STOCK PURCHASE WARRANT
EXHIBIT
10.3
NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER
THIS
WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED,
TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION THAT
IS
EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.
No.
WTPA
- ___
To
Purchase____________
Shares
of
Common Stock of
XXXXXX.XXX,
INC.
THIS
CERTIFIES that, for value received, __________________
(the
“Holder”) is entitled, upon the terms and subject to the conditions hereinafter
set forth, at any time prior to the close of business on July 7, 2010 (the
“Termination Date”), but not thereafter, to subscribe for and purchase from
XXXxxx.xxx, Inc., a corporation incorporated in Delaware (the “Company”), up to
____________________________________
(_________)
shares
(the “Warrant Shares”) of the common stock, $.0001 par value, of the Company
(the “Common Stock”). The purchase price of one share of Common Stock (the
“Exercise Price”) under this Warrant shall be $0.35. The Exercise Price and the
number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. In the event of any conflict between the terms
of
this Warrant and the Securities Purchase Agreement, the Securities Purchase
Agreement shall control. Capitalized terms used and not otherwise defined
herein
shall have the meanings set forth for such terms in the Securities Purchase
Agreement. This Warrant is part of an authorized class of up to 342,864 Warrants
of like tenor authorized by the Company pursuant to several Securities Purchase
Agreements variously dated between the Company and the persons identified
therein relating to the purchase and sale of Units, consisting of 6% Convertible
Subordinated Notes and Warrants (the “Purchase Agreement”). Capitalized terms
used without being identified herein shall have the meaning ascribed to such
terms by the Purchase Agreement between the Company and the initial
Holder.
1. Title
to Warrant.
Prior
to and subject to compliance with applicable laws, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency
of the
Company by the Holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed.
2. Authorization
of Shares.
The
Company covenants that all shares of Common Stock that may be issued upon
the
exercise of rights represented by this Warrant will, upon exercise of the
rights
represented by this Warrant, be duly authorized, validly issued, fully-paid
and
nonassessable and free from all taxes, liens and charges in respect of the
issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
3. Exercise
of Warrant.
Except
as
otherwise expressly provided herein, exercise of the purchase rights represented
by this Warrant may be made at any time or times on or before the close of
business on the Termination Date by the surrender of this Warrant and the
Notice
of Exercise form annexed hereto duly executed, at the office of the Company
(or
such other office or agency of the Company as it may designate by notice
in
writing to the registered Holder hereof at the address of such Holder appearing
on the books of the Company), and upon payment of the Exercise Price of the
Warrant Shares thereby purchased by wire transfer or certified check, cashier’s
check or money order drawn on a United States bank. The Holder of this Warrant
shall be entitled to receive a certificate for the number of shares of Common
Stock so purchased. If a registration statement for 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 by the first anniversary
of
the first closing of the offering contemplated by the Purchase Agreement
(and
provided further that (a) such registration statement shall also have been
kept
current for at least one year after the effective date thereof and (b) the
Holder of the Warrant shall be entitled to the benefits of indemnification
and
contribution provisions of the Purchase Agreement with respect to such
registration statement, this Warrant may also be exercised in whole or in
part
by means of a “cashless exercise” by means of tendering this Warrant to the
Company together with a written demand to receive the number of shares of
Common
Stock equal in total Market Value (as hereinafter defined) to the difference
between the total Market Value of the shares of Common Stock issuable upon
such
exercise of this Warrant (to the extent exercised) and the total cash Exercise
Price of that part of the Warrant being exercised. “Market Value” for this
purpose shall be the price for the last trade of the Common Stock as reported
by
Bloomberg L.P. on the close of business on the last Trading Day (as such
term is
defined in the Note issued pursuant to the Purchase Agreement) preceding
the
tender of the original documentation for such cashless exercise. Certificates
for shares purchased hereunder shall be delivered to the Holder hereof within
seven (7) Trading Days after the date on which this Warrant shall have been
exercised as aforesaid. This Warrant shall be deemed to have been exercised
and
such certificate or certificates shall be deemed to have been issued, and
Holder
or any other person so designated to be named therein shall be deemed to
have
become a holder of record of such shares for all purposes, as of the date
the
Warrant has been exercised by payment to the Company of the Exercise Price
(or
in the case of a cashless exercise, the date the original documents for such
cashless exercise have been received by the Company). If this Warrant shall
have
been exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to Holder
a new
Warrant evidencing the rights of Holder to purchase the unpurchased shares
of
Common Stock called for by this Warrant; which new Warrant shall in all other
respects be identical with this Warrant.
