THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
Science Dynamics Corporation
COMMON STOCK PURCHASE WARRANT A
1. Issuance. In consideration of good and valuable consideration,
the receipt of which is hereby acknowledged by Science Dynamics Corporation,
a Delaware corporation (the "Company"), ALPHA VENTURE CAPITAL, INC., or
registered assigns (the "Holder") is hereby granted the right to purchase at
any time commencing March 2, 2001 until 5:00 P.M., New York City time, on
March 2, 2005 (the "Expiration Date"), 500,000 fully paid and nonassessable
shares of the Company's Common Stock, par value $.01 per share (the "Common
Stock") at an initial exercise price per share of an amount equal to $_____
[the lesser of (a) one hundred percent (100%) of the average of the five (5)
closing bid prices following December 15, 2000 or (b) one hundred percent
(100%) of the average of the five (5) closing bid prices following the
effective date of the Registration Statement, but in no event less than $5.00
per share] (the "Exercise Price"), subject to further adjustment as set forth
in Section 6 hereof.
2. Exercise of Warrants. This Warrant is exercisable in whole or
in part at the Exercise Price per share of Common Stock payable hereunder,
payable in cash or by certified or official bank check, or by "cashless
exercise," by means of tendering this Warrant to the Company to receive a number
of shares of Common Stock set forth in Section 1 above. Upon surrender of this
Warrant with the annexed Notice of Exercise Form duly executed, together with
payment of the Exercise Price for the shares of Common Stock purchased, the
Holder shall be entitled to receive a certificate or certificates for the shares
of Common Stock so purchased.
3. Reservation of Shares. The Company hereby agrees that at all
times during the term of this Warrant there shall be reserved for issuance
upon exercise of this Warrant such number of shares of its Common Stock as
shall be required for issuance upon exercise of this Warrant (the "Warrant
Shares").
4. Mutilation or Loss of Warrant. Upon receipt by the Company
of evidence satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and
deliver a new Warrant of like tenor and date and any such lost, stolen,
destroyed or mutilated Warrant shall thereupon become void.
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5. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at
law or equity, and the rights of the Holder are limited to those expressed in
this Warrant and are not enforceable against the Company except to the extent
set forth herein.
6. Protection Against Dilution.
---------------------------
6.1 Adjustment Mechanism. If an adjustment of the Exercise
Price is required pursuant to this Section 6, the Holder shall be entitled to
purchase such number of additional shares of Common Stock as will cause (i) the
total number of shares of Common Stock Holder is entitled to purchase pursuant
to this Warrant, multiplied by (ii) the adjusted purchase price per share (the
"Adjusted Exercise Price"), to equal (iii) the total number of shares of
Common Stock Holder is entitled to purchase before adjustment multiplied by
the Exercise Price before adjustment. For example, if Holder receives a
warrant to purchase 1,500,000 shares of Common Stock at an Exercise Price of
$1.00, and the Adjusted Exercise Price is $0.50, Holder will be entitled to
receive 3,000,000 shares of Common Stock.
6.2 Capital Adjustments. In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment
affecting the Common Stock of the Company, the provisions of this Section 6
shall be applied as if such capital adjustment event had occurred immediately
prior to the date of this Warrant and the original purchase price had been
fairly allocated to the stock resulting from such capital adjustment; and in
other respects the provisions of this Section shall be applied in a fair,
equitable and reasonable manner so as to give effect, as nearly as may be, to
the purposes hereof.
6.3 Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or of a part of
its assets in a transaction (the "Spin Off") in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (i) to be
reserved Spin Off Securities equal to the number thereof which would have been
issued if Holder had exercised its right to purchase all of the remaining
Common Stock available to Holder under this Warrant as of the close of business
on the trading day immediately before the record date (the "Outstanding
Warrants") for determining the amount of the number of Spin Off Securities to
be issued to security holders of the Company (the "Reserved Spin Off Shares"),
and (ii) to be issued to the Holder upon exercise of all or any of the
Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to
(x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I)
the numerator is the amount of the Outstanding Warrants then being exercised,
and (II) the denominator is the Outstanding Warrants.
7. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage pre-paid. Any such notice shall be deemed
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given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission, or, if mailed, two days after the date of deposit in the United
States mails, as follows:
If to the Company:
Science Dynamics Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
Attention: Xx. Xxx X. Xxxxxxx, President and C.E.O.
If to the Holder:
Alpha Venture Capital, Inc.
Avarua Rarotonga
Xxxx Islands
Fax No. (000) 000-0000
Attention: Xx. Xxxxx Xxxxxx, Director
Any party may designate another address or person for receipt of notices
hereunder by notice given to the other parties in accordance with this
Section.
8. Liquidated Damages. If the Company fails to cause its
transfer agent to deliver to the Holder unlegended certificates representing
the Warrant Shares within ten (10) business days after the Date of Exercise,
the Company shall pay to such Holder, in cash, as liquidated damages and not
as a penalty, $1,000 for each day after such tenth (10th) trading day until
such certificates are delivered. Nothing herein shall limit the Holder's right
to pursue actual damages for the Company's failure to deliver certificates
representing shares of Common Stock upon exercise within the period specified
herein and the Holder shall have the right to pursue all remedies available
to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. The exercise of any such rights shall
not prohibit the Holder from seeking to enforce damages pursuant to any other
Section hereof or under applicable law.
9. Supplements and Amendments; Whole Agreement. This Warrant
may be amended or supplemented only by an instrument in writing signed by the
parties hereto. This Warrant of even date herewith contain the full
understanding of the parties hereto with respect to the subject matter hereof
and thereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
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11. Counterparts. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but
one and the same instrument.
12. Descriptive Headings. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, Science Dynamics Corporation has executed this Warrant
as of the day of , 2001.
Science Dynamics Corporation
By: ____________________________________
ATTEST:
_______________________________
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NOTICE OF EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of ______________, to purchase
__________shares of the Common Stock, par value $.01 per share, of Science
Dynamics Corporation and tenders herewith payment in accordance with Section
1 of said Common Stock Purchase Warrant.
Please deliver the stock certificate to:
Dated:______________________
By:__________________________________
CASH: $ __________________________
CASHLESS EXERCISE: _____________
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