WARRANT # 1
WARRANT
# 1
THIS
WARRANT AND THE SECURITIES PURCHASABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT
OR SUCH APPLICABLE STATE SECURITIES LAWS, UNLESS THE PROPOSED TRANSFER MAY
BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.
FUTURE
NOW GROUP, INC.
WARRANT
|
No.
W1-2
|
October
30, 2007
|
THIS
CERTIFIES that, for value received, PROFESSIONAL TRADERS FUND, LLC, or its
assigns (the “Holder”), shall be entitled to subscribe for and purchase from
FUTURE NOW GROUP, INC., a Nevada corporation (the “Corporation”), Four hundred
and seventy-six thousand, two hundred (476,200) shares (subject to adjustment
as
provided herein, the “Warrant Shares”) of the Corporation’s Common Stock at the
exercise price determined below (the "Exercise Price" or the "Exercise Price
Per
Share") for each Warrant Share, during the Exercise Period (as defined in
Section 1), pursuant to the terms and subject to the conditions of this Warrant.
Certain terms used in this Warrant are defined in Section 4. The Corporation
represents and warrants that the Warrant Shares, if issued on the date of this
Warrant, would represent 0.50% of the Corporation’s issued and outstanding
Common Stock. The Exercise Price or the Exercise Price Per Share shall be the
lesser of (i) $.35 or (ii) the New Transaction Price, in all events subject
to
further adjustment as provided herein. "New Transaction Price" means the lowest
per share price at which the Corporation sells Common Stock, or is obligated
to
issue Common Stock pursuant to any Convertible Securities, in any transaction
(other than an Excluded Transaction, defined below) in which the Corporation
engages after the date hereof, and before the exercise hereof, and if no such
price is designated, such price shall be deemed $.01.
As
used
herein, the term “Common Stock” shall mean (i) the class of stock designated
above or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value or from no par value to par value.
In
the event the Corporation shall, after the date hereof, issue securities of
greater or superior voting rights than the shares of Common Stock outstanding
as
of the date hereof, the Holder, at its option, may receive upon exercise of
any
Warrant either Common Stock or a like number of such securities with greater
or
superior voting rights.
Notwithstanding
the provisions of this Warrant, in no event (except (i) as specifically provided
in the Warrant as an exception to this provision, (ii) during the forty-five
(45) day period prior to the expiration of the Exercise Period, or (iii) while
there is outstanding a tender offer for any or all of the shares of the
Corporation's Common Stock) shall the Holder be entitled to exercise this
Warrant, or the Corporation have the obligation to issue shares upon such
exercise of all or any portion of this Warrant to the extent that, after such
exercise the sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates (other than shares of Common Stock which may
be
deemed beneficially owned through ownership of the unexercised portion of the
Warrants or other right to purchase Common Stock or through the ownership of
the
unconverted portion of convertible securities), and (2) the number of shares
of
Common Stock issuable upon the exercise of the Warrants with respect to which
the determination of the proviso is being made, would result in beneficial
ownership by the Holder and its Affiliates of more than 4.99% of the outstanding
shares of Common Stock (after taking into account the shares to be issued to
the
Holder upon such exercise). For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance
with
Section 12(d) of the Securities Exchange Act of 1934, as amended except as
otherwise provided in clause (1) of such sentence.
Section
1. Exercise
Period.
This
Warrant may be exercised in whole or in part by the Holder at any time after
the
date hereof until 5:00 p.m. Eastern Time on the last day of the month in which
occurs the fifth anniversary of the effective date of a registration statement
filed under the Securities Act of 1933, as amended (the “1933 Act”), covering
the Common Stock issuable upon exercise of this Warrant (such period being
herein referred to as the “Exercise Period”). The Corporation agrees to use
reasonable efforts to mail to the original Holder by certified mail, return
receipt requested, notice of the expiration date of this Warrant, no later
than
15 days prior to such date, but failure to provide notice will not extend the
Exercise Period.
Section
2. Exercise
of Warrant.
