THIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR QUALIFIED UNDER ANY APPLICABLE SECURITIES LAWS. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND QUALIFICATION UNDER SUCH STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND/OR
QUALIFICATION IS NOT REQUIRED.
THE SAINT JAMES
COMPANY
WARRANT TO PURCHASE SHARES
OF COMMON STOCK
THIS
CERTIFIES THAT , for
value received, Samson Investment Company, a Nevada corporation,
(the “ Grantee ”), or Grantee’s
assigns (Grantor and Grantor’s assigns being the “
Holder ”), is entitled to subscribe for and
purchase at any time during the Exercise Period from The Saint
James Company, a North Carolina corporation, with an office located
at Broadway Plaza, 520 Broadway, Suite 350, Santa Monica,
California 90401 (the “ Company ”), a
number of shares of Common Stock equal to the Share Number at a
per-share price equal to the Exercise Price in effect at such time.
This Warrant is issued pursuant to the Designation, Assignment, and
Assumption Agreement dated as of October 20, 2008, by and between
the Company and the Grantor.
1. DEFINITIONS . As used herein, the following terms shall have
the following respective meanings:
(a) “ Aggregate Warrant
Price ” shall mean the dollar value obtained by
multiplying $10.00 by 120,000.
(b) “ Common Stock ”
shall mean the common stock of the Company.
(c) “ Exercise Period
” shall mean the period commencing on October 20, 2008, and
ending on October 20, 2013.
(d) “ Exercise Price ”
shall mean $10.00 per share of Common Stock.
(e) “ Exercise Shares
” shall mean any Common Stock acquired upon exercise of this
Warrant.
(f) “ Share Number ,”
at any time, shall mean (i) the Aggregate Warrant Price minus the
aggregate exercise price previously paid upon exercise of this
Warrant, divided by (ii) the Exercise Price then in
effect.
2.1 General; Exercise of Warrant
.
(a) The rights represented by this Warrant may be
exercised as a whole or in part at any time during the Exercise
Period, by delivery of the following to the Company at its address
set forth above (or at such other address as it may designate by
notice in writing to the Holder):
(i)
An executed Notice of Exercise in
the form attached hereto;
(ii) Payment of the Exercise Price either in cash or
by check; and
(b) Upon the exercise of the rights represented by
this Warrant, a certificate or certificates for the Exercise Shares
so purchased, registered in the name of the Holder or persons
affiliated with the Holder, if the Holder so designates (and such
designation is in compliance with applicable securities laws and
any stockholders, investor rights or similar agreement), shall be
issued and delivered to the Holder as promptly as practicable after
the rights represented by this Warrant shall have been so
exercised.
(c) The person in whose name any certificate or
certificates for Exercise Shares are to be issued upon exercise of
this Warrant shall be deemed to have become the holder of record of
such shares on the date on which this Warrant was surrendered and
payment of the Exercise Price was made, irrespective of the date of
delivery of such certificate or certificates, except that, if the
date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer
books are open.
3. COVENANTS OF THE COMPANY.
3.1 Covenants as to Exercise Shares
. The Company covenants and agrees
that all Exercise Shares that may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be
validly issued and outstanding, fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issuance
thereof. The Company further covenants and agrees that the Company
will at all times during the Exercise Period have authorized and
reserved, free from preemptive rights, a sufficient number of
shares of its Common Stock to provide for the exercise of the
rights represented by this Warrant. If at any time during the
Exercise Period the number of authorized but unissued shares of
Common Stock shall not be sufficient to permit exercise of this
Warrant, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes.
3.2 No Impairment . Except and to the extent as waived or
consented to by the Holder, the Company will not, by amendment of
its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the
provisions of this Warrant and in the taking of all such action as
may be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment.
3.3 Notices of Record Date . In the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash
dividends paid in previous quarters) or other distribution, the
Company shall mail to the Holder, at least ten (10) days prior to
the date specified herein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend or
distribution.
4. REPRESENTATIONS OF THE HOLDER.
4.1 Acquisition of Warrant for Holder’s
Account . The Holder
represents and warrants that it is acquiring the Warrant and any
shares of capital stock issued or issuable upon exercise or
conversion of the Warrant for investment purposes only and not with
a view to or for resale in connection with any distribution or
public offering thereof within the meaning of the Securities Act.
The Holder also represents that the entire legal and beneficial
interests of the Warrant and Exercise Shares the Holder is
acquiring is being acquired for, and will be held for, the account
of the Holder only.
4.2 Accredited Investor . The Holder represents and warrants that,
unless not a “U.S. Person” as defined below, the Holder
it is an “accredited investor” as such term is defined
in Rule 501 under the Securities Act of 1933, as amended (the
“ Securities Act ”). The Holder shall
provide the Company with such additional information as the Company
may reasonably request with respect to the Holder’s status as
an “accredited investor.”
4.3 Securities Are Not Registered
.
(a) The Holder understands that the Warrant and the
Exercise Shares have not been registered under the Securities Act,
on the basis that no distribution or public offering of the stock
of the Company is to be effected, or registered or qualified under
any applicable state securities laws. The Holder realizes that the
basis for the exemption may not be present if, notwithstanding its
representations, the Holder has a present intention of acquiring
the securities for a fixed or determinable period and, in the
future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the
securities. The Holder has no such present intention.
(b) The Holder recognizes that the Warrant and the
Exercise Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption
from such registration is available. The Company has no obligation
to register the Warrant or the Exercise Shares of the Company, or
to comply with any exemption from such registration.
(c) The Holder is aware that neither the Warrant
nor the Exercise Shares may be sold pursuant to Rule 144 adopted
under the Securities Act unless certain conditions specified
therein are met. For so long as the Warrants are outstanding and
for the one-year period thereafter, the Company will use its best
efforts to satisfy these conditions.
(d) The Holder is aware of the Company’s
business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and
knowledgeable decision regarding its investment in the Company. The
Holder is experienced in making investments of this type and has
such knowledge and background in financial and business matters
that the Holder is capable of evaluating the merits and risks of
this investment and protecting its own interests. The Holder has
had an opportunity to ask questions of, and receive answers from,
the Company and its officers and employees regarding the business,
financial affairs and other aspects of the Company, and has further
had the opportunity to obtain information (to the extent the
Company possesses or can acquire such information without
unreasonable effort or expense) which the Holder deems necessary to
evaluate an investment in the Company and to verify the accuracy of
information otherwise provided to the Holder.
4.4
Disposition of Warrant and Exercise
Shares.
(a) Except for transfers by the Holder to its
affiliates in compliance wi
