REED’S, INC. WARRANT TO PURCHASE COMMON STOCK **** __________ Shares of Common Stock****
THIS
WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR
AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS
NOT
REQUIRED.
Warrant
No. B - __
June
15, 2007
▇▇▇▇’▇,
INC.
WARRANT
TO PURCHASE COMMON STOCK
****
__________ Shares of Common Stock****
THIS
WARRANT CERTIFIES THAT, for value received, _____________, or registered assigns
(the “Holder”),
is
entitled to subscribe for and purchase from ▇▇▇▇’▇, Inc., a Delaware corporation
(the “Company”),
up to
and including the number of fully paid and nonassessable shares of common stock,
par value $0.0001 per share (the “Common
Stock”)
of the
Company set forth above, at the exercise price of $6.60 per share ( the
“Warrant
Exercise Price”)
(and
as adjusted from time to time pursuant to Section 3 hereof), at any time or
from
time to time from the date first set forth above (the “Issue
Date”)
and
prior to or upon June 15, 2012 (the “Expiration
Date”),
subject to the provisions and upon the terms and conditions hereinafter set
forth:
1. Method
of Exercise; Cash Payment; Issuance of New Warrant.
Subject
to the provisions of this Warrant, the purchase right represented by this
Warrant may be exercised by the Holder hereof, in whole or in part and from
time
to time, at the election of the Holder hereof, by the surrender of this Warrant
(with the notice of exercise substantially in the form attached hereto as
Exhibit A
duly
completed and executed) at the principal executive offices of the Company and
accompanied by payment to the Company, by (a) certified or bank check acceptable
to the Company, (b) cancellation by the Holder of indebtedness of the Company
to
the Holder, if agreed to in advance in writing by the Company in the Company’s
sole and absolute discretion, or (c) by wire transfer to an account designated
by the Company, or any combination of (a), (b) and (c), of an amount equal
to
the then applicable Warrant Exercise Price multiplied by the number of Warrant
Shares then being purchased; or
The
person or persons in whose name(s) any certificate(s) representing the shares
of
the Company’s capital stock to be issued upon exercise of this Warrant (the
“Warrant
Shares”)
shall
be deemed to have become the holder(s) of record of, and shall be treated for
all purposes as the record holder(s) of, the shares represented thereby (and
such shares shall be deemed to have been issued) immediately prior to the close
of business on the date or dates upon which this Warrant is exercised. In the
event of any exercise of the rights represented by this Warrant, certificates
for the Warrant Shares so purchased shall be delivered to the Holder hereof
as
soon as possible and in any event within 20 days after such exercise and, unless
this Warrant has been fully exercised or expired, a new warrant having the
same
terms as this Warrant and representing the remaining portion of such shares,
if
any, with respect to which this Warrant shall not then have
been
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exercised
shall also be issued to the Holder hereof as soon as possible and in any event
within such 20-day period.
2. Reservation
of Shares.
During
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized, and reserved for the purpose
of
the issuance upon exercise of the purchase rights evidenced by this Warrant
a
sufficient number of shares of its capital stock to provide for the exercise
of
the rights represented by this Warrant.
3. Adjustment
of Warrant Exercise Price and Number of Shares.
The
number and kind of securities purchasable upon the exercise of this Warrant
and
the Warrant Exercise Price shall be subject to adjustment to the nearest whole
share (one-half and greater being rounded upward) and nearest cent (one-half
cent and greater being rounded upward) from time to time upon the occurrence
of
certain events, as follows. Each of the adjustments provided by the
subsections below shall be deemed separate adjustments and any adjustment
of this Warrant pursuant to one subsection of this Section 3 shall preclude
additional adjustments for the same event or transaction by the remaining
subsections.
(a) Reclassification.
