Common use of Class A Warrants Clause in Contracts

Class A Warrants. Each Class A Warrant entitles the holder thereof to purchase one (1) share of Common Stock at a price of $1.00 per share, through and including December 31, 2018. The Warrants are redeemable by the Company, upon thirty (30) days notice, at a price of $.05 per Warrant, provided the average of the closing bid price of the Common Stock, as reported by the National Association of Securities Dealers Automated Quotation (“NASDAQ”) System (or the average of the last sale price if the Common Stock is then listed on the NASDAQ National Market System or a securities exchange), shall equal or exceed $2.00 per share (subject to adjustment) for 10 consecutive trading days prior to the date on which the Company gives notice of redemption. The holders of Warrants called for redemption have exercise rights until the close of business on the date fixed for redemption. The exercise price and number of shares of Common Stock or other securities issuable on exercise of the Warrants are subject to adjustment in certain circumstances, including in the event of a stock dividend, recapitalization, reorganization, merger or consolidation of the Company. However, no Warrant is subject to adjustment for issuances of Common Stock at a price below the exercise price of that Warrant. The Warrants may be exercised upon surrender of the Warrant certificate on or prior to the expiration date at the offices of the Company, with the exercise form on the reverse side of the certificate completed and executed as indicated, accompanied by full payment of the exercise price (by certified check payable to the Company) to the Company for the number of Warrants being exercised. The Warrant holders do not have the rights or privilege of holders of Common Stock. Warrants are generally more speculative than the shares of Common Stock purchasable upon the exercise thereof. Historically, the percentage increase or decrease in the market price of a Warrant has tended to be greater than the percentage increase or decrease in the market price of the underlying common shares. Warrants may become valueless, or of reduced value, if the market price of the shares of Common Stock decreases, or increases only modestly, over the term of the Warrants. The Company has no present intent to have the warrants trade in any market. No fractional shares will be issued upon exercise of the Warrants. However, if a Warrant holder exercises all Warrants then owned of record by him, the Company will pay to such Warrant holder, in lieu of the issuance of any fractional share which is otherwise issuable, an amount in cash based on the market value of the common stock on the last trading day prior to the exercise date.