VOID AFTER 5:00 P.M. (EST) ON FEBRUARY 9, 2009 WINSONIC DIGITAL MEDIA GROUP, LTD. STOCK PURCHASE WARRANT
Exhibit
4.13
WINSONIC
DIGITAL MEDIA GROUP, LTD.
NEITHER
THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE SECURITIES ISSUABLE
UPON
EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW
TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS.
THE
COMPANY (AS DEFINED BELOW), IN ITS SOLE DISCRETION, SHALL HAVE THE RIGHT
TO
REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO
THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH
ANY
PROPOSED TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE
SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED
IN
EXCHANGE FOR THIS WARRANT.
VOID
AFTER 5:00 P.M. (EST) ON FEBRUARY 9, 2009
WINSONIC
DIGITAL MEDIA GROUP, LTD.
STOCK
PURCHASE WARRANT
| Warrant No. ____________ | As of February 9, 2008 |
FOR
VALUE
RECEIVED, Winsonic Digital Media Group, Ltd., a Nevada corporation (the
“Company”),
hereby grants to ____________,
of
_____________________, or its registered successors and/or assigns (the
“Warrantholder”)
the
right to purchase from the Company _________
shares
(the
“Warrant
Shares”)
of the
Company’s common stock, par value $0.001 per share (the “Common
Stock”),
at a
price per share of $0.40 (the “Exercise
Price”),
at
any time on or after the date hereof (the “Warrant
Commencement Date”)
until
5:00 p.m. (EST) on February 9, 2009 (the “Expiration
Time”).
As
provided herein, the Exercise Price and the number of shares of Common
Stock or
other securities which may be purchased upon the exercise of this Warrant
are,
upon the happening of certain events, subject to modification and
adjustment.
The
rights of the registered holder of this Warrant shall be subject to the
following further terms and conditions:
1. Exercise
of Warrant.
(a)
This
Warrant may be exercised, in whole or in part, at any time and from time
to
time, during the period commencing on the Warrant Commencement Date and
terminating at the Expiration Time.
(b) This
Warrant shall be deemed to have been exercised when the Company has received
at
its principal office all of the following items (the “Exercise
Time”):
(i) this
Warrant;
(ii) a
completed exercise form in the form attached hereto (the “Exercise
Form”),
executed by the Warrantholder exercising all or part of the purchase rights
represented by this Warrant;
(iii) the
payment in full to the Company of an amount of consideration therefor equal
to
the Exercise Price in effect on the date of such exercise multiplied by
the
number of Warrant Shares with respect to which this Warrant is then being
exercised, payable by certified or official bank check or wire transfer
of
immediately available funds.
(c) As
soon
as practicable, but no later than ten business days following the Exercise
Time,
the Company, at its expense (including the payment by it of any applicable
taxes), will cause to be issued in the name of and delivered to the
Warrantholder, or such other person identified in the Exercise Form,
certificates evidencing the number of Warrant Shares to which the Warrantholder,
or such other person identified in the Exercise Form, shall be entitled.
Unless
this Warrant has expired or all of the purchase rights represented hereby
have
been exercised, the Company shall prepare a new Warrant, substantially
indentical hereto, representing the rights formerly represented by this
Warrant
which have not expired or been exercised and shall, within such ten business
day
period, deliver such new Warrant to the person designated for delivery
in the
Exercise Form.
(d) No
certificates for fractional Warrant Shares shall be issued upon the exercise
of
all or any part of this Warrant. In lieu of issuing any fractional Warrant
Shares the Company shall round up the calculation of the number of Warrant
Shares issuable upon exercise to the nearest whole number of Warrant
Shares.
(e) The
Warrant Shares issuable upon the exercise of this Warrant shall be deemed
to
have been issued to the Warrantholder at the Exercise Time, and the
Warrantholder shall be deemed for all purposes to have become the record
holder
of such Warrant Shares at the Exercise Time; provided,
that,
if the
Company shall have notified the Warrantholder in writing, that additional
documentation and/or information is required to effect the exercise of
this
Warrant, for the purpose of Section 1(b), the “Exercise Time” shall be the time
when the Company receives such documentation and/or information.
2
2. Issuance
and Reservation of Warrant Shares.
The
Company covenants and agrees that:
(a)
all
Warrant Shares which may be issued upon the exercise of all or part of
this
Warrant will, upon issuance in accordance with the terms hereof, be validly
issued, fully paid and non-assessable and free from all taxes, liens and
charges
with respect to the issue thereof;
(b) at
all
times prior to the Expiration Time, the Company shall keep reserved for
issuance
a sufficient number of authorized shares of Warrant Shares to permit the
exercise in full of this Warrant; and
(c) if
any
shares of Common Stock to be reserved for the purpose of the issuance of
Warrant
Shares 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 Company will
promptly
use its commercially reasonable best efforts to effect such registration
or
obtain such approval, as the case may be.
3. Adjustments
of Exercise Price; Number and Character of Warrant
Shares.
The
Exercise Price and the number and kind of securities, purchasable upon
the
exercise of this Warrant shall be subject to adjustment from time to time
upon
the happening of the events enumerated in this Section 3.
(a) Stock
Dividends, Subdivisions and Combinations.
