UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

May 1, 2013

Date of Report (date of earliest event reported)

 

 

 

GBS ENTERPRISES INCORPORATED

(Exact name of Registrant as specified in its charter)

 

Nevada   000-52223   27-375505

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

 

585 Molly Lane

Woodstock, GA 30189

(Address of principal executive offices) (Zip Code)

 

(404) 891-1711

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On April 29, 2013, GBS Enterprises Incorporated, a Nevada corporation (the “Company”), entered into a Note Purchase and Security Agreement (the “Loan Agreement”) with Stephen D. Baksa (the “Lender”). Pursuant to the Loan Agreement, the Company issued a secured promissory note, dated April 29, 2013 (the “Note”), to the Lender for the principal amount of $200,000.00, bearing an annual interest rate of 3% and maturing on June 30, 2013 or such other time as described in more detail in the Note, without any penalty for prepayment. To secure the obligations of the Company under the Note, the Company granted the Lender a first priority security interest in certain financial holdbacks and notes payable as more fully described in the text of the document. The Note contains customary provisions upon an Event of Default, as more fully described in the full text of the document.

 

In connection with the execution of the Loan Agreement, on April 29, 2013, the Company issued the Lender two common stock purchase warrants (the “Warrants”) pursuant to which the Lender is entitled to purchase 100,000 shares of common at an exercise price of $0.25 from May 1, 2013 until April 30, 2016. The Company issued the Warrants pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(2) promulgated under the Securities Act in light of that the issuance was isolated and did not involve a public offering of securities.

 

The foregoing descriptions of the Loan Agreement, the Note, and Warrants do not purport to be complete and are subject to, and qualified in their entirety by, the full texts of the documents, which are filed as Exhibits 10.1 through 10.3 hereto and incorporated by reference herein.

 

On April 29, 2013, the Company entered into a Note Purchase and Security Agreement (the “Loan Agreement”) with Vitamin B Venture GmbH (the “Lender”). Pursuant to the Loan Agreement, the Company issued a secured promissory note, dated April 29, 2013 (the “Note”), to the Lender for the principal amount of $200,000.00, bearing an annual interest rate of 3% and maturing on June 30, 2013 or such other time as described in more detail in the Note, without any penalty for prepayment. To secure the obligations of the Company under the Note, the Company granted the Lender a first priority security interest in certain financial holdbacks and notes payable as more fully described in the text of the document. The Note contains customary provisions upon an Event of Default, as more fully described in the full text of the document.

 

In connection with the execution of the Loan Agreement, on April 29, 2013, the Company issued the Lender two common stock purchase warrants (the “Warrants”) pursuant to which the Lender is entitled to purchase 100,000 shares of common at an exercise price of $0.25 from May 1, 2013 until April 30, 2016.

 

The Company issued the Warrants pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) promulgated under the Securities Act in light of that the issuance was isolated and did not involve a public offering of securities.

 

Joerg Ott, the Chairman of the Board of Directors, has voting and dispositive control over Vitamin B Venture GmbH and is deemed to be the beneficial owner of the securities described above.

 

The foregoing descriptions of the Loan Agreement, the Note, and Warrants do not purport to be complete and are subject to, and qualified in their entirety by, the full texts of the documents, which are filed as Exhibits 10.4 through 10.6 hereto and incorporated by reference herein.

 

 
 

 

Item 2.03. Creation of a Direct Financial Obligation.

 

The disclosure of the Loan Agreements and the Notes under Item 1.01 above is hereby incorporated by reference into this Item 2.03.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

The disclosure under Item 1.01 is hereby incorporated by reference into this Item 3.02.

 

Item 9.01(d). Exhibits.

 

Exhibit

No.

  Description
10.1   Secured Promissory Note, dated April 29, 2013, by and between GBS Enterprises Incorporated and Stephen D. Baksa
     
10.2   Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Stephen D. Baksa
     
10.3   Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Stephen D. Baksa
     
10.4   Secured Promissory Note, dated April 29, 2013, by and between GBS Enterprises Incorporated and Vitamin B Venture GmbH
     
10.5   Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Vitamin B Venture GmbH
     
10.6   Common Stock Purchase Warrant, issued April 29, 2013, by GBS Enterprises Incorporated to Vitamin B Venture GmbH

  

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  GBS ENTERPRISES INCORPORATED
   
Date: May 1, 2013   By: /s/ Gary MacDonald
    Name: Gary MacDonald
    Title: Interim Chief Executive Officer
              (Principal Executive Officer)

 

 

 

SECURED PROMISSORY NOTE

 

$200,000.00 April 26, 2013

 

FOR VALUE RECEIVED , GBS Enterprises Incorporated (the "Company" or the "Maker"), promises to pay to the order of Stephen Baksa or its permitted assigns (collectively, the "Payee"), the principal amount of Dollar Two Hundred Thousand ($200,000.00) pursuant to the terms hereof. All unpaid principal shall be due and payable in full on June 30, 2013 by the Maker on such date. The date at which the Note will be repaid, is referred to as the "Maturity Date." The unpaid principal amount hereof shall accrue simple interest (calculated on the basis of a 30-day month) at the rate of 2% per month commencing on June 30, 2013 and to be paid monthly.

 

All payments shall be in lawful money of the United States of America at the principal office of the Company, or at such other place as the Payee may from time to time designate in writing to the Company. All payments shall be applied first to accrued interest, and thereafter to principal.

