WARRANT TO PURCHASE SHARES OF COMMON STOCK OF PACIFIC ALLIANCE CORPORATION EXERCISABLE ON OR BEFORE, AND VOID AFTER
Exhibit
4.1
Pacific
Alliance Corporation
Form
8-K
File No.
000-51777
EXECUTION
COPY
NEITHER
THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR ANY APPLICABLE STATE SECURITIES
LAWS. AS A RESULT, THIS WARRANT AND SUCH SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR EVIDENCE SATISFACTORY TO THE COMPANY OF AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT OR COMPLIANCE WITH RULE 144 UNDER SUCH
ACT. THE TRANSFER OF THIS WARRANT IS FURTHER RESTRICTED AS PROVIDED
HEREIN.
WARRANT
TO PURCHASE SHARES
OF
COMMON STOCK
OF
PACIFIC ALLIANCE CORPORATION
EXERCISABLE
ON OR BEFORE, AND VOID AFTER
5:00 P.M.
UTAH TIME ON JUNE 30, 2014
This
Certifies That Sycamore ventures, LLC, SERIES 1 a Utah limited liability company
(the “Holder”),
or registered assigns, is entitled to subscribe for and purchase from PACIFIC
ALLIANCE CORPORATION, a Delaware corporation (the “Company”), at any
time permitted hereunder after July 1, 2009, and through June 30, 2014 (subject
to the terms and provisions of this Warrant), up to 500,000 shares of the
Company’s common stock at an exercise price of $0.05 per share, subject to
adjustment as provided herein (as adjusted, the “Purchase
Price”).
The
shares that may be acquired upon exercise of this Warrant are referred to herein
as the “Warrant
Shares.” As used herein, the term “Holder” means the Holder
identified in the paragraph above and any party who acquires all or a part of
this Warrant as a registered transferee of such Holder. The term
“Convertible
Securities” means any stock or other securities convertible into, or
exchangeable for, Company common stock. This Warrant is subject
to the following terms and conditions:
1. Exercise. The
rights represented by this Warrant may be exercised by the Holder, in whole or
in part (but not as to a fractional share of common stock), by written Notice of
Exercise (in the form attached hereto) delivered to the Company at its principal
office prior to the expiration of this Warrant and accompanied or preceded by
the surrender of this Warrant, along with a check in payment of the Purchase
Price multiplied by
the number of Warrant Shares being purchased hereunder (unless this Warrant is
being exercised pursuant to Section 9 below). The right to exercise
this Warrant shall vest only upon a change in control of the Company, which
shall be deemed to occur upon any of the following: (a) an
acquisition by one or more individuals, entities or associations of effective
control (whether through legal or beneficial ownership of capital stock, by
contract or otherwise) of more than 33% of the voting securities of the Company,
or (b) a merger, acquisition or consolidation of the Company or any of its
affiliates (specifically including but not limited to a subsidiary), with or
into any other entity or association, or the merger or consolidation of any
other entity or association with or into the Company or any of its affiliates
(specifically including but not limited to a subsidiary).
As used
herein, the term “affiliates” shall have the meaning ascribed to such term under
the Securities Act of 1933.
2. Exchange and
Replacement. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of
this Warrant, the Company will make and deliver a new Warrant of like tenor, in lieu of
this Warrant. This Warrant shall be promptly canceled by the Company
upon the surrender hereof in connection with any exchange or
replacement.
3. Issuance of the Warrant
Shares.
(a) Subject
to the provisions of paragraph (b) below, certificates for the Warrant Shares
purchased hereunder shall be delivered to the Holder within a reasonable time,
not exceeding five business days, after the rights represented by this Warrant
shall have been exercised in accordance with the requirements hereof, and,
unless this Warrant has expired, a new Warrant
representing the right to purchase the number of Warrant Shares, if any, with
respect to which this Warrant shall not then have been exercised shall also be
delivered to the Holder within such time.
(b) Notwithstanding
the foregoing, the Company shall not be required to
recognize any exercise, or deliver any certificate for Warrant Shares upon
attempted exercise, of this Warrant except in accordance with exemptions from
the applicable securities, registration requirements or registrations under
applicable securities laws. The Company shall not be obligated to
effect a registration of the Warrant Shares under federal or state securities
laws unless specifically so provided herein. The Holder agrees to
execute such documents and make such representations, warranties and agreements
as may be required solely to comply with the exemptions relied upon by the
Company, or the registrations made, for the issuance of the Warrant Shares or
their later resale pursuant to a registration statement filed by the
Company.
4. Covenants of the
Company. The Company covenants and agrees that during the
period within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this Warrant a sufficient
number of shares of common stock to provide for the exercise of the rights
represented by this Warrant.
5. Purchase Price and Warrant
Share Adjustments. The provisions of this
Warrant are subject to adjustment as provided in this Section 5.