(a) The
rights represented by this Warrant may be exercised, in whole or in any part
(but not as to a fractional share of Common Stock), by (i) the surrender of
this
Warrant (properly endorsed) at the principal office of the Corporation at ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (or at such other agency or
office of the Corporation in the United States of America as it may designate
by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Corporation), (ii) delivery to the Corporation of a notice of
election to exercise in the form of Exhibit A, and (iii) either (a) payment
to
the Corporation by cash, wire transfer funds or check in an amount equal to
the
then applicable Exercise Price Per Share multiplied by the number of Warrant
Shares then being purchased, or, (b) alternatively, provided that, on or before
the first anniversary of date of issuance of this Warrant a registration
statement covering the resale of the Warrant Shares that are the subject of
the
Exercise Notice by the Holder pursuant to the 1933 Act is not available for
the
resale of such Warrant Shares, or if the issue is no longer effective during
the
period the Warrants are still outstanding, the Holder may exercise its right
during the Exercise Period to receive Warrant Shares on a net basis such that,
without any payment of funds by the Holder, the Holder receives that number
of
Warrant Shares otherwise issuable upon exercise of its Warrants less the number
of Warrant Shares having an aggregate Market Price at the time of exercise
equal
to the aggregate Exercise Price Per Share that would otherwise have been payable
by the Holder of all such Warrant Shares.
(b) Each
date
on which this Warrant is surrendered and on which payment of the Exercise Price
is made in accordance with Section 2(a) above is referred to as an “Exercise
Date.” Simultaneously with each exercise, the Corporation shall issue and
deliver a certificate or certificates for the Warrant Shares being purchased
pursuant to such exercise, registered in the name of the Holder or the Holder’s
designee, to such Holder or designee, as the case may be. If such exercise
shall
not have been for the full number of the Warrant Shares, then the Corporation
shall issue and deliver to the Holder a new Warrant, registered in the name
of
the Holder, of like tenor to this Warrant, for the balance of the Warrant
Shares.
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(c) The
person in whose name any certificate for shares of Common Stock is issued or
issuable upon any exercise shall for all purposes be deemed to have become
the
holder of record of such shares as of the Exercise Date. The Corporation shall
pay all documentary, stamp or other transactional taxes attributable to the
issuance or delivery of shares of Common Stock upon exercise of all or any
part
of this Warrant; provided, however, that the Corporation shall not be required
to pay taxes which may be payable in respect of any transfer involved in the
issuance or delivery of any certificate for such shares in a name other than
that of the Holder to the extent such taxes would exceed the taxes otherwise
payable if such certificate had been issued to the Holder.
No
fractional shares of Common Stock will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares, the Corporation shall make
a
cash payment therefor equal in amount to the product of the applicable fraction
multiplied by the current Market Price per share of Common Stock.
(d) This
Warrant and the Warrant Shares are covered by and are entitled to the benefits
of that certain Registration Rights Agreement dated the date hereof between
the
Corporation and the Holder.
Section
3. Antidilution
Provisions.
The
number of shares of Common Stock purchasable on exercise of this Warrant and
payment of the Exercise Price shall be subject to adjustment from time to time
as provided in this Section 3.
(b) Treatment
of Options and Convertible Securities.
If the
Corporation, at any time or from time to time after the date of this Warrant,
shall issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities entitled to receive, any
Options (defined below) or Convertible Securities (defined below), then, and
in
each such case, the maximum number of shares of Common Stock (as set forth
in
the instrument relating thereto, without regard to any provisions contained
therein for a subsequent adjustment of such number and whether or not the right
to convert or exchange or exercise is immediate or conditioned upon the passage
of time, the occurrence or non-occurrence of some event or otherwise) issuable
upon the exercise of such Options or, in the case of Convertible Securities
and
options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be shares of Common Stock issued and consequently give rise
to adjustment as, and to the extent, provided in paragraph (a) as of the time
of
such issue, sale, grant or assumption or, in case such a record date shall
have
been fixed, as of the close of business on such record date; provided
that, in
each such case no further adjustment to the Exercise Price shall be made upon
the subsequent issue or sale of shares of Common Stock upon the exercise of
such
Options or the conversion or exchange of such Convertible
Securities.
