Exhibit 3.07
THIS WARRANT WAS ORIGINALLY ISSUED ON SEPTEMBER 24, 1999 AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND
REGULATIONS THEREUNDER, THE PROVISIONS OF THIS WARRANT OR ANY APPLICABLE STATE
LAWS.
Dated: September 24, 1999 150,000 Shares
Certificate No. WC-2
ID TECHNOLOGIES CORPORATION
COMMON STOCK PURCHASE WARRANT
THIS CERTIFIES THAT for value received, subject to the terms and
conditions hereinafter set forth, Centennial Venture Partners, LLC, a North
Carolina limited liability company, or assigns (the "HOLDER"), is entitled to
purchase up to One Hundred Fifty Thousand (150,000) shares of Common Stock (the
"COMMON STOCK") of ID Technologies Corporation, a North Carolina corporation
(the "COMPANY"), at a purchase price of $0.01 per share (as such purchase price
may be adjusted from time to time as herein provided) (the "PURCHASE PRICE")
upon presentation of this Warrant and payment of the Purchase Price for the
shares of Common Stock purchased at the principal office of the Company or at
such other place as shall have been designated by the Company. The number of
shares of Common Stock which are purchasable hereunder, as adjusted pursuant to
the provisions below, is hereinafter referred to as the "WARRANT SHARES."
This Warrant is made and given in connection with the closing of the
sale and issuance by the Company of Convertible Debentures in the aggregate
original principal amount of Three Hundred Thousand Dollars ($300,000.00) on the
date hereof (each of such Convertible Debentures, a "DEBENTURE" and,
collectively, the "DEBENTURES", and each holder of such Debentures, a "DEBENTURE
HOLDER").
This Warrant is subject to the following provisions:
1. Exercise of Warrant.
a. This Warrant may be exercised, in whole or in part, at any
time upon demand by holders of Debentures representing greater than
fifty percent (50%) of the aggregate outstanding principal balance of
all Debentures, or at the option of the Holder upon an Exercise Event
(as defined below), or automatically upon a Qualified Public Offering
(as defined below), and in any case prior to September 24, 2009, by the
delivery to the Company of written notice of such exercise and the
tender to the Company of the Purchase Price for the Warrant Shares
purchasable pursuant to such exercise of this Warrant. This Warrant
shall expire with respect to any Warrant Shares which have not been
purchased prior to end of the day on September 24, 2009. In case of the
exercise to purchase less than all Warrant Shares purchasable
hereunder, the Company shall cancel
this Warrant and shall execute and deliver a new Warrant of like tenor
for the balance of the shares which may be purchased hereunder. As used
herein, "EXERCISE EVENT" means the making or receiving by Company of
any offer, proposal or commitment, or entering into any letter of
intent, contract or agreement, relating to any of the following
transactions, or any earlier announcement by the Company or any other
party to any such transaction (or any public announcement), or any
earlier filing with or notice to the Securities and Exchange Commission
("SEC") or any other governmental agency or authority, in any such case
relating to any of the following transactions: (i) any merger or other
corporate reorganization which results in the failure of the holders of
the capital stock of the Company to hold greater than 50% of the votes
attributable to the shares of voting stock of the surviving company;
(ii) any transaction resulting in a change in the ownership of greater
than 50% of the Common Stock (determined on an as-exercised,
as-converted, fully-diluted basis, excluding warrants of the Debenture
Holders to purchase up to an aggregate of $500,000 of Common Stock upon
the occurrence of an Exercise Event as defined therein, to the extent
not exercised); (iii) any transaction resulting in the sale of all or
substantially all of the assets of the Company; or (iv) a Qualified
Public Offering. The Company shall notify the Holder in writing
immediately upon the occurrence of an Exercise Event and in any event
within sixty (60) days prior to the closing thereof, and the Company,
within such time, shall notify the other parties to such transaction of
the warrants held by the Holder. Upon exercise of this Warrant by the
Holder, such Holder shall be entitled to participate in any such
transaction as a shareholder. As used herein, "QUALIFIED PUBLIC
OFFERING" means an underwritten public offering registered under the
Securities Act of 1933 (the "1933 ACT") (other than a registration
relating solely to employee benefit plans or to a transaction under
Rule 145 under the 1933 Act or any successor rule thereto) in which
(before deduction of underwriter commissions and selling expenses) the
public offering price is equal to or exceeds Five Dollars ($5.00) per
share of Common Stock (subject to adjustment for stock splits, reverse
stock splits and other similar corporate reorganizations) and the gross
proceeds to Company equal or exceed Fifteen Million Dollars
($15,000,000.00).