(a) Subject
to paragraph (b) below, in case the Company shall hereafter: (i) pay
any dividends on any class of stock of the Company payable in common stock or
Convertible Securities; (ii) subdivide its then-outstanding shares of common
stock into a greater number of shares; or (iii) combine outstanding shares of
common stock, by reclassification or otherwise; then, in any such event, the
Purchase Price in effect immediately prior to such event shall (until adjusted
again pursuant hereto) be adjusted immediately after such event to a price
(calculated to the nearest full cent) determined by dividing (A) the number of
shares of common stock outstanding immediately prior to such event, multiplied
by the then-existing Purchase Price, by (B) the total number of shares of common
stock outstanding immediately after such event (including in each case the
maximum number of shares of common stock issuable in respect of any Convertible
Securities), and the resulting quotient shall be the adjusted Purchase
Price.
2
An
adjustment made pursuant to this paragraph shall become effective immediately
after the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification. All calculations under this
paragraph shall be made to the nearest cent or to the nearest 1/100 of a share,
as the case may be.
(b) In
case of any consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the surviving corporation, or in
case of any sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, or in the case of any
statutory exchange of securities with another corporation (including any
exchange effected in connection with a merger of a third corporation into the
Company), there shall be no adjustment under paragraph (a) above but the Holder
of this Warrant then outstanding shall have the right thereafter to convert this
Warrant into the kind and amount of shares of stock and other securities, and any other property,
which he, she or it would have owned or have been entitled to receive
immediately after such consolidation, merger, statutory exchange sale or
conveyance had such Warrant been converted immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or
conveyance. The provisions of this paragraph shall similarly apply to
successive consolidations, mergers, statutory exchanges, sales or
conveyances.
6. No Voting
Rights. This Warrant by itself shall not entitle the Holder to
any voting rights or other rights as a stockholder of the Company.
7. Notice of Transfer of
Warrant or Resale of the Warrant Shares.
(a) By
acceptance hereof, the Holder agrees to give written notice to the Company
before transferring this Warrant or transferring any Warrant Shares of such
▇▇▇▇▇▇’s intention to do so, describing briefly the manner of any proposed
transfer. If in the opinion of counsel to the Company the proposed
transfer may be effected without registration or qualification (under any
federal and state securities laws), the Company, as promptly as practicable,
shall notify the Holder of such opinion, whereupon the Holder shall be entitled
to transfer this Warrant or to dispose of Warrant Shares received upon the
previous exercise of this Warrant, all in accordance with the terms of the notice
delivered by the Holder to the Company; provided, however, that an appropriate
legend may be endorsed on this Warrant or the certificates for such Warrant
Shares respecting restrictions upon transfer thereof necessary or advisable in
the opinion of counsel and satisfactory to the Company to prevent further
transfers which would be in violation of Section 5 of the Securities Act of 1933
(the “Securities
Act”) and applicable state securities laws; and provided further that the
prospective transferee or purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required solely to. comply
with the exemptions relied upon by the Company for the transfer of disposition
of the Warrant or Warrant Shares.
(b) If,
in the opinion of counsel referred to in this Section 7, the proposed transfer
or disposition of this Warrant or such Warrant Shares described in the written
notice given pursuant to this Section 7 may not be effected without registration
or qualification of this Warrant or such Warrant Shares the Company shall
promptly give written notice thereof to the Holder, and the Holder will limit
its activities in respect to such transfer or disposition as, in the opinion of
both such counsel, are permitted by law.
8. No Fractional
Shares. No fractional shares will be issued upon the exercise
hereof.
3
9. Net Issue
Exercise. In lieu of exercising this Warrant pursuant to
Section 1 hereof, the Holder may elect to receive, without the payment of any
additional consideration, a number of Warrant Shares equal to the value (as
determined below) of this Warrant (or the portion thereof being exercised) by
surrender of this Warrant to the Company together with a duly executed Notice of
Exercise (in the form attached hereto) in which the appropriate alternative is
initialed by the Holder. In such event, the Company shall issue to
the Holder the number of Warrant Shares computed by applying the following
formula:
X = Y (A-B)
A
Where:
|
X
|
=
|
the
number of Warrant Shares to be issued to the Holder;
|
|
|
Y
|
=
|
the
number of Warrant Shares subject to this warrant (or, if only a portion of
this Warrant is being exercised, the number of Warrant Sharessubject to
the portion of this Warrant being exercised);
|
|
|
A
|
=
|
the
Fair Market Value of one Warrant Share (at the date of such exercise);
and
|
|
|
B
|
=
|
the
Purchase Price, as adjusted to the date of such
calculation.
|
For
purposes of the above, the “Fair Market Value” of
one share shall equal the average of the closing sale prices of the common stock
quoted on a Nasdaq Stock Market, the AMEX, or NYSE (collectively, a “Stock Exchange”), or
listed in the Over-The-Counter Bulletin Board (or the Pink Sheets) or the
closing price quoted on any national securities exchange on which such
securities are listed, whichever is applicable, for the ten consecutive trading
days immediately prior to the date of determination of Fair Market Value (or, if
no sales take place on any such trading day, the average of the closing bid and
asked prices on such trading day). If, however, the common stock is
not traded on a Stock Exchange or the Over-The-Counter Bulletin Board or Pink
Sheets, the Fair Market Value of a Warrant Share shall be determined in good
faith by the Company’s board of directors.
