Document:

Ex10.23

Exhibit 10.23

AMENDED AND RESTATED TAX SHARING AGREEMENT

This Amended and Restated Tax Sharing Agreement (the "Agreement"), dated as of December 21, 2011, is entered into by and among MACANDREWS & FORBES HOLDINGS INC. ("Mafco"), M&F WORLDWIDE CORP., a Delaware corporation ("MFW"), HARLAND CLARKE HOLDINGS CORP. (formerly CLARKE AMERICAN CORP.), a Delaware corporation ("Clarke"), and PCT INTERNATIONAL HOLDINGS INC., a Delaware corporation (“PCT”).   

R E C I T A L S

WHEREAS, prior to the date hereof, MFW was the common parent corporation of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the "Code"), that elected to file consolidated federal income tax returns and Clarke and PCT are members of such group;
WHEREAS, on the effective date of this Agreement, Mafco will acquire 100% of the stock of MFW, and MFW and its Subsidiaries will join the affiliated group of corporations within the meaning of Section 1504(a) of the Code of which Mafco is the common parent;
WHEREAS, MFW, Clarke and PCT desire, to the extent permitted by the Code, and the regulations promulgated thereunder (the "Treasury Regulations"), that the PCT Group and the Clarke Group (each as defined below) be included in the Parent Consolidated Group as defined below;
WHEREAS, MFW, Clarke and PCT desire, to the extent permitted by applicable foreign, state and local law, that members of the Parent Consolidated Group shall be included in the filing of consolidated, combined or unitary tax returns for state tax purposes if so requested by MFW;
WHEREAS, MFW, Clarke and PCT wish to allocate and settle among themselves in an equitable manner (i) the consolidated federal income tax liability, (ii) any applicable consolidated, combined or unitary tax liability for foreign, state and/or local tax purposes, and (iii) certain other tax matters, for Agreement Years (as defined herein); 
WHEREAS, Clarke and PCT desire to be indemnified by MFW with respect to certain tax liabilities, and MFW is willing to so indemnify such parties; and 
WHEREAS, MFW, Clarke and PCT are parties to a Tax Sharing Agreement entered into as of December 15, 2005 (the "Original TSA") providing for the foregoing with respect to the affiliated group of corporations within the meaning of Section 1504(a) of the Code of which MFW was the common parent and now wish to amend and restate such agreement and 

to add Mafco as a party in order to provide for the foregoing with respect to the affiliated group of corporations within the meaning of Section 1504(a) of the Code of which Mafco is the common parent.  
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:
1.    Definitions.
For purposes of this Agreement, the following terms shall be defined as follows:
(a)    "Agreement Year" for each Subgroup shall mean, (i) with respect to federal income taxes, any taxable year or portion thereof beginning on or after the date of the Original TSA with respect to which a consolidated federal income tax return is properly filed by Parent on behalf of the Parent Consolidated Group which includes the PCT Subgroup or the Clarke Subgroup, as applicable, and (ii) with respect to foreign, state or local income or franchise taxes, any taxable year or portion thereof beginning on or after the date of the Original TSA with respect to which a Combined Return is properly filed.  
(b)    "Clarke Subgroup" shall mean the affiliated group of corporations (including any predecessors and successors thereto) within the meaning of Section 1504(a) of the Code, of which Clarke would be the common parent if it were not included in the Parent Consolidated Group.
(c)    "Combined Return" shall mean any consolidated, combined or unitary tax return filed for foreign, state or local income or franchise tax purposes which includes (x) one or more members of the PCT Subgroup and one or more other members of the Parent Consolidated Group (without reference to the PCT Subgroup) or (y) one or more members of the Clarke Subgroup and one or more other members of the Parent Consolidated Group (without reference to the Clarke Subgroup).
(d)    "Estimated Tax Payments" for any Agreement Year shall mean, with respect to each of the Clarke Subgroup and the PCT Subgroup, the aggregate payments by each of Clarke and PCT, respectively, to Parent for such Agreement Year pursuant to Section 3 hereof.  
(e)    "Final Determination" shall mean a closing agreement with the Internal Revenue Service or the relevant state or local taxing authorities, an agreement contained on Internal Revenue Service Form 870-AD or other comparable form, an agreement that constitutes a determination under Section 1313(a)(4) of the Code, a claim for refund which has been allowed, a deficiency notice with respect to which the period for filing a petition with the Tax Court or the relevant state or local tribunal has expired or a decision of any court of competent jurisdiction that is not subject to appeal or as to which the time for appeal has expired.
(f)    "Other Tax" shall mean any consolidated, combined or unitary foreign, state or local income or franchise taxes.
(g)    "Parent" shall mean, for all taxable periods beginning on or after the date of the Original 

