EXHIBIT 10.9
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933
ACT") OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
CLASS B WARRANT TO PURCHASE SHARES
OF THE STOCK OF
SUNGAME CORPORATION
(VOID AFTER EXPIRATION DATE - __________________)
Issue Date: ________, 2009
This certifies that _______ or his successors or assigns ("HOLDER")
shall be entitled to purchase from SUNGAME CORPORATION, a Delaware corporation
("COMPANY"), having its principal place of business at ________________________,
up to a total of _______________________________ fully paid and non-assessable
shares of the Company's common stock, ("COMMON STOCK"), at a price per share
equal to the Exercise Price (as defined below).
The exercise price (the "EXERCISE PRICE") of this Class B Warrant will
be equal to $2.50 per share, subject to adjustment upon the occurrence of the
events described in Section 2 of this Class B Warrant.
This Class B Warrant shall be exercisable into shares of Common Stock
at any time, or from time-to-time, up to and including 5:00 p.m. (New York time)
on __________________ ("EXPIRATION DATE"), provided, however, if such date is
not a Business Day, then on the Business Day immediately following such date).
This Class B Warrant is exercisable in whole or in part upon the surrender to
the Company at its principal place of business (or at such other location as the
Company may advise the Holder in writing) of this Class B Warrant properly
endorsed with a form of subscription in substantially the form attached hereto
duly filled in and signed and, if applicable, upon payment in cash or by check
of the aggregate Exercise Price for the number of shares for which this Class B
Warrant is being exercised as determined in accordance with the provisions
hereof.
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.A GENERAL. This Class B Warrant is exercisable in full, or in
part, at the option of the Holder of record at any time or
from time, to time, up to the Expiration Date for all of the
shares of Common Stock (but not for a fraction of a share)
which may be purchased hereunder. In the case of the exercise
of less than all of the Class B Warrants represented hereby,
the Company shall cancel this Class B Warrant Certificate upon
the surrender hereof and shall execute and deliver a new Class
B Warrant Certificate or Class B Warrant Certificates of like
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tenor for the balance of such Class B Warrants. The Company
agrees that the shares of Common Stock purchased under this
Class B Warrant shall be and are deemed to be issued to the
Holder hereof as the record owner of such shares as of the
close of business on the date on which the exercise notice
(attached hereto as Schedule A or B) is delivered to the
Company via facsimile; provided, however, that in such case
this Class B Warrant shall be surrendered to the Company
within three (3) business days. Certificates for the shares of
Common Stock so purchased, together with any other securities
or property to which the Holder is entitled upon such
exercise, shall be delivered to the Holder by the Company at
the Company's expense within a reasonable time after the
rights represented by this Class B Warrant have been so
exercised, and in any event, within three business days of
such exercise and delivery of the Exercise Price. The Company
shall, no later than the close of business on the first
business day following the date on which the Company receives
the exercise notice by facsimile transmission issue and
deliver to the Company's Transfer Agent irrevocable
instructions to issue and deliver or cause to be delivered to
such Holder the number of Warrant Shares exercised within two
business days thereafter by either express mail or hand
delivery. Each Common Stock certificate so delivered shall be
in such denominations of 10,000 or more shares of Common
Stock, in increments of 10,000, as may be requested by the
Holder hereof and shall be registered on the Company's books
in the name designated by such ▇▇▇▇▇▇, provided that no Holder
of this Class B Warrant shall be permitted to exercise any
warrants to the extent that such exercise would cause any
Holder to be the beneficial owner of more than 4.999% of the
then outstanding Company's Common Stock, at that given time
(as determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules
thereunder This limitation shall not be deemed to prevent any
Holder from acquiring more than an aggregate of 4.999% of the
Common Stock, so long as such Holder does not beneficially
own, or have the right to beneficially more than 4.999% of the
Company's Common Stock at any given time. The limitations
contained herein shall cease to apply upon sixty-one (61)
days' prior written notice from the Holder to the Company.