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(c) Change
in Capital Stock.
If the
Corporation (i) pays a dividend or makes a distribution on its Common Stock
in
shares of its Common Stock, (ii) subdivides its outstanding shares of Common
Stock into a greater number of shares, (iii) combines its outstanding shares
of
Common Stock into a smaller number of shares, or (iv) issues by reclassification
of its Common Stock any shares of its capital stock, then in each case the
Exercise Price in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant exercised thereafter
may receive the aggregate number and kind of shares of capital stock of the
Corporation which he would have owned immediately following such action if
such
Warrant had been exercised immediately prior to such action.
The
adjustment as provided in this paragraph (c) shall become effective immediately
after the record date in the case of a dividend or distribution and immediately
after the effective date in the case of a subdivision, combination or
reclassification. If after an adjustment, a Holder of a Warrant, upon its
exercise, may receive shares of two or more classes of capital stock of the
Corporation, the Corporation shall determine the allocation of the adjusted
Exercise Price between the classes of capital stock. After such allocation,
the
exercise privilege and the exercise price of each such class of capital stock
shall thereafter be subject to adjustment on terms comparable to those
applicable to Common Stock in this Section 3.
(d) Dilution
in Case of Other Securities.
In case
any Other Securities (as defined in Section 4) shall be issued or sold or shall
become subject to issue or sale upon the conversion or exchange of any
securities of the Corporation or to subscription, purchase or other acquisition
pursuant to any Options issued or granted by the Corporation such as to dilute,
on a basis to which the standards established in the other provisions of this
Section 3 are applicable, then, and in each such case, the computations,
adjustments and readjustments provided for in this Section 3 shall be made
as
nearly as possible in the manner so provided and applied to determine the amount
of Other Securities from time to time receivable upon the exercise of the
Warrants, so as to protect the Holder against the effect of such
dilution.
(e) Other
Changes in Common Stock.
If the
Corporation shall be a party to any Significant Corporate Event (as defned
in
section 4) in which the previously outstanding shares of Common Stock shall
be
changed into or exchanged for different securities of the Corporation or common
stock or other securities of another corporation or interests in a noncorporate
entity or other property (including cash) or any combination of any of the
foregoing, as a condition of the consummation of such Significant Corporate
Event, lawful and adequate provisions shall be made so that (1) the Holder,
upon
the exercise hereof at any time on or after the date such a Significant
Corporate Event is consummated (the “Consummation Date”) (but during the
Exercise Period), shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of the Warrant Shares
issuable upon such exercise prior to the Consummation Date, the amount of
securities or other property to which the Holder would actually have been
entitled as a holder of Common Stock upon the consummation of such a Significant
Corporate Event if the Holder had exercised this Warrant immediately prior
thereto (subject to adjustments from and after the Consummation Date as nearly
equivalent as possible to the adjustments provided for in this Section 3),
or
(2) in the case of a Significant Corporate Event in which the Corporation is
not
the survivor, if so elected by the Holder, the Holder shall be entitled to
receive on the Consummation Date in cancellation of this Warrant, the amount
of
securities or other property to which the Holder would actually have been
entitled as a holder of Common Stock upon consummation of such Significant
Corporate Event if the Holder had exercised this Warrant immediately prior
thereto and had paid the Exercise Price therefor.
-4-
Notwithstanding
anything contained herein to the contrary, unless the Holder makes an election
under clause (2) above, the Corporation shall not effect any Significant
Corporate Event unless prior to the consummation thereof each acquiring
corporation or other person which may be required to deliver any securities
or
other property upon the exercise of this Warrant shall assume, by written
instrument delivered to the Holder, the obligation to deliver to the Holder
such
securities or other property to which, in accordance with the foregoing
provisions, the Holder may be entitled and an opinion of counsel reasonably
satisfactory, which opinion shall state that this Warrant, including, without
limitation, the exercise and anti-dilution provisions applicable to this
Warrant, if any, shall thereafter continue in full force and effect and shall
be
enforceable against such acquiring corporation or other person in accordance
with the terms hereof.