 

THE PAYEE WILL RECEIVE A 3-YEAR WARRANT TO PURCHASE 100,000 SHARES OF COMMON STOCK AT $0.25 PER SHARE EXERCISABLE FROM MAY 1, 2013 UNTIL APRIL 30, 2016. WARRANT DETAILS ARE ATTACHED AS EXHIBIT A.

 

THIS NOTE IS SECURED PURSUANT TO FIFTY PERCENT (50%) OF CERTAIN FINANCIAL HOLDBACKS TO BE PAID TO THE MAKER AND SET FORTH IN SECTIONS 1.2(C) AND 1.2(D) RESPECTIVELY OF THE STOCK PURCHASE AGREEMENT BETWEEN GBS ENTERPRISES, INC AND GLOBAL TELECOM & TECHNOLOGY AMERICAS, INC. DATED FEBRUARY 1, 2013 WHICH HAS BEEN PUBLICLY DISCLOSED IN A FORM 8-K DATED FEBRUARY 7 2013 AND IS HEREBY INCORPORATED BY REFERENCE (THE "SECURITY AGREEMENT").

 

In the event, this Note is not paid in full on or before June 30, 2013; a penalty fee of $20,000 (Dollars Twenty Thousand) shall become immediately due and payable without notice or demand. All unpaid principal amount hereof shall accrue simple interest (calculated on the basis of a 30-day month) at the rate of 2% per month commencing on July 1, 2013 and to be paid in advance by each 5 th of the month, and

 

THE PAYEE WILL RECEIVE AN ADDITIONAL 3-YEAR WARRANT TO PURCHASE 100,000 SHARES OF COMMON STOCK AT $0.25 PER SHARE EXERCISABLE FROM JULY 1, 2013 UNTIL JUNE 30, 2016. WARRANT DETAILS ARE ATTACHED AS EXHIBIT B, and.

 

THIS NOTE WILL BE SECURED PURSUANT TO DOLLAR THREE HUNDRED THOUSAND ($300,000) OF CERTAIN NOTES PAYABLE TO BE PAID TO THE MAKER AND SET FORTH IN THE SECURED PROMISSORY NOTE FROM GROUP BUSINESS SOFTWARE AG (THE “NOTE”) DATED JUNE 30, 2011 AND IS HEREBY INCORPORATED BY REFERENCE (THE “ADDITIONAL SECURITY AGREEMENT”).

 

 
 

 

In the event, this Note is not paid in full on or before August 30, 2013; a second penalty fee of $30,000 (Dollars Thirty Thousand) shall become immediately due and payable without notice or demand.

 

1. In the event, the Maker fails to pay all outstanding amounts owed as part of this Note on or before August 30, 2013; (a) an amount of Dollar Three Hundred Thousand ($300,000) of the Note will be assigned from the Maker to the Payee. The assignment is attached as EXHIBIT C.

 

2.          All covenants, agreements and undertakings in this Note by or on behalf of any of the parties shall bind and inure to the benefit of the respective successors and assigns of the parties whether so expressed or not.

 

3.          The Maker may prepay any part of this Note without the prior written consent of the Payee. Maker has to prepay the Note in the event (i) of an acquisition, merger or similar transaction in which the shareholders of the Company immediately prior to such transaction own less than 50% of the voting power of the Company's shares after such transaction or (ii) a sale or transfer of all or substantially all of the Company's assets. The events described in subsections 4(i) and 4(ii) are defined as a "Liquidity Event". The Company's right to prepay this Note shall be expressly conditioned on the Company providing Payee at least twenty (20) days advance written notice of the Liquidity Event, but no more than thirty (30) days advance written notice describing the terms of the Liquidity Event in detail, including an analysis of the projected distribution to the Company's shareholders.

 

4.                         Each of the following events shall constitute an “Event of Default” hereunder: the Maker shall fail to pay any principal or interest on this Note on the date due; the Maker shall default on any other debt obligation and shall fail to remedy such default within any applicable grace period; the Maker shall materially breach any covenant or agreement contained in the Security Agreement; or the Maker shall become the subject of bankruptcy or insolvency proceedings under federal or state law. Upon the occurrence of any Event of Default, the entire unpaid principal balance of this Note and all unpaid accrued interest hereunder shall become immediately due and payable without notice or demand.

 

5.          The Maker waives presentment for payment, demand, protest and notice of protest for nonpayment of this Note, and consents to any extension or postponement of the time of payment or any other indulgence. This Note may be amended by agreement of the Payee and the Maker.

 

6.          In the event that Payee brings a legal action against the Maker, or the Maker brings a legal action against Payee, to enforce or otherwise determine the meaning or enforceability of this Note or any provision hereof, the party prevailing in such action shall recover from the opposing party all reasonable expenses, including attorneys' fees, directly attributable to such action.

 

7.          This Note shall be governed in all respects by the laws of Georgia. Any and all disputes arising out of or related to this Note shall be adjudicated exclusively in the state and federal courts located in Atlanta, Georgia.

 

 
 

 

8.          The Company hereby agrees, subject only to any limitation imposed by applicable law, to pay all expenses, including reasonable attorneys' fees and legal expenses, incurred by the holder of this Note ("Costs") in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by declaration or otherwise. The Company agrees that any delay on the part of the holder in exercising any rights hereunder will not operate as a waiver of such rights. The holder of this Note shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies, and no waiver of any kind shall be valid unless in writing and signed by the party or parties waiving such rights or remedies.

 

IN WITNESS WHEREOF , this Note has been executed and delivered on the date specified by the Maker.

