Exhibit 10.4
 
 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE 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 ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT.

 
PURDEN LAKE RESOURCE CORP.
 
WARRANT TO PURCHASE
 
[____________] SHARES
 
OF COMMON STOCK
 
(SUBJECT TO ADJUSTMENT)
 

 
Warrant No.: [___] [___________], 2009
 
This certifies that for value, [__________] or its registered and permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, at
any time from and after the date set forth above (the “Original Issuance Date”)
and before 5:00 p.m., Eastern Time, on the date that is the five (5) year
anniversary of the Original Issuance Date (the “Expiration Date”), to purchase
from PURDEN LAKE RESOURCE CORP., a Delaware corporation (the “Company”),
[_____________ (__________)] shares (subject to adjustment as described herein),
of common stock of the Company, par value $0.001 per share (the “Common Stock”),
upon surrender hereof, at the principal office of the Company referred to below,
with a duly executed exercise notice (the “Exercise Notice”) in the form
attached hereto as Exhibit A and simultaneous payment therefor in lawful,
immediately available money of the United States, at an initial exercise price
per share of $3.81 (the “Exercise Price”).   The Exercise Price is subject to
adjustment as provided below, and the term “Common Stock” shall include, unless
the context otherwise requires, the stock and other securities and property at
the time receivable upon the exercise of this Warrant. The term “Warrants,” as
used herein, shall mean this Warrant and any other Warrants delivered in
substitution or exchange therefor as provided herein.
 
This Warrant is one of a series of similar Warrants issued in connection with
the Company’s private placement (the “Offering”) of its units (the “Units”),
each Unit consisting of (i) 3,937 shares of Common Stock and (ii) a Warrant
exercisable into 514 shares of Common Stock, pursuant to the Company’s
Confidential Private Offering Memorandum dated October 23, 2009 (the
“Memorandum”).
 
 

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1.    Definitions.  In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Memorandum.
 
2.    Exercise.
 
A.    Method of Exercise.  This Warrant may be exercised at any time or from
time to time from and after the Original Issuance Date and before 5:00 p.m.,
Eastern Time, on the Expiration Date, on any Business Day (as defined below),
for the full number of shares of Common Stock called for hereby, by surrendering
it at the Company’s principal office, at No. 102, Chengzhan Road, Liuzhou City,
Guangxi Province, PRC (the “Principal Office”), Attention: Xiao Yan Zhang, with
the Exercise Notice duly executed, together with payment in an amount equal to
(a) the number of shares of Common Stock called for on the face of this Warrant,
as adjusted in accordance with the preceding paragraph of this Warrant
multiplied (b) by the Exercise Price then in effect. Payment of the Exercise
Price must be made by payment in immediately available funds. This Warrant may
be exercised for less than the full number of shares of Common Stock at the time
called for hereby, except that the number of shares of Common Stock receivable
upon the exercise of this Warrant as a whole, and the sum payable upon the
exercise of this Warrant as a whole, shall be proportionately reduced. Upon a
partial exercise of this Warrant in accordance with the terms hereof, this
Warrant shall be surrendered to the Company, and a new Warrant of the same tenor
and for the purchase of the number of such shares not purchased upon such
exercise shall be issued by the Company to Holder without any charge therefor. A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise (the “Exercise Date”) as
provided above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder of
such shares of record as of the close of business on the Exercise Date. Within
ten (10) Business Days after the Exercise Date, the Company shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of full shares of Common Stock issuable upon such
exercise.  For purposes of this Warrant, “Business Day” means any day that is
not a Saturday, a Sunday, or a day on which banks are required or permitted to
be closed in the State of New York.
 
B.    Cashless Exercise. Notwithstanding any provision herein to the contrary
and commencing six (6) months following the Original Issuance Date, if a
registration statement under the Securities Act providing for the resale of the
Warrant Stock is not then in effect by the date such registration statement is
required to be effective pursuant to the terms of the Offering or not effective
at any time thereafter, in lieu of exercising this Warrant by payment of cash,
the Holder may elect to exercise this Warrant by a cashless exercise and shall
receive the number of shares of Common Stock equal to an amount (as determined
below) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:
 

     
X = Y - (A)(Y)
  
B
     
  Where
X =
the number of shares of Common Stock to be issued to the Holder.
     

 
 
 
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Y =
the number of shares of Common Stock issuable upon exercise of this Warrant in
accordance with the terms of this Warrant by means of a cash exercise rather
than a cashless exercise.
       
A =
the Exercise Price.
       