(f) Other
Dividends or Other Distributions.
If the
Corporation declares a dividend or other distribution upon its capital stock,
other than a dividend payable in shares of Common Stock, then the Corporation
shall pay over to the Holder, on the dividend payment date, the cash, stock
or
Other Securities and other property which the Holder would have received if
the
Holder had exercised this Warrant in full and had been the record holder of
the
Warrant Shares represented by this Warrant on the date on which a record is
taken for the purpose of such dividend, or, if a record is not taken, the date
as of which the holders of such capital stock of record entitled to such
dividend are to be determined, provided that,
in the
case of a dividend consisting of stock or securities (other than shares of
Common Stock, Options or Convertible Securities) or other property (except
cash), the Holder may, at its option, elect that instead, lawful and adequate
provisions shall be made (including without limitation any necessary reduction
in the Exercise Price) whereby the Holder shall thereafter have the right to
receive, upon exercise of this Warrant on the terms and conditions specified
in
this Warrant and in addition to the Warrant Shares issuable upon such exercise,
such shares of stock, securities or property.
(g) Adjustment
of Number of Shares.
Upon
each adjustment in the Exercise Price, the number of Warrant Shares purchasable
hereunder shall be adjusted to the nearest whole share to the product obtained
by multiplying the number of Warrant Shares purchasable immediately prior to
such adjustment in the Exercise Price by a fraction, the numerator of which
shall be the Exercise Price immediately prior to such adjustment and the
denominator of which shall be the Exercise Price immediately
thereafter.
(h) Notice
of Adjustment.
Whenever the Exercise Price or the number of Warrant Shares for which this
Warrant is exercisable shall be adjusted pursuant to this Section 3, the
Corporation shall deliver a certificate signed by its chief financial officer
to
the Holder setting forth, in reasonable detail, the event requiring the
adjustment, the method by which adjustment was calculated specifying the number
of Warrant Shares for which this Warrant is now exercisable, and any change
in
the Exercise Price.
(i) Notice
of Certain Corporate Action.
In case
the Corporation shall propose to (1) pay any dividend or make any other
distribution to the holders of its capital stock, (2) offer to the holders
of
its capital stock rights to subscribe for or to purchase shares of Common Stock
or shares of any other class of securities, rights or options, (3) effect any
reclassification of its capital stock, (4) effect any reorganization, or (5)
effect any Significant Corporate Event, then, in each such case, the Corporation
shall give to the Holder a notice of such proposed action, which shall specify
the date on which a record is to be taken for the purposes of such dividend,
distribution rights or vote, or the date on which such reclassification,
reorganization, or Significant Corporate Event is to take place and the date
of
participation therein by the holders of capital stock, if any such date is
to be
fixed and shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action on the capital stock,
if any, and the number and kind of any other shares of capital stock which
will
comprise the Warrant Shares, and the Exercise Price, after giving effect to
any
adjustment, if any, which will be required by this Section 3 as a result of
such
action. Such notice shall be so given in the case of any action covered by
clause (1) or (2) above at least 20 days prior to the record date for
determining holders of the capital stock for purposes of such action, and in
the
case of any other such action, at least 30 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders
of
capital stock, whichever shall be the earlier.
-5-
(j) Certain
Events.
If any
event occurs as to which, in the good faith judgment of the Board of Directors
of the Corporation, the other provisions of this Section 3 are not strictly
applicable or if strictly applicable would not fairly protect the exercise
rights of the Holder in accordance with the essential intent and principles
of
this Section 3, then the Board of Directors of the Corporation in the good
faith, reasonable exercise of its business judgment may decrease the Exercise
Price and/or increase the number of Warrant Shares issuable upon exercise
hereof, in accordance with such essential intent and principles so as to protect
such exercise rights as aforesaid.
