This Warrant Agreement involves
Title: COMMON STOCK PURCHASE WARRANT AGREEMENT
Governing Law: New Jersey Date: 2/11/2008
COMMON STOCK PURCHASE WARRANT AGREEMENT
This Common Stock Purchase Warrant Agreement is made as of , 200_, by and between Gold Ribbon Bio Energy Holdings Inc. and Registrar and Transfer Company (the “Warrant Agent”).
WHEREAS, the Company has determined to issue and deliver Common Stock Purchase Warrants (the “Warrants”) entitling the holders of the Warrants to purchase an aggregate of up to 12,000,000 Common Shares of the Company;
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they will be issued and may be exercised, and the respective rights, limitations and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things necessary have been done and performed to make the Warrant, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided in this Agreement, the valid, binding and legal obligation of the Company, and to authorize the execution and delivery of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto agree as follows:
Execution and Countersignature of Warrants
1.01. Execution and Countersignature of Warrants .
(a) Each Warrant, whenever issued, shall be dated , 200_, shall be substantially in the form of Exhibit A attached hereto and incorporated hereby, and shall be signed by, or bear the facsimile signature of, the President or a Vice President and of the Secretary or an Assistant Secretary of the Company. If any officer whose facsimile signature has been placed upon any Warrant ceases to be that officer before the Warrant is issued, the Warrant may be issued with the same effect as if the officer had not ceased to be that officer on the date of issuance.
(b) No Warrant may be exercised until it has been countersigned by the Warrant Agent. The Warrant Agent shall countersign a Warrant only if:
(i) the Warrant is to be issued in exchange or substitution for one or more previously countersigned Warrants, as provided in this Agreement, or
(ii) the Company instructs the Warrant Agent to do so.
(c) Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant is invalid and of no effect.
Warrant Price, Duration and Exercise of Warrants
2.01. Warrant Price . Each Warrant, when countersigned by the Warrant Agent, shall entitle the holder of the Warrant, subject to the provisions of this Agreement, to purchase from the Company two hundred (200) Common Shares for each Warrant as stated on the face of the Warrant at the price of five dollars ($5.00) per share until such time prior to the expiration date as described in the Warrant, as up to 60,000 warrants have been exercised and the Company has received up to $60,000,000 in the process, subject to the adjustments provided in Article III of this Agreement. The Warrant Price as used herein shall refer to the price per share at which Common Shares may be purchased at the time a Warrant is exercised.
2.02. Duration of Warrants . Warrants may be exercised only on or before the earlier date on which 60,000 Warrants have been issued or the date that is the last Friday of the seventh calendar month after the date of issue of the Warrants (the “Expiration Date”). Notwithstanding the foregoing, if notice has been given as provided in Article III hereof in connection with the liquidation, dissolution or winding up of the Company, the Warrants shall expire at the close of business on the third full business day before the date specified in the notice as the record date for determining holders of stock entitled to receive any distribution upon the liquidation, dissolution or winding up; provided, however, that such date is at least five (5) business days after the date of the notice.
2.03. Exercise of Warrants .
(a) A Warrant, when countersigned by the Warrant Agent, may be exercised by surrendering it at the office of the Warrant Agent in Cranford, New Jersey, or at the office of its successor as warrant agent, prior to the close of business of the Warrant Agent on the Expiration Date or such earlier date as may be applicable with the exercise form set forth in the Warrant duly completed and executed, and by paying in full, in lawful money of the United States, the Warrant Price for each full Common Share as to which the Warrant is exercised, and any applicable taxes. Notwithstanding the foregoing, the Company is only required to use reasonable efforts which will permit the purchase and sale of the Common Shares underlying the Warrants and is not required to qualify the Warrants or the Common Shares underlying the Warrants in any state.
(b) As soon as practicable after the exercise of any Warrant, the Company shall issue to, or upon the order of, the holder or holders of the Warrant, in whatever name or names the Warrant holder may direct, a certificate or certificates for the number of full Common Shares to which the holder or holders are entitled, registered in the name or names specified by the holder or holders, and, if the Warrant is not exercised in full (except with respect to a remaining fraction of a share), a new countersigned Warrant for the number of shares (including fractional shares) as to which the Warrant has not been exercised. All Warrants surrendered shall be canceled by the Company.
(c) If the same holder of one or more Warrants exercises the purchase rights under the Warrants in the same transaction in a manner that leaves the right to purchase a fraction of a share unexercised, the Company shall pay a cash adjustment with respect to that final fraction in an amount equal to the same fraction of the current market price of one Common Share on the business day that
next precedes the day of exercise reduced by the same fraction of the Warrant Price of one Common Share on that day. For this purpose, the current market price shall be the price of one Common Share on the principal stock exchange on which the Common Shares is traded on the next preceding business day, or, if no sales take place on that day or if the Common Shares are not then listed on a stock exchange, the average of the reported bid and asked prices on that day in the over-the-counter market.
