THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
K’S MEDIA
Warrant
No. 2008-1A
Number
of Shares: 1,666,667
Warrant
Issuance Date: July 17, 2008
WARRANT
TO PURCHASE COMMON STOCK
VOID
AFTER 5:00 P.M., EASTERN TIME,
ON
THE EXPIRATION DATE
FOR
VALUE RECEIVED, K’s Media, a Nevada corporation (the
“ Company
”), hereby agrees to sell upon the terms and on the
conditions hereinafter set forth herein, at any time
commencing on the date hereof but no later than 5:00 p.m.,
Eastern Standard Time, on the date that is five (5) years
following the earlier of (a) the date a registration statement
including the Warrant Stock (defined below) is declared
effective by the United States Securities and Exchange
Commission; or (b) the date the holder of Warrant Stock may
transfer the Warrant Stock without application of the volume
limitations set forth in Rule 144 of the Securities Act of
1933, as amended (the “ Expiration
Date ”), to Fu, SongYang (the
“ Initial
Holder ”), or his registered assigns (the Initial
Holder or his registered assigns, the “ Registered
Holder ”), under the terms as hereinafter set
forth, One
Million Six Hundred Sixty Six Thousand Six Hundred Sixty Seven
(1,666,667) fully paid and non-assessable shares of the
Company’s Common Stock, par value $0.00001 per share
(the “ Warrant
Stock ”), at a purchase price per share of
$6.00
(the “ Purchase
Price ”), pursuant to the terms and conditions
set forth in this warrant (the “ Warrant
”). The number of shares of Warrant Stock to
be so issued and the Purchase Price are subject to adjustment
in certain events as hereinafter set forth. All
dollar amounts stated herein are in United States
Dollars.
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(a)
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This
Warrant may be exercised by the Registered Holder, in whole or in
part, by surrendering this Warrant, with the purchase/exercise form
appended hereto as Exhibit A
duly executed by such Registered Holder or by such Registered
Holder’s duly authorized attorney, at the principal office of
the Company, or at such other office or agency as the Company may
designate to the Registered Holder in writing, accompanied by
payment in full of the Purchase Price payable in respect of the
number of shares of Warrant Stock purchased upon such
exercise. The Purchase Price may be paid by cash, check,
wire transfer, or by the surrender of promissory notes or other
instruments representing indebtedness of the Company to the
Registered Holder.
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(b)
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Each
exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in
Section
1(a) above. At such time, the person or persons
in whose name or names any certificates for Warrant Stock shall be
issuable upon such exercise as provided in Section 1(c)
below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such
certificates.
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(c)
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As
soon as practicable after the exercise of this Warrant, in whole or
in part, and in any event within thirty (30) business days
thereafter, the Company at its expense will cause to be issued in
the name of, and delivered to, the Registered Holder, or as such
Registered Holder (upon payment by such Registered Holder of any
applicable transfer and other taxes) may direct:
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(i)
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a
certificate or certificates for the number of shares of Warrant
Stock to which such Registered Holder shall be entitled,
and
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(ii)
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in
case such exercise is in part only, a new warrant or warrants
(dated the date hereof) of like tenor, calling in the aggregate on
the face or faces thereof for the number of shares of Warrant Stock
equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Warrant minus
the number of such shares purchased by the Registered Holder upon
such exercise as provided in Section 1(a)
above.
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(a)
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Unregistered Security . Each Registered Holder
acknowledges that this Warrant and the Warrant Stock have not been
registered under the Securities Act of 1933, as amended (the
“ Securities Act
”), and agrees not to sell, pledge, distribute, offer for
sale, transfer, or otherwise dispose of this Warrant or any Warrant
Stock issued upon its exercise in the absence of (i) an effective
registration statement under the Securities Act as to this Warrant
or such Warrant Stock and registration or qualification of this
Warrant or such Warrant Stock under any applicable U.S. federal or
state securities law then in effect; (ii) an opinion of counsel,
reasonably satisfactory to the Company, that such registration or
qualification is not required; or (iii) other evidence satisfactory
to the Company in its sole discretion that such registration or
qualification is not required. Each certificate or other
instrument for Warrant Stock issued upon the exercise of this
Warrant shall bear a legend substantially to the foregoing
effect. In addition, so long as the foregoing legend may
remain on any stock certificate delivered to the Registered Holder,
the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented
thereby on its books and records and with those to whom it may
delegate registrar and transfer functions.
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(b)
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Transferability . Subject to the provisions of
Section
2(a) hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of the Warrant
with a properly executed assignment (in the form of Exhibit B
hereto) at the principal office of the Company.
