EXHIBIT 4.1
PROTOCALL TECHNOLOGIES INCORPORATED
NO._____ _____ SHARES
WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:30 P.M., EASTERN STANDARD
TIME, ON THE EXPIRATION DATE
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED
WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF
APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
FOR VALUE RECEIVED, PROTOCALL TECHNOLOGIES INCORPORATED, a New York
corporation _____________________________ (the "Company"), hereby agrees to sell
upon the terms and on the conditions hereinafter set forth, but no later than
5:30 p.m., Eastern Standard Time, on the Expiration Date (as hereinafter
defined) to ______________________, or registered assigns (the "Holder"), under
the terms as hereinafter set forth, _____________________ (__________) fully
paid and non-assessable shares of the Company's Common Stock, par value $.001
per share (the "Warrant Stock"), at a purchase price per share of $1.50 (the
"Warrant Price"), pursuant to this warrant (this "Warrant"). The number of
shares of Warrant Stock to be so issued and the Warrant Price are subject to
adjustment in certain events as hereinafter set forth. The term "Common Stock"
shall mean, when used herein, unless the context otherwise requires, the stock
and other securities and property at the time receivable upon the exercise of
this Warrant.
This Warrant is one of a series of the Company's bridge investor
warrants to purchase common stock (collectively, the "Warrants"). Capitalized
terms used and not otherwise defined herein shall have the respective meanings
attributed thereto in Section 9.
1. Exercise of Warrant.
(a) The Holder may exercise this Warrant according to its
terms by surrendering this Warrant to the Company at the address set forth in
Section 10, the subscription form attached hereto having then been duly executed
by the Holder, accompanied by cash, certified check or bank draft in payment of
the purchase price, in lawful money of the United States of America, for the
number of shares of the Warrant Stock specified in the subscription form, or as
otherwise provided in this Warrant prior to 5:30 p.m., Eastern Standard Time, on
______________, 2007 (the "Expiration Date").
(b) This Warrant may be exercised in whole or in part so long
as any exercise in part hereof would not involve the issuance of fractional
shares of Warrant Stock. If exercised in part, the Company shall deliver to the
Holder a new Warrant, identical in form, in the name of the Holder, evidencing
the right to purchase the number of shares of Warrant Stock as to which this
Warrant has not been exercised, which new Warrant shall be signed by an
appropriate officer of the Company. The term Warrant as used herein shall
include any subsequent Warrant issued as provided herein.
(c) No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. The Company shall pay
cash in lieu of fractions with respect to the Warrants based upon the fair
market value of such fractional shares of Common Stock (which shall be the
closing price of such shares on the exchange or market on which the Common Stock
is then traded) at the time of exercise of this Warrant.
(d) In the event of any exercise of the rights represented by
this Warrant, a certificate or certificates for the Warrant Stock so purchased,
registered in the name of the Holder, shall be delivered to the Holder within a
reasonable time after such rights shall have been so exercised. The person or
entity in whose name any certificate for the Warrant Stock is issued upon
exercise of the rights represented by this Warrant shall for all purposes be
deemed to have become the holder of record of such shares immediately prior to
the close of business on the date on which the Warrant was surrendered and
payment of the Warrant Price and any applicable taxes was made, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the opening of business on the next succeeding date on which the stock transfer
books are open. Except as provided in Section 4 hereof, the Company shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on exercise of this
Warrant.
2. Disposition of Warrant Stock and Warrant.
(a) The Holder hereby acknowledges that this Warrant and any
Warrant Stock purchased pursuant hereto are not being registered (i) under the
Act on the ground that the issuance of this Warrant is exempt from registration
under Section 4(2) of the Act as not involving any public offering or (ii) under
any applicable state securities law because the issuance of this Warrant does
not involve any public offering; and that the Company's reliance on the Section
4(2) exemption of the Act and under applicable state securities laws is
predicated in part on the representations hereby made to the Company by the
Holder that it is acquiring this Warrant and will acquire the Warrant Stock for
investment for its own account, with no present intention of dividing its
participation with others or reselling or otherwise distributing the same,
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control.
The Holder hereby agrees that, until such time as the Warrant
Stock is covered by an effective registration statement or may be sold pursuant
to Rule 144(k) under the Act, it will not sell or transfer all or any part of
this Warrant and/or Warrant Stock unless and until it shall first have given
notice to the Company describing such sale or transfer and furnished to the
Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.
