The securities represented by this Warrant and issuable upon
exercise hereof have not been registered under the Securities Act
of 1933, as amended (the "Act"), or under the provisions of any
applicable state securities laws, but have been acquired by the
registered holder hereof for purposes of investment and in reliance
on statutory exemptions under the Act, and under any applicable
state securities laws. These securities and the securities issued
upon exercise hereof may not be sold, pledged, transferred or
assigned, nor may this Warrant be exercised, except in a
transaction which is exempt under the provisions of the Act and any
applicable state securities laws or pursuant to an effective
registration statement.
COMMON STOCK PURCHASE WARRANT
| Date of Issuance: _________ __,
2008 |
Certificate No. W-__
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For
value received, Legend Media, Inc., a Nevada corporation (the
"
Company "),
hereby grants to Maoming China Fund, a limited partnership, or its
permitted transferees and assigns ("
Warrantholder "),
the right to purchase from the Company a total of ________ shares
of the Company's common stock, par value $0.001 per share ("
Common Stock "),
at a price per share of equal to $2.50 (the "
Initial Exercise Price ").
The exercise price and number of Warrant Shares (and the amount and
kind of other securities) for which this Warrant is exercisable
shall be subject to adjustment as provided in Section 2 hereof.
This Warrant is being issued in connection with the Securities
Purchase Agreement between Warrantholder and the Company’s
dated as of March 31, 2008 (the "
Purchase Agreement ").
Certain capitalized terms used herein are defined in Section 4
hereof.
This
Warrant is subject to the following provisions:
SECTION
1.
Exercise of Warrant .
(a)
Terms of Warrants; Exercise Period .
Subject to the terms of this Agreement, the Registered Holder shall
have the right, commencing on the date hereof and expiring on the
three (3) year anniversary hereof (the "
Expiration Date "),
to exercise this Warrant, in whole or in part, and receive from the
Company the number of Warrant Shares which the Registered Holder
may at the time be entitled to receive on either: (1) exercise of
this Warrant and payment of the Aggregate Exercise Price then in
effect for the Warrant Shares (“
Cash Exercise ”),
or (2) exercise of this Warrant by Cashless Exercise, as defined in
Section 1(b). To the extent not exercised prior to the Expiration
Date, this Warrant shall become void and all rights thereunder and
all rights in respect thereof under this Agreement shall cease as
of such time.
(b)
Cashless Exercise .
In lieu of exercising the Warrant by Cash Exercise, at any time
after the first anniversary of this Warrant if the Warrant Shares
have not been registered with the Securities and Exchange
Commission, the Registered Holder may satisfy its obligation to pay
the Aggregate Exercise Price for the Warrant Shares through a
“cashless exercise,” in which event the Company shall
issue to the Registered Holder the number of Warrant Shares
determined as follows:
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X
= Y [(A-B)/A]
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where:
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X
= the number of Warrant Shares to be issued to the
Holder.
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Y
= the number of Warrant Shares with respect to which this
Warrant is being exercised.
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A
= the arithmetic average of the Last Sale Price of the Common
Stock for the five Trading Days immediately prior to (but not
including) the Exercise Time.
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B
= the Exercise Price.
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(c)
Exercise Procedure .
(i)
This
Warrant shall be deemed to have been exer-cised on the date
specified in a written notice from the Registered Holder to
the Company (the "
Exercise Time ")
and within three Business Days following the Exercise Time, the
Registered Holder shall deliver the following to the
Company:
(A)
a
completed Exercise Notice, as described in Section 1(d)
below, in which Registered Holder shall provide all
information requested therein including whether the warrant is
being exercised by Cash Exercise or Cashless
Exercise;
(B)
this
Warrant;
(C)
if
this Warrant is not registered in the name of the Registered
Holder, an Assignment or Assignments in the form set forth
in
Exhibit II hereto
evidencing the assignment of this Warrant to the Registered Holder,
in which case the Registered Holder shall have complied with the
provisions set forth in Section 6 hereof; and
(D)
if
the Warrant is being exercised by Cash Exercise, a check
payable to the Company in an amount equal to the product of
the Exercise Price (as such term is de-fined in Section 2)
multiplied by the number of Warrant Shares being purchased
upon such exercise (the "
Aggregate Exercise Price ").
