WHERIFY WIRELESS, INC. WARRANT TO PURCHASE _______ SHARES OF COMMON STOCK (SUBJECT TO ADJUSTMENT) (Void after _____ __, 2013)
NEITHER
THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT
AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
WHERIFY
WIRELESS, INC.
WARRANT
TO PURCHASE
_______
SHARES
OF
COMMON STOCK
(SUBJECT
TO ADJUSTMENT)
(Void
after _____ __, 2013)
|
Investor
Warrant No: ___
|
____
__, 2008
|
This
certifies that for value, _________________________, or registered assigns
(the
“Holder”),
is
entitled, subject to the terms set forth below, at any time from and after
________ __, 2008 (the “Original Issuance
Date”)
and
before 5:00 p.m., Eastern Time, on ________ __, 2013 (the “Expiration
Date”),
to
purchase from Wherify Wireless, Inc., a Delaware corporation, (the “Company”),
____________________
(_______) shares
(subject to adjustment as described herein), of common stock, par value $___
per
share, of the Company (the “Common
Stock”),
upon
surrender hereof, at the principal office of the Company referred to below,
with
a duly executed subscription form in the form attached hereto as Exhibit A
and
simultaneous payment therefore in lawful, immediately available money of the
United States or otherwise as hereinafter provided, at an initial exercise
price
per share (the “Purchase
Price”)
a set
forth in Section 1. The Purchase Price is subject to further adjustment as
provided in Section
4
below.
The term “Common
Stock”
shall
include, unless the context otherwise requires, the stock and other securities
and property at the time receivable upon the exercise of this Warrant. The
term
“Warrant,”
as
used herein, shall mean this Warrant and any other Warrants delivered in
substitution or exchange therefore as provided herein.
This
Warrant was issued pursuant to the Bridge Note and Warrant Purchase Agreement
(“BWPA”),
dated
the date hereof, by and between the Company and the Holder.
1. Exercise.
This
Warrant may be exercised at any time or from time to time from and after the
Original Issuance Date through and including the Expiration Date (the
“Exercise
Period”),
on
any business day, for the full number of shares of Common Stock called for
hereby, by surrendering this Warrant at the principal office of the Company,
at
▇▇ ▇▇▇▇▇ ▇▇▇▇, #▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the “Principal
Office”),
with
the subscription form duly executed, together with payment in an amount equal
to
(a) the number of shares of Common Stock called for on the face of this
Warrant, multiplied (b) by the Purchase Price. Payment of the Purchase
Price may be made at Holder’s choosing either: (1) by payment in immediately
available funds; or (2) in lieu of any cash payment, if this Warrant is
exercised on a date when a Registration Statement (as defined in the
Registration Rights Agreement), covering the resale of the shares of Common
Stock issuable upon exercise of this Warrant has not been declared effective
by
the Securities and Exchange Commission (the “Commission”),
or is
no longer in effect, in exchange for the number of shares of Common Stock equal
to the product of (x) the number of shares to which the Warrants are being
exercised multiplied by (y) a fraction, the numerator of which is the Purchase
Price and the denominator of which is the Fair Market Value (as defined below).
This Warrant may be exercised for less than the full number of shares of Common
Stock at the time called for hereby, except that the number of shares receivable
upon the exercise of this Warrant as a whole, and the sum payable upon the
exercise of this Warrant as a whole, shall be proportionately reduced. Upon
a
partial exercise of this Warrant in accordance with the terms hereof, this
Warrant shall be surrendered, and a new Warrant of the same tenor and for the
purchase of the number of such shares not purchased upon such exercise shall
be
issued by the Company to Holder without any charge therefore. This Warrant
shall
be deemed to have been exercised immediately prior to the close of business
on
the date of its surrender for exercise as provided above, and the person
entitled to receive the shares of Common Stock issuable upon such exercise
shall
be treated for all purposes as the holder of such shares of record as of the
close of business on such date. Within two (2) business days after such date,
the Company shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates for the number of full shares of Common
Stock issuable upon such exercise, together with cash, in lieu of any fraction
of a share, equal to such fraction of the then Fair Market Value on the date
of
exercise of one full share of Common Stock.
