Contract
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED.
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No. 2005-10
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Void
after September 14,
2010
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CAMPUSTECH,
INC.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
September
14, 2005
This
Warrant is issued to Xxxxx Xxxxxxxxxxx (the “Holder”)
by
CampusTech, Inc., a Delaware corporation (the “Company”),
pursuant to the purchase of the 10% Convertible Promissory Note dated September
14, 2005, by and between the Company and the
Holder (the “Note”).
1. Purchase
of Shares.
Subject
to the terms and conditions hereinafter set forth and set forth in the Note,
the
Holder is entitled, upon surrender of this Warrant at the principal office
of
the Company (or at such other place as the Company shall notify the holder
hereof in writing), to purchase from the Company, in whole or in part, up to
the
number of fully paid and nonassessable Shares of Common Stock that equals the
quotient obtained by dividing (a) the Warrant Coverage Amount (as defined
below) by (b) the Exercise Price (as defined below).
2. Definitions.
(a) Change
of Control.
The
term “Change
of Control” shall
mean (i) any consolidation or merger involving the Company pursuant to
which the Company’s stockholders immediately prior to the transaction or series
of transactions, as the case may be, own less than fifty percent (50%) of the
voting securities of the surviving entity or (ii) the sale of all or
substantially all of the assets of the Company.
(b) Exercise
Period.
The
term “Exercise
Period”
means
the period commencing on the first to occur of (i) September 14, 2005 or (ii)
the first date that any notice is required to be delivered pursuant to the
provisions of Section 14(b) hereof and ending on the expiration of this Warrant
pursuant to Section 14 hereof.
(c) Exercise
Price.
The
exercise price for the Shares shall be $0.25 per share (such applicable price,
as adjusted from time to time, is herein referred to as the “Exercise
Price”).
(d) Warrant
Coverage Amount.
The
term “Warrant
Coverage Amount”
shall
mean $50,000.00.
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3. Method
of Exercise.
While
this Warrant remains outstanding and exercisable in accordance with
Section 2 above, the holder may exercise, in whole or in part, the purchase
rights evidenced hereby. Such exercise shall be effected by:
(i) the
surrender of the Warrant, together with a notice of exercise to the Secretary
of
the Company at its principal offices; and
(ii) the
payment to the Company of an amount equal to the aggregate Exercise Price for
the number of Shares being purchased.
4. Net
Exercise.
In lieu
of exercising this Warrant by payment of cash to the Company in accordance
with
Section 3 above, the holder of this Warrant may elect to receive shares equal
to
the value of this Warrant (or the portion thereof being canceled) by surrender
of this Warrant at the principal office of the Company together with notice
of
such election, in which event the Company shall issue to the holder hereof
a
number of Shares computed using the following formula:
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Y
(A - B)
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X
=
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A
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Where
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X
--
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The
number of Shares to be issued to the holder of this
Warrant.
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Y
--
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The
number of Shares purchasable under this
Warrant.
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A
--
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The
fair market value of one Share.
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B
--
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The
Exercise Price (as adjusted to the date of such
calculations).
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For
purposes of this Section 4, the fair market value of a Share shall mean the
price per Share that the Company could obtain from a willing buyer for Shares
sold by the Company from authorized but unissued Shares, as determined in good
faith by the Company’s Board of Directors.
5. Certificates
for Shares.
Upon
the exercise of the purchase rights evidenced by this Warrant, one or more
certificates for the number of Shares so purchased shall be issued as soon
as
practicable thereafter, and in any event within thirty (30) days of the delivery
of the subscription notice.
6. Issuance
of Shares; No Impairment.
The
Company covenants that the Shares, when issued pursuant to the exercise of
this
Warrant, will be duly and validly issued, fully paid and nonassessable and
free
from all taxes, liens, and charges with respect to the issuance thereof. The
Company will not, by amendment of its organizational documents, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets 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 action as may be necessary or appropriate in order to protect
the rights of the Holder of this Warrant against impairment.
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7. Adjustment
of Exercise Price and Number of Shares.
The
number of and kind of securities purchasable upon exercise of this Warrant
and
the Exercise Price shall be subject to adjustment from time to time as
follows:
(a) Subdivisions,
Combinations and Other Issuances.
If the
Company shall at any time prior to the expiration of this Warrant subdivide
the
Shares, by split or otherwise, or combine its Shares, or issue additional shares
of its Shares as a dividend, then the number of Shares issuable on the exercise
of this Warrant shall forthwith be proportionately increased in the case of
a
subdivision or stock dividend, or proportionately decreased in the case of
a
combination. Appropriate adjustments shall also be made to the purchase price
payable per share, but the aggregate purchase price payable for the total number
of Shares purchasable under this Warrant (as adjusted) shall remain the same.
Any adjustment under this Section 7(a) shall become effective at the close
of business on the date the subdivision or combination becomes effective, or
as
of the record date of such dividend, or in the event that no record date is
fixed, upon the making of such dividend.
(b) Reclassification,
Reorganization and Consolidation.
In case
of any reclassification, capital reorganization, or change in the capital stock
of the Company (other than as a result of a subdivision, combination, or stock
dividend provided for in Section 7(a) above), then the Company shall make
appropriate provision so that the holder of this Warrant shall have the right
at
any time prior to the expiration of this Warrant to purchase, at a total price
equal to that payable upon the exercise of this Warrant, the kind and amount
of
shares of stock and other securities and property receivable in connection
with
such reclassification, reorganization, or change by a holder of the same number
of Shares as were purchasable by the holder of this Warrant immediately prior
to
such reclassification, reorganization, or change. In any such case appropriate
provisions shall be made with respect to the rights and interest of the holder
of this Warrant so that the provisions hereof shall thereafter be applicable
with respect to any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made to the purchase
price per share payable hereunder, provided the aggregate purchase price shall
remain the same.