(ii)
Certificates
for Warrant Shares purchased upon exercise of this Warrant
shall be delivered by the Company to the Registered Holder
within five Business Days after the date of the Exercise Time.
Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Company shall
prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant
that have not expired or been exercised and shall, within such
five day period, deliver such new Warrant to the Person
designated for delivery in the Exercise Notice.
(iii)
The
Warrant Shares issuable upon the exercise of this Warrant
shall be deemed to have been issued to the Registered Holder
at the Exercise Time, and the Registered Holder shall be
deemed for all purposes to have become the record holder of
such Warrant Shares at the Exercise Time.
(iv)
The
Company shall not close its books against the transfer of this
Warrant or of any Warrant Shares issued or issuable upon the
exercise of this Warrant in any manner which interferes with
the timely exercise of this Warrant.
(v)
The
Company shall assist and cooperate with the Registered Holder
or any Registered Holder required to make any governmental
filings or obtain any governmental approvals prior to or
in connection with any exercise of this Warrant.
(vi)
The
Company shall at all times reserve and keep available out of
its authorized but unissued capital stock, solely for the
purpose of issuance upon the exercise of this Warrant, the
maximum number of Warrant Shares issuable upon the exercise of
this Warrant. All Warrant Shares which are so issuable shall,
when issued and upon the payment of the Exercise Price
therefor, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The
Company shall take all such ac-tions as may be necessary to
assure that all such Warrant Shares may be so issued without
violation by the Company of any applica-ble law or
governmen-tal regulation or any requirements of any domestic
securities exchange upon which securities of the Company may
be listed (except for official notice of issuance which shall
be immediately deliv-ered by the Company upon each such
issuance).
(d)
Exercise Notice .
Upon any exercise of this Warrant, the Registered Holder shall
deliver an Exercise Notice in the form set forth in
Exhibit I hereto,
except that if the Warrant Shares are not to be issued in the name
of the Person in whose name this Warrant is registered, the
Exercise Notice shall also state the name of the Person to whom the
certificates for the Warrant Shares are to be issued, and if the
number of Warrant Shares to be issued does not include all the
Warrant Shares purchasable or which can be acquired by Cashless
Exercise here-under, it shall also state the name of the Person to
whom a new Warrant for the unexer-cised portion of the rights
hereunder is to be issued. Such Exercise Notice shall be dated the
actual date of execution thereof.
SECTION
2.
Adjustment of Exercise Price and Number of Shares
.
In order to prevent dilution of the rights granted under this
Warrant, the Initial Exercise Price shall be subject to adjustment
from time to time as provided in this Section 2 (such price or
such price as last adjusted pursuant to the terms hereof, as the
case may be, is herein called the "
Exercise Price "),
and the number of Warrant Shares obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as
provided in this Section 2.
(a)
Reorganization, Reclassification, Consolida-tion, Merger or
Sale .
In case of any reclassification, capital reorganization,
consolidation, merger, sale of all or substan-tially all of the
Company's assets to another Person or any other change in the
Common Stock of the Company, other than as a result of a
subdivision, combination, or stock dividend provided for in
Section 2(b) below (any of which, a "
Change Event "),
then, as a condition of such Change Event, lawful provision shall
be made, and duly executed documents evidencing the same from the
Company or its successor shall be delivered to the Registered
Holder, so that the Registered Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a
total price equal to that payable upon the exercise of this Warrant
(subject to adjustment of the Exercise Price as provided in Section
2), the kind and amount of shares of stock and other securities and
property receivable in connection with such Change Event by a
holder of the same number of shares of Common Stock as were
purchasable by the Registered Holder immediately prior to such
Change Event. In any such case appropriate provisions shall be made
with respect to the rights and interest of the Registered Holder so
that the provisions hereof shall thereafter be applicable with
respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall
be made to the purchase price per share payable hereunder, provided
the aggregate purchase price shall remain the same.
(b)
Subdivisions, Combinations and Other Issuances
.
If the Company shall at any time prior to the expiration of this
Warrant (i) subdivide its Common Stock, by split-up or otherwise,
or combine its Common Stock, or (ii) issue additional shares of its
Common Stock or other equity securities as a d
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