Exhibit 4.5
THIS WARRANT AND THE SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT MAY NOT BE
EXERCISED OR TRANSFERRED UNLESS REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
PRO ELITE, INC.
(A NEW JERSEY CORPORATION)
CLASS C COMMON STOCK PURCHASE WARRANT
____________ SHARES
1. ISSUANCE OF WARRANT.
PRO ELITE, INC. (the "Company") hereby grants and issues to
_______________________________ or assigns (the "Warrantholder"), a warrant (the
"Warrant") to purchase ______________ shares of the Company's common stock (the
"Common Stock"). The Warrant is exercisable for a period of one (1) year
commencing from the date hereof(the "Exercise Period"), at an exercise price of
$1.25 per share (the "Exercise Price"). This Warrant may be exercised in whole
at any time or in part from time to time during the Exercise Period. The
exercise price per share and the number of shares of Common Stock issuable upon
exercise of this Warrant are subject to adjustment as hereinafter provided.
2. MANNER OF EXERCISE.
(a) This Warrant may be exercised, from time to time, in whole or
in part, by giving written notice of such exercise to the
Company, accompanied by payment in full in cash or certified
check to the Company of the Exercise Price of the shares to be
purchased. As soon as practicable, but not later than 30 days
after the Warrantholder has given said written notice and made
said payment, the Company shall, without charging stock issue
or transfer taxes to the Warrantholder, issue the number of
shares of duly authorized Common Stock issuable upon such
exercise, which shall be duly issued, fully paid and
nonassessable, and shall deliver to the Warrantholder a
certificate or certificates therefor, registered in the
Warrantholder's name. The Warrantholder shall be deemed a
stockholder of the Company upon exercise of this Warrant as
provided in this Section 2, except that if payment is made by
personal check, he or she shall not be deemed a stockholder
until such time as his or her check has cleared.
(b) If this Warrant is exercised in part, it must be
1
exercised for a number of whole shares of Common Stock, and
the Warrantholder will be entitled to and shall receive a new
Warrant, as soon as practicable, but in no event later than 15
business days, covering the Warrant Shares which have not been
exercised. Upon such surrender of this Warrant, the Company
will: (i) issue a certificate or certificates, in such
denominations as are requested for delivery by the
Warrantholder, in the name of the Warrantholder for the
largest number of whole shares of Common Stock to which the
Warrantholder shall be entitled and, if this Warrant is
exercised in whole, in lieu of any fractional share of Common
Stock to which the Warrantholder may be entitled, pay to the
Warrantholder cash in an amount equal to the fair value of
such fractional share (determined in such reasonable manner as
the Board of Directors of the Company shall from time to time
establish); and (ii) deliver the other securities and
properties receivable upon the exercise of this Warrant, or
the proportionate part thereof if this Warrant is exercised in
part, pursuant to the provisions of this Warrant. Upon
exercise in accordance with Subsection 2(a) or (b), the
Warrantholder shall be deemed to be the holder of record of
the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such
shares of Common Stock shall not then actually be delivered to
the Warrantholder.
3. REPRESENTATION OF WARRANTHOLDER.
By exercising this Warrant, the Warrantholder shall be deemed to have made the
following representations:
(a) The Warrantholder understands and agrees that the
shares of Common Stock to be acquired upon exercise of
this Warrant has not been registered under the Act and
will only be issued to the Warrantholder upon such
registration or if an exemption from the registration
requirements is available under the Act; and that the
shares have not been registered with any state
securities commission or authority. The Warrantholder
further understands that the shares to be acquired upon
exercise of the Warrant may not be offered or sold,
unless registered or exempt from registration under the
Act and any applicable securities or blue sky laws, and
that prior to any such offer or sale, the Company may
require, as a condition to effecting a transfer of the
shares of Common Stock issuable upon the exercise of
2
the Warrant, an opinion of counsel acceptable to the Company
as to the registration or exemption therefrom under the Act
and any state blue sky laws. The Warrantholder also
understands that the Company is under no obligation to
register the Warrant Shares on his, her or its behalf or to
assist him, her or it in complying with any exemption from
registration.
