BBM HOLDINGS, INC. AND COTTONWOOD STOCK TRANSFER WARRANT AGREEMENT Dated as of October 15, 2007
AND
COTTONWOOD
STOCK TRANSFER
___________________________
Dated
as of October 15, 2007
AGREEMENT,
dated this 15th day of October, 2007, between BBM HOLDINGS, INC., a Utah
corporation (the “Company”), and COTTONWOOD STOCK TRANSFER, as Warrant Agent
(the “Warrant Agent”).
W
I T N E S S E T H :
WHEREAS,
the holders of the Series A Exchangeable Preferred Stock (the “Series A Stock”)
of the Corporation suffered a disproportionate loss as a result of the
termination of the broadband maritime operations of the Corporation, which
assets were acquired at the same time as the Series A Stock was
issued;
WHEREAS,
the Board decided to issue three year common stock purchase warrants (the
“Warrants”) to the holders of Series A Stock in compensation for such loss;
and
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and
the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer and exchange of certificates representing the Warrants
and the exercise of the Warrants;
NOW,
THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company, the holders
of
certificates representing the Warrants and the Warrant Agent, the parties
hereto
agree as follows:
Section
1.
Definitions
As used
herein, the following terms shall have the following meanings, unless the
context shall otherwise require:
“Common
Stock” shall mean stock of the Company of any class whether now or hereafter
authorized, which has the right to participate in the voting and in the
distribution of earnings and assets of the Company without limit as to amount
or
percentage.
“Convertible
Securities” means (i) options to purchase or rights to subscribe for Common
Stock, (ii) securities by their terms convertible into or exchangeable for
Common Stock or (iii) options to purchase or rights to subscribe for such
convertible or exchangeable securities.
“Corporate
Office” shall mean the office of the Warrant Agent (or its successor) which at
any particular time is its principal business in New York, New York, shall
be
administered, which office is located on the date hereof at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
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“Exercise
Date” shall mean, subject to the provisions of Section 4(b) hereof, as to any
Warrant, the date on which the Warrant Agent shall have received both (i)
the
Warrant Certificate representing such Warrant, with the exercise form thereon
duly executed by the Registered Holder thereof or his attorney duly authorized
in writing, and (ii) payment in cash or by certified or bank check made payable
to the Warrant Agent for the account of the Company, of the amount in lawful
money of the United States of America equal to the applicable Purchase Price
in
good funds.
“Fair
Market Value” shall mean the value of a share of Common Stock as determined in
accordance with the following provisions:
(1) If
the
Common Stock is listed or admitted to unlisted trading privileges on the
NYSE or
the AMEX or is traded on the Nasdaq Capital Market, the Fair Market Value
of a
share of Common Stock shall be equal to the average of the closing sale price
of
the Common Stock during the thirty (30) trading days immediately preceding
the
date of the event which requires the determination or Fair Market Value on
whichever of such exchanges or Nasdaq Capital Market had the total highest
daily
trading volume for the Common Stock during such thirty (30) day trading
period.
(2) If
the
Common Stock is not listed or admitted to unlisted trading privileges on
either
the NYSE or the AMEX and is not traded on Nasdaq Capital Market, but is quoted
or reported on NASDAQ, the Fair Market Value of a share of Common Stock shall
be
the average of the last reported closing bid and asked prices (or the last
sale
price, if then reported on NASDAQ) of the Common Stock during the thirty
(30)
trading days immediately preceding the date of the event which requires the
determination of Fair Market Value.
(3) If
the
Common Stock is not listed or admitted to unlisted trading privileges on
either
of the NYSE or the AMEX and is not traded on Nasdaq Capital Market or quoted
or
reported on NASDAQ, but is listed or admitted to unlisted trading privileges
on
the BSE or another national securities exchange (other than the NYSE or the
AMEX) in the United States, the Fair Market Value of a share of Common Stock
shall be the average of the closing sale price of the Common Stock during
the
thirty (30) trading days immediately preceding the date of the event which
requires the determination of Fair Market Value.
(4) If
the
Common Stock is not listed or admitted to unlisted trading privileges on
any
national securities exchange, or listed for trading on Nasdaq Capital Market
or
quoted or reported on NASDAQ, but is traded in the over-the-counter market,
the
Fair Market Value of a share of Common Stock shall be the average of the
average
of the last reported bid and asked prices of the Common Stock reported by
the
National Quotation Bureau, Inc. for the thirty (30) trading days immediately
preceding the date of the event which requires the determination of Fair
Market
Value.
