THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH WARRANT OR
SHARES UNDERLYING THE WARRANTS NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
(1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT
KINGSTON MINES
LTD.
COMMON STOCK PURCHASE
WARRANT “A-1”
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Number of
Shares: 1,352,390
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Holder:
Arimathea Limited
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Original Issue
Date: May 10, 2008
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Expiration
Date: May 10, 2018
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Exercise Price
per Share: U.S. $.10
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Kingston Mines
Ltd., a company organized and existing under the laws of the State
of Nevada (the “ Company ”),
hereby certifies that, for value received, ARIMATHEA
LIMITED, or its registered assigns (the “
Warrant Holder ”), is entitled,
subject to the terms set forth below, to purchase from the Company
up to One Million Three Hundred Fifty-Two Thousand Three Hundred
and Ninety (1,352,390) shares (as adjusted from time to time as
provided in Section 7, the “ Warrant
Shares ”) of common stock, $.0001 par value (the
“ Common Stock ”), of the
Company at a price of ten cents ($.10) per Warrant Share (as
adjusted from time to time as provided in Section 7, the “
Exercise Price ”), at such dates as
set forth in Section 5 hereof (such dates, the “
Vesting Dates ”) and from time to
time from and after the date thereof and through and including 5:00
p.m. New York City time on May 7, 2018 (the “
Expiration Date ”), and subject to
the following terms and conditions:
1.
Registration of
Warrant . The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the
“ Warrant Register ”), in the
name of the record Warrant Holder hereof from time to time. The
Company may deem and treat the registered Warrant Holder of this
Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Warrant Holder, and for
all other purposes, and the Company shall not be affected by notice
to the contrary.
2.
Investment
Representation . The Warrant Holder by accepting this Warrant
represents that the Warrant Holder is acquiring this Warrant for
its own account or the account of an affiliate for investment
purposes and not with the view to any offering or distribution and
that the Warrant Holder will not sell or otherwise dispose of this
Warrant or the underlying Warrant Shares in violation of applicable
securities laws. The Warrant Holder acknowledges that the
certificates representing any Warrant Shares will bear a legend
indicating that they have not been registered under the United
States Securities Act of 1933, as amended (the “
Securities Act ”) and may not be sold
by the Warrant Holder except pursuant to an effective registration
statement or pursuant to an exemption from registration
requirements of the Securities Act and in accordance with federal
and state securities laws. This Warrant was acquired by the Warrant
Holder pursuant to the exemption from the registration requirements
of the Securities Act afforded by Regulation S thereunder, and the
Warrant Holder acknowledges and covenants that this Warrant may not
be exercised by or on behalf of a Person except as provided in
Regulation S). “ Person ” means
an individual, partnership, firm, limited liability company, trust,
joint venture, association, corporation, or any other legal
entity.
3.
Validity of Warrant and
Issue of Shares . The Company represents and warrants that this
Warrant has been duly authorized and validly issued and warrants
and agrees that all of the Common Stock that may be issued upon the
exercise of the rights represented by this Warrant will, when
issued upon such exercise, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof. The Company further
warrants 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 and reserved a sufficient number of
Common Stock to provide for the exercise of the rights represented
by this Warrant.
4.
Registration of Transfers
and Exchange of Warrants .
a. Subject to compliance with the legend set forth
on the face of this Warrant, the Company shall register the
transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant with the Form of Assignment attached
hereto duly completed and signed, to the Company at the office
specified in or pursuant to Section 13. Upon any such registration
or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a
“ New Warrant ”), evidencing
the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the
transferring Warrant Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder
of a Warrant.
b. This Warrant is exchangeable, upon the
surrender hereof by the Warrant Holder to the office of the Company
specified in or pursuant to Section 13 for one or more New
Warrants, evidencing in the aggregate the right to purchase the
number of Warrant Shares which may then be purchased hereunder. Any
such New Warrant will be dated the date of such
exchange.
5.
