NETWORK CN INC. WARRANT
Exhibit
10.4
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
144
UNDER SUCH ACT.
Void
after
November
11, 2009
NETWORK
CN INC. WARRANT
This
Warrant is issued to Wei An
Developments Limited (the "Holder"), pursuant to the terms of that certain
Note
and Warrant Purchase Agreement (the "Purchase Agreement"), dated as of November
12, 2007, between the Holder and Network CN Inc. (the “Company”).
1. Purchase
of Shares. Subject to the terms and conditions hereinafter set
forth and as set forth in the Purchase Agreement, the Holder is entitled, upon
surrender of this Warrant at the principal office of the Company (or at such
other place as the Company shall notify the Holder in writing), to purchase
from
the Company up to Two Hundred and Fifty Thousand (250,000) shares of the common
stock (“Common Stock”) of the Company (the “Warrant Shares”).
2. Exercise
Period. The Holder may exercise this Warrant, in whole or in
part, as the case may be, by surrendering it to the Company at its principal
office, with a duly executed Subscription Form (in substantially the form
attached hereto).
3. Exercise
Price. The initial exercise price for the Warrant Shares shall be
$2.30 per share.
4. Method
of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 2 above, the Holder may exercise,
in whole or in part, the purchase rights evidenced hereby. Such
exercise shall be effected by:
(a) the
surrender of the Warrant, together with a duly executed copy of the form of
subscription attached hereto, to the Secretary the Company at its principal
offices; and
(b) the payment
in cash (by check or wire transfer) to the Company of an amount equal to
the applicable aggregate Exercise Price for the number of Warrant Shares being
purchased.
5. Certificates
for Warrant Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Warrant
Shares so purchased shall be issued as soon as practicable thereafter, and
in
any event within three (3) business days of the delivery of the subscription
notice, together with cash in lieu of any fraction of a Warrant Share equal
to
such fraction of the current Fair Market Value of one Warrant Share as of the
date of exercise.
6. Issuance
of Warrant Shares. The Company covenants that the Warrant Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof, and free from any and all restrictions
on
transfer other those imposed by applicable federal and state securities
laws.
7. No
Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares which would, otherwise be
issuable, the Company shall round up the number of Warrant Shares issued to
the
Holder to the nearest whole number.
8. No
Stockholder Rights. Prior to exercise of this Warrant, the holder
hereof shall not, by reason of by being a holder hereof, be entitled to any
rights of a stockholder with respect to the Warrant Shares, including (without
limitation) the right to vote such Warrant Shares, receive dividends or other
distributions thereon, exercise preemptive rights or be notified of stockholder
meetings, and such holder shall not be entitled to any notice or other
communication concerning the business or affairs of the Company.
9. Market
Standoff. The Holder hereby agrees that if reasonably so
requested by the Company or any representative of the underwriters (the
"Managing Underwriter") in connection with any registration of the offering
of
any securities of the Company under the Act, such holder shall not sell or
otherwise transfer any securities of the Company during the 180-day period
(the
"Market Standoff Period") following the effective date of a registration
statement of the Company filed under the Act. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.
10. Partial
Exercise; Effective Date of Exercise. In case of any partial
exercise of this Warrant, the Company shall cancel this Warrant upon surrender
hereof and shall execute and deliver a new Warrant of like tenor and date for
the balance of the Warrant Shares purchasable hereunder. This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided
above.
11. Loss
or Mutilation. Upon receipt of evidence reasonably satisfactory
to the Company of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of indemnity reasonably satisfactory to it,
and
(in the case of mutilation) upon surrender and cancellation of this Warrant,
the
Company will execute and deliver in lieu thereof a new Warrant of like tenor
as
the lost, stolen, destroyed or mutilated Warrant.
12. Taxes. The
Holder shall be responsible for payment of all taxes in connection with the
issue and delivery of the Warrant Shares upon exercise of the
Warrant.
13. Successors
and Assigns. The terms and provisions of this Warrant and the
Agreement shall inure to the benefit of, and be binding upon, the Company and
the Holder and their respective successors and assigns.
14. Amendments
and Waivers. Any term of this Warrant may be amended and the
observance of any term of this Warrant may be waived (either generally or in
a
particular instance
and either retroactively or prospectively), with the written consent of the
Company and the Holder.
15. Governing
Law. This Warrant shall be governed by the laws of the State of
California without giving effect to any principles of choice or conflict
laws.
16. Notices. All
Notices under this Warrant shall be given in accordance with the
Agreement.
17. Severability. If
any term, provision, covenant or restriction of this Warrant is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this Warrant shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
18. Saturdays,
Sundays and Holidays. If the expiration date of this Warrant
falls on a Saturday, Sunday or legal holiday, the expiration date shall be
automatically extended until 5:00 p.m. California time the next business
day.
19. No
Impairment. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets
or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action
as
may be necessary or appropriate in order to protect the rights of the Holder
against impairment.
20. Restrictions
on Transfer. This Warrant may not be sold, pledged, or otherwise transferred
without the prior written consent of the Company.
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By:
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Chief
Executive Officer
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SUBSCRIPTION
Attention:
Corporate Secretary
The
Holder hereby elects to purchase,
pursuant to the provisions of the Warrant to purchase shares of capital stock
issued by Network CN Inc. and held by the undersigned, _____ shares
of Common Stock of Network CN Inc.
Payment
of the exercise price per share
required under such Warrant accompanies
this
Subscription in cash in the amount of $__________.
The
undersigned hereby represents and
warrants that it is acquiring such shares for its own account for investment
purposes only, and not for resale or with a view to distribution of such shares
or any part thereof. Shares and cash paid in lieu of fractional
shares should be issued to the undersigned at the address below.
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Holder
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Date:
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Address:
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