[EXHIBIT 4.4]
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
SERIES B WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
XXXXXXXXXX.XXX
Expires August 20, 2012
No.: W-B-07- __ Number of Shares: 6,668,230
Date of Issuance: August 20, 2007
FOR VALUE RECEIVED, the undersigned, Xxxxxxxxxx.xxx, a Nevada
corporation (together with its successors and assigns, the "Issuer"),
hereby certifies that Vision Opportunity Master Fund, Ltd., or its
registered assigns (the "Holder") is entitled to subscribe for and
purchase, during the Term (as hereinafter defined), up to 6,668,230
shares (subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Common Stock
of the Issuer, at an exercise price per share equal to the Warrant
Price then in effect, subject, however, to the provisions and upon the
terms and conditions hereinafter set forth. Capitalized terms used in
this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 9 hereof.
1. Term. The term of this Warrant shall commence on August
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20, 2007, and shall expire at 6:00 p.m., eastern time, on August 20,
2012; provided, however, in the event that the Share Increase (as
defined in the Purchase Agreement) has not been effected within ninety
(90) days following the Original Issue Date, the term of this Warrant
shall be automatically extended for a period of one (1) year and the
Issuer shall promptly issue to the Holder a new Warrant evidencing the
extension of such term (such period being the "Term").
2. Method of Exercise; Payment; Issuance of New Warrant;
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Transfer and Exchange.
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(a) Time of Exercise. The purchase rights represented by this
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Warrant may be exercised in whole or in part during the Term.
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(b) Method of Exercise. The Holder hereof may exercise this
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Warrant, in whole or in part, by the surrender of this Warrant (with
the exercise form attached hereto duly executed) at the principal
office of the Issuer, and by the payment to the Issuer of an amount of
consideration therefor equal to the Warrant Price in effect on the
date of such exercise multiplied by the number of shares of Warrant
Stock with respect to which this Warrant is then being exercised,
payable at such Holder's election (i) by certified or official bank
check or by wire transfer to an account designated by the Issuer, (ii)
by "cashless exercise" in accordance with the provisions of subsection
(c) of this Section 2, but only when a registration statement under
the Securities Act providing for the resale of the Warrant Stock is
not then in effect by the date such registration statement is required
to be effective pursuant to the Registration Rights Agreement (as
defined in the Purchase Agreement), or (iii) by a combination of the
foregoing methods of payment selected by the Holder of this Warrant,
if cashless exercise is available. In connection with the exercise of
the Warrants, the Holder shall be required to exercise Warrants
convertible into a minimum of one hundred thousand shares of Common
Stock in any single exercise.
(c) Cashless Exercise. Notwithstanding any provisions herein
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to the contrary and commencing one (1) year following the Original
Issue Date if (i) the Per Share Market Value of one share of Common
Stock is greater than the Warrant Price (at the date of calculation as
set forth below) and (ii) a registration statement under the
Securities Act providing for the resale of the Warrant Stock is not
then in effect by the date such registration statement is required to
be effective pursuant to the Registration Rights Agreement (as defined
in the Purchase Agreement) or not effective at any time during the
Effectiveness Period (as defined in the Registration Rights Agreement)
in accordance with the terms of the Registration Rights Agreement,
unless the registration statement is not effective as a result of the
Issuer exercising its rights under Section 3(n) of the Registration
Rights Agreement, in lieu of exercising this Warrant by payment of
cash, the Holder may exercise this Warrant by a cashless exercise and
shall receive the number of shares of Common Stock equal to an amount
computed using the following formula upon surrender of this Warrant at
the principal office of the Issuer together with the properly endorsed
Notice of Exercise:
X = Y - (A)(Y)
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B
Where X = the number of shares of Common Stock to be issued to
the Holder.
Y = the number of shares of Common Stock purchasable upon
exercise of all of the Warrant or, if only a portion
of the Warrant is being exercised, the portion of the
Warrant being exercised.
A = the Warrant Price.
B = the Per Share Market Value of one share of Common Stock.
(d) Issuance of Stock Certificates. In the event of any
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exercise of this Warrant in accordance with and subject to the terms
and conditions hereof, certificates for the shares of Warrant Stock so
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purchased shall be dated the date of such exercise and delivered to
the Holder hereof within a reasonable time, not exceeding three (3)
Trading Days after such exercise (the "Delivery Date") or, at the
request of the Holder (provided that a registration statement under
the Securities Act providing for the resale of the Warrant Stock is
then in effect or that the shares of Warrant Stock are otherwise
exempt from registration), issued and delivered to the Depository
Trust Company ("DTC") account on the Holder's behalf via the Deposit
Withdrawal Agent Commission System ("DWAC") within a reasonable time,
not exceeding three (3) Trading Days after such exercise, and the
Holder hereof shall be deemed for all purposes to be the holder of the
shares of Warrant Stock so purchased as of the date of such exercise.
Notwithstanding the foregoing to the contrary, the Issuer or its
transfer agent shall only be obligated to issue and deliver the shares
to the DTC on a holder's behalf via DWAC if such exercise is in
connection with a sale or other exemption from registration by which
the shares may be issued without a restrictive legend and the Issuer
and its transfer agent are participating in DTC through the DWAC
system. The Holder shall deliver this original Warrant, or an
indemnification reasonably acceptable to the Issuer undertaking with
respect to such Warrant in the case of its loss, theft or destruction,
at such time that this Warrant is fully exercised. With respect to
partial exercises of this Warrant, the Issuer shall keep written
records for the Holder of the number of shares of Warrant Stock
exercised as of each date of exercise.
(e) Compensation for Buy-In on Failure to Timely Deliver
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Certificates Upon Exercise. In addition to any other rights available
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to the Holder, if the Issuer fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the
Warrant Stock pursuant to an exercise on or before the Delivery Date,
and if after such date the Holder is required by its broker to
purchase (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Stock which the Holder anticipated receiving upon such
exercise (a "Buy-In"), then the Issuer shall (1) pay in cash to the
Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (y) the amount obtained by multiplying (A)
the number of shares of Warrant Stock that the Issuer was required to
deliver to the Holder in connection with the exercise at issue times
(B) the price at which the sell order giving rise to such purchase
obligation was executed, and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of shares
of Warrant Stock for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been
issued had the Issuer timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of
$10,000, under clause (1) of the immediately preceding sentence the
Issuer shall be required to pay the Holder $1,000. The Holder shall
provide the Issuer written notice indicating the amounts payable to
the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Issuer.
Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief with respect to the Issuer's failure to timely deliver
certificates representing shares of Common Stock upon exercise of this
Warrant as required pursuant to the terms hereof.
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(f) Transferability of Warrant. Subject to Section 2(h)
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hereof, this Warrant may be transferred by a Holder, in whole or in
part, without the consent of the Issuer. If transferred pursuant to
this paragraph, this Warrant may be transferred on the books of the
Issuer by the Holder hereof in person or by duly authorized attorney,
upon surrender of this Warrant at the principal office of the Issuer,
properly endorsed (by the Holder executing an assignment in the form
attached hereto) and upon payment of any necessary transfer tax or
other governmental charge imposed upon such transfer. This Warrant is
exchangeable at the principal office of the Issuer for Warrants to
purchase the same aggregate number of shares of Warrant Stock, each
new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of
such exchange. All Warrants issued on transfers or exchanges shall be
dated the Original Issue Date and shall be identical with this Warrant
except as to the number of shares of Warrant Stock issuable pursuant
thereto.
(g) Continuing Rights of Holder. The Issuer will, at the time
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of or at any time after each exercise of this Warrant, upon the
request of the Holder hereof, acknowledge in writing the extent, if
any, of its continuing obligation to afford to such Holder all rights
to which such Holder shall continue to be entitled after such exercise
in accordance with the terms of this Warrant, provided that if any
such Holder shall fail to make any such request, the failure shall not
affect the continuing obligation of the Issuer to afford such rights
to such Holder.
(h) Compliance with Securities Laws.
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(i) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Warrant Stock to
be issued upon exercise hereof are being acquired solely for the
Holder's own account and not as a nominee for any other party,
and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock
to be issued upon exercise hereof except pursuant to an effective
registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this
Warrant and all certificates representing shares of Warrant Stock
issued upon exercise hereof shall be stamped or imprinted with a
legend in substantially the following form:
THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS
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OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
(iii) The Issuer agrees to reissue this Warrant or
certificates representing any of the Warrant Stock, without the
legend set forth above if at such time, prior to making any
transfer of any such securities, the Holder shall give written
notice to the Issuer describing the manner and terms of such
transfer. Such proposed transfer will not be effected until: (a)
either (i) the Issuer has received an opinion of counsel
reasonably satisfactory to the Issuer, to the effect that the
registration of such securities under the Securities Act is not
required in connection with such proposed transfer, (ii) a
registration statement under the Securities Act covering such
proposed disposition has been filed by the Issuer with the
Securities and Exchange Commission and has become effective under
the Securities Act; provided however, that the Issuer has no
obligation or intent to register the Warrant, but shall register
the shares of Common Stock underlying the Warrants pursuant to
the terms of the Registration Rights Agreement (as defined in the
Purchase Agreement), (iii) the Issuer has received other evidence
reasonably satisfactory to the Issuer that such registration and
qualification under the Securities Act and state securities laws
are not required, or (iv) the Holder provides the Issuer with
reasonable assurances that such security can be sold pursuant to
Rule 144 under the Securities Act; and (b) either (i) the Issuer
has received an opinion of counsel reasonably satisfactory to the
Issuer, to the effect that registration or qualification under
the securities or "blue sky" laws of any state is not required in
connection with such proposed disposition, or (ii) compliance
with applicable state securities or "blue sky" laws has been
effected or a valid exemption exists with respect thereto. The
Issuer will respond to any such notice from a holder within three
(3) Trading Days. In the case of any proposed transfer under
this Section 2(h), the Issuer will use reasonable efforts to
comply with any such applicable state securities or "blue sky"
laws, but shall in no event be required, (x) to qualify to do
business in any state where it is not then qualified, (y) to take
any action that would subject it to tax or to the general service
of process in any state where it is not then subject, or (z) to
comply with state securities or "blue sky" laws of any state for
which registration by coordination is unavailable to the Issuer
or to register the Warrants under state securities laws. The
restrictions on transfer contained in this Section 2(h) shall be
in addition to, and not by way of limitation of, any other
restrictions on transfer contained in any other section of this
Warrant. Whenever a certificate representing the Warrant Stock
is required to be issued to a Holder without a legend, in lieu of
delivering physical certificates representing the Warrant Stock,
the Issuer shall cause its transfer agent to electronically
transmit the Warrant Stock to the Holder by crediting the account
of the Holder or Holder's Prime Broker with DTC through its DWAC
system (to the extent not inconsistent with any provisions of
this Warrant or the Purchase Agreement).
(i) Accredited Investor Status. In no event may the
--------------------------
Holder exercise this Warrant in whole or in part unless the Holder
is an "accredited investor" as defined in Regulation D under the
Securities Act.
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3. Stock Fully Paid; Reservation and Listing of Shares;
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Covenants.
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(a) Stock Fully Paid. The Issuer represents, warrants,
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covenants and agrees that all shares of Warrant Stock which may be
issued upon the exercise of this Warrant or otherwise hereunder will,
when issued in accordance with the terms of this Warrant, be duly
authorized, validly issued, fully paid and non-assessable and free
from all taxes, liens and charges created by or through the Issuer.
The Issuer further covenants and agrees that during the period within
which this Warrant may be exercised, the Issuer will at all times have
authorized and reserved for the purpose of the issuance upon exercise
of this Warrant a number of authorized but unissued shares of Common
Stock equal to at least one hundred fifty (150%) of the number of
shares of Common Stock issuable upon exercise of this Warrant without
regard to any limitations on exercise.