TSA and ending prior to the effective date of this Agreement, MFW, and for all taxable periods beginning on or after the effective date of this Agreement, Mafco.
(h)    "Parent Consolidated Group" shall mean the affiliated group of corporations (including any predecessors and successors thereto) within the meaning of Section 1504(a) of the Code electing to file consolidated federal income tax returns and of which Parent is the common parent.
(i)    "PCT Subgroup" shall mean the affiliated group of corporations (including any predecessors and successors thereto) within the meaning of Section 1504(a) of the Code, of which PCT would be the common parent if it were not included in the Parent Consolidated Group.
(j)    "Pro Forma Federal Tax Liability" for each respective Subgroup shall mean, with respect to each Agreement Year, the consolidated federal taxable income liability or, if applicable, the consolidated federal alternative minimum tax liability that such Subgroup would have incurred if it had not been included in the Parent Consolidated Group for such Agreement Year, but had instead filed its own consolidated return for such Agreement Year and all prior Agreement Years; provided, that in computing such tax liability for any Agreement Year, such Subgroup shall not take into account any amounts paid or payable by such Subgroup to Parent  under Sections 2, 3 or 5 hereof or by Parent to the Subgroup under Sections 2, 3, 5 or 7 hereof.  In computing the Pro Forma Federal Tax Liability of a Subgroup, the Subgroup shall be entitled to take into account deductions and/or credits attributable to the carryover or carryback of any losses and/or credits of any member of such Subgroup, after taking into account any limitations on the use of such losses and credits imposed pursuant to Sections 172, 382, 383, 384, 904 or 1212 of the Code or by Treasury Regulations Sections 1.1502-15, 1.1502-20, 1.1502-21, 1.1502-22, 1.1502-91, 1.1502-92, 1.1502-93 or 1.1502-94, provided, further, that any Code Section 199 tax benefit shall be determined by Parent for the entire Parent Consolidated Group and allocated to each of its Subsidiaries in accordance with the methodology of the Treasury Regulations and IRS guidance under Section 199 of the Code.  If the computation of Pro Forma Federal Tax Liability of a Subgroup does not result in a positive number, such Pro Forma Federal Tax Liability shall be deemed to be zero.
(k)    "Pro Forma Other Tax Liability" for each respective Subgroup shall mean, with respect to each Agreement Year, the aggregate Other Tax, computed in a manner consistent with the computation of the Pro Forma Federal Tax Liability as defined above, that the Subgroup or any of the members of such Subgroup would have incurred with respect to each relevant foreign, state and local taxing jurisdiction for any Agreement Year if such Subgroup or any member thereof had filed with such jurisdiction either a separate return (in a case where only one member of such Subgroup joins in the filing of the applicable Combined Return) or a combined return (in a case where more than one member of such Subgroup joins in the filing of the applicable Combined Return).
(l)    "Subgroup" shall mean each of the Clarke Subgroup and the PCT Subgroup.
(m)    "Subsidiary" as to any entity (the parent corporation) shall mean a corporation that would 