(k) Purchase
of Common Stock by Corporation.
If the
Corporation at any time while this Warrant is outstanding, directly or
indirectly, through an affiliate or otherwise, purchases, redeems or acquires
any shares of Common Stock at a price per share in excess of the then current
Market Price per share for Common Stock then the Exercise Price shall be
adjusted to that price determined by multiplying such Exercise Price by a
fraction, (i) the numerator of which is the number of outstanding shares of
Common Stock prior to such purchase, redemption or other acquisition minus
the
number of shares of Common Stock which the aggregate consideration for the
total
number of such shares of Common Stock so purchased, redeemed or acquired would
have purchased at the current Market Price and (ii) the denominator of which
is
the number of outstanding shares of Common Stock after giving effect to such
purchase, redemption or acquisition.
(l) Computation
of Consideration.
For the
purposes of this Section 3:
(1) the
consideration for any shares of Common Stock or any Options or Convertible
Securities, irrespective of the accounting treatment of such
consideration,
(i) insofar
as it consists of cash, shall be computed as the amount of cash received by
the
Corporation, and insofar as it consists of securities, the Market Price therefor
or insofar as it consists of other property, the Fair Market Value thereof,
as
of the date immediately preceding such issue, sale, grant, or the record date
therefor, in each case without deducting any expenses paid or incurred by the
Corporation, any commissions or compensation paid or concessions or discounts
allowed to underwriters, dealers or others performing similar services, and
any
accrued interest or dividends in connection with such issue or sale,
and
-6-
(ii) in
case
shares of Common Stock or Options or Convertible Securities are or are to be
issued, sold or granted together with other stock or securities or other assets
of the Corporation for a consideration which covers both, shall be the
proportion of such consideration so received, computed as provided in
subdivision (i) above, allocable to such shares of Common Stock or Options
or
Convertible Securities, as the case may be, all as determined by the Board
of
Directors of the Corporation in the good faith reasonable exercise of its
business judgment; and
(2) shares
of
Common Stock deemed to have been issued upon the issue, sale, or grant of
Options or Convertible Securities pursuant to Section 3(b), shall be deemed
to
have been issued for a consideration per share of Common Stock determined by
dividing
(i) the
total
amount, if any, received and receivable (or, pursuant to this Section 3(l),
deemed to have been received) by the Corporation as consideration for the issue,
sale, or grant of the Options or Convertible Securities in question, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Corporation
upon the exercise in full of such Options or the conversion or exchange of
such
Convertible Securities or, in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion
or
exchange of such Convertible Securities, in each case comprising such
consideration as provided in the foregoing subdivision (1), by
(ii) the
maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such Options
or the conversion or exchange of such Convertible Securities.
Section
4. Certain
Defined Terms.
“Affiliate”
means
any corporation, partnership, limited liability company, joint venture, trust,
unincorporated organization or other person which, directly or indirectly,
controls or is controlled by or is under common control with the Holder.
“Convertible
Securities”
means
any evidences of indebtedness, shares of stock, or securities directly or
indirectly convertible into or exchangeable by their terms for shares of Common
Stock.
"Excluded
Transaction"
means
issuances of shares of Common Stock pursuant to options or other convertible
securities issued to employees, officers or directors, as approved by the
Corporation’s Board of Directors, so long as such shares are subject to a
lock-up agreement generally applicable to all officers and directors of the
Corporation.
“Fair
Market Value”
means,
on any relevant date, as to any property, the fair market value as reasonably
determined by the Board of Directors of the Corporation and reasonably
acceptable to the Holder, but if the Holder has not so accepted such
determination of fair market value within 10 business days of the date notice
of
such determination by the Board of Directors is delivered to the Holder, then
as
determined by an independent investment banking firm selected by the Holder
and
reasonably acceptable to the Corporation. If the Fair Market Value as determined
by such investment banking firm exceeds the Fair Market Value as determined
by
the Board of Directors by 10% or more, the cost of the engagement of the
investment banking firm will be borne by the Corporation.