The
Holder is granted the piggy back registration rights set forth in the Purchase
Agreement, provided such rights may only be assigned in the manner described
in
the Securities Purchase Agreement.
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4. No
Fractional Shares or Scrip.
No
fractional shares or scrip representing fractional shares shall be issued
upon
the exercise of this Warrant. As to any fraction of a share that Holder would
otherwise be entitled to purchase upon such exercise, the Company shall cause
the Transfer Agent to issue one whole share of Common Stock in respect of
such
fraction of a share of Common Stock.
5. Charges,
Taxes and Expenses.
Issuance of certificates for shares of Common Stock upon the exercise of
this
Warrant shall be made without charge to the Holder hereof for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company,
and
such certificates shall be issued in the name of the Holder of this Warrant
or
in such name or names as may be directed by the Holder of this Warrant;
provided, however, that in the event certificates for shares of Common Stock
are
to be issued in a name other than the name of the Holder of this Warrant,
this
Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the Holder hereof; and the Company
may
require, as a condition thereto, the payment of a sum sufficient to reimburse
it
for any transfer tax incidental thereto.
6. Closing
of Books.
The
Company will not close its shareholder books or records in any manner that
prevents the timely exercise of this Warrant.
7. Transfer,
Division and Combination.
(a)
Subject to compliance with any applicable securities laws, transfer of this
Warrant and all rights hereunder, in whole or in part, shall be registered
on
the books of the Company to be maintained for such purpose, upon surrender
of
this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by Holder or its agent or attorney, and payment of funds sufficient
to
pay any transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees and in
the
denomination or denominations specified in such instrument of assignment,
and
shall issue to the assignor a new Warrant evidencing the portion of this
Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant,
if
properly assigned, may be exercised by a new Holder for the purchase of shares
of Common Stock without having a new Warrant issued.
(b) This
Warrant may be divided or combined with other Warrants upon presentation
hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with Section
7(a), as to any transfer that may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange
for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
(c) The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.
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(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
8. No
Rights as Shareholder until Exercise.
This
Warrant does not entitle the Holder hereof to any voting rights or other
rights
as a shareholder of the Company prior to the exercise hereof. Upon the surrender
of this Warrant and the payment of the aggregate Exercise Price as contemplated
by Section 3, the Warrant Shares so purchased shall be and be deemed to be
issued to such Holder as the record owner of such shares as of the close
of
business on the later of the date of such surrender or payment.
9. Loss,
Theft, Destruction or Mutilation of Warrant.
The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant
certificate or any stock certificate relating to the Warrant Shares, and
in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (which shall not include the posting of any bond), and upon surrender
and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and
dated
as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays,
Sundays, Holidays, etc.
If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
11. Adjustments
of Exercise Price and Number of Warrant Shares.
The
number and kind of securities purchasable upon the exercise of this Warrant
and
the Exercise Price shall be subject to adjustment from time to time upon
the
happening of any of the following.
(a) Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets.
