upon such Transaction by a holder of the number of Shares into
which this Warrant could have been exercised immediately prior to such
Transaction, provided that the Company shall structure such Transaction so that
the Holder shall be entitled to sell this Warrant in the
Transaction. Such certificate shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in Section 4 hereof and shall contain other terms identical to the terms
hereof. If, in the case of any such Transaction, the stock, other
securities, cash or property receivable thereupon by a holder of Common Stock
includes stock or other securities of a Person (other than the successor or
purchasing Persons and other than the Company) which controls or is controlled
by the successor or purchasing Person or which, in connection with such
Transaction, issues stock, securities, other property or cash to holders of
Common Units, then such certificate also shall be executed by such Person, and
such Person shall, in such certificate, specifically assume the obligations of
such successor or purchasing Person and acknowledge its obligations to issue
such stock, securities, other property or cash to the Holder upon exercise of
this Warrant as provided above. The provisions of this Section 8 similarly shall
apply to successive Transactions.
9. Notice of Certain
Transactions. In the event that the Company shall propose
(a) to pay any dividend payable in securities of any class to the holders
of its Common Stock or to make any other non-cash dividend or distribution to
the holders of its Common Stock, (b) to offer the holders of its Common
Stock rights to subscribe for or to purchase any securities convertible into
shares of Common Stock or shares of stock of any class or any other securities,
rights or options, (c) to effect any capital reorganization,
reclassification, consolidation or merger affecting the class of Common Stock,
as a whole, (d) to effect the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, or (e) a Financing, the Company shall,
within the time limits specified below, send to the Holder a notice of such
proposed action or offer. Such notice shall be mailed to the Holder
at its address as it appears in the Warrant Register (as defined in
Section 2(d)), which shall specify the record date for the purposes of such
dividend, distribution or rights, or the date such issuance or event is to take
place and the date of participation therein by the holders of Common Stock, if
any such date is to be fixed, and shall briefly indicate the effect of such
action on the Common Stock and on the number and kind of any other shares of
stock and on other property, if any, and the number of shares of Common Stock
and other property, if any, issuable upon exercise of this Warrant and the
Exercise Price after giving effect to any adjustment pursuant to Section 4
which will be required as a result of such action. Such notice shall
be given as promptly as possible and (x) in the case of any action covered by
clause (a) or (b) above, at least ten (10) Business Days prior to the record
date for determining holders of the Common Stock for purposes of such action or
(y) in the case of any other such action, at least twenty (20) Business Days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be the
earlier.
-11-
9. Notices. Any
notice herein required or permitted to be given shall be in writing and shall be
delivered personally, by nationally-recognized overnight courier or by facsimile
machine confirmed telecopy to the applicable addresses set forth below (or to
such other address as a party may designate by written notice in accordance with
the provisions of this Section 9), and shall be deemed given and effective on
the earliest of (a) the date of transmission if such notice or communication is
delivered by fax prior to 5:30 p.m. (Eastern Time) on a business day, (b) the
next business day after the date of transmission if such notice or communication
is delivered via fax on a day that is not a business day or later than 5:30 p.m.
(Eastern Time) on a business day, (c) the 1st
business day after the date of mailing if sent by U.S. nationally recognized
overnight courier service for next business day delivery, or (d) upon actual
receipt by the party to whom such notice is required to be given. The addresses
for such communications shall be:
|
If
to the Company:
|
|
|
Perpetual
Technologies, Inc.
|
|
|
Shishan
Industrial Park
|
|
|
Nanhai
District, Foshan City, Guangdong Province, PRC
|
|
|
Attention: Mr. Ji
Lie
|
|
|
Facsimile: _________________________
|
|
|
with
a copy to:
|
|
|
Guzov
Ofsink, LLC
|
|
|
600
Madison Avenue
|
|
|
New
York, New York 10022
|
|
|
Attention: Darren Ofsink,
Esq.