“Purchase
Price”
shall
mean, prior to the application of any adjustment pursuant to Section
4
hereof,
that price which is equal to seventy-five (75%) percent of the conversion price
of the securities issued in the Recapitalization Financing (as defined in the
BWPA); provided,
that,
in the
event that there shall not be a closing of the Recapitalization Financing,
the
Purchase Price shall be $0.001 per share. The Purchase Price may be adjusted
as
provided for in Section
4
and, at
such time as any provision thereof shall have resulted in an adjustment to
the
Purchase price, that adjusted price shall be the then effective Purchase
Price.
“Fair
Market Value”
shall
mean, as of any date: (i) if shares of the Common Stock are listed on a
national securities exchange, the average of the closing prices as reported
for
composite transactions during the ten (10) consecutive trading days preceding
the trading day immediately prior to such date or, if no sale occurred on a
trading day, then the mean between the closing bid and asked prices on such
exchange on such trading day; (ii) if shares of the Common Stock are not so
listed but are traded on the NASDAQ Global Market (“NGM”),
the
average of the closing prices as reported on the NGM during the ten (10)
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a trading day, then the mean between the highest
bid and lowest asked prices as of the close of business on such trading day,
as
reported on the NGM; or if applicable, the NASDAQ Capital Market (“NCM”),
(iii)
if not then included for quotation on the NGM or the NCM, the average of the
highest reported bid and lowest reported asked prices as reported by the OTC
Bulletin Board of the National Quotation Bureau, as the case may be; or
(iv) if the shares of the Common Stock are not then publicly traded, the
fair market price of the Common Stock as determined in good faith by the
independent members of the Board of Directors of the Company and the Holders
of
a majority of the then outstanding Warrants.
2. Shares
Fully Paid; Payment of Taxes. All shares of Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-assessable,
and the Company shall pay all taxes and other governmental charges (other than
income taxes to the holder) that may be imposed in respect of the issue or
delivery thereof.
3. Transfer
and Exchange.
(a)
Neither this Warrant nor the Common Stock to be issued upon exercise hereof
(the
“Warrant
Shares”)
have
been registered under the Act or any state securities laws (“Blue
Sky Laws”).
This
Warrant has been acquired, and the Warrant Shares and all securities issuable
thereunder or upon recapitalization thereof will be acquired for investment
purposes and not with a view to distribution or resale and may not be pledged,
hypothecated, sold, made subject to a security interest, or otherwise
transferred without: (i) an effective registration statement for such Warrant
under the Act and such applicable Blue Sky Laws; or (ii) an opinion of counsel
reasonably satisfactory to the Company that registration is not required under
the Act or under any applicable Blue Sky Laws.
(b) Upon
compliance with applicable federal and state securities laws as set forth in
Section
3,
above,
this Warrant and all rights hereunder are transferable, in whole or in part,
on
the books of the Company maintained for such purpose at its Principal Office
by
the Holder in person or by duly authorized attorney, upon surrender of this
Warrant together with a completed and executed assignment form in the form
attached hereto as Exhibit B,
and
payment of any necessary transfer tax or other governmental charge imposed
upon
such transfer. Upon any partial transfer, the Company will issue and deliver
to
the assignee a new Warrant with respect to the shares of Common Stock for which
it is exercisable that have been transferred, and will deliver to the Holder
a
new Warrant or Warrants with respect to the shares of Common Stock not so
transferred. A Warrant may be transferred only by the procedure set forth
herein. No transfer shall be effective until such transfer is recorded on the
books of the Company, provided that such transfer is recorded promptly by the
Company, and until such transfer on such books, the Company shall treat the
registered Holder hereof as the owner of the Warrant for all
purposes.
(c) This
Warrant is exchangeable at the Principal Office for two or more new Warrants,
each in the form of this Warrant, to purchase the same aggregate number of
shares of Common Stock, each new Warrant to represent the right to purchase
such
number of shares as the Holder shall designate at the time of such exchange,
but
which shall not exceed the total number of shares for which this Warrant may
be
from time to time exercisable.
