COMMON STOCK PURCHASE WARRANT To Purchase 1,782,000 Shares of Common Stock of BEYOND COMMERCE, INC.
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE 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 AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
To
Purchase 1,782,000
Shares of Common Stock of
BEYOND
COMMERCE, INC.
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, LINLITHGOW HOLDINGS LLC (the
“Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time from on or after the date hereof
(the “Initial Exercise
Date”) to on or prior to the close of business on May 20, 2014, the five
year anniversary of the Initial Exercise Date, (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Beyond Commerce, Inc., a
Nevada corporation (the “Company”), 1,782,000 shares (the “Warrant Shares”) of
Common Stock, $0.001 par value, of the Company (the “Common
Stock”). The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).
Section
1.
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Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings set
forth in that certain Purchase Agreement (the “Purchase
Agreement”), dated May 20, 2009, between Linlithgow Holdings, LLC
and the Holder.
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Section
2. Exercise.
a)
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Exercise of
Warrant. Exercise of the purchase rights represented by
this Warrant may be made at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form
annexed hereto (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company); provided, however, within
5 Trading Days of the date said Notice of Exercise is delivered to the
Company, the Holder shall have surrendered this Warrant to the Company and
the Company shall have received payment of the aggregate
Exercise Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States
bank.
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b)
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Exercise
Price. The exercise price of the Common Stock under this
Warrant shall be be $0.90 per share. (the “Exercise
Price”), subject to adjustment pursuant to Section 3
hereof.
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c)
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Cashless
Exercise. This Warrant may also be exercised by means of
a “cashless exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A),
where:
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(A)
= the VWAP on the Trading Day immediately preceding the date of such
election;
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(B) =
the Exercise Price of this Warrant, as adjusted;
and
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(X) = the
number of Warrant Shares issuable upon exercise of this Warrant in accordance
with the terms of this Warrant by means of a cash exercise rather than a
cashless exercise.
d)
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Exercise
Limitations; Xxxxxx’s
Restrictions. The Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2(c) or
otherwise, to the extent that after giving effect to such issuance after
exercise, the Holder (together with the Holder’s affiliates), as set forth
on the applicable Notice of Exercise, would beneficially own in excess of
4.9% of the number of shares of the Common Stock outstanding immediately
after giving effect to such issuance. For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by the
Holder and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Notes or Warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this
Section 2(d), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act, it being acknowledged by Holder that
the Company is not representing to Holder that such calculation is in
compliance with Section 13(d) of the Exchange Act and Holder is solely
responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in
this Section 2(d) applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder) and of
which a portion of this Warrant is exercisable shall be in the sole
discretion of such Xxxxxx, and the submission of a Notice of Exercise
shall be deemed to be such Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by such Holder) and
of which portion of this Warrant is exercisable, in each case subject to
such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such
determination. For purposes of this Section 2(d), in
determining the number of outstanding shares of Common Stock, the Holder
may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Form 10-Q or Form 10-K (or similar form),
as the case may be, (y) a more recent public announcement by the Company
or (z) any other notice by the Company or the Company’s Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon
the written or oral request of the Holder, the Company shall within two
Trading Days confirm orally and in writing to the Holder the number of
shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this
Warrant, by the Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The
provisions of this Section 2(d) may be waived by the Holder upon, at the
election of the Holder, not less than 61 days’ prior notice to the
Company, and the provisions of this Section 2(d) shall continue to apply
until such 61st
day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver).
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1
e)
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Mechanics of
Exercise.
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i)
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Authorization of
Warrant Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue). The Company
covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or
of any requirements of the Trading Market upon which the Common Stock may
be listed.
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ii)
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Delivery of
Certificates Upon Exercise. Certificates for shares
purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime
broker with the Depository Trust Company through its Deposit Withdrawal
Agent Commission (“DWAC”) system
if the Company is a participant in such system, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Exercise
within 3 Trading Days from the delivery to the Company of the Notice of
Exercise Form, surrender of this Warrant and payment of the aggregate
Exercise Price as set forth above (“Warrant Share Delivery
Date”). This Warrant shall be deemed to have been
exercised on the date the Exercise Price is received by the
Company. The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein
shall be deemed to have become a holder of record of such shares for all
purposes, as of the date the Warrant has been exercised by payment to the
Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of
such shares, have been paid.
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2
iii)
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Delivery of New
Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to Holder
a new Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in all
other respects be identical with this
Warrant.
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iv)
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Rescission
Rights. If the Company fails to cause its transfer agent
to transmit to the Holder a certificate or certificates representing the
Warrant Shares pursuant to this Section 2(e)(iv) by the Warrant Share
Delivery Date, then the Holder will have the right to rescind such
exercise.