(b) Reservation. If any shares of Common Stock required to be
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reserved for issuance upon exercise of this Warrant or as otherwise
provided hereunder require registration or qualification with any
Governmental Authority under any federal or state law before such
shares may be so issued, the Issuer will in good faith use its best
efforts as expeditiously as possible at its expense to cause such
shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it
will, at its expense, list thereon, and maintain and increase when
necessary such listing, of, all shares of Warrant Stock from time to
time issued upon exercise of this Warrant or as otherwise provided
hereunder (provided that such Warrant Stock has been registered
pursuant to a registration statement under the Securities Act then in
effect), and, to the extent permissible under the applicable
securities exchange rules, all unissued shares of Warrant Stock which
are at any time issuable hereunder, so long as any shares of Common
Stock shall be so listed. The Issuer will also so list on each
securities exchange or market, and will maintain such listing of, any
other securities which the Holder of this Warrant shall be entitled to
receive upon the exercise of this Warrant if at the time any
securities of the same class shall be listed on such securities
exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including,
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without limitation, amending the Articles of Incorporation or the by-
laws of the Issuer, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other 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 the Holder hereof against dilution (to the extent specifically
provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any,
of its Common Stock to exceed the then effective Warrant Price, (ii)
not amend or modify any provision of the Articles of Incorporation or
by-laws of the Issuer in any manner that would adversely affect the
rights of the Holders of the Warrants, (iii) take all such action as
may be reasonably necessary in order that the Issuer may validly and
legally issue fully paid and nonassessable shares of Common Stock,
free and clear of any liens, claims, encumbrances and restrictions
(other than as provided herein) upon the exercise of this Warrant, and
(iv) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
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jurisdiction thereof as may be reasonably necessary to enable the
Issuer to perform its obligations under this Warrant.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of
------------------------------------
evidence satisfactory to the Issuer of the ownership of and the loss,
theft, destruction or mutilation of any Warrant and, in the case of
any such loss, theft or destruction, upon receipt of indemnity or
security satisfactory to the Issuer or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the
Issuer will make and deliver, in lieu of such lost, stolen, destroyed
or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.
(e) Payment of Taxes. The Issuer will pay any documentary
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stamp taxes attributable to the initial issuance of the Warrant Stock
issuable upon exercise of this Warrant; provided, however, that the
Issuer shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance or
delivery of any certificates representing Warrant Stock in a name
other than that of the Holder in respect to which such shares are
issued.
4. Adjustment of Warrant Price. The price at which such
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shares of Warrant Stock may be purchased upon exercise of this Warrant
shall be subject to adjustment from time to time as set forth in this
Section 4. The Issuer shall give the Holder notice of any event
described below which requires an adjustment pursuant to this Section
4 in accordance with the notice provisions set forth in Section 5.
(a) Recapitalization, Reorganization, Reclassification,
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Consolidation, Merger or Sale.
-----------------------------
(i) In case the Issuer after the Original Issue Date shall
do any of the following (each, a "Triggering Event"): (a)
consolidate or merge with or into any other Person and the Issuer
shall not be the continuing or surviving corporation of such
consolidation or merger (except for the Merger (as defined in
subsection (c) below), or any future strategic acquisitions,
which are approved in writing by the Holder, such approval not to
be unreasonably withheld (each a "Permitted Future
Transaction")), or (b) permit any other Person to consolidate
with or merge into the Issuer and the Issuer shall be the
continuing or surviving Person but, in connection with such
consolidation or merger (except for the Merger, or a Permitted
Future Transaction), any Capital Stock of the Issuer shall be
changed into or exchanged for Securities of any other Person or
cash or any other property, or (c) transfer all or substantially
all of its properties or assets to any other Person, or (d)
effect a capital reorganization or reclassification of its
Capital Stock, then, and in the case of each such Triggering
Event, proper provision shall be made to the Warrant Price and
the number of shares of Warrant Stock that may be purchased upon
exercise of this Warrant so that, upon the basis and the terms
and in the manner provided in this Warrant, the Holder of this
Warrant shall be entitled upon the exercise hereof at any time
after the consummation of such Triggering Event, to the extent
this Warrant is not exercised prior to such Triggering Event, to
receive at the Warrant Price as adjusted to take into account the
consummation of such Triggering Event, in lieu of the Common
Stock issuable upon such exercise of this Warrant prior to such
Triggering Event or any securities that this Warrant would
entitle the Holder to offer the Triggering Event were it not for
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this provision, the Securities, cash and property to which such
Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights
represented by this Warrant immediately prior thereto (including
the right of a shareholder to elect the type of consideration it
will receive upon a Triggering Event), subject to adjustments
(subsequent to such corporate action) as nearly equivalent as
possible to the adjustments provided for elsewhere in this
Section 4; provided, however, the Holder at its option may elect
to receive instead an amount in cash equal to the value of this
Warrant calculated in accordance with the Black-Scholes formula.
Immediately upon the occurrence of a Triggering Event, the Issuer
shall notify the Holder in writing of such Triggering Event and
provide the calculations in determining the number of shares of
Warrant Stock issuable upon exercise of the new warrant and the
adjusted Warrant Price. Upon the Holder's request, in lieu of
receiving cash or other property as set out above, the continuing
or surviving corporation as a result of such Triggering Event
shall issue to the Holder a new warrant of like tenor evidencing
the right to purchase the adjusted number of shares of Warrant
Stock and the adjusted Warrant Price pursuant to the terms and
provisions of this Section 4(a)(i). Notwithstanding the
foregoing to the contrary, this Section 4(a)(i) shall only apply
if the surviving entity pursuant to any such Triggering Event is
a company that has a class of equity securities registered
pursuant to the Securities Exchange Act of 1934, as amended, and
its common stock is listed or quoted on a national securities
exchange, national automated quotation system or the OTC Bulletin
Board. In the event that the surviving entity pursuant to any
such Triggering Event is not a public company that is registered
pursuant to the Securities Exchange Act of 1934, as amended, or
its common stock is not listed or quoted on a national securities
exchange, national automated quotation system or the OTC Bulletin
Board, then the Holder shall have the right to demand that the
Issuer pay to the Holder an amount in cash equal to the value of
this Warrant calculated in accordance with the Black-Scholes
formula in exchange for termination of this Warrant.
