Common use of Warrant Consideration Clause in Contracts

Warrant Consideration. On the Closing Date, Buyer shall execute and deliver to CECG warrants (the “Warrants”) to purchase Buyer Common Stock, in substantially the form attached hereto as Exhibit B (the “Warrant Consideration”), having the following terms: (i) an option to purchase 500,000 shares of Buyer Common Stock exercisable at a price per share that is $0.75 in excess of the Market Price and that expires on the first anniversary of the Closing Date; (ii) an option to purchase 500,000 shares of Buyer Common Stock exercisable at a price per share that is $1.75 in excess of the Market Price and that expires on the second anniversary of the Closing Date; and (iii) an option to purchase 500,000 shares of Buyer Common Stock exercisable at a price per share that is $2.75 in excess of the Market Price and that expires on the third anniversary of the Closing Date. In the event that a warrant expiration date occurs on a day other than a Business Day, such expiration date shall instead be on the next succeeding Business Day. The value of the Warrant Consideration shall be reasonably determined by Buyer at Closing in accordance with GAAP; provided, however, that in the event this Agreement is terminated pursuant to Section 10.01(b), for purposes of the definition of “Superior Sale Transaction” and the calculation of any amounts payable pursuant to Section 10.03(b), the value of the Warrant Consideration comprising a portion of the Purchase Price will be determined in good faith by the Selling Parties pursuant to the Black-Scholes model utilizing the average closing price of the shares of Buyer Common Stock over the 10 day trading period ending on the business day immediately preceding the date that this Agreement is terminated. In the event that Buyer disagrees with the Selling Parties’ calculation of the value of the Warrant Consideration, Buyer shall deliver a written objection to the Selling Parties no later than 15 Business Days after delivery to Buyer of such calculation and, if the Parties do not reach agreement on the value of the Warrant Consideration within 15 Business Days after Buyer’s delivery to the Selling Parties of such objection, the Parties shall engage a mutually agreeable investment banking firm to determine the value of the Warrant Consideration, whose determination will be final and binding on the Parties. The Selling Parties shall pay one half of the fees and expenses of such investment banking firm and Buyer shall pay the other half of such fees and expenses.