1.B EXERCISE FOR CASH
This Class B Warrant may be exercised, in whole at any time or
in part from time to time, commencing on the date hereof and
prior to 5:00 P.M., New York time, on __________________, by
the Holder by the facsimile delivery of the exercise notice,
as attached hereto, on the date of the exercise and by
surrender of this Class B Warrant within three (3) business
days from the exercise day at the address set forth hereof,
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together with proper payment of the aggregate Exercise Price
payable hereunder for the Class B Warrant Shares ("AGGREGATE
WARRANT PRICE"), or the proportionate part thereof if this
Class B Warrant is exercised in part. Payment for the Class B
Warrant Shares shall be made by wire, or check payable to the
order of the Company. If this Class B Warrant is exercised in
part, this Class B Warrant must be exercised for a number of
whole shares of the Common Stock, and the Holder is entitled
to receive a new Class B Warrant covering the Class B Warrant
Shares which have not been exercised and setting forth the
proportionate part of the Aggregate Warrant Price applicable
to such Class B Warrant Shares. Upon such surrender of this
Class B Warrant the Company will (a) issue a certificate or
certificates in the name of the Holder for the largest number
of whole shares of the Common Stock to which the Holder shall
be entitled and (b) deliver the other securities and
properties receivable upon the exercise of this Class B
Warrant, or the proportionate part thereof if this Class B
Warrant is exercised in part, pursuant to the provisions of
this Class B Warrant.
1.C SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Common Stock which may
be issued upon the exercise of the rights represented by this
Class B Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes,
liens and charges with respect to the issue thereof. The
Company further covenants and agrees that, during the period
within which the rights represented by this Class B Warrant
may be exercised, the Company will at all times have
authorized and reserved, for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this
Class B Warrant, a sufficient number of shares of authorized
but unissued Common Stock, when and as required to provide for
the exercise of the rights represented by this Class B
Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be
issued as provided herein without violation of any applicable
law or regulation, or of any requirements of any domestic
securities exchange upon which the Common Stock or other
securities may be listed; provided, however, that the Company
shall not be required to effect a registration under federal
or state securities laws with respect to such exercise other
than as required by the Registration Rights Agreement. The
Company will not take any action which would result in any
adjustment of the Exercise Price if the total number of shares
of Common Stock issuable after such action upon exercise of
all outstanding warrants, together with all shares of Common
Stock then outstanding and all shares of Common Stock then
issuable upon exercise of all options and upon the conversion
of all convertible securities then outstanding, would exceed
the total number of shares of Common Stock then authorized by
the Company's Articles of Incorporation ("COMPANY CHARTER").
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1.D BUY-IN. In addition to any other rights available to a Holder,
if the Company fails to deliver to the Holder a certificate
representing Warrant Shares by the fifth Trading Day after the
date on which delivery of such certificate is required by this
Warrant, and if after such fifth Trading Day the Holder
purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the
Holder on or after the Exercise Date of the Warrant Shares
that the Holder anticipated receiving from the Company (a
"BUY-IN"), then the Company shall, within three Trading Days
after the Holder's request and in the Holder's discretion,
either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so
purchased (the "BUY-IN PRICE"), at which point the Company's
obligation to deliver such certificate (and to issue such
Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or
certificates representing such Common Stock and pay cash to
the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (A) such number of shares of
Common Stock, times (B) the Closing Price on the date of the
event giving rise to the Company's obligation to deliver such
certificate. Notwithstanding the foregoing, the Company shall
have no liability under this subsection for the Buy-In Price
if it has compiled with the requirements of subsection 1.1
above and notwithstanding it using its best efforts to have
its transfer agent deliver the Warrant Shares to the Holders
within three trading days of the Holder's request such Warrant
Shares are not delivered on a timely basis.
2. DETERMINATION OR ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The
Exercise Price and the number of shares purchasable upon the exercise of this
Class B Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 2. Upon each adjustment
of the Exercise Price, the Holder of this Class B Warrant shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment, the
number of shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.
2.A SUBDIVISION OR COMBINATION OF COMMON STOCK. In case the
Company shall at any time subdivide or reclassify its
outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely,
in case the outstanding shares of Common Stock of the Company
shall be combined or reclassified into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased.