If
the
Common Stock is not listed or admitted to unlisted trading privileges on
any
national securities exchange, or listed for trading on Nasdaq Capital Market
or
quoted or reported on NASDAQ, and bid and asked prices of the Common Stock
are
not reported by the National Quotation Bureau, Inc., the Fair Market Value
of a
share of Common Stock shall be an amount, not less than the book value thereof
as of the end of the most recently completed fiscal quarter of the Company
ending prior to the date requiring a determination of Fair Market Value,
determined in accordance with general accepted accounting principles,
consistently applied.
2
“Initial
Warrant Exercise Date” shall mean October 31, 2007.
“Purchase
Price” shall mean, subject to modification and adjustment as provided in Section
8, $1.19 and further subject to the Company's right, in its sole discretion,
to
decrease the Purchase Price for a period of not less than 30 days on not
less
than 30 days' prior written notice to the Registered Holders.
“Registered
Holder” shall mean the person in whose name any certificate representing the
Warrants shall be registered on the books maintained by the Warrant Agent
pursuant to Section 6.
“Subsidiary”
or “Subsidiaries” shall mean any corporation or corporations, as the case may
be, of which stock having ordinary power to elect a majority of the Board
of
Directors of such corporation (regardless of whether or not at the time stock
of
any other class or classes of such corporation shall have or may have voting
power by reason of the happening of any contingency) is at the time directly
or
indirectly owned by the Company or by one or more Subsidiaries, or by the
Company and one or more Subsidiaries.
“Transfer
Agent” shall mean Cottonwood Stock Transfer, or its authorized
successor.
“Warrant
Agent” shall mean Cottonwood Stock Transfer, or its authorized
successor.
“Warrant
Certificate” shall mean a certificate representing each of the Warrants
substantially in the forms annexed hereto as Exhibit A.
“Warrant
Expiration Date” shall mean 5:00 p.m. (New York time), on October 31, 2011, or,
if such date shall in the State of New York be a holiday or a day on which
banks
are authorized to close, then 5:00 p.m. (New York time) on the next following
day which in the State of New York is not a holiday or a day on which banks
are
authorized to close, subject to the Company's right, prior to the Warrant
Expiration Date, in its sole discretion, to extend such Warrant Expiration
Date
on five business days prior written notice to the Registered
Holders.
Section
2.
Warrants
and Issuance of Warrant Certificates.
(a) Each
Warrant shall initially entitle the Registered Holder of the Warrant Certificate
representing such Warrant to purchase at the Purchase Price therefor from
the
Initial Warrant Exercise Date until the Warrant Expiration Date one share
of
Common Stock upon the exercise thereof, subject to modification and adjustment
as provided in Section 8.
3
(b) The
Company has executed and delivered to the Warrant Agent certificates
representing the Warrants, which shall be countersigned, issued and delivered
by
the Warrant Agent upon the written order of the Company signed by its Chairman
of the Board, President or a Vice President and by its Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary.
(c) From
time
to time, up to the Warrant Expiration Date, as the case may be, the Warrant
Agent shall countersign and deliver Warrant Certificates in required
denominations of one or whole number multiples thereof to the person entitled
thereto in connection with any transfer or exchange permitted under this
Agreement. No Warrant Certificates shall be issued except (i) Warrant
Certificates initially issued hereunder, (ii) Warrant Certificates issued
upon
any transfer or exchange of Warrants, (iii) Warrant Certificates issued in
replacement of lost, stolen, destroyed or mutilated Warrant Certificates
pursuant to Section 7, and (iv) at the option of the Company, Warrant
Certificates in such form as may be approved by its Board of Directors, to
reflect any adjustment or change in the Purchase Price or the number of shares
of Common Stock purchasable upon exercise of the Warrants.
Section
3.
Form
and Execution of Warrant Certificates.
(a) The
Warrant Certificates shall be substantially in the form annexed hereto
as
Exhibit A (the provisions of which are hereby incorporated herein) and
may have
such letters, numbers or other marks of identification or designation and
such
legends, summaries or endorsements printed, lithographed or engraved thereon
as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any law or with
any rule
or regulation made pursuant thereto or with any rule or regulation of any
stock
exchange on which Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon
initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates).