 

GBS Enterprises Incorporated ("MAKER")

 

 
 

 

By:    
     
Name:    
     
Title:    

 

 

 

THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

 

Warrant Number: WA-2013-03

 

COMMON STOCK PURCHASE WARRANT

 

THIS CERTIFIES THAT , for value received, Stephen D. Baksa , or his permitted assigns, is entitled to purchase from GBS Enterprises Incorporated, a Nevada corporation (the “ Company ”), at any time or from time to time during the period specified in Section 2 hereof, ONE HUNDRED THOUSAND (100,000 ) fully paid and nonassessable shares of the Company’s common stock (the “Common Stock”), at an exercise price per share equal to TWENTY-FIVE CENTS (USD $0.25 ) (the “ Exercise Price ”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasable hereunder.

 

This Warrant is subject to the following terms, provisions, and conditions:

 

1.              Manner of Exercise; Issuance of Certificates; Payment for Shares . Subject to the provisions hereof, this Warrant may be exercised by the holder hereof (“ Warrantholder ”), in whole or in part, by the surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “ Exercise Agreement ”), to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder), and upon the full payment to the Company in cash, by certified or official bank check or by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have been made for such shares as set forth above. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding five (5) business days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of such holder or such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.

 

2.             Period of Exercise . This Warrant is exercisable at any time or from time to time on or after the date on which this Warrant is issued and until 5:00 p.m., New York time on the third anniversary of the date of grant (the “ Exercise Period ”).

 

3.              Certain Agreements of the Company . The Company hereby covenants and agrees as follows:

 

 
 

 

(a)           Shares to be Fully Paid . All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof.

 

(b)            Reservation of Shares . During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.

 

(c)            Certain Actions Prohibited . The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

(d)           Successors and Assigns . This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all the Company’s assets.

 

4.              Tax Issues . The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the holder of this Warrant.

 

5.              No Rights or Liabilities as a Shareholder . This Warrant shall not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action by the holder hereof to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

6.              Adjustments in Exercise Price/Number of Shares .

 

(a)            Subdivision of or Combination of Common Stock . If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable upon the exercise of this Warrant into a greater number of shares, then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines (by any reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Exercise Price in effect immediately prior to such subdivision will be proportionately increased.

 

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(b)           Adjustment of Number of Shares . Upon each adjustment of the Exercise Price pursuant to the provision above, the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

 

(c)           Minimum Adjustment of Exercise Price . No adjustment of the Exercise Price shall be made in an amount of less than 1% of the Exercise Price in effect at the time such adjustment is otherwise required to be made, but any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to not less than 1% of such Exercise Price.

 

7.              Transfer, Exchange, and Replacement of Warrant .

 

(a)            Restriction on Transfer . This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the form attached hereto, at the office or agency of the Company referred to in Section 8 below, provided, however, that any transfer or assignment shall be subject to the conditions set forth herein. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by any notice to the contrary.

 

(b)            Warrant Exchangeable for Different Denominations . This Warrant is exchangeable, upon the surrender hereof by the holder hereof at the office or agency of the Company referred to in Section 8 below, for new Warrants of like tenor representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number of shares as shall be designated by the holder hereof at the time of such surrender.

 

(c)            Replacement of Warrant . Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

(d)           Cancellation; Payment of Expenses . Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this Section 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all reasonable and customary expenses (other than legal expenses and taxes, if any, incurred by the holder or transferees) and charges payable in connection with the preparation, execution, and delivery of Warrants pursuant to this Section 7.

 

(e)            Register . The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

 

(f)            Exercise or Transfer Without Registration . If, at the time of the surrender of this Warrant in connection with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration under the Securities Act and under applicable state securities or blue sky laws and (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company.

  

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8.              Notices . All notices, requests, and other communications required or permitted to be given or delivered hereunder to the holder of this Warrant shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be given or delivered hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to the office of the Company c/o Chief Executive Officer, 585 Molly Lane, Woodstock, GA 30189, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other communication may be sent by facsimile, but shall in such case be subsequently confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as provided above. All notices, requests, and other communications shall be deemed to have been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Section 8, or, if mailed by registered or certified mail or with a recognized overnight mail courier, two days after deposit with the United States Post Office or the day following deposit with such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be.

 

9.              Governing Law . THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

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10.           Miscellaneous .

 

(a)            Amendments . This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the holder hereof.

 

(b)            Descriptive Headings . The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof.

 

(c)            Remedies . The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Warrant, that the holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer.

 

GBS ENTERPRISES INCORPORATED  
     
By:    
     
  Name: Gary D. MacDonald  
     
  Title: Chief Executive Officer  

 

Dated as of May 1, 2013

 

REGISTERED WARRANTHOLDER: STEPHEN D. BAKSA
   
WARRANT NO.: WA-2013-03
   
WARRANT SHARES: 100,000
   
EXERCISE PRICE: $0.25 PER SHARE

 

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FORM OF EXERCISE AGREEMENT

 

Dated: ______________________

 

The undersigned, pursuant to the provisions set forth in Warrant No: WA-2013-03 , hereby agrees to purchase _____________________ shares of Common Stock of GBS Enterprises Incorporated covered by such Warrant, at $________________ per share and makes payment herewith in full therefor at the price per share provided by such Warrant in cash or by certified or official bank check in the amount of $________________.