2.B DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the
holders of Common Stock (or any shares of stock or other
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securities at the time receivable upon the exercise of this
Class B Warrant) shall have received or become entitled to
receive, without payment therefore:
2.B.A Stock, Common Stock or any shares of capital stock or
other securities which are at any time directly or
indirectly convertible into or exchangeable for
Common Stock, or any rights or options to subscribe
for, purchase or otherwise acquire any of the
foregoing by way of dividend or other distribution,
2.B.B Any cash paid or payable otherwise than as a cash
dividend, or
2.B.C Stock, Common Stock or additional capital stock or
other securities or property (including cash) by way
of spinoff, split-up, reclassification, combination
of shares or similar corporate rearrangement, (other
than shares of Common Stock issued as a stock split
or adjustments in respect of which shall be covered
by the terms of Section 2.1 above), then and in each
such case, the Holder hereof shall, upon the exercise
of this Class B Warrant, be entitled to receive, in
addition to the number of shares of Common Stock or
other capital stock receivable thereupon, and without
payment of any additional consideration therefor, the
amount of stock and other securities and property
(including cash in the cases referred to in clause
(2.2.2) above and this clause (2.2.3)) which such
Holder would hold on the date of such exercise had he
been the holder of record of such Common Stock as of
the date on which holders of Common Stock received or
became entitled to receive such shares or all other
additional stock and other securities and property.
2.C REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.
2.C.A If any recapitalization, reclassification or
reorganization of the capital stock of the Company,
or any consolidation or merger of the Company with
another corporation, or the sale of all or
substantially all of its assets or other transaction
shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock,
securities, or other assets or property (an "ORGANIC
CHANGE"), then, as a condition of such Organic
Change, lawful and adequate provisions shall be made
by the Company whereby the Holder hereof shall
thereafter have the right, upon exercise of this
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Class B Warrant, to purchase and receive (in lieu of
the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable
upon the exercise of the rights represented by this
Class B Warrant) such shares of stock, securities or
other assets or property as may be issued or payable
with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the
number of shares of such stock immediately
theretofore purchasable and receivable upon the
exercise of the rights represented by this Class B
Warrant. In the event of any Organic Change,
appropriate provision shall be made by the Company
with respect to the rights and interests of the
Holder of this Class B Warrant to the end that the
provisions hereof (including, without limitation,
provisions for adjustments of the Exercise Price and
of the number of shares purchasable and receivable
upon the exercise of this Class B Warrant) shall
thereafter be applicable, in relation to any shares
of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company will not effect
any such consolidation, merger or sale unless, prior
to the consummation thereof, the successor
corporation (if other than the Company) resulting
from such consolidation or the corporation purchasing
such assets shall assume by written instrument
executed and mailed or delivered to the Holder hereof
at the last address of such Holder appearing on the
books of the Company, the obligation to deliver to
such Holder, upon ▇▇▇▇▇▇'s exercise of this Class B
Warrant and payment of the purchase price in
accordance with the terms hereof, such shares of
stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled
to purchase.
2.C.B No adjustment of the Exercise Price, however, shall
be made in an amount less than $.01 per Share, but
any such lesser adjustment shall be carried forward
and shall be made at the time and together with the
next subsequent adjustment which together with any
adjustments so carried forward shall amount to $.01
per Share or more.
2.2 CERTAIN EVENTS. If any change in the outstanding Common Stock of the Company
or any other event occurs as to which the other provisions of this Section 2 are
not strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of the Class B Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment
in the number and class of shares available under the Class B Warrant, the
Exercise Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Class B Warrant upon exercise for the same aggregate Exercise
Price the total number, and kind of shares as he would have owned had the Class
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B Warrant been exercised prior to the event and had he continued to hold such
shares until after the event requiring adjustment.
2.3 NOTICES OF CHANGE.
2.3.1 Upon any determination or adjustment in the number or
class of shares subject to this Class B Warrant and
of the Exercise Price, the Company shall give written
notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of
such determination or adjustment.
2.3.2 The Company shall give written notice to the Holder
at least 20 business days prior to the date on which
the Company closes its books or takes a record for
determining rights to receive any dividends or
distributions.
2.3.3 The Company shall also give written notice to the
Holder at least 20 days prior to the date on which an
Organic Change shall take place.
3. ISSUE TAX. The issuance of certificates for shares of Common Stock upon the
exercise of the Class B Warrant shall be made without charge to the Holder of
the Class B Warrant for any issue tax (other than any applicable income taxes)
in respect thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Class B Warrant being exercised.
4. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of stock issued or issuable
upon the exercise of any warrant in any manner which interferes with the timely
exercise of this Class B Warrant.
5. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing contained in
this Class B Warrant shall be construed as conferring upon the Holder hereof the
right to vote as a shareholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Class B Warrant, the interest represented
hereby, or the shares purchasable hereunder until, and only to the extent that,
this Class B Warrant shall have been exercised, subject to the Holder's rights
under Section 2 of this Class B Warrant. The Holder of this Class B Warrant
shall receive all notices as if a shareholder of the Company. No provisions
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Exercise
Price or as a shareholder of the Company, whether such liability is asserted by
the Company or by its creditors.
6. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the Holder of this Class B Warrant and of the
holder of shares of Common Stock issued upon exercise of this Class B Warrant,
shall survive the exercise of this Class B Warrant.
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7. FURTHER REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
7.A ARTICLES AND BYLAWS. The Company has made available to Holder
true, complete and correct copies of the Company Charter and
Bylaws, as amended, through the date hereof.
7.B DUE AUTHORITY. The execution and delivery by the Company of
this Class B Warrant and the performance of all obligations of
the Company hereunder, including the issuance to Holder of the
right to acquire the shares of Common Stock, have been duly
authorized by all necessary corporate action on the part of
the Company, and the Class B Warrant is not inconsistent with
the Company Charter or Bylaws and constitutes a legal, valid
and binding agreement of the Company, enforceable in
accordance with its terms.
7.C CONSENTS AND APPROVALS. No consent or approval of, giving of
notice to, registration with, or taking of any other action in
respect of any state, federal or other governmental authority
or agency is required with respect to the execution, delivery
and performance by the Company of its obligations under this
Class B Warrant, except for any filing required by applicable
federal and state securities laws, which filing will be
effective by the time required thereby.
7.D ISSUED SECURITIES. All issued and outstanding shares of
capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. All
outstanding shares of capital stock were issued in full
compliance with all federal and state securities laws.
7.E EXEMPT TRANSACTION. Subject to the accuracy of the Holders
representations in Section 8 hereof, the issuance of the
Common Stock upon exercise of this Class B Warrant will
constitute a transaction exempt from (i) the registration
requirements of Section 5 of the Securities Act of 1933, as
amended ("1933 ACT"), in reliance upon Section 4(2) thereof,
or upon the applicable exemption under Regulation D, and (ii)
the qualification requirements of the applicable state
securities laws.
7.F COMPLIANCE WITH RULE 144. At the written request of the
Holder, who proposes to sell Common Stock issuable upon the
exercise of the Class B Warrant in compliance with Rule 144
promulgated by the Securities and Exchange Commission, the
Company shall furnish to the Holder, within five (5) days
after receipt of such request, a written statement confirming
the Company's compliance with the filing requirements of the
Securities and Exchange Commission as set forth in such Rule,
as such Rule may be amended from time to time.
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8. REPRESENTATIONS AND COVENANTS OF THE HOLDER.
8.A This Class B Warrant has been entered into by the Company in
reliance upon the following representations and covenants of
the Holder:
8.A.A INVESTMENT PURPOSE. The Class B Warrant or the Common
Stock issuable upon exercise of the Class B Warrant
will be acquired for investment and not with a view
to the sale or distribution of any part thereof, and
the Holder has no present intention of selling or
engaging in any public distribution of the same
except pursuant to a registration or exemption.
8.A.B PRIVATE ISSUE. The Holder understands (i) that the
Class B Warrant and the Common Stock issuable upon
exercise of this Class B Warrant are not registered
under the 1933 Act or qualified under applicable
state securities laws on the ground that the issuance
contemplated by this Class B Warrant will be exempt
from the registration and qualifications requirements
thereof, and (ii) that the Company's reliance on such
exemption is predicated on the representations set
forth in this Section 8.
8.A.C DISPOSITION OF HOLDERS RIGHTS. In no event will the
Holder make a disposition of the Class B Warrant or
the Common Stock issuable upon exercise of the Class
B Warrant unless and until (i) it shall have notified
the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the
Company with an opinion of counsel (which counsel may
either be inside or outside counsel to the Holder)
satisfactory to the Company and its counsel to the
effect that (A) appropriate action necessary for
compliance with the 1933 Act has been taken, or (B)
an exemption from the registration requirements of
the 1933 Act is available. Notwithstanding the
foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire
Common Stock issuable on the exercise of such rights
do not apply to transfers from the beneficial owner
of any of the aforementioned securities to its
nominee or from such nominee to its beneficial owner,
and shall terminate as to any particular share of
stock when (1) such security shall have been
effectively registered under the 1933 Act and sold by
the Holder thereof in accordance with such
registration or (2) such security shall have been
sold without registration in compliance with Rule 144
under the 1933 Act, or (3) a letter shall have been
issued to the Holder at its request by the staff of
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the Securities and Exchange Commission or a ruling
shall have been issued to the Holder at its request
by such Commission stating that no action shall be
recommended by such staff or taken by such
Commission, as the case may be, if such security is
transferred without registration under the 1933 Act
in accordance with the conditions set forth in such
letter or ruling and such letter or ruling specifies
that no subsequent restrictions on transfer are
required. Whenever the restrictions imposed hereunder
shall terminate, as hereinabove provided, the Holder
or holder of a share of stock then outstanding as to
which such restrictions have terminated shall be
entitled to receive from the Company, without expense
to such Holder, one or more new certificates for the
Class B Warrant or for such shares of stock not
bearing any restrictive legend.