(b) Warrant
Certificates shall be executed on behalf of the Company by its Chairman
of the
Board, President or any Vice President and by its Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary, by manual signatures
or by
facsimile signatures printed thereon, and shall have imprinted thereon
a
facsimile of the Company's seal. Warrant Certificates shall be manually
countersigned. In case any officer of the Company who shall have signed
any of
the Warrant Certificates shall cease to be such officer of the Company
before
the date of issuance of the Warrant Certificates or before countersignature
by
the Warrant Agent and issue and delivery thereof, such Warrant Certificates,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered
with the same force and effect as though the person who signed such Warrant
Certificates had not ceased to be such officer of the Company.
Section
4.
Exercise.
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(a) Warrants
in denominations of one or whole number multiples thereof may be exercised
commencing at any time on or after the Initial Warrant Exercise Date, but
not
after the Warrant Expiration Date, upon the terms and subject to the conditions
set forth herein (including the provisions set forth in Sections 4(b) and
5
hereof) and in the applicable Warrant Certificate. A Warrant shall be deemed
to
have been exercised immediately prior to the close of business on the Exercise
Date, provided that the Warrant Certificate representing such Warrant, with
the
exercise form thereon duly executed by the Registered Holder thereof or his
attorney duly authorized in writing, together with payment in cash or by
check
made payable to the Company, of an amount in lawful money of the United States
of America equal to the applicable Purchase Price has been received in good
funds by the Warrant Agent. The person entitled to receive the securities
deliverable upon such exercise shall be treated for all purposes as the holder
of such securities as of the close of business on the Exercise Date. As soon
as
practicable on or after the Exercise Date and in any event within five business
days after having received authorization from the Company, the Warrant Agent
on
behalf of the Company shall cause to be issued to the person or persons entitled
to receive the same a Common Stock certificate or certificates for the shares
of
Common Stock deliverable upon such exercise, and the Warrant Agent shall
deliver
the same to the person or persons entitled thereto. Upon the exercise of
any
Warrant, the Warrant Agent shall promptly notify the Company in writing of
such
fact and of the number of securities delivered upon such exercise and shall
cause all payments of an amount in cash or by check made payable to the order
of
the Company, equal to the Purchase Price, to be deposited promptly in the
Company's bank account.
(b) The
Company shall not be required to issue fractional shares upon the exercise
of
Warrants. Warrants may only be exercised in such multiples as are required
to
permit the issuance by the Company of one or more whole shares. If one or
more
Warrants shall be presented for exercise at the same time by the same Registered
Holder, the number of whole shares which shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of shares
purchasable on exercise of the Warrants so presented. If any fraction of
a share
would, except for the provisions provided herein, be issuable on the exercise
of
any Warrant (or specified portion thereof), the Company shall pay an amount
in
cash equal to such fraction multiplied by the then current Fair Market Value
of
a share of Common Stock.
Section
5.
Reservation
of Shares; Listing; Payment of Taxes; etc.
(a) The
Company covenants that it will at all times reserve and keep available
out of
its authorized Common Stock, solely for the purpose of issue upon exercise
of
Warrants, such number of shares of Common Stock as shall then be issuable
upon
the exercise of all outstanding Warrants. The Company covenants that all
shares
of Common Stock which shall be issuable upon exercise of the Warrants shall,
at
the time of delivery thereof, be duly and validly issued and fully paid
and
nonassessable and free from all preemptive or similar rights, taxes, liens
and
charges with respect to the issue thereof, and that upon issuance such
shares
shall be listed on each securities exchange, if any, on which the other
shares
of outstanding Common Stock of the Company are then listed.
5
(b) The
Company covenants that if any securities to be reserved for the purpose
of
exercise of Warrants hereunder require registration with, or approval of,
any
governmental authority under any federal securities law before such securities
may be validly issued or delivered upon such exercise, then the Company
will
file a registration statement under the federal securities laws or a post
effective amendment, use its best efforts to cause the same to become effective
and use its best efforts to keep such registration statement current while
any
of the Warrants are outstanding and deliver a prospectus which complies
with
Section 10(a)(3) of the Securities Act of 1933, as amended, (the “Act”), to the
Registered Holder exercising the Warrant (except, if in the opinion of
counsel
to the Company, such registration is not required under the federal securities
law or if the Company receives a letter from the staff of the Securities
and
Exchange Commission (the “Commission”) stating that it would not take any
enforcement action if such registration is not effected). The Company will
use
best efforts to obtain appropriate approvals or registrations under state
“blue
sky” securities laws. With respect to any such securities, however, Warrants
may
not be exercised by, or shares of Common Stock issued to, any Registered
Holder
in any state in which such exercise would be unlawful.