-7-
“Market
Price”
means,
as to any security on any relevant date, the Fair Market Value per share of
such
security, or if there shall be a public market for such security, the average
of
the daily closing prices for the ten (10) consecutive trading days before such
date excluding any trades which are not bona fide arm’s length transactions. The
closing price for each day shall be (a) if such security is listed or admitted
for trading on any national securities exchange, the last sale price of such
security, regular way, or the mean of the closing bid and asked prices thereof
if no such sale occurred, in each case as officially reported on the principal
securities exchange on which such security are listed, or (b) if quoted on
NASDAQ or any similar system of automated dissemination of quotations of
securities prices then in common use the mean between the closing high bid
and
low asked quotations of such security in the over-the-counter market as shown
by
NASDAQ or such similar system of automated dissemination of quotations of
securities prices, as reported by any member firm of the New York Stock Exchange
selected by the Corporation, (c) if not quoted as described in clause (b),
the
mean between the high bid and low asked quotations for the Warrant Shares as
reported by NASDAQ or any similar successor organization, as reported by any
member firm of the New York Stock Exchange selected by the Corporation. If
such
security is quoted on a national securities or central market system in lieu
of
a market or quotation system described above, the closing price shall be
determined in the manner set forth in clause (a) of the preceding sentence
if
bid and asked quotations are reported but actual transactions are not, and
in
the manner set forth in clause (b) of the preceding sentence if actual
transactions are reported.
“Options”
means
rights, options or warrants to subscribe for, purchase or otherwise acquire
either Common Stock or Convertible Securities.
“Other
Securities”
means
any capital stock (other than Common Stock) and any other securities of the
Corporation or any other person (corporate or otherwise) which the Holder at
any
time shall be entitled to receive, or shall have received, upon the exercise
or
partial exercise of this Warrant, in lieu of or in addition to shares of Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of shares of Common Stock or Other Securities
pursuant to Section 3 or otherwise.
“Significant
Corporate Event”
means
any sale, transfer or lease of all or substantially all of the Corporation’s
assets, a merger or consolidation involving the Corporation, the repurchase
by
the Corporation of more than 10% of the Corporation’s capital stock, liquidation
or dissolution of the Corporation.
Section
5. Representations,
Warranties and Covenants as to Stock.
The
Corporation represents and warrants to the Holder that (i) all shares of Common
Stock which may be issued upon the exercise of this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and free from all taxes,
liens and charges with respect to the issuance thereof (ii) the Corporation
is
duly organized, validly existing and in good standing under the laws of the
State of Nevada, has all requisite power to carry on its business as presently
being conducted, and is qualified to do business and is in good standing in
every jurisdiction in which the failure so to qualify or to be in good standing
could have a material adverse effect on the Corporation, (iii) the Corporation
has all requisite power and authority to execute and deliver this Warrant and
to
perform its obligations hereunder, (iv) this Warrant has been duly authorized
by
all necessary corporate action on the part of the Corporation, has been duly
executed and delivered by the Corporation and constitutes the valid and legally
binding obligation of the Corporation enforceable in accordance with its terms,
(v) the execution, delivery and performance of this Warrant by the Corporation
have not violated and shall not violate any law, rule or regulation to which
the
Corporation is subject, the certificate of incorporation or by-laws of the
Corporation or any material agreement to which the Corporation is a party or
by
which it is bound, (vi) the authorized capital stock of the Corporation consists
of 900,000,000 shares and (vii) except as set forth on Schedule 5 hereto, there
are no outstanding warrants, options, agreements, convertible securities or
other commitments pursuant to which the Corporation is or may become obligated
to issue or sell any shares of its capital stock or other securities, and no
preemptive rights or similar rights to purchase or otherwise acquire shares
of
the capital stock or other securities of the Corporation exist. The Corporation
covenants to the Holder that it will (a) from time to time take all such action
as may be required to assure that the stated or par value per share of the
Common Stock is at all times no greater than the then effective Exercise Price
and (b) not amend or modify any provision of its Articles of Incorporation
or
by-laws in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of
the
Common Stock or the rights of the Holder of any Warrants. The Corporation
further covenants and agrees that the Corporation will take all such action
as
may be required to assure that the Corporation shall at all times have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of its Common Stock to provide for the exercise of this Warrant in full.
