Exhibit 4.4
THIS WARRANT HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
AND IS NOT TRANSFERABLE
EXCEPT AS PROVIDED HEREIN
0Xxxxxxxxx.xxx
PURCHASE WARRANT
ISSUED TO:
GENERATION CAPITAL ASSOCIATES
EXERCISABLE TO PURCHASE
SHARES OF COMMON STOCK
of
0Xxxxxxxxx.xxx
This is to certify that, for value received and subject to the terms and
conditions set forth below, the Warrantholder (hereinafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue
to the Warrantholder, at any time during the Term(hereinafter defined), the
number of shares of Common Stock of the Company at the Exercise Price
provided below.
This Warrant Certificate is issued subject to the following terms and
conditions:
1. DEFINITIONS OF CERTAIN TERMS. Except as may be otherwise clearly
required by the context, the following terms have the following meanings:
"ACT" means the Securities Act of 1933, as amended.
"CASHLESS EXERCISE" means an exercise of the Warrant in which, in lieu of
payment of the Exercise Price, the Holder elects to receive a lesser number
of Securities such that the value of the Securities that such Holder would
otherwise have been entitled to receive but has agreed not to receive, as
determined by the average high closing bid price for such Securities on the
20 trading days immediately preceding the date of exercise, is equal to the
Exercise Price with respect to such exercise. A Holder may only elect a
Cashless Exercise if the Securities issuable by the Company on such exercise
are publicly traded securities.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Company.
"COMMON STOCK VALUE" shall be equal to the 133.3 percent of the Exercise
Price multiplied by the number of shares that would be issuable if the
portion of the Warrant being redeemed was exercised at such Exercise Price.
"COMPANY" means 0Xxxxxxxxx.xxx, a California corporation.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the price at which the Warrantholder may purchase one
share of Common Stock upon exercise of Warrants as determined from time to
time pursuant to the provisions hereof. The Exercise Price shall be equal to
75% of the average high closing bid price for the Common Stock on the 20
trading days immediately preceding the date of exercise.
"EXERCISE NUMBER" means the number of shares of Common Stock for which the
Warrant is exercisable. The Exercise Number shall be equal to 1,500,000
divided by the Exercise Price.
"PUBLIC OFFERING" means a registered public offering of equity securities of
the Company following which the Company will be obligated to file reports
under Section 12 of the Exchange Act.
"RULES AND REGULATIONS" means the rules and regulations of the Commission
adopted under the Act.
"SECURITIES" means the securities obtained or obtainable upon exercise of the
Warrant or securities obtained or obtainable upon exercise, exchange, or
conversion of such securities.
"TERM" means a period of three years commencing on the later to occur of the
first anniversary of the effective date of a Public Offering that is
effective prior to October 31, 1999 and March 31, 2000.
"WARRANTHOLDER" means the record holder of the Warrant or Securities
"WARRANT" means the warrant evidenced by this certificate.
2. EXERCISE OF WARRANTS. All or any part of the Warrant may be exercised
at any time during the Term by surrendering this Warrant Certificate,
together with appropriate instructions, duly executed by the Warrantholder or
by its duly authorized attorney, at the office of the Company, 000 Xxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, or at such other office or agency as the
Company may designate. The date on which such instructions are received by
the Company shall be the date of exercise. If the Holder has elected a
Cashless Exercise, such instructions shall so state. Upon receipt of notice
of exercise, the Company shall immediately instruct its transfer agent to
prepare certificates for the Securities to be received by the Warrantholder
upon completion of the Warrant exercise. When such certificates are prepared,
the Company shall notify the Warrantholder and deliver such certificates to
the Warrantholder or as per the Warrantholder's instructions immediately upon
payment in full by the Warrantholder, in lawful money of the United States,
of the Exercise Price (if any) payable with respect to the Securities being
purchased, if any. Certificates representing the Securities received upon
exercise of the Warrant shall bear such legends as may be required by the
Act, the Rules and Regulations and any comparable provisions of State law.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver
to the Warrantholder a new Warrant Certificate (dated the date hereof), in
form and tenor similar to this Warrant Certificate, evidencing that portion
of the Warrant not exercised. The Securities to be obtained on exercise of
the Warrant will be deemed to have been issued, and any person exercising the
Warrants will be deemed to have become a
holder of record of those Securities, as of the date of the payment of the
Exercise Price or notice of Cashless Exercise.
3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class, and price of the
securities for which the Warrant is exercisable are subject to adjustment
from time to time upon the happening of certain events as follows:
(a) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company, or
other change in the capital structure of the Company, then, as a condition of
such change, lawful and adequate provision will be made so that the holder of
this Warrant Certificate will have the right thereafter to receive upon the
exercise of the Warrant the kind and amount of shares of stock or other
securities or property to which it would have been entitled if, immediately
prior to such event, it had held the number of shares of Common Stock
obtainable upon the exercise of the Warrant. In any such case, appropriate
adjustment will be made in the application of the provisions set forth herein
with respect to the rights and interest thereafter of the Warrantholder, to
the end that the provisions set forth herein will thereafter be applicable,
as nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the exercise of the Warrant. The Company
will not permit any change in its capital structure to occur unless the
issuer of the shares of stock or other securities to be received by the
holder of this Warrant Certificate, if not the Company, agrees to be bound by
and comply with the provisions of this Warrant Certificate.