In case
the Company shall at any time on or after the Warrant Commencement Date
and on
or before the Expiration Time:
(i) pay
a
dividend in shares of Common Stock or make a distribution in shares of
Common
Stock or such other stock to holders of all its outstanding shares of Common
Stock;
(ii) subdivide
or reclassify the outstanding shares of Common Stock into a greater number
of
shares;
(iii) combine
the outstanding shares of Common Stock into a smaller number of shares
of Common
Stock; or
(iv) issue
by
reclassification of its shares of Common Stock other securities of the
Company
(including any such reclassification in connection with a consolidation
or
merger in which the Company is the continuing corporation);
then
the
number and kind of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Warrantholder shall
be
entitled to receive the kind and number of shares of Common Stock or other
securities of the Company which the Warrantholder would have owned or have
been
entitled to receive after the happening of any of the events described
above had
this Warrant been exercised immediately prior to the earlier of the happening
of
such event or any record date in respect thereto. In the event of any adjustment
of the number of Warrant Shares purchasable upon the exercise of this Warrant
pursuant to this Section 3(a), the Exercise Price shall be adjusted to
be the
amount resulting from dividing the number of shares of Common Stock (including
fractional shares of Common Stock) covered by such Warrant immediately
after
such adjustment into the total amount payable upon exercise of such Warrant
in
full immediately prior to such adjustment. An adjustment made pursuant
to this
Section 3(a) shall become effective immediately after the effective date
of such
event. Such adjustment shall be made successively whenever any event listed
above shall occur.
3
(b) Extraordinary
Dividends.
In case
the Company shall at any time on or after the Warrant Commencement Date
and on
or before the Expiration Time fix a record date for the issuance of rights,
options, or warrants to all holders of its outstanding shares of Common
Stock,
entitling them (for a period expiring within 45 days after such record
date) to
subscribe for or purchase shares of Common Stock (or securities exchangeable
for
or convertible into shares of Common Stock) at a price per share of Common
Stock
(or having an exchange or conversion price per share of Common Stock, with
respect to a security exchangeable for or convertible into shares of Common
Stock) which is lower than the current Market Price per share of Common
Stock
(as defined in Section 3(d) below) on such record date, then the Exercise
Price
shall be adjusted by multiplying the Exercise Price in effect immediately
prior
to such record date by a fraction, of which (i) the numerator shall be
the
number of shares of Common Stock outstanding on such record date plus
the
number of shares of Common Stock which the aggregate offering price of
the total
number of shares of Common Stock to be offered (or the aggregate initial
exchange or conversion price of the exchangeable or convertible securities
so to
be offered) would purchase at such current Market Price and (ii) the denominator
shall be the number of shares of Common Stock outstanding on such record
date
plus the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the exchangeable or convertible
securities so to be offered are initially exchangeable or convertible).
Such
adjustment shall become effective at the close of business on such record
date;
however, to the extent that shares of Common Stock (or securities exchangeable
for or convertible into shares of Common Stock) are not delivered after
the
expiration of such rights, options, or warrants, the Exercise Price shall
be
readjusted (but only with respect to exercises of this Warrant after such
expiration) to the Exercise Price which would then be in effect had the
adjustments made upon the issuance of such rights, options, or warrants
been
made upon the basis of delivery of only the number of shares of Common
Stock (or
securities exchangeable for or convertible into shares of Common Stock)
actually
issued. In case any subscription price may be paid in a consideration part
or
all of which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company
and shall be described in a statement mailed to the Warrantholder. Shares
of
Common Stock owned by or held for the account of the Company shall not
be deemed
outstanding for the purpose of any such computation.
(c) Extraordinary
Distributions.
In case
the Company shall, at any time on or after the Warrant Commencement Date
and on
or before the Expiration Time, distribute to all holders of its shares
of Common
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the surviving corporation) evidences
of its
indebtedness or assets (excluding cash dividends and distributions payable
out
of consolidated net income or earned surplus in accordance with Nevada
law and
dividends or distributions payable in shares of stock described in Section
3(a)
above) or rights, options, or warrants or exchangeable or convertible securities
containing the right to subscribe for or purchase shares of Common Stock
(or
securities exchangeable for or convertible into shares of Common Stock),
then
the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect
immediately prior to the record date for such distribution by a fraction,
of
which (i) the numerator shall be the current Market Price per share of
Common
Stock (as defined in Section 3(d)) on such record date, less
the fair
market value (as determined in good faith by the Board of Directors of
the
Company, whose determination shall be conclusive, and described in a notice
to
the Warrantholders) of the portion of the evidences of indebtedness or
assets so
to be distributed or of such rights, options or warrants applicable to
one share
of Common Stock and (ii) the denominator shall be such current Market Price
per
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of distribution
retroactive to the record date for such transaction.
4
(d) Current
Market Price Defined.
