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NEITHER THIS SECURITY NOR THE SECURITIES INTO
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
COMMON STOCK PURCHASE WARRANTS
To Purchase ________ Shares of Common Stock
of
TERRA NOSTRA RESOURCES CORP.
No. W-__
August 28,
2007
THIS COMMON STOCK PURCHASE WARRANT (the “
Warrant ”) CERTIFIES that, for value received,
___________________ (the “ Holder ”), is
entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time
on or after the date of this Warrant and on or prior to the
fifth anniversary of the date of this Warrant (the “
Termination Date ”) but not thereafter, to
subscribe for and purchase from Terra Nostra Resources Corp., a
Nevada corporation (the “ Company ”), up to
_______ shares (the “ Warrant Shares ”) of
the Common Stock, par value $0.001 per share, of the Company
(the “ Common Stock ”). The purchase price
per share of Common Stock (the “ Exercise Price
”) under this Warrant shall be US$1.75. The Exercise Price
and the number of Warrant Shares for which the Warrant is
exercisable shall be subject to adjustment as provided herein.
Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Securities Purchase
Agreement (the “ Securities Purchase Agreement
”), among the Company and the Purchaser parties signatory
thereto (the date of such Agreement, the “ Closing
Date ”).
1.
Title to Warrant . Prior to the
Termination Date and subject to compliance with applicable laws,
including transfer restrictions imposed by applicable securities
laws, and Section 7 of this Warrant, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office
or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together
with the Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.
2
Authorization of Shares . The
Company covenants that all Warrant Shares which may be issued
from time to time upon the exercise of the purchase rights
represented by this Warrant in accordance with the terms of this
Warrant, including the payment of the exercise price for such
Warrant Shares, will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).
3.
Exercise of Warrant .
(a)
Subject to Section 3(c), exercise of the
purchase rights represented by this Warrant may be made at any
time or times on or after the date hereof but on or before 5
p.m., New York City time, on the Termination Date by delivery to
the Company of a duly executed Notice of
Exercise Form annexed hereto (or such other
office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder
appearing on the books of the Company) and surrender of this
Warrant, together with payment of the aggregate Exercise Price
of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank in
immediately available funds. Certificates for shares purchased
hereunder shall be delivered to the Holder within seven (7)
Trading Days from the delivery to the Company of the Notice of
Exercise Form, surrender of this Warrant and payment of the
aggregate Exercise Price as set forth above (“ Warrant
Share Delivery Date ”). This Warrant shall be deemed
to have been exercised on the later of the date the Notice of
Exercise is delivered to the Company and the date the Exercise
Price is received by the Company. The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder,
if any, pursuant to Section 5 prior to the issuance of such
shares, have been paid. If the Company fails to deliver to the
Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 3(a) by the end of business (New
York City time) on the seventh Trading Day following the Warrant
Share Delivery Date, then the Holder will have the right to
rescind such exercise. Nothing herein shall limit a Holder's
right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to
the Company's failure to timely deliver certificates
representing shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
(b)
If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver
to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
(c)
The Company may accelerate the Termination Date
by delivery of a notice to the Holder (an “
Acceleration Notice ”) in the manner specified in
Section 16(d) to a date not less than 30 days from the date of
such Acceleration Notice, if (i) a registration statement under
the Securities Act covering the Warrant Shares is effective and
available for use by the Holder on the date of such Acceleration
Notice, (ii) the closing price of the Common Stock on the stock
exchange or automated quotation system on which the Common Stock
is then principally traded (the “ Principal Market
”) for each of the twenty (20) consecutive trading days on
such Principal Market (each, a “ Trading Day
”) immediately preceding the date of the Acceleration
Notice is at least 300% of the Exercise Price in effect on such
Trading Day and (iii) the average daily trading volume for the
Common Stock during such 20 consecutive Trading Day period on
such Principal Market exceeded 500,000 shares. If the
Termination Date is accelerated in the manner described in this
Section 3(c) and the registration statement referred to in
clause (i) of this Section 3(c) has remained effective and
available for use by the Holder, then this Warrant will
automatically expire at 5 p.m., New York City time, on the date
specified in the Acceleration Notice.
4.
No Fractional Shares or Scrip .
No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the
Exercise Price.
5.
Charges, Taxes and Expenses .
Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may
be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the Company may require,
as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
6.
Closing of Books .
The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.
7.
Transfer, Division and Combination .
(a)
Subject to compliance with any applicable
securities laws and the conditions set forth in Sections 1 and
7(e) hereof and to the provisions of the Securities Purchase
Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company, together with a
written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or
attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a
new Warrant or Warrants in the name of the assignee or assignees
and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.
Notwithstanding the foregoing, the Holder will not
voluntarily and knowingly assign or transfer this Warrant or the
Warrant Shares to any direct competitor of the Company without
the Company’s prior written consent.
(b)
This Warrant may be divided or combined with
other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be
involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c)
The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or
Warrants under this Section 7.
(d)
The Company agrees to maintain, at its aforesaid
office, books for the registration and the registration of
transfer of the Warrants.
(e)
The Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written
opinion of counsel reasonably acceptable to the Company (which
opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect
that such transfer may be made without registration under the
Securities Act and under applicable state securities or blue sky
laws, (ii) that the holder or transferee execute and deliver to
the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act or a qualified
institutional buyer as defined in Rule 144A(a) under the
Securities Act.
8.
No Rights as Shareholder until Exercise
.
This Warrant does not entitle the Holder to any
voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant
and the payment of the aggregate Exercise Price, the Warrant
Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of
business on the later
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