(c) The
Company shall pay all documentary, stamp or similar taxes and other governmental
charges that may be imposed with respect to the issuance of Warrants, or
the
issuance or delivery of any shares of Common Stock upon exercise of the
Warrants; provided, however, that if shares of Common Stock are to be delivered
in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if
any.
(d) The
Warrant Agent is hereby irrevocably authorized as the Transfer Agent to
requisition from time to time certificates representing shares of Common
Stock
or other securities required upon exercise of the Warrants, and the Company
will
comply with all such requisitions.
Section
6.
Exchange
and Registration of Transfer.
(a) Warrant
Certificates may be exchanged for other Warrant Certificates representing
an
equal aggregate number of Warrants or may be transferred in whole or in
part.
Warrant Certificates to be so exchanged shall be surrendered to the Warrant
Agent at its Corporate Office, and the Company shall execute and the Warrant
Agent shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The
Warrant Agent shall keep, at its Corporate Office, books in which, subject
to
such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof. Upon due presentment for registration
of
transfer of any Warrant Certificate at such office, the Company shall execute
and the Warrant Agent shall issue and deliver to the transferee or transferees
a
new Warrant Certificate or Certificates representing an equal aggregate
number
of Warrants.
(c) With
respect to any Warrant Certificates presented for registration or transfer,
or
for exchange or exercise, the subscription or exercise form, as the case
may be,
on the reverse thereof shall be duly endorsed or be accompanied by a written
instrument or instruments of transfer and subscription, in form satisfactory
to
the Company and the Warrant Agent, duly executed by the Registered Holder
thereof or his attorney duly authorized in writing.
(d) No
service charge shall be made for any exchange or registration of transfer
of
Warrant Certificates. However, the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in
connection therewith.
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(e) All
Warrant Certificates surrendered for exercise or for exchange shall be
promptly
canceled by the Warrant Agent.
(f) Prior
to
due presentment for registration or transfer thereof, the Company and the
Warrant Agent may deem and treat the Registered Holder of any Warrant
Certificate as the absolute owner thereof of each Warrant represented thereby
(notwithstanding any notations of ownership or writing thereon made by
anyone
other than the Company or the Warrant Agent) for all purposes and shall
not be
affected by any notice to the contrary.
Section
7.
Loss
or Mutilation.
Upon
receipt by the Company and the Warrant Agent of evidence satisfactory to
them of
the ownership of and the loss, theft, destruction or mutilation of any
Warrant
Certificate and (in the case of loss, theft or destruction) of indemnity
satisfactory to them, and (in case of mutilation) upon surrender and
cancellation thereof, the Company shall execute and the Warrant Agent shall
countersign and deliver in lieu thereof a new Warrant Certificate representing
an equal aggregate number of Warrants. Applicants for a substitute Warrant
Certificate shall also comply with such other reasonable regulations and
pay
such other reasonable charges as the Warrant Agent may prescribe.
Section
8.
Adjustment
of Purchase Price and Number of Shares Deliverable.
(a) Except
as
hereinafter provided, in the event the Company shall, at any time or from
time
to time after the date hereof, issue any shares of Common Stock as a stock
dividend to the holders of Common Stock, or subdivide or combine the outstanding
shares of Common Stock into a greater or lesser number of shares (any such
issuance, subdivision or combination being herein called a “Change of Shares”),
then, and thereafter upon each further Change of Shares, the Purchase Price
for
the Warrants (whether or not the same shall be issued and outstanding)
in effect
immediately prior to such Change of Shares shall be changed to a price
(including any applicable fraction of a cent to the nearest cent) determined
by
dividing (i) the sum of (A) the total number of shares of Common Stock
outstanding immediately prior to such Change of Shares, multiplied by the
Purchase Price in effect immediately prior to such Change of Shares and
(B) the
consideration, if any, received by the Company upon such sale, issuance,
subdivision or combination, by (ii) the total number of shares of Common
Stock
immediately after issuance, subdivision or such Change of Shares; provided,
however, that in no event shall the Purchase Price be adjusted pursuant
to this
computation to an amount in excess of the Purchase Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Common Stock. For the purposes of any adjustment to be made in
accordance with this Section 8(a), the Shares of Common Stock issuable
by way of
dividend or other distribution on any stock of the Company shall be deemed
to
have been issued immediately after the opening of business on the day following
the record date for the determination of shareholders entitled to receive
such
dividend or other distribution and shall be deemed to have been issued
without
consideration.
