THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (ACT”). THIS WARRANT AND THE COMMON SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED HEREIN.
ARDMORE HOLDING
CORPORATION
SERIES E WARRANT TO PURCHASE
250,000 SHARES OF
COMMON STOCK, PAR VALUE
$0.001 PER SHARE
FOR VALUE
RECEIVED, Allied Merit International Investment, Inc.,
(“Warrantholder”), is entitled to purchase, subject to
the provisions of this Series E Warrant (the
“Warrant”), from Ardmore Holding Corporation, a
Delaware corporation (“Company”), at any time prior to
5:00 P.M., New York City time on the third anniversary of the date
hereof at an exercise price per share equal to the Warrant Price
(as defined), 250,000 shares (“Warrant Shares”) of the
Company’s Common Stock, par value $0.001 per share
(“Common Stock”). The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time as described
herein. The term “Warrant Price” means $1.08, subject
to adjustment as provided in Section 8 herein.
Section
1. Registration; Representations of
Warrantholder . (a) The
Company shall maintain books for the transfer and registration of
the Warrant. Upon the initial issuance of this Warrant, the Company
shall issue and register the Warrant in the name of the
Warrantholder.
(b) By
acceptance of this Warrant, the Warrantholder represents and
warrants that (i) it either is (y) not a U.S. Person (as such term
is used in Rule 902(k) promulgated under the Act or (z) is an
“accredited investor” as such term is defined in Rule
501 promulgated under the Act, (ii) the Warrants and the Warrant
Shares are and will be acquired for the Warrantholder’s own
account, not as nominee or agent, and not with a view to the resale
or distribution of any part thereof in violation of the Act, and
the Warrantholder has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation
of the Act, (iii) it can bear the economic risk and complete loss
of its investment in the Warrants and Warrant Shares and has such
knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment in
the Warrants and the Warrant Shares and (iv) understands that the
Warrants and Warrant Shares are characterized as “restricted
securities” under the Act inasmuch as they are being acquired
from the Company in a transaction not involving a public offering
and that under the Act and applicable regulations the Warrants and
Warrant Shares may be resold without registration under the Act
only in certain limited circumstances. By acceptance of this
Warrant, the Warrantholder covenants and agrees that it will not
engage in transactions with respect to the Warrants and Warrant
Shares in violation of United States securities laws (including
without limitation Rule 10b-5 promulgated under the Securities
Exchange Act of 1934, as amended) nor on the basis of any material
non-public information regarding the Company or its
subsidiaries.
Section
2. Transfers . The Company shall transfer this Warrant from
time to time upon the books to be maintained by the Company for
that purpose, upon surrender hereof for transfer, properly endorsed
or accompanied by appropriate instructions for transfer and such
other documents as may be reasonably required by the Company
(including without limitation, an opinion of counsel (in form and
substance satisfactory to the Company) to be delivered by counsel
to the Warrantholder to the effect that such transfer is exempt
from registration under the Act and applicable securities
laws).