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v)
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Compensation for
Buy-In on Failure to Timely Deliver Certificates Upon
Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause its transfer agent to transmit
to the Holder a certificate or certificates representing the Warrant
Shares pursuant to an exercise on or before the Warrant Share 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
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then
the Company 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 Warrant Shares that the Company
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
Warrant Shares 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 Company 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 Company shall be required to pay
the Holder $1,000. The Holder shall provide the Company 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 Company. 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 Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms
hereof.
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3
vi)
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No Fractional Shares
or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Exercise
Price.
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vii)
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Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder or in such
name or names as may be directed by the Holder; provided, however, that
in the event certificates for Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto.
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viii)
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Closing of
Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms
hereof.
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Section
3. Certain Adjustments.
a)
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Stock Dividends and
Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by
the Company pursuant to this Warrant), (B) subdivides outstanding shares
of Common Stock into a larger number of shares, (C) combines (including by
way of reverse stock split) outstanding shares of Common Stock into a
smaller number of shares, or (D) issues by reclassification of shares of
the Common Stock any shares of capital stock of the Company, then in each
case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
after such event and the number of shares issuable upon exercise of this
Warrant shall be proportionately adjusted. Any adjustment made
pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.
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4
b)
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Subsequent Equity
Sales. If the Company or any Subsidiary thereof, as applicable, at
any time while this Warrant is outstanding, shall offer, sell, grant any
option to purchase or offer, sell or grant any right to reprice its
securities, or otherwise dispose of or issue (or announce any offer, sale,
grant or any option to purchase or other disposition) any Common Stock or
Common Stock Equivalents entitling any Person to acquire shares of Common
Stock, at an effective price per share less than the then Exercise Price
(such lower price, the “Base Share
Price” and such issuances collectively, a “Dilutive
Issuance”), as adjusted hereunder (if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which is issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective
price per share which is less than the Exercise Price, such issuance shall
be deemed to have occurred for less than the Exercise Price), then, the
Exercise Price shall be reduced to equal the Base Share Price and the
number of Warrant Shares issuable hereunder shall be increased such that
the aggregate Exercise Price payable hereunder, after taking into account
the decrease in the Exercise Price, shall be equal to the aggregate
Exercise Price prior to such adjustment. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are
issued. Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued. The Company shall
notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or of
applicable reset price, exchange price, conversion price and other pricing
terms (such notice the “Dilutive Issuance
Notice”). For purposes of clarification, whether or not
the Company provides a Dilutive Issuance Notice pursuant to this Section
3(b), upon the occurrence of any Dilutive Issuance, after the date of such
Dilutive Issuance the Holder is entitled to receive a number of Warrant
Shares based upon the Base Share Price regardless of whether the Holder
accurately refers to the Base Share Price in the Notice of
Exercise
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c)
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Pro Rata
Distributions. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not
to Holders of the Warrants) evidences of its indebtedness or assets or
rights or warrants to subscribe for or purchase any security other than
the Common Stock (which shall be subject to Section 3(b)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution
by a fraction of which the denominator shall be the
VWAP (“VWAP” shall
mean for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on
a Trading Market, the daily volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the Trading Market
on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time)
to 4:02 p.m. (New York City time); (b) if the OTC Bulletin Board is
not a Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c) if the Common Stock is not then quoted for trading on the OTC
Bulletin Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported; or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding
and reasonably acceptable to the Company) determined as of the record date
mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at
such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the
Common Stock as determined by the Board of Directors in good
faith. In either case the adjustments shall be described in a
statement provided to the Holders of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one
share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after
the record date mentioned above.
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5
d)
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Exempt
Issuance. Notwithstanding the foregoing, no adjustment shall be
made pursuant to this Section 3 with respect to an Exempt
Issuance. An “Exempt Issuance” shall be defined as the issuance
of (a) shares of Common Stock or options to employees, officers or
directors of the Company pursuant to any stock or option plan duly adopted
by a majority of the non-employee members of the Board of Directors of the
Company or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or
securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease the
exercise, exchange or conversion price of any such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions,
provided any such issuance shall only be to a Person which is, itself or
through its subsidiaries, an operating company in a business synergistic
with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is
investing in securities
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e)
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Calculations.
All calculations under this Section 3 shall be made to the nearest cent or
the nearest 1/100th of a share, as the case may be. The number of shares
of Common Stock outstanding at any given time shall not includes shares of
Common Stock owned or held by or for the account of the Company, and the
description of any such shares of Common Stock shall be considered on
issue or sale of Common Stock. For purposes of this
Section 3, the
number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding treasury shares, if any) issued and
outstanding.