7
(b) Upon
each
adjustment of the Purchase Price pursuant to this Section 8, the number
of
shares of Common Stock purchasable upon the exercise of each Warrant shall
be
the number derived by multiplying the number of shares of Common Stock
purchasable immediately prior to such adjustment by the Purchase Price
in effect
prior to such adjustment and dividing the product so obtained by the applicable
adjusted Purchase Price.
(c) In
case
of any reclassification or change of outstanding shares of Common Stock
issuable
upon exercise of the Warrants (other than a change in par value, or from
par
value to no par value, or from no par value to par value or as a result
of a
subdivision or combination), or in case of any consolidation or merger
of the
Company with or into another corporation (other than a merger with a Subsidiary
in which merger the Company is the continuing corporation and which does
not
result in any reclassification or change of the then outstanding shares
of
Common Stock or other capital stock issuable upon exercise of the Warrants
(other than a change in par value, or from par value to no par value, or
from no
par value to par value or as a result of subdivision or combination)) or
in case
of any sale or conveyance to another corporation of the property of the
Company
as an entity, then, as a condition of such reclassification, change,
consolidation, merger, sale or conveyance, the Company, or such successor
or
purchasing corporation, as the case may be, shall make lawful and adequate
provision whereby the Registered Holder of each Warrant then outstanding
shall
have the right thereafter to receive on exercise of such Warrant the kind
and
amount of securities and property receivable upon such reclassification,
change,
consolidation, merger, sale or conveyance by a holder of the number of
securities issuable upon exercise of such Warrant immediately prior to
such
reclassification, change, consolidation, merger, sale or conveyance and
shall
forthwith file at the Corporate Office of the Warrant Agent a statement
signed
by its President or a Vice President and by its Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary evidencing such provision.
Such provisions shall include provision for adjustments which shall be
as nearly
equivalent as may be practicable to the adjustments provided for in Section
8(a)
and (b). The above provisions of this Section 8(c) shall similarly apply
to
successive reclassifications and changes of shares of Common Stock and
to
successive consolidations, mergers, sales or conveyances.
(d) Irrespective
of any adjustments or changes in the Purchase Price or the number of shares
of
Common Stock purchasable upon exercise of the Warrants, the Warrant Certificates
theretofore and thereafter issued shall, unless the Company shall exercise
its
option to issue new Warrant Certificates pursuant to Section 2(c) hereof,
continue to express the Purchase Price per share and the number of shares
purchasable thereunder as the Purchase Price per share.
(e) After
each adjustment of the Purchase Price pursuant to this Section 8, the Company
will promptly prepare a certificate signed by the Chairman or President,
and by
the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary, of the Company setting forth: (i) the Purchase Price as so adjusted,
(ii) the number of shares of Common Stock purchasable upon exercise of
each
Warrant, after such adjustment, and (iii) a brief statement of the facts
accounting for such adjustment. The Company will promptly file such certificate
with the Warrant Agent and cause a brief summary thereof to be sent by
ordinary
first class mail to each Registered Holder at his last address as it shall
appear on the registry books of the Warrant Agent. No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect the
validity thereof except as to the Registered Holder to whom the Company
failed
to mail such notice, or except as to the Registered Holder whose notice
was
defective. The affidavit of an officer of the Warrant Agent or the Secretary
or
an Assistant Secretary of the Company that such notice has been mailed
shall, in
the absence of fraud, be prima facie evidence of the facts stated
therein.
8
(f) No
adjustment of the Purchase Price shall be made as a result of or in connection
with any Change of Shares if the amount of said adjustment shall be less
than
$.01, provided, however, that in such case, any adjustment that would otherwise
be required then to be made shall be carried forward and shall be made
at the
time of and together with the next subsequent adjustment that shall amount,
together with any adjustment so carried forward, to at least $.01. In addition,
Registered Holders shall not be entitled to cash dividends paid by the
Company
prior to the exercise of any Warrant or Warrants held by them.
Section
9.
Concerning
the Warrant Agent.
(a) The
Warrant Agent acts hereunder as agent and in a ministerial capacity for
the
Company, its duties shall be determined solely by the provisions hereof.