(c) Notice
of Adjustment.
When
any adjustment is required to be made in the number or kind of shares
purchasable upon exercise of the Warrant, or in the Exercise Price, the Company
shall promptly notify the holder of such event and of the number of Shares
or
other securities or property thereafter purchasable upon exercise of this
Warrant.
8. No
Fractional Shares or Scrip.
No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor on the basis of the Exercise Price then
in
effect.
9. Representations
of the Company.
The
Company represents that all corporate actions on the part of the Company, its
officers, directors and stockholders necessary for the sale and issuance of
this
Warrant, and the issuance of the Shares upon exercise hereof, have been
taken.
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10. Representations
and Warranties by the Holder.
The
Holder represents and warrants to the Company as follows:
(a) This
Warrant and the Shares issuable upon exercise thereof are being acquired for
its
own account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act of 1933, as amended (the “Act”).
Upon
exercise of this Warrant, the Holder shall, if so requested by the Company,
confirm in writing, in a form satisfactory to the Company, that the securities
issuable upon exercise of this Warrant are being acquired for investment and
not
with a view toward distribution or resale.
(b) The
Holder understands that the Warrant and the Shares have not been registered
under the Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Act pursuant to
Section 4(2) thereof, and that they must be held by the Holder
indefinitely, and that the Holder must therefore bear the economic risk of
such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Act or is exempted from such registration. The Holder further
understands that such exemption depends upon, among other things, the bona
fide
nature of the Holder’s investment intent expressed above.
(c) The
Holder has such knowledge and experience in financial and business matters
that
it is capable of evaluating the merits and risks of the purchase of this Warrant
and the Shares purchasable pursuant to the terms of this Warrant and of
protecting its interests in connection therewith.
(d) The
Holder is able to bear the economic risk of the purchase of the Shares pursuant
to the terms of this Warrant.
(e) The
Holder is an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated under the Act.
11. Restrictive
Legend.
The
Shares (unless registered under the Act) shall be stamped or imprinted with
a
legend in substantially the following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN
EXEMPTION THEREFROM UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING
THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY.
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12. Rights
of Stockholders.
No
holder of this Warrant shall be entitled, as a Warrant holder, to vote or
receive dividends or be deemed the holder of the Shares or any other securities
of the Company which may at any time be issuable on the exercise hereof for
any
purpose, nor shall anything contained herein be construed to confer upon the
holder of this Warrant, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have
been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
13. Expiration
of Warrant; Notice of Certain Events Terminating This Warrant.
This
Warrant shall expire and shall no longer be exercisable upon the earlier to
occur of: (i) 5:00 p.m., Pacific Time, on September 14, 2010; (ii) a Change
of Control; or (iii) the closing of an initial public offering of the Company’s
Common Stock.
The
Company shall provide at least ten (10) days prior written notice of any event
set forth in Section 14(a)(ii) or (iii). If such notice is not provided timely,
the expiration date relating to any such event shall be extended to the date
that is ten (10) days after delivery by the Company of such notice.
14. Notices.
All
notices and other communications required or permitted hereunder shall be in
writing, shall be effective when given, and shall in any event be deemed to
be
given upon receipt or, if earlier, (a) five (5) days after deposit with the
U.S. Postal Service or other applicable postal service, if delivered by first
class mail, postage prepaid, (b) upon delivery, if delivered by hand,
(c) one (1) business day after the business day of deposit with
Federal Express or similar overnight courier, freight prepaid, or (d) one
(1) business day after the business day of facsimile transmission, if delivered
by facsimile transmission with copy by first class mail, postage prepaid, and
shall be addressed (i) if to the Holder, at the Holder’s address , and
(ii) if to the Company, at the address of its principal corporate offices
or at such other address as a party may designate by ten (10) days advance
written notice to the other party pursuant to the provisions above.
Governing
Law.
This
Warrant and all actions arising out of or in connection with this Agreement
shall be governed by and construed in accordance with the laws of the State
of
Delaware, without regard to the conflicts of law provisions of the State of
Delaware or of any other state.
[Remainder
of this Page Intentionally Left Blank]
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Issued
this 14th day of September, 2005.
CAMPUSTECH,
INC., a
Delaware corporation
/S/
Xxxxxx X.
Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
President
EXHIBIT A
NOTICE
OF EXERCISE
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TO:
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CampusTech,
Inc.
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Attention:
President
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1. The
undersigned hereby elects to purchase __________ Shares of Common Stock pursuant
to the terms of the attached Warrant.
2. Method
of
Exercise (Please initial the applicable blank):
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The
undersigned elects to exercise the attached Warrant by means of a
cash
payment, and tenders herewith payment in full for the purchase price
of
the shares being purchased, together with all applicable transfer
taxes,
if any.
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The
undersigned elects to exercise the attached Warrant by means of the
net
exercise provisions of Section 4 of the
Warrant.
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3. Please
issue a certificate or certificates representing said Shares in the name of
the
undersigned or in such other name as is specified below:
_________________________________
(Name)
_________________________________
_________________________________
(Address)
4. The
undersigned hereby represents and warrants that the aforesaid Shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares
and all representations and warranties of the undersigned set forth in
Section 10 of the attached Warrant (including Section 10 (e) thereof)
are true and correct as of the date hereof.
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(Signature)
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(Name)
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(Date)
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(Title)
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