be an includible corporation that is a member of an affiliated group of corporations of which the parent corporation would be the common parent, all within the meaning attributable to such terms in Section 1504 of the Code and Treasury Regulations thereunder.
2.    Tax Payments.
(a)    For each Agreement Year, each of Clarke and PCT, respectively, shall pay to Parent an amount equal to the excess, if any, of the Clarke Subgroup's Pro Forma Federal Tax Liability or the PCT Subgroup's Federal Tax Liability, as applicable, for such Agreement Year over the aggregate amount of the Estimated Tax Payments actually made by Clarke or PCT, as applicable, to Parent pursuant to Section 3(a) hereof for such Agreement Year.  If the aggregate amount of the Estimated Tax Payments actually made to Parent by each of Clarke and/or PCT pursuant to Section 3(a) hereof for such Agreement Year exceeds the Clarke Subgroup's Pro Forma Federal Tax Liability or the PCT Subgroup's Pro Forma Federal Tax Liability, as applicable, for such Agreement Year, Parent shall pay to Clarke and/or PCT, as applicable, an amount equal to such excess.
(b)  For each Agreement Year, each of Clarke and PCT, respectively, shall pay to Parent an amount equal to the excess, if any, of the Clarke Subgroup's Pro Forma Other Tax Liability or the PCT Subgroup's Other Tax Liability, as applicable, for such Agreement Year over the aggregate amount of the Estimated Tax Payments actually made by Clarke or PCT, as applicable, to Parent pursuant to Section 3(b) hereof for such Agreement Year.  If the aggregate amount of the Estimated Tax Payments actually made to Parent by each of Clarke and/or PCT pursuant to Section 3(b) hereof for such Agreement Year exceeds the Clarke Subgroup's Pro Forma Other Tax Liability or the PCT Subgroup's Pro Forma Other Tax Liability, as applicable, for such Agreement Year, Parent shall pay to Clarke and/or PCT, as applicable, an amount equal to such excess.
3.    Estimated Tax Payments.
(a)    During each Agreement Year, each of Clarke and PCT shall pay to Parent, no later than the tenth day of each of the third, sixth, ninth and twelfth months of such Agreement Year, the amount of estimated federal income taxes that each of the Clarke Subgroup and the PCT Subgroup, as applicable, would have been required to pay on or before the fifteenth day of each such month if such Subgroup were filing its own consolidated federal income tax return for such Agreement Year and was not part of the Parent Consolidated Group.  Such estimated federal income tax liability shall be determined in a manner consistent with the calculation of the Pro Forma Federal Tax Liability the applicable Subgroup and shall reflect the estimated taxable income of such Subgroup projected for three, six, nine and twelve months, respectively.
(b)    During each Agreement Year, each of Clarke and PCT shall pay to Parent, no later than the fifth day prior to the date an estimated foreign, state or local payment is due, the amount of estimated taxes that each of the Clarke Subgroup and the PCT Subgroup, as applicable, would have been required to pay if such Subgroup (or any member 

thereof) had filed for such period either a separate return (in the case where only one member of such Subgroup joins in the filing of the applicable Combined Return) or a combined return (in a case where more than one member of such Subgroup joins in the filing of the applicable Combined Return).  The estimated foreign, state or local income or franchise tax liability of the Clarke Subgroup and the PCT Subgroup shall be determined in a manner consistent with the calculation of the Pro Forma Other Tax Liability of such Subgroup.  
4.    Time and Form of Payment.
(a)  Payments to be made by each of Clarke and PCT pursuant to Section 2 hereof shall be made no later than the fifth day prior to the due date of the Parent Consolidated Group's consolidated federal income tax return or any relevant Combined Return for the period with respect to which such a payment is due.  If the due date for any such return is extended, any amounts due at the time of filing a request for extension of time to file shall be paid on an estimated basis.  No later than five (5) days prior to the extended due date for such return for such Agreement Year, the payment due from each of Clarke and PCT shall be recalculated, and any difference between (i) the Pro Forma Federal Tax Liability and the Pro Forma Other Tax Liability of each respective Subgroup for such Agreement Year and (ii) all prior Estimated Tax Payments by Clarke or PCT, as applicable, with respect to such Agreement Year shall be paid by such fifth day to the party entitled thereto, with interest from the original due date at the relevant statutory rate.
(b)    The parties agree to cause each Subsidiary of Clarke and PCT to pay to Clarke or PCT, as applicable, its share of each of the items of the applicable Subgroup's Pro Forma Federal Tax Liability and Pro Forma Other Tax Liability as well as such Subsidiary's allocable share of Estimated Tax Payments, each such share to be determined in accordance with the principles of Sections 1(i), 1(j), 3(a) and 3(b) hereof, no later than one (1) business day prior to the date upon which the relevant payment by Clarke or PCT, as applicable, is required to be made under the terms hereof.  Each of Clarke and PCT agrees to pay its respective Subsidiaries, such Subsidiary's share of any payment received by such party from Parent pursuant to this Agreement, each such share to be determined in accordance with the principles of Sections 1(i), 1(j), 3(a) and 3(b) hereof, as promptly as practicable following the receipt of any such payment and the determination of such share.
5.    Adjustments.
(a)    Redeterminations of Tax Liability.  In the event of any redetermination of the consolidated federal income tax liability of the Parent Consolidated Group for any Agreement Year (or of the consolidated, combined or unitary foreign, state or local income or franchise tax liability for any Agreement Year) as the result of an audit by the Internal Revenue Service (or the relevant foreign, state or local taxing authorities), a claim for refund or otherwise, the Pro Forma Federal Tax Liability and/or the Pro Forma Other Tax Liability, as applicable, of each Subgroup shall be recomputed for such Agreement Year and any prior and subsequent Agreement Years to take into account such redetermination, and payments due pursuant to Section 2 hereof shall be appropriately adjusted.  Any payment pursuant to Section 2 hereof that is required 

