EXHIBIT 10.72
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW. THIS SECURITY MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT IN
COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION
REQUIREMENTS AND ALL APPLICABLE STATE SECURITIES LAWS.
SSP SOLUTIONS, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: Number of Shares: 150,000
Date of Issuance: March 12, 2003
SSP Solutions, Inc., a Delaware corporation ("COMPANY"), hereby
certifies that Integral Systems, Inc., a Maryland corporation, or its permitted
assigns (the "HOLDER"), is entitled to purchase, on the terms and conditions
contained herein, 150,000 fully-paid and non-assessable shares of the Company's
Common Stock ("WARRANT SHARES"), at the price of $1.30 per Warrant Share
("WARRANT PURCHASE PRICE") from time to time prior to the Expiration Date (as
such term is defined below). The number of Warrant Shares and the Warrant
Purchase Price are subject to adjustment as set forth in SECTION 3.
This Warrant is subject to the following terms and conditions:
1. DEFINITIONS.
For the purposes of this Warrant, the following terms shall have the
respective meanings set forth below:
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a legal
holiday.
"COMMON STOCK" means the Common Stock, $0.01 par value per share, of
the Company.
"COMPANY" has the meaning set forth in the preamble of this Warrant.
"DESIGNATED OFFICE" has the meaning set forth in SECTION 2.1 of this
Warrant.
"EXPIRATION DATE" means March 11, 2006.
"FAIR MARKET VALUE" with respect to the Common Stock or any other
security shall mean the per share amount equal to the last sales price of the
Common Stock (or such other security) on the applicable date as reported on a
national securities exchange or on Nasdaq, or, if a last sale reporting
quotation is not available for the Common Stock (or such other security), the
average of the closing bid and asked prices of the Common Stock (or such other
security) on such date as reported by Nasdaq or on the OTC Bulletin Board
Service, or if not so reported, as listed in the National Quotation Bureau,
Inc.'s "Pink Sheets." If such quotations are unavailable with respect to the
Common Stock or other securities, and for property and assets other than
securities, "Fair Market Value" shall mean the amount be determined by the
mutual agreement of the Company and the Holder. In the event the Company and the
Holder are unable to arrive at a mutually agreeable determination within 30 days
after the date triggering the requirement to make such determination, the
Company and the Holder shall each retain a separate independent investment
banking firm of national reputation. Such firms shall jointly determine the Fair
Market Value as of the applicable date and deliver their opinion in writing to
the Company and the Holder within 30 days of their retention. If such firms
cannot make such determination with the 30-day period, then, unless otherwise
directed by agreement of the Company and the Holder, such firms, in their sole
discretion, shall choose another independent investment banking firm of national
reputation, which firm shall make such determination and render such opinion
within 30 days after its retention. In either case, the determination so made
shall be conclusive and binding on the Company and the Holder. In no event shall
the marketability, or lack thereof, or lack of registration of a security be a
factor in determining the fair value of such security. The fees and expenses of
all investment banking firms retained to make a Fair Market Value determination
in accordance with this Warrant shall be borne by the Company.
"FORBEARANCE AGREEMENT" means that certain Forbearance Agreement dated
March 12, 2003 by and between the Company and Integral Systems, Inc.
"HOLDER" has the meaning set forth in the preamble of this Warrant.
"NASDAQ" means The Nasdaq National Market or SmallCap Market, or any
successor reporting system.
"OTHER PROPERTY" has the meaning set forth in SECTION 3.4 of this
Warrant.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, limited liability partnership, institution, public benefit
corporation, entity or government (whether Federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
political subdivision, agency, body or department thereof).
"WARRANT" means this Warrant as originally issued pursuant to the
Forbearance Agreement, any amendment of such original Warrant, and any warrant
issued upon transfer, division or combination of, or in substitution for, such
original Warrant or any other such Warrant. All Warrants shall at all times be
identical as to terms and conditions and date, except as to the number of
Warrant Shares for which they may be exercised.
"WARRANT PURCHASE PRICE" has the meaning set forth in the preamble of
this Warrant (as adjusted in accordance with the terms of this Warrant).