(ii) In the event that the Holder has elected not to
exercise this Warrant prior to the consummation of a Triggering
Event and has also elected not to receive an amount in cash equal
to the value of this Warrant calculated in accordance with the
Black-Scholes formula pursuant to the provisions of Section
4(a)(i) above, so long as the surviving entity pursuant to any
Triggering Event is a company that has a class of equity
securities registered pursuant to the Securities Exchange Act of
1934, as amended, and its common stock is listed or quoted on a
national securities exchange, national automated quotation system
or the OTC Bulletin Board, the surviving entity and/or each
Person (other than the Issuer) which may be required to deliver
any Securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holder of this
Warrant, (A) the obligations of the Issuer under this Warrant
(and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and
shall not release the Issuer from, any continuing obligations of
the Issuer under this Warrant) if the Holders does not elect to
receive cash or securities under Section 4(a)(i) or (B) the
obligation to deliver to such Holder such Securities, cash or
property as, in accordance with the foregoing provisions of this
subsection (a), and such Holder shall be entitled to receive a
written acknowledgement executed by the President or Chief
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Financial Officer of the Issuer, stating that this Warrant shall
thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this
subsection (a) shall be applicable to the Securities, cash or
property which the surviving entity and/or each such Person may
be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto.
(b) Stock Dividends, Subdivisions and Combinations. If at
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any time the Issuer shall:
(i) make or issue or set a record date for the
holders of the Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, shares
of Common Stock,
(ii) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock,
then (1) the number of shares of Common Stock for which this Warrant
is exercisable immediately after the occurrence of any such event
shall be adjusted to equal the number of shares of Common Stock which
a record holder of the same number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the occurrence of
such event would own or be entitled to receive after the happening of
such event, and (2) the Warrant Price then in effect shall be adjusted
to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable
immediately after such adjustment.
(c) Certain Other Distributions. If at any time the Issuer
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shall make or issue or set a record date for the holders of the Common
Stock for the purpose of entitling them to receive any dividend or
other distribution of:
(i) cash,
(ii) any evidences of its indebtedness, any shares of
stock of any class or any other securities or property of any
nature whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock), or
(iii) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property of any nature
whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock),
then (1) the number of shares of Common Stock for which this Warrant
is exercisable shall be adjusted to equal the product of the number of
shares of Common Stock for which this Warrant is exercisable
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immediately prior to such adjustment multiplied by a fraction (A) the
numerator of which shall be the Per Share Market Value of Common Stock
at the date of taking such record and (B) the denominator of which
shall be such Per Share Market Value minus the amount allocable to one
share of Common Stock of any such cash so distributable and of the
fair value (as determined in good faith by the Board of Directors of
the Issuer and supported by an opinion from an investment banking firm
mutually agreed upon by the Issuer and the Holder) of any and all such
evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights so
distributable, and (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant Price then in effect multiplied by
the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the
number of shares of Common Stock for which this Warrant is exercisable
immediately after such adjustment. A reclassification of the Common
Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock
and shares of any other class of stock shall be deemed a distribution
by the Issuer to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4(c) and,
if the outstanding shares of Common Stock shall be changed into a
larger or smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common
Stock within the meaning of Section 4(b). This Section 4(c) shall not
apply to the issuance by the Company of (i) warrants for up to
3,000,000 shares of Common Stock of the Company in connection with an
employee stock option program (an "ESOP") to be established concurrent
with closing of the merger between Medpro Safety Products, Inc.
("Medpro") and the Company (the "Merger"), priced at $1.81 per share,
to be issued to the current management of Medpro and the future
management of the Company (the "ESOP Warrants"), and (ii) 68,036
warrants, priced at $1.99, to be issued to Xxxxxxxx Research (the
"Xxxxxxxx Research Warrants").
(d) Issuance of Additional Shares of Common Stock. For a
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period of twelve (12) months after the Issuance Date, as defined
below (the "Price Protection Period"), in the event the Company shall
issue or sell any additional shares of Common Stock (otherwise than as
provided herein or pursuant to Common Stock Equivalents (hereafter
defined) granted or issued prior to the Issuance Date) (the
"Additional Shares of Common Stock"), at a price per share ("New
Price") less than the conversion price of the Series A Preferred Stock
of the Issuer (the "Conversion Price") then in effect ("Down Round"),
or without consideration, the Conversion Price shall be reduced
concurrently with such issue to the New Price. The "Issuance Date"
shall be defined as the date of the issuance of the Series A Preferred
Stock of the Issuer to the Holder, or August 20, 2007. After the
Price Protection Period, the Conversion Price shall be reset to the
Conversion Price in effect immediately prior to the Down Round, and
thereafter, for so long as the Series A Preferred Stock has not been
converted into Common Stock, but only for a period of twelve (12)
months, the Conversion Price then in effect upon each issuance of a
Down Round shall be adjusted to that price (rounded to the nearest
cent) determined by multiplying the Conversion Price by a fraction:
1) the numerator of which shall be equal to
the sum of (A) the number of shares of Common Stock outstanding
immediately prior to the issuance of such Additional Shares of Common
Stock plus (B) the number of shares of Common Stock (rounded to the
-10-
nearest whole share) which the aggregate consideration for the total
number of such Additional Shares of Common Stock so issued would
purchase at a price per share equal to the then Conversion Price, and
2) the denominator of which shall be equal to
the number of shares of Common Stock outstanding immediately after the
issuance of such Additional Shares of Common Stock. This Section
4(d)(2) and the adjustments described herein shall not apply to (i)
the issuance of Common Stock pursuant to the agency agreement between
SGPF, LLC and Medpro, in connection with the Merger, (ii) a Permitted
Future Transaction, (iii) the ESOP Warrants, or (iv) the Xxxxxxxx
Research Warrants.
(e) Issuance of Common Stock Equivalents. In the event the
------------------------------------
Issuer shall at any time following the Original Issuance Date take a
record of the holders of its Common Stock for the purpose of entitling
them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Issuer is the
surviving corporation) issue or sell, any Common Stock Equivalents,
whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common
Stock is issuable upon such conversion or exchange shall be less than
the Warrant Price in effect immediately prior to the time of such
issue or sale, or if, after any such issuance of Common Stock
Equivalents, the price per share for which Additional Shares of Common
Stock may be issuable thereafter is amended or adjusted, and such
price as so amended shall be less than the Warrant Price in effect at
the time of such amendment or adjustment, then the Warrant Price then
in effect shall be adjusted as provided in Section 4(d). No further
adjustments of the number of shares of Common Stock for which this
Warrant is exercisable and the Warrant Price then in effect shall be
made upon the actual issue of such Common Stock upon conversion or
exchange of such Common Stock Equivalents. This Section 4(e) shall
not apply to the issuance of (i) the ESOP Warrants, or (ii) the
Xxxxxxxx Research Warrants.
