THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO
THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS
WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT.
TXP CORPORATION
Warrant To Purchase Common Stock
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Warrant
No.: JVE-003
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Number
of Shares: 1,280,000
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Date
of Issuance: ________ ___, 2007
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TXP
CORPORATION, a Nevada corporation (the “
Company ”),
hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
James Von Ehr, II (the
“
Holder ”),
the registered holder hereof or his permitted assigns, is entitled,
subject to the terms set forth below, to purchase from the Company
upon surrender of this Warrant, at any time or times on or after
the date hereof, but not after 11:59 P.M. Eastern Time on the
Expiration Date (as defined herein) One Million Two Hundred Eighty
Thousand (1,280,000) fully paid and nonassessable shares of Common
Stock (as defined herein) of the Company (the “
Warrant Shares ”)
at the exercise price per share provided in Section 1(b) below
or as subsequently adjusted; provided, however, that in no event
shall the holder be entitled to exercise this Warrant for a number
of Warrant Shares in excess of that number of Warrant Shares which,
upon giving effect to such exercise, would cause the aggregate
number of shares of Common Stock beneficially owned by the holder
and his affiliates to exceed 4.99% of the outstanding shares of the
Common Stock following such exercise, except within sixty (60) days
of the Expiration Date (however, such restriction may be waived by
Holder (but only as to itself and not to any other holder) upon not
less than 65 days prior notice to the Company). For purposes of the
foregoing proviso, the aggregate number of shares of Common Stock
beneficially owned by the Holder and his affiliates shall include
the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such proviso is
being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised
Warrants beneficially owned by the Holder and his affiliates and
(ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned
by the Holder and his affiliates (including, without limitation,
any convertible notes or preferred stock) subject to a limitation
on conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes
of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. For purposes of this Warrant, in determining the
number of outstanding shares of Common Stock Holder may rely on the
number of outstanding shares of Common Stock as reflected in (1)
the Company's most recent Form 10-QSB or Form 10-KSB, as the case
may be, (2) a more recent public announcement by the Company or (3)
any other notice by the Company or its transfer agent setting forth
the number of shares of Common Stock outstanding. Upon the written
request of Holder, the Company shall promptly, but in no event
later than one (1) Business Day following the receipt of such
notice, confirm in writing to Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to
the exercise of Warrants (as defined below) by Holder and his
affiliates since the date as of which such number of outstanding
shares of Common Stock was reported.
Section
1.
(a) This
Warrant is the common stock purchase warrant (the
“
Warrant ”)
issued pursuant to a certain Agreement (“
Agreement ”)
dated the date hereof between the Company and the
Buyer.
(b)
Definitions .
The following words and terms as used in this Warrant shall have
the following meanings:
(i) “
Approved Stock Plan ”
means any employee benefit plan which has been approved by the
Board of Directors of the Company, pursuant to which the Company's
securities may be issued to any employee, officer, or director for
services provided to the Company.
(ii) “
Business Day ”
means any day other than Saturday, Sunday or other day on which
commercial banks in the City of New York are authorized or required
by law to remain closed.
(iii) “
Closing Bid Price ”
means the closing bid price of Common Stock as quoted on the
Principal Market (as reported by Bloomberg Financial Markets
(“
Bloomberg ”)
through its “Volume at Price” function).
(iv) “
Common Stock ”
means (i) the Company's common stock, par value $0.001 per
share, and (ii) any capital stock into which such Common Stock
shall have been changed or any capital stock resulting from a
reclassification of such Common Stock.
(v) “
Expiration Date ”
means the date seven (7) years from the Issuance Date of this
Warrant or, if such date falls on a Saturday, Sunday or other day
on which banks are required or authorized to be closed in the City
of New York or the State of New York or on which trading does not
take place on the Principal Exchange or automated quotation system
on which the Common Stock is traded (a “
Holiday ”),
the next date that is not a Holiday.
(vi) “
Issuance Date ”
means the date hereof.
(vii) “
Options ”
means any rights, warrants or options to subscribe for or purchase
Common Stock or Convertible Securities.
(viii) “
Other Securities ”
means (i) those options and warrants of the Company issued
prior to, and outstanding on, the Issuance Date of this Warrant,
(ii) the shares of Common Stock issuable on exercise of such
options and warrants, provided such options and warrants are not
amended after the Issuance Date of this Warrant and (iii) the
shares of Common Stock issuable upon exercise of this
Warrant.
(ix) “
Person ”
means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency
thereof.
(x) “
Principal Market ”
means the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market, the Nasdaq SmallCap Market, whichever is at
the time the principal trading exchange or market for such
security, or the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg or, if no bid or
sale information is reported for such security by Bloomberg, then
the average of the bid prices of each of the market makers for such
security as reported in the “pink sheets” by the
National Quotation Bureau, Inc.
(xi) “
Securities Act ”
means the Securities Act of 1933, as amended.
(xii) “
Warrant ”
means this Warrant and all Warrants issued in exchange, transfer or
replacement thereof.
(xiii) “
Warrant Exercise Price ”
shall be $0.40 or as subsequently adjusted as provided in
Section 8 hereof.
(xiv) “
Warrant Shares ”
means the shares of Common Stock issuable at any time upon exercise
of this Warrant.
(c) Other
Definitional Provisions.
(i) Except
as otherwise specified herein, all references herein
(A) to the Company shall be deemed to include the
Company's successors and (B) to any applicable law
defined or referred to herein shall be deemed references to
such applicable law as the same may have been or may be
amended or supplemented from time to time.