The
Warrant Agent shall not, by issuing and delivering Warrant Certificates
or by
any other act hereunder, be deemed to make any representations as to the
validity or value or authorization of the Warrant Certificates or the Warrants
represented thereby or of any securities or other property delivered upon
exercise of any Warrant or whether any stock issued upon exercise of any
Warrant
is fully paid and nonassessable.
(b) The
Warrant Agent shall not at any time be under any duty or responsibility
to any
holder of Warrant Certificates to make or cause to be made any adjustment
of the
Purchase Price provided in this Agreement, or to determine whether any
fact
exists which may require any such adjustment, or with respect to the nature
or
extent of any such adjustment, when made, or with respect to the method
employed
in making the same. It shall not (i) be liable for any recital or statement
of
fact contained herein or for any action taken, suffered or omitted by it
in
reliance on any Warrant Certificate or other document or instrument believed
by
it in good faith to be genuine and to have been signed or presented by
the
proper party or parties, (ii) be responsible for any failure on the part
of the
Company to comply with any of its covenants and obligations contained in
this
Agreement or in any Warrant Certificate, or (iii) be liable for any act
or
omission in connection with this Agreement except for its own gross negligence
or willful misconduct.
(c) The
Warrant Agent may at any time consult with counsel satisfactory to it (who
may
be counsel for the Company) and shall incur no liability or responsibility
for
any action taken, suffered or omitted by it in good faith in accordance
with the
opinion or advice of such counsel.
(d) Any
notice, statement, instruction, request, direction, order or demand of
the
Company shall be sufficiently evidenced by an instrument signed by the
Chairman
of the Board of Directors, President or any Vice President (unless other
evidence in respect thereof is herein specifically prescribed). The Warrant
Agent shall not be liable for any action taken, suffered or omitted by
it in
accordance with such notice, statement, instruction, request, direction,
order
or demand.
9
(e) The
Company agrees to pay the Warrant Agent reasonable compensation for its
services
hereunder and to reimburse it for its reasonable expenses hereunder; the
Company
further agrees to indemnify the Warrant Agent and save it harmless against
any
and all losses, expenses and liabilities, including judgments, costs and
counsel
fees, for anything done or omitted by the Warrant Agent in the execution
of its
duties and powers hereunder except losses, expenses and liabilities arising
as a
result of the Warrant Agent's gross negligence or willful
misconduct.
(f) The
Warrant Agent may resign its duties and be discharged from all further
duties
and liabilities hereunder (except liabilities arising as a result of the
Warrant
Agent's own gross negligence or willful misconduct), after giving 30 days'
prior
written notice to the Company. At least 15 days prior to the date such
resignation is to become effective, the Warrant Agent shall cause a copy
of such
notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation the Company
shall
appoint in writing a new warrant agent. If the Company shall fail to make
such
appointment within a period of 30 days after it has been notified in writing
of
such resignation by the resigning Warrant Agent, then the Registered Holder
of
any Warrant Certificate may apply to any court of competent jurisdiction
for the
appointment of a new warrant agent. Any new warrant agent, whether appointed
by
the Company or by such a court, shall be a bank or trust company having
a
capital and surplus, as shown by its last published report to its stockholders,
of not less than $10,000,000 or a stock transfer company doing business
in New
York. After acceptance in writing of such appointment by the new warrant
agent
is received by the Company, such new warrant agent shall be vested with
the same
powers, rights, duties and responsibilities as if it had been originally
named
herein as the warrant agent, without any further assurance, conveyance,
act or
deed; but if for any reason it shall be necessary or expedient to execute
and
deliver any further assurance, conveyance, act or deed, the same shall
be done
at the expense of the Company and shall be legally and validly executed
and
delivered by the resigning Warrant Agent. Not later than the effective
date of
any such appointment the Company shall file notice thereof with the resigning
Warrant Agent and shall forthwith cause a copy of such notice to be mailed
to
the Registered Holder of each Warrant Certificate.
(g) Any
corporation into which the Warrant Agent or any new warrant agent may be
converted or merged, any corporation resulting from any consolidation to
which
the Warrant Agent or any new warrant agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent or any
new
warrant agent shall be a successor warrant agent under this Agreement without
any further act, provided that such corporation is eligible for appointment
as
successor to the Warrant Agent under the provisions of the preceding paragraph.
Any such successor warrant agent shall promptly cause notice of its succession
as warrant agent to be mailed to the Company and to the Registered Holders
of
each Warrant Certificate.