(b) If, at the time of issuance of the shares issuable upon
exercise of this Warrant, no registration statement is in effect with respect to
such shares under applicable provisions of the Act, the Company may at its
election require that the Holder provide the Company with written reconfirmation
of the Holder's investment intent and that any stock certificate delivered to
the Holder of a surrendered Warrant shall bear legends reading substantially as
follows:
"TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT
PURSUANT TO WHICH THESE SHARES WERE PURCHASED FROM THE
COMPANY. COPIES OF THOSE RESTRICTIONS ARE ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY, AND NO TRANSFER OF SUCH
SHARES OR OF THIS CERTIFICATE, OR OF ANY SHARES OR OTHER
SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR
OR IN RESPECT OF SUCH SHARES, SHALL BE EFFECTIVE UNLESS AND
UNTIL THE TERMS AND CONDITIONS THEREIN SET FORTH SHALL HAVE
BEEN COMPLIED WITH."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT."
In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate "stop transfer"
orders with respect
to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.
3. Reservation of Shares. The Company hereby agrees that at
all times there shall be reserved for issuance upon the exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price, be validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and preemptive rights with respect to the issuance thereof, other
than taxes, if any, in respect of any transfer occurring contemporaneously with
such issuance and other than transfer restrictions imposed by federal and state
securities laws.
4. Exchange, Transfer, Assignment or Loss of Warrant. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other Warrants of different denominations, entitling
the Holder or Holders 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 stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
5. Capital Adjustments. This Warrant is subject to the
following further provisions:
(a) Recapitalization, Reclassification and Succession. If any
recapitalization of the Company or reclassification of its Common Stock or any
merger or consolidation of the Company into or with a corporation or other
business entity, or the sale or transfer of all or substantially all of the
Company's assets or of any successor corporation's assets to any other
corporation or business entity (any such corporation or other business entity
being included within the meaning of the term "successor corporation") shall be
effected, at any time while this Warrant remains outstanding and unexpired,
then, as a condition of such recapitalization, reclassification, merger,
consolidation, sale or transfer, lawful and adequate provision shall be made
whereby the Holder of this Warrant thereafter shall have the right to receive
upon the exercise hereof as provided in Section 1 and in lieu of the shares of
Common Stock immediately theretofore issuable upon the exercise of this Warrant,
such shares of capital stock, securities or other property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of shares of Common Stock immediately
theretofore issuable upon the exercise of this Warrant had
such recapitalization, reclassification, merger, consolidation, sale or transfer
not taken place, and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
(b) Subdivision or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the number of shares of Warrant Stock purchasable upon
exercise of this Warrant and the Warrant Price shall be proportionately
adjusted.
(c) Stock Dividends and Distributions. If the Company at any
time while this Warrant is outstanding and unexpired shall issue or pay the
holders of its Common Stock, or take a record of the holders of its Common Stock
for the purpose of entitling them to receive, a dividend payable in, or other
distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in
accordance with Section 5(e) and (ii) the number of shares of Warrant Stock
purchasable upon exercise of this Warrant shall be adjusted to the number of
shares of Common Stock that Holder would have owned immediately following such
action had this Warrant been exercised immediately prior thereto.
(d) Stock and Rights Offering to Shareholders. If at any time
after the date of issuance of this Warrant, the Company shall issue or sell, or
fix a record date for the purposes of entitling holders of its Common Stock to
receive, (i) Common Stock or (ii) rights, options or warrants entitling the
holders thereof to subscribe for or purchase Common Stock (or securities
convertible or exchangeable into or exercisable for Common Stock), in any such
case, at a price per share (or having a conversion, exchange or exercise price
per share) that is less than the closing price per share of the Company's Common
Stock on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or traded on any such exchange,
on the National Market or SmallCap Market of the National Association of
Securities Dealers Automated Quotations System ("Nasdaq"), or if not listed or
traded on any such exchange or system, the average of the bid and asked price
per share on Nasdaq or, if such quotations are not available, the fair market
value per share of the Company's Common Stock as reasonably determined by the
Board of Directors of the Company (the "Closing Price") on the date of such
issuance or sale or on such record date then, immediately after the date of such
issuance or sale or on such record date, (x) the Warrant Price shall be adjusted
in accordance with Section 5(e), and (y) the number of shares of Warrant Stock
purchasable upon exercise of this Warrant shall be adjusted to that number
determined by multiplying the number of shares of Warrant Stock purchasable upon
exercise of this Warrant immediately before the date of such issuance or sale or
such record date by a fraction, the denominator of which will be the number of
shares of Common Stock outstanding on such date plus the number of shares of
Common Stock that the aggregate offering price of the total number of shares so
offered for subscription or purchase (or the aggregate initial conversion price,
exchange price or exercise price of the convertible securities or exchangeable
securities or rights, options or warrants, as the case may be, so offered) would
purchase at such Closing Price, and the numerator of which will be the number of
shares of Common Stock outstanding on such date plus the
number of additional shares of Common Stock offered for subscription or purchase
(or into which the convertible or exchangeable securities or rights, options or
warrants so offered are initially convertible or exchangeable or exercisable,
as the case may be).