For the
purpose of any computation under Sections 3(b) and/or 3(c), the current
“Market
Price”
per
share of Common Stock at any date shall be deemed to be the average daily
Closing Price of the shares of Common Stock for twenty consecutive trading
days
ending three trading days before the date in question. The term “Closing
Price”
of
the
shares of Common Stock for a day or days shall mean (i) if the shares of
Common
Stock are listed or admitted for trading on a national securities exchange,
the
last reported sales price regular way, or, in case no such reported sale
takes
place on such day or days, the average of the reported closing bid and
asked
prices regular way, in either case on the principal national securities
exchange
on which the shares of the Common Stock are listed or admitted for trading,
or
(ii) if the shares of Common Stock are not listed or admitted for trading
on a
national securities exchange, (A) the last transaction price for the Common
Stock on The Nasdaq Stock Market (“Nasdaq”)
or, in
the case no such reported transaction takes place on such day or days,
the
average of the reported closing bid and asked prices thereof quoted on
Nasdaq,
or (B) if the shares of Common Stock are not quoted on Nasdaq, the average
of
the closing bid and asked prices of the Common Stock as quoted on the
Over-The-Counter Bulletin Board maintained by the NASD, or (C) if the shares
of
Common Stock are not quoted on Nasdaq nor on the Bulletin Board, the average
of
the closing bid and asked prices of the common stock in the over-the-counter
market, as reported by The Pink Sheets, LLC, or an equivalent generally
accepted
reporting service, or (iii) if on any such day or days the shares of Common
Stock are not listed on a national securities exchange nor quoted on Nasdaq,
on
the Bulletin Board, or by The Pink Sheets, LLC, the fair market value of
the
shares of Common Stock on such day or days, as determined in good faith
by the
Board of Directors of the Company, shall be used.
(e)
Capital
Reorganizations and Other Reclassifications. In
case
of any capital reorganization of the Company, or of any reclassification
of the
shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in Section 3(a)), or
in case
of the consolidation of the Company with, or the merger of the Company
with, or
merger of the Company into, any other corporation (other than a reclassification
of the shares of Common Stock referred to in Section 3(a) or a consolidation
or
merger which does not result in any reclassification or change of the
outstanding shares of Common Stock) or of the sale of the properties and
assets
of the Company as, or substantially as, an entirety to any other corporation
or
entity occurring on or after the Warrant Commencement Date and on or before
the
Expiration Time, this Warrant shall, after such capital reorganization,
reclassification of shares of Common Stock, consolidation, merger, or sale,
be
exercisable, upon the terms and conditions specified in this Warrant, for
the
kind, amount and number of shares or other securities, assets, or cash
to which
a holder of the number of shares of Common Stock purchasable (at the time
of
such capital reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale) upon exercise of this Warrant would have
been
entitled to receive upon such capital reorganization, reclassification
of shares
of Common Stock, consolidation, merger, or sale, as otherwise provided
herein;
and in any such case, if necessary, the provisions set forth in this Section
3
with respect to the rights and interests thereafter of the Warrantholder
shall
be appropriately adjusted so as to be applicable, as nearly equivalent
as
possible, to any shares or other securities, assets, or cash thereafter
deliverable on the exercise of this Warrant. The Company shall not effect
any
such consolidation, merger, or sale, unless prior to or simultaneously
with the
consummation thereof the successor corporation or entity (if other than
the
Company) resulting from such consolidation or merger or the corporation
or
entity purchasing such assets or other appropriate corporation or entity
shall
assume, by written instrument, the obligation to deliver to the Warrantholder
such shares, securities, assets, or cash as, in accordance with the foregoing
provisions, such holders may be entitled to purchase and the other obligations
hereunder. The subdivision or combination of shares of Common Stock at
any time
outstanding into a greater or lesser number of shares shall not be deemed
to be
a reclassification of the shares of Common Stock for purposes of this Section
3(e).
5
(f) Minimum
Adjustment. Except
as
hereinafter provided, no adjustment of the Exercise Price hereunder shall
be
made if such adjustment results in a change of the Exercise Price then
in effect
of less than five cents ($0.05) per share. Any adjustment of less than
five
cents ($0.05) per share of any Exercise Price shall be carried forward
and shall
be made at the time of and together with any subsequent adjustment, which,
together with adjustment or adjustments so carried forward, amounts to
five
cents ($0.05) per share or more. However, upon exercise of this Warrant,
the
Company shall make all necessary adjustments (to the nearest cent) not
theretofore made to the Exercise Price up to and including the effective
date
upon which this Warrant is exercised.
(g) Notice
of Adjustments. Whenever
the Exercise Price shall be adjusted pursuant to this Section 3, the Company
shall promptly deliver a certificate signed by the President or a Vice
President
and by the Chief Executive Officer, Chief Financial Officer, Treasurer
or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company,
setting forth, in reasonable detail, the event requiring the adjustment,
the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors of
the
Company made any determination hereunder), by first class mail postage
prepaid
to the Warrantholder.
(h) Deferral
of Issuance of Additional Shares in Certain Circumstances. In
any
case in which this Section 3 shall require that an adjustment in the Exercise
Price be made effective as of a record date for a specified event, the
Company
may elect to defer until the occurrence of such event issuing to the holder
of a
Warrant exercised after such record date the shares of Common Stock, if
any,
issuable upon such exercise over and above the Warrant Shares, if any,
issuable
upon such exercise on the basis of the Exercise Price in effect prior to
such
adjustment; provided,
however,
that
the Company shall deliver as soon as practicable to such holder a due ▇▇▇▇
or
other appropriate instrument evidencing such holder’s right to receive such
additional shares of Common Stock upon the occurrence of the event requiring
such adjustment.
6
(i) Company
Right to Reduce the Exercise Price.
Notwithstanding anything contained in this Warrant to the contrary, the
Company
has the right, exercisable in the Company’s sole discretion, at any time prior
to the Expiration Time, and from time to time, on not less than 30 days’ prior
written notice (each, a “Reduced
Exercise Price Notice”),
to
reduce the Exercise Price as then in effect; provided
that the
period in which such reduced Exercise Price shall be in effect shall be
for no
less than fifteen nor more than 90 days and such period shall be clearly
identified in the Reduced Exercise Price Notice.