(b) By exercising this Warrant, the Warrantholder
acknowledges that he, she or it has, either alone
and/or through his, her or its agents, been afforded
access to all material information concerning the
Company and has received responses to all questions
specifically posed to the Company relevant to the
issuance of the Warrants to the Warrantholder. Without
limiting the foregoing, the Warrantholder, upon
exercise of this Warrant, hereby represents that he,
she or it has alone and/or through his, her or its
agents, had adequate opportunity to ask questions of
and receive answers from, responsible officers and/or
directors of the Company and to conduct any other
investigation he deems necessary and appropriate
concerning the issuance of the Warrant. Except as set
forth herein, the Company has made no representations
or warranties to the Warrantholder which have induced,
persuaded or stimulated the Warrantholder to exercise
the Warrant.
(c) The Warrantholder acknowledges that the Company will be
relying upon the representations made herein in issuing the
shares of Common Stock, upon exercise of the Warrant, without
registration.
(d) The Warrantholder acknowledges that any shares issued pursuant
to the exercise of this Warrant, in the absence of a
registration thereof, shall bear a restrictive legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
("THE ACT") AND ARE "RESTRICTED SECURITIES" AS THAT
TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARES
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
3
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANTS
The Warrants are exchangeable, without expense, at the option
of the Warrantholder, upon presentation and surrender hereof to the Company, or
at the office of its stock transfer agent, for other Warrants of different
denominations entitling the holder thereof to purchase in the aggregate the same
number of shares of common stock purchasable hereunder. Upon surrender of this
Warrant to the Company or at the office of its transfer agent, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver new
Warrants in the name of the assignee named in such instrument of assignment, and
this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other Warrants which carry the same rights upon presentation
hereof, at the office of the Company or at the office of its transfer agent,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Warrantholder hereof. The term
"Warrant" and /or "Warrants" as used herein includes any Warrants into which
this Warrant may be divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of the
Warrants, and (in the case of loss, theft, or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of these
Warrants, if mutilated, the Company will execute and deliver a new Warrant of
like tenor.
5. RESTRICTIONS.
The Warrantholder shall not be entitled to any dividend declared by the
Company, and shall not be entitled to any voting rights by virtue of the
Warrants, except with respect to any shares of common stock issued upon the
exercise hereof.
6. ADJUSTMENTS TO EXERCISE PRICE.
The price per share at which shares of common stock may be purchased
hereunder, and the number of such shares to be purchased upon exercise hereof,
are subject to change or adjustment as follows:
(a) In case the Company shall, while this Warrant remains
unexercised, in whole or in part, and in force, effect a
recapitalization of such character that the shares of common
stock purchasable hereunder shall be changed into or become
exchangeable for a larger or smaller number of shares, then,
after the date of record for
4
effecting such recapitalization, the number of shares of
common stock which the holder hereof shall be entitled to
purchase hereunder shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease
in the number of shares of common stock by reason of such
recapitalization, and the purchase price hereunder per share
of such recapitalized common stock shall, in the case of an
increase in the number of such shares, be proportionately
reduced, and in the case of a decrease in the number of such
shares, shall be proportionately increased. For the purpose of
this subsection (a), a stock dividend, stock split or reverse
split shall be considered a recapitalization and an exchange
for a larger or smaller number of shares, as the case may be.
(b) In the case of any consolidation of the Company with, or
merger of the Company into, any other corporation, or in case
of any sale or conveyance of all or substantially all of the
assets of the Company in connection with a plan of complete
liquidation of the Company, then, as a condition of such
consolidation, merger or sale or conveyance, adequate
provisions shall be made whereby the holder hereof shall
thereafter have the right to purchase and receive, upon the
basis and upon the terms and conditions specified in this
Warrant and in lieu of shares of common stock immediately
theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such shares of stock or
securities as may be issued in connection with such
consolidation, merger or sale or conveyance with respect to or
in exchange for the number of outstanding shares of common
stock immediately therefore purchasable and receivable upon
the exercise of the rights represented hereby had such
consolidation, merger or sale or conveyance not taken place,
and in any such case appropriate provision shall be made with
respect to the rights and interests of the holder of this
Warrant to the end that the provisions hereof shall be
applicable as nearly as may be in relation to any shares of
stock or securities thereafter deliverable upon the exercise
hereof.
