LIONS GATE LIGHTING CORP. FORM OF COMMON STOCK WARRANT
NEITHER
THIS SECURITY NOR ANY SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THIS
SECURITY HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY U.S. STATE OR OTHER JURISDICTION
OR ANY EXCHANGE OR SELF-REGULATORY ORGANIZATION, IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED,
AND SUCH OTHER LAWS AND REQUIREMENTS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR LISTING OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
SUCH REGISTRATION AND/OR LISTING REQUIREMENTS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH WILL BE
REASONABLY ACCEPTABLE TO THE COMPANY.
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FORM
OF COMMON STOCK WARRANT
No_________
_______________,
2010
Lions
Gate Lighting Corp., a Nevada corporation (the “Company”), hereby certifies
that ______________________________, its permissible transferees, designees,
successors and assigns (collectively, the “Holder”), for value received,
is entitled to purchase from the Company at any time and from time to time
commencing on the date first appearing above (the “Issuance Date”), up to and
through 12:01a.m. (EST) on the date five (5) years from the Issuance Date (the
“Termination Date”) up
to _______ shares (each, a “Share” and collectively the
“Shares”) of the
Company’s common stock, at an exercise price per Share equal to $2.00 (the
“Exercise
Price”). The number of Shares purchasable hereunder and the
Exercise Price are subject to adjustment as provided in Section 4
hereof.
This
Warrant is being issued as part of units (the “Units”) issued by the Company
in a private placement pursuant to the Company’s Confidential Private Placement
Memorandum dated December 24, 2009, as amended and/or supplemented (the “PPM”) and accompanying
Subscription Agreement (the “Agreement”).
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1.
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Method of Exercise;
Payment.
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(a) Exercise. The
purchase rights represented by this Warrant may be exercised, for cash only, by
the Holder, in whole or in part, at any time, or from time to time, by the
surrender of this Warrant (with the notice of exercise form (the "Notice of Exercise") attached
hereto as Exhibit A duly executed) at the principal office of the Company,
and by payment to the Company of an amount equal to the Exercise Price
multiplied by the number of the Shares being purchased, which amount may be
paid, at the election of the Holder, by wire transfer or certified check payable
to the order of the Company. The person or persons in whose name(s) any
certificate(s) representing Shares shall be issuable upon exercise of this
Warrant shall be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the Shares represented
thereby (and such Shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is
exercised.
(b) Stock
Certificates. In the event of any exercise of the rights
represented by this Warrant, as promptly as practicable after this Warrant is
surrendered and delivered to the Company along with all other appropriate
documentation on or after the date of exercise and in any event within ten (10)
days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of Shares issuable upon such exercise. In the event this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of Shares for
which this Warrant may then be exercised.
(c) Taxes. The
issuance of the Shares upon the exercise of this Warrant, and the delivery of
certificates or other instruments representing such Shares, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance.
2. Warrant.
(a) Transfer and
Replacement. At any time prior to the exercise hereof, this
Warrant may be exchanged upon presentation and surrender to the Company, alone
or with other warrants of like tenor of different denominations registered in
the name of the same Holder, for another warrant or warrants of like tenor in
the name of such Holder exercisable for the aggregate number of Shares as the
warrant or warrants surrendered.
(b) Replacement of
Warrant. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft, or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver in lieu thereof,
a new Warrant of like tenor.
(c) Cancellation. Payment of
Expenses. Upon the surrender of this Warrant in connection with any
transfer, exchange or replacement as provided in this Section 2, this Warrant
shall be promptly canceled by the Company. The Holder shall pay all
taxes and all other expenses (including legal expenses, if any, incurred by the
Holder or transferees) and charges payable in connection with the preparation,
execution and delivery of Warrants pursuant to this Section 2.
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(d) Warrant
Register. The Company shall maintain, at its principal
executive offices (or at the offices of the transfer agent for the Warrant or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant (the “Warrant Register”), in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
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3.
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Rights and Obligations
of Holders of this
Warrant.
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The
Holder of this Warrant shall not, by virtue hereof, be entitled to any rights of
a shareholder in the Company, either at law or in
equity; provided, however, that in the event any
certificate representing shares of Common Stock or other securities is issued to
the holder hereof upon exercise of this Warrant, such holder shall, for all
purposes, be deemed to have become the holder of record of such Common Stock on
the date on which this Warrant, together with a duly executed Notice of
Exercise, was surrendered and payment of the aggregate Exercise Price was made,
irrespective of the date of delivery of such Common Stock
certificate.