(h) The
Warrant Agent, its subsidiaries and affiliates, and any of its or their
officers
or directors, may buy and hold or sell Warrants or other securities of
the
Company and otherwise deal with the Company in the same manner and to the
same
extent and with like effect as though it were not Warrant Agent. Nothing
herein
shall preclude the Warrant Agent from acting in any other capacity for
the
Company or for any other legal entity.
10
(i) The
Warrant Agent shall retain for a period of two years from the date of exercise
any Warrant Certificate received by it upon such exercise.
Section
10.
Modification
of Agreement.
The
Warrant Agent and the Company may by supplemental agreement make any changes
or
corrections in this Agreement (i) that they shall deem appropriate to cure
any
ambiguity or to correct any defective or inconsistent provision or manifest
mistake or error herein contained; or (ii) that they may deem necessary
or
desirable and which shall not adversely affect the interests of the holders
of
Warrant Certificates; provided, however, that this Agreement shall not
otherwise
be modified, supplemented or altered in any respect except with the consent
in
writing of the Registered Holders representing not less that 66-2/3% of
the
Warrants then outstanding; provided, further, that no change in the number
or
nature of the securities purchasable upon the exercise of any Warrant,
or to
increase the Purchase Price therefor, shall be made without the consent
in
writing of the Registered Holder of the Warrant Certificate.
Section
11.
Notices.
All
notices, requests, consents and other communications hereunder shall be
in
writing and shall be deemed to have been made when delivered or mailed
first-class postage prepaid, or delivered to a telegraph office for transmission
if to the Registered Holder of a Warrant Certificate, at the address of
such
holder as shown on the registry books maintained by the Warrant Agent;
if to the
Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, fax:
▇▇▇-▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary; with a copy to ▇▇▇▇
&
Hessen LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, fax: ▇▇▇-▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or at such other address as may have been furnished
to
the Warrant Agent in writing by the Company; and if to the Warrant Agent,
at its
Corporate Office.
Section
12.
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York without giving effect to conflicts of laws.
Section
13.
Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the Company,
the
Warrant Agent and their respective successors and assigns and the holders
from
time to time of Warrant Certificates or any of them. Except as hereinafter
stated, nothing in this Agreement is intended or shall be construed to
confer
upon any other person any right, remedy or claim or to impose upon any
other
person any duty, liability or obligation.
11
Section
14.
Severability.
Whenever
possible, each provision of this Agreement shall be interpreted in such
a manner
as to be effective and valid under applicable law, but if any provision
of this
Agreement shall be deemed prohibited or invalid under such applicable law,
such
provision shall be ineffective to the extent of such prohibition or invalidity,
and such prohibition or invalidity shall not invalidate the remainder of
such
provision or any other provision of this Agreement.
Section
15.
Headings.
The
headings of the sections of this Agreement are for convenience and shall
not by
themselves determine the interpretation of this Agreement.
This
Agreement may be executed in several counterparts, which taken together
shall
constitute a single document.
[signature
page follows]
12
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
[SEAL]
|
COTTONWOOD
STOCK TRANSFER,
as Warrant Agent
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By:
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By:
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EXHIBIT
A
FORM
OF WARRANTS
[Face]
[Upper
Left Corner]
EXERCISABLE
ON OR BEFORE, AND VOID AFTER, 5:00 P.M. EASTERN TIME, October 31,
2011.
[Center]
or
registered assigns (the “Registered
Holder”)
is the
owner of the number of Warrants (the “Warrants”)
specified above. Each Warrant initially entitles the Registered Holder
to
purchase, subject to the terms and conditions set forth in this Certificate
and
the Warrant Agreement (as hereinafter defined), one fully paid and nonassessable
share of Common Stock, $0.01 par value, of BBM Holdings, Inc., a Utah
corporation (the “Company”),
at
any time on or before the Expiration Date (as hereinafter defined) upon
the
presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of Cottonwood
Stock Transfer, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as
Warrant
Agent, or its successor (the “Warrant
Agent”),
accompanied by payment of $1.19 per share, subject to adjustment (the
“Purchase
Price”),
in
lawful money of the United States of America in cash or by certified or
bank
check made payable to the Company.
This
Warrant Certificate and each Warrant represented hereby are issued pursuant
to
and are subject in all respects to the terms and conditions set forth in
the
Warrant Agreement (the “Warrant
Agreement”),
dated
October 15, 2007, by and between the Company and the Warrant Agent.