B =
the Per Share Market Value of one share of Common Stock on the Business Day
immediately preceding the date of such election.

For the purpose of this Warrant, “Per Share Market Value” means on any
particular date (a) the last closing price per share of the Common Stock on such
market that the Common Stock is then listed, or if there is no closing price on
such date, then the closing bid price on such date, or if there is no closing
bid price on such date, then the closing price on such exchange or quotation
system on the date nearest preceding such date, or (b) if the Common Stock is
not listed then on a market or any registered national stock exchange, the last
closing price for a share of Common Stock in the over-the-counter market, as
reported by Bloomberg at the close of business on such date, or if there is no
closing price on such date, then the closing bid price on such date, or (c) if
the Common Stock is not then reported by the trading market or any registered
national stock exchange or in the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices),
then the average of the “Pink Sheet” quotes for the five (5) Business Days
preceding such date of determination, or (d) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Co-Placement Agents;
provided, however, that the Company, after receipt of the determination by such
independent appraiser, shall have the right to select an additional independent
appraiser, in which case, the fair market value shall be equal to the average of
the determinations by each such independent appraiser; and provided, further,
that all determinations of the Per Share Market Value shall be appropriately
adjusted for any stock dividends, stock splits or other similar transactions
during such period. The determination of fair market value by an independent
appraiser shall be based upon the fair market value of the Company determined on
a going concern basis as between a willing buyer and a willing seller and taking
into account all relevant factors determinative of value, and shall be final and
binding on all parties. In determining the fair market value of any shares of
Common Stock, no consideration shall be given to any restrictions on transfer of
the Common Stock imposed by agreement or by federal or state securities laws, or
to the existence or absence of, or any limitations on, voting rights.

C.    Limitation on Exercise.  Notwithstanding any provisions herein to the
contrary, the number of shares of Common Stock that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall
be limited to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its affiliates and any other persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), does
 
 
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not exceed 4.9% (the “Maximum Percentage”) of the total number of issued and
outstanding shares of Common Stock. For such purposes, beneficial ownership
shall be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. This restriction may not be
waived.
 
D.    Exercise Disputes.  In the case of any dispute with respect to the number
of shares of Common Stock to be issued upon exercise of this Warrant and/or the
Exercise Price in effect at the time of exercise, the Company shall promptly
submit the disputed determinations or arithmetic calculations to the Holder via
fax (or, if the Holder has not provided the Company with a fax number, by
overnight courier) within five (5) Business Days of receipt of the Holder’s
Exercise Notice.  If the Holder and the Company are unable to agree as to the
determination of the number of shares of Common Stock to be issued upon exercise
of this Warrant and/or the Exercise Price within five (5) Business Days of such
disputed determination or arithmetic calculation being submitted to the Holder
by the Company, then the Company shall in accordance with this Section, on the
next Business Day submit the disputed determination to its independent
auditor.  The Company shall cause its independent auditor to perform the
determinations or calculations and notify the Company and the Holder of the
results promptly, in writing and in sufficient detail to give the Holder and the
Company a clear understanding of its determinations and calculations.  The
determination by the Company’s independent auditor shall be binding upon all
parties absent manifest error.  The Company shall then on the next Business Day
instruct its transfer agent to issue certificate(s) representing the appropriate
number of shares of Common Stock in accordance with the independent auditor’s
determination and this Section.  The prevailing party shall be entitled to
reimbursement of all fees and expenses of such determination and calculation,
but in no event shall the Company be liable to the Holder for any diminution of
value or damages therefrom during the period that such exercise is disputed.

3.    Shares Fully Paid; Payment of Taxes. All shares of Common Stock issued
upon the exercise of this Warrant, in accordance with the terms of this Warrant,
shall be validly issued, fully paid and non-assessable, and the Company shall
pay all taxes and other governmental charges (other than income taxes to the
holder) that may be imposed in respect of the issue or delivery thereof.
 
4.    Transfer and Exchange.
 
A.    Transfer.  This Warrant and all rights hereunder are transferable, in
whole or in part, on the books of the Company maintained for such purpose at the
Principal Office by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant at the Principal Office together with: (i) a completed
and executed form of assignment, a form of which is attached hereto as
Exhibit B, (ii) payment of any necessary transfer tax or other governmental
charge imposed upon such transfer, and (iii) an opinion of counsel reasonably
acceptable to the Company stating that such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”). Upon any partial transfer of this Warrant, the Company will
issue and deliver to Holder a new Warrant or Warrants with respect to the
portion of this Warrant not so transferred. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant
when endorsed in blank shall be deemed negotiable and that when this Warrant
shall have been so endorsed, the holder hereof may be treated by the Company and
all other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer
 
 
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hereof on the books of the Company, any notice to the contrary notwithstanding;
but until such transfer on such books, the Company may treat the registered
Holder hereof as the owner for all purposes.
 