b. In lieu of exercising this Warrant in accordance with
Section 1.a. hereof, the Holder may elect to receive, at any time
following the occurrence of an Exercise Event, without the payment of
such Holder of any additional consideration, shares equal to the value
of this Warrant or any portion hereof exercised, as determined below,
by the surrender of this Warrant to the Company (with the notice of
exercise form attached hereto as Exhibit A duly executed), at the
principal office of the Company. Thereupon, the Company shall within
thirty (30) days after request by Holder issue to such Holder such
number of fully paid and nonassessable Warrant Shares as is computed
using the following formula:
X = Y(A-B)
------
A
Where X = the number of shares to be issued to
such Holder pursuant to Section 1.a.
Y = the number of shares covered by
this Warrant in respect of which the
election is made pursuant to Section 1.b.
A = the Market Price of one share of
Common Stock at the time the election
is made pursuant to Section 1.b.
B = the Purchase Price in effect under
this Warrant at the time the election
is made pursuant to Section 1.b.
For purposes hereof, the term "MARKET PRICE" shall mean the
average of the daily closing prices per shares of the Common Stock for
the ten (10) consecutive trading days immediately preceding the day as
of which Market Price is being determined. The closing price for each
day shall be the last sale price regular way or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the New York Stock Exchange, or,
if shares of the Common Stock are not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities
exchange on which the shares are listed or admitted to trading, or if
the shares are not so listed or admitted to trading, the average of the
closing bid and asked prices as quoted on NASDAQ. If shares of the
Common Stock are not listed or admitted to trading on any exchange or
quoted on NASDAQ, the Market Price shall be deemed to be the higher of
(A) the book value of a share of the Common Stock as determined by any
firm of independent public accountants of recognized standing, selected
by the board of directors of the Company, as at the last day of any
month ending within sixty (60) days preceding the date as of which the
determination is to be made or (B) the fair value thereof determined in
good faith by an independent brokerage firm or Standard & Poor's
Corporation as of a date which is within fifteen (15) days of the date
as of which the determination is to be made (the fees and expenses of
any brokerage firm or other firm engaged pursuant to this Section 1.b.
to be paid by the Company). The Board of Directors of the Company shall
promptly respond in writing to any inquiry by the Holder as to the
Market Price of one share of Common Stock made pursuant to the
immediately preceding sentence. Notwithstanding the provisions of
Section 1.b. and unless as otherwise agreed in writing, the Holder
shall not have any registration rights with respect to the Warrant or
the Warrant Shares.
2. Compliance with Securities Laws: The Holder of this Warrant, by its
acceptance of this instrument, represents and acknowledges that this Warrant is
acquired for the Holder's own account for investment purposes and that this
Warrant and the Warrant Shares issuable upon exercise hereof, respectively, have
not been registered under the Securities Act of 1933, as amended. Accordingly,
any transfer of this Warrant and such Warrant Shares shall be subject to legal
restrictions. The Holder agrees that it will not offer for sale or sell, assign
or otherwise dispose of (except exercise) this Warrant or any Warrant Shares
issued to it pursuant to exercise hereof, except in accordance with applicable
securities laws.
3. Shares of Common Stock in Reserve: The Company agrees at all times
to reserve a sufficient number of authorized but unissued shares of Common Stock
for the purposes of this Warrant, and to take such action as may be necessary to
ensure that all Warrant Shares issued
upon exercise of this Warrant will be duly and validly authorized and issued and
fully paid and nonassessable.
4. No Voting or Dividend Rights: This Warrant shall not entitle the
Holder hereof to any voting rights or other rights as a shareholder of the
Company, and no dividend or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the Warrant Shares which may
be purchased hereunder until and unless, and except to the extent that, this
Warrant shall be exercised.
