Exhibit
4.2
THIS
WARRANT AND THE SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
SERIES J WARRANT TO
PURCHASE
SHARES OF SERIES B CONVERTIBLE
PREFERRED STOCK
OF
WUHAN GENERAL GROUP (CHINA),
INC.
(formerly known as UNITED NATIONAL
FILM CORPORATION)
Expires November 7, 2008
|
No.: W-J-07-
__
|
Number of Shares:
___________
|
Date of
Issuance: February 7, 2007
FOR VALUE RECEIVED, the undersigned, Wuhan
General Group (China), Inc. (formerly known as United National Film
Corporation), a Nevada corporation (together with its successors
and assigns, the " Issuer "), hereby certifies that
_______________________________ or its registered assigns is
entitled to subscribe for and purchase, during the Term (as
hereinafter defined), up to ____________________________________
(_____________) shares (subject to adjustment as hereinafter
provided) of the duly authorized, validly issued, fully paid and
non-assessable Series B Convertible Preferred Stock of the Issuer,
at an exercise price per share equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth. Capitalized terms used in this
Warrant and not otherwise defined herein shall have the respective
meanings specified in Section 8 hereof.
1. Term .
The term of this Warrant shall commence on February 7, 2007 and
shall expire at 6:00 p.m., Eastern Time, on November 7, 2008 (such
period being the " Term ").
2. Method of Exercise; Payment; Issuance
of New Warrant; Transfer and Exchange .
(a) Time of Exercise . The purchase rights represented by this
Warrant may be exercised in whole or in part during the
Term.
(b) Method of Exercise . The Holder hereof may exercise this Warrant,
in whole or in part, by the surrender of this Warrant (with the
exercise form attached hereto duly executed) at the principal
office of the Issuer, and by the payment to the Issuer of an amount
of consideration therefor equal to the Warrant Price in effect on
the date of such exercise multiplied by the number of shares of
Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election by certified or
official bank check or by wire transfer to an account designated by
the Issuer .
(c) Issuance of Stock Certificates
. In the event of any exercise of
this Warrant in accordance with and subject to the terms and
conditions hereof, certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to
the Holder hereof within a reasonable time (the “ Delivery
Date “), and the Holder hereof shall be deemed for all
purposes to be the holder of the shares of Warrant Stock so
purchased as of the date of such exercise. The Holder shall deliver
this original Warrant, or an indemnification reasonably acceptable
to the Issuer undertaking with respect to such Warrant in the case
of its loss, theft or destruction, at such time that this Warrant
is fully exercised. With respect to partial exercises of this
Warrant, the Issuer shall keep written records for the Holder of
the number of shares of Warrant Stock exercised as of each date of
exercise.
(d) Transferability of Warrant
. Subject to Section 2(f) hereof,
this Warrant may be transferred by a Holder, in whole or in part,
without the consent of the Issuer. If transferred pursuant to this
paragraph, this Warrant may be transferred on the books of the
Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of
the Issuer, properly endorsed (by the Holder executing an
assignment in the form attached hereto) and upon payment of any
necessary transfer tax or other governmental charge imposed upon
such transfer. This Warrant is exchangeable at the principal office
of the Issuer for Warrants to purchase the same aggregate number of
shares of Warrant Stock, each new Warrant to represent the right to
purchase such number of shares of Warrant Stock as the Holder
hereof shall designate at the time of such exchange. All Warrants
issued on transfers or exchanges shall be dated the Original Issue
Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant
thereto.
(e) Continuing Rights of Holder
. The Issuer will, at the time of or
at any time after each exercise of this Warrant, upon the request
of the Holder hereof, acknowledge in writing the extent, if any, of
its continuing obligation to afford to such Holder all rights to
which such Holder shall continue to be entitled after such exercise
in accordance with the terms of this Warrant, provided that
if any such Holder shall fail to make any such request, the failure
shall not affect the continuing obligation of the Issuer to afford
such rights to such Holder.
(f) Compliance with Securities Laws.