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(c)
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Warrant Register . The Company will maintain a
register containing the names and addresses of the Registered
Holders of this Warrant. Until any transfer of this
Warrant is made in the warrant register, the Company may treat the
Registered Holder of this Warrant as the absolute owner hereof for
all purposes; provided ,
however , that
if this Warrant is properly assigned in blank, the Company may (but
shall not be required to) treat the bearer hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary. Any Registered Holder may change such
Registered Holder’s address as shown on the warrant register
by written notice to the Company requesting such
change.
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3.
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Reservation of Shares . Subject
to approval of the holders of the Company’s capital stock to
authorize an increase in the Company’s authorized capital
stock, the Company hereby agrees that at all times there shall be
reserved for issuance upon the exercise of this Warrant such number
of shares of its Common Stock as shall be required for issuance
upon exercise of this Warrant. The Company further
agrees that all shares which may be issued upon the exercise of the
rights represented by this Warrant, upon payment therefor, will be
duly authorized and will, upon issuance and against payment of the
exercise price, be validly issued, fully paid, and non-assessable,
free from all taxes, liens, charges and preemptive rights with
respect to the issuance thereof, other than taxes, if any, in
respect of any transfer occurring contemporaneously with such
issuance and other than transfer restrictions imposed by federal
and state securities laws.
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4.
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Cash in Lieu of Fractional Shares . No fractional
shares will be issued in connection with any exercise
hereunder. In lieu of any fractional shares which would
otherwise be issuable, the Company shall round the number of shares
of Common Stock deliverable upon exercise of this Warrant to the
nearest whole number of shares; provided that the maximum number of
shares of Common Stock issuable upon exercise of this Warrant,
regardless of rounding resulting from exercise of this Warrant on
two or more occasions, shall not exceed 1,666,667 shares of Common
Stock (subject to adjustment as set forth herein).
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5.
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Exchange, Transfer or Assignment of Warrant . This
Warrant is exchangeable, without expense, at the option of the
Registered Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations, entitling the Registered
Holder or Registered Holders thereof to purchase in the aggregate
the same number of shares of Common Stock purchasable
hereunder. Upon surrender of this Warrant to the Company
or at the office of its stock transfer agent, if any, with the
assignment form annexed hereto as Exhibit B duly executed and funds
sufficient to pay any transfer or other tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this
Warrant shall promptly be canceled. This Warrant may be
divided or combined with other Warrants that carry the same rights
upon presentation hereof at the office of the Company or at the
office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued and signed by the Registered Holder
hereof.
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6.
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Contingent Transactions; Capital Adjustments . This
Warrant is subject to the following further
provisions:
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(a)
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Subsequent Issuance of Common Stock . If, during
the period beginning on the date of issuance of this Warrant and
terminating on the date that is six (6) months following the date
of issuance of this Warrant, the Company shall sell, or
definitively contract to sell, shares of the Company’s Common
Stock, or securities exercisable for or convertible into (and
actually exercised or converted during such period) shares of
Common Stock (excluding any Excluded Shares (as defined below))
(the ” Additional
Shares ”), to a third party purchaser at a price less
than $3.00 per share of Common Stock (as adjusted for stock splits,
stock dividends, recapitalizations, and similar transactions), the
Company shall either, at its option, (a) repurchase this Warrant at
an aggregate purchase price equal to $0.05; provided ,
however , in
such case the Registered Holder shall have the right, under the
terms and subject to the conditions set forth in the Subscription
Agreement between the Initial Holder and the Company, to cause the
Company to also repurchase all shares of Common Stock and warrants
(including this Warrant) to purchase Common Stock issued to the
Initial Holder on the date of issuance of this Warrant at a price
and under the terms set forth in the Subscription Agreement between
the Initial Holder and the Company, dated as of the date hereof; or
(b) reduce the Purchase Price for the Warrant Shares such that the
Purchase Price shall be equal to an amount (calculated to the
nearest cent) determined by multiplying the initial Purchase Price
by a fraction, (i) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such
issuance plus the number of shares of Common Stock which the
aggregate consideration received by the Company for the total
number of Additional Shares of Common Stock so issued would
purchase at $3.00 per share (as adjusted for stock splits, stock
dividends, recapitalizations, and similar transactions), and (ii)
the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issuance plus the
number of such Additional Shares of Common Stock so
issued. Upon the Company’s election to adjust the
Purchase Price pursuant to subsection (b) of this Section 6(a) ,
the Company shall promptly compute such adjustment in accordance
with the terms hereof and prepare and furnish to the Registered
Holder a certificate (the “ Adjustment
Certificate ”) setting forth such adjustment and
showing in detail the method of calculation upon which such
adjustment is based. Promptly following receipt of the
Adjustment Certificate, the Registered Holder shall surrender this
Warrant to the Company, and promptly upon receipt the Company shall
prepare and issue to th
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