If any shares of Common Stock reserved for the purpose of issuance upon the
exercise of this Warrant require registration with or approval of any
governmental authority under any Federal or state law before such shares may
be
validly issued or delivered upon exercise, then the Corporation shall at its
expense in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
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Section
6. Purchase
Rights.
If at
any time the Corporation grants, issues or sells any Options, Convertible
Securities, Other Securities or any shares of any capital stock, or rights
to
purchase stock, warrants, securities or other property pro rata to the record
holders of Common Stock (the "Purchase Rights"), then the Holder shall be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder
had
held the number of shares of Common Stock acquirable upon complete exercise
of
this Warrant immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the person or the record holders of Common Stock are to
be
determined for the grant, issue or sale of such Purchase Rights. For the
avoidance of doubt, the foregoing is intended to include, without limitation,
a
preemption right in favor of the Holder with respect to any issuance of equity
securities by the Corporation by which the Holder will have the right, but
not
the obligation, to maintain its respective proportionate share of ownership
interest in the Corporation through the purchase of additional shares in the
new
issuance on the terms and conditions in such issuance. The terms of this Section
6 shall expire at the end of the Exercise Period.
Section
7. No
Shareholder Rights.
This
Warrant shall not entitle the Holder to any voting rights or other rights as
a
shareholder of the Corporation.
Section
8. Restrictions
on Transfer.
Subject
to applicable securities laws this Warrant, the Warrant Shares and all rights
hereunder are transferable to any Affiliate of the Holder, in whole or in part,
and from time to time, upon (i) surrender of this Warrant properly endorsed,
and
(ii) delivery of a notice of transfer in the form of Exhibit B by the Holder
of
its duly authorized attorney at the office of the Corporation, the Corporation
will at its expense issue to or upon the order of the Holder a new Warrant
or
Warrants of like tenor in the name of such Holder or as such Holder may direct.
Each transferee and holder of this Warrant, by accepting or holding the same,
consents that this Warrant, when endorsed, in blank, shall be deemed negotiable,
and, when so endorsed, the holder hereof shall be treated by the Corporation
and
all other persons dealing with this Warrant as the absolute owner hereof for
any
purposes and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Corporation, any notice
to the contrary notwithstanding; provided, however, that until each such
transfer is recorded on such books, the Corporation may treat the registered
holder hereof as the owner hereof for all purposes. Until such time as it is
no
longer required under the Act, the certificates representing the Warrant Shares
shall bear the following legend:
“The
shares of Stock represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Act”), and may not be sold or
transferred in the absence of an effective registration statement under the
Act
or an opinion of counsel in form satisfactory to the Corporation that such
registration is not required under the Act.”
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Section
9. Lost,
Stolen, Mutilated or Destroyed Warrant.
If this
Warrant is lost, stolen, mutilated or destroyed, the Corporation shall at its
expense (upon delivery of an indemnity agreement reasonably satisfactory in
the
Corporation and, in the case of a mutilated Warrant, surrender thereof), issue
a
new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original
contractual obligation of the Corporation, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section
10. Notices.
All
notices or other communications which are required or permitted hereunder shall
be in writing and sufficient if delivered personally or sent by recognized
overnight courier, prepaid, addressed as follows:
|
If
to the Corporation, to:
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Future
Now Group, Inc.
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▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇▇,
▇▇. 11201
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|
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Attention:
Chief Financial Officer
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|
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Facsimile
Number: ▇▇▇-▇▇▇-▇▇▇▇
|
|
|
If
to the Holder, at:
|
Professional
Offshore Opportunity
|
|
Fund
Ltd.
|
|
|
℅
Professional Traders Management, LLC
|
|
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▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
|
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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|
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Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇
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or
to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith.