pursuant to this Section 5(a) as a result of such adjustment shall be paid within seven (7) days after the date of a Final Determination with respect to such redetermination or as soon as such adjustment can practicably be calculated, if later, together with interest for the period at the rate provided for in the relevant statute.
(b)  Refund of Tax Sharing Payment.  In the event that the calculation of the taxable income of each of the Subgroups (determined in accordance with the principles of Sections 1(i) and 1(j) hereof) for any Agreement Year results in a loss, such loss may be carried back and deducted in calculating such Subgroup's Pro Forma Federal Tax Liability or Pro Forma Other Tax Liability, as applicable, for prior Agreement Years in the same manner as it would have been carried back and deducted had it constituted a net operating loss deduction under Section 172 of the Code or a net capital loss deduction under Section 1212 of the Code (or in the case of foreign, state or local tax, under applicable foreign, state or local provisions), as such provisions would have been applied if such Subgroup had not been included in the Parent Consolidated Group (or joined in the filing of the applicable Combined Return) for such Agreement Year, but had instead filed its own consolidated return (or its own separate return or combined return, as applicable) for such Agreement Year and all prior Agreement Years, but in each case after taking into account any limitation on the use of such loss imposed pursuant to Section 382, 383, 384 or 904 of the Code or Treasury Regulations Sections 1.1502-15, 1.1502-20, 1.1502-21, 1.1502-22, 1.1502-91, 1.1502-92, 1.1502-93 or 1.1502-94 (or with respect to foreign, state and local tax, applicable foreign, state or local provisions).  In such case, the applicable Subgroup's Pro Forma Federal Tax Liability and/or Pro Forma Other Tax Liability shall be recomputed for the Agreement Year or Years to which such loss is carried and for any subsequent Agreement Years to take into account the deduction of such loss, and payments made pursuant to Section 2 hereof shall be appropriately adjusted.  Any payment pursuant to Section 2 hereof that is required pursuant to this Section 5(b) as a result of any such adjustment shall be paid within seven (7) days after the date of filing the consolidated federal income tax return of the Parent Consolidated Group (or the applicable Combined Return) for the year in which such loss arises.  Excess credits for any Agreement Year shall be carried back and otherwise treated in a manner consistent with the provisions of this Section 5.
6.    Interest on Unpaid Amounts.
In the event that any party fails to pay any amount owed pursuant to this Agreement within ten (10) days after the date when due, interest shall accrue on any unpaid amount at the "designated rate" from the due date until such amounts are fully paid.  For purposes of this Agreement, the "designated rate" shall mean ten percent (10%).
7.    Indemnification.
Parent shall indemnify each member of the Clarke Subgroup and the PCT Subgroup, respectively, on an after-tax basis (taking into account, when realized, any tax detriment or tax benefit to such Subgroup of (x) a payment hereunder or (y) the liability to the Internal Revenue Service or any applicable foreign, state or local taxing authority giving rise to such a payment), with respect to and in the amount of:

(a)  any liability to the Internal Revenue Service for federal income tax incurred by such Subgroup for any Agreement Year with respect to which such Subgroup is included in the Parent Consolidated Group for purposes of filing a consolidated federal income tax return;
(b)  any liability for Other Taxes to a foreign, state or local taxing authority incurred by such Subgroup with respect to any such jurisdiction for any Agreement Year with respect to which the Subgroup or any member thereof participates in the filing of a Combined Return;
(c)  any liability for federal income tax to the Internal Revenue Service or any Other Tax to  any applicable foreign, state or local taxing authority, as the case may be, incurred by any member of such Subgroup to the extent attributable to any member of the Parent Consolidated Group (determined without reference to other members of such Subgroup) and for which the Subgroup or any member thereof is liable as a result of being included in the Parent Consolidated Group or as a result of participating in the filing of a Combined Return; and
(d)  interest, penalties and additions to tax, and costs and expenses in connection with any liabilities described in Sections 7(a), (b) and (c) above.
Parent shall pay to Clarke and/or PCT, as applicable, any amount due under Sections 7(a), (b) and (c) and Section 7(d) (to the extent such amounts are related to amounts under Sections 7(a), (b) and (c)) no later than seven (7) days after the date of a Final Determination with respect thereto.
8.    Filing of Returns, Payment of Tax.
(a)  Appointment of Parent as Agent.  Each of Clarke and PCT hereby appoint (and hereby appoint on behalf of each of their respective Subsidiaries) Parent as their agent, so long as Clarke and PCT, as applicable, are members of the Parent Consolidated Group for the purpose of (i) filing consolidated federal income tax returns and, (ii) for making any election or application or taking any action in connection therewith on behalf of any member of the Clarke Subgroup or the PCT Subgroup, as applicable, consistent with the terms of this Agreement.  Each of Clarke and PCT hereby appoint (and hereby appoint on behalf of each of their respective Subsidiaries) Parent as their agent, so long as any member of the Clarke Subgroup or the PCT Subgroup, as applicable, is eligible to join in the filing of any Combined Return, for the purpose of (i) filing any such Combined Return that Parent may elect to file, and (ii) for making any election or application or taking any action in connection therewith on behalf of any member of the Clarke Subgroup or the PCT Subgroup, as applicable, consistent with the terms of this Agreement.  Each of Clarke and PCT hereby consent (and hereby consent on behalf of their respective Subsidiaries) to the filing of such returns, and to the making of such elections and applications.  Parent agrees that to the extent that the filing of any Combined Return would reduce the Other Tax liability of any Subgroup (or any member thereof) without causing an increase in Other Tax liability of any other member of the Parent Consolidated Group (determined without reference to such Subgroup) in such period, Parent will file or cause to be filed for such taxable period a Combined Return; provided, 

however, that such filing is permitted by applicable state or local law.  Except as provided in this Paragraph 8, nothing herein shall be construed as requiring Parent or any Subsidiary of Parent to file any Combined Return for any Agreement Year.
(b)    Cooperation.  Each of Clarke and PCT shall cooperate, and shall cause their respective Subsidiaries to cooperate, with Parent in the filing, to the extent permitted by law, of a consolidated federal income tax return and such Combined Returns as Parent elects to file or cause to be filed, by maintaining such books and records and providing such information as may be necessary or useful in the filing of such returns and executing any documents and taking any actions which Parent may reasonably request in connection therewith.  Clarke, PCT and the Parent shall provide one another with such information concerning such returns and the application of payments made under this Agreement as Parent, Clarke or PCT may reasonably request of one another.
(c)    Payment of Tax.  For each Agreement Year, Parent shall timely pay or discharge, or cause to be timely paid or discharged, the consolidated federal income tax liability of the Parent Consolidated Group for such Agreement Year and the Other Tax liability shown on any Combined Return that Parent elects or is required to file.
9.    Resolution of Disputes.
Any dispute concerning the calculation or basis of determination of any payment provided for hereunder shall be resolved by the independent certified public accountants for Parent, whose judgment shall be conclusive and binding upon the parties, in the absence of manifest error.
10.    Adjudications.
In any audit, conference, or other proceeding with the Internal Revenue Service or the relevant foreign, state or local authorities, or in any judicial proceedings concerning the determination of (i) the federal income tax liabilities of the Parent Consolidated Group, (ii) any tax item of any member of either Subgroup, or (iii) the Other Tax liability with respect to any Combined Return, the parties shall be represented by persons selected by Parent.  Parent shall undertake any settlement or other action that it is permitted to take pursuant to this Section 10 affecting (x) the federal income tax or Other Tax liability of any member of a Subgroup or (y) any amount payable by or receivable to either Clarke or PCT pursuant to this Agreement, with the same diligence and care as if such action pertained to an income tax liability of Parent and as if any amount that might be so payable by or receivable to such party were payable by or receivable to Parent.  Each of Clarke and PCT hereby appoint (and hereby appoint on behalf of their respective Subsidiaries) Parent as their agent for the purpose of proposing and concluding any such settlement.
11.    Binding Effect; Successors and Assigns.
This Agreement shall be binding upon Mafco, MFW, Clarke, PCT and each of their respective present and future Subsidiaries, and any predecessor or successor to any of the foregoing.  This Agreement shall inure to the benefit of, and be binding upon, any successors or assigns of the persons described in the preceding sentence.  Mafco, MFW, Clarke and PCT 

