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Exhibit 4.4
THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH
HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF MAY
2, 2008, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT
OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE,
CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS,
THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS
SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH
ACT.
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Right to
Purchase
5,555,555 Shares
of
Common Stock, par
value
$.0001 per
share
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SERIES B STOCK PURCHASE WARRANT
THIS CERTIFIES THAT , for value received, STEVEN POSNER IRREVOCABLE
TRUST U/T/A or its registered assigns, is entitled to
purchase from FIRSTWAY ENTERPRISES,
INC., a Delaware corporation (the “Company”), at
any time or from time to time during the period specified in
Paragraph 2 hereof, 5,555,555 fully paid and nonassessable
shares of the Company’s Common Stock, par value $.0001 per
share (the “Common Stock”), at an exercise price per
share equal to $.30 (the “Exercise Price”). The term
“Warrant Shares,” as used herein, refers to the shares
of Common Stock purchasable hereunder. The Warrant
Shares and the Exercise Price are subject to adjustment as provided
in Paragraph 4 hereof. The term “Warrants”
means this Warrant and the other warrants issued pursuant to that
certain Securities Purchase Agreement, dated May 2, 2008, by and
among the Company and the Buyers listed on the execution page
thereof (the “Securities Purchase
Agreement”).
This
Warrant is subject to the following terms, provisions, and
conditions:
1.
Manner of
Exercise; Issuance of Certificates; Payment for
Shares.
This
Warrant may be exercised by the holder hereof, in whole or in
part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the
“Exercise Agreement”), 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 holder hereof), and upon payment to the Company in
cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price
for the Warrant Shares specified in the Exercise
Agreement.
If
the resale of the Warrant Shares by the holder is not
registered pursuant to an effective registration statement
under the Securities Act of 1933, as amended by November 2,
2009, this Warrant (or any portion thereof) may be exercised
by presentation and surrender of this Warrant to the Company
at its principal executive offices with a written notice of
the holder’s intention to effect a cashless exercise,
including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the
terms hereof (a “Cashless
Exercise”). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares
of Common Stock determined by multiplying the number of
Warrant Shares to which it would otherwise be entitled by a
fraction, the numerator of which shall be the difference
between the then current Market Price per share of the Common
Stock and the Exercise Price, and the denominator
of which shall be the then current Market Price per share of
Common Stock. For example, if the holder is
exercising 100,000 Warrants with a per Warrant exercise price
of $0.75 per share through a cashless exercise when the Common
Stock’s current Market Price per share is $2.00 per
share, then upon such Cashless Exercise the holder will
receive 62,500 shares of Common Stock. Market Price
per share shall be calculated as the average closing sales
price (or closing bid price) of the Company's Common Stock for
the prior five trading days.
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
(including the Note (as defined in the Securities Purchase
Agreement)) 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 4.999% 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.
The 4.999% limitation may only be waived by the holder of the
warrant upon 61 days written notice to the
Company.
2.
Period of
Exercise .
This
Warrant is exercisable at any time or from time to time on or
after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement and
before 6:00 p.m., New York, New York time on the fourth (4
th
) anniversary of the date of issuance (the “Exercise
Period”).
3.
Certain
Agreements of the Company .
The
Company hereby covenants and agrees as follows:
(a)
Shares to be Fully Paid . All
Warrant Shares will, upon issuance in accordance with the terms of
this Warrant, be validly issued, fully paid, and nonassessable and
free from all taxes, liens, and charges with respect to the issue
thereof.
(b)
Reservation of Shares . During
the Exercise Period, the Company shall at all times have
authorized, and reserved for the purpose of issuance upon exercise
of this Warrant, a sufficient number of shares of Common Stock
to provide for the exercise of this Warrant.
4.
Antidilution
Provisions .
During
the Exercise Period, the Exercise Price and the number of
Warrant Shares shall be subject to adjustment from time to
time as provided in this Paragraph 4.
In
the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise
Price shall be rounded up to the nearest cent.
(a)
Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock . Except as
otherwise provided in Paragraphs 4(c) and 4(e) hereof or with
respect to an Excluded Issuance (as defined in the Note), if and
whenever on or after the date of issuance of this Warrant, the
Company issues or sells, or in accordance with Paragraph 4(b)
hereof is deemed to have issued or sold, any shares of Common Stock
for no consideration or for a consideration per share (before
deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the
Conversion Price (as defined in the Note) on the date of issuance
(a “Dilutive Issuance”), then immediately upon the
Dilutive Issuance, the Exercise Price will be reduced to a price
equal to a product of (x) the Exercise Price in effect immediately
prior to such issue or sale and (y) the quotient of (1) the sum of
(I) the product derived by multiplying the Exercise Price in effect
immediately prior to such time by the number of shares of Common
Stock Deemed Outstanding immediately prior to such issue or sale
plus (II) the consideration received by the Company upon such issue
or sale, by (2) the product derived by multiplying (I) the Exercise
Price in effect immediately prior to such time by (II) the number
of shares of common stock deemed outstanding immediately after such
issue or sale. The issuance by the Company of securities
convertible or exchangeable into shares of Common Stock at
conversion or exchange price less than the Conversion Price shall
be deemed a Dilutive Issuance resulting in a reduction in the
Exercise price as calculated herein. For example, if the
Company has 50,000,000 shares of common stock outstanding, the
Exercise Price is $.24, and the Company subsequently sells
10,000,000 shares of common stock at $.10, then the Exercise Price
will be reduced to $.1667 based on the above formula as
follows:
$0.24
x ($.24 x
50,000,000) + ($.10 x 10,000,000) = $.2166
($.24 x
60,000,000)
(b)
Subdivision or Combination of Common Stock . If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise)
the shares of Common Stock acquirable hereunder into a greater
number of shares, then, after the date of record for effecting such
subdivision, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced. If the
Company at any time combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise)
the shares of Common Stock acquirable hereunder into a smaller
number of shares, then, after the date of record for effecting such
combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.
(c)
Adjustment in Number of Shares . Upon each
adjustment of the Exercise Price pursuant to the provisions of this
Paragraph 4, the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted by multiplying a number
equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise
Price.
(d)
Consolidation, Merger or Sale . In case
of any consolidation of the Company with, or merger of the Company
into any other corporation, or in case of any sale or conveyance of
all or substantially all of the assets of the Company other than in
connection with a plan of complete liquidation of the Company, then
as a condition of such consolidation, merger or sale or conveyance,
ade
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