INNERLIGHT HOLDINGS, INC. CLASS “A” COMMON STOCK PURCHASE WARRANT
Exhibit
10.7
CLASS
“A” COMMON STOCK PURCHASE WARRANT
THIS
WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND NEITHER
THIS WARRANT NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND THE RULES AND REGULATIONS THEREUNDER. BY
ITS ACCEPTANCE HEREOF, THE HOLDER OF THIS WARRANT REPRESENTS THAT IT IS
ACQUIRING THIS WARRANT FOR INVESTMENT AND AGREES TO COMPLY IN ALL RESPECTS WITH
ANY APPLICABLE STATE SECURITIES LAWS COVERING THE PURCHASE OF THIS WARRANT AND
RESTRICTING ITS TRANSFER, COPIES OF WHICH MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THIS
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE.
|
Dated:
February 24, 2008
|
CLASS “A” STOCK PURCHASE
WARRANT
To
purchase up to _____________ Shares of Common Stock of
at a
purchase price of $.25 per Share.
Expiring
December 31, 2013
THIS IS
TO CERTIFY THAT, for value received, ____________________________________________
or
registered assigns (the "Holder"), is entitled, subject to certain conditions
set forth in Section 1.01 hereof, to purchase from INNERLIGHT HOLDINGS, INC., a
Delaware corporation (the "Company"), at any time or from time to time
after the date of issuance, and prior to 5:00 p.m. Mountain time, on December
31, 2013, at the Company's principal executive office, at the Exercise Price, up
to the number of shares of Common Stock, $.001 par value per share (the "Common
Stock"), of the Company shown above, all subject to adjustment and upon the
terms and conditions as hereinafter provided, and is entitled also to exercise
the other appurtenant rights, powers and privileges hereinafter
described. No fractional Shares will be issued upon the exercise of
this Warrant. This Warrant is being issued to Holder in lieu of cash
compensation for services rendered by Holder to the Company.
Notwithstanding
the foregoing, this Warrant shall become immediately exercisable in the event
of:
1
(a) the
sale, lease, exchange, transfer or other disposition (including, without
limitation, by merger, consolidation or otherwise) of assets constituting all or
substantially all of the assets of the Company and its subsidiaries, taken as a
whole, to a Person or group of Persons (other than to any Person or Persons who,
together with their Affiliates, beneficially own or control a majority of the
issued and outstanding voting securities of the Company immediately prior to
such transaction),
(b) any
merger, consolidation or other business combination or refinancing or
recapitalization that results in the holders of the issued and outstanding
voting securities of the Company immediately prior to such transaction
beneficially owning or controlling less than a majority of the voting securities
of the continuing or surviving entity immediately following such
transaction.
(c) the
disposition of assets constituting all or substantially all of the assets of the
Company and its subsidiaries, taken as a whole, in liquidation of the
Company.
For
purposes hereof, "Person" means any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, Governmental Authority or other
entity of any kind, and shall include any successor (by merger or otherwise) of
any such entity.
This
Warrant, or any part thereof, shall be exercised by properly executing the
annexed Subscription Form and by mailing the Warrant, executed Subscription Form
and payment in full of the aggregate option price of the number of Shares
purchased to the principal office of the Company.
2
In lieu
of the payment of the Exercise Price in cash, the Holder shall have the right
(but not the obligation) to pay the Exercise Price for the Shares of Common
Stock being purchased upon exercise of this Warrant by the surrender to the
Company of any exercisable but unexercised portion of this Warrant having a
"Value" (as defined below), at the close of trading on the last trading day
immediately preceding the exercise of this Warrant, equal to the Exercise Price
multiplied by the number of Shares of Common Stock being purchased upon exercise
(the "Cashless Exercise Right"). The sum of (a) the number of shares
of Common Stock being purchased upon exercise of the non-surrendered portion of
this Warrant pursuant to the Cashless Exercise Right and (b) the number of
Shares of Common Stock underlying the portion of this Warrant being surrendered,
shall not in any event be greater than the total number of shares of Common
Stock that would be purchasable upon the complete exercise of this Warrant if
the Exercise Price were paid in cash. Upon exercise of the Cashless
Exercise Right, the Company shall deliver to the Holder (without payment by the
Holder of any of the Exercise Price in cash) that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the "Value" (as defined
below) of the portion of this Warrant being surrendered at the time the Cashless
Exercise Right is exercised by (y) the Exercise Price. The "Value" of
the portion of this Warrant being surrendered shall equal the product of
multiplying (x) the number of shares of Common Stock underlying the portion of
this Warrant being surrendered by (y) the excess of the Market Price over the
Exercise Price. As used herein, the term "Market Price" at any date
shall be deemed to be the last reported sale price per share of the Common Stock
on such date, or, in case no such reported sale takes place on such day, the
average of the last reported sale prices for the immediately preceding three
trading days, in either case as officially reported by the principal securities
exchange on which shares of the Common Stock are listed or admitted to trading,
or, if shares of the Common Stock are not listed or admitted to trading on any
national securities exchange or if any such exchange on which shares of the
Common Stock are listed is not its principal trading market, the last reported
sale price as furnished by the NASD through the Nasdaq National Market or
SmallCap Market, or, if applicable, the OTC Bulletin Board, or if the Shares of
Common Stock are not listed or admitted to trading on the Nasdaq National Market
or SmallCap Market or OTC Bulletin Board or similar organization, as determined
in good faith by resolution of the Board of Directors of the Company, based on
the best information available.