In case
the Company shall reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another corporation (where the Company
is not
the surviving corporation or where there is a change in or distribution with
respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of
the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock
of
the successor or acquiring corporation (“Other Property”), are to be received by
or distributed to the holders of Common Stock of the Company, then Holder
shall
have the right thereafter to receive, upon exercise of this Warrant, the
number
of shares of common stock of the successor or acquiring corporation or of
the
Company, if it is the surviving corporation, and Other Property receivable
upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock
for
which this Warrant is exercisable immediately prior to
4
such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring corporation
(if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of this
Warrant to be performed and observed by the Company and all the obligations
and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of shares of Common Stock
for which this Warrant is exercisable which shall be as nearly equivalent
as
practicable to the adjustments provided for in this Section 11. For purposes
of
this Section 11, “common stock of the successor or acquiring corporation” shall
include stock of such corporation of any class which is not preferred as
to
dividends or assets over any other class of stock of such corporation and
which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into
or
exchangeable for any such stock, either immediately or upon the arrival of
a
specified date or the happening of a specified event and any warrants or
other
rights to subscribe for or purchase any such stock. The foregoing provisions
of
this Section 11 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of
assets.
12. Voluntary
Adjustment by the Company.
The
Company may at any time during the term of this Warrant, reduce the then
current
Exercise Price to any amount and for any period of time deemed appropriate
by
the Board of Directors of the Company, except to the extent such action would
delay or impair the Holder’s right to publicly resell the Warrant Shares
pursuant to Rule 144 promulgated under the Securities Act or
otherwise.
13. Notice
of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or
other
property purchasable upon the exercise of this Warrant or the Exercise Price
is
adjusted, as herein provided, the Company shall promptly mail by registered
or
certified mail, return receipt requested, to the Holder of this Warrant notice
of such adjustment or adjustments setting forth the number of Warrant Shares
(and other securities or property) purchasable upon the exercise of this
Warrant
and the Exercise Price of such Warrant Shares (and other securities or property)
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment
was
made. Such notice, in the absence of manifest error, shall be conclusive
evidence of the correctness of such adjustment.
14. Notice
of Corporate Action.
If at
any time:
(i) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right
to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock
of any class or any other securities or property, or to receive any other
right,
or
(ii) there
shall be any capital reorganization of the Company, any reclassification
or
recapitalization of the capital stock of the Company or any consolidation
or
merger of the Company with, or any sale, transfer or other disposition of
all or
substantially all the property, assets or business of the Company to, another
corporation or,
5
(iii) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company; then,
in
any one or more of such cases, the Company shall give to Holder (i) at least
10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote
in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case
of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10
days’
prior written notice of the date when the same shall take place. Such notice
in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution
or
right, the date on which the holders of Common Stock shall be entitled to
any
such dividend, distribution or right, and the amount and character thereof,
and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of
which
the holders of Common Stock shall be entitled to exchange their shares of
Common
Stock for securities or other property deliverable upon such disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to Holder at the last address of Holder
appearing on the books of the Company and delivered in accordance with Section
16(d).
15. Authorized
Shares.
(a) The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number
of
shares to provide for the issuance of the Warrant Shares upon the exercise
of
any purchase rights under this Warrant. The Company further covenants that
its
issuance of this Warrant shall constitute full authority to its officers
who are
charged with the duty of executing stock certificates to execute and issue
the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action
as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock may be listed.
(b) The
Company shall not by any action, including, without limitation, amending
its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of
the terms of this Warrant, but will at all times in good faith assist in
the
carrying out of all such terms and in the taking of all such actions as may
be
necessary or appropriate to protect the rights of Holder against impairment.
Without limiting the generality of the foregoing, the Company will (i) not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action
as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant, and (iii) use its best efforts to obtain all such
authorizations, exemptions or
6
consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.
(c) Upon
the
request of Holder, the Company will at any time during the period this Warrant
is outstanding acknowledge in writing, in form reasonably satisfactory to
Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.
(d) Before
taking any action pursuant to Section 11 or 12 that would cause an adjustment
reducing the current Exercise Price below the then par value, if any, of
the
shares of Common Stock issuable upon exercise of the Warrants, the Company
shall
take any corporate action that may be necessary in order that the Company
may
validly and legally issue fully- paid and nonassessable shares of such Common
Stock at such adjusted Exercise Price.