4. Replacement
of Warrant.
On
receipt of evidence reasonably satisfactory to the Company of the loss,
theft,
destruction or mutilation of this Warrant, and, in each case of loss, theft
or
destruction, delivery of an indemnity agreement reasonably satisfactory
in form
and substance to the Company or, in the case of mutilation, on surrender
and
cancellation of this Warrant, the Company at its expense shall execute
and
deliver, in lieu of this Warrant, a new Warrant of like tenor.
5. Registration.
This
Warrant, as well as all other warrant certificates representing warrants
issued
by the Company shall be numbered and shall be registered in a register
(the
“Warrant
Register”)
maintained at the Company’s principal office as they are issued. The Warrant
Register shall list the name, address and Social Security or other Federal
Identification Number, if any, of the Warrantholder. The Company shall
be
entitled to treat the Warrantholder as set forth in the Warrant Register
as the
owner in fact of this Warrant for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in this Warrant on
the
part of any other person, and shall not be liable for any registration
of
transfer of all or a portion of this Warrant that are registered or to
be
registered in the name of a fiduciary or the nominee of a fiduciary unless
made
with the actual knowledge that a fiduciary or nominee is committing a breach
of
trust in requesting such registration of transfer, or with such knowledge
of
such facts that its participation therein amounts to bad faith.
6. Exchange
of Warrant.
This
Warrant may be exchanged for another certificate or certificates entitling
the
Warrantholder thereof to purchase a like aggregate number of Warrant Shares
as
this Warrant entitles such Warrantholder to purchase. A Warrantholder desiring
to so exchange this Warrant shall make such request in writing delivered
to the
Company, and shall surrender this Warrant therewith. Thereupon, the Company
shall execute and deliver to the person entitled thereto a new certificate
or
certificates, as the case may be, as so requested.
7
7. Notices.
All
notices and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed given when personally delivered
or sent
by registered or certified mail (return receipt requested, postage prepaid),
facsimile transmission or overnight courier, if to the Warrantholder, at
such
address as is shown on the Warrant Register or as may otherwise may have
been
furnished to the Company in writing in accordance with this Section 7 by
the
Warrantholder and, if to the Company:
Winsonic
Digital Media Group, LTD.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board and CEO
Facsimile
Number: (▇▇▇) ▇▇▇-▇▇▇▇
or
such
other address as the Company shall give notice thereof to the Warrantholder
in
accordance with this Section 7.
8. Piggy-Back
Registration Rights.
(a)Defined
Terms.
As used
in this Section 8, terms defined elsewhere herein shall have their assigned
meanings and each of the following terms shall have the following meanings
(such
definitions to be applicable to both the plural and singular of the terms
defined):
(i) Registrable
Securities; Effectiveness Period.
The
term “Registrable
Securities”
shall
mean any shares of the Company Common Stock issuable upon exercise of this
Warrant in accordance with the terms and conditions hereof. For the purposes
of
this Section 8, securities will cease to be Registrable Securities when
(A) a registration statement under the Act, covering such Registrable
Securities has been declared effective and (1) such Registrable Securities
have
been disposed of pursuant to such effective registration statement or (2)
such
registration statement has remained effective for 270 consecutive days,
(B) such
Registrable Securities are transferred pursuant to an exemption from the
registration requirements of the Act, including, without limitation, Rules
144
and 144A promulgated thereunder, (C) such Registrable Securities are eligible
for sale pursuant to Rule 144(k) of the Act (or any similar provision then
in
force) or (D) such Registrable Securities have been otherwise transferred
and
the Company, in accordance with applicable law and regulations, has delivered
new certificates or other evidences of ownership for such securities which
are
not subject to any stop transfer order or other restriction on transfer
((A)
through (D) collectively referred to herein as the “Effectiveness
Period”).
(ii) Rightsholders.
The
term “Rightsholder”
shall
include the Warrantholder, all successors and assigns of the Warrantholder
and
all transferees of Registrable Securities where such transfer affirmatively
includes the transfer and assignment of the rights of the Warrantholder
under
this Warrant with respect to the transferred Registrable Securities and
such
transferee agrees in writing to assume all of the Warrantholder’s agreements,
obligations and liabilities under this Warrant.
8
(b)Piggy-Back
Registration.