4. Adjustments.
(a) Stock Dividends, Reclassifications,
Recapitalizations, Etc. While this Warrant is outstanding, in
the event the Company: (i) pays a dividend in Common Stock or
makes a distribution in Common Stock, (ii) subdivides its outstanding
Common Stock into a greater number of shares, (iii) combines its
outstanding Common Stock into a smaller number of shares or (iv) increases
or decreases the number of shares of Common Stock outstanding by
reclassification of its Common Stock (including a recapitalization in connection
with a consolidation or merger in which the Company is the continuing
corporation), then (1) the Exercise Price on the record date of such
division or distribution or the effective date of such action shall be adjusted
by multiplying such Exercise Price by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and
the denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and (2) the number of shares of Common Stock
for which this Warrant may be exercised immediately before such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
Exercise Price immediately before such event and the denominator of which is the
Exercise Price immediately after such event.
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(b) Combination:
Liquidation. While this Warrant is outstanding, (i) In
the event of a Combination (as defined below), each Holder shall have the right
to receive upon exercise of the Warrant the kind and amount of shares of capital
stock or other securities or property which such Holder would have been entitled
to receive upon or as a result of such Combination had such Warrant been
exercised immediately prior to such event (subject to further adjustment in
accordance with the terms hereof). Unless paragraph (ii) is
applicable to a Combination, the Company shall provide that the surviving or
acquiring Person (as defined below) (the “Successor Company”) in such
Combination will assume by written instrument the obligations under this
Section 4 and the obligations to deliver to the Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to acquire. “Combination” means an event in
which the Company consolidates with, mergers with or into, or sells all or
substantially all of its assets to another Person, where “Person” means any individual,
corporation, partnership, joint venture, limited liability company, association,
joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity; (ii) In the event
of (x) a Combination where consideration to the holders of Common Stock in
exchange for their shares is payable solely in cash or (y) the dissolution,
liquidation or winding-up of the Company, the Holders shall be entitled to
receive, upon surrender of their Warrant, distributions on an equal basis with
the holders of Common Stock or other securities issuable upon exercise of the
Warrant, as if the Warrant had been exercised immediately prior to such event,
less the Exercise Price. In case of any Combination described in this
Section 4, the surviving or acquiring Person and, in the event of any
dissolution, liquidation or winding-up of the Company, the Company, shall
deposit promptly with an agent or trustee for the benefit of the Holders of the
funds, if any, necessary to pay to the Holders the amounts to which they are
entitled as described above. After such funds and the surrendered
Warrant are received, the Company is required to deliver a check in such amount
as is appropriate (or, in the case or consideration other than cash, such other
consideration as is appropriate) to such Person or Persons as it may be directed
in writing by the Holders surrendering such Warrant.
(c) Notice of
Adjustment. Whenever the Exercise Price or the number of
shares of Common Stock and other property, if any, issuable upon exercise of the
Warrant is adjusted, as provided in this Section 4, the Company shall deliver to
the holders of the Warrant in accordance with Section 10 a certificate of
the Company’s Chief Financial Officer setting forth, in reasonable detail, the
event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which (i) the Board of
Directors determined the fair value of any evidences of indebtedness, other
securities or property or warrants, options or other subscription or purchase
rights and (ii) the Current Market Value (as defined below) of the Common Stock
was determined, if either of such determinations were required), and specifying
the Exercise Price and number of shares of Common Stock issuable upon exercise
of the Warrant after giving effect to such adjustment.
(d) Notice of Certain
Transactions. While this Warrant is outstanding, in the event
that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
non-cash dividend or distribution to the holders of its Common Stock,
(b) to offer the holders of its Common Stock rights to subscribe for or to
purchase any securities convertible into shares of Common Stock or shares of
stock of any class or any other securities, rights or options, (c) to
effect any capital reorganization, reclassification, consolidation or merger
affecting the class of Common Stock, as a whole, or (d) to effect the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
the Company shall, within the time limits specified below, send to each Holder a
notice of such proposed action or offer. Such notice shall be mailed
to the Holders at their addresses as they appear in the Warrant Register, which
shall specify the record date for the purposes of such dividend, distribution or
rights, or the date such issuance or event is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to be
fixed, and shall briefly indicate the effect of such action on the Common Stock
and on the number and kind of any other shares of stock and on other property,
if any, and the number of shares of Common Stock and other property, if any,
issuable upon exercise of each Warrant and the Exercise Price after giving
effect to any adjustment pursuant to Section 4 which
will be required as a result of such action. Such notice shall be
given as promptly as possible and (x) in the case of any action covered by
clause (a) or (b) above, at least ten (10) days prior to the record date for
determining holders of the Common Stock for purposes of such action or (y) in
the case of any other such action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of Common Stock, whichever shall be the earlier.