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6
f) Notice to
Holders.
i. Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to this Section
3, the Company shall promptly mail to each Holder a notice setting forth the
Exercise Price after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. If the Company issues a variable rate security,
the Company shall be deemed to have issued Common Stock or Common Stock
Equivalents at the lowest possible conversion or exercise price at which such
securities may be converted or exercised.
ii. Notice to Allow Exercise by
Xxxxxx. If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last addresses as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution, redemption, rights
or warrants, or if a record is not to be taken, the date as of which the holders
of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant
during the 20-day period commencing the date of such notice to the effective
date of the event triggering such notice.
g)
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Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A)
the Company effects any merger or consolidation of the Company with or
into another Person, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related
transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
“Fundamental
Transaction”), then, upon any subsequent conversion of this
Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise absent such
Fundamental Transaction, at the option of the Holder, (a) upon exercise of
this Warrant, the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving
corporation, and Alternate Consideration receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event or
(b) cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula (the “Alternate
Consideration”). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary
to effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder
a new warrant consistent with the foregoing provisions and evidencing the
Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is
effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this paragraph (f) and insuring
that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
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h)
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Voluntary Adjustment
By Company. The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any
period of time deemed appropriate by the Board of Directors of the
Company.
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7
Section
4. Transfer of
Warrant.
a)
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Transferability. Subject
to compliance with any applicable securities laws and the conditions set
forth in Sections 5(a) and 4(d) hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.
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8
b)
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New Warrants.
This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with
a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 4(a), as to any
transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange
for the Warrant or Warrants to be divided or combined in accordance with
such notice.
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c)
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Warrant
Register. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to
time. The Company may deem and treat the registered Holder of
this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes,
absent actual notice to the
contrary.
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d)
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Transfer
Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue
sky laws, the Company may require, as a condition of allowing such
transfer (i) that the Holder or transferee of this Warrant, as the case
may be, furnish to the Company a written opinion of counsel (which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made
without registration under the
Securities Act and under applicable state securities or blue sky laws,
(ii) that the holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the
Securities Act or a qualified institutional buyer as defined in Rule
144A(a) under the Securities
Act.
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Section
5.
Miscellaneous.
a)
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Title to
Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 4 of this Warrant, this
Warrant and all rights hereunder are transferable, in whole or in part, at
the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed. The
transferee shall sign an investment letter in form and substance
reasonably satisfactory to the
Company.
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b)
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No Rights as
Shareholder Until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender
of this Warrant and the payment of the aggregate Exercise Price (or by
means of a cashless exercise), the Warrant Shares so purchased shall be
and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such
surrender or payment.
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9
c)
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Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any
bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock
certificate.
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d)
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Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not
a Saturday, Sunday or legal
holiday.
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e)
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Authorized
Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock
a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of
this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue
the necessary certificates for the Warrant Shares upon the exercise of the
purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the trading market
upon which the Common Stock may be
listed.
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Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
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f)
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Jurisdiction.
All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase
Agreement.
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g)
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Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale
imposed by state and federal securities
laws.
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h)
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Nonwaiver and
Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder’s rights, powers or
remedies, notwithstanding the fact that all rights hereunder terminate on
the Termination Date. If the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any
material damages to the Holder, the Company shall pay to Holder such
amounts as shall be sufficient to cover any costs and expenses including,
but not limited to, reasonable attorneys’ fees, including those of
appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.
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i)
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Notices. Any
notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance
with the notice provisions of the Purchase
Agreement.
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j)
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Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase price of any
Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the
Company.
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k)
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Remedies. Holder,
in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of
its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason
of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at
law would be adequate.
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l)
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Successors and
Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of all Holders from time
to time of this Warrant and shall be enforceable by any such Holder or
holder of Warrant Shares.
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m)
|
Amendment. This
Warrant may be modified or amended or the provisions hereof waived with
the written consent of the Company and the
Holder.
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n)
|
Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this
Warrant.
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o)
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Headings. The
headings used in this Warrant are for the convenience of reference only
and shall not, for any purpose, be deemed a part of this
Warrant.
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11
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated: May
20, 2009
BEYOND COMMERCE, INC. | |||
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By:
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/s/ Xxxxxx XxXxxxx | |
Name Xxxxxx XxXxxxx | |||
Title Chief Executive Officer | |||
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12
NOTICE
OF EXERCISE
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TO:
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(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).
(3) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor. The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE
OF HOLDER]
Name of
Investing Entity:
________________________________________________________________________
Signature of Authorized Signatory of
Investing Entity:
_________________________________________________
Name of
Authorized Signatory:
___________________________________________________________________
Title of
Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
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ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
Holder’s
Signature: _____________________________
Holder’s
Address:
_____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
14