|
|
|
Facsimile: 212-688-7273
|
|
|
if
to the Holder:
|
to
the Holder’s address as specified in the records of the
|
|
Company
|
10. Registration
Rights. The Holder shall be entitled to the registration
rights as are contained in the Registration Rights Agreement of even date
herewith, by and among the Company, the Investor and the Other Investors, the
provisions of which are deemed incorporated herein by reference. In
furtherance and not in limitation of any other provision of this Warrant, if the
Company at any time shall list its Common Stock on any national securities
exchange, the Company will, at its expense, simultaneously list on such exchange
(and maintain such listing for so long as the Common Stock remains so listed)
all of the Shares from time to time issuable upon the exercise of the Warrants;
and the Company will so list on any national securities exchange and will so
register (and will maintain such listing for so long as the such Other
Securities (as hereinafter defined) remain so listed) any other securities (the
“Other
Securities”) which the Holder at any time shall be entitled to receive,
or shall have received, upon the exercise of this Warrant, in lieu of or in
addition to the Shares, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Shares or such Other Securities
if and at the time that any Other Securities shall be listed on such national
securities exchange by the Company.
-12-
11. Successors and
Assigns. This Warrant shall be binding on and shall inure to
the benefit of the Holder and the Company and their respective heirs, executors,
personal representatives, successors and assigns.
12. Headings. The
headings of various sections of this Warrant have been inserted for reference
only and shall not affect the meaning or construction of any of the provisions
hereof.
13. Severability. If any
provision of this Warrant is held to be unenforceable under applicable law, such
provision shall be excluded from this Warrant, and the balance hereof shall be
interpreted as if such provision were so excluded.
14. Modification and
Waiver. This Warrant and any provision hereof may be amended,
waived, discharged or terminated only by an instrument in writing signed by the
Company and the Holder.
15. Specific
Enforcement. The Company and the Holder acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Holder and the
Company shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Warrant and to enforce specifically the terms
and provisions hereof, this being in addition to any other remedy to which
either of them may be entitled by law or equity.
16. Assignment. This
Warrant may be transferred or assigned only in whole, if prior to the Effective
Date, or in whole or in part, if on or after the Effective Date, at any time and
from time to time by the then Holder by submitting this Warrant to the Company
together with a duly executed Assignment in substantially the form and substance
of the Form of Assignment which accompanies this Warrant, as Exhibit B
hereto, and, upon the Company’s receipt hereof, and in any event, within five
(5) business days thereafter, the Company shall issue in the name or names
specified by the Holder and, in the event of a partial transfer, in the name of
the Holder, a new Warrant or Warrants evidencing the right to purchase such
number of Shares as shall be equal to the number of Shares then purchasable
hereunder.
-13-
17. Limitation on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon
any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by the Holder and its affiliates and any other persons whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999%
of the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such exercise); provided, however, that upon a
holder of this Warrant providing the Company with sixty-one (61) days notice
(pursuant to Section 9 hereof) (the "Waiver Notice") that
such Holder would like to waive this Section 17 with regard to any or all shares
of Common Stock issuable upon exercise of this Warrant, this Section 17 will be
of no force or effect with regard to all or a portion of the Warrant referenced
in the Waiver Notice; provided, further, that this
provision shall be of no further force or effect during the sixty-one (61) days
immediately preceding the expiration of the term of this Warrant. For such
purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will
constitute a representation by the Holder that it has evaluated the limitation
set forth in this paragraph and determined that issuance of the full number of
Shares requested in such Exercise Notice is permitted under this paragraph. This
provision shall not restrict the number of shares of Common Stock which the
Holder may receive or beneficially own in order to determine the amount of
securities or other consideration that the Holder may receive in the event
of a merger or other business combination or reclassification involving the
Company.
18. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement 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 conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) will be commenced in 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, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an improper
or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
-14-
19. Stock Fully Paid. The
Company covenants and agrees that all Shares will be duly authorized, validly
issued and fully paid and nonassessable and free from all taxes, liens and
charges created by or through the Issuer. The Company shall at all
times reserve and keep available for issuance upon the exercise of this Warrant
such number of its authorized but unissued shares of Common Stock as will from
time to time be sufficient to permit the exercise of this Warrant in full, and
shall take all action required to increase the authorized number of shares of
Common Stock if at any time there shall be insufficient authorized but unissued
shares of Common Stock to permit such reservation or to permit the exercise of
this Warrant in full.
20.