 

Please issue a certificate or certificates for such shares of Common Stock in the name of and pay any cash for any fractional share to:

 

Name:  
   
Signature:  
   
Address:  
   
Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

and, if said number of shares of Common Stock shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned covering the balance of the shares purchasable thereunder less any fraction of a share paid in cash.

 

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FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED , the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock covered thereby set forth herein below, to:

 

Name of Assignee Address No of Shares
     

, and hereby irrevocably constitutes and appoints ___________________________________ as agent and attorney-in-fact to transfer said Warrant on the books of the within-named corporation, with full power of substitution in the premises.

 

Dated: ________ __, 20__

 

In the presence of:  
       
    Name:  
       
    Signature:  
       
    Title of Signing Officer or Agent (if any):
       
    Address:  
       
      Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

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THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

 

Warrant Number: WA-2013-05

 

COMMON STOCK PURCHASE WARRANT

 

THIS CERTIFIES THAT , for value received, Stephen D. Baksa , or his permitted assigns, is entitled to purchase from GBS Enterprises Incorporated, a Nevada corporation (the “ Company ”), at any time or from time to time during the period specified in Section 2 hereof, ONE HUNDRED THOUSAND (100,000 ) fully paid and nonassessable shares of the Company’s common stock (the “Common Stock”), at an exercise price per share equal to TWENTY-FIVE CENTS (USD $0.25 ) (the “ Exercise Price ”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasable hereunder.

 

This Warrant is subject to the following terms, provisions, and conditions:

 

1.             Manner of Exercise; Issuance of Certificates; Payment for Shares .  Subject to the provisions hereof, this Warrant may be exercised by the holder hereof (“ Warrantholder ”), in whole or in part, by the surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “ Exercise Agreement ”), to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder), and upon the full payment to the Company in cash, by certified or official bank check or by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have been made for such shares as set forth above. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding five (5) business days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of such holder or such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.

 

2.             Period of Exercise This Warrant is exercisable at any time or from its issue date of July 1, 2013 until 5:00 p.m., New York time on the third anniversary of the date of grant (the “ Exercise Period ”).

 

3.            Certain Agreements of the Company .  The Company hereby covenants and agrees as follows:

 

 
 

 

(a)           Shares to be Fully Paid .  All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof.

 

(b)           Reservation of Shares .   During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.

 

(c)           Certain Actions Prohibited .  The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

(d)           Successors and Assigns .  This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all the Company’s assets.

 

4.            Tax Issues .  The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the holder of this Warrant.

 

5.            No Rights or Liabilities as a Shareholder .   This Warrant shall not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action by the holder hereof to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

6.            Adjustments in Exercise Price/Number of Shares .

 

(a)           Subdivision of or Combination of Common Stock .  If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable upon the exercise of this Warrant into a greater number of shares, then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines (by any reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Exercise Price in effect immediately prior to such subdivision will be proportionately increased.

 

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(b)           Adjustment of Number of Shares .  Upon each adjustment of the Exercise Price pursuant to the provision above, the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

 

(c)           Minimum Adjustment of Exercise Price .  No adjustment of the Exercise Price shall be made in an amount of less than 1% of the Exercise Price in effect at the time such adjustment is otherwise required to be made, but any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to not less than 1% of such Exercise Price.

 

7.            Transfer, Exchange, and Replacement of Warrant .

 

(a)           Restriction on Transfer . This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the form attached hereto, at the office or agency of the Company referred to in Section 8 below, provided, however, that any transfer or assignment shall be subject to the conditions set forth herein. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by any notice to the contrary.

 

(b)           Warrant Exchangeable for Different Denominations .  This Warrant is exchangeable, upon the surrender hereof by the holder hereof at the office or agency of the Company referred to in Section 8 below, for new Warrants of like tenor representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number of shares as shall be designated by the holder hereof at the time of such surrender.

 

(c)           Replacement of Warrant .   Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

(d)           Cancellation; Payment of Expenses .   Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this Section 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all reasonable and customary expenses (other than legal expenses and taxes, if any, incurred by the holder or transferees) and charges payable in connection with the preparation, execution, and delivery of Warrants pursuant to this Section 7.

 

(e)           Register .   The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

 

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(f)           Exercise or Transfer Without Registration .  If, at the time of the surrender of this Warrant in connection with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration under the Securities Act and under applicable state securities or blue sky laws and (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company.

 

8.            Notices .   All notices, requests, and other communications required or permitted to be given or delivered hereunder to the holder of this Warrant shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be given or delivered hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to the office of the Company c/o Chief Executive Officer, 585 Molly Lane, Woodstock, GA 30189, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other communication may be sent by facsimile, but shall in such case be subsequently confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as provided above. All notices, requests, and other communications shall be deemed to have been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Section 8, or, if mailed by registered or certified mail or with a recognized overnight mail courier, two days after deposit with the United States Post Office or the day following deposit with such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be.

 

9.            Governing Law .   THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

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10.           Miscellaneous .

 

(a)           Amendments .  This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the holder hereof.

 

(b)           Descriptive Headings .  The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof.

 

(c)           Remedies .  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Warrant, that the holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer.

 

GBS ENTERPRISES INCORPORATED
   
By:    
   
  Name: Gary D. MacDonald
   
  Title: Chief Executive Officer

 

Dated as of May 1, 2013

 

REGISTERED WARRANTHOLDER: STEPHEN D. BAKSA
   
WARRANT NO.: WA-2013-05
   
WARRANT SHARES: 100,000
   
EXERCISE PRICE: $0.25 PER SHARE

 

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FORM OF EXERCISE AGREEMENT

 

Dated: ______________________

 

The undersigned, pursuant to the provisions set forth in Warrant No: WA-2013-05 , hereby agrees to purchase _____________________ shares of Common Stock of GBS Enterprises Incorporated covered by such Warrant, at $________________ per share and makes payment herewith in full therefor at the price per share provided by such Warrant in cash or by certified or official bank check in the amount of $________________.