(f) Other Provisions applicable to Adjustments under this
-----------------------------------------------------
Section. The following provisions shall be applicable to the making
-------
of adjustments of the number of shares of Common Stock for which this
Warrant is exercisable and the Warrant Price then in effect provided
for in this Section 4:
(i) Computation of Consideration. To the extent that any
----------------------------
Additional Shares of Common Stock or any Common Stock Equivalents (or
any warrants or other rights therefor) shall be issued for cash
consideration, the consideration received by the Issuer therefor shall
be the amount of the cash received by the Issuer therefor, or, if such
Additional Shares of Common Stock or Common Stock Equivalents are
offered by the Issuer for subscription, the subscription price, or, if
such Additional Shares of Common Stock or Common Stock Equivalents are
sold to underwriters or dealers for public offering without a
subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest
or accrued dividends and without taking into account any compensation,
discounts or expenses paid or incurred by the Issuer for and in the
underwriting of, or otherwise in connection with, the issuance
thereof). In connection with any merger or consolidation in which the
Issuer is the surviving corporation (other than any consolidation or
merger in which the previously outstanding shares of Common Stock of
the Issuer shall be changed to or exchanged for the stock or other
securities of another corporation), the amount of consideration
therefore shall be, deemed to be the fair market value, as determined
-11-
reasonably and in good faith by the Board, of such portion of the
assets and business of the nonsurviving corporation as the Board may
determine to be attributable to such shares of Common Stock or Common
Stock Equivalents, as the case may be. The consideration for any
Additional Shares of Common Stock issuable pursuant to any warrants or
other rights to subscribe for or purchase the same shall be the
consideration received by the Issuer for issuing such warrants or
other rights plus the additional consideration payable to the Issuer
upon exercise of such warrants or other rights. The consideration for
any Additional Shares of Common Stock issuable pursuant to the terms
of any Common Stock Equivalents shall be the consideration received by
the Issuer for issuing warrants or other rights to subscribe for or
purchase such Common Stock Equivalents, plus the consideration paid or
payable to the Issuer in respect of the subscription for or purchase
of such Common Stock Equivalents, plus the additional consideration,
if any, payable to the Issuer upon the exercise of the right of
conversion or exchange in such Common Stock Equivalents. In the event
of any consolidation or merger of the Issuer in which the Issuer is
not the surviving corporation or in which the previously outstanding
shares of Common Stock of the Issuer shall be changed into or
exchanged for the stock or other securities of another corporation, or
in the event of any sale of all or substantially all of the assets of
the Issuer for stock or other securities of any corporation, the
Issuer shall be deemed to have issued a number of shares of its Common
Stock for stock or securities or other property of the other
corporation computed on the basis of the actual exchange ratio on
which the transaction was predicated, and for a consideration equal to
the fair market value on the date of such transaction of all such
stock or securities or other property of the other corporation. In
the event any consideration received by the Issuer for any securities
consists of property other than cash, the fair market value thereof at
the time of issuance or as otherwise applicable shall be as determined
in good faith by the Board. In the event Common Stock is issued with
other shares or securities or other assets of the Issuer for
consideration which covers both, the consideration computed as
provided in this Section 4(f)(i) shall be allocated among such
securities and assets as determined in good faith by the Board.
(ii) When Adjustments to Be Made. The adjustments required
---------------------------
by this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except that any adjustment
of the number of shares of Common Stock for which this Warrant is
exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of the Common
Stock, as provided for in Section 4(b)) up to, but not beyond the date
of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than one
percent (1%) of the shares of Common Stock for which this Warrant is
exercisable immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount
(except as aforesaid) which is postponed shall be carried forward and
made as soon as such adjustment, together with other adjustments
required by this Section 4 and not previously made, would result in a
minimum adjustment or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence.
(iii) Fractional Interests. In computing adjustments under
--------------------
this Section 4, fractional interests in Common Stock shall be taken
into account to the nearest one one-hundredth (1/100th) of a share.
-12-
(iv) When Adjustment Not Required. If the Issuer shall
----------------------------
take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution or subscription
or purchase rights and shall, thereafter and before the distribution
to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(g) Form of Warrant after Adjustments. The form of this
---------------------------------
Warrant need not be changed because of any adjustments in the Warrant
Price or the number and kind of Securities purchasable upon the
exercise of this Warrant.
(h) Escrow of Warrant Stock. If after any property becomes
-----------------------
distributable pursuant to this Section 4 by reason of the taking of
any record of the holders of Common Stock, but prior to the occurrence
of the event for which such record is taken, and the Holder exercises
this Warrant, any shares of Common Stock issuable upon exercise by
reason of such adjustment shall be deemed the last shares of Common
Stock for which this Warrant is exercised (notwithstanding any other
provision to the contrary herein) and such shares or other property
shall be held in escrow for the Holder by the Issuer to be issued to
the Holder upon and to the extent that the event actually takes place,
upon payment of the current Warrant Price. Notwithstanding any other
provision to the contrary herein, if the event for which such record
was taken fails to occur or is rescinded, then such escrowed shares
shall be cancelled by the Issuer and escrowed property returned.
5. Notice of Adjustments. Whenever the Warrant Price or
---------------------
Warrant Share Number shall be adjusted pursuant to Section 4 hereof
(for purposes of this Section 5, each an "adjustment"), the Issuer
shall cause its Chief Financial Officer to prepare and execute a
certificate setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on
which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment,
and shall cause copies of such certificate to be delivered to the
Holder of this Warrant promptly after each adjustment. Any dispute
between the Issuer and the Holder of this Warrant with respect to the
matters set forth in such certificate may at the option of the Holder
of this Warrant be submitted to a national or regional accounting firm
reasonably acceptable to the Issuer and the Holder, provided that the
Issuer shall have ten (10) days after receipt of notice from such
Holder of its selection of such firm to object thereto, in which case
such Holder shall select another such firm and the Issuer shall have
no such right of objection. The firm selected by the Holder of this
Warrant as provided in the preceding sentence shall be instructed to
deliver a written opinion as to such matters to the Issuer and such
Holder within thirty (30) days after submission to it of such dispute.