The
Cashless Exercise Right may be exercised by the Holder on any business day not
later than the Expiration Date by delivering to the Company the Warrant with a
duly executed exercise form attached thereto with the cashless exercise section
completed, exercising the Cashless Exercise Right and specifying the total
number of Shares of Common Stock it will purchase pursuant to such Cashless
Exercise Right.
The
Company shall not be required to issue fractions of Common Shares upon exercise
of this Warrant. If any fractions of a share would, but for this
Section, be issuable upon any exercise of this Warrant, in lieu of such
fractional share the Company shall round any fraction up to the nearest whole
number of shares of Common Stock.
If, in the opinion of counsel to the
Company, any law or regulation of the Securities and Exchange Commission or any
other body having jurisdiction shall require the Company or the Holder to take
any action in connection with the Shares being purchased pursuant to this
Warrant, then the Shares shall not be delivered until the completion of the
necessary action.
3
The
Company covenants and agrees that all Warrant Shares that may be issued upon the
exercise of this Warrant will, upon issuance, be duly authorized and issue,
fully paid and non-assessable as set forth herein. The Company
further covenants and agrees that until the expiration date of this Warrant the
Company will, at all times, have authorized, and reserved for the purpose of
issuance or transfer upon exercise of this Warrant, a sufficient number of
shares of Common Stock to provide for the exercise of this Warrant.
No later
than 60 days from the date hereof, the Company shall prepare and file with the
Securities and Exchange Commission (the “Commission”) a registration statement
on Form S-1 or comparable form and such other documents, including a prospectus,
as may be reasonably necessary in the opinion of counsel for the Company, so as
to permit a public offering and sale of the Common Stock issuable upon the
exercise of the Warrants.
This
Warrant, and the rights and privileges conferred hereby, shall be exercisable
only by the Holder and shall not be assignable or transferable except pursuant
to the provisions of the Securities Act of 1933, as amended, and the Rules and
Regulations promulgated thereunder, AND with the written consent of the
Company. This Warrant shall be binding upon and shall inure to the
benefit of the Company and any successor to the Company and to the Holder's
successors and assigns.
The
Holder, by acceptance hereof, acknowledges and agrees that:
(a) The
Warrant represented by this certificate has not been registered under the
Securities Act of 1933, as amended. This Warrant has been issued to
Holder in consideration of services rendered to the Corporation and for
investment purposes only and not with a view to distribution or sale, and may
not be made subject to a security interest or be pledged, hypothecated or
otherwise transferred without an effective Registration Statement for such
Warrant under the Securities Act of 1933, as amended, or an opinion of counsel
for the Company that registration is not required under such Act. Any
Shares issued upon the exercise of this Warrant shall bear an appropriate
restrictive legend unless such Shares have been registered with the
Securities and Exchange Commission.
4
(b) Each
notice of exercise of any portion of this Warrant must be accompanied by a
representation in writing signed by the Holder or the Holder's legal
representative, as the case may be, that the Shares of Common Stock are being
acquired in good faith for investment purposes only any not with a view to or
for sale in connection with any resale of distribution thereof.
(c)(1) In
case the Company shall at any time subdivide the outstanding Common Stock into a
greater number of shares or declare a dividend payable in Common Stock, the
Warrant Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding Common
Stock shall be combined into a smaller number of shares, the Warrant Exercise
Price in effect immediately prior to such combination shall be proportionately
increased.