 

Please issue a certificate or certificates for such shares of Common Stock in the name of and pay any cash for any fractional share to:

 

Name:  
   
Signature:  
   
Address:  

 

Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

and, if said number of shares of Common Stock shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned covering the balance of the shares purchasable thereunder less any fraction of a share paid in cash.

 

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FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED , the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock covered thereby set forth herein below, to:

 

Name of Assignee Address No of Shares
     

, and hereby irrevocably constitutes and appoints ___________________________________ as agent and attorney-in-fact to transfer said Warrant on the books of the within-named corporation, with full power of substitution in the premises.

 

Dated: ________ __, 20__

 

In the presence of:      
       
    Name:  
       
    Signature:  
       
    Title of Signing Officer or Agent (if any):
     
    Address:  
       
      Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

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SECURED PROMISSORY NOTE

 

  $200,000.00 April 26, 2013

 

FOR VALUE RECEIVED , GBS Enterprises Incorporated (the "Company" or the "Maker"), promises to pay to the order of Vitamin B Venture GmbH or its permitted assigns (collectively, the "Payee"), the principal amount of Dollar Two Hundred Thousand ($200,000.00) pursuant to the terms hereof. All unpaid principal shall be due and payable in full on June 30, 2013 by the Maker on such date. The date at which the Note will be repaid, is referred to as the "Maturity Date." The unpaid principal amount hereof shall accrue simple interest (calculated on the basis of a 30-day month) at the rate of 2% per month commencing on June 30, 2013 and to be paid monthly.

 

All payments shall be in lawful money of the United States of America at the principal office of the Company, or at such other place as the Payee may from time to time designate in writing to the Company. All payments shall be applied first to accrued interest, and thereafter to principal.

 

THE PAYEE WILL RECEIVE A 3-YEAR WARRANT TO PURCHASE 100,000 SHARES OF COMMON STOCK AT $0.25 PER SHARE EXERCISABLE FROM MAY 1, 2013 UNTIL APRIL 30, 2016. WARRANT DETAILS ARE ATTACHED AS EXHIBIT A.

 

THIS NOTE IS SECURED PURSUANT TO FIFTY PERCENT (50%) OF CERTAIN FINANCIAL HOLDBACKS TO BE PAID TO THE MAKER AND SET FORTH IN SECTIONS 1.2(C) AND 1.2(D) RESPECTIVELY OF THE STOCK PURCHASE AGREEMENT BETWEEN GBS ENTERPRISES, INC AND GLOBAL TELECOM & TECHNOLOGY AMERICAS, INC. DATED FEBRUARY 1, 2013 WHICH HAS BEEN PUBLICLY DISCLOSED IN A FORM 8-K DATED FEBRUARY 7 2013 AND IS HEREBY INCORPORATED BY REFERENCE (THE "SECURITY AGREEMENT").

 

In the event, this Note is not paid in full on or before June 30, 2013; a penalty fee of $20,000 (Dollars Twenty Thousand) shall become immediately due and payable without notice or demand. All unpaid principal amount hereof shall accrue simple interest (calculated on the basis of a 30-day month) at the rate of 2% per month commencing on July 1, 2013 and to be paid in advance by each 5 th of the month, and

 

THE PAYEE WILL RECEIVE AN ADDITIONAL 3-YEAR WARRANT TO PURCHASE 100,000 SHARES OF COMMON STOCK AT $0.25 PER SHARE EXERCISABLE FROM JULY 1, 2013 UNTIL JUNE 30, 2016. WARRANT DETAILS ARE ATTACHED AS EXHIBIT B, and.

 

THIS NOTE WILL BE SECURED PURSUANT TO DOLLAR THREE HUNDRED THOUSAND ($300,000) OF CERTAIN NOTES PAYABLE TO BE PAID TO THE MAKER AND SET FORTH IN THE SECURED PROMISSORY NOTE FROM GROUP BUSINESS SOFTWARE AG (THE “NOTE”) DATED JUNE 30, 2011 AND IS HEREBY INCORPORATED BY REFERENCE (THE “ADDITIONAL SECURITY AGREEMENT”).

 

 
 

 

In the event, this Note is not paid in full on or before August 30, 2013; a second penalty fee of $30,000 (Dollars Thirty Thousand) shall become immediately due and payable without notice or demand.

 

1. In the event, the Maker fails to pay all outstanding amounts owed as part of this Note on or before August 30, 2013; (a) an amount of Dollar Three Hundred Thousand ($300,000) of the Note will be assigned from the Maker to the Payee. The assignment is attached as EXHIBIT C.

 

2.          All covenants, agreements and undertakings in this Note by or on behalf of any of the parties shall bind and inure to the benefit of the respective successors and assigns of the parties whether so expressed or not.

 

3.          The Maker may prepay any part of this Note without the prior written consent of the Payee. Maker has to prepay the Note in the event (i) of an acquisition, merger or similar transaction in which the shareholders of the Company immediately prior to such transaction own less than 50% of the voting power of the Company's shares after such transaction or (ii) a sale or transfer of all or substantially all of the Company's assets. The events described in subsections 4(i) and 4(ii) are defined as a "Liquidity Event". The Company's right to prepay this Note shall be expressly conditioned on the Company providing Payee at least twenty (20) days advance written notice of the Liquidity Event, but no more than thirty (30) days advance written notice describing the terms of the Liquidity Event in detail, including an analysis of the projected distribution to the Company's shareholders.

