THE
SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS
(I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO
THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR QUALIFICATION
UNDER APPLICABLE STATE SECURITIES LAWS.
SUBJECT
TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE
VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE ___, 2011 (THE
“EXPIRATION DATE”).
No.
C-
EMERALD DAIRY INC.
WARRANT TO PURCHASE __________ SHARES OF
COMMON STOCK, PAR VALUE $0.001 PER SHARE
FOR
VALUE RECEIVED, ____________________
(“Warrantholder”), is entitled to purchase,
subject to the provisions of this Warrant, from Emerald Dairy
Inc., a Nevada corporation (“Company”), at any
time not later than 5:00 P.M., Eastern time, on the Expiration
Date (as defined above), at an exercise price per share equal
to $2.61 (the exercise price in effect being herein called the
“Warrant Price”), __________ 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.
This Warrant is being issued pursuant to the Securities
Purchase Agreement, dated as of June __, 2008 (the
“Purchase Agreement”), among the Company and the
initial holders of the Company Warrants (as defined below).
Capitalized terms used herein have the respective meanings
ascribed thereto in the Purchase Agreement unless otherwise
defined herein.
Section
1.
Registration .
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.
Section
2.
Transfers .
As provided herein, this Warrant may be transferred only pursuant
to a registration statement filed under the Securities Act of 1933,
as amended (the “Securities Act”), or an exemption from
such registration. Subject to such restrictions, 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, if required by the
Company, an opinion of its counsel to the effect that such transfer
is exempt from the registration requirements of the Securities Act,
to establish that such transfer is being made in accordance with
the terms hereof, and a new Warrant shall be issued to the
transferee and the surrendered Warrant shall be canceled by the
Company.
Section
3.
Exercise of Warrant .
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 three (3) 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. As used herein, “business
day” means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of
business. Each exercise hereof shall constitute the re-affirmation
by the Warrantholder that the representations and warranties
contained in Section 5 of the Purchase Agreement are true and
correct in all material respects with respect to the Warrantholder
as of the time of such exercise.
Notwithstanding
anything in this Warrant to the contrary, in no event shall
the Holder of this Warrant 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 Holder 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 Holder and its affiliates of more than 9.99%
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 Holder and the
Company;
provided ,
however ,
such waiver may not be effective less than sixty-one (61) days from
the date thereof.
Section
4.
Compliance with the Securities Act of 1933 .
Except as provided in the Purchase Agreement, 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 Company 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
Company 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 shares of Common Stock outstanding immediately after
giving effect to such change and (ii) the number of Warrant
Shares purchasable upon exercise of this Warrant shall be
adjusted by multiplying the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior to
the date on which such change shall become effective by a
fraction, the numerator of which is shall be the Warrant Price
in effect immediately prior to the date on which such change
shall become effective and the denominator of which shall be
the Warrant Price in effect immediately after giving effect to
such change, calculated in accordance with clause (i) above.
Such adjustments shall be made successively whenever any event
listed above shall occur.
(b)
If
any capital reorganization or reclassification of the capital
stock of the Company, cons
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