In case
of any reclassification or change of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value
to
no par value, or from no par value to par value, or as a result of a subdivision
or combination) into the same or a different number or class of securities,
the
Company shall duly execute and deliver to the Holder of this Warrant a new
warrant (in form and substance reasonably satisfactory to the Holder of this
Warrant), so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, at a total purchase price not to exceed
that payable upon the exercise of the unexercised portion of this Warrant,
and
in lieu of the shares of Common Stock theretofore issuable upon exercise of
this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification or change by a holder of the
number of shares then purchasable under this Warrant. The Company shall deliver
such new warrant as soon as possible and in any event within 20 days after
such
reclassification or change. Such new warrant shall provide for adjustments
that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 3. The provisions of this subparagraph (a) shall similarly
apply to successive reclassifications or changes.
(b) Stock
Splits or Combination of Shares.
If the
Company at any time while this Warrant remains outstanding and unexpired shall
subdivide (by stock split) or combine (by reverse stock split) its outstanding
shares of capital stock of the class into which this Warrant is exercisable,
the
Warrant Exercise Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination, effective at the close
of
business on the date the subdivision or combination becomes effective and the
number of shares of Common Stock issuable upon exercise of this Warrant shall
be
proportionately increased in the case of a subdivision or decreased in the
case
of a combination, and in each case to the nearest whole share, effective at
the
close of business on the date the subdivision or combination becomes effective.
The provisions of this subparagraph (b) shall similarly apply to successive
subdivisions or combinations of outstanding shares of capital stock into which
this Warrant is exercisable.
(c) Common
Stock Dividends.
If the
Company at any time while this Warrant is outstanding and unexpired shall pay
a
dividend with respect to Common Stock payable in Common Stock, then (i) the
Warrant Exercise Price shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution
(the “Record
Date”),
to
that price determined by multiplying the Warrant Exercise Price in effect
immediately prior to such date of determination by a fraction (A) the numerator
of which shall be the total number of shares of Common Stock outstanding
immediately prior to such dividend or distribution, and (B) the denominator
of
which shall be the total number of shares of Common Stock outstanding
immediately after such dividend or distribution and (ii) the number of shares
of
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Common
Stock issuable upon exercise of this Warrant shall be proportionately adjusted,
to the nearest whole share, from and after the Record Date by multiplying the
number of shares of Common Stock purchasable hereunder immediately prior to
such
Record Date by a fraction (A) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately after such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately prior to such dividend or
distribution. The provisions of this subparagraph (c) shall similarly apply
to
successive Common Stock dividends by the Company.
4. Notice
of Adjustments.
Whenever the Warrant Exercise Price or the number of shares of Common Stock
purchasable hereunder shall be adjusted pursuant to Section 3 above, the Company
shall deliver a written notice, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which
such
adjustment was calculated, and the Warrant Exercise Price and the number of
shares of Common Stock purchasable hereunder after giving effect to such
adjustment, and shall use commercially reasonable efforts to cause copies of
such notice to be delivered to the Holder of this Warrant within twenty (20)
days after the occurrence of the event resulting in such adjustment at such
Holder’s last known address in accordance with Section 10 hereof.
5. Fractional
Shares.
No
fractional shares will be issued in connection with any exercise hereunder,
but
in lieu of such fractional shares, the number of shares of Common Stock to
be
issued shall be rounded up to the nearest whole number.
6. Compliance
with Securities Act of 1933; Transfer of Warrant or Shares.
(a) Compliance
with Securities Act of 1933.
The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant, the
Warrant Shares and the capital stock issuable upon conversion of the Warrant
Shares (collectively, the “Securities”)
are
being acquired for investment and that such holder will not offer, sell,
transfer or otherwise dispose of the Securities except under circumstances
which
will not result in a violation of the Securities Act of 1933, as amended (the
“Securities
Act”)
and
any applicable state securities laws. Upon exercise of this Warrant, unless
the
Warrant Shares being acquired are registered under the Securities Act and any
applicable state securities laws or an exemption from such registration is
available, the Holder hereof shall confirm in writing that the Warrant Shares
so
purchased are being acquired for investment and not with a view toward
distribution or resale in violation of the Securities Act and shall confirm
such
other matters related thereto as may be reasonably requested by the Company.