"WARRANT SHARES" has the meaning set forth in the preamble of this
Warrant.
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2. EXERCISE.
2.1 EXERCISE; DELIVERY OF CERTIFICATES. This Warrant may be exercised,
at the option of the Holder, from time to time prior to 5:00 Eastern time on the
Expiration Date, for all or any part of the Warrant Shares. This Warrant may be
exercised by delivering the payment of the Warrant Purchase Price in accordance
with Section 2.2 for the number of Warrant Shares being purchased and
concurrently surrendering this Warrant to the Company at its principal office
("DESIGNATED OFFICE"), together with the Form of Exercise Subscription (the
"EXERCISE SUBSCRIPTION") attached hereto duly completed and signed. The Warrant
Shares purchased under this Warrant shall be and are deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the
date on which this Warrant has been surrendered and payment made therefor in
accordance with Section 2.2. Certificates for Warrant Shares so purchased shall
be delivered to the Holder within three Business Days after this Warrant has
been exercised, and, in case of a purchase of less than all of the Warrant
Shares purchasable upon exercise of this Warrant, the Company shall cancel this
Warrant and, within three Business Days, shall execute and deliver to the Holder
a new Warrant of like tenor for the balance of the Warrant Shares. Each
certificate so delivered shall be registered in the name of the Holder or,
subject to compliance with applicable laws, such other name as shall be
designated by the Holder.
2.2 PAYMENT OF WARRANT PRICE. Payment of the Warrant Purchase Price may
be made, at the option of the Holder (i) by certified or official bank check,
(ii) by wire transfer, (iii) by Cashless Exercise as provided in Section 2.3,
(iv) by surrender to the Company of securities of the Company previously
acquired by the Holder with a Fair Market Value equal to the Warrant Purchase
Price for the Warrant Shares being purchased or (v) by any combination of the
foregoing.
2.3 CASHLESS EXERCISE. Notwithstanding anything contained herein to the
contrary, the holder of this Warrant may, at its election exercised in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the aggregate Warrant Purchase Price, elect instead to receive
upon such exercise the "net number" of shares of Common Stock determined
according to the following formula (a "CASHLESS EXERCISE"):
Net Number = (A X B) - (A X C)
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B
For purposes of the foregoing formula:
A = the total number of shares with respect to which
this Warrant is then being exercised.
B = the Fair Market Value per share of the Common
Stock on the date immediately preceding the date of
the Exercise Subscription.
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C = the Warrant Purchase Price then in effect for the
applicable Warrant Shares at the time of such
exercise.
3. ADJUSTMENTS TO THE NUMBER OF WARRANT SHARES AND TO THE WARRANT PURCHASE
PRICE. The number of Warrant Shares for which this Warrant is exercisable and
the Warrant Purchase Price shall be subject to adjustment from time to time as
set forth in this SECTION 3.
3.1 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time the
Company:
(a) pays a dividend or other distribution on its Common Stock
in shares of Common Stock or shares of any other class or series of
capital stock,
(b) subdivides its outstanding Common Stock into a larger
number of shares of Common Stock; or
(c) combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior to the record date for such dividend or distribution or the
effective date of such subdivision or combination shall be adjusted so that the
Holder of this Warrant shall thereafter be entitled to receive upon exercise of
this Warrant the kind and number of Warrant Shares that such Holder would have
owned or have been entitled to receive immediately after such record date or
effective date had this Warrant been exercised immediately prior to such record
date or effective date. An adjustment made pursuant to this Section shall become
effective immediately after the effective date of such event, but be retroactive
to the record date, if any, for such event.
Upon any adjustment of the number of Warrant Shares purchasable upon
the exercise of this Warrant as herein provided, the Warrant Purchase Price per
share shall be adjusted by multiplying such Warrant Purchase Price immediately
prior to such adjustment by a fraction, the numerator of which shall be the
number of Warrant Shares purchasable upon the exercise of this Warrant
immediately prior to such adjustment and the denominator of which shall be the
number of Warrant Shares so purchasable immediately thereafter.