(d) Transfer
of the Warrant Shares issued upon the exercise of this Warrant shall be
restricted in the same manner and to the same extent as the Warrant, and the
certificates representing such Warrant Shares shall bear substantially the
following legend, until such Warrant Shares have been registered under the
Act
or may be removed as otherwise permitted under the Act:
“THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE
STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION
STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) IN THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE ACT OR SUCH APPLICABLE
STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER.”
(e) The
Holder and the Company agree to execute such other documents and instruments
as
counsel to the Company deems necessary to effect the compliance of the issuance
of this Warrant and any Warrant Shares issued upon exercise hereof with
applicable federal and state securities laws, including compliance with
applicable exemptions from the registration requirements of such
laws.
4. Anti-Dilution
Provisions.
The
Purchase Price in effect at any time and the number and kind of securities
issuable upon conversion of this Warrant shall be subject to adjustment from
time to time upon the happening of certain events as follows:
A. Adjustment
for Stock Splits and Combinations.
If the
Company at any time or from time to time on or after the date of Warrant
issuance (the “Original
Issuance Date”)
effects a subdivision of the outstanding Common Stock, the Purchase Price then
in effect immediately before that subdivision shall be proportionately
decreased, and conversely, if the Company at any time or from time to time
on or
after the Original Issuance Date combines the outstanding shares of Common
Stock
into a smaller number of shares, the Purchase Price then in effect immediately
before the combination shall be proportionately increased. Any adjustment under
this Section
4(A) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
B. Adjustment
for Certain Dividends and Distributions.
If the
Company at any time or from time to time on or after the Original Issuance
Date
makes or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Purchase Price then
in
effect shall be decreased as of the time of such issuance or, in the event
such
record date is fixed, as of the close of business on such record date, by
multiplying the Purchase Price then in effect by a fraction (1) the numerator
of
which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on
such
record date and (2) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;
provided,
however,
that if
such record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefore, the Purchase Price
shall be recomputed accordingly as of the close of business on such record
date
and thereafter the Purchase Price shall be adjusted pursuant to this
Section 4(B)
as of
the time of actual payment of such dividends or distributions.
C. Adjustments
for Other Dividends and Distributions.
In the
event the Company at any time or from time to time on or after the Original
Issuance Date makes, or fixes a record date for the determination of holders
of
Common Stock entitled to receive, a dividend or other distribution payable
in
securities of the Company other than shares of Common Stock, then and in each
such event provision shall be made so that the Holders of Warrants shall receive
upon exercise thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Company which they would
have received had their Warrants been exercised into Common Stock on the date
of
such event and had they thereafter, during the period from the date of such
event to and including the conversion date, retained such securities receivable
by them as aforesaid during such period, subject to all other adjustments called
for during such period under this Section
4
with
respect to the rights of the Holders of the Warrants.
D. Adjustment
for Reclassification, Exchange and Substitution.
In the
event that at any time or from time to time on or after the Original Issuance
Date, the Common Stock issuable upon the exercise of the Warrants is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets, provided for elsewhere in this
Section 4),
then
and in any such event each Holder of Warrants shall have the right thereafter
to
exercise such Warrant to receive the kind and amount of stock and other
securities and property receivable upon such recapitalization, reclassification
or other change, by holders of the maximum number of shares of Common Stock
for
which such Warrants could have been exercised immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein.
E. Reorganizations,
Mergers, Consolidations or Sales of Assets.
If at
any time or from time to time on or after the Original Issuance Date there
is a
capital reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Section 4)
or a
merger or consolidation of the Company with or into another corporation, or
the
sale of all or substantially all of the Company’s properties and assets to any
other person, then, as a part of such reorganization, merger, consolidation
or
sale, provision shall be made so that the Holders of the Warrants shall
thereafter be entitled to receive upon exercise of the Warrants the number
of
shares of stock or other securities or property to which a holder of the number
of shares of Common Stock deliverable upon conversion would have been entitled
on such capital reorganization, merger, consolidation, or sale. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 4
with
respect to the rights of the Holders of the Warrants after the reorganization,
merger, consolidation or sale to the end that the provisions of this
Section 4
(including adjustment of the Purchase Price then in effect and the number of
shares to be received upon exercise of the Warrants) shall be applicable after
that event and be as nearly equivalent as may be practicable.