(i) The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant and the shares of
Warrant Stock to be issued upon exercise hereof are being acquired
solely for the Holder's own account and not as a nominee for any
other party, and for investment, and that the Holder will not
offer, sell or otherwise dispose of this Warrant or any shares of
Warrant Stock to be issued upon exercise hereof except pursuant to
an effective registration statement, or an exemption from
registration, under the Securities Act and any applicable state
securities laws.
(ii) Except as provided in paragraph (iii)
below, this Warrant and all certificates representing shares of
Warrant Stock issued upon exercise hereof shall be stamped or
imprinted with a legend in substantially the following
form:
THIS WARRANT
AND THE SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
(iii) The Issuer agrees to reissue this
Warrant or certificates representing any of the Warrant Stock,
without the legend set forth above if at such time, prior to making
any transfer of any such securities, the Holder shall give written
notice to the Issuer describing the manner and terms of such
transfer. Such proposed transfer will not be effected until: (a)
either (i) the Issuer has received an opinion of counsel reasonably
satisfactory to the Issuer, to the effect that the registration of
such securities under the Securities Act is not required in
connection with such proposed transfer, (ii) a registration
statement under the Securities Act covering such proposed
disposition has been filed by the Issuer with the Securities and
Exchange Commission and has become effective under the Securities
Act, (iii) the Issuer has received other evidence reasonably
satisfactory to the Issuer that such registration and qualification
under the Securities Act and state securities laws are not
required, or (iv) the Holder provides the Issuer with reasonable
assurances that such security can be sold pursuant to Rule 144
under the Securities Act; and (b) either (i) the Issuer has
received an opinion of counsel reasonably satisfactory to the
Issuer, to the effect that registration or qualification under the
securities or "blue sky" laws of any state is not required in
connection with such proposed disposition, or (ii) compliance with
applicable state securities or "blue sky" laws has been effected or
a valid exemption exists with respect thereto. The Issuer will
respond to any such notice from a holder within three (3) Trading
Days. In the case of any proposed transfer under this Section 2(f),
the Issuer will use reasonable efforts to comply with any such
applicable state securities or "blue sky" laws, but shall in no
event be required, (x) to qualify to do business in any state where
it is not then qualified, (y) to take any action that would subject
it to tax or to the general service of process in any state where
it is not then subject, or (z) to comply with state securities or
“blue sky” laws of any state for which registration by
coordination is unavailable to the Issuer. The restrictions on
transfer contained in this Section 2(f) shall be in addition to,
and not by way of limitation of, any other restrictions on transfer
contained in any other section of this Warrant.
(g) Accredited Investor Status
. In no event may the Holder
exercise this Warrant in whole or in part unless the Holder is an
“accredited investor” as defined in Regulation D under
the Securities Act.
3. Stock Fully Paid; Reservation and Listing of
Shares; Covenants .
(a) Stock Fully Paid . The Issuer represents, warrants, covenants
and agrees that all shares of Warrant Stock which may be issued
upon the exercise of this Warrant or otherwise hereunder will, when
issued in accordance with the terms of this Warrant, be duly
authorized, validly issued, fully paid and non-assessable and free
from all taxes, liens and charges created by or through the Issuer.
The Issuer further covenants and agrees that during the period
within which this Warrant may be exercised, the Issuer will at all
times have authorized and reserved for the purpose of the issuance
upon exercise of this Warrant a number of authorized but unissued
shares of Series B Convertible Preferred Stock equal to at least
one hundred percent (100%) of the number of shares of Series B
Convertible Preferred Stock issuable upon exercise of this
Warrant.