(b) When any adjustment is required to be made in the number of shares
of Common Stock, other securities, or the property purchasable upon exercise
of the Warrant, the Company will promptly determine the new number of such
shares or other securities or property purchasable upon exercise of the
Warrant and (i) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the new number of such
shares or other securities or property purchasable upon exercise of the
Warrant and (ii) cause a copy of such statement to be mailed to the
Warrantholder within thirty (30) days after the date of the event giving rise
to the adjustment.
(c) No fractional shares of Common Stock or other securities will be
issued in connection with the exercise of the Warrant, but the Company will
pay, in lieu of fractional shares, a cash payment therefor on the basis of
the mean between the bid and asked prices of the Common Stock in the
over-the-counter market or the closing price on a national securities
exchange on the day immediately prior to exercise.
(d) Notwithstanding anything herein to the contrary, there will be no
adjustment made hereunder on account of the sale of the Common Stock or other
Securities purchasable upon exercise of the Warrant.
4. RESERVATION OF SECURITIES. The Company agrees that the number of
shares of Common Stock or other Securities reasonably sufficient to provide
for the exercise of the Warrant upon the basis set forth above will at all
times during the term of the Warrant be reserved for exercise.
5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of
the Warrant will be duly and validly issued in accordance with their terms,
and the Company will pay all documentary and transfer taxes, if any, in
respect of the original issuance thereof upon exercise of the Warrant.
6. RESTRICTIONS ON TRANSFER. This Warrant Certificate and the Warrant
may not be sold, transferred, assigned or hypothecated except as specifically
provided in this Section 6. This Warrant Certificate and the Warrant are
transferable:
(a) in whole, but not in part, to an entity that controls, is
controlled by or is under common control with the transferor;
(b) in a prorata distribution to the owners of the transferor;
(c) by will or pursuant to the laws of descent and distribution; or
(d) in connection with a bona fida pledge or hypothecation of the
Warrant as security for indebtedness of the Warrantholder, or any
foreclosure pursuant to the terms of such pledge or hypothecation.
7. REDEMPTION OF THE WARRANT. The Company may redeem all or any part of
the Warrant upon 15 days prior notice to the holders at any time on or after
July 1, 1999. The redemption price of any Warrants shall be a percentage of
the Common Stock Value indicated below.
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DATE OF REDEMPTION NOTICE COMMON STOCK VALUE PERCENT
July 1, 1999 - September 30, 1999 21%
October 1, 1999 - December 31, 1999 22%
January 1, 2000 - March 31, 2000 23%
April 1, 2000 - June 30, 2000 24%
On or after July 1, 2000 25%
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8. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled to
any rights of a shareholder of the Company but will, upon written request to
the Company, be
entitled to receive such quarterly or annual reports as the Company
distributes to its shareholders.
9. OBLIGATION TO REGISTER UNDER THE EXCHANGE ACT. If a Public Offering
is not consummated on or before June 30, 1999 and if, at that time or at any
time thereafter, the Company is not actively pursuing an underwritten Public
Offering that the Company reasonably expects to be completed within 60 days,
the Company will, not later than August 31, 1999, file with the SEC a
registration statement under Section 12 of the Exchange Act which will become
effective by operation of law on or before October 31, 1999 and will use its
best efforts to clear all comments of the SEC staff with regard to such
registration statement on or before November 30, 1999.
10. LIMITATION ON EXERCISE. Notwithstanding anything to the contrary
herein, the Warrantholder shall not be permitted to exercise the Warrant to
the extent that such exercise would cause the Warrantholder to be the
beneficial owner of more than 5% of the then outstanding Common Stock
immediately following such exercise. This limitation shall not be deemed to
prevent the Warrantholder from acquiring more than an aggregate of 5% of the
Common Stock, so long as the Warrantholder does not beneficially own more
than 5% of Common Stock immediately following such exercise.
11. NOTICE. Any notice permitted or required hereby shall be deemed
validly given if (i) sent by registered mail, return receipt requested, or by
a recognized package delivery company that maintains a record of deliveries,
or (ii) received at the address of the person to whom such notice is directed
by any physical or electronic means. Any notice to the Company shall be
addressed to the Company at
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone (000) 000-0000
or at any fax or email address maintained by the Company for general
corporate purposes. Any notice to the Warrantholder shall be addressed to the
Warrantholder at
Suite 4990
00 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-00000
with a copy to:
Xxxxx X. Xxxxxxxx
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax (000) 000-0000
or at any fax or email address maintained by Lender for general corporate
purposes.
Either party may change addresses at which it wishes to receive notice
by valid notice to the other setting forth the new address.
12. Applicable Law. This Warrant Certificate shall be governed by and
interpreted under the laws of the State of New York, excluding provisions
thereof relating to conflict of laws.
Dated as of March 18, 1999
0Xxxxxxxxx.xxx
By: XXXXXXXX WEISDORN
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Title: President
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