Section
3. Exercise of Warrant; Limitations on
Exercise . (a) Subject to
the provisions hereof, the Warrantholder may exercise this Warrant,
in whole or in part, at any time prior to its expiration upon
surrender of the Warrant, together with delivery of a duly executed
Warrant exercise form, in the form attached hereto as “
Appendix A ” (the “Exercise Agreement”)
and payment by cash, certified check or wire transfer of funds of
the aggregate Warrant Price for that number of Warrant Shares then
being purchased, to the Company during normal business hours on any
business day at the Company’s principal executive offices (or
such other office or agency of the Company as it may designate by
notice to the Warrantholder). The Warrant Shares so purchased shall
be deemed to be issued to the Warrantholder or the
Warrantholder’s designee, as the record owner of such shares,
as of the close of business on the date on which this Warrant shall
have been surrendered (or the date evidence of loss, theft or
destruction thereof and security or indemnity satisfactory to the
Company has been provided to the Company), the Warrant Price shall
have been paid and the completed Exercise Agreement shall have been
delivered. Certificates for the Warrant Shares so purchased shall
be delivered to the Warrantholder within a reasonable time, not
exceeding seven Business Days, after this Warrant shall have been
so exercised. The certificates so delivered shall be in such
denominations as may be requested by the Warrantholder and shall be
registered in the name of the Warrantholder or such other name as
shall be designated by the Warrantholder, as specified in the
Exercise Agreement. If this Warrant shall have been exercised only
in part, then, unless this Warrant has expired, the Company shall,
at its expense, at the time of delivery of such certificates,
deliver to the Warrantholder a new Warrant representing the right
to purchase the number of shares with respect to which this Warrant
shall not then have been exercised. Each exercise hereof shall
constitute the re-affirmation by the Warrantholder that the
representations and warranties contained in Section1(b) hereof are
true and correct in all respects
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(b)
Notwithstanding anything in this Warrant to the contrary, in no
event shall the Warrantholder be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants
(or portions thereof) upon exercise of which the sum of (i) the
number of shares of Common Stock beneficially owned by the
Warrantholder and its Affiliates (other than shares of Common Stock
which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of
any other securities of the Company (subject to a limitation on
conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon
exercise of the Warrants (or portions thereof) with respect to
which the determination described herein is being made, would
result in beneficial ownership by the Warrantholder and its
Affiliates of more than 4.99% of the outstanding shares of Common
Stock. For purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and
Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the preceding sentence. Notwithstanding anything to the
contrary contained herein, the limitation on exercise of this
Warrant may be waived by written agreement between the
Warrantholder and the Company; provided , however ,
such waiver may not be effective less than sixty-one (61) days from
the date thereof. The term “Affiliates” as used herein
shall have the meaning ascribed to such term by Rule 144
promulgated under the Act.
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Section
4. Compliance with the Securities Act of
1933 . The Company may
cause the legend set forth on the first page of this Warrant to be
set forth on each Warrant, and a similar legend on any security
issued or issuable upon exercise of this Warrant, unless counsel
for the Company is of the opinion as to any such security that such
legend is unnecessary.
Section
5. Payment of Taxes . The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares
issuable upon the exercise of the Warrant; provided,
however , that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for
Warrant Shares in a name other than that of the Warrantholder in
respect of which such shares are issued, and in such case, the
Company shall not be required to issue or deliver any certificate
for Warrant Shares or any Warrant until the person requesting the
same has paid to the Company the amount of such tax or has
established to the Company’s reasonable satisfaction that
such tax has been paid. The Warrantholder shall be responsible for
income taxes due under federal, state or other law, if any such tax
is due.
Section
6. Mutilated or Missing Warrants
. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in
exchange and substitution of and upon surrender and cancellation of
the mutilated Warrant, or in lieu of and substitution for the
Warrant lost, stolen or destroyed, a new Warrant of like tenor and
for the purchase of a like number of Warrant Shares, but only upon
receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of the Warrant, and with respect to a
lost, stolen or destroyed Warrant, reasonable indemnity or bond
with respect thereto, if requested by the Company.
Section
7. Reservation of Common Stock
. The Company shall at all times
reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of providing for the
exercise of the Warrants, such number of shares of Common Stock as
shall from time to time equal the number of shares sufficient to
permit the exercise of the Warrants in accordance with their
respective terms. The Company agrees that all Warrant Shares issued
upon due exercise of the Warrant shall be, at the time of delivery
of the certificates for such Warrant Shares, duly authorized,
validly issued, fully paid and non-assessable shares of Common
Stock of the Company.
Section
8. Adjustments . Subject and pursuant to the provisions of this
Section 8, the Warrant Price and number of Warrant Shares subject
to this Warrant shall be subject to adjustment from time to time as
set forth hereinafter.
(a)
If the Company shall, at any time
or from time to time while this Warrant is outstanding, pay a
dividend or make a distribution on its Common Stock in shares of
Common Stock, subdivide its outstanding shares of Common Stock into
a greater number of shares or combine its outstanding shares of
Common Stock into a smaller number of shares or issue by
reclassification of its outstanding shares of Common Stock any
shares of its capital stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing corporation), then (i) the Warrant Price in effect
immediately prior to the date on which such change shall become
effective shall be adjusted by multiplying such Warrant Price by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such change and the
denominator of which shall be the number of sh
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