F. Sale
of Shares Below Purchase Price:
(1)
If at
any time or from time to time following the later to occur of the Original
Issuance Date or closing date of the Recapitalization Date, the Company issues
or sells, or is deemed by the express provisions of this Section 4(F)
to have
issued or sold, Additional Shares of Common Stock (as hereinafter defined),
other than (i) in the Recapitalization Financing or (ii) as a dividend or other
distribution on any class of stock and other than upon a subdivision or
combination of shares of Common Stock, in either case as provided in
Section 4(A)
above,
for an Effective Price (as hereinafter defined) less than the then existing
Purchase Price, then and in each such case the then existing Purchase Price
shall be reduced, as of the opening of business on the date of such issue or
sale, to a price equal to the Effective Price for such Additional Shares of
Common Stock.
(2) For
the
purpose of making any adjustment required under Section 4(F),
the
consideration received by the Company for any issue or sale of securities shall
(I) to the extent it consists of cash be computed at the amount of cash
received by the Company, (II) to the extent it consists of property other
than cash, be computed at the fair value of that property as determined in
good
faith by the board of directors of the Company (the “Board”),
(III) if Additional Shares of Common Stock, Convertible Securities (as
hereinafter defined) or rights or options to purchase either Additional Shares
of Common Stock or Convertible Securities are issued or sold together with
other
stock or securities or other assets of the Company for a consideration which
covers both, be computed as the portion of the consideration so received that
may be reasonably determined in good faith by the Board to be allocable to
such
Additional Shares of Common Stock, Convertible Securities or rights or options,
and (IV) be computed after reduction for all expenses payable by the
Company in connection with such issue or sale.
(3) For
the
purpose of the adjustment required under Section 4(F),
if the
Company issues or sells any rights, warrants or options for the purchase of,
or
stock or other securities convertible into or exchangeable for, Additional
Shares of Common Stock (such convertible or exchangeable stock or securities
being hereinafter referred to as “Convertible
Securities”)
and if
the Effective Price of such Additional Shares of Common Stock is less than
the
Purchase Price then in effect, then in each case the Company shall be deemed
to
have issued at the time of the issuance of such rights, warrants, options or
Convertible Securities the maximum number of Additional Shares of Common Stock
issuable upon exercise, conversion or exchange thereof and to have received
as
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the issuance
of
such rights, warrants, options or Convertible Securities, plus, in the case
of
such rights, warrants or options, the minimum amounts of consideration, if
any,
payable to the Company upon the exercise of such rights, warrants or options,
plus, in the case of Convertible Securities, the minimum amounts of
consideration, if any, payable to the Company (other than by cancellation of
liabilities or obligations evidenced by such Convertible Securities) upon the
conversion or exchange thereof. No further adjustment of the Purchase Price,
adjusted upon the issuance of such rights, warrants, options or Convertible
Securities, shall be made as a result of the actual issuance of Additional
Shares of Common Stock on the exercise of any such rights, warrants or options
or the conversion or exchange of any such Convertible Securities. If any such
rights or options or the conversion or exchange privilege represented by any
such Convertible Securities shall expire without having been exercised, the
Purchase Price adjusted upon the issuance of such rights, warrants, options
or
Convertible Securities shall be readjusted to the Purchase Price which would
have been in effect had an adjustment been made on the basis that the only
Additional Shares of Common Stock so issued were the Additional Shares of Common
Stock, if any, actually issued or sold on the exercise of such rights, warrants,
or options or rights of conversion or exchange of such Convertible Securities,
and such Additional Shares of Common Stock, if any, were issued or sold for
the
consideration actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of
all
such rights, warrants, or options, whether or not exercised, plus the
consideration received for issuing or selling the Convertible Securities
actually converted or exchanged, plus the consideration, if any, actually
received by the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion or
exchange of such Convertible Securities.