3.2 RIGHTS; OPTIONS; WARRANTS. If at any time the Company issues
(without payment of any consideration) to all holders of outstanding Common
Stock rights, options or warrants to subscribe for or purchase shares of Common
Stock or securities convertible into or exchangeable for Common Stock, then the
Company shall also distribute such rights, options, warrants or securities to
the Holders of this Warrant as if this Warrant had been exercised immediately
prior to the record date for such distribution.
3.3 DISTRIBUTION OF ASSETS OR SECURITIES. If at any time the Company
makes a distribution to all holders of Common Stock of any asset (other than
cash) or security other than those referred to in SECTIONS 3.1, 3.2 OR 3.5, and
other than in connection with the liquidation, dissolution or winding up of the
Company, then and in each such case, the Warrant Purchase Price shall be
adjusted to equal the number determined by multiplying the Warrant Purchase
Price in effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution by a
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fraction (which shall not be less than zero), the numerator of which shall be
the Fair Market Value per share of the COMMON STOCK on the date fixed for such
determination less the then Fair Market Value of the portion of the assets or
securities so distributed applicable to one share of Common Stock, and the
denominator of which shall be such Fair Market Value per share of the Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. Upon any adjustment in the
Warrant Purchase Price as provided above, the number of shares of Common Stock
purchasable upon the exercise of this Warrant shall also be adjusted and shall
be that number determined by multiplying the number of Warrant Shares issuable
upon exercise immediately prior to such adjustment by a fraction, the numerator
of which is the Warrant Purchase Price in effect immediately prior to such
adjustment and the denominator of which is the Warrant Purchase Price as so
adjusted.
3.4 REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. If at any time the Company reorganizes its capital,
reclassifies its capital stock, consolidates, merges or combines with or into
another Person (where the Company is not the surviving corporation or where
there is any change whatsoever in, or distribution with respect to, the
outstanding Common Stock of the Company), or the Company sells, transfers or
otherwise disposes of all or substantially all of its property, assets or
business to another Person, other than in a transaction provided for in SECTION
3.1, 3.2, 3.3 OR 3.5, and, pursuant to the terms of such reorganization,
reclassification, consolidation, merger, combination, sale, transfer or other
disposition of assets, (i) shares of common stock of the successor or acquiring
Person or of the Company (if it is the surviving corporation) or (ii) any cash,
shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring Person or the Company
("OTHER PROPERTY") are to be received by or distributed to the holders of COMMON
STOCK of the Company who are holders immediately prior to such transaction, then
the Holder of this Warrant shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of COMMON STOCK, securities of
the successor or acquiring Person, and/or Other Property which holder of the
number of shares of COMMON STOCK for which this Warrant is exercisable
immediately prior to such event would have owned or received immediately after
and as a result of such event. In such event, the aggregate Warrant Purchase
Price otherwise payable for the Warrant Shares issuable upon exercise of this
Warrant shall be allocated among such securities and Other Property in
proportion to the respective fair market values of such securities and Other
Property as determined in good faith by the Board of Directors of the Company.
In any such event, the successor or acquiring Person (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as the Holder may approve (as determined by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of any shares of the securities of such successor or acquiring
Person for which this Warrant thus becomes exercisable, which modifications
shall be as equivalent as practicable to the adjustments provided for in this
SECTION 3.4. The foregoing provisions of this Section shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales,
transfers and other dispositions of assets.
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3.5 DISSOLUTION, TOTAL LIQUIDATION OR WINDING-UP. If at any time there
shall be a voluntary or involuntary dissolution, total liquidation or winding-up
of the Company, other than as contemplated by SECTION 3.4, then the Company
shall cause to be mailed (by registered or certified mail, return receipt
requested, postage prepaid) to the Holder of this Warrant at the Holder's
address as shown on the Warrant register, at the earliest practicable time (and,
in any event, not less than 30 calendar days before any date set for definitive
action) notice of the date on which such dissolution, liquidation or winding-up
shall take place, as the case may be. Such notice shall also specify the date as
of which the Holders of the shares of record of Common Stock shall be entitled
to exchange their shares for securities, money or other property deliverable
upon such dissolution, liquidation or winding-up, as the case may be. On such
date, the Holder of this Warrant shall be entitled to receive upon surrender of
this Warrant the cash or other property, less the Warrant Purchase Price for
this Warrant then in effect, that the Holder would have been entitled to receive
had this Warrant been exercised immediately prior to such dissolution,
liquidation or winding-up. Upon receipt of such cash or other property, any and
all rights of the Holder to exercise this Warrant shall terminate in their
entirety. In the event such cash or other property distributable in such
dissolution, liquidation or winding-up has a fair market value which is less
than the Warrant Purchase Price for this Warrant then in effect, this Warrant
shall terminate and be of no further force or effect upon such dissolution,
liquidation or winding-up.
