EXHIBIT 99.8
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
EXERCISABLE UNTIL ON OR BEFORE _______ [THIRD ANNIVERSARY OF INITIAL CLOSING]
5:00 P.M., NEW YORK TIME OR THE REDEMPTION DATE OF THE WARRANT, WHICHEVER IS
EARLIER.
CLASS D WARRANTS
ACE MARKETING & PROMOTIONS, INC.
This warrant certificate (the "Warrant Certificate") certifies that or
registered assigns, is the registered holder (the "Holder") of Warrants to
purchase, at any time until 5:00 P.M. New York time on the earlier of the
Redemption Date of the Class D Warrants (as defined herein) or __________, 2012
[third anniversary of initial closing date] (the "Expiration Date"), up to
fully-paid and non-assessable shares, subject to adjustment in accordance with
Article 6 hereof (the "Warrant Shares"), of the common stock, par value $.0001
per share (the "Common Stock"), of ACE MARKETING & PROMOTIONS, INC., a New York
corporation (the "Company"), subject to the terms and conditions set forth
herein. The warrants represented by this Warrant Certificate and any warrants
resulting from a transfer or subdivision of the warrants represented by this
Warrant Certificate shall sometimes hereinafter be referred to, individually, as
a "Warrant" and, collectively, as the "Warrants."
This Warrant is one of a series of warrants of like tenor being issued
in connection with the Company's private offering (the "OFFERING") of Units
consisting of (i) such number of shares of common stock, par value $.0001 per
share ("Common Stock" or the "Shares") as is determined by dividing $15,000 by
85% of the average closing price per share of the Common Stock for the forty
five (45) trading day period immediately preceding each Closing, as reported on
the OTC Bulletin Board; provided, however, that the price per Share after such
discount shall be no greater than $0.80 per share and no less than $0.60 per
share and (ii) three-year Class D Common Stock Purchase Warrants to purchase 50%
of the number of shares of Common Stock included in each Unit in accordance
with, and subject to, the terms and conditions described in that certain
Confidential Private Placement Offering Memorandum dated July 14, 2009, as the
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same may be supplemented from time to time and that certain Subscription
Agreement between the Company and the Holder.
The term "WARRANT" as used herein, shall include this Warrant, and any
warrants delivered in substitution or exchange therefor as provided herein.
1. EXERCISE OF WARRANTS. This Warrant is initially exercisable to
purchase one Warrant Share at an initial exercise price of $1.00 per share,
subject to adjustment as set forth in Article 6 hereof, payable in cash or by
check to the order of the Company, or any combination of cash or check. Upon
surrender of this Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Warrant Shares purchased, at the Company's
principal offices (presently located at 457 Rockaway Avenue, Valley Stream, NY
11587), the registered holder of the Warrant Certificate (the "Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Warrant Shares so purchased. The purchase rights represented by this Warrant
Certificate are exercisable at the option of the Holder hereof, in whole or in
part (but not as to fractional shares). In the case of the purchase of less than
all the Warrant Shares purchasable under this Warrant Certificate, the Company
shall cancel this Warrant Certificate upon its surrender and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the Warrant
Shares purchasable hereunder.
1A. NET ISSUANCE. In addition to exercise of this Warrant as provided
in Section 1 above, if, at any time after the date that is six (6) months after
the initial closing of the Offering, a Registration Statement covering the
resale of the Warrant Shares is not then effective or no current prospectus
under such Registration Statement is available, the Holder may satisfy its
obligation to pay the Exercise Price through a "cashless exercise," in which
event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be
issued to the Holder pursuant to the
cashless exercise.
Y = the number of Warrant Shares with
respect to which this Warrant is being
exercised (at the time of such
calculation).
A = the average of the Closing Prices for
the five Trading Days immediately prior to
(but not including) the Exercise Date.
B = the Exercise Price (as adjusted to the
date of such calculation).
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For purposes of this Section 1A, "Closing Prices" for any date, shall
mean the closing price per share of the Common Stock for such date (or the
nearest preceding date) on the primary trading market on which the Common Stock
is then listed or quoted.