(e) Before
taking any action that would result in an adjustment in the Exercise Price,
the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
16. Miscellaneous.
(a) Jurisdiction.
This
Warrant shall be binding upon any successors or assigns of the Company. This
Warrant shall constitute a contract under the laws of the State of Delaware
without regard to its conflict of law principles or rules.
(b) Restrictions.
The
Holder hereof acknowledges that the Warrant Shares acquired upon the exercise
of
this Warrant, if not registered or exempt from registration, will have
restrictions upon resale imposed by state and Federal securities
laws.
(c) Nonwaiver
and Expenses.
No
course of dealing or any delay or failure to exercise any right hereunder
on the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies; notwithstanding which all rights hereunder
terminate on the Termination Date. If the Company fails to comply with any
provision of this Warrant, the Company shall pay to Holder such amounts as
shall
be sufficient to cover any costs and expenses including, but not limited
to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred
by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder. The foregoing
shall
not contribute a limitation on the rights of the Holder in the event of the
Company’s breach or default of its obligations hereunder.
(d) Notices.
Any
notice, request or other document required or permitted to be given or delivered
to the Holder hereof by the Company shall be delivered in accordance with
the
notice provisions of the Purchase Agreement.
(e) Limitation
of Liability.
No
provision hereof, in the absence of affirmative action by Holder to purchase
shares of Common Stock, and no enumeration herein of the rights or privileges
of
Holder hereof, shall give rise to any liability of Holder for the purchase
7
price
of
any Common Stock or as a stockholder of the Company, whether such liability
is
asserted by the Company or by creditors of the Company.
(f) Remedies.
Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the
provisions of this Warrant and hereby agrees to waive the defense in any
action
for specific performance that a remedy at law would be adequate.
(g) Successors
and Assigns.
Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all
Holders
from time to time of this Warrant and shall be enforceable by any such Holder
or
holder of Warrant Shares.
(h) Indemnification.
The
Company agrees to indemnify and hold harmless Holder from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits,
claims, costs, attorneys’ fees, expenses and disbursements of any kind that may
be imposed upon, incurred by or asserted against Holder in any manner relating
to or arising out of any failure by the Company to perform or observe in
any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Warrant; provided,
however,
that
the Company will not be liable hereunder to the extent that any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, attorneys’ fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder’s negligence,
bad faith or willful misconduct in its capacity as a stockholder or
warrantholder of the Company.
(i) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
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(j) Headings.
The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated:
___________, 2005
|
XXXXXX.XXX,
INC.
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
ATTEST:
__________________________
Secretary
9
NOTICE
OF
EXERCISE
To: XXXxxx.xxx,
Inc.
(1) The
undersigned hereby elects to purchase ________ shares of Common Stock (the
“Common Stock”) of XXXxxx.xxx, Inc., pursuant to the terms of the attached
Warrant, and [ ] tenders herewith payment of the exercise price in full OR
[ ]
tenders the Warrant for cashless exercise, together with all applicable transfer
taxes, if any.
(2) Calculation
of cashless exercise value, if
applicable:_________________________________________________________________________
___________________________________________________________________________________________________________________________.
(3) Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
_______________________________
(Name)
_______________________________
(Address)
_______________________________
Dated:
______________________________
Signature
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ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the Warrant.)
FOR
VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
Holder's
Signature: _____________________________
Holder's
Address: _____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.
ASSIGNMENT
OF THIS WARRANT AND RELATED RIGHTS MAY ONLY BE MADE IN COMPLIANCE WITH
APPLICABLE LAW AND THE TERMS OF THE SECURITIES PURCHASE AGREEMENT PURSUANT
TO
WHICH THIS WARRANT WAS ISSUED. ANY TRANSFER IN VIOLATION THEREOF SHALL BE
VOID
NOT BINDING UPON THE COMPANY.
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