5. Adjustment of Purchase Price and Number of Shares:
a. The Purchase Price hereof shall be subject to adjustment
from time to time as follows:
i. In case the Company shall (a) pay a dividend on
its Common Stock in Common Stock, (b) subdivide its
outstanding shares of Common Stock, or (c) combine its
outstanding shares of Common Stock into a smaller number of
shares, then, in such an event, the Purchase Price in effect
immediately prior thereto shall be adjusted proportionately so
that the adjusted Purchase Price will bear the same relation
to the Purchase Price in effect immediately prior to any such
event as the total number of shares of Common Stock
outstanding immediately prior to any such event shall bear to
the total number of shares of Common Stock outstanding
immediately after such event. An adjustment made pursuant to
this subdivision i. (a) shall become effective retroactively
immediately after the record date in the case of a dividend
and (b) shall become effective immediately after the effective
date in the case of a subdivision or combination. The Purchase
Price, as so adjusted, shall be readjusted in the same manner
upon the happening of any successive event or events described
herein.
ii. In case the Company shall issue additional shares
of Common Stock at a Net Consideration Per Share (as defined
in subdivision iv. below) which is less than the Purchase
Price at the time of such issuance, the Purchase Price shall
be adjusted so that the same shall equal the Net Consideration
Per Share. Such adjustment shall be made whenever such Common
Stock is issued and shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive such Common Stock.
iii. In case the Company shall issue rights or
options for the purchase of Common Stock or any stock or
securities convertible into or exchangeable for Common Stock
(such rights, options, convertible or exchangeable stock or
securities being herein called "CONVERTIBLE SECURITIES"),
whether or not such Convertible Securities are immediately
exercisable, entitling the holders thereof to subscribe for or
purchase shares of Common Stock at a Net Consideration Per
Share (as defined in subdivision iv. below) which is less than
the Purchase Price at the time of such issuance, the Purchase
Price shall be adjusted so that the same shall equal the Net
Consideration Per Share. Such adjustment shall be made
whenever such Convertible Securities are issued and shall
become effective retroactively immediately after the record
date for the determination of stockholders entitled to receive
such Convertible Securities. In the event the Company shall
subsequently cancel or terminate such Convertible Securities,
the Purchase Price shall be readjusted to be the same as if
the Company had not issued such Convertible Securities.
iv. "NET CONSIDERATION PER SHARE" shall mean the
amount equal to the total amount of consideration received by
the Company for the issuance of such Common Stock or
Convertible Securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or
conversion of any such Convertible Securities, divided by the
aggregate number of shares of Common Stock issued and the
number of shares of Common Stock that would be issued if all
such Convertible Securities were exercised, exchanged or
converted.
v. No adjustment of the Purchase Price shall be made
if the amount of such adjustment shall be less than $0.01 per
share, but in such case any adjustment that would otherwise be
required then to be made shall be carried forward and shall be
made at the time of and together with the next subsequent
adjustment, which, together with any adjustment so carried
forward, shall amount to not less than $0.01 per share. In
case the Company shall at any time issue Common Stock by way
of dividend on any stock of the Company or subdivide or
combine the outstanding shares of the Common Stock, said
amount of $0.01 per share (as theretofore increased or
decreased, if the same amount shall have been adjusted in
accordance with the provisions of this subparagraph) shall
forthwith be proportionately increased in the case of a
combination or decreased in the case of such a subdivision or
stock dividend so as appropriately to reflect the same.
b. Upon each adjustment of the Purchase Price pursuant to
subdivisions i., ii., or iii. of Subsection 5.a., the number of shares
of Common Stock purchasable upon exercise of this Warrant shall be
adjusted to the number of shares of Common Stock, calculated to the
nearest one hundredth of a share, obtained by multiplying the number of
shares of Common Stock purchasable immediately prior to such adjustment
upon the exercise of this Warrant by the Purchase Price in effect prior
to such adjustment and dividing the product so obtained by the new
Purchase Price.
c. In case of any capital reorganization of the Company, or of
any reclassification of the Common Stock, this Warrant shall be
exercisable after such capital reorganization or reclassification upon
the terms and conditions specified in this Warrant, for the number of
shares of stock or other securities which the Common Stock issuable (at
the time of such capital reorganization or reclassification) upon
exercise of this Warrant would have been entitled to receive upon such
capital reorganization or reclassification if such exercise had taken
place immediately prior to such action. The subdivision or combination
of shares of Common Stock at any time outstanding into a greater or
lesser number of shares of Common Stock shall not be deemed to be a
reclassification of the Common Stock of the Company for the purposes of
this Subsection 5.c.
d. Whenever the Purchase Price is adjusted as herein provided,
the Company shall compute the adjusted Purchase Price in accordance
with Subsection 5.a. and shall prepare a certificate signed by its
President and its chief financial officer setting forth the adjusted
Purchase Price and showing in reasonable detail the method of such
adjustment and the fact requiring the adjustment and upon which such
calculation is based, and such certificate shall forthwith be forwarded
to the Holder.