For purposes of Rule 144 promulgated under the Act (as defined herein),
it is intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued.
This Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of its surrender for exercise as provided
above, and the person entitled to receive the Warrant Shares issuable upon such
exercise shall be treated for all purposes as the holder of record of such
securities as of the close of business on such date. As promptly as practicable
on or after such date and in any event within five (5) business days after such
date, the Company at its expense shall issue and deliver, to the person or
persons entitled to receive them, certificates and/or instruments representing
the Warrant Shares as to which the Holder has so exercised this Warrant in the
name of the Holder or its designee. In the event that this Warrant is exercised
in part, the Company at its expense will execute and deliver a new Warrant of
like tenor exercisable for the number of Warrant Shares for which this Warrant
has not been exercised.
The Company hereby represents and warrants that the Warrant Shares
issuable upon the exercise of this Warrant, when issued, sold and delivered,
will be duly and validly authorized and issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issuance thereof (other
than liens or charges created by or imposed upon the recipient of the Warrant
Shares).
2. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants, the
issuance of certificates for the Warrant Shares purchased pursuant to such
exercise shall be made forthwith without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Article 3
hereof) be issued in the name of, or in such names as may be directed by, the
Holder thereof; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any such certificates in a name other than that of the Holder
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
The Warrant Certificates and, upon exercise of the Warrants, the
certificates representing the Warrant Shares shall be executed on behalf of the
Company by the manual or facsimile signature of those officers required to sign
such certificates under applicable law.
This Warrant Certificate and, upon exercise of the Warrants, in part or
in whole, certificates representing the Warrant Shares shall bear a legend
substantially similar to the following:
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The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act"), and may not be
offered or sold except (i) pursuant to an effective registration
statement under the Act, (ii) to the extent applicable, pursuant to
Rule 144 under the Act (or any similar rule under such Act relating to
the disposition of securities), or (iii) upon the delivery by the
holder to the Company of an opinion of counsel, reasonably satisfactory
to counsel to the issuer, stating that an exemption from registration
under such Act is available.
3. RESTRICTION ON TRANSFER OF WARRANTS AND WARRANT SHARES. The Holder
of this Warrant Certificate, by its acceptance thereof, represents and warrants
to, and covenants and agrees with the Company that the Warrants and the Warrant
Shares issuable upon exercise of the Warrants are being acquired for the
Holder's own account as an investment and not with a view to the resale or
distribution thereof and that the Warrants and the Warrant Shares are not
registered under the Act or any state securities or blue sky laws and,
therefore, may not be transferred unless such securities are either registered
under the Act and any applicable state securities law or an exemption from such
registration is available. The Holder of this Warrant Certificate acknowledges
that the Holder is an "accredited investor" within the meaning of Regulation D
promulgated under the Act who has been provided with an opportunity to ask
questions of representatives of the Company concerning the Company and that all
such questions were answered to the satisfaction of the Holder. In connection
with any purchase of Warrant Shares the Holder agrees to execute any documents
which may be reasonably required by counsel to the Company to comply with the
provisions of the Act and applicable state securities laws.
4. REDEMPTION RIGHTS OF CLASS D WARRANTS. Each outstanding Class D Warrant
may be redeemed at the option of the Company, in whole or in part on a pro-rata
basis, by giving not less than 30 days prior notice as provided below, which
notice may not be given before, but may be given at any time after (i) six
months from the initial closing of the Offering and (ii) the closing price of
the Common Stock on the principal exchange or market on which it is then traded
has equaled or exceeded $2.50 per share on each of twenty (20) consecutive
trading days ending within 10 days prior to the date that the notice of
redemption is mailed to the Holder. The price at which Warrants may be redeemed
is $0.001 per Warrant. On and after the redemption date the holders of record of
redeemed Warrants shall be entitled to payment of the Redemption Price upon
surrender of such redeemed Warrants to the Company at the office of the Company.
Notice of redemption of Warrants shall be given at least 30 days prior to the
redemption date by mailing, by first class mail, postage prepaid, a copy of such
notice to all of the holders of record of Warrants at their respective addresses
appearing on the books or transfer records of the Company or such other address
designated in writing by the Holder to the Company (the date of redemption as
set forth in the foregoing notice, the "Redemption Date"). The Holder shall have
the right to exercise this Class D Warrant at any time prior to the Redemption
Date.