may assign their right to receive payments under this Agreement but may not assign or delegate their obligations hereunder.
12.    Interpretation.
This Agreement is intended to calculate and allocate certain federal, foreign, state and local income and franchise tax liabilities of members of Parent, the Clarke Subgroup and the PCT Subgroup, and any situation or circumstance concerning such calculation and allocation that is not specifically contemplated hereby or provided for herein shall be dealt with in a manner consistent with the underlying principles of calculation and allocation in this Agreement.
13.    Legal, Accounting and Other Fees.
Any (a) fees or expenses for legal, accounting or other professional services rendered in connection with (i) the preparation of a consolidated federal or combined state or local income tax return for the Parent Consolidated Group or for members of the Parent Consolidated Group, (ii) the application of the provisions of this Agreement or (iii) the conduct of any audit, conference or proceeding of the Internal Revenue Service or relevant state or local authorities or judicial proceedings relevant to any determination required to be made hereunder and (b) upfront costs associated with the appeal of a redetermination of the consolidated federal income tax liability of the Parent Consolidated Group for any Agreement Year as described in Section 5(a) shall be allocated between Parent, Clarke and PCT in a manner resulting in each of Clarke and PCT, as applicable, bearing a reasonable approximation of the actual amount of such fees or expenses hereunder reasonably related to, and for the benefit of, the Clarke Subgroup or the PCT Subgroup, as applicable, rather than to or for other members of the Parent Consolidated Group.
14.    Effect of the Agreement.
This Agreement shall determine the liability as between (i) Parent and the members of the Clarke Subgroup to each other, and (ii) Parent and the members of the PCT Subgroup to each other, in each case as to the matters provided for herein, whether or not such determination is effective for purposes of the Code or of applicable foreign, state or local revenue laws, or for financial reporting purposes or for any other purposes.
15.    Entire Agreement.
This Agreement embodies the entire understanding among the parties relating to its subject matter and supersedes and terminates any prior agreements and understandings among the parties with respect to such subject matter.  Any and all prior correspondence, conversations and memoranda are merged herein and shall be without effect hereon.  No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce either party to enter into this Agreement.  This Agreement, including this provision against oral modification, shall not be modified or terminated except by a writing duly signed by each of the parties hereto, and no waiver of any provisions of this Agreement shall be effective unless in a writing duly signed by the party sought to be bound.
16.    Code References.

Any references to the Code or Treasury Regulations shall be deemed to refer to the relevant provisions of any successor statute or regulation and shall refer to such provisions as in effect from time to time.
17.    Notices.
Any payment, notice or communication required or permitted to be given under this Agreement shall be in writing (including telecopy communication) and mailed, telecopied or delivered:
If to Clarke, to;
Harland Clarke Holdings Corp.
10931 Laureate Drive
San Antonio, Texas 78249
Attention:  General Counsel
Facsimile: (210) 558-4370
If to PCT, to:
PCT International Holdings, Inc.
35 East 62nd Street
New York, New York 10065
Attention:  General Counsel
Facsimile:  (212) 572-5184

If to MFW, to:
M&F Worldwide Corp.
35 East 62nd Street
New York, New York 10065
Attention:  General Counsel
Facsimile:  (212) 572-5184

If to Mafco, to:
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10065
Attention:  General Counsel
Facsimile:  (212) 572-5184

or to such other address as a party shall furnish in writing to the other parties.  All such notices and communications shall be effective when received.
18.    Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
19.    New Members.
Each of the parties to this Agreement recognizes that from time to time, new Subsidiaries of the Parent may be added to the Parent Consolidated Group.  Each of the parties agrees that any new Subsidiary of the Parent shall, without the express written consent of the other parties, become a party to this Agreement for all purposes of this Agreement with respect to 