(b) Reservation . If any shares of Series B Convertible
Preferred Stock required to be reserved for issuance upon exercise
of this Warrant or as otherwise provided hereunder require
registration or qualification with any Governmental Authority under
any federal or state law before such shares may be so issued, the
Issuer will in good faith use its best efforts as expeditiously as
possible at its expense to cause such shares to be duly registered
or qualified. If the Issuer shall list any shares of Series B
Convertible Preferred Stock on any securities exchange or market it
will, at its expense, list thereon, and maintain and increase when
necessary such listing, of, all shares of Warrant Stock from time
to time issued upon exercise of this Warrant or as otherwise
provided hereunder (provided that such Warrant Stock has been
registered pursuant to a registration statement under the
Securities Act then in effect), and, to the extent permissible
under the applicable securities exchange rules, all unissued shares
of Warrant Stock which are at any time issuable hereunder, so long
as any shares of Series B Convertible Preferred Stock shall be so
listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities
which the Holder of this Warrant shall be entitled to receive upon
the exercise of this Warrant if at the time any securities of the
same class shall be listed on such securities exchange or market by
the Issuer.
(c) Covenants . The Issuer shall not by any action including,
without limitation, amending the Articles of Incorporation or the
by-laws of the Issuer, or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder hereof
against dilution (to the extent specifically provided herein) or
impairment. Without limiting the generality of the foregoing, the
Issuer will (i) not permit the par value, if any, of its Common
Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Articles of Incorporation or by-laws of
the Issuer in any manner that would adversely affect the rights of
the Holders of the Warrants, (iii) take all such action as may be
reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Series B
Convertible Preferred Stock, free and clear of any liens, claims,
encumbrances and restrictions (other than as provided herein) upon
the exercise of this Warrant, and (iv) use its best efforts to
obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its
obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants
. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft,
destruction or mutilation of any Warrant and, in the case of any
such loss, theft or destruction, upon receipt of indemnity or
security satisfactory to the Issuer or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the
Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same number of shares of
Common Stock.
4. Adjustment of Warrant Price
. The price at which such shares of
Warrant Stock may be purchased upon exercise of this Warrant shall
be subject to adjustment from time to time as set forth in this
Section 4. The Issuer shall give the Holder notice of any event
described below which requires an adjustment pursuant to this
Section 4 in accordance with the notice provisions set forth in
Section 5.
(a) Recapitalization, Reorganization,
Reclassification, Consolidation, Merger or Sale
.
(i) In case the Issuer after the Original Issue
Date shall do any of the following (each, a " Triggering
Event "): (a) consolidate or merge with or into any other
Person and the Issuer shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) permit any
other Person to consolidate with or merge into the Issuer and the
Issuer shall be the continuing or surviving Person but, in
connection with such consolidation or merger, any Capital Stock of
the Issuer shall be changed into or exchanged for Securities of any
other Person or cash or any other property, or (c) transfer all or
substantially all of its properties or assets to any other Person,
or (d) effect a capital reorganization or reclassification of its
Capital Stock, then, and in the case of each such Triggering Event,
proper provision shall be made to the Warrant Price and the number
of shares of Warrant Stock that may be purchased upon exercise of
this Warrant so that, upon the basis and the terms and in the
manner provided in this Warrant, the Holder of this Warrant shall
be entitled upon the exercise hereof at any time after the
consummation of such Triggering Event, to the extent this Warrant
is not exercised prior to such Triggering Event, to receive at the
Warrant Price in effect at the time immediately prior to the
consummation of such Triggering Event, in lieu of the Series B
Convertible Preferred Stock issuable upon such exercise of this
Warrant prior to such Triggering Event, the Securities, cash and
property to which such Holder would have been entitled upon the
consummation of such Triggering Event if such Holder had exercised
the rights represented by this Warrant immediately prior thereto
(including the right of a shareholder to elect the type of
consideration it will receive upon a Triggering Event), subject to
adjustments (subsequent to such corporate action) as nearly
equivalent as possible to the adjustments provided for elsewhere in
this Section 4. Immediately upon the occurrence of a Triggering
Event, the Issuer shall notify the Holder in writing of such
Triggering Event Upon the Holder’s request, the continuing or
surviving corporation as a result of such Triggering Event shall
issue to the Holder a new warrant of like tenor evidencing the
Holder’s rights hereunder.