(4) For
the
purpose of the adjustment required under Section 4(F),
if the
Company issues or sells, or is deemed by the express provisions of this
Section 4 to
have issued or sold, any rights or options for the purchase of Convertible
Securities and if the Effective Price of the Additional Shares of Common Stock
underlying such Convertible Securities is less than the Purchase Price then
in
effect, then in each such case the Company shall be deemed to have issued at
the
time of the issuance of such rights or options the maximum number of Additional
Shares of Common Stock issuable upon conversion or exchange of the total amount
of Convertible Securities covered by such rights or options and to have received
as consideration for the issuance of such Additional Shares of Common Stock
an
amount equal to the amount of consideration, if any, received by the Company
for
the issuance of such rights, warrants or options, plus the minimum amounts
of
consideration, if any, payable to the Company upon the exercise of such rights,
warrants or options, plus the minimum amount of consideration, if any, payable
to the Company (other than by cancellation of liabilities or obligations
evidenced by such Convertible Securities) upon the conversion or exchange of
such Convertible Securities. No further adjustment of the Purchase Price,
adjusted upon the issuance of such rights, warrants or options, shall be made
as
a result of the actual issuance of the Convertible Securities upon the exercise
of such rights, warrants or options or upon the actual issuance of Additional
Shares of Common Stock upon the conversion or exchange of such Convertible
Securities. The provisions of paragraph (3) above for the readjustment of
the Purchase Price upon the expiration of rights, warrants or options or the
rights of conversion or exchange of Convertible Securities shall apply
mutatis mutandis
to the
rights, warrants options and Convertible Securities referred to in this
paragraph (4).
(5) “Additional
Shares of Common Stock”
shall
mean all shares of Common Stock issued by the Company on or after the Original
Issuance Date, whether or not subsequently reacquired or retired by the Company,
other than (I) the Warrant Shares, (II) shares of Common Stock issuable
upon exercise of warrants, options and Convertible Securities outstanding as
of
the Original Issuance Date (provided that the terms of such warrants, options
and Convertible Securities are not modified after the Original Issuance Date
to
adjust the exercise price), (III) shares of Common Stock issued pursuant to
any event for which adjustment is made to the Purchase Price under Section 4
hereof
or to the exercise price under the anti-dilution provisions of any securities
outstanding as of the Original Issuance Date or reserved under the Company's
stock option and stock purchase plans, and (IV) Common Stock issuable upon
the
conversion of warrants issued to ▇▇▇▇▇▇▇ & Company (UK) Ltd. (“▇▇▇▇▇▇▇”
or
the
“Placement
Agent”)
in
connection with the sale of the Bridge Notes. The “Effective
Price”
of
Additional Shares of Common Stock shall mean the quotient determined by dividing
the total number of Additional Shares of Common Stock issued or sold, or deemed
to have been issued or sold by the Company under this Section 4F,
into
the aggregate consideration received, or deemed to have been received, by the
Company for such issue under this Section 4F,
for
such Additional Shares of Common Stock.
(6) Other
than a reduction pursuant to its applicable anti-dilution provisions, any
reduction in the conversion price of any Convertible Security, whether
outstanding on the Original Issuance Date or thereafter, or the price of any
option, warrant or right to purchase Common Stock or any Convertible Security
(whether such option, warrant or right is outstanding on the Original Issuance
Date or thereafter), to an Effective Price less than the current Purchase Price,
shall be deemed to be an issuance of such Convertible Security and all such
options, warrants or rights at such Effective Price, and the provisions of
Sections 4(F)(3),
(4)
and
(5)
shall
apply thereto mutatis mutandis.
(7) Any
time
an adjustment is made to the Purchase Price pursuant to Section
4(F),
a
corresponding proportionate change shall be made to the number of shares of
Common Stock issuable upon conversion of this Warrant.
G. No
Adjustments in Certain Circumstances.
No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one ($0.01) cent in such price;
provided,
however,
that
any adjustments which by reason of this Section 4(G)
are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All calculations under
this
Section 4(G)
shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the
case
may be.