8.A.D FINANCIAL RISK. The Holder has such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of its
investment, and has the ability to bear the economic
risks of its investment.
8.A.E RISK OF NO REGISTRATION. The Holder understands that
if the Company does not file reports pursuant to
Section 15(d) and/or Section 12(g), of the Securities
Exchange Act of 1934 ("1934 ACT"), or if a
registration statement covering the securities under
the 1933 Act is not in effect when it desires to sell
(i) the Class B Warrant, or (ii) the Common Stock
issuable upon exercise of the Class B Warrant, it may
be required to hold such securities for an indefinite
period. The Holder also understands that any sale of
the Class B Warrant or the Common Stock issuable upon
exercise of the Class B Warrant which might be made
by it in reliance upon Rule 144 under the 1933 Act
may be made only in accordance with the terms and
conditions of that Rule.
8.A.F ACCREDITED INVESTOR. The Holder is an "accredited
investor" within the meaning of Regulation D
promulgated under the 1933 Act.
9. MODIFICATION AND WAIVER. This Class B Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by (a) the party against which enforcement of the same is sought or (b)
the Company and the holders of at least a majority of the number of shares into
which the Class B Warrants are exercisable (without regard to any limitation
contained herein on such exercise), it being understood that upon the
satisfaction of the conditions described in (a) and (b) above, each Class B
Warrant (including any Class B Warrant held by the Holder who did not execute
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the agreement specified in (b) above) shall be deemed to incorporate any
amendment, modification, change or waiver effected thereby as of the effective
date thereof. Notwithstanding the foregoing, no modification to this Section 9
will be effective against any Holder without his consent.
10. TRANSFER OF THIS CLASS B WARRANT. The Holder may sell, transfer, assign,
pledge or otherwise dispose of this Class B Warrant, in whole or in part, as
long as such sale or other disposition is made pursuant to an effective
registration statement or an exemption from the registration requirements of the
Securities Act. Upon such transfer or other disposition (other than a pledge),
the Holder shall deliver this Warrant to the Company together with a written
notice to the Company, substantially in the form of the Transfer Notice attached
hereto as Exhibit B (the "TRANSFER NOTICE"), indicating the person or persons to
whom this Class B Warrant shall be transferred and, if less than all of this
Class B Warrant is transferred, the number of Warrant Shares to be covered by
the part of this Class B Warrant to be transferred to each such person. Within
three (3) Business Days of receiving a Transfer Notice and the original of this
Class B Warrant, the Company shall deliver to the each transferee designated by
the Holder a Class B Warrant(s) of like tenor and terms for the appropriate
number of Warrant Shares and, if less than all this Class B Warrant is
transferred, shall deliver to the Holder a Class B Warrant for the remaining
number of Warrant Shares. No transfer can be made without Company's written
consent.
11. NOTICES. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given upon (i) personal delivery, against written receipt thereof, (ii) delivery
via facsimile or e-mail as set forth below (iii) two business days after deposit
with Federal Express or another nationally recognized overnight courier service,
or (iv) five business days after being forwarded, postage paid, via certified or
registered mail, return receipt requested, addressed to each of the other
parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by ten days advance written notice.
12. BINDING EFFECT ON SUCCESSORS; BENEFIT. As provided in Section 2.3 above,
this Class B Warrant shall be binding upon any corporation succeeding the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets. All of the obligations of the Company relating to the
Common Stock issuable upon the exercise of this Class B Warrant shall survive
the exercise and termination of this Class B Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder hereof. This Series A Warrant shall be for the sole and
exclusive benefit of the Holder and nothing in this Series A Warrant shall be
construed to confer upon any person other than the Holder any legal or equitable
right, remedy or claim hereunder.
13. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of the
several sections and paragraphs of this Class B Warrant are inserted for
convenience only and do not constitute a part of this Class B Warrant. This
Class B Warrant shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by the laws of the State of Delaware.
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14. LOST WARRANTS. The Company represents and warrants to the Holder hereof that
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction, or mutilation of this Class B Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Class B Warrant, the Company, at the Holder's
expense, will make and deliver a new Class B Warrant, of like tenor, in lieu of
the lost, stolen, destroyed or mutilated Class B Warrant.
15. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise of
this Class B Warrant. The Company shall, in lieu of issuing any fractional
share, pay the Holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Exercise Price.
16. REDEMPTION. This Class B Warrant may be called for redemption and redeemed
at the option of the Company, at a redemption price of $.50 per Class B Warrant,
at any time between the Effective Date of the Registration Statement and the
Expiration Date upon 10 day written notice delivered to the Holder, provided:
(a) the Closing Bid or last sales price of the Common Stock issuable upon
exercise of such Class B Warrant has been at least 175% of the Exercise Price
for twenty (20) consecutive trading days ending not more than 3 days prior to
the date of notice of redemption; (b) there is an effective registration
statement with a current prospectus available covering the shares of Common
Stock issuable upon exercise of this Class B Warrant; and (c) no public
announcement of a pending or proposed Organic Change has occurred that has not
been consummated. If any of the foregoing conditions shall cease to be satisfied
at any time during the required period, then the Holder may elect to nullify the
Redemption Notice in which case the Redemption Notice shall be null and void, ab
initio. On and after the date fixed for redemption, the Holder shall have no
rights with respect to this Class B Warrant except to receive the $.50 per Class
B Warrant upon surrender of this Certificate. All Class B Warrants must be
redeemed if any are redeemed. The Company covenants and agrees that it will
honor all Exercise Notices tendered through the Business Day immediately
preceding the Redemption Date. The redemption payment shall be made in cash on
date fixed for redemption in the Company's notice of redemption, as described
below (the "Redemption Date"). The redemption payment is due in full on the
Redemption Date.
The notice of redemption shall specify: (i) the Redemption Price; (ii)
the date fixed for redemption (the "REDEMPTION DATE"); (iii) the place where
Class B Warrant Certificates shall be delivered and the redemption price paid;
and (iv) that the right to exercise the Class B Warrants shall terminate at 5:00
p.m. EST on the Business Day immediately preceding the Redemption Date. An
affidavit of the Secretary or an Assistant Secretary of the Company that notice
of redemption has been mailed shall, in the absence of fraud, be conclusive
evidence of the facts stated therein.
From and after the Redemption Date, the Company shall, at the place
specified in the notice of redemption, upon presentation and surrender to the
Company by or on behalf of the Holder thereof of this Class B Warrant, deliver
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or cause to be delivered to or upon the written order of such holder a sum of
cash equal to the Redemption Price of each such Class B Warrant. From and after
the Redemption Date and upon the deposit or setting aside by the Company of a
sum sufficient to redeem all the Class B Warrants called for redemption, such
Class B Warrants shall expire and become void and all rights hereunder and shall
cease, except the right, if any, to receive payment of the Redemption Price.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this [ ] day of ________,
200__.
Sungame Corporation
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SCHEDULE A
SUBSCRIPTION FORM
Date: _________________, _______
Sungame Corporation - Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise the Class B Warrant issued to
it by Sungame Corporation ("COMPANY") and dated ______ ___ ____, ("WARRANT") and
to purchase thereunder __________________________________ shares of the Common
Stock of the Company ("SHARES") at a purchase price of two dollars and fifty
cents ($2.50) per Share or an aggregate purchase price of __________________
________________ Dollars ($__________) ("EXERCISE PRICE").
Pursuant to the terms of the Warrant, the undersigned has delivered the
Exercise Price herewith in full in cash or by certified check or wire transfer.
Very truly yours,
ASSIGNMENT
To Be Executed by the Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ______________________________________________________
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
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[please print or type name and address]
_____________________of the Class B Warrants represented by this Class B Warrant
Certificate, and hereby irrevocably constitutes and appoints
_________________________________________ Attorney to transfer this Class B
Warrant Certificate on the books of the Company, with full power of substitution
in the premises.
Dated: x
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Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS CLASS B WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.