The
Warrant Shares (unless registered under the Securities Act and any applicable
state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE “ACT”).
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR
AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS
NOT
REQUIRED.
Such
legend shall be removed by the Company, upon the request of a Holder, at such
time as the restrictions on the transfer of the applicable security shall have
terminated.
(b) Transferability
of the Warrant.
Subject
to compliance with Section 6(c) below, which provisions are intended to ensure
compliance with applicable federal and states securities laws, the Securities
may be transferred by the Holder hereof, in whole or in part and from time
to
time.
-3-
(c) Method
of Transfer.
With
respect to any offer, sale, transfer or other disposition of the Securities,
the
Holder hereof shall prior to such offer, sale, transfer or other
disposition:
(i) surrender
this Warrant or certificate representing Warrant Shares at the principal
executive offices of the Company or provide evidence reasonably satisfactory
to
the Company of the loss, theft or destruction of this Warrant or certificate
representing Warrant Shares and an indemnity agreement reasonable satisfactory
to the Company,
(ii) pay
any
applicable transfer taxes or establish
to the satisfaction of the Company that such taxes have been paid,
(iii) deliver
a
written assignment to the Company in substantially the form attached hereto
as
Exhibit
B
or
appropriate stock power duly completed and executed prior to transfer,
describing briefly the manner thereof, and
(iv) deliver
a
written opinion of such ▇▇▇▇▇▇’s counsel, or other evidence, if reasonably
requested by the Company, to the effect that such offer, sale, transfer or
other
disposition may be effected without registration or qualification (under the
Securities Act as then in effect and any applicable state securities law then
in
effect) of the Securities.
As
soon
as reasonably practicable after receiving the items set forth above, the Company
shall notify the Holder that it may sell, transfer or otherwise dispose of
the
Securities, all in accordance with the terms of the notice delivered to the
Company. If a determination has been made pursuant to this Section 6(c) that
the
opinion of counsel for the Holder or other evidence is not reasonably
satisfactory to the Company, the Company shall so notify the Holder promptly
with details of such determination. Notwithstanding the foregoing, the
Securities may, as to such federal laws, be offered, sold or otherwise disposed
of in accordance with Rule 144 under the Securities Act if the Company satisfied
the provisions thereof and provided that the Holder shall furnish such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 have been satisfied. Each certificate
representing this Warrant or Warrant Shares thus transferred (except a transfer
pursuant to Rule 144 or an effective registration statement) shall bear a legend
as to the applicable restrictions on transferability in order to ensure
compliance with applicable federal and state securities laws, unless in the
aforesaid opinion of counsel to the Holder and to the reasonable satisfaction
of
the Company, such legend is not required in order to ensure compliance with
such
laws. Upon
any
partial transfer of this Warrant, the Company will issue and deliver to such
new
holder a new
warrant (in form and substance similar to this Warrant) with
respect to the portion transferred and will issue and deliver to the Holder
a
new
warrant (in form and substance similar to this Warrant) with
respect to the portion not transferred as
soon
as possible and in any event within 20 days after such transfer.
7. No
Rights as Shareholders; Information.
Prior
to exercise of this Warrant, the Holder of this Warrant, as such, shall not
be
entitled to vote the Warrant Shares or receive dividends on or be deemed the
holder of such shares, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or
upon any matter submitted to shareholders at any meeting thereof, or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise
until this Warrant shall have been exercised and the shares of Common Stock
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.
8.
Call
Provision and Certain Registration Rights.
This
Warrant has been issued as part of the compensation to the placement agents
in a
private placement (the “Private Placement”) of the Company’s
-4-
securities
which was completed on June 15, 2007. The Holder of this Warrant will have
the
registration rights provided to and obligations of the purchasers in the
Private
Placement in accordance with the terms and conditions of a Registration Rights
Agreement relating to the Private Placement, but solely with respect to the
shares of Common Stock underlying this Warrant and the Holder agrees to be
bound
by the terms and conditions of the Registration Rights Agreement. The warrants
(the “Purchaser Warrants”) issued to the purchasers in the Private Placement
include a “call provision” relating to any time that the Closing Sale Price (as
such term is defined in the Purchaser Warrants) of the Common Stock equal
or
exceed $10.00 per share (and as adjusted from time to time pursuant to the
terms
of the Purchaser Warrants) for a period of ten consecutive trading days.