5. Notices
of Record Date.
In
case:
A. the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of the Warrants) for
the
purpose of entitling them to receive any dividend or other distribution, or
any
right to subscribe for or purchase any shares of stock of any class or any
other
securities, or to receive any other right, or
B. of
any
capital reorganization of the Company, any reclassification of the capital
stock
of the Company, any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of
the
Company to another corporation, or
C. of
any
voluntary dissolution, liquidation or winding-up of the Company; then, and
in
each such case, the Company will mail or cause to be mailed to each holder
of a
Warrant at the time outstanding a notice specifying, as the case may be,
(a) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (b) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is expected to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such stock or securities at the time receivable upon the exercise of the
Warrants) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up, such notice shall be mailed at least
ten
(10) days prior to the date therein specified.
6. Loss
or Mutilation.
Upon
receipt by the Company of evidence satisfactory to it (in the exercise of
reasonable discretion) of the ownership of and the loss, theft, destruction
or
mutilation of any Warrant and (in the case of loss, theft or destruction) of
indemnity satisfactory to it (in the exercise of reasonable discretion), and
(in
the case of mutilation) upon surrender and cancellation thereof, the Company
will execute and deliver in lieu thereof a new Warrant of like
tenor.
7. Reservation
of Common Stock.
The
Company shall at all times reserve and keep available for issue upon the
exercise of Warrants such number of its authorized but unissued shares of Common
Stock as will be sufficient to permit the exercise in full of all outstanding
Warrants. All of the shares of Commons Stock issuable upon the exercise of
the
rights represented by this Warrant will, upon issuance and receipt of the
Purchase Price therefore, be fully paid and non-assessable, and free from all
preemptive rights, rights of first refusal or first offer, taxes, liens and
charges of whatever nature, with respect to the issuance thereof.
8. Registration
Rights Agreement.
The
Holder of this Warrant shall have the same registration rights as those provided
to purchasers in the Recapitalization Financing with respect to the Holders’
Warrant Shares.
9. No
Rights as Stockholder Conferred by Warrants.
The
Warrant shall not entitle the Holder hereof to any of the rights, either at
law
or in equity, of a stockholder of the Company. The Holder shall, upon the
exercise thereof, not be entitled to any dividend that may have accrued or
which
may previously have been paid with respect to shares of stock issuable upon
the
exercise of the Warrant, except as may otherwise be provided in Section
4
hereof.
10. Notices.
All
notices and other communications from the Company to the Holder of this Warrant
shall be mailed by first class, registered or certified mail, postage prepaid,
and/or a nationally recognized overnight courier service to the address
furnished to the Company in writing by the Holder.
11. Change;
Modifications; Waiver.
No
terms of this Warrant may be amended, waived or modified except by the express
written consent of the Company and the holders of not less than 50.1% of the
shares of Common Stock then issuable under outstanding Warrants issued in
connection with the Financing.
12. Endorsement
of Warrants.
The
Warrant when presented or surrendered for exchange, transfer or registration
shall be accompanied (if so required by the Company) by an assignment in the
form attached hereto as Exhibit
B
or such
other written instrument of transfer, in form satisfactory to the Company,
duly
executed by the registered Holder or by his duly authorized
attorney.
13. Agreement
of Warrant Holders.
The
Holder, and to the extent that portions of this Warrant are assigned and there
is more than one Holder of warrants exercisable for the Warrant Shares, every
holder of a Warrant, by accepting the same, consents and agrees with the Company
and with all other Warrant holders that: (a) the Warrants are transferable
only
as permitted by Section
3
above;
(b) the Warrants are transferable only on the registry books of the Company
as
herein provided; and (c) the Company may deem and treat the person in whose
name
the Warrant certificate is registered as the absolute owner thereof and of
the
Warrants evidenced thereby for all purposes whatsoever, and the Company shall
not be affected by any notice to the contrary,
14. Payment
of Taxes.