In
the
event of certain contingencies provided for in the Warrant Agreement, the
Purchase Price and the number of shares of Common Stock subject to purchase
upon
the exercise of each Warrant represented hereby are subject to modification
or
adjustment.
Each
Warrant represented hereby is exercisable at the option of the Registered
Holder, but no fractional shares will be issued. In the case of the exercise
of
less than all of the Warrants represented hereby, the Company shall cancel
this
Warrant Certificate upon the surrender hereof and shall execute and deliver
a
new Warrant Certificate or Warrant Certificates of like tenor, which the
Warrant
Agent shall countersign, for the balance of such Warrants.
Each
Warrant represented hereby is subject to redemption by the Company as provided
in the Warrant Agreement in the event of certain contingencies related
to the
market price of the Company’s Common Stock.
15
The
term
“Expiration
Date”
shall
mean 5:00 p.m. (New York time) on October 31, 2011. If such date shall
in the
State of New York be a holiday or a day on which the banks are authorized
to
close, then the Expiration Date shall mean 5:00 p.m. (New York time) the
next
following day which in the State of New York is not a holiday or a day
on which
banks are authorized to close.
This
Warrant Certificate is exchangeable, upon the surrender hereof by the Registered
Holder at the corporate office of the Warrant Agent, for a new Warrant
Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to
represent
such number of Warrants as shall be designated by such Registered Holder
at the
time of such surrender. Upon due presentment and payment of any tax or
other
charge imposed in connection therewith or incident thereto, for registration
of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants
will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior
to
the exercise of any Warrant represented hereby, the Registered Holder shall
not
be entitled to any rights of a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided in the Warrant Agreement.
Prior
to
due presentment for registration of transfer hereof, the Company and the
Warrant
Agent may deem and treat the Registered Holder as the absolute owner hereof
and
of each Warrant represented hereby (notwithstanding any notations of ownership
or writing hereon made by anyone other than a duly authorized officer of
the
Company or the Warrant Agent) for all purposes and shall not be affected
by any
notice to the contrary, except as provided in the Warrant Agreement. This
Warrant Certificate shall be governed by and construed in accordance with
the
laws of the State of New York without giving effect to conflicts of
laws.
This
Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
16
IN
WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly
executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted
hereon.
Dated:
_____________, 2007
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[SEAL]
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By:
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_______________________________
__________________,
President
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By:
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_______________________________
_________________,
Secretary
|
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COUNTERSIGNED:
|
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Cottonwood
Stock Transfer, as Warrant Agent
|
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By:
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_______________________________
Name:
|
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_______________________________
Title:
|
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_______________________________
|
SUBSCRIPTION
FORM
To
Be
Executed by the Registered Holder
in
Order
to Exercise Warrants
The
undersigned Registered Holder hereby irrevocably elects to exercise Warrants
represented by this Warrant Certificate, and to purchase the securities
issuable
upon the exercise of such Warrants, and requests that certificates for
such
securities shall be issued in name of
PLEASE
INSERT SOCIAL SECURITY
OR
OTHER IDENTIFYING NUMBER
__________________________
__________________________
__________________________
__________________________
(please
print or type name and address)
and
be
delivered to
__________________________
__________________________
__________________________
__________________________
(please
print or type name and address)
and
if
such number of Warrants shall not be all the Warrants evidenced by this
Warrant
Certificate, that a new Warrant Certificate for the balance of such Warrants
be
registered in the name of, and delivered to, the Registered Holder at the
address stated below.
ASSIGNMENT
To
Be
Executed by the Registered Holder
in
Order
to Assign Warrants
FOR
VALUE
RECEIVED, _______________________, hereby sells, assigns and transfers
unto
PLEASE
INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER
_______________________________
_______________________________
_______________________________
_______________________________
(please
print or type name and address)
____________________
of the Warrants represented by this Warrant Certificate, and hereby irrevocably
constitutes and appoints ________________________________ Attorney to transfer
this Warrant Certificate of the Company, with full power of substitution
in the
premises.
| Dated: _______________________________ | X _______________________________ |
| _______________________________ |
THE
SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME
AS WR1TTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE
GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION WITH MEMBERSHIP IN AN APPROVED
SIGNATURE MEDALLION PROGRAM PURSUANT TO SEC RULE 17Ad-15.