THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.
WARRANT TO PURCHASE COMMON STOCK
OF
▇▇▇.▇▇▇, INC.
VOID AFTER _______, 20__
This Warrant (the "Warrant") is issued to _____________ or his
registered assigns ("Holder") by ▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Company"), on _______, ______ (the "Warrant Issue Date") for consideration of
$____ in the aggregate, receipt of which is hereby acknowledged.
1. Purchase Shares. Subject to the terms and conditions herein set
forth, the Holder is entitled, upon surrender of this Warrant at the principal
corporate office of the Company (or at such other place as the Company shall
notify the Holder hereof in writing), to purchase from the Company up to
___________ shares of common stock (the "Warrant Shares") of the Company, $.001
par value (the "Common Stock") at the Exercise Price (defined below), subject to
adjustment as provided in Section 8.
2. Exercise Price. The purchase price for the Shares shall be $_____
per Warrant Share, as adjusted from time to time pursuant to Section 8 hereof
(the "Exercise Price").
3. Exercise Period. This Warrant shall be exercisable, in whole or in
part, during the period commencing on the Warrant Issue Date and ending at 5:00
p.m. on _________, 20__ (the "Exercise Period").
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the rights to purchase the Warrant Shares evidenced hereby.
Such exercise shall be effected by:
(a) the surrender of the Warrant, together with a duly
executed copy of the form of Notice of Exercise attached hereto, to the
Secretary of the Company at its principal corporate offices; and
(b) the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Warrant Shares being
purchased.
5. Net Exercise. In lieu of exercising this Warrant pursuant to Section
4, the Holder may elect to receive, without the payment by the Holder of any
additional consideration, Warrant Shares equal to the value of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the Notice of Exercise attached
hereto indicating such election, in which event the Company shall issue to the
holder hereof a number of Warrant Shares computed using the following formula:
Y (A - B)
---------
X = A
Where: X = The number of Warrant Shares to be issued to the Holder pursuant to this net
exercise;
Y = The number of Warrant Shares in respect of which the net issue election is
made;
A = The fair market value of one Warrant Share at the time the net issue election
is made;
B = The Exercise Price (as adjusted to the date of the net issuance).
For purposes of this Section 5, the fair market value of one Warrant Share as of
a particular date shall be determined as follows: (i) if traded on a securities
exchange or through the Nasdaq National Market, the value shall be deemed to be
the average of the closing prices of the securities on such exchange over the
thirty (30) day period ending three (3) days prior to the net exercise election;
(ii) if traded over-the-counter, the value shall be deemed to be the average of
the closing bid and offer prices (whichever is applicable) over the thirty (30)
day period ending three (3) days prior to the net exercise; and (iii) if there
is no active public market, the value shall be the fair market value thereof, as
determined in good faith by the Board of Directors of the Company.
6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Warrant
Shares so purchased shall be issued as soon as practicable thereafter (with
appropriate restrictive legends, if applicable), and in any event within thirty
(30) days of the delivery of the subscription notice and the Holder's compliance
with Section 4 or 5 (as applicable) hereof.
7. Issuance of Shares. The Company covenants that the Warrant Shares,
when issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
8. Adjustment of Exercise Price and Kind and Number of Shares. The
number and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the
Company shall at any time during the Exercise Period of this Warrant
(i) subdivide its Common Stock, by split-up or otherwise, or combine
its Common Stock, or (ii) issue additional shares of its Common Stock
or other equity securities as a dividend with respect to any shares of
its Common Stock, the number of shares of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased
in the case of a subdivision or stock dividend, or proportionately
decreased in the case of a combination. Appropriate adjustments shall
also be made to the Exercise Price payable per Warrant Share, but the
aggregate Exercise Price payable for the total number of Warrant Shares
purchasable under this Warrant (as adjusted) shall remain the same. Any
adjustment under this Section 8(a) shall become effective at the close
of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event
that no record date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization and Consolidation. In
case of any reclassification, capital reorganization, or change in the
Common Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above),
then, as a condition of such reclassification, reorganization, or
change, lawful provision shall be made, and duly executed documents
evidencing the same from the Company or its successor shall be
delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total
price equal to that payable upon the exercise of this Warrant (subject
to adjustment of the Exercise Price as provided in Section 8, the kind
and amount of shares of stock and other securities and property
receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Common Stock as were
purchasable by the Holder immediately prior to such reclassification,
reorganization, or change. In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder so
that the provisions hereof shall thereafter be applicable with respect
to any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made to the
purchase price per share payable hereunder, provided the aggregate
purchase price shall remain the same.
(c) Notice of Adjustment. When any adjustment is required to
be made in the number or kind of shares purchasable upon exercise of
the Warrant, or in the Exercise Price, the Company shall promptly
notify the Holder of such event and of the number of shares of Common
Stock or other securities or property thereafter purchasable upon
exercise of this Warrant.
(d) Issuance of New Warrant. Upon the occurrence of any of the
events listed in this Section 8 that results in an adjustment of the
type, number or exercise price of the securities underlying this
Warrant, the Holder shall have the right to receive a new warrant
reflecting such adjustment upon the Holder tendering this Warrant in
exchange. The new warrant shall otherwise have terms identical to this
Warrant.
9. Covenants and Conditions.
------------------------
(a) No Impairment. Pursuant to the terms and conditions of
this Warrant, Company shall: (i) reserve an appropriate number of
shares of Company's Common Stock to facilitate the issuance of shares
to Holder pursuant to this Warrant, (ii) not amend its articles in a
manner which would materially impair Company's ability to comply with
the terms of the Warrant or otherwise unfairly impair the rights of the
Holder.