B.    Exchange.  This Warrant is exchangeable at the Principal Office for two
(2) or more new Warrants, each in the form of this Warrant, to purchase the same
aggregate number of shares of Common Stock, each new Warrant to represent the
right to purchase such number of shares as the Holder shall designate at the
time of such exchange, but which shall not exceed the total number of shares for
which this Warrant may be from time to time exercisable.
 
5.    Certain Adjustments.  The Exercise Price in effect at any time and the
number and kind of securities issuable upon exercise of this Warrant shall be
subject to adjustment from time to time upon the happening of certain events as
follows:
 
A.    Adjustment for Stock Splits and Combinations. If the Company at any time
or from time to time on or after the Original Issuance Date effects a stock
split or subdivision of the outstanding Common Stock, the Exercise Price then in
effect immediately before that stock split or subdivision shall be
proportionately decreased and the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be proportionately increased.
If the Company at any time or from time to time effects a reverse stock split or
combines the outstanding shares of Common Stock into a smaller number of shares,
the Exercise Price then in effect immediately before that reverse stock split or
combination shall be proportionately increased and the number of shares of
Common Stock theretofore receivable upon the exercise of this Warrant shall be
proportionately decreased. Each adjustment under this Section 5A shall become
effective at the close of business on the date the stock split, subdivision,
reverse stock split or combination becomes effective.
 
B.    Adjustment for Certain Dividends and Distributions. If the Company at any
time or from time to time on or after the Original Issuance Date makes or fixes
a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Exercise Price then in effect shall be
decreased as of the time of such issuance or, in the event such record date is
fixed, as of the close of business on such record date, by multiplying the
Exercise Price then in effect by a fraction (1) the numerator of which is the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date and
(2) the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution; provided, however, that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Exercise Price
shall be recomputed accordingly as of the close of business on such record date
and thereafter the Exercise Price shall be adjusted pursuant to this Section 5B
as of the time of actual payment of such dividends or distributions.
 
C.    Adjustments for Other Dividends and Distributions. In the event the
Company at any time or from time to time on or after the Original Issuance Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in securities of
the Company other than shares of Common Stock, then
 
 
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and in each such event provision shall be made so that the Holder of this
Warrant shall receive upon conversion thereof, in addition to the number of
shares of Common Stock receivable thereupon, the amount of securities of the
Company which the Holder would have received had this Warrant been exercised on
the date of such event and had Holder thereafter, during the period from the
date of such event to and including the conversion date, retained such
securities receivable by the Holder as aforesaid during such period, subject to
all other adjustments called for during such period under this Section 5 with
respect to the rights of the Holder of this Warrant.
 
D.    Adjustment for Recapitalization, Reorganization, Reclassification,
Consolidation, Merger or Sale.  In case the Company after the Original Issue
Date shall do any of the following (each, a “Recap Event”): (a) consolidate or
merge with or into any other Person and the Company 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 Company and the Company shall
be the continuing or surviving Person but, in connection with such consolidation
or merger, any Common Stock of the Company 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 Common
Stock, then, and in the case of each such Recap Event, proper provision shall be
made to the Exercise Price and the number of shares of Common 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
Recap Event, to the extent this Warrant is not exercised prior to such Recap
Event, to receive at the Exercise Price in effect at the time immediately prior
to the consummation of such Recap Event, in lieu of the Common Stock issuable
upon such exercise of this Warrant prior to such Recap Event, the securities,
cash and property to which such Holder would have been entitled upon the
consummation of such Recap 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 Recap
Event), subject to adjustments (subsequent to such corporate action) as nearly
equivalent as possible to the adjustments provided for elsewhere in this
Section; provided, however, the Holder at its option may elect to receive an
amount in unregistered shares of the common stock of the surviving entity equal
to the value of this Warrant calculated in accordance with the Black-Scholes
formula; provided, further, such shares of Common Stock shall be valued at a
twenty percent (20%) discount to the VWAP of the Common Stock for the twenty
(20) Trading Days immediately prior to the Recap Event. Immediately upon the
occurrence of a Recap Event, the Company shall notify the Holder in writing of
such Recap Event and provide the calculations in determining the number of
shares of Warrant Stock issuable upon exercise of the new warrant and the
adjusted Warrant Price. Upon the Holder’s request, the continuing or surviving
corporation as a result of such Recap Event shall issue to the Holder a new
warrant of like tenor evidencing the right to purchase the adjusted number of
shares of Warrant Stock and the adjusted Warrant Price pursuant to the terms and
provisions of this Section 4(a)(i).  In the event that the surviving entity
pursuant to any such Recap Event is not a public company that is registered
pursuant to the Exchange Act of 1934, as amended, or its common stock is not
listed or quoted on a national securities exchange, national automated quotation
system or the OTC Bulletin Board, then the Holder at its option may elect to
receive an amount in unregistered shares of the common stock of the surviving
entity equal to the value of this Warrant calculated in accordance with the
Black-Scholes formula.
 