Section
11. Remedies.
The
Corporation stipulates that the remedies at law of the Holder of this Warrant
in
the event of a default or threatened default by the Corporation in the
performance of or compliance with any of the terms of this Warrant are not
and
will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance
of
any agreement contained herein or by an injunction against a violation of any
of
the terms hereof or otherwise.
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Section
12. Successors
and Assigns.
This
Warrant and the rights evidenced hereby shall inure to the benefit of and be
binding upon the successors and assigns of the Corporation, the Holder hereof
and (to the extent provided herein) the holders of Warrant Shares issued
pursuant hereto, and shall be enforceable by any such Holder or
holders.
Section
13. Modification
and Severability.
If, in
any action before any court or agency legally empowered to enforce any provision
contained herein, any provision hereof is found to be unenforceable, then such
provision shall be deemed modified to the extent necessary to make it
enforceable by such court or agency. If any such provision is not enforceable
as
set forth in the preceding sentence, the unenforceability of such provision
shall not affect the other provisions of this Warrant, but this Warrant shall
be
construed as if such unenforceable provision had never been contained
herein.
Section
14. Governing
Law.
The
construction, validity, interpretation and enforcement of this Warrant shall
be
governed by the laws of the State of New York (without giving effect to any
laws
or rules relating to conflicts of laws that would cause the application of
the
laws of any jurisdiction other than the State of New York).
Section
15. Headings.
The
headings of the various sections contained in this Warrant have been inserted
for convenience of reference only and should not be deemed to be a part of
this
Warrant.
IN
WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
its
duly authorized officer as of the date first written above.
|
FUTURE
NOW GROUP, INC.
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||
| |
|
|
| By: | ||
|
Name:
Title:
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||
-11-
EXHIBIT
A
FORM
OF
NOTICE OF ELECTION TO EXERCISE
[To
be
executed only upon exercise
of
the
Warrant to which this form is attached]
To
FUTURE
NOW GROUP, INC.:
The
undersigned, the holder of the Warrant to which this form is attached, hereby
irrevocably elects to exercise the right represented by such Warrant to purchase
shares
of Common Stock of FUTURE NOW GROUP, INC., and herewith either [circle (a)
or
(b)]: (a) tenders the aggregate payment of $_________ in the form of cash,
wire
transfer funds, check or (b) elects to exercise its right to acquire the Common
Stock without any payment of funds as provided in Section 2 of the Warrant.
The
undersigned requests that a certificate for such shares be issued in the name
of
,
whose
address is __________________, and that such certificate be delivered to
______________________, whose address is
________________________________________.
If
such
number of shares is less than all of the shares purchasable under the Warrant,
the undersigned requests that a new Warrant, of like tenor as the Warrant to
which this form is attached, representing the right to purchase the remaining
balance of the shares purchasable under such current Warrant be registered
in
the name of __________________, whose address is
_____________________________________, and that such new Warrant be delivered
to
__________________, whose address is
__________________________________________.
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Signature:
|
|
|
(Signature
must conform in all respects to
the
name of the holder of the Warrant as
specified
on the face of the Warrant)
|
Date:
_______________
-12-
EXHIBIT
B
FORM
OF
NOTICE OF TRANSFER
[To
be
executed only upon transfer
of
the
Warrant to which this form is attached]
For
value
received, the undersigned hereby sells, assigns and transfers unto
____________________________ all of the rights represented by the Warrant to
which this form is attached to purchase _________________________ shares of
Common Stock of FUTURE NOW GROUP, INC. (the “Corporation”), to which such
Warrant relates, and appoints _________________________ as its attorney to
transfer such right on the books of the Corporation, with full power of
substitution in the premises.
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|
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|
(Signature
must conform in all respects to
the
name of the holder of the Warrant as
specified
on the face of the Warrant)
|
|
|
Address:
|
|
Date: _______________
Signed
in
the presence of:
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