 

4.                            Each of the following events shall constitute an “Event of Default” hereunder: the Maker shall fail to pay any principal or interest on this Note on the date due; the Maker shall default on any other debt obligation and shall fail to remedy such default within any applicable grace period; the Maker shall materially breach any covenant or agreement contained in the Security Agreement; or the Maker shall become the subject of bankruptcy or insolvency proceedings under federal or state law. Upon the occurrence of any Event of Default, the entire unpaid principal balance of this Note and all unpaid accrued interest hereunder shall become immediately due and payable without notice or demand.

 

5.          The Maker waives presentment for payment, demand, protest and notice of protest for nonpayment of this Note, and consents to any extension or postponement of the time of payment or any other indulgence. This Note may be amended by agreement of the Payee and the Maker.

 

6.          In the event that Payee brings a legal action against the Maker, or the Maker brings a legal action against Payee, to enforce or otherwise determine the meaning or enforceability of this Note or any provision hereof, the party prevailing in such action shall recover from the opposing party all reasonable expenses, including attorneys' fees, directly attributable to such action.

 

7.          This Note shall be governed in all respects by the laws of Georgia. Any and all disputes arising out of or related to this Note shall be adjudicated exclusively in the state and federal courts located in Atlanta, Georgia.

 

 
 

 

8.          The Company hereby agrees, subject only to any limitation imposed by applicable law, to pay all expenses, including reasonable attorneys' fees and legal expenses, incurred by the holder of this Note ("Costs") in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by declaration or otherwise. The Company agrees that any delay on the part of the holder in exercising any rights hereunder will not operate as a waiver of such rights. The holder of this Note shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies, and no waiver of any kind shall be valid unless in writing and signed by the party or parties waiving such rights or remedies.

 

IN WITNESS WHEREOF , this Note has been executed and delivered on the date specified by the Maker.

 

GBS Enterprises Incorporated ("MAKER")

 

 
 

 

By:    
     
Name:    
     
Title:    

 

 

 

 

THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

 

Warrant Number: WA-2013-04

 

COMMON STOCK PURCHASE WARRANT

 

THIS CERTIFIES THAT , for value received, Vitamin B Venture GmbH , or his permitted assigns, is entitled to purchase from GBS Enterprises Incorporated, a Nevada corporation (the “ Company ”), at any time or from time to time during the period specified in Section 2 hereof, ONE HUNDRED THOUSAND (100,000 ) fully paid and nonassessable shares of the Company’s common stock (the “Common Stock”), at an exercise price per share equal to TWENTY-FIVE CENTS (USD $0.25 ) (the “ Exercise Price ”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasable hereunder.

 

This Warrant is subject to the following terms, provisions, and conditions:

 

1.             Manner of Exercise; Issuance of Certificates; Payment for Shares . Subject to the provisions hereof, this Warrant may be exercised by the holder hereof (“ Warrantholder ”), in whole or in part, by the surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “ Exercise Agreement ”), to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder), and upon the full payment to the Company in cash, by certified or official bank check or by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have been made for such shares as set forth above. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding five (5) business days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of such holder or such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.

 

2.             Period of Exercise . This Warrant is exercisable at any time or from time to time on or after the date on which this Warrant is issued and until 5:00 p.m., New York time on the third anniversary of the date of grant (the “ Exercise Period ”).

 

3.             Certain Agreements of the Company . The Company hereby covenants and agrees as follows:

 

 
 

 

(a)           Shares to be Fully Paid . All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof.

 

(b)           Reservation of Shares . During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.

 

(c)           Certain Actions Prohibited . The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

(d)           Successors and Assigns . This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all the Company’s assets.

 

4.             Tax Issues . The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the holder of this Warrant.

 

5.             No Rights or Liabilities as a Shareholder . This Warrant shall not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action by the holder hereof to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

6.             Adjustments in Exercise Price/Number of Shares .

 

(a)           Subdivision of or Combination of Common Stock . If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable upon the exercise of this Warrant into a greater number of shares, then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines (by any reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Exercise Price in effect immediately prior to such subdivision will be proportionately increased.

 

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(b)           Adjustment of Number of Shares . Upon each adjustment of the Exercise Price pursuant to the provision above, the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

 

(c)           Minimum Adjustment of Exercise Price . No adjustment of the Exercise Price shall be made in an amount of less than 1% of the Exercise Price in effect at the time such adjustment is otherwise required to be made, but any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to not less than 1% of such Exercise Price.

 

7.             Transfer, Exchange, and Replacement of Warrant .

 

(a)           Restriction on Transfer . This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the form attached hereto, at the office or agency of the Company referred to in Section 8 below, provided, however, that any transfer or assignment shall be subject to the conditions set forth herein. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by any notice to the contrary.

 

(b)           Warrant Exchangeable for Different Denominations . This Warrant is exchangeable, upon the surrender hereof by the holder hereof at the office or agency of the Company referred to in Section 8 below, for new Warrants of like tenor representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number of shares as shall be designated by the holder hereof at the time of such surrender.