The
Company will pay all stamp, transfer and other similar taxes payable in
connection with the original issuance of this Warrant and the shares of Common
Stock issuable upon exercise thereof, provided, however, that the Company shall
not be required to (i) pay any such tax which may be payable in respect of
any
transfer involving the transfer and delivery of this Warrant or the issuance
or
delivery of certificates for shares of Common Stock issuable upon exercise
thereof in a name other than that of the registered Holder of this Warrant
or
(ii) issue or deliver any certificate for shares of Common Stock upon the
exercise of this Warrant until any such tax required to be paid under clause
(i)
shall have been paid, all such tax being payable by the holder of this Warrant
at the time of surrender.
15. Fractional
Interest.
The
Company shall not be required to issue fractional shares of Common Stock on
the
exercise of this Warrant. If more than one Warrant shall be presented for
exercise at the same time by the Holder, the number of full shares of Common
Stock which shall be issuable upon such exercise shall be computed on the basis
of the aggregate number of shares of Common Stock acquirable on exercise of
the
Warrants so presented. If any fraction of a share of Common Stock would, except
for the provisions of this Section
15,
be
issuable on the exercise of any Warrant (or specified portion thereof), the
Company shall pay an amount in cash calculated by it to be equal to the Purchase
Price per share multiplied by such fraction computed to the nearest whole cent.
The Holder by his acceptance of this Warrant expressly waives any and all rights
to receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
16. Entire
Agreement.
This
Warrant constitutes the full and entire understanding and agreement among the
parties with regard to the subject matter hereof and no party shall be liable
or
bound to any other party in any manner by any representations, warranties,
covenants or agreements except as specifically set forth herein.
17. Successors
and Assigns.
All
covenants and provisions of this Warrant by or for the benefit of the Company
or
the Holder of this Warrant shall bind and inure to the benefit of their
respective successors, permitted assigns, heirs and personal
representatives.
18. Termination.
This
Warrant shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date
or
upon such earlier date on which all of this Warrant has been exercised (the
“Termination
Date”).
19. Headings.
The
headings in this Warrant are for purposes of convenience in reference only,
and
shall not be deemed to constitute a part hereof.
20. Governing
Law, Etc.
This
Agreement shall be governed by and construed exclusively in accordance with
the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby irrevocably agree that any suit
or
proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the
City, County and State of New York. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect
as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit
or
proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from
the
other party hereto of all of its reasonable legal fees and
expenses.
Remainder
of Page Intentionally Left Blank
WARRANT
SIGNATURE PAGE
Dated:
________ __, 2008
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WHERIFY
WIRELESS, INC.
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|
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By:
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|
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Name:
|
|
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Title:
|
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EXHIBIT
A
SUBSCRIPTION
FORM
(To
be
executed only upon exercise of Warrant)
The
undersigned registered owner of this Warrant irrevocably exercises this Warrant
and purchases _______ shares of the Common Stock of Wherify Wireless, Inc.,
purchasable with this Warrant, and herewith makes payment therefore (either
in
cash or pursuant to the cashless exercise provisions set forth in Section
1
of the
Warrant), all at the price and on the terms and conditions specified in this
Warrant. The undersigned makes the representations and warranties set forth
in
Section 3 of the Warrant.
Dated:
_____________________________
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(Signature
of Registered Owner)
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(Street
Address)
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(City
/ State / Zip Code)
|
EXHIBIT
B
FORM
OF ASSIGNMENT
FOR
VALUE RECEIVED
the
undersigned registered owner of this Warrant hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock set forth
below:
|
Name
of Assignee
|
Address
|
Number
of Shares
|
and
does
hereby irrevocably constitute and appoint __________________________ Attorney
to
make such transfer on the books of Wherify Wireless, Inc., maintained for the
purpose, with full power of substitution in the premises.
Dated:
_____________________________
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(Signature)
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(Witness)
|
The
undersigned Assignee of the Warrant hereby makes to Wherify Wireless, Inc.,
as
of the date hereof, with respect to the Assignee, all of the representations
and
warranties made by the Holder, and the undersigned Assignee agrees to be bound
by all the terms and conditions of the Warrant.
Dated:
_____________________________
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(Signature)
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