(i) If,
at
any time on or after the date hereof and prior to the Expiration Time,
the
Company proposes to file a registration statement under the Act with respect
to
an offering by the Company or any other party of any class of equity security
similar to any Registrable Securities (other than a registration statement
on
Form S-4 or Form S-8 or any successor form or a registration statement
filed
solely in connection with a stock option or other employee benefit plan,
an
exchange offer, a business combination transaction or an offering of securities
solely to the existing stockholders or employees of the Company), then
the
Company, on each such occasion, shall give written notice (each, a “Piggy-Back
Notice”)
of
such proposed filing to all of the Rightsholders owning Registrable Securities
at least fifteen days before the anticipated filing date of such registration
statement, and such Piggy-Back Notice also shall be required to offer to
such
Rightsholders the opportunity to register such aggregate number of Registrable
Securities as each such Rightsholder may request. Each such Rightsholder
shall
have the right, exercisable for the five days immediately following the
giving
of a Piggy-Back Notice, to request, by written notice (each, a “Holder
Notice”)
to the
Company, the inclusion of all or any portion of the Registrable Securities
of
such Rightsholders in such registration statement. The Company shall use
reasonable efforts to cause the managing underwriter(s) of a proposed
underwritten offering to permit the inclusion of the Registrable Securities
which were the subject of all Holder Notices in such underwritten offering
on
the same terms and conditions as any similar securities of the Company
included
therein. Notwithstanding anything to the contrary contained in this Section
8(b), if the managing underwriter(s) of such underwritten offering or any
proposed underwritten offering delivers a written opinion to the Rightsholders
of Registrable Securities which were the subject of all Holder Notices
that the
total amount and kind of securities which they, the Company and any other
person
intend to include in such offering is such as to materially and adversely
affect
the success of such offering, then the amount of securities to be offered
for
the accounts of such Rightsholders and persons other than the Company shall
be
eliminated or reduced pro rata (based on the amount of securities owned
by such
Rightsholders and other persons which carry registration rights) to the
extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter(s) in the
managing underwriter’s written opinion.
(ii) Number
of Piggy-Back Registrations; Expenses.
The
obligations of the Company under this Section 8 shall be unlimited with
respect
to each Rightsholder. Subject to the provisions of Section 8(d) hereof,
the
Company will pay all Registration Expenses (as defined below) in connection
with
any registration of Registrable Securities effected pursuant to this Section
8,
but the Company shall not be responsible for the payment of any underwriter’s
discount, commission or selling concession in connection therewith.
(iii) Withdrawal
or Suspension of Registration Statement.
Notwithstanding anything contained to the contrary in this Section 8, the
Company shall have the absolute right, whether before or after the giving
of a
Piggy-Back Notice or receipt of a Holder Notice, to determine not to file
a
registration statement to which the Rightsholders shall have the right
to
include their Registrable Securities therein, to withdraw such registration
statement or to delay or suspend pursuing the effectiveness of such registration
statement. In the event of such a determination after the giving of a Piggy-Back
Notice, the Company shall give notice of such determination to all Rightsholders
and, thereupon, (A) in the case of a determination not to register or to
withdraw such registration statement, the Company shall be relieved of
its
obligation under this Section 8 to register any of the Registrable Securities
in
connection with such registration and (B) in the case of a determination to
delay the registration, the Company shall be permitted to delay or suspend
the
registration of Registrable Securities pursuant to this Section 8(b) for
the
same period as the delay in the registration of such other securities.
No
registration effected under this Section 8 shall relieve the Company of
its
obligation to effect any registration upon demand otherwise granted to
a
Rightsholder under any other agreement with the Company.
9
(c)Registration
Procedures.
(i) Obligations
of the Company.
The
Company will, in connection with any registration pursuant to Section 8(b)
hereof, as expeditiously as possible:
(1) prepare
and file with the Securities and Exchange Commission (the “Commission”)
a
registration statement under the Act on any appropriate form chosen by
the
Company, in the Company’s sole discretion, which shall be available for the sale
of all Registrable Securities in accordance with the intended method(s)
of
distribution thereof set forth in all applicable Holder Notices, and use
the
Company’s commercially reasonable efforts to cause such registration statement
to become effective as soon thereafter as reasonably practicable; provided,
that,
at least five business days before filing with the Commission of such
registration statement, the Company shall furnish to each Rightsholder
whose
Registrable Securities are to be included therein draft copies of such
registration statement, including all exhibits thereto; and provided,
further,
the
Company shall modify or amend the registration statement as it relates
to such
Rightsholder as reasonably requested by such Rightsholder on a timely basis,
and
shall reasonably consider other changes to the registration statement (but
not
including any exhibit or document incorporated therein by reference) reasonably
requested by such Rightsholder on a timely basis, in light of the requirements
of the Act and any other applicable laws and regulations.