Such opinion shall be final and binding on the parties hereto. The
costs and expenses of the initial accounting firm shall be paid
equally by the Issuer and the Holder and, in the case of an objection
by the Issuer, the costs and expenses of the subsequent accounting
firm shall be paid in full by the Issuer.
-13-
6. Fractional Shares. No fractional shares of Warrant Stock
-----------------
will be issued in connection with any exercise hereof, but in lieu of
such fractional shares, the Issuer shall round the number of shares to
be issued upon exercise up to the nearest whole number of shares.
7. Ownership Cap and Exercise Restriction. Notwithstanding
--------------------------------------
anything to the contrary set forth in this Warrant, at no time may a
Holder of this Warrant exercise this Warrant if the number of shares
of Common Stock to be issued pursuant to such exercise would exceed,
when aggregated with all other shares of Common Stock owned by such
Holder at such time, the number of shares of Common Stock which would
result in such Holder beneficially owning (as determined in accordance
with Section 13(d) of the Exchange Act and the rules thereunder) in
excess of 4.9% of the then issued and outstanding shares of Common
Stock; provided, however, that upon a holder of this Warrant providing
the Issuer with sixty-one (61) days notice (pursuant to Section 13
hereof) (the "Waiver Notice") that such Holder would like to waive
this Section 7 with regard to any or all shares of Common Stock
issuable upon exercise of this Warrant, this Section 7 will be of no
force or effect with regard to all or a portion of the Warrant
referenced in the Waiver Notice; provided, further, that this
provision shall be of no further force or effect during the sixty-one
(61) days immediately preceding the expiration of the term of this
Warrant.
8. Definitions. For the purposes of this Warrant, the
-----------
following terms have the following meanings:
"Additional Shares of Common Stock" means all shares of
---------------------------------
Common Stock issued by the Issuer after the Original Issue Date,
and all shares of Other Common, if any, issued by the Issuer
after the Original Issue Date, except: (i) securities issued
(other than for cash) in connection with a merger, acquisition,
or consolidation, (ii) securities issued pursuant to the
conversion or exercise of convertible or exercisable securities
issued or outstanding on or prior to the date of the Purchase
Agreement or issued pursuant to the Purchase Agreement or
otherwise excepted herein (so long as the conversion or exercise
price in such securities are not amended to lower such price
and/or adversely affect the Holders), (iii) the Warrant Stock,
(iv) securities issued in connection with bona fide strategic
license agreements or other partnering arrangements so long as
such issuances are not for the purpose of raising capital, (v)
Common Stock issued or the issuance or grants of options to
purchase Common Stock pursuant to the Issuer's stock option plans
and employee stock purchase plans outstanding as they exist on
the date of the Purchase Agreement, (vi) any warrants issued to
the placement agent and its designees or to the Company's
investor relations firm for the transactions contemplated by the
Purchase Agreement, and (vii) Common Stock issued by Issuer in
connection with Medpro's agency agreement with SGPF, LLC, which
is contemplated in connection with the Merger.
"Articles of Incorporation" means the Articles of
-------------------------
Incorporation of the Issuer as in effect on the Original Issue
Date, and as hereafter from time to time amended, modified,
supplemented or restated in accordance with the terms hereof and
thereof and pursuant to applicable law.
"Board" shall mean the Board of Directors of the Issuer.
-----
-14-
"Capital Stock" means and includes (i) any and all shares,
-------------
interests, participations or other equivalents of or interests in
(however designated) corporate stock, including, without
limitation, shares of preferred or preference stock, (ii) all
partnership interests (whether general or limited) in any Person
which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and
(iv) all equity or ownership interests in any Person of any other
type.
"Common Stock" means the Common Stock, $0.01 par value per
------------
share, of the Issuer and any other Capital Stock into which such
stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or
-----------------------
warrant, option or other right to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness,
----------------------
shares of Capital Stock or other Securities which are or may be
at any time convertible into or exchangeable for Additional
Shares of Common Stock. The term "Convertible Security" means
one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory
----------------------
or self-regulatory entity, department, body, official, authority,
commission, board, agency or instrumentality, whether federal,
state or local, and whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own
-------
any Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or
---------------------
major regional investment banking firm or firm of independent
certified public accountants of recognized standing (which may be
the firm that regularly examines the financial statements of the
Issuer) that is regularly engaged in the business of appraising
the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the
Issuer or the Holder of any Warrant.
"Issuer" means Xxxxxxxxxx.xxx, a Nevada corporation, and
------
its successors.
"Majority Holders" means at any time the Holders of
----------------
Warrants exercisable for a majority of the shares of Warrant
Stock issuable under the Warrants at the time outstanding.
"Original Issue Date" means August 20, 2007.
-------------------
"OTC Bulletin Board" means the over-the-counter electronic
------------------
bulletin board.
"Other Common" means any other Capital Stock of the Issuer
------------
of any class which shall be authorized at any time after the date
-15-
of this Warrant (other than Common Stock) and which shall have
the right to participate in the distribution of earnings and
assets of the Issuer without limitation as to amount.
"Outstanding Common Stock" means, at any given time, the
------------------------
aggregate amount of outstanding shares of Common Stock, assuming
full exercise, conversion or exchange (as applicable) of all
options, warrants and other Securities which are convertible into
or exercisable or exchangeable for, and any right to subscribe
for, shares of Common Stock that are outstanding at such time.