Exercise of Warrants .
a. This Warrant shall vest and become exercisable
upon the attainment of the terms and conditions set forth on
Exhibit A .
b. Upon surrender of this Warrant with the Form of
Election to Purchase attached hereto on Exhibit
B , duly completed and signed to the Company, at its
address set forth in Section 13, and upon payment and delivery of
the Exercise Price per Warrant Share multiplied by the number of
Warrant Shares that the Warrant Holder intends to purchase
hereunder, in lawful money of the United States of America, in cash
or by certified or official bank check or checks, to the Company,
all as specified by the Warrant Holder in the Form of Election to
Purchase, the Company shall promptly (but in no event later than 7
business days after the Date of Exercise (as defined herein)) issue
or cause to be issued and cause to be delivered to or upon the
written order of the Warrant Holder and in such name or names as
the Warrant Holder may designate (subject to the restrictions on
transfer described in the legend set forth on the face of this
Warrant), a certificate for the Warrant Shares issuable upon such
exercise, with such restrictive legend as required by the
Securities Act. Any person so designated by the Warrant Holder to
receive Warrant Shares shall be deemed to have become holder of
record of such Warrant Shares as of the Date of Exercise of this
Warrant.
c.
A “ Date of
Exercise ” means the date on which the Company
shall have received (i) this Warrant (or any New Warrant, as
applicable), with the Form of Election to Purchase attached hereto
(or attached to such New Warrant) appropriately completed and duly
signed, and (ii) payment of the Exercise Price for the number of
Warrant Shares so indicated by the Warrant Holder to be
purchased.
d. This Warrant shall be exercisable at any time
after the Vesting Dates and from time to time for such number of
Warrant Shares as is indicated in the attached Form of Election To
Purchase. If less than all of the Warrant Shares which may be
purchased under this Warrant are exercised at any time, the Company
shall issue or cause to be issued, at its expense, a New Warrant
evidencing the right to purchase the remaining number of Warrant
Shares for which no exercise has been evidenced by this
Warrant.
e. (i) Notwithstanding
anything contained herein to the contrary, the holder of this
Warrant may, at its election exercised in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “
Net Number ” of shares of Common
Stock determined according to the following formula (a “
Cashless Exercise ”):
Net Number = (A
x (B - C))/B
(ii) For purposes of the foregoing
formula:
A= the total
number shares with respect to which this Warrant is then being
exercised.
B= the last
reported sale price (as reported by Bloomberg) of the Common Stock
on the trading day immediately preceding the date of the Exercise
Notice.
C= the Warrant
Exercise Price then in effect at the time of such
exercise.
f. The holder of this Warrant agrees not to
exercise this Warrant for a period of twelve (12) months. The
holder of this Warrant also agrees not to elect a Cashless Exercise
so long as there is an effective registration statement for the
Warrant Shares.
6.
Maximum
Exercise . The Warrant Holder shall not be entitled to
exercise this Warrant on a Date of Exercise
in connection with that number of shares of Common Stock which
would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Warrant Holder and its affiliates
on an exercise date, and (ii) the number of shares of Common Stock
issuable upon the exercise of this Warrant with respect to which
the determination of this limitation is being made on an exercise
date, which would result in beneficial ownership by the Warrant
Holder and its affiliates of more than 4.9% of the outstanding
shares of Common Stock on such date. This Section 6 may be waived
or amended only with the consent of the Holder and the consent of
holders of a majority of the shares of outstanding Common Stock of
the Company. For the 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-3 thereunder.
7.
Adjustment of Exercise
Price and Number of Shares . The character of the shares of stock or other
securities at the time issuable upon exercise of this Warrant and
the Exercise Price therefore, are subject to adjustment upon the
occurrence of the following events, and all such adjustments shall
be cumulative, provided however, that no adjustment of the number
of shares of Common Stock or other securities shall occur unless
and until such cumulative adjustment shall equal twenty percent
(20%) of the number of shares of Common Stock or other securities
at the time issuable upon exercise of this Warrant:
a.
Adjustment for Stock Splits,
Stock Dividends, Recapitalizations, Etc.
T