(2) prepare
and file with the Commission such amendments and supplements to a registration
statement and the prospectus used in connection therewith as may be necessary
to
keep the registration statement effective and to comply with the provisions
of
the Act with respect to the sale or other disposition of all securities
covered
by the registration statement during the Effectiveness Period;
10
(3) furnish
to such Rightsholder such number of copies of a prospectus, including a
preliminary prospectus, in conformation with the requirements of the Act,
and
such other documents, as such Rightsholder may reasonably request;
(4) use
its
reasonable efforts to register or qualify the Registrable Securities included
in
such registration statement under such other securities or blue sky laws
of such
jurisdictions as any Rightsholder whose Registrable Securities are included
in
such registration statement reasonably requests in writing and do any and
all
other acts and things which may be necessary or advisable to enable such
Rightsholder to consummate the disposition in such jurisdictions of such
Registrable Securities; provided,
that
the Company will not be required to (i) qualify generally to do business
in any
jurisdiction where it would not otherwise be required to qualify but for
this
clause (4), (ii) subject itself to taxation in any such jurisdiction or
(iii)
take any action which would subject it to general service of process in
any such
jurisdiction;
(5) notify
each Rightsholder of any Registrable Securities covered by the registration
statement, promptly at any time when a prospectus relating thereto is required
to be delivered under the Act, of the occurrence of a Discontinuation Event
(as
defined below). For purposes of this Section 8(c)(5), a “Discontinuation
Event”
shall
mean (i) when the Commission notifies the Company that there will be a
“review”
of such registration statement and whenever the Commission comments in
writing
on such registration statement and until the Company has addressed the
comments
in a supplemented prospectus and/or amended registration statement and/or
supplementally; (ii) any request by the Commission or any other Federal
or state
governmental authority for amendments or supplements to such registration
statement or prospectus or for additional information and until the request
has
been responded to; (iii) the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement covering any
or all
of the Registrable Securities or the initiation of any proceedings for
that
purpose; (iv) the receipt by the Company of any notification with respect
to the
suspension of the qualification or exemption from qualification of any
of the
Registrable Securities for sale in any jurisdiction, or the initiation
or
threatening, in writing, of any proceeding for such purpose; and/or (v)
the
occurrence of any event or passage of time that makes the financial statements
included in such registration statement ineligible for inclusion therein
or any
statement made in such registration statement or prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any
material respect or that requires any revisions to such registration statement,
prospectus or other documents so that, in the case of such registration
statement or prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required
to be
stated therein or necessary to make the statements therein in light of
the
circumstances under which they were made, not misleading;
(6) use
reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of such registration statement at the earliest possible time
and
to prevent the entry of such an order;
11
(7) make
available for inspection by each Rightsholder whose Registrable Securities
are
included in such registration statement, any underwriter(s) participating
in any
disposition pursuant to such registration statement, and any representative,
agent or employee of or attorney or accountant retained by any such Rightsholder
or underwriter(s) (collectively, the “Inspectors”),
all
financial and other records, pertinent corporate documents and properties
of the
Company (collectively, the “Records”)
and
cause the officers, directors and employees of the Company to supply all
information reasonably requested by any such Inspector in connection with
such
registration statement; provided,
that
records which the Company determines, in good faith, to be confidential
and
which it notifies the Inspectors are confidential shall not be disclosed
by the
Inspectors, unless (i) the release of such Records is ordered pursuant
to a
subpoena or other order from a court of competent jurisdiction or (ii)
the
disclosure of such Records is required by any applicable law or regulation
or
any governmental regulatory body with jurisdiction over such Rightsholder
or
underwriter; provided,
further,
that
such Rightsholder or underwriter(s) agree that such Rightsholder or
underwriter(s) will, upon learning the disclosure of such Records is sought
in a
court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company’s expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(8) cooperate
with the Rightsholder whose Registrable Securities are included in such
registration statement and the managing underwriter(s), if any, to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold thereunder, not bearing any restrictive legends,
and
enable such Registrable Securities to be in such denominations and registered
in
such names as such Rightsholder or any managing underwriter(s) may reasonably
request at least two business days prior to any sale of Registrable
Securities;
(9) comply
with all applicable rules and regulations of the Commission and promptly
make
generally available to its security holders an earnings statement covering
a
period of twelve months commencing, (i) in an underwritten offering, at
the end
of any fiscal quarter in which Registrable Securities are sold to
underwriter(s), or (ii) in a non-underwritten offering, with the first
month of
the Company’s first fiscal quarter beginning after the effective date of such
registration statement, which earnings statement in each case shall satisfy
the
provisions of Section 11(a) of the Act;
(10) provide
a
CUSIP number for all Registrable Securities not later than the effective
date of
the registration statement relating to the first public offering of Registrable
Securities of the Company pursuant hereto;
(11) enter
into such customary agreements (including an underwriting agreement in
customary
form) and take all such other actions reasonably requested by the Rightsholders
holding a majority of the Registrable Securities included in such registration
statement or the managing underwriter(s) in order to expedite and facilitate
the
disposition of such Registrable Securities and in such connection, whether
or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, (i) make such representations
and warranties, if any, to the holders of such Registrable Securities and
any
underwriter(s) with respect to the registration statement, prospectus and
documents incorporated by reference, if any, in form, substance and scope
as are
customarily made by issuers to underwriter(s) in underwritten offerings
and
confirm the same if and when requested, (ii) obtain opinions of counsel
to the
Company and updates thereof addressed to each such Rightsholder and the
underwriter(s), if any, with respect to the registration statement, prospectus
and documents incorporated by reference, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and
such
other matters as may be reasonably requested by such Rightsholders and
underwriter(s), (iii) obtain a “comfort” letter from the Company’s independent
certified public accountants addressed to such Rightsholders and to the
underwriter(s), if any, which letters shall be in customary form and cover
matters of the type customarily covered in “comfort” letters by accountants in
connection with underwritten public offerings, and (iv) deliver such documents
and certificates as may be reasonably requested by the Rightsholders holding
a
majority of such Registrable Securities and managing underwriter(s), if
any, to
evidence compliance with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company; each such action
required by this clause (11) shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;
and
12
(12) if
requested by the holders of a majority of the Registrable Securities included
in
such registration statement, use its best efforts to cause all Registrable
Securities which are included in such registration statement to be listed,
subject to notice of issuance, by the date of the first sale of such Registrable
Securities pursuant to such registration statement, on each securities
exchange,
if any, on which securities similar to the Registered Securities are
listed.
(ii) Obligations
of Rightsholders.