3.6 OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The
following provisions shall be applicable to the adjustments provided for
pursuant to this SECTION 3:
3.6.1 WHEN ADJUSTMENTS TO BE MADE. The adjustments required by
this SECTION 3 shall be made whenever and as often as any specified
event requiring such an adjustment shall occur. For the purpose of any
such adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.
3.6.2 RECORD DATE. If the Company fixes a record date of the
holders of COMMON STOCK or of Common Stock for the purpose of entitling
them (i) to receive a dividend or other distribution payable in shares
of Common Stock or in shares of any other class or series of capital
stock or securities convertible into or exchangeable for Common Stock
or shares of any other class or series of capital stock or (ii) to
subscribe for or purchase shares of Common Stock or such other shares
or securities, then all references in this SECTION 3 to the date of the
issuance or sale of such shares of Common Stock or such other shares or
securities shall be deemed to be references to such record date.
3.6.3 WHEN ADJUSTMENT NOT REQUIRED. If the Company fixes a
record date of the holders of its Securities or Common Stock for the
purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights to which the provisions of SECTION 3.1
or 3.2 would apply, but shall, thereafter and before the distribution
to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
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3.6.4 NOTICE OF ADJUSTMENTS. Whenever the number of shares of
Common Stock for which this Warrant is exercisable or the Warrant
Purchase Price shall be adjusted or recalculated pursuant to this
SECTION 3, the Company shall forthwith prepare a certificate to be
executed by the chief financial officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment or
recalculation and the method by which such adjustment or recalculation
was calculated, specifying the number of shares of Common Stock for
which this Warrant is exercisable and (if such adjustment was made
pursuant to SECTION 3.4) describing the number and kind of any other
shares of stock or Other Property for which this Warrant is
exercisable, and any related change in the Warrant Purchase Price,
after giving effect to such adjustment, recalculation or change. The
Company shall mail (by registered or certified mail, return receipt
requested, postage prepaid) a signed copy of such certificate to be
delivered to the Holder within three Business Days of the event that
caused such adjustment or recalculation. The Company shall keep at the
Designated Office copies of all such certificates and cause the same to
be available for inspection at said office during normal business hours
by the Holder or any prospective transferee of this Warrant designated
by the Holder.
3.6.5 INDEPENDENT APPLICATION. Except as otherwise provided
herein, all subsections of this SECTION 3 are intended to operate
independently of one another (but without duplication). If an event
occurs that requires the application of more than one subsection, all
applicable subsections shall be given independent effect without
duplication.
4. COMPANY'S WARRANTIES AND COVENANTS.
4.1 GENERAL. The Company has taken all action necessary and appropriate
to properly authorize, reserve and issue those shares of Common Stock issuable
to the Holder pursuant to this Warrant, including an authorization of issuance
and setting of the Warrant Purchase Price. The Warrant Shares represented hereby
shall, when issued, be duly and validly issued, fully paid and non-assessable.
4.2 RULE 144 REPORTING. The Company will use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 promulgated by the Securities and
Exchange Commission (the "Commission") under the Securities Act ("Rule 144") or
any similar or analogous rule promulgated under the Securities Act, at all times
after the effective date of the first registration filed by the Company for an
offering of its securities to the general public;
(b) File with the Commission, in a timely manner, all reports
and other documents required of the Company under the Securities Exchange Act of
1934, as amended (the "Exchange Act"); and
(c) So long as the Holder owns any Warrant Shares, furnish to
the Holder forthwith upon request (i) a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 and of the Exchange
Act; (ii) a copy of the most recent annual or quarterly report of the Company;
and (iii) such other reports and documents as the Holder may reasonably request
in availing itself of any rule or regulation of the Commission allowing it to
sell any such securities without registration.