 

(c)           Replacement of Warrant . Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

(d)           Cancellation; Payment of Expenses . Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this Section 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all reasonable and customary expenses (other than legal expenses and taxes, if any, incurred by the holder or transferees) and charges payable in connection with the preparation, execution, and delivery of Warrants pursuant to this Section 7.

 

(e)           Register. The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

 

(f)           Exercise or Transfer Without Registration . If, at the time of the surrender of this Warrant in connection with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration under the Securities Act and under applicable state securities or blue sky laws and (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company.

 

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8.            Notices . All notices, requests, and other communications required or permitted to be given or delivered hereunder to the holder of this Warrant shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be given or delivered hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to the office of the Company c/o Chief Executive Officer, 585 Molly Lane, Woodstock, GA 30189, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other communication may be sent by facsimile, but shall in such case be subsequently confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as provided above. All notices, requests, and other communications shall be deemed to have been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Section 8, or, if mailed by registered or certified mail or with a recognized overnight mail courier, two days after deposit with the United States Post Office or the day following deposit with such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be.

 

9.             Governing Law . THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

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10.           Miscellaneous .

 

(a)           Amendments . This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the holder hereof.

 

(b)           Descriptive Headings . The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof.

 

(c)           Remedies . The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Warrant, that the holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer.

 

GBS ENTERPRISES INCORPORATED  
     
By:    
     
  Name: Gary D. MacDonald  
     
  Title: Chief Executive Officer  

 

Dated as of May 1, 2013

 

REGISTERED WARRANTHOLDER: VITAMIN B VENTURE GMBH
   
WARRANT NO.: WA-2013-04
   
WARRANT SHARES: 100,000
   
EXERCISE PRICE: $0.25 PER SHARE

 

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FORM OF EXERCISE AGREEMENT

 

Dated: ______________________

 

The undersigned, pursuant to the provisions set forth in Warrant No: WA-2013-04 , hereby agrees to purchase _____________________ shares of Common Stock of GBS Enterprises Incorporated covered by such Warrant, at $________________ per share and makes payment herewith in full therefor at the price per share provided by such Warrant in cash or by certified or official bank check in the amount of $________________.

 

Please issue a certificate or certificates for such shares of Common Stock in the name of and pay any cash for any fractional share to:

 

Name:  
   
Signature:  
   
Address:  
   
Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

and, if said number of shares of Common Stock shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned covering the balance of the shares purchasable thereunder less any fraction of a share paid in cash.

 

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FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED , the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock covered thereby set forth herein below, to:

 

Name of Assignee Address No of Shares

 

, and hereby irrevocably constitutes and appoints ___________________________________ as agent and attorney-in-fact to transfer said Warrant on the books of the within-named corporation, with full power of substitution in the premises.

 

Dated: ________ __, 20__

 

In the presence of:      
       
    Name:  
       
    Signature:  
     
    Title of Signing Officer or Agent (if any):
       
    Address:  
       
      Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

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THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.

 

Warrant Number: WA-2013-06

 

COMMON STOCK PURCHASE WARRANT

 

THIS CERTIFIES THAT , for value received, Vitamin B Venture GmbH , or his permitted assigns, is entitled to purchase from GBS Enterprises Incorporated, a Nevada corporation (the “ Company ”), at any time or from time to time during the period specified in Section 2 hereof, ONE HUNDRED THOUSAND (100,000 ) fully paid and nonassessable shares of the Company’s common stock (the “Common Stock”), at an exercise price per share equal to TWENTY-FIVE CENTS (USD $0.25 ) (the “ Exercise Price ”). The term “Warrant Shares,” as used herein, refers to the shares of Common Stock purchasable hereunder.

 

This Warrant is subject to the following terms, provisions, and conditions:

 

1.            Manner of Exercise; Issuance of Certificates; Payment for Shares .  Subject to the provisions hereof, this Warrant may be exercised by the holder hereof (“ Warrantholder ”), in whole or in part, by the surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “ Exercise Agreement ”), to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder), and upon the full payment to the Company in cash, by certified or official bank check or by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have been made for such shares as set forth above. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding five (5) business days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of such holder or such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.

 

2.            Period of Exercise .   This Warrant is exercisable at any time or from its issue date of July 1, 2013 until 5:00 p.m., New York time on the third anniversary of the date of grant (the “ Exercise Period ”).

 

Certain Agreements of the Company . The Company hereby covenants and agrees as follows:

 

 
 

 

(a)           Shares to be Fully Paid .  All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and nonassessable and free from all taxes, liens, and charges with respect to the issue thereof.

 

(b)           Reservation of Shares .  During the Exercise Period, the Company shall at all times have authorized, and reserved for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.

 

(c)           Certain Actions Prohibited .  The Company will not, by amendment of its charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

(d)           Successors and Assigns .  This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all the Company’s assets.

 

3.            Tax Issues .   The issuance of certificates for Warrant Shares upon the exercise of this Warrant shall be made without charge to the holder of this Warrant or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the holder of this Warrant.

 

4.            No Rights or Liabilities as a Shareholder .   This Warrant shall not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company. No provision of this Warrant, in the absence of affirmative action by the holder hereof to purchase Warrant Shares, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to any liability of such holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

5.            Adjustments in Exercise Price/Number of Shares .

 

(a)           Subdivision of or Combination of Common Stock .  If the Company at any time subdivides (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable upon the exercise of this Warrant into a greater number of shares, then, after the date of record for effecting such subdivision, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time combines (by any reverse stock split, recapitalization, reorganization, reclassification or otherwise) the shares of Common Stock acquirable hereunder into a smaller number of shares, then, after the date of record for effecting such combination, the Exercise Price in effect immediately prior to such subdivision will be proportionately increased.