 
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In the event that the Holder has elected not to exercise this Warrant prior to
the consummation of a Recap Event and has also elected not to receive an amount
in unregistered shares equal to the value of this Warrant calculated in
accordance with the Black-Scholes formula, so long as the surviving entity
pursuant to any Recap Event is a company that has a class of equity securities
registered pursuant to the Exchange Act 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
Company) 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 Company under this Warrant (and if the
Company shall survive the consummation of such Recap Event, such assumption
shall be in addition to, and shall not release the Company from, any continuing
obligations of the Company 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 Company, 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.

E.    Reserved.
 
F.    Adjustment for Sale of Shares Below Exercise Price.
 
(i)    In the event the Company shall at any time issue Additional Stock (as
defined below) at a price per share less than $2.54 or without consideration (a
“Trigger Issuance”), then the Exercise Price then in effect upon each such
Trigger Issuance shall be changed to a price equal to 150% of the consideration
per share received by the Company in respect of the shares issued in such
Trigger Issuance (rounded to the nearest tenth of a cent).  Such adjustment
shall be made successively whenever such an issuance is made.

 
(ii)    “Additional Stock” shall mean Common Stock or options, warrants or other
rights to acquire or securities convertible into or exchangeable for shares of
Common Stock, including shares held in the Company’s treasury, and shares of
Common Stock issued upon the exercise of any options, rights or warrants to
subscribe for shares of Common Stock and shares of Common Stock issued upon the
direct or indirect conversion or exchange of securities for shares of Common
Stock, other than securities:
 
(1) issued or issuable upon the exercise of any Warrants and/or Agent Warrants
issued in connection with the Offering;
 
 
 
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(2) issued or issuable upon the conversion or exercise or exchange of options,
warrants, rights and other securities or debt that are outstanding on the
Original Issuance Date;
 
(3) issued or issuable pursuant to stock purchase or stock option plans which
have been approved by the Company’s board of directors and shareholders on or
prior to the Original Issuance Date;
 
(4) issued or issuable as a result of any anti-dilution in any outstanding
securities of the Company that are outstanding on the Original Issuance Date; or
 
(5) issued or issuable to employees, officers or directors pursuant to stock
option plans approved by the independent members of the Company’s Board of
Directors and the stockholders of the Company.
 
G.    Reserved
 
H.    Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Exercise Price pursuant to this Section 5, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of a Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request at any time of any holder of a Warrant, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) Exercise Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the exercise of the Warrant.
 
6.    Notices of Record Date. In case:
 
A.    the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time receivable upon the exercise of the
Warrants) for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right, or
 
B.    of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation or merger of the Company with or
into another corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation, or
 
C.    of any voluntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to each
holder of a Warrant at the time outstanding a notice specifying, as the case may
be, (a) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (b) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is expected to take place, and the time, if any is to be fixed, as of
which the holders of record of Common Stock (or such stock or securities at the
time receivable upon the exercise
 
 
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of the Warrants) shall be entitled to exchange their shares of Common Stock (or
such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up, such notice shall be mailed at least ten
(10) days prior to the date therein specified.
 
7.    Loss or Mutilation. Upon receipt by the Company of evidence satisfactory
to it (in the exercise of reasonable discretion) of the ownership of and the
loss, theft, destruction or mutilation of any Warrant and (in the case of loss,
theft or destruction) of indemnity satisfactory to it (in the exercise of
reasonable discretion), and (in the case of mutilation) upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof a new
Warrant of like tenor.
 
8.    Reservation of Common Stock. The Company shall at all times reserve and
keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All of the shares of Common
Stock issuable upon the exercise of the rights represented by this Warrant will,
upon issuance and receipt of the Exercise Price therefor, be fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges of whatever nature, with respect to the
issuance thereof.
 