Reservation. If any shares of Common Stock required to
be reserved for issuance upon exercise of this Warrant or as otherwise provided
hereunder require registration or qualification with any governmental authority
under any federal or state law before such shares may be so issued, the Company
will in good faith use its best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or qualified. If
the Company shall list any shares of Common Stock on any securities exchange or
market it will, at its expense, list thereon, maintain and increase when
necessary such listing, of, all shares of Warrant Stock from time to time issued
upon exercise of this Warrant or as otherwise provided hereunder (provided that
such Warrant Stock has been registered pursuant to a registration statement
under the Securities Act then in effect), and, to the extent permissible under
the applicable securities exchange rules, all unissued Shares which are at any
time issuable hereunder, so long as any shares of Common Stock shall be so
listed. The Company will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Company.
(c) Covenants. The
Company shall not by any action including, without limitation, amending the
Ceritifcate of Incorporation or the by-laws of the Company, or through any
reorganization, 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 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 the Holder
hereof against dilution (to the extent specifically provided herein) or
impairment. Without limiting the generality of the foregoing, the
Company will (i) not permit the par value, if any, of its Common Stock to exceed
the then effective Warrant Price, (ii) not amend or modify any provision of the
Articles of Incorporation or by-laws of the Company in any manner that would
adversely affect the rights of the Holders of the Warrants, (iii) take all such
action as may be reasonably necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Company to perform its obligations under this
Warrant.
(signature
page immediately follows)
-15-
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed,
manually or by facsimile, by one of its officers thereunto duly
authorized.
|
PERPETUAL
TECHNOLOGIES, INC.
|
||
|
Date:
February 12, 2010
|
By:____________________________________
|
|
|
Name:
|
Jie
Li
|
|
|
Title:
|
Chief
Executive Officer
|
|
-16-
EXHIBIT
A
TO
WARRANT
CERTIFICATE
ELECTION
TO PURCHASE
To Be
Executed by the Holder
in Order
to Exercise the Warrant
The
undersigned Holder hereby elects to purchase _______ Shares pursuant
to the attached Warrant, and requests that certificates for securities be issued
in the name of:
__________________________________________________________
(Please
type or print name and address)
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Social
Security or Tax Identification Number)
and
delivered
to:_____________________________________________________________________________
_______________________________________________________________________________.
(Please
type or print name and address if different from above)
If such
number of Shares being purchased hereby shall not be all the Shares that may be
purchased pursuant to the attached Warrant, a new Warrant for the balance of
such Shares shall be registered in the name of, and delivered to, the Holder at
the address set forth below.
In full
payment of the purchase price with respect to the Shares purchased, the
undersigned hereby tenders payment of $__________ by check, money order or wire
transfer payable in United States currency to the order of Perpetual
Technologies, Inc.
|
HOLDER:
|
|
|
By:_____________________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
Address:
|
|
|
Dated:
|
-17-
EXHIBIT
B
TO
WARRANT
FORM OF
ASSIGNMENT
(To be
signed only on transfer of Warrant)
For value
received, the undersigned hereby sells, assigns, and transfers unto
______________________ ___________________________ the right represented by the
within Warrant to purchase ___________ shares of Common Stock of Perpetual
Technologies, Inc., a Delaware corporation, to which the within Warrant relates,
and appoints _________________________________ Attorney to transfer such right
on the books of Perpetual Technologies, Inc., with full power of substitution of
premises.
|
Dated:
|
By:_________________________________________________
|
|
Name:_______________________________________________
|
|
|
Title:________________________________________________
|
|
|
(signature
must conform to name of holder
|
|
|
as
specified on the face of the Warrant)
|
|
|
Address:
|
Signed in
the presence of :
Dated:
-18-
EXHIBIT
C
TO
WARRANT
NOTICE OF CASHLESS
EXERCISE
|
To:
|
Perpetual
Technologies, Inc.
|
|
|
[address]
|
The undersigned hereby elects under
Section 1(b) to surrender the right to purchase _______ Shares pursuant to
this Warrant. The certificate(s) for the Shares issuable upon such
net issue election shall be issued in the name of the undersigned or as
otherwise indicated below.
|
Name
(please print)
|
|
|
Address
|
|
|
Signature
|
|
|
Name
for Registration
|
|
|
(if
different from name above)
|
Dated:
-19-