"Person" means an individual, corporation, limited
------
liability company, partnership, joint stock company, trust,
unincorporated organization, joint venture, Governmental
Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a)
----------------------
the last closing bid price per share of the Common Stock on such
date on the OTC Bulletin Board or a registered national stock
exchange on which the Common Stock is then listed, or if there is
no such price on such date, then the closing price on such
exchange or quotation system on the date nearest preceding such
date, or (b) if the Common Stock is not listed or traded then on
the OTC Bulletin Board or any registered national stock exchange,
the last closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the OTC Bulletin Board or
by the Pink Sheets LLC or similar organization or agency
succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock
as determined by an Independent Appraiser selected in good faith
by the Majority Holders; provided, however, that the Issuer,
after receipt of the determination by such Independent Appraiser,
shall have the right to select an additional Independent
Appraiser, in which case, the fair market value shall be equal to
the average of the determinations by each such Independent
Appraiser; and provided, further that all determinations of the
Per Share Market Value shall be appropriately adjusted for any
stock dividends, stock splits or other similar transactions
during such period. The determination of fair market value by an
Independent Appraiser shall be based upon the fair market value
of the Issuer determined on a going concern basis as between a
willing buyer and a willing seller and taking into account all
relevant factors determinative of value, and shall be final and
binding on all parties. In determining the fair market value of
any shares of Common Stock, no consideration shall be given to
any restrictions on transfer of the Common Stock imposed by
agreement or by federal or state securities laws, or to the
existence or absence of, or any limitations on, voting rights.
"Purchase Agreement" means the Series B Convertible
------------------
Preferred Stock Purchase Agreement dated as of August 20, 2007,
among the Issuer and the Purchasers.
"Purchasers" means the purchasers of the Series B
----------
Convertible Preferred Stock and the Warrants issued by the Issuer
pursuant to the Purchase Agreement.
"Securities" means any debt or equity securities of the
----------
Issuer, whether now or hereafter authorized, any instrument
convertible into or exchangeable for Securities or a Security,
and any option, warrant or other right to purchase or acquire any
-16-
Security. "Security" means one of the Securities.
"Securities Act" means the Securities Act of 1933, as
--------------
amended, or any similar federal statute then in effect.
"Subsidiary" means any corporation at least 50% of whose
----------
outstanding Voting Stock shall at the time be owned directly or
indirectly by the Issuer or by one or more of its Subsidiaries,
or by the Issuer and one or more of its Subsidiaries.
"Term" has the meaning specified in Section 1 hereof.
----
"Trading Day" means (a) a day on which the Common Stock is
-----------
traded on the OTC Bulletin Board or any other exchange or trading
venue on which the Common Stock may be principally traded in the
future, or (b) if the Common Stock is not traded on the OTC
Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the Pink Sheets LLC (or
any similar organization or agency succeeding its functions of
reporting prices); provided, however, that in the event that the
Common Stock is not listed or quoted as set forth in (a) or (b)
hereof, then Trading Day shall mean any day except Saturday,
Sunday and any day which shall be a legal holiday or a day on
which banking institutions in the State of New York are
authorized or required by law or other government action to
close.
"Voting Stock" means, as applied to the Capital Stock of
------------
any corporation, Capital Stock of any class or classes (however
designated) having ordinary voting power for the election of a
majority of the members of the Board of Directors (or other
governing body) of such corporation, other than Capital Stock
having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to
--------
the Purchase Agreement, including, without limitation, this
Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the
provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such
other Warrants.
"Warrant Price" initially means $1.99, as such price may be
-------------
adjusted from time to time as shall result from the adjustments
specified in this Warrant, including Section 4 hereto.
"Warrant Share Number" means at any time the aggregate
--------------------
number of shares of Warrant Stock which may at such time be
purchased upon exercise of this Warrant, after giving effect to
all prior adjustments and increases to such number made or
required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise
-------------
of any Warrant or Warrants or otherwise issuable pursuant to any
Warrant or Warrants.
-17-
9. Other Notices. In case at any time:
-------------
(A) the Issuer shall make any distributions to
the holders of Common Stock; or
(B) the Issuer shall authorize the granting to
all holders of its Common Stock of rights
to subscribe for or purchase any shares of
Capital Stock of any class or other rights;
or
(C) there shall be any reclassification of the
Capital Stock of the Issuer; or
(D) there shall be any capital reorganization
by the Issuer; or
(E) there shall be any (i) consolidation or
merger involving the Issuer or (ii) sale,
transfer or other disposition of all or
substantially all of the Issuer's property,
assets or business (except a merger or
other reorganization in which the Issuer
shall be the surviving corporation and its
shares of Capital Stock shall continue to
be outstanding and unchanged and except a
consolidation, merger, sale, transfer or
other disposition involving a wholly-owned
Subsidiary); or
(F) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of
the Issuer or any partial liquidation of
the Issuer or distribution to holders of
Common Stock;
then, in each of such cases, the Issuer shall give written notice to
the Holder of the date on which (i) the books of the Issuer shall
close or a record shall be taken for such dividend, distribution or
subscription rights or (ii) such reorganization, reclassification,
consolidation, merger, disposition, dissolution, liquidation or
winding-up, as the case may be, shall take place. Such notice also
shall specify the date as of which the holders of Common Stock of
record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their
certificates for Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, disposition, dissolution, liquidation or winding-up, as the
case may be. Such notice shall be given at least twenty (20) days
prior to the action in question and not less than ten (10) days prior
to the record date or the date on which the Issuer's transfer books
are closed in respect thereto. This Warrant entitles the Holder to
receive copies of all financial and other information distributed or
required to be distributed to the holders of the Common Stock.
10. Amendment and Waiver. Any term, covenant, agreement or
--------------------
condition in this Warrant may be amended, or compliance therewith may
be waived (either generally or in a particular instance and either
retroactively or prospectively), by a written instrument or written
instruments executed by the Issuer and the Majority Holders; provided,
-18-
however, that no such amendment or waiver shall reduce the Warrant
Share Number, increase the Warrant Price, shorten the period during
which this Warrant may be exercised or modify any provision of this
Section 11 without the consent of the Holder of this Warrant. No
consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of this Warrant
unless the same consideration is also offered to all holders of the
Warrants.
11. Governing Law; Jurisdiction. This Warrant shall be
---------------------------
governed by and construed in accordance with the internal laws of the
State of New York, without giving effect to any of the conflicts of
law principles which would result in the application of the
substantive law of another jurisdiction. This Warrant shall not be
interpreted or construed with any presumption against the party
causing this Warrant to be drafted. The Issuer and the Holder agree
that venue for any dispute arising under this Warrant will lie
exclusively in the state or federal courts located in New York County,
New York, and the parties irrevocably waive any right to raise forum
non conveniens or any other argument that New York is not the proper
venue. The Issuer and the Holder irrevocably consent to personal
jurisdiction in the state and federal courts of the state of New York.