9.    Registration Rights.  All shares of Common Stock issuable upon exercise of
this Warrant shall have the registration rights set forth in the Subscription
Agreement, subject to any applicable limitations, by and between the Holder and
the Company, which rights are expressly incorporated and made a part of this
Warrant.
 
10.    Notices. All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first class, registered or certified
mail, postage prepaid, to the address furnished to the Company in writing by the
Holder.
 
11.    Change; Modifications; Waiver. No terms of this Warrant may be amended,
waived or modified except by the express written consent of the Company and the
Holder.
 
12.    Headings. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
 
13.    Governing Law, Etc. This Warrant shall be governed by and construed
solely and exclusively under and pursuant to the laws of the State of New York
as applied to agreements among New York residents entered into and to be
performed entirely within New York.  Each of the parties hereto expressly and
irrevocably (1) agree that any legal suit, action or proceeding arising out of
or relating to this Warrant will be instituted exclusively in either the
New York State Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York, (2) waive any objection
they may have now or hereafter to the venue of any such suit, action or
proceeding, and (3) consent to the in personam jurisdiction of either the
New York State Supreme Court, County of New York, or the United States District
Court for the Southern District of New York in any such suit, action or
proceeding.  Each of the parties hereto further agree to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding in either the New York State Supreme Court, County of New York, or in
the United States District Court for the Southern District of
 
 
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New York and agree that service of process upon it mailed by certified mail to
its address will be deemed in every respect effective service of process upon
it, in any such suit, action or proceeding.  THE PARTIES HERETO AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS WARRANT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY.  THE PARTY PREVAILING THEREIN SHALL BE ENTITLED TO PAYMENT FROM THE
OTHER PARTY HERETO OF ALL OF ITS REASONABLE COUNSEL FEES AND DISBURSEMENTS.
 
[Signature page to follow]
 
 
 
 
 
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[Signature page to Warrant]
 

 
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its authorized officer as of the date first indicated above.
 
         
PURDEN LAKE RESOURCE CORP.
   
  
       
By:  
   
Name:
 
 
Title:
 

 
 
 
 
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EXHIBIT A
 
SUBSCRIPTION FORM
 
(To be executed by the Holder only upon exercise of Warrant)
 
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant and purchases _______ shares of Common Stock of Purden Lake Resource
Corp. purchasable with this Warrant, and herewith makes payment therefor, all at
the price and on the terms and conditions specified in this Warrant.
 
The Holder shall make payment of the Exercise Price as follows (check one):
 
______ “Cash Exercise” pursuant to Section 2.A of the Warrant
 
______ “Cashless Exercise” pursuant to Section 2.B of the Warrant
 
Notwithstanding anything to the contrary contained herein, this Exercise Notice
shall constitute a representation by the Holder that, after giving effect to the
exercise provided for in this Exercise Notice, the Holder (together with its
affiliates) will not have beneficial ownership (together with the beneficial
ownership of such Person’s affiliates) of a number of shares of Common Stock
which exceeds the Maximum Percentage of the total outstanding shares of Common
Stock as determined pursuant to the provisions of Section 2C of the Warrant.
 
The Holder represents to the Company that, as of the date of exercise:
 
i.            the shares of Common Stock being purchased pursuant to this
Exercise Notice are being acquired solely for the Holder’s own account and not
as a nominee for any other party, for investment, and not with a view toward
distribution or resale; and
 
ii.           the Holder is an “accredited investor” as such term is defined in
Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
 
If the Holder cannot make the representations required above because they are
factually incorrect, it shall be a condition to the exercise of the Warrant that
the Company receive such other representations as the Company considers
necessary, acting reasonably, to assure the Company that the issuance of
securities upon exercise of this Warrant shall not violate any United States or
other applicable securities laws.
 
Dated:
   
Name of Holder:
         
(Print)
         
By:
     
Name:
     
Title:
     
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)

 
 
 
 

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EXHIBIT B
 
FORM OF ASSIGNMENT
 

 
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Common Stock set forth below:
 
Name of Assignee
 
Address
 
Number of Shares
         

 
and does hereby irrevocably constitute and appoint __________________________
Attorney to make such transfer on the books of Purden Lake Resource Corp.
maintained for the purpose, with full power of substitution in the premises.
 
 Dated:
           
(Signature)
                     
(Witness)
 
 
         

The undersigned Assignee of the Warrant hereby makes to Purden Lake Resource
Corp., as of the date hereof, with respect to the Assignee, all of the
representations and warranties made by the Holder, and the undersigned Assignee
agrees to be bound by all the terms and conditions of the Warrant.

 Dated:
           
(Signature)