In
connection with any registration of Registrable Securities of a Rightsholder
pursuant to Section 8(b) hereof:
(1) The
Company may require that each Rightsholder whose Registrable Securities
are
included in such registration statement furnish to the Company such information
regarding the distribution of such Registrable Securities and such Rightsholder
as the Company may from time to time reasonably request in writing;
(2) Each
Rightsholder agrees by its acquisition of such Registrable Securities that,
upon
receipt of any notice from the Company of the happening of any Discontinuation
Event, shall forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Rightsholder’s receipt of the copies of the supplemented prospectus
and/or amended registration statement or until it is advised in writing
by the
Company that the use of the applicable prospectus may be resumed, and,
in either
case, has received copies of any additional or supplemental filings that
are
incorporated or deemed to be incorporated by reference in such prospectus
or
registration statement; and
13
(3) It
shall
be a condition precedent to the Company's obligation to take any action
pursuant
to this Section 8 in respect of the Registrable Securities that are to
be
registered at the request of any Rightsholder that such Rightsholder shall
furnish to the Company such information regarding the securities held by
such
Rightsholder, the intended method of disposition thereof and any other
information as the Company shall reasonably request and as shall be required
in
connection with the action taken by the Company. No Rightsholder may participate
in any underwritten registration hereunder unless such Rightsholder (i)
agrees
to sell such holder’s securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and to comply with Regulation M under the Securities Exchange
Act
of 1934, as amended and (ii) completes and executes all questionnaires,
appropriate and limited powers of attorney, escrow agreements, indemnities,
underwriting agreements and other documents reasonably required under the
terms
of such underwriting arrangement.
(d)Registration
Expenses.
All
expenses incident to the performance of or compliance with this Warrant
by the
Company, including, without imitation, all registration and filing fees
of the
Commission, NASD, Inc. and other agencies, fees and expenses of compliance
with
securities or blue sky laws (including reasonable fees and disbursements
of
counsel in connection with blue sky qualifications of the Registrable
Securities), rating agency fees, printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries
and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with the listing, if any,
of the
Registrable Securities on any securities exchange and fees and disbursements
of
counsel for the Company and the Company’s independent certified public
accountants (including the expenses of any special audit or “comfort” letters
required by or incidental to such performance), Act or other liability
insurance
(if the Company elects to obtain such insurance), the fees and expenses
of any
special experts retained by the Company in connection with such registration
and
the fees and expenses of any other person retained by the Company (but
not
including any underwriting discounts or commissions attributable to the
sale of
Registrable Securities or other out-of-pocket expenses of the Rightsholders,
or
the agents who act on their behalf, unless reimbursement is specifically
approved by the Company) will be borne by the Company. All such expenses
are
herein referred to as “Registration
Expenses”.
(e)Indemnification;
Contribution.
(i) Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless, to the full extent permitted
by
law, each Rightsholder, its officers and directors and each person who
controls
such Rightsholder (within the meaning of the Act), if any, and any agent
thereof
against all losses, claims, damages, liabilities and expenses incurred
by such
party pursuant to any actual or threatened suit, action, proceeding or
investigation (including reasonable attorney’s fees and expenses) arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary prospectus
or
any omission or alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein (in the case
of a
prospectus, in the light of the circumstances under which they were made)
not
misleading, except insofar as the same arise out of or are based upon,
any such
untrue statement or omission based upon information with respect to such
Rightsholder furnished in writing to the Company by such Rightsholder expressly
for use therein.
14
(ii) Indemnification
by Rightsholder.
In
connection with any registration statement in which a Rightsholder is
participating, each such Rightsholder will be required to furnish to the
Company
in writing such information with respect to such Rightsholder as the Company
reasonably requests for use in connection with any such registration statement
or prospectus, and each Rightsholder agrees to the extent it is such a
holder of
Registrable Securities included in such registration statement, and each
other
such holder of Registrable Securities included in such Registration Statement
hereby agrees, to indemnify, to the full extent permitted by law, the Company,
the directors and officers of the Company and each person who controls
the
Company (within the meaning of the Act) and any agent thereof, against
any
losses, claims, damages, liabilities and expenses (including reasonable
attorney’s fees and expenses) incurred by such party pursuant to any actual or
threatened suit, action, proceeding or investigation arising out of or
based
upon any untrue or alleged untrue statement of a material fact or any omission
or alleged omission of a material fact necessary, to make the statements
therein
(in the case of a prospectus, in the light of the circumstances under which
they
are made) not misleading, to the extent, but only to the extent, that such
untrue statement or omission is based upon information relating to such
Rightsholder or other holder furnished in writing to the Company expressly
for
use therein.
(iii) Conduct
of Indemnification Proceedings.
Promptly
after receipt by an indemnified party under this Section 8(d) of written
notice
of the commencement of any action, proceeding, suit or investigation or
threat
thereof made in writing for which such indemnified party may claim
indemnification or contribution pursuant to this Warrant, such indemnified
party
shall notify in writing the indemnifying party of such commencement or
threat;
but the omission so to notify the indemnifying party shall not relieve
the
indemnifying party from any liability which the indemnifying party may
have to
any indemnified party (A) hereunder, unless the indemnifying party is
actually prejudiced thereby, or (B) otherwise than under this Section 8(d).