(d) All Common Shares issued upon the exercise of a Warrant shall be duly and validly issued, fully paid and nonassessable, and the Company shall pay all taxes in connection with the issuance of such shares. The Company shall not be required to pay any tax imposed in connection with any transfer involved in the issuance of a certificate for Common Shares in any name other than that of the holder or holders of the Warrant surrendered in connection with the purchase of the shares. In this case the Company shall not be required to issue or deliver any stock certificate until the tax has been paid.
(e) Each person in whose name any certificate for Common Shares is issued shall be deemed to have become the holder of record of the shares on the date on which the Warrant was surrendered and payment of the Warrant Price and any applicable taxes was made, irrespective of the date of delivery of the certificate, except that, if the date of surrender and payment is a date when the stock transfer books of the Company are closed, a person shall be deemed to have become the holder of shares at the close of business on the next succeeding date on which the stock transfer books are open. Except as otherwise provided in Article III, each person holding any shares received upon exercise of Warrants shall be entitled to receive only dividends or distributions which are payable to holders of record on or after the date on which the person is deemed to become the holder of record of such shares.
3.01. Stock Dividends - Split-Ups . If after the date of this Agreement, and subject to the provisions of Section 3.07 hereof, the number of outstanding Common Shares of the Company is increased by a stock dividend payable in Common Shares or by a split-up of Common Shares, then, on the day following the date fixed for the determination of holders of Common Shares entitled to receive the stock dividend or split-up, the number of shares issuable on exercise of each Warrant shall be increased in proportion to the increase in outstanding shares and the then applicable Warrant Price shall be correspondingly decreased.
3.02. Aggregation of Shares . If after the date of this Agreement, and subject to the provisions of Section 3.07 hereof, the number of outstanding Common Shares of the Company is decreased by a combination or reclassification of Common Shares, then, after the effective date of the combination or reclassification, the number of Common Shares issuable on exercise of each Warrant shall be decreased in proportion to the decrease in outstanding Common Shares and the then applicable Warrant Price shall be correspondingly increased.
3.03. Special Stock Dividends . If after the date of this Agreement, and subject to the provisions of Section 3.07 hereof, shares of any class of stock of the Company (other than Common Shares) are issued by way of a stock dividend on outstanding Common
Shares, then, commencing with the day following the date fixed for the determination of holders of Common Shares entitled to receive the stock dividend, in addition to any Common Share receivable upon exercise of the Warrants, the Warrant holders upon exercise of the Warrants shall be entitled to receive, as nearly as practicable, the same number of shares of dividend stock, plus any shares issued upon any subsequent change, replacement, subdivision or combination of the stock dividend, to which the holders would have been entitled if their Warrants would have been exercised immediately prior to the stock dividend. No adjustment in the Warrant Price shall be made merely by virtue of the happening of any event specified in this Section 3.03.
3.04. Reorganization, Etc . If after the date of this Agreement any capital reorganization or reclassification of the Common Shares of the Company, or consolidation or merger of the Company with another corporation, or sale of all or substantially all of its assets to another corporation is effective, then, as a condition of the reorganization, reclassification, consolidation, merger or sale, lawful and fair provision shall be made whereby the Warrant holders after the transaction shall have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Common Shares of the Company purchasable and receivable immediately prior to the transaction upon the exercise of the rights represented by the Warrants, the shares of stock, securities or assets that may be issued or payable with respect to or in exchange for a number of outstanding Common Shares equal to the number of Common Shares purchasable and receivable immediately prior to the transaction upon the exercise of the rights represented by the Warrants if the reorganization, reclassification, consolidation, merger or sale had not taken place. Appropriate provisions shall be made in connection with a reorganization, reclassification, consolidation, merger or sale with respect to the rights and interests of the Warrant holders to the end that the provision of this Agreement (including, without limitation, provisions for adjustments of the Warrant Price and of the number of shares purchasable upon exercise of the Warrants) shall immediately after the transaction be applicable as nearly as possible to any shares of stock, securities or assets deliverable immediately after the transaction upon the exercise of the Warrants. The Company shall not effect any consolidation, merger or sale unless, prior to the consummation of the transaction, the successor corporation (if other than the Company) resulting from the consolidation or merger, or the corporation purchasing the assets, assumes by written instrument executed and delivered to the Warrant Agent the obligation to deliver to the Warrant holders the shares of stock, securities or assets in accordance with the foregoing provisions that the holders may be entitled to purchase.
3.05. Notice of Change in Warrant . Upon any adjustment of the Warrant Price or the number of shares issuable on exercise of a Warrant, then and in each case the Company shall give written notice of the adjustment to the Warrant Agent. The notice shall state the Warrant Price resulting from the adjustment and the increase or decrease, if any, in the number of shares purchasable at that price upon exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which the calculation is based. The Company shall mail or cause to be mailed to each holder of Warrants at the address registered with the Company, a notice setting forth such change or adjustment. Failure to file a statement or to give notice, or any defect in a statement or notice, shall not affect the legality or validity of the changes or adjustments.
3.06. Other Notices . In case at any time:
(a) the Company pays any dividends payable in stock upon its Common Shares or makes any distributions (other than regular cash dividends) to the holders of its Common Shares;