The Issuer and the Holder consent to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at
the address in effect for notices to it under this Warrant and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 12 shall affect
or limit any right to serve process in any other manner permitted by
law. The Issuer and the Holder hereby agree that the prevailing party
in any suit, action or proceeding arising out of or relating to this
Warrant or the Purchase Agreement, shall be entitled to reimbursement
for reasonable legal fees from the non-prevailing party. The parties
hereby waive all rights to a trial by jury.
12. Notices. Any notice, demand, request, waiver or other
-------
communication required or permitted to be given hereunder shall be in
writing and shall be effective (a) upon hand delivery by telecopy or
facsimile at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Issuer: Xxxxxxxxxx.xxx
[Address]
Attention:
Tel. No.:
Fax No.:
with copies (which
copies shall not
constitute notice)
[Xxxxxxxxxx.xxx, Counsel]
Tel. No.:
Fax No.:
-19-
If to any Holder: At the address of such Holder set forth on
Exhibit A to this Agreement, with copies to
Holder's counsel as set forth on Exhibit A or
as specified in writing by such Holder with
copies to:
with copies (which
copies shall not
constitute notice)
to: Lord Bissell & Brook LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Tel No.: (000) 000-0000
Fax No.: (000) 000-0000
Any party hereto may from time to time change its address for
notices by giving written notice of such changed address to the other
party hereto.
13. Warrant Agent. The Issuer may, by written notice to each
-------------
Holder of this Warrant, appoint an agent having an office in New York,
New York for the purpose of issuing shares of Warrant Stock on the
exercise of this Warrant pursuant to subsection (b) of Section 2
hereof, exchanging this Warrant pursuant to subsection (d) of Section
2 hereof or replacing this Warrant pursuant to subsection (d) of
Section 3 hereof, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made
at such office by such agent.
14. Remedies. The Issuer stipulates that the remedies at law
--------
of the Holder of this Warrant in the event of any default or
threatened default by the Issuer in the performance of or compliance
with any of the terms of this Warrant are not and will not be adequate
and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of
any of the terms hereof or otherwise.
15. Successors and Assigns. This Warrant and the rights
----------------------
evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Issuer, the Holder hereof and (to the
extent provided herein) the Holders of Warrant Stock issued pursuant
hereto, and shall be enforceable by any such Holder or Holder of
Warrant Stock.
16. Modification and Severability. If, in any action before
-----------------------------
any court or agency legally empowered to enforce any provision
contained herein, any provision hereof is found to be unenforceable,
then such provision shall be deemed modified to the extent necessary
to make it enforceable by such court or agency. If any such provision
is not enforceable as set forth in the preceding sentence, the
unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if
such unenforceable provision had never been contained herein.
17. Headings. The headings of the Sections of this Warrant are
--------
for convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
-20-
18. Registration Rights. The Holder of this Warrant is
-------------------
entitled to the benefit of certain registration rights with respect to
the shares of Warrant Stock issuable upon the exercise of this Warrant
pursuant to that certain Registration Rights Agreement, of even date
herewith, by and among the Company and Persons listed on Schedule I
thereto (the "Registration Rights Agreement") and the registration
rights with respect to the shares of Warrant Stock issuable upon the
exercise of this Warrant by any subsequent Holder may only be assigned
in accordance with the terms and provisions of the Registrations
Rights Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Issuer has executed this Series B Warrant
as of the day and year first above written.
XXXXXXXXXX.XXX
By:___________________________________
Name:
Title:
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EXERCISE FORM
SERIES B WARRANT
XXXXXXXXXX.XXX
The undersigned _______________, pursuant to the provisions of the
within Warrant, hereby elects to purchase _____ shares of Common Stock
of Xxxxxxxxxx.xxx covered by the within Warrant.
Dated: _________________ Signature ______________________
Address ______________________
______________________
Number of shares of Common Stock beneficially owned or deemed
beneficially owned by the Holder on the date of Exercise:_____________
The undersigned is an "accredited investor" as defined in Regulation D
under the Securities Act of 1933, as amended.
The undersigned intends that payment of the Warrant Price shall be
made as (check one):
Cash Exercise _______
Cashless Exercise _______
If the Holder has elected a Cash Exercise, the Holder shall pay the
sum of $________ by certified or official bank check (or via wire
transfer) to the Issuer in accordance with the terms of the Warrant.
If the Holder has elected a Cashless Exercise, a certificate shall be
issued to the Holder for the number of shares equal to the whole
number portion of the product of the calculation set forth below,
which is ___________. The Company shall pay a cash adjustment in
respect of the fractional portion of the product of the calculation
set forth below in an amount equal to the product of the fractional
portion of such product and the Per Share Market Value on the date of
exercise, which product is ____________.
X = Y - (A)(Y)
------
B
Where:
The number of Ordinary Shares to be issued to the Holder _________("X").
The number of Ordinary Shares purchasable upon exercise of all of the
Warrant or, if only a portion of the Warrant is being exercised, the
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portion of the Warrant being exercised __________ ("Y").
The Warrant Price ______________ ("A").
The Per Share Market Value of one Ordinary Share _____________ ("B").
ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and
transfers unto __________________ the within Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_____________, attorney, to transfer the said Warrant on the books of
the within named corporation.
Dated: _________________ Signature ______________________
Address ______________________
______________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, _________________ hereby sells, assigns and
transfers unto __________________ the right to purchase _________
shares of Warrant Stock evidenced by the within Warrant together with
all rights therein, and does irrevocably constitute and appoint
___________________, attorney, to transfer that part of the said
Warrant on the books of the within named corporation.
Dated: _________________ Signature ______________________
Address ______________________
______________________
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-___ canceled (or transferred or exchanged) this
_____ day of ___________, _____, shares of Common Stock issued
therefor in the name of _______________, Warrant No. W-_____ issued
for ____ shares of Common Stock in the name of _______________.
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