In
case any such action, suit or proceeding shall be brought against any
indemnified party, and the indemnified party shall notify the indemnifying
party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and the indemnifying party shall assume the defense
thereof,
with counsel reasonably satisfactory to the indemnified party, and the
obligation to pay all expenses relating thereto. The indemnified party
shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of
such
counsel shall be at the expense of such indemnified party unless (A) the
indemnifying party has agreed to pay such fees and expenses, (B) the
indemnifying party shall have failed to assume the defense of such action,
suit
or proceeding or to employ counsel reasonably satisfactory to the indemnified
party therein or to pay all expenses relating thereto or (C) the named
parties
to any such action or proceeding (including any impleaded parties) include
both
the indemnified party and the indemnifying party and the indemnified party
shall
have been advised by counsel that there may be one or more legal defenses
available to the indemnified party which are different from or additional
to
those available to the indemnifying party and which may result in a conflict
between the indemnifying party and such indemnified party (in which case,
if the
indemnified party notifies the indemnifying party in writing that the
indemnified party elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume
the defense of such action or proceeding on behalf of the indemnified party;
it
being understood, however, that the indemnifying party shall not, in connection
with any one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the
fees and expenses of more than one separate firm of attorneys at any time
for
the indemnified party, which firm shall be designated in writing by the
indemnified party).
15
(iv) Contribution.
If the
indemnification provided for in this Section 8(d) from the indemnifying
party is
unavailable to an indemnified party hereunder in respect of any losses,
claims,
damages, liabilities or expenses referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute
to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (A) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying
party
on the one hand and the indemnified party on the other or (B) if the
allocation provided by clause (A) above is not permitted by applicable
law, in
such proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party on the one hand and the indemnified
party on
the other but also the relative fault of the indemnifying party and indemnified
party, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and the indemnified parties shall be determined
by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or
alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such action. The amount paid or payable by a party as a result
of the
losses, claims, damages, liabilities and expenses referred to above shall
be
deemed to include, subject to the limitation set forth in Section 5.5,
any legal
or other fees or expenses reasonably incurred by such party in connection
with
any investigation or proceeding.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8(d)(iv) were determined by pro rata allocation
or by
any other method of allocation which does not take into account the equitable
considerations referred to in clauses (A) and (B) of the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from
any person who was not guilty of such fraudulent misrepresentation.
16
(v) Limitation.
Notwithstanding anything to the contrary contained in this Section 8(d),
no
holder of Registrable Securities shall be liable for indemnification and
contribution payments aggregating an amount in excess of the maximum amount
received by such holder in connection with any sale of Registrable Securities
as
contemplated herein.
9. Redemption.
To the
extent permitted by applicable law, this Warrant is redeemable by the Company
in
whole, but not in part, on not less than ten days’ prior written notice (the
“Redemption
Notice”)
at a
redemption price of $0.001 (the “Redemption
Price”),
at
any time on or after the Warrant Commencement Date and on or before the
Expiration Time. The Warrantholders will have full rights to exercise all
rights
under this Warrant subject to the Redemption Notice until 5:00 p.m. (EST)
(the
“Accelerated
Expiration Time”),
on
the business day immediately preceding the date fixed for redemption (the
“Redemption
Date”)
in the
Redemption Notice.
10. Miscellaneous.
This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. This Warrant
shall
be governed by and construed in accordance with the laws of the State of
New
York without giving effect to conflicts of law principles thereof. The
headings
in this Warrant are for purposes of reference only, and shall not limit
or
otherwise affect any of the terms hereof.
| Winsonic Digital Media Group, Ltd. | ||
| |
|
|
| By: | ||
|
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, |
||
| Chief Executive Officer | ||
17
EXERCISE
FORM
| Dated:_____________ |
TO:
Winsonic Digital Media Group, Ltd. (the “Company”)
The
undersigned hereby irrevocably elects to exercise the right to purchase
represented by the attached Warrant for, and to purchase thereunder,
________________ shares of the Company’s common stock, par value $0.001 (the
“Common
Stock”),
and
hereby makes payment of $______________ in payment of the actual Exercise
Price
thereof.
[The
number of share of Common Stock to be issued does not include all shares
of
Common Stock purchasable as provided in the attached Warrant and, accordingly,
a
certificate evidencing a new Warrant for _________ shares of Common Stock
is to
be issued in the name of __________________, whose address is
_____________________________________________ _________________________________
and whose (SS#)(FEIN#) is ____________________.]
I
ACKNOWLEDGE THAT SUCH SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED OR UNDER ANY APPLICABLE STATE SECURITIES
LAWS
AND SUCH SHARES OF COMMON STOCK
MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THE COMPANY,
IN
ITS SOLE DISCRETION, SHALL HAVE THE RIGHT TO REQUIRE AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER THE
ACT IS NOT REQUIRED IN CONNECTION WITH ANY PROPOSED TRANSFER NOR IS SUCH
TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.
INSTRUCTIONS
FOR REGISTRATION OF COMMON STOCK
| Name: | ||
| (Please type or print in block letters) | ||
| (SS#)(FEIN#): | ||
| Address: | ||
| Signature: | ||
|
(Signature
must conform in all respects to the name of the Warrantholder
as
set forth on the face of this
Warrant.)
|
ASSIGNMENT
FORM
| FOR VALUE RECEIVED, | ||
| (Please type or print in block letters) |
hereby
sells, assigns and transfers all rights of the undersigned under the attached
Warrant with respect to the number of shares of Common Stock covered thereby
set
forth below, unto:
| Name of Assignee(s) | SS#/FEIN# | Address(es) | No. of Shares |
Dated:
__________________
| Signature: | ||
|
(Signature
must conform in all respects to the
name of the Warrantholder as
set forth on the face of this Certificate.)
|
||
| By: | ||
| Title: | ||