5. EXERCISE PRICE
5.1 INITIAL AND ADJUSTED EXERCISE PRICE. The initial exercise
price of each Warrant shall be $1.00 per Warrant Share. The adjusted exercise
price shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Article 6 hereof.
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5.2 EXERCISE PRICE. The term "Exercise Price" herein shall
mean the initial exercise price or the adjusted exercise price, depending upon
the context.
6. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
6.1 DIVIDENDS AND DISTRIBUTIONS. If at any time prior to the
Expiration Date, the Company shall pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock, then upon such dividend or
distribution, the Exercise Price in effect immediately prior to such dividend or
distribution shall be reduced to a price determined by dividing an amount equal
to the total number of shares of Common Stock outstanding immediately prior to
such dividend or distribution multiplied by the Exercise Price in effect
immediately prior to such dividend or distribution, by the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution. For purposes of any computation to be made in accordance with the
provisions of this Section 6.1, the Common Stock issuable by way of dividend or
distribution shall be deemed to have been issued immediately after the opening
of business on the date following the date fixed for determination of
shareholders entitled to receive such dividend or distribution. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Article 6.1,
the number of Warrant Shares issuable upon the exercise of each Warrant shall be
adjusted to the nearest full share of Common Stock by multiplying a number equal
to the Exercise Price in effect immediately prior to such adjustment by the
number of Warrant Shares issuable upon exercise of the Warrants immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
6.2 SUBDIVISION AND COMBINATION. If at any time prior to the
Expiration Date, the Company shall subdivide (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) the
shares of Common Stock subject to acquisition 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 and the number of shares of Common Stock subject to
acquisition upon exercise of this Warrant will be proportionately increased. If
the Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
subject to acquisition hereunder into a lesser 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 and the
number of shares of Common Stock subject to acquisition upon exercise of this
Warrant will be proportionately decreased.
6.3 REORGANIZATION, MERGER OR SALE OF ASSETS If, at any time
prior to the Expiration Date, there shall be (i) a reorganization (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), (ii) a merger or consolidation of the Company with or into
another corporation in which the Company is not the surviving entity, or (iii) a
sale or transfer of the Company's properties and assets in, or substantially in,
their entirety to any other person, then, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision shall be made so that
the Holder shall thereafter be entitled to receive upon payment of the Exercise
Price then in effect, the number of shares of stock or other securities or
property of the successor or corporation resulting from such reorganization,
merger, consolidation, sale or transfer that a holder of the shares of Common
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Stock deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer. If the per-share consideration payable to the
Holder for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration shall
be determined in good faith by the Company's Board of Directors. In all events,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon exercise of this Warrant. Notwithstanding the
above, in the event the sale or merger of the Company is consummated by means of
an all cash transaction whereby the Company's Common Stock will cease to be
outstanding, this Warrant must be exercised prior to the close of such
transaction or it will be cashed out for the consideration paid to holders of
Common Stock in the transaction less the Exercise Price.
6.4 NOTICE OF ADJUSTMENTS. Upon any adjustment of the Exercise
Price, then and in each such case the Company shall give notice thereof to the
Holder, which notice shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of Warrant Shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
6.5 DETERMINATION OF OUTSTANDING SHARES. The number of shares
of Common Stock at any one time outstanding shall include the aggregate number
of shares issued or issuable upon the exercise of outstanding options, rights,
warrants and upon the conversion or exchange of outstanding convertible or
exchangeable securities.
7. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. This Warrant
Certificate is exchangeable without expense, upon the surrender hereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant of like tenor, in
lieu thereof.
8. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
and shall not be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up to the nearest whole number of
shares of Common Stock.
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9. RESERVATION OF SHARES. The Company covenants and agrees that it will
at all times reserve and keep available out of its authorized share capital,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock as shall be equal to the number of Warrant
Shares issuable upon the exercise of the Warrants, for issuance upon such
exercise, and that, upon exercise of the Warrants and payment of the Exercise
Price therefor, all Warrant Shares issuable upon such exercise shall be duly and
validly issued, fully paid, nonassessable and not subject to the preemptive
rights of any shareholder.
10. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement
shall be construed as conferring upon the Holder or Holders the right to vote or
to consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
then out of current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common Stock any
additional shares of Common Stock or other shares of capital stock of the
Company or securities convertible into or exchangeable for shares of Common
Stock or other shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor;
(c) a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed; or
(d) the Company or an affiliate of the Company shall propose to issue
any rights to subscribe for shares of Common Stock or any other securities of
the Company or of such affiliate to all the stockholders of the Company;
then, in any one or more of said events, the Company shall give written notice
of such event at least twenty (20) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
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11. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to a registered Holder of the Warrants, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Article 1 of this
Agreement or to such other address as the Company may designate by notice to the
Holders.
12. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
13. GOVERNING LAW.
13.1 CHOICE OF LAW. This Agreement shall be deemed to have
been made and delivered in the State of New York and shall be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal laws of the State of New York.
13.2 JURISDICTION AND SERVICE OF PROCESS. The Company and the
Holder each (a) agrees that any legal suit, action or proceeding arising out of
or relating to this Warrant Certificate shall be instituted exclusively in the
Supreme Court of New York, New York, New York, or in the United States District
Court for the Southern District of New York, New York (b) waives any objection
which the Company or such Holder may have now or hereafter based upon FORUM NON
CONVENIENS or to the venue of any such suit, action or proceeding, and (c)
irrevocably consents to the jurisdiction of the Supreme Court of New York, New
York, New York, or in the United States District Court for the Southern District
of New York, New York in any such suit, action or proceeding. The Company and
the Holder each further agrees (a) to accept and acknowledge service of any and
all process which may be served in any such suit, action or proceeding in the
Supreme Court of New York, New York, New York, or in the United States District
Court for the Southern District of New York, New York and (b) agrees that
service of process upon the Company or the Holder mailed by certified mail to
their respective addresses shall be deemed in every respect effective service of
process upon the Company or the Holder, as the case may be, in any suit, action
or proceeding. FURTHER, BOTH THE COMPANY AND HOLDER HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION TO ENFORCE THE TERMS OF THIS WARRANT CERTIFICATE AND IN CONNECTION
WITH ANY DEFENSE, COUNTERCLAIM OR CROSS-CLAIM ASSERTED IN ANY SUCH ACTION.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of the _____ day of __________, 2009.
ACE MARKETING & PROMOTIONS, INC.
By:
--------------------------------------
Dean L. Julia, Chief Executive Officer
(Corporate Seal)
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[FORM OF ELECTION TO PURCHASE]
(1) The undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[_] in lawful money of the United States; or
[_] [if permitted] the cancellation of such number of Warrant Shares
as is necessary, in accordance with the formula set forth in
subsection 1A, to exercise this Warrant with respect to the maximum
number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 1A.
(3) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:
___________________________________________, whose address is
________________ ____________________________________________________________,
and that such certificate be delivered to ___________________, whose address is
____________________ ___________________________.
Dated: _______________ Signature: ___________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
_________________________________
_________________________________
(Insert Social Security or Other
Identifying Number of Holder)
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ASSIGNMENT FORM
---------------
The undersigned, being the true and lawful owner of Holder Warrants to purchase
shares of Common Stock of Ace Marketing & Promotions, Inc. hereby assigns and
transfers unto:
Name: _______________________________________________
(Please typewrite or print in block letters)
Address: _______________________________________________
_______________________________________________
_______________________________________________
Social Security Number/ Federal ID: _____________________
the right to purchase Common Stock of _____________ represented by this Warrant
to the extent of shares of Common Stock as to which such right is exercisable
and does hereby irrevocably constitute and appoint __________________________
___________________ Attorney, to transfer the same on the books of Ace Marketing
& Promotions, Inc. with full power of substitution in the premises.
Dated: ___________________
____________________________________
Name of Registered Holder
____________________________________
Signature
____________________________________
Signature, if held jointly
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