taxable periods ending after such Subsidiary was added to the Parent Consolidated Group.
20.    Termination.
This Agreement shall terminate at such time as all obligations and liabilities of the parties hereto have been satisfied.  Except as otherwise provided herein, Clarke and/or PCT, as applicable shall not have any obligations or liabilities under this Agreement for any taxable period, or portion thereof, (i) with respect to federal income taxes, during which the Clarke Subgroup or the PCT Subgroup, as applicable, is not included in the Parent Consolidated Group, and (ii) with respect to Other Taxes, during which no member of the Clarke Subgroup or the PCT Subgroup, as applicable, joins in the filing of a Combined Return; provided, however, that the indemnification obligations and liabilities of Parent under Section 7 shall continue and shall not terminate.  The obligations and liabilities of the parties arising under this Agreement with respect to any Agreement Year and the indemnification obligations and liabilities of Parent arising under Section 7 shall continue in full force and effect until all such obligations have been met and such liabilities have been paid in full, whether by expiration of time, operation of law, or otherwise.  The obligations and liabilities of each party are made for the benefit of, and shall be enforceable by, the other parties and their successors and permitted assigns.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by its respective duly authorized officer as of the date first set forth above.
                    	
		
	MACANDREWS & FORBES HOLDINGS INC.

	 
	 

	By:
	/s/ Adam F. Ingler

	Name:
	Adam F. Ingler

	Title:
	Senior Vice President

	 
	 

	M&F WORLDWIDE CORP.

	 
	 

	By:
	/s/ Paul G. Savas

	Name:
	Paul G. Savas

	Title:
	Executive Vice President &

	 
	Chief Financial Officer

	 
	 

	HARLAND CLARKE HOLDINGS CORP.

	 
	 

	By:
	/s/ Peter A. Fera, Jr.

	Name:
	Peter A. Fera, Jr.

	Title:
	Executive Vice President &

	 
	Chief Financial Officer

	 
	 

	PCT INTERNATIONAL HOLDINGS INC.

	 
	 

	By:
	/s/ Paul G. Savas

	Name:
	Paul G. Savas

	Title:
	Executive Vice President &

	 
	Chief Financial Officerex4-1.htm

Exhibit 4.1

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

 PHOTOVOLTAIC SOLAR CELLS, INC.

(to be renamed MetaStat, Inc.)

 

Warrant Shares: [_______]                                                                                                Initial Exercise Date: February 27, 2012

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the four year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Photovoltaic Solar Cells, Inc., a Nevada corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock.  The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                      Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated February 27, 2012, among the Company and the purchasers signatory thereto.

 

Section 2.                      Exercise.

 

a) Exercise of Warrant.  Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise form annexed hereto and within five (5) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and

  

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the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall use its commercially reasonable efforts to deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

b) Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $1.40, subject to adjustment hereunder (the “Exercise Price”).

 

c)  Mechanics of Exercise.

 

    i. Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder and in connection with such issuance or resale such Warrant shares are sold by the Holder, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is five (5) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required), and (C) payment of the aggregate Exercise Price as set forth above (such date, the “Warrant Share Delivery Date”).   The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such Warrant Shares, having been paid.

 

    ii. Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

    iii. Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

  

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    iv. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the date that is two (2) Trading Days following the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

     v. No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

         vi. Charges, Taxes and Expenses.  The Company shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue or delivery of the Warrant Shares upon exercise of this Warrant; provided, however, that the Company shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such exercise.

 

     vii. Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

  

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e)           Holder’s Exercise Limitations.  The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.   In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the 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 conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

  

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Section 3.                      Certain Adjustments.

 

a)           Adjustments for Stock Splits, Combinations, Certain Dividends and Distributions.  If the Company shall, at any time or from time to time after the Initial Exercise Date, effect a split of the outstanding Common Stock (or any other subdivision of its shares of Common Stock into a larger number of shares of Common Stock), combine the outstanding shares of Common Stock into a smaller number of shares of Common Stock, or make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in shares of Common Stock, then, in each event (i) the number of shares of Common Stock for which this Warrant shall be exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock that a record holder of the same number of shares of Common Stock for which this Warrant is exercisable immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (ii) the Exercise Price then in effect shall be adjusted to equal (A) the Exercise Price then in effect multiplied by the number of shares of Common Stock for which this Warrant is exercisable immediately prior to the adjustment divided by (B) the number of shares of Common Stock for which this Warrant is exercisable immediately after such adjustment.