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(e) Current Market
Value. The “Current Market Value” per
share of Common Stock or any other security at any date means (i) if the
security is not registered under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)
and/or traded on a national securities exchange, quotation system or bulletin
board, (a) the value of the security, determined in good faith by the Board of
Directors of the Company and certified in a board resolution, based on the most
recently completed arm’s-length transaction between the Company and a Person
other than an affiliate of the Company or between any two such Persons and the
closing of which occurs on such date or shall have occurred within the six-month
period preceding such date, or (b) if no such transaction shall have occurred
within the six-month period, the value of the security as determined by an
independent financial expert or an agreed upon financial valuation model or (ii)
if the security is registered under the Exchange Act and/or traded on a national
securities exchange, quotation system or bulletin board, the average of the
daily closing bid prices (or the equivalent in an over-the-counter
market) for each day on which the Common Stock is traded for any period on the
principal securities exchange or other securities market on which the common
Stock is being traded (each, a “Trading Day”) during the
period commencing thirty (30) days before such date and ending on the date one
(1) day prior to such date.
5. Fractional
Shares.
In lieu
of issuance of a fractional share upon any exercise hereunder, the Company will
issue an additional whole share in lieu of that fractional share, calculated on
the basis of the Exercise Price.
6. Legends.
Prior to
issuance of the shares of Common Stock underlying this Warrant, all such
certificates representing such shares shall bear a restrictive legend to the
effect that the Shares represented by such certificate have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and that the
Shares may not be sold or transferred in the absence of such registration or an
exemption therefrom, such legend to be substantially in the form of the
bold-face language appearing at the top of Page 1 of this
Warrant. The Holder confirms on the date of exercise of this Warrant
the representations and warranties in Section 1.3 of the Agreement.
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7. Disposition of Warrants or
Shares.
The
Holder of this Warrant, each transferee hereof and any holder and transferee of
any Shares, by his or its acceptance thereof, agrees that no public distribution
of Warrants or Shares will be made in violation of the provisions of the
Securities Act. Furthermore, it shall be a condition to the transfer
of this Warrant that any transferee thereof deliver to the Company his or its
written agreement to accept and be bound by all of the terms and conditions
contained in this Warrant.
8. Merger or
Consolidation.
The
Company will not merge or consolidate with or into any other corporation, or
sell or otherwise transfer its property, assets and business substantially as an
entirety to another corporation, unless the corporation resulting from such
merger or consolidation (if not the Company), or such transferee corporation, as
the case may be, shall expressly assume, by supplemental agreement reasonably
satisfactory in form and substance to the Holder, the due and punctual
performance and observance of each and every covenant and condition of this
Warrant to be performed and observed by the Company.
9. Notices.
Except as
otherwise specified herein to the contrary, all notices, requests, demands and
other communications required or desired to be given hereunder shall only be
effective if given in writing by certified or registered U.S. mail with return
receipt requested and postage prepaid; by private overnight delivery service
(e.g. Federal Express); by facsimile transmission (if no original documents or
instruments must accompany the notice); or by personal delivery. Any
such notice shall be deemed to have been given (a) on the business day
immediately following the mailing thereof, if mailed by certified or registered
U.S. mail as specified above; (b) on the business day immediately following
deposit with a private overnight delivery service if sent by said service; (c)
upon receipt of confirmation of transmission if sent by facsimile transmission;
or (d) upon personal delivery of the notice. All such notices shall
be sent to the following addresses (or to such other address or addresses as a
party may have advised the other in the manner provided in this
Section 9):
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If to the Company:
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▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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26th Floor, Suite 2640
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New York, NY 10174
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Attn: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
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▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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New York, NY 10005
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Notwithstanding
the time of effectiveness of notices set forth in this Section 10, a Notice of
Exercise shall not be deemed effectively given until it has been duly completed
and submitted to the Company together with this original Warrant and payment of
the Exercise Price in a manner set forth in this Section 10.
11. Limitation on
Exercise.
Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the
extent necessary to insure that, following such exercise (or other issuance),
the total number of shares of Common Stock then beneficially owned by such
Holder and its affiliates and any other persons whose beneficial ownership of
Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 4.99%
of the total number of issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such exercise). For
such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. The holder may waive the restriction in whole or in part
upon and effective after 61 days prior written notice to the Company. This
provision shall not restrict the number of shares of Common Stock which a Holder
may receive or beneficially own in order to determine the amount of
securities or other consideration that such Holder may receive in the event
of a merger or other business combination or reclassification involving the
Company.
12. Governing
Law.
This
Agreement shall be governed by and construed solely and exclusively in
accordance with and pursuant to the internal laws of the State of New York
without regard to the conflicts of laws principles thereof. The parties hereto
hereby expressly and irrevocably agree that any suit or proceeding arising
directly and/or indirectly pursuant to or under this Agreement shall be brought
solely in a federal or state court located in the City, County and State of New
York. By its execution hereof, the parties hereby covenant and irrevocably
submit to the in personam jurisdiction of the
federal and state courts located in the City, County and State of New York and
agree that any process in any such action may be served upon any of them
personally, or by certified mail or registered mail upon them or their agent,
return receipt requested, with the same full force and effect as if personally
served upon them in New York City. The parties hereto expressly and irrevocably
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense or lack of in
personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment
from the other party hereto of all of its reasonable counsel fees and
disbursements.
13. Successors and
Assigns.
This
Warrant shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
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14. Headings.
The
headings of various sections of this Warrant have been inserted for reference
only and shall not affect the meaning or construction of any of the provisions
hereof.
15. Severability.
If any
provision of this Warrant is held to be unenforceable under applicable law, such
provision shall be excluded from this Warrant, and the balance hereof shall be
interpreted as if such provision were so excluded.
16. Modification and
Waiver.
This
Warrant and any provision hereof may be amended, waived, discharged or
terminated only by an instrument in writing signed by the Company and the
Holder.
17. Specific
Enforcement.
The
Company and the Holder acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Warrant were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Warrant and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which either of them may be entitled by law or
equity.
18. Assignment.
This
Warrant may be transferred or assigned, in whole or in part, at any time and
from time to time by the then Holder by submitting this Warrant to the Company
together with a duly executed Assignment in substantially the form and substance
of the Form of Assignment which accompanies this Warrant
as Exhibit B hereto, and, upon the Company’s receipt
thereof, and in any event, within five (5) business days thereafter, the Company
shall issue a Warrant to the Holder to evidence that portion of this Warrant, if
any as shall not have been so transferred or assigned.
(Signature
Page Immediately Follows)
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IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed, manually or by facsimile,
by one of its officers thereunto duly authorized.
Date:
__________________, 2010
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EXHIBIT A
NOTICE OF
EXERCISE
To Be
Executed by the Holder
in Order
to Exercise the Warrant
The
undersigned Holder hereby elects to purchase _______ Shares pursuant to the
attached Warrant, and requests that certificates for securities be issued in the
name of:
__________________________________________________________
(Please
type or print name and address)
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Social
Security or Tax Identification Number)
and delivered to:_________________________________________________________________________________________________________________________
________.
(Please
type or print name and address if different from above)
If such
number of Shares being purchased hereby shall not be all the Shares that may be
purchased pursuant to the attached Warrant, a new Warrant for the balance of
such Shares shall be registered in the name of, and delivered to, the Holder at
the address set forth below.
In full
payment of the purchase price with respect to the Shares purchased and transfer
taxes, if any, the undersigned hereby tenders payment of $__________ by check,
money order or wire transfer payable in United States currency to the order of
[________________].
The
Holder hereby confirms as of the date hereof the representations and warranties
in Section 1.3 of the Agreement.
HOLDER:
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By:
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Name:
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Title:
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Address:
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Dated:
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EXHIBIT
B
FORM OF
ASSIGNMENT
(To be
signed only on transfer of Warrant)
For value
received, the undersigned hereby sells, assigns, and transfers unto
_____________ the right represented by the within Warrant to purchase ______
shares of Common Stock of Lions Gate Lighting Corp., a Nevada corporation, to
which the within Warrant relates, and appoints ____________________ Attorney to
transfer such right on the books of Lions Gate Lighting Corp., a Nevada
corporation, with full power of substitution of premises.
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Dated:
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By:
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Name:
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Title:
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(signature
must conform to name
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of
holder as specified on the fact of the Warrant)
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Address:
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Signed in
the presence of:
Dated:
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