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5. REGISTRATION RIGHTS. The Holder shall have registration rights with respect
to the Warrant Shares in accordance with the terms of the Registration Rights
Agreement by and between Holder and the Company of even date herewith.
6. MISCELLANEOUS.
6.1 RESTRICTIVE LEGEND. This Warrant, any Warrant issued upon transfer
of this Warrant and any Warrant Shares issued upon exercise of this Warrant or
any portion thereof shall be imprinted with the following legend, in addition to
any legend required under applicable state securities laws:
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW. THIS SECURITY MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED,
EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF
SUCH ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS AND ALL
APPLICABLE STATE SECURITIES LAWS.
The legend shall be appropriately modified upon issuance of
certificates for shares of Common Stock.
Upon request of the Holder of such a certificate, the Company shall
issue to such Holder a new certificate free of the foregoing legend, if, with
such request, the Holder provides the Company with an opinion of counsel
reasonably acceptable to the Company stating that the securities evidenced by
such certificate can be sold under Rule 144 or a similar Rule permitting resales
without restriction.
6.2 ISSUE TAX. The issuance of shares of Common Stock upon the exercise
of this Warrant shall be made without charge to the Holder for any issue tax in
respect thereof.
6.3 CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of this Warrant or of any Warrant Shares in any
manner that interferes with the timely exercise hereof unless required by
applicable law.
6.4 NO VOTING RIGHTS; LIMITATION OF LIABILITY. Except as expressly set
forth in this Warrant, nothing contained in this Warrant shall be construed as
conferring upon the Holder (i) the right to vote or to consent as a stockholder
in respect of meetings of stockholders for the election of directors of the
Company or any other matter, (ii) the right to receive dividends except as set
forth in SECTION 3, or (iii) any other rights as a stockholder of the Company.
No provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
Warrant Purchase Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by its creditors.
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6.5 MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement is sought.
6.6 NOTICES. All notices, requests, demands and other communications
which are required or may be given under this Warrant shall be in writing and
shall be deemed to have been duly given if transmitted by telecopier with
receipt acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of 72 hours
after mailing, if mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
(a) If to the initial Holder, at:
Integral Systems, Inc.
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (301) (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to any other or subsequent Holder, at:
the Holder's address as shown on the books of the Company.
(c) If to the Company, at:
SSP Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address or addresses as the Holder, or the Company, as the case
may be, may specify by written notice given in accordance with this SECTION 6.6.
6.7 SUCCESSORS AND ASSIGNS. Subject to the requirements of applicable
law, Holder may assign all or any portion of this Warrant at any time or from
time to time without the consent of the Company.. Each assignment of this
Warrant, in whole or in part, shall be registered on the books of the Company to
be maintained for such purpose, upon surrender of this Warrant at the Designated
Office, together with appropriate instruments of assignment, duly filled in and
executed. Upon such surrender and delivery, the Company shall, at its own
expense, within three Business Days execute and deliver a new Warrant or
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Warrants in the name of the assignee or assignees specified in such assignment
and in the denominations specified therein and this Warrant shall promptly be
canceled. In the event any portion of this Warrant is not being assigned, the
Company shall, at its own expense, within three Business Days issue to the
Holder a new Warrant evidencing the portion not so assigned. This Warrant shall
be binding upon and inure to the benefit of the Company and the Holder of this
Warrant, and their respective successors and permitted assigns and shall
include, with respect to the Company, any Person succeeding the Company by
merger, consolidation, combination or acquisition of all or substantially all of
the Company's assets, and in such case, except as expressly provided herein, all
of the obligations of the Company hereunder shall survive such merger,
consolidation, combination or acquisition.
6.8 DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are for convenience of reference only and do not
constitute a part of this Warrant and are not to be considered in construing or
interpreting this Warrant.