b)           Adjustment for Other Dividends and Distributions. If the Company shall, at any time or from time to time after the Initial Exercise Date, make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in (i) cash, (ii) any evidences of indebtedness, or any other securities of the Company or any property of any nature whatsoever, other than, in each case, shares of Common Stock; or (iii) any warrants or other rights to subscribe for or purchase any evidences of indebtedness, or any other securities of the Company or any property of any nature whatsoever, other than, in each case, shares of Common Stock, then, and in each event, (A) the number of shares of Common Stock for which this Warrant shall be exercisable shall be adjusted to equal the product of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such adjustment multiplied by a fraction (1) the numerator of which shall be the last closing bid price per share of the Common Stock at the date of taking such record and (2) the denominator of which shall be such last closing bid price per share of the Common Stock minus the amount allocable to one share of Common Stock of any such cash so distributable and of the fair value (as determined in good faith by the Board) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so distributable, and (B) the Exercise Price then in effect shall be adjusted to equal (1) the Exercise Price then in effect multiplied by the number of shares of Common Stock for which this Warrant is exercisable immediately prior to the adjustment divided by (2) the number of shares of Common Stock for which this Warrant is exercisable immediately after such adjustment. A reclassification of the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Company to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 3(b) and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock within the meaning of Section 3(a).

  

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c)           ­Adjustments for Reclassification, Exchange or Substitution. If the Common Stock for which this Warrant is exercisable at any time or from time to time after the Initial Exercise Date shall be changed to the same or different number of shares of any class or classes of stock, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination of shares or stock dividends provided for in Section 3(a), Section 3(b), or a reorganization, merger, consolidation, or sale of assets provided for in Section 3(d)), then, and in each event, an appropriate revision to the Exercise Price shall be made and provisions shall be made (by adjustments of the Exercise Price or otherwise) so that, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, in lieu of Warrant Stock, the kind and amount of shares of stock and other securities receivable upon reclassification, exchange, substitution or other change, by holders of the number of shares of Common Stock for which this Warrant was exercisable immediately prior to such reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

 

d)           ­Adjustments for Reorganization, Merger, Consolidation or Sales of Assets. If at any time or from time to time after the Initial Exercise Date there shall be a capital reorganization of the Company (other than by way of a stock split or combination of shares or stock dividends or distributions provided for in Section 3(a), and Section 3(b), or a reclassification, exchange or substitution of shares provided for in Section 3(c)), or a merger or consolidation of the Company with or into another corporation where the holders of the Company’s outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting securities of the merged or consolidated entity, immediately after such merger or consolidation, or the sale of all or substantially all of the Company’s properties or assets to any other person (an “Organic Change”), then as a part of such Organic Change an appropriate revision to the Exercise Price shall be made if necessary and provision shall be made if necessary (by adjustments of the Exercise Price or otherwise) so that, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, in lieu of Warrant Stock, the kind and amount of shares of stock and other securities or property of the Company or any successor corporation resulting from the Organic Change. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 3(d) with respect to the rights of the Holder after the Organic Change to the end that the provisions of this Section 3(d) (including any adjustment in the Exercise Price then in effect and the number of shares of stock or other securities deliverable upon exercise of this Warrant) shall be applied after that event in as nearly an equivalent manner as may be practicable.

 

e)           Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f)           Notice to Holder.

 

    i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment..

 

  

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      ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice  except as may otherwise be expressly set forth herein.

 

Section 4.                      Transfer of Warrant.

 

a) Transferability.  Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations reasonably requested in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be substantially identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

  

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c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of the Purchase Agreement and applicable securities laws.

 

e) Representation by the Holder.  The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

 

Section 5.                      Miscellaneous.

 

a) No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d) Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation in any material respect of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.

 

  

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 The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate 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 of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be reasonably necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, reasonably necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be reasonably necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of this Warrant and the Purchase Agreement.

 

f) Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant will have restrictions upon resale imposed by state and federal securities laws.

 

g) Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.

 

h) Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i) Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

  

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j) Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the prior written consent of the Company and the holders of a majority of the then outstanding outstanding warrants issued pursuant to the Purchase Agreement.

 

m) Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

(Signature Page Follows)

 

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	 	
PHOTOVOLTAIC SOLAR CELLS, INC. 

(to be renamed MetaStat, Inc.)

 

 

 

	 	
By:__________________________________________

     Name:

     Title:

 

 

  

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NOTICE OF EXERCISE

TO:           PHOTOVOLTAIC SOLAR CELLS, INC. (TO BE RENAMED METASTAT, INC.)

(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) 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:

 

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4)  Accredited Investor.  The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

  

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____ all of or [_______ shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:                                           _____________________________

Holder’s Address:                                             _____________________________

                                     _____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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