10. Registration
Rights.
(a) Subject
to paragraph (d) of this Section, each time the Company shall determine to
proceed with the actual preparation and filing of a registration statement under
the Securities Act, in connection with the proposed offer and sale for money of
any of its securities by it (other than a registration on Form S-8, S-4 or any
successor forms or other inappropriate forms), the Company will give written
notice of its determination to Holder. Upon the written request of
Holder given within 30 days after receipt of any such notice from the Company,
the Company will, except as herein provided, cause all Warrant Shares with
respect to which ▇▇▇▇▇▇ has requested registration to be included in such
registration statement, all to the extent requisite to permit the sale or other
disposition by Holder of the shares to be so registered; provided, however, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any such registration initiated by it. If any such
registration pertains to an underwritten offering in whole or in part, the
Company may require that the shares requested for inclusion by Holder pursuant
to this section be included in the underwritten offering on the same terms and
conditions as the securities otherwise being sold through the
underwriters.
4
If, in
the good faith judgment of the managing underwriter of such underwritten
offering, the inclusion of all of the Warrant Shares originally covered by a
request for registration made by Holder would reduce the amount of securities to
be offered by the Company or interfere with the successful marketing of the
securities to be offered by the Company, the number of Warrant Shares owned by
or issuable to Holder and otherwise to be included in the underwritten offering
may be reduced. Any Warrant Shares which are thus excluded from the
underwritten offering shall be withheld from the market by Holder for a period,
not to exceed 180 days, that the managing underwriter reasonably determines is
necessary in order to effect the underwritten offering.
(b) If
and whenever the Company is required by the provisions of Section 10(a) to
effect the registration of any Warrant Shares under the Securities Act, the
Company will:
(i) prepare
and file with the Securities and Exchange Commission (“SEC”) a registration
statement with respect to such shares, and use reasonable commercial efforts to
cause such registration statement to become and remain effective for such period
as may be reasonably necessary to effect the sale of such shares, not to exceed
two years from the date of issuance of the covered Warrant Shares;
(ii) prepare
and file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep such
registration statement effective for such period as may be reasonably necessary
to effect the sale of such securities, not to exceed two years from the date of
issuance of the covered Warrant Shares;
(iii) furnish
to Holder and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as Holder and underwriters
may reasonably request in order to facilitate the public offering of such
securities;
(iv) use
reasonable commercial efforts to register or qualify the securities covered by
such registration statement under such state securities or blue sky laws of such
jurisdictions as the underwriters may reasonably request within 20 days
following the original filing of such registration statement, except that the
Company shall not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified; and
(v) prepare
and promptly file with the SEC any amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.
5
(c) With
respect to any registration of shares pursuant to Section 10(a), the Company
shall bear the following fees, costs and expenses: all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, fees and disbursements of counsel for the
underwriter or underwriters of such securities (if the Company and/or selling
security holders are required to bear such fees and disbursements), all internal
Company expenses, the premiums and other costs of policies of insurance against
liability arising out of the public offering, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered or qualified. Fees and disbursements of counsel and
accountants for Holder, underwriting discounts and commissions and transfer
taxes for Holder and any other expenses incurred by Holder not expressly
included above shall be borne by Holder.
(d) Notwithstanding
anything to the contrary herein, the Company shall not be obligated to register
the resale of any Warrant Shares purchased for cash or purchased to
Section 9 which have been outstanding for more than one year.
In
Witness Whereof, the Company has caused this Warrant to be signed by its duly
authorized officer.
PACIFIC
ALLIANCE CORPORATION:
By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
President
6
NOTICE
OF EXERCISE
(To be
signed upon exercise of Warrant)
The
Undersigned, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, of the shares of common stock of Pacific Alliance Corporation to
which such Warrant relates and herewith makes payment of $______________________
therefor in cash or by certified check (unless the Warrant is being exercised
pursuant to Section 9, in which case the box below indicating such fact is
checked), and requests that the certificate for such shares be issued in the
name of, and be delivered to, _____________________the address for which is set
forth below the signature of the undersigned.
|
|
The
undersigned is exercising the Warrant pursuant to the Net Issue Exercise
provisions of Section 9.
|
Dated:
_______________________, 20____
|
Signature
|
|
|
Name
|
|
|
Address
|
|
|
City,
State, Zip Code
|
|
|
Social
Security or Tax Identification No.
|
7
ASSIGNMENT
FORM
(To be
signed only upon authorized transfer of Warrant)
For Value
Received, the undersigned hereby sells, assigns, and transfers unto
_______________________________ the right to purchase the securities of PACIFIC
ALLIANCE CORPORATION, a Delaware corporation, to which the within Warrant
relates and appoints ______________________, attorney, to transfer said right on
the books of PACIFIC ALLIANCE CORPORATION with full power of substitution in the
premises.
Dated:
_______________________, 20____
|
Signature
|
|
|
Name
|
|
|
Address
|
|
|
City,
State, Zip Code
|
|
|
Social
Security or Tax Identification No.
|
8