(c) In case the Company shall, while this Warrant remains
unexercised in whole or in part, and in force, offer to the
holders of Common Stock any rights to subscribe for additional
shares of stock of the Company, then the Company shall give
written notice thereof to the registered holder hereof not
less than thirty (30) days prior to the date on which the
books of the Company are closed or a record date fixed for the
determination of
5
shareholders entitled to such subscription rights. Such notice
shall specify the date as to which the books shall be closed
or the record date fixed with respect to such offer or
subscription, and the right of the holder hereof to
participate in such offer or subscription shall terminate if
this Warrant shall not be exercised on or before the date of
such closing of the books or such record date.
(d) Any adjustment pursuant to the foregoing provisions shall be
made on the basis of the number of shares of common stock
which the holder hereof would have been entitled to acquire by
exercise of this Warrant immediately prior to the event giving
rise to such adjustment and, as to the purchase price
hereunder per share, whether or not in effect immediately
prior to the time of such adjustment, on the basis of such
purchase price immediately prior to the event giving rise to
such adjustment. Whenever any such adjustment is required to
be made, the Company shall forthwith determine the new number
of shares of common stock which the holder shall be entitled
to purchase hereunder and/or such new purchase price per
share, and shall prepare, retain on file and transmit to the
holder hereof within ten (10) days after such preparation a
statement describing in reasonable detail the method used in
calculating such adjustment(s).
7. FRACTIONAL SHARES
No fractional shares or script representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise of this Warrant, the Company shall pay to the
Warrantholder an amount in cash equal to such fraction multiplied by the current
market value of such fractional share, determined as follows:
(a) If the common stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on the Nasdaq National or
SmallCap Market, the current value shall be the reported last
sale price of one share of common Stock on such exchange or
system on the last business day prior to the date of exercise
of this Warrant, or if the Common Stock is included in the
Nasdaq or other automated quotation system other than the
National or SmallCap Market or if no such sale is made on such
day, the current value shall be the average of the closing bid
and asked prices for such day on such exchange or system; or
6
(b) If the common stock is not so listed or admitted to unlisted
trading privileges, the current value shall be the mean of the
reported last bid and asked prices of one share of common
stock as reported by the National Quotation Bureau, Inc. on
the last business day prior to the date of the exercise of
this Warrant; or
(c) If the common stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so
reported, the current value of one share of common stock shall
be an amount, not less than book value, determined in such
reasonable manner as may be prescribed by the Board of
Directors of the Company.
8. RESERVATION OF WARRANT SHARES.
The Company agrees that, prior to the expiration of this Warrant, the
Company will at all times have authorized and in reserve, and will keep
available, solely for issuance or delivery upon the exercise of this Warrant,
the shares of common stock and other securities and properties as from time to
time shall be receivable upon the exercise of this Warrant, free and clear of
all restrictions on sale or transfer and free and clear of all preemptive rights
and rights of first refusal.
9. REDEMPTION.
This Warrant shall be redeemable in whole or in part, by the Company at
a price of $.05 per Warrant upon not less than thirty (30) days prior written
notice if the closing bid price of the Company's common stock for the twenty
(20) consecutive trading days immediately prior to the date on which the notice
of redemption is given, shall have exceeded $2.50 per share.
10. AMENDMENT.
This Warrant may be amended upon the written consent of the Company and
the Warrantholder.
11. JURISDICTION
This Warrant shall be governed by and construed in accordance
with the laws of the State of New Jersey.
12. PARAGRAPH HEADINGS
Paragraph headings are for purposes of convenience only and
should be deemed to have no meaning for purposes of construing this instrument.
7
EXECUTED under seal as of May 30, 2001.
Pro Elite, Inc.
By:
----------------------------
Xxxxxx Xxxxxx
Chairman and CEO
8
PURCHASE FORM
Dated:
The undersigned hereby irrevocably elects to exercise the within
Warrants to the extent of purchasing __________ shares of Common Stock and
hereby makes payment of $____________ in payment of the exercise price thereof.
----------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
NAME
---- --------------------------------------------
(Please typewrite or print in block letters)
SIGNATURE
--------- ---------------------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED hereby
-------------------------------
sells, assigns and transfers unto
Name
---------------------------------------------
(Please typewrite or print in block letters)
Address
----------------------------------------------------------
Social Security or Employer Identification No.
-------------------
The right to purchase Common Stock represented by this Warrant to the extent of
_____ shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint __________________ attorney to transfer the same on the
books of the company with full power of substitution.
Dated: ,
--------------- ----
Signature
-------------------------------------
Signature Guaranteed:
----------------------
Social Security Number
9