6.9 LOST WARRANT OR CERTIFICATES. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or of a stock certificate evidencing Warrant Shares and, in the
case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company or, in the case of any such mutilation,
upon surrender and cancellation of such Warrant or stock certificate, the
Company shall make and deliver to Holder, within three Business Days of receipt
by the Company of such documentation, a new Warrant or stock certificate, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
6.10 TERMINATION OF THIS WARRANT. This Warrant shall terminate and
shall no longer be exercisable after the Expiration Date.
6.11 NO IMPAIRMENT. The Company shall not by any action including,
without limitation, amending its charter documents or regulations or through any
reorganization, reclassification, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (i) not increase the par value (if
any) of any shares of Common Stock receivable upon the exercise of this Warrant
above the amount payable therefor upon such exercise immediately prior to such
increase in par value, (ii) take all such action 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, free
and clear of all liens, encumbrances, equities and claims, and (iii) use its
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
6.12 GOVERNING LAW. In all respects, including all matters of
construction, validity and performance, this Warrant and the rights and
obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware applicable to contracts
made and performed in such state, without regard to principles thereof regarding
conflicts of laws.
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6.13 REMEDIES. If the Company fails to observe or perform any covenant
or agreement to be observed or performed under this Warrant, the Holder of this
Warrant may proceed to protect and enforce its rights by suit in equity or
action at law, whether for specific performance of any term contained in this
Warrant or for an injunction against the breach of any such term or in aid of
the exercise of any power granted in this Warrant or to enforce any other legal
or equitable right of such party, or to take any one or more of such actions.
The Company shall pay all fees, costs, and expenses, including without
limitation, fees and expenses of attorneys, accountants and other experts
retained by the Holder of this Warrant, and all fees, costs and expenses of
appeals, incurred or expended by the Holder of this Warrant in connection with
the enforcement of this Warrant or the collection of any sums due hereunder,
whether or not suit is commenced, unless and to the extent that the Company
prevails in any action, suit or proceeding initiated by the Holder which a court
of competent jurisdiction determines was initiated or maintained by the Holder
in bad faith. None of the rights, powers or remedies conferred under this
Warrant shall be mutually exclusive, and each such right, power or remedy shall
be cumulative and in addition to any other right, power or remedy whether
conferred by this Warrant or now or hereafter available at law, in equity, by
statute or otherwise.
6.14 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, AND UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THIS
WARRANT, THE FORBEARANCE AGREEMENT AND/OR ANY RELATED AGREEMENT OR THE
TRANSACTIONS COMPLETED HEREBY OR THEREBY.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-11-
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
and issued by its duly authorized representative on the date first above
written.
SSP SOLUTIONS, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Co-Chairman and Chief
Executive Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
-12-
FORM OF EXERCISE SUBSCRIPTION
-----------------------------
(TO BE SIGNED ONLY UPON EXERCISE OF THIS WARRANT)
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of SSP
Solutions, Inc., a Delaware corporation (the "COMPANY"), evidenced by the
attached Warrant (the "WARRANT"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. FORM OF WARRANT PURCHASE PRICE. The holder intends that payment of the
Warrant Purchase Price shall be made as:
____________ "CASH EXERCISE" with respect to _________________
Warrant Shares; and/or
____________ "CASHLESS EXERCISE" with respect to _________________
Warrant Shares (to the extent permitted by the terms
of the Warrant).
2. PAYMENT OF WARRANT PURCHASE PRICE. If the holder has elected a Cash Exercise
with respect to some or all of the Warrant Shares to be issued pursuant hereto,
the holder shall pay the sum of $___________________ to the Company in
accordance with the terms of the Warrant.
3. DELIVERY OF WARRANT SHARES. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
Date: ______________________ __________________________________________
Name of the Holder (must conform precisely
to the name specified on the face of the
Warrant)
__________________________________________
Signature of authorized representative of
the Holder
__________________________________________
Print or type name of authorized
representative
Social Security Number of the Holder:
__________________________________________
Address of the Holder:____________________
__________________________________________
__________________________________________