e. The form of this Warrant need not be changed because of any
change in the Purchase Price pursuant to this Section 5 and any Warrant
issued after such change may state the same Purchase Price and the same
number of shares of Common Stock as are stated in this Warrant as
initially issued. However, the Company may at any time in its sole
discretion (which shall be conclusive) make any change in the form of
this Warrant that it may deem appropriate and that does not affect the
substance thereof. Any Warrant thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant or
otherwise, may be in the form as so changed.
f. Notwithstanding any provision hereof, if an adjustment of
the Purchase Price is made pursuant to this Section (or any subsection
hereof) and the event causing such adjustment also causes an adjustment
to the conversion price of Series A Preferred stock of Corporation
under the Articles of Incorporation of Corporation, or to the purchase
price, conversion price, number of warrant shares or similar
adjustments under any debentures, warrants or any other instruments to
which Corporation is a party, no additional adjustment under this
Section shall be made solely as a result of such adjustment(s) under
the Articles of Incorporation, debentures, warrants or such other
instruments.
6. Notices to Warrant Holder in Certain Events: Without limiting the
other provisions of this Warrant, in case -
a. Dividends or Distributions: the Company shall declare a
dividend (or any other distribution) payable upon its Common Stock
otherwise than in cash or in its Common Stock;
b. Issuance of Stock: the Company shall authorize the issuance
of any additional shares of Common Stock or Convertible Securities
(including any public offering or private placement);
c. Reorganization Transactions: the Board of Directors or
shareholders of the Company shall vote upon any capital reorganization
of the Company, reclassification of the capital stock of the Company,
consolidation or merger of the Company with or into another
corporation, or conveyance of all or substantially all of the assets of
the Company to another corporation; or
d. Dissolution or Liquidation: the commencement of voluntary
or involuntary dissolution, liquidation or winding up of the Company;
-- then, and in any such case, the Company shall cause to be delivered
to the Holder at least sixty (60) days prior to the date hereinafter specified,
a notice stating (as applicable): (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or rights, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (ii)
the date on which additional shares of Common Stock or Convertible Securities
are to be issued, and the adjustments in Purchase Price and Warrant Shares to be
made hereunder; or (iii) the date on which such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up is to take place, and the date, if any, to be fixed as of which
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
7. Replacement Warrant for Lost Certificate: Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and reimbursement to the Company of all reasonable expenses incidental thereto
(and upon surrender and cancellation of this Warrant if mutilated), the Company
will execute and deliver a new Warrant of like tenor, in lieu of this Warrant.
8. Assignability; Binding Effect; Amendments; Waivers: This Warrant
shall be binding upon and inure to the benefit of any and all successors and
assigns of the Holder and the Company; PROVIDED, HOWEVER, that no Assignment may
be made by the Holder hereof except for an Assignment to an Approved Party (as
defined below). Each Person to whom all or any part of the Warrant is assigned
shall execute and deliver to the Company a counterpart of the Investor Rights
Agreement as a condition to receipt of a Warrant in the assignee's name. Any
Assignment made without first complying with the provisions of this Section 8
shall be void and of no legal effect. This Warrant may be amended or modified,
or any of its provisions waived, only with the prior written consent of
Debenture Holders holding Debentures representing greater than fifty percent
(50%) of the aggregate outstanding principal balance of all Debentures.
9. As used herein:
e. "AFFILIATES" means with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under common
control with such Person. For the purposes of this definition,
"CONTROL" (including with correlative meanings, the terms "CONTROLLING"
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as applied to any
Person, means the possession, directly, indirectly or beneficially, of
either: (i) 50% equity ownership; or (ii) the power to direct or cause
the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.
f. "APPROVED PARTY" means: (i) Affiliates; (ii) parents
(including step-parents and adoptive parents) and children (including
step-children, adopted children and children of the half-blood); (iii)
partners or retired partners of a partnership, or members or retired
members in a limited liability company; or (iv) Persons to whom an
Assignment is made with the prior written approval of the Company. The
Company's approval shall not be unreasonably withheld, provided that it
may refuse such approval if the proposed assignee is reasonably
believed by the Company to be a competitor of the Company.
g. "ASSIGNMENT" means any sale, assignment, gift, pledge,
encumbrance or other transfer or disposition of this Warrant;
h. "PERSON" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the Company has executed this Warrant under seal
effective as of the date first above written.
COMPANY:
ID TECHNOLOGIES CORPORATION
ATTEST:
By: /s/ ▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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(Assistant) Secretary
(Affix Corporate Seal)