 

2
 

 

(b)           Adjustment of Number of Shares .  Upon each adjustment of the Exercise Price pursuant to the provision above, the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a number equal to the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise Price.

 

(c)           Minimum Adjustment of Exercise Price .   No adjustment of the Exercise Price shall be made in an amount of less than 1% of the Exercise Price in effect at the time such adjustment is otherwise required to be made, but any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to not less than 1% of such Exercise Price.

 

6.            Transfer, Exchange, and Replacement of Warrant .

 

(a)           Restriction on Transfer .   This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed assignment in the form attached hereto, at the office or agency of the Company referred to in Section 8 below, provided, however, that any transfer or assignment shall be subject to the conditions set forth herein. Until due presentment for registration of transfer on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by any notice to the contrary.

 

(b)           Warrant Exchangeable for Different Denominations .  This Warrant is exchangeable, upon the surrender hereof by the holder hereof at the office or agency of the Company referred to in Section 8 below, for new Warrants of like tenor representing in the aggregate the right to purchase the number of shares of Common Stock which may be purchased hereunder, each of such new Warrants to represent the right to purchase such number of shares as shall be designated by the holder hereof at the time of such surrender.

 

(c)           Replacement of Warrant .  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

(d)           Cancellation; Payment of Expenses .  Upon the surrender of this Warrant in connection with any transfer, exchange, or replacement as provided in this Section 7, this Warrant shall be promptly canceled by the Company. The Company shall pay all reasonable and customary expenses (other than legal expenses and taxes, if any, incurred by the holder or transferees) and charges payable in connection with the preparation, execution, and delivery of Warrants pursuant to this Section 7.

 

(e)           Register .  The Company shall maintain, at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee and each prior owner of this Warrant.

 

(f)           Exercise or Transfer Without Registration .  If, at the time of the surrender of this Warrant in connection with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration under the Securities Act and under applicable state securities or blue sky laws and (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company.

 

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7.            Notices .  All notices, requests, and other communications required or permitted to be given or delivered hereunder to the holder of this Warrant shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to such holder at the address shown for such holder on the books of the Company, or at such other address as shall have been furnished to the Company by notice from such holder. All notices, requests, and other communications required or permitted to be given or delivered hereunder to the Company shall be in writing, and shall be personally delivered, or shall be sent by certified or registered mail or by recognized overnight mail courier, postage prepaid and addressed, to the office of the Company c/o Chief Executive Officer, 585 Molly Lane, Woodstock, GA 30189, or at such other address as shall have been furnished to the holder of this Warrant by notice from the Company. Any such notice, request, or other communication may be sent by facsimile, but shall in such case be subsequently confirmed by a writing personally delivered or sent by certified or registered mail or by recognized overnight mail courier as provided above. All notices, requests, and other communications shall be deemed to have been given either at the time of the receipt thereof by the person entitled to receive such notice at the address of such person for purposes of this Section 8, or, if mailed by registered or certified mail or with a recognized overnight mail courier, two days after deposit with the United States Post Office or the day following deposit with such overnight mail courier, if postage is prepaid and the mailing is properly addressed, as the case may be.

 

8.            Governing Law .   THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

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9.            Miscellaneous .

 

(a)           Amendments .   This Warrant and any provision hereof may only be amended by an instrument in writing signed by the Company and the holder hereof.

 

(b)           Descriptive Headings .   The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or construction of any of the provisions hereof.

 

(c)           Remedies .  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Warrant will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Warrant, that the holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Warrant and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

 

5
 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer.

 

GBS ENTERPRISES INCORPORATED  
   
By:    
     
  Name: Gary D. MacDonald  
     
  Title: Chief Executive Officer  

 

Dated as of May 1, 2013

 

REGISTERED WARRANTHOLDER: VITAMIN B VENTURE GMBH
   
WARRANT NO.: WA-2013-06
   
WARRANT SHARES: 100,000
   
EXERCISE PRICE: $0.25 PER SHARE

 

6
 

 

FORM OF EXERCISE AGREEMENT

 

Dated: ______________________

 

The undersigned, pursuant to the provisions set forth in Warrant No: WA-2013-06 , hereby agrees to purchase _____________________ shares of Common Stock of GBS Enterprises Incorporated covered by such Warrant, at $________________ per share and makes payment herewith in full therefor at the price per share provided by such Warrant in cash or by certified or official bank check in the amount of $________________.

 

Please issue a certificate or certificates for such shares of Common Stock in the name of and pay any cash for any fractional share to:

 

Name:  
   
Signature:  
   
Address:  

 

Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

and, if said number of shares of Common Stock shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned covering the balance of the shares purchasable thereunder less any fraction of a share paid in cash.

 

7
 

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED , the undersigned hereby sells, assigns, and transfers all the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock covered thereby set forth herein below, to:

 

Name of Assignee Address No of Shares

 

, and hereby irrevocably constitutes and appoints ___________________________________ as agent and attorney-in-fact to transfer said Warrant on the books of the within-named corporation, with full power of substitution in the premises.

 

Dated: ________ __, 20__

 

In the presence of:  
   
  Name:
   
  Signature:
   
  Title of Signing Officer or Agent (if any):
   
  Address:
   
    Note: The above signature should correspond exactly with the name on the face of the within Warrant, if applicable.

 

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