If the Company shall at any time after the date of issuance of
this Warrant distribute to all holders of its Common Stock any shares of capital
stock of the Company (other than Common Stock) or evidences of its indebtedness
or assets (excluding cash dividends or distributions paid from retained earnings
or current year's or prior year's earnings of the Company) or rights or warrants
to subscribe for or purchase any of its securities (excluding those referred to
in the immediately preceding paragraph) (any of the foregoing being hereinafter
in this paragraph called the "Securities"), then in each such case, the Company
shall reserve shares or other units of such securities for distribution to the
Holder upon exercise of this Warrant so that, in addition to the shares of the
Common Stock to which such Holder is entitled, such Holder will receive upon
such exercise the amount and kind of such Securities which such Holder would
have received if the Holder had, immediately prior to the record date for the
distribution of the Securities, exercised this Warrant.
(e) Warrant Price Adjustment. Whenever the number of shares of
Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein
provided, the Warrant Price payable upon the exercise of this Warrant shall be
adjusted to that price determined by multiplying the Warrant Price immediately
prior to such adjustment by a fraction (i) the numerator of which shall be the
number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately prior to such adjustment, and (ii) the denominator of which shall be
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately thereafter.
(f) Certain Shares Excluded. The number of shares of Common
Stock outstanding at any given time for purposes of the adjustments set forth in
this Section 5 shall exclude any shares then directly or indirectly held in the
treasury of the Company.
(g) Deferral and Cumulation of De Minimis Adjustments. The
Company shall not be required to make any adjustment pursuant to this Section 5
if the amount of such adjustment would be less than one percent (1%) of the
Warrant Price in effect immediately before the event that would otherwise have
given rise to such adjustment. In such case, however, any adjustment that would
otherwise have been required to be made shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
or adjustments so carried forward, shall amount to not less than one percent
(1%) of the Warrant Price in effect immediately before the event giving rise to
such next subsequent adjustment.
(h) Duration of Adjustment. Following each computation or
readjustment as provided in this Section 5, the new adjusted Warrant Price and
number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall remain in effect until a further computation or readjustment thereof is
required.
6. Notice to Holders.
(a) Notice of Record Date. In case:
(i) 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 this Warrant) for the purpose of
entitling them to receive any dividend (other than a cash
dividend payable out of earned surplus of the Company) 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;
(ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation with or merger of the Company into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or
(iii) 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 the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) 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 (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is 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 this Warrant) 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 or winding-up. Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date.
(b) Certificate of Adjustment. Whenever any adjustment shall
be made pursuant to Section 5 hereof, the Company shall promptly make a
certificate signed by its Chairman and Chief Executive Officer, its President or
a Vice President and by its Treasurer or Assistant Treasurer or its Secretary or
Assistant Secretary, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Warrant Price and number of shares of Warrant Stock
purchasable upon exercise of this Warrant after giving effect to such
adjustment, and shall promptly cause copies of such certificates to be mailed
(by first class mail, postage prepaid) to the Holder of this Warrant.
7. Loss, Theft, Destruction or Mutilation. Upon receipt by the
Company of evidence satisfactory to it, in the exercise of its reasonable
discretion, of the
ownership and the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company and, in the case of mutilation, upon surrender and cancellation
thereof, the Company will execute and deliver in lieu thereof, without expense
to the Holder, a new Warrant of like tenor dated the date hereof.
8. Warrant Holder Not a Stockholder. The Holder of this
Warrant, as such, shall not be entitled by reason of this Warrant to any rights
whatsoever as a stockholder of the Company.
9. Definitions. As used herein, unless the context otherwise
requires, the following terms have the respective meanings:
(a) "Affiliate": with respect to any Person, the following:
(i) any other Person that at such time directly or indirectly through one or
more intermediaries controls, or is controlled by or is under common control
with such first Person or (ii) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% of more of any class of voting or equity interests. As used in such
definition, "controls," "controlled by" and "under common control," as used with
respect to an Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
(b) "Person": any natural person, corporation, division of a
corporation, partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or government or any
agency or political subdivision thereof.
(c) "Subsidiaries": with respect to any Person, any
corporation, association or other business entity (whether now existing or
hereafter organized) of which at least a majority of the securities or other
ownership interests having ordinary voting power for the election of directors
is, at the time as of which any determination is being made, owned or controlled
by such Person or one or more subsidiaries of such Person.
10. Notices. Any notice required or contemplated by this
Warrant shall be deemed to have been duly given if transmitted by registered or
certified mail, return receipt requested, to the Company at 00 Xxxx Xxxxx,
Xxxxxxx, Xxx Xxxx 00000-0000, Attention: President, or to the Holder at the name
and address set forth in the Warrant Register maintained by the Company.
11. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR
ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAW RULES.
IN WITNESS WHEREOF, the Company has duly caused this Warrant
to be signed on its behalf, in its corporate name and by its duly authorized
officers, as of this ____ day of _______________ 2004.
PROTOCALL TECHNOLOGIES INCORPORATED
By:
-------------------------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive
Officer