In the
event that the Company shall exercise the call provision in the Purchaser
Warrants, the mandatory registration rights of the Holder of this Warrant
or any
shares underlying this Warrant set forth in the Registration Rights Agreement
shall immediately terminate, and the Holder will only have the piggyback
registration rights for such securities as are set forth in the Registration
Rights Agreement.
9. Modification
and Waiver; Effect of Amendment or Waiver.
This
Warrant and any provision hereof may be modified, amended, waived, discharged
or
terminated only by an instrument in writing, designated as an amendment to
this
Warrant and executed by a duly authorized officer of the Company and the Holder
of this Warrant. Any waiver or amendment effected in accordance with this
Section 9 shall be binding upon the Holder, each future holder of this Warrant
or of any shares purchased under this Warrant (including securities into which
such shares have been converted) and the Company.
10. Notices.
Any
notice, request, communication or other document required or permitted to be
given or delivered to the Holder hereof or the Company shall be delivered by
personal delivery, or shall be sent by certified United States mail, first-class
postage prepaid or by overnight delivery using a nationally recognized courier
service, to each such holder at its address as shown on the books of the Company
or to the Company at the address indicated on the signature page of this
Warrant. All such notices, requests, communications or other documents shall
be
deemed to have been received by the recipient (i) in the case of personal
delivery, on the date of such delivery, (ii) in the case of delivery by a
nationally recognized courier service, on the next business day subsequent
to
deposit with the courier and (iii) in the case of mailing, on the fourth
business day following the date of deposit in the United States mails,
first-class postage prepaid.
11. Successors.
The
obligations of the Company relating to the Warrant Shares shall inure to the
benefit of the successors and assigns of the Holder hereof and shall be binding
upon any successor entity whether upon a Change of Control or sale of all or
substantially all of the assets of the Company. Upon such event, the successor
entity shall assume the obligations of this Warrant, and this Warrant (or any
substitute warrant as provided hereinbefore) shall be exercisable for the
securities, cash and property of the successor entity on the terms provided
herein.
12. Lost
Warrants or Stock Certificates.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate and, in
the
case of any such loss, theft or destruction, upon receipt of an indemnity
agreement reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such mutilated Warrant or stock
certificate, the Company will issue and deliver a new warrant (containing the
same terms as this Warrant) or stock certificate, in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
13. Descriptive
Headings.
The
descriptive headings of the several paragraphs of this Warrant are inserted
for
convenience only and do not constitute a part of this Warrant. The language
in
this Warrant shall be construed as to its fair meaning without regard to which
party drafted this Warrant.
-5-
14. Governing
Law.
This
Warrant shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by, the laws of the State of Delaware, without
reference to principles governing choice or conflicts of laws.
15. Entire
Agreement.
This
Warrant constitutes the full and entire understanding and agreement between
the
parties with regard to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations, and undertakings of the parties,
whether oral or written, with respect to such subject matter.
16. No
Impairment.
The
Company will not, by an voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this
Warrant by the Company, but will at all times in good faith assist in carrying
out all the provisions of this Warrant and in the taking of all such actions
as
may be necessary or appropriate in order to protect the rights of the Holder
of
this Warrant against impairment.
17. Issue
Taxes.
The
Company shall pay any and all issue and other taxes payable in respect of any
issue or delivery of Common Stock upon the exercise of this Warrant that may
be
imposed under the laws of the United States of America or by any state,
political subdivision or taxing authority of the United States of America;
provided,
however,
that
the Company shall not be required
to pay any tax or taxes that may be payable in respect of any transfer involved
in the issue or delivery of any Warrant or certificates for Common
Stock in
a name
other than that of the registered holder of such Warrant, and no such issue
or
delivery shall be made unless and until the person or entity requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.