(ii) When
used in this Warrant, the words “
herein ”,
“
hereof ”,
and “
hereunder
” and
words of similar import, shall refer to this Warrant as a whole and
not to any provision of this Warrant, and the words “
Section ”,
“
Schedule ”,
and “
Exhibit ”
shall refer to Sections of, and Schedules and Exhibits to, this
Warrant unless otherwise specified.
(iii) Whenever
the context so requires, the neuter gender includes the
masculine or feminine, and the singular number includes the
plural, and vice versa.
Section
2.
Exercise of Warrant .
Subject
to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of
the Company, pro rata as hereinafter provided, at any time on
any Business Day on or after the opening of business on such
Business Day, commencing with the first day after the date
hereof, and prior to 11:59 P.M. Eastern Time on the
Expiration Date (i) by delivery of a written notice, in the
form of the subscription notice attached as
Exhibit A hereto
(the “
Exercise Notice ”),
of such holder's election to exercise this Warrant, which notice
shall specify the number of Warrant Shares to be
purchased, payment to the Company of an amount equal to the
Warrant Exercise Price(s) applicable to the Warrant Shares being
purchased, multiplied by the number of Warrant Shares (at the
applicable Warrant Exercise Price) as to which this Warrant is
being exercised (plus any applicable issue or transfer taxes)
(the “
Aggregate Exercise Price ”)
in cash or wire transfer of immediately available funds and the
surrender of this Warrant (or an indemnification undertaking with
respect to this Warrant in the case of its loss, theft or
destruction) to a common carrier for overnight delivery to the
Company as soon as practicable following such date. In lieu of
exercising this Warrant for cash as specified in the preceding
sentence, Holder may from time to time convert this Warrant, in
whole or in part, as a “cashless exercise” into a
number of Warrant Shares determined by dividing (a) the aggregate
fair market value of the Warrant Shares or other securities
otherwise issuable upon exercise of this Warrant minus the
aggregate Warrant Exercise Price of such Warrant Shares by (b) the
fair market value of one Warrant Share.
In
the event of any exercise of the rights represented by this
Warrant in compliance with this Section 2, the Company shall
on or before the fifth (5th) Business Day following the
date of receipt of the Exercise Notice, the Aggregate Exercise
Price and this Warrant (or an indemnification undertaking with
respect to this Warrant in the case of its loss, theft or
destruction) and the receipt of the representations of the
holder specified in Section 6 hereof, if requested by the
Company (the “
Exercise Delivery Documents ”),
and if the Common Stock is DTC eligible, credit such aggregate
number of shares of Common Stock to which the holder shall be
entitled to the holder's or his designee's balance account with The
Depository Trust Company; provided, however, if the holder who
submitted the Exercise Notice requested physical delivery of any or
all of the Warrant Shares, or, if the Common Stock is not DTC
eligible then the Company shall, on or before the
fifth (5
th )
Business Day following receipt of the Exercise Delivery Documents,
issue and surrender to a common carrier for overnight delivery to
the address specified in the Exercise Notice, a certificate,
registered in the name of the holder, for the number of shares of
Common Stock to which the holder shall be entitled pursuant to such
request. Upon delivery of the Exercise Notice and Aggregate
Exercise Price referred to above the holder of this Warrant shall
be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has
been exercised. In the case of a dispute as to the determination of
the Warrant Exercise Price, the Closing Bid Price, the Company
shall promptly issue to the holder the number of Warrant Shares
that is not disputed and shall submit the disputed determinations
or arithmetic calculations to the holder via facsimile within one
(1) Business Day of receipt of the holder's Exercise
Notice.
(a) If
the holder and the Company are unable to agree upon the
determination of the Warrant Exercise Price within one (1) day
of such disputed determination being submitted to the holder,
then the Company shall immediately submit via facsimile the
disputed determination of the Warrant Exercise Price or the
Closing Bid Price to an independent, reputable investment
banking firm. The Company shall cause the investment banking
firm or the accountant, as the case may be, to perform the
determinations and notify the Company and the holder of the
results no later than forty-eight (48) hours from the time it
receives the disputed determinations. Such investment banking
firm's or accountant's determination or calculation, as the
case may be, shall be deemed conclusive absent manifest
error.
(b) Unless
the rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, as soon as
practicable and in no event later than five (5) Business Days
after any exercise and at its own expense, issue a new Warrant
identical in all respects to this Warrant exercised except it
shall represent rights to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under
this Warrant exercised, less the number of Warrant Shares with
respect to which such Warrant is exercised.
(c) No
fractional Warrant Shares are to be issued upon any pro rata
exercise of this Warrant, but rather the number of Warrant
Shares issued upon such exercise of this Warrant shall be
rounded up or down to the nearest whole number.
Section
3.
Covenants as to Common Stock .
The Company hereby covenants and agrees as follows:
(a) This
Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly
authorized and validly issued.
(b) All
Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue
thereof.
(c) During
the period within which the rights represented by this Warrant
may be exercised, the Company will at all times have
authorized and reserved at least one hundred percent (100%) of
the number of shares of Common Stock needed to provide for the
exercise of the rights then represented by this Warrant and
the par value of said shares will at all times be less than or
equal to the applicable Warrant Exercise Price.
(d) If
at any time after the date hereof the Company shall file a
registration statement, the Company shall include the Warrant
Shares issuable to the holder, pursuant to the terms of this
Warrant and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all Warrant
Shares from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, as the case
may be, and shall maintain such listing of, any other shares
of capital stock of the Com
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