(c)(2) In
the event that the Company shall, at any time prior to the expiration date of
this Warrant and prior to the exercise thereof: [i] declare or pay to the
holders of the Common Stock of the Corporation a dividend payable in any class
of shares of stock of the Company; or [ii] change, or otherwise reclassify its
Common Stock into the same or a different number of shares with or without
par value, or into shares of any class or classes; or [iii] consolidate or merge
with, or transfer its property as an entirety or substantially as an
entirety to any other corporation; or [iv] make any distribution of its
assets to holders of its Common Stock as a liquidation or partial
liquidation dividend or by way of return of capital; then, upon the subsequent
exercise of this Warrant, the Holder hereof shall receive for the exercise
price, in addition to or in substitution for the Share of Common Stock to
which the Holder would otherwise be entitled upon such exercise, such additional
shares of stock or scrip of the Corporation, or such reclassified shares of
stock of the Company, or such shares of the securities or property of the
Company resulting from such consolidation, merger or transfer, or such assets of
the Corporation which Holder would have been entitled to receive had the
Holder exercised the Warrant prior to the happening of any of the foregoing
events.
This Warrant does not confer upon the
Holder hereof any right whatsoever as a stockholder of the
Company. Upon the exercise of this Warrant the subscription form
attached hereto must be duly executed and the accompanying instructions for the
recording of stock completed.
(d) All
notices, requests and other communications provided for herein shall be in
writing, and shall be deemed to have been made or given when delivered or
mailed, first class, postage prepaid, or sent by telex or other telegraphic
communications equipment. Such notices and communications shall be
addressed:
|
(i)
|
if
to the Company, to its registered address.
|
|
(ii)
|
if
to the Holder, to its address as shown on the registry books maintained by
the Company.
|
5
(e) No
failure or delay of the Holder in exercising any right, power or privilege,
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof, or any abandonment or discontinuance of steps to enforce
such a right, power or privilege, preclude any other or further exercise thereof
or the exercise of any other right, power or
privilege. The rights and remedies of the Holder are cumulative and
not exclusive of any rights or remedies which it would otherwise
have. The provisions of this Warrant may be amended, modified or
waived if, but only if, such amendment, modification or waiver is in writing and
is signed by a majority of the holders of the Warrants; provided that no
amendment, modification or waiver may change the exercise price of (including
without limitation any adjustments or any provisions with respect to
adjustments, the expiration of or the manner of exercising the Warrants) without
the consent in writing of all of the holders of the Warrants
outstanding.
This
Warrant shall be construed in accordance with and governed by the laws of the
State of Delaware.
All
warranties, representations and covenants made by the Company herein or in any
certificate or other instrument delivered by or on behalf of it in connection
herewith or the Notes shall be considered to have been relied upon by the Holder
and shall survive the issuance and delivery of the Warrants and the Shares of
Common Stock issuable upon exercise of this Warrant, and shall continue in full
force and effect so long as this Warrant is outstanding. All
statements in any such certificate or other instrument shall constitute
representations and warranties hereunder.
All
the covenants, stipulations, promises and agreements in this Warrant contained
by or on behalf of the Company shall bind its successors and assigns, whether or
not so expressed.
In
case any one or more of the provisions contained in this Warrant shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforce ability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired in such jurisdiction and
shall not invalidate or render illegal or unenforceable such provision in any
other jurisdiction.
This
Warrant shall not entitle the Holder to any rights as a stockholder of the
Company.
6
IN WITNESS WHEREOF, INNERLIGHT
HOLDINGS, INC. has caused this Warrant to be executed in its corporate name by
one of its officers hereunto duly authorized, and its corporate seal to be
hereunto affixed, all as of the day and year first above written.
|
By:
|
||
|
PRESIDENT
|
||
7
______________________________
CLASS
“A” COMMON STOCK PURCHASE WARRANT
SUBSCRIPTION
FORM
The
undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing _____________ of the Shares of Common Stock of INNERLIGHT
HOLDINGS, INC. at the exercise price of $.25 per Share, for a total price for
this subscription of $______________. Please issue the Shares of
Common Stock so purchased in accordance with the instructions given
below.
Date:_________________________
|
(Signature
of Holder)
|
|
Name
of Holder:
|
|
|
Registered
Address
|
|
|
Taxpayer
|
Identification
Number:
|
|
|
[Corporate
Seal]
|
||
|
Attest:
|
||
8