(ii) In the event that the Holder has elected not to
exercise this Warrant prior to the consummation of a Triggering
Event, so long as the surviving entity pursuant to any Triggering
Event is a company that has a class of equity securities registered
pursuant to the Securities Exchange Act of 1934, as amended, and
its common stock is listed or quoted on a national securities
exchange, national automated quotation system or the OTC Bulletin
Board, the surviving entity and/or each Person (other than the
Issuer) which may be required to deliver any Securities, cash or
property upon the exercise of this Warrant as provided herein shall
assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of
the Issuer under this Warrant (and if the Issuer shall survive the
consummation of such Triggering Event, such assumption shall be in
addition to, and shall not release the Issuer from, any continuing
obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to such Holder such Securities, cash or
property as, in accordance with the foregoing provisions of this
subsection (a), such Holder shall be entitled to receive, and the
surviving entity and/or each such Person shall have similarly
delivered to such Holder an opinion of counsel for the surviving
entity and/or each such Person, which counsel shall be reasonably
satisfactory to such Holder, or in the alternative, a written
acknowledgement executed by the President or Chief Financial
Officer of the Issuer, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including,
without limitation, all of the provisions of this subsection (a))
shall be applicable to the Securities, cash or property which the
surviving entity and/or each such Person may be required to deliver
upon any exercise of this Warrant or the exercise of any rights
pursuant hereto.
(b) Stock Dividends and Certain Other
Distributions . If at any
time the Issuer shall make or issue or set a record date for the
holders of the Series B Convertible Preferred Stock for the purpose
of entitling them to receive a dividend or other distribution
of:
(i) shares of Common Stock,
(ii) cash (other than a cash dividend
payable out of earnings or earned surplus legally available for the
payment of dividends under the laws of the jurisdiction of
incorporation of the Issuer),
(iii) any evidences of its indebtedness,
any shares of stock of any class or any other securities or
property of any nature whatsoever (other than cash, Common Stock
Equivalents or Additional Shares of Common Stock), or
(iv) any warrants or other rights to
subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property of
any nature whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock),
then upon
exercise of this Warrant, the Holder shall be entitled to receive
the same dividend or other distribution as if the Holder had been a
record holder of the number of shares of Warrant Stock so exercised
on the applicable record date.
(c) Issuance of Additional Shares of Common
Stock . For a period of
two (2) years following the Original Issue Date, in the event the
Issuer shall issue any Additional Shares of Common Stock (otherwise
than as provided in the foregoing subsections (a) through (b) of
this Section 4), at a price per share less than the Warrant Price
then in effect or without consideration, then the Warrant Price
upon each such issuance shall be adjusted to the price equal to the
consideration per share paid for such Additional Shares of Common
Stock.
(d) Issuance of Common Stock
Equivalents . For a period of two (2) years following the
Original Issue Date, in the event the Issuer shall take a record of
the holders of its Common Stock for the purpose of entitling them
to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Issuer is the
surviving corporation) issue or sell, any Common Stock Equivalents,
whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common
Stock is issuable upon such conversion or exchange shall be less
than the Warrant Price in effect immediately prior to the time of
such issue or sale, or if, after any such issuance of Common Stock
Equivalents, the price per share for which Additional Shares of
Common Stock may be issuable thereafter is amended or adjusted, and
such price as so amended shall be less than the Warrant Price in
effect at the time of such amendment or adjustment, then the
Warrant Price then in effect shall be adjusted as provided in
Section 4(c). No further adjustments of the number of shares of
Series B Convertible Preferred Stock for which this Warrant is
exercisable and the Warrant Price then in effect shall be made upon
the actual issue of such Common Stock upon conversion or exchange
of such Common Stock Equivalents.
(e) Superseding Adjustment . If, at any time after any adjustment of the
Warrant Price then in effect shall have been made pursuant to
Section 4(d) as the result of any issuance of Common Stock
Equivalents, and such Common Stock Equivalents, or the right of
conversion or exchange in such Common Stock Equivalents, shall
expire, and all of such or the right of conver