18. Severability.
In the
event that any one or more of the provisions contained in this Warrant shall
for
any reason be held to be invalid, illegal or unenforceable in any respect,
such
provision(s) shall be ineffective only to the extent of such invalidity,
illegality or unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Warrant and such invalidity,
illegality or unenforceability shall not affect any other provision of this
Warrant, which shall remain in full force and effect.
19. Survival
of Representations, Warranties and Agreements.
All
representations and warranties of the Company and the Holder hereof shall
survive the Issue Date of this Warrant, the exercise or conversion of this
Warrant (or any part hereof) or the termination or expiration of rights
hereunder. All agreements of the Company and the Holder hereof contained herein
shall survive indefinitely, until by their respective terms, they are no longer
operative.
20. Counterparts.
This
Warrant may be executed in two or more counterparts, each of which shall be
an
original, and all of which together shall constitute one
instrument.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF,
the
parties hereto have caused this Warrant to be duly executed as of the issue
date
of this Warrant by its duly authorized officers.
▇▇▇▇’▇,
INC.
a
Delaware corporation
By: ________________________________
Name: ▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇
Title: Chief
Executive Officer
SIGNATURE
PAGE TO WARRANT TO PURCHASE COMMON STOCK
EXHIBIT
A
NOTICE
OF EXERCISE
To:
▇▇▇▇’▇, INC. (the “Company”)
1. The
undersigned hereby:
| o |
elects
to purchase __________ shares of Common Stock of the Company pursuant
to
the terms of the attached Warrant, and tenders herewith payment of
the
purchase price of such shares in
full.
|
2. Please
issue a certificate or certificates representing said shares in the name of
the
undersigned or in such other name or names as are specified below:
_________________________________________
(Name)
_________________________________________
(Address)
_________________________________________
(City,
State)
3. The
undersigned represents that the aforesaid shares being acquired for the account
of the undersigned for investment and not with a view to, or for resale in
connection with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares, all except as in
compliance with applicable securities laws, and that the undersigned is an
“accredited investor” within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended.
_______________
(Date)
__________________________________________
(Signature)
|
NOTICE:
Signature
must be guaranteed by a commercial bank or trust company or a member
firm
of a major stock exchange if shares of capital stock are to be issued,
or
securities are to be delivered, other than to or in the name of the
registered holder of this Warrant. In addition, signature must correspond
in all respects with the name as written upon the face of the Warrant
in
every particular without alteration or any change
whatever.
|
EXHIBIT
B
FORM
OF ASSIGNMENT
FOR
VALUE RECEIVED,
the
undersigned holder of the attached Warrant hereby sells, assigns and transfers
unto _______________________ whose address is
_______________________________________ and whose taxpayer identification number
is _________________the undersigned’s right, title and interest in and to the
Warrant issued by ▇▇▇▇’▇, Inc., a Delaware corporation (the “Company”)
to
purchase _______ shares of the Company’s Common Stock, and does hereby
irrevocably constitute and appoint __________________________ attorney to
transfer said Warrant on the books of the Company with full power of
substitution in the premises.
In
connection with such sale, assignment, transfer or other disposition of this
Warrant, the undersigned hereby confirms that:
| o |
such
sale, transfer or other disposition may be effected without registration
or qualification (under the Securities Act as then in effect and
any
applicable state securities law then in effect) of this Warrant or
the
shares of capital stock of the Company issuable thereunder and has
attached hereto a written opinion of the undersigned’s counsel to that
effect; or
|
| o |
such
sale, transfer or other disposition has been registered under the
Securities Act of 1933, as amended, and registered and/or qualified
under
all applicable state securities
laws.
|
_______________
(Date)
__________________________________________
(Signature)
|
NOTICE:
Signature
must correspond in all respects with the name as written upon the
face of
the Warrant in every particular without alteration or any change
whatever.
|