(b) Registration Rights. The Company hereby grants the Holder
one piggyback registration right on customary terms and conditions
(including the Company's agreement to pay all expenses of such
registrations other than underwriting discounts). Notwithstanding the
foregoing, Holder's rights hereunder shall be subordinate to holders of
securities of the Company who currently hold piggyback registration
rights.
10. Representations and Warranties. Pursuant to the terms and
conditions of this Warrant, the Company represents and warrants that (i) the
Company is duly organized under the laws of the State of Delaware, and (ii) the
issuance of this Warrant has been duly authorized by all necessary corporate
action of the Company and does not conflict with the terms any of the bylaws,
articles of incorporation or any material agreements of the Company.
11. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
12. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
shares of Common Stock issuable on the exercise hereof, including, without
limitation, the right to vote such shares of Common Stock, receive dividends or
other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such Holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company.
13. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
14. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder. Any waiver or amendment effected
in accordance with this Section shall be binding upon each holder of any shares
of Common Stock purchased under this Warrant at the time
outstanding (including securities into which such shares have been converted),
each future holder of all such Shares, and the Company.
15. Notices. All notices required under this Warrant shall be deemed to
have been given or made for all purposes (i) upon personal delivery, (ii) upon
an automatic machine generated confirmation receipt that the communication was
successfully sent to the applicable number if sent by facsimile; (iii) one
business day after being sent, when sent by professional overnight courier
service, or (iv) five business days after posting when sent by registered or
certified mail. Notices to the Company shall be sent to the principal corporate
office of the Company (or at such other place as the Company shall notify the
Holder hereof in writing). Notices to the Holder shall be sent to the address of
the Holder on the books of the Company (or at such other place as the Holder
shall notify the Company hereof in writing).
16. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
17. Governing Law. This Warrant shall be governed by the laws of the
State of Delaware as applied to agreements among Delaware residents made and to
be performed entirely within the State of Delaware, and without reference to any
of its conflict of laws principles.
IN WITNESS WHEREOF, ▇▇▇.▇▇▇, Inc. caused this Warrant to be executed by
an officer thereunto duly authorized.
▇▇▇.▇▇▇, INC.
By:___________________________
Name:________________________
Address:
Fax Number:
NOTICE OF EXERCISE
------------------
To:
The undersigned hereby elects to [check applicable
subsection]:
________ (a) Purchase _________________ shares of Common Stock
of _____________, pursuant to the terms of the
attached Warrant and payment of the Exercise Price
per share required under such Warrant accompanies
this notice;
OR
________ (b) Exercise the attached Warrant for [all of the
shares] [________ of the shares] [cross out
inapplicable phrase] purchasable under the Warrant
pursuant to the net exercise provisions of Section 5
of such Warrant.
The undersigned hereby represents and warrants that the
undersigned is acquiring such shares for its own account for investment purposes
only, and not for resale or with a view to distribution of such shares or any
part thereof.
WARRANTHOLDER:
-----------------------------------------
By:
[NAME]
Address:
Date:
Name in which shares should be registered:
AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK
This Amendment to the Warrant to Purchase Common Stock of ▇▇▇.▇▇▇, Inc.
issued on _______, 20__ (the "Warrant") to _________(the "Holder") by ▇▇▇.▇▇▇,
Inc. (the "Company") is made as of this ____ day of ________, 20__.
WHEREAS: The Company has issued a Warrant to the Holder dated
_________, 20__; and
WHEREAS: The Company and the Holder wish to amend the Warrant as set
forth herein.
NOW THEREFORE, the Company and the Holder hereby agree as follows:
1. Section 9 (b) is hereby amended to read as follows:
9 (b) Registration Rights. At any time after the execution of this Agreement, if
the Company determines that it will file a registration statement under the 1933
Act (other than a registration statement on a Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing securities holders) on any form that would also permit the
registration of the Warrant Shares and such filing is to be on its behalf and/or
on behalf of selling holders of its securities for the general registration of
its securities to be sold for cash, at such time the Company will, within
forty-five (45) days following such determination, give the Holder written
notice by registered mail of such determination setting forth the date on which
the Company proposes to file such registration statement, which date will be no
earlier than thirty (30) days from the date of such notice, and advising the
Holder of its right to have its Warrant Shares included in such registration.
Upon the written request of the Holder received by the Company no later than
thirty (30) days after the date of the Company's notice, the Company will use
all reasonable efforts to cause to be registered under the 1933 Act all of the
Warrant Shares that the Holder has so requested to be registered. If, in the
written opinion of the managing underwriter or underwriters (or, in the case of
a non-underwritten offering, in the written opinion of the placement agent), the
total amount of such securities to be so registered, including such Warrant
Shares, will exceed the maximum amount of the Company's securities which can be
marketed (i) at a price reasonably related to the then current value of such
securities, or (ii) without otherwise materially and adversely affecting the
entire offering, then the amount of the Warrant Shares to be offered for the
accounts of the Holder will be reduced pro rata to the extent necessary to
reduce the total amount of securities to be included in such offering to the
recommended amount; provided, that if securities are being offered for the
account of other persons which have registration rights which are pari passu
with the Holder as well as the Company, such reduction will not represent a
greater fraction of the number of securities intended to be offered by the
Holder than the fraction of
1
similar reductions imposed on such other persons which have rights pari passu
with the Holder, other than the Company over the amount of securities they
intended to offer. Notwithstanding the foregoing, the rights of the Holder set
forth in this Section 9(b), shall, only in the event of an underwritten public
offering of the Company's securities, be subordinate to the rights of such
shareholders and warrantholders of the Company with respect to a maximum of
11,248,408 shares of common stock and 3,133,520 shares of common stock
underlying Warrants which have been issued by the Company.
2. All other provisions of the Warrant shall remain in force and
effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly
executed as of the date first written above.
▇▇▇.▇▇▇, INC.
By: ________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
CEO
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