THIS WARRANT AND THE SHARES OF SERIES B2 PREFERRED STOCK WHICH MAY BE PURCHASED
UPON THE EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE,
OFFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS.
WARP TECHNOLOGY HOLDINGS, INC.
SERIES B-2 PREFERRED STOCK PURCHASE WARRANT
DATED, as of August ___, 2004
Holder: ___________________
Number of shares of
Series B-2 Preferred
Stock underlying
Warrant (subject to
adjustment):
_________________________
THIS CERTIFIES THAT Holder is the owner of a Warrant to purchase the
number of shares of Series B-2 Preferred Stock (the "Warrant Shares") as set
forth above (and as may be adjusted from time to time) of WARP Technology
Holdings, Inc., a Nevada corporation (hereinafter called the "Company") at an
exercise price per share of One Thousand Dollars ($1,000) per share (the
"Exercise Price") at any time during the period commencing as of August __, 2004
and ending on the earlier of: (i) subject to Section 3, an Acquisition of the
Company (as defined in Section 14) or (ii) August ___, 2009 (the "Expiration
Date").
1. METHOD OF EXERCISE; PAYMENT.
(a) Cash Exercise. The purchase rights represented by this Warrant may
be exercised by the Holder, in whole or in part, by the surrender of this
Warrant (with the notice of exercise form attached hereto as Exhibit A duly
executed) at the principal office of the Company, and by the payment to the
Company, by certified, cashier's or other check acceptable to the Company or by
wire transfer to an account designated by the Company, of an amount equal to the
aggregate Exercise Price of the Warrant Shares being purchased.
(b) Stock Certificates. In the event of any exercise of the rights
represented by this Warrant, certificates for the Warrant Shares so purchased
shall be delivered to the Holder within a reasonable time and, unless this
Warrant has been fully exercised or has expired, a new Warrant representing the
Warrant Shares with respect to which this Warrant shall not have been exercised
shall also be issued to the Holder within such time.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares
issuable upon the exercise of the rights represented by this Warrant will, upon
issuance and receipt of the Exercise Price therefore, be fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company shall at all times have authorized and
reserved for issuance sufficient shares of its Series B-2 Preferred Stock to
provide for the exercise of the rights represented by this Warrant and
sufficient shares of its Common Stock to provide for the conversion of such
shares of Series B-2 Preferred Stock.
3. ADJUSTMENTS. The number and kind of securities purchasable upon the
exercise of this Warrant and the Exercise Price therefore shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:
(a) Reclassification. In the case of any reclassification or change of
securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any
merger of the Company with or into another corporation (other than a merger with
another corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant) or an
Acquisition, the Company, or such successor or purchasing corporation, as the
case may be, shall duly execute and deliver to the holder of this Warrant a new
Warrant (in form and substance reasonably satisfactory to the holder of this
Warrant), or the Company shall make appropriate provision without the issuance
of a new Warrant, so that the holder of this Warrant shall have the right to
receive, at a total purchase price not to exceed that payable upon the exercise
of the unexercised portion of this Warrant, and in lieu of the Warrant Shares of
Series B-2 Preferred Stock theretofore issuable upon exercise of this Warrant,
(i) the kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, change, merger or Acquisition by a holder
of the number of Warrant Shares of Series B-2 Preferred Stock then purchasable
under this Warrant, or (ii) in the case of such a merger or an Acquisition in
which the consideration paid consists all or in part of assets other than
securities of the successor or purchasing corporation, at the option of the
Holder of this Warrant, the securities of the successor or purchasing
corporation having a value at the time of the transaction equivalent to the fair
market value of the Series B-2 Preferred Stock at the time of the transaction.
The provisions of this subparagraph (a) shall similarly apply to successive
reclassifications, changes, mergers and transfers. Furthermore, the Company
shall not effect any such merger or Acquisition, unless prior to the
consummation of such merger or Acquisition, the Holder of this Warrant shall
have been given a reasonable opportunity, not less than ten (10) business days,
to then elect to receive upon the exercise of this Warrant either the stock,
securities or assets then issuable with respect to the Series B-2 Preferred
Stock of the Company or the stock, securities or assets, or the equivalent,
issued to previous holders of the Series B-2 Preferred Stock in accordance with
such merger or Acquisition (including, without limitation, the opportunity for
the holder of this Warrant to exercise this
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Warrant and then to convert such Series B-2 Preferred Stock received upon
exercise hereof into shares of Common Stock in accordance with the terms of the
Series B-2 Preferred Stock); provided, however, that the holders of a majority
in interest of this Warrant and such other warrants to acquire shares of Series
B-2 Stock sold under that certain Series B-2 Preferred Stock Purchase Agreement
entered into as of August 4, 2004 between and among the Company and the holders
of the Series B-2 Stock named therein, may waive such ten (10) business day
exercise period.
(b) Stock Splits, Dividends and Combinations. In the event that the
Company shall at any time subdivide the outstanding shares of Common Stock or
shall issue a stock dividend on its outstanding shares of Common Stock the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of the subdivision or immediately after
the record date of such dividend, be proportionately increased, and the Exercise
Price shall be proportionately decreased, and in the event that the Company
shall at any time combine the outstanding shares of Common Stock the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
combination shall be proportionately decreased, and the Exercise Price shall be
proportionately increased, effective at the close of business on the date of
such combination.
4. NOTICE OF ADJUSTMENTS. Whenever the number of Warrant Shares purchasable
hereunder or the Exercise Price thereof shall be adjusted pursuant to Section 3
hereof, the Company shall provide notice to the Holder setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the number
and class of shares which may be purchased thereafter and the Exercise Price
therefore after giving effect to such adjustment.
5. FRACTIONAL SHARES. The Company shall not be required to issue fractional
shares of Series B-2 Preferred Stock on the exercise of this Warrant. The number
of full shares of Series B-2 Preferred Stock which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of shares of
Series B-2 Preferred Stock acquirable on exercise of the Warrant so presented.
If any fraction of a share of Series B-2 Preferred Stock would, except for the
provisions of this Section, be issuable on the exercise of any Warrant (or
specified portion thereof) then such fractional share shall be rounded up or
down to the nearest whole share.
6. REPRESENTATIONS OF THE COMPANY. The Company represents that all corporate
actions on the part of the Company, its officers, directors and shareholders
necessary for the sale and issuance of the Warrant Shares pursuant hereto and
the performance of the Company's obligations hereunder were taken prior to and
are effective as of the effective date of this Warrant.
7. REPRESENTATIONS AND WARRANTIES BY THE HOLDER. The Holder represents and
warrants to the Company as follows:
(a) This Warrant and the Warrant Shares issuable upon exercise thereof
are being acquired for its own account, for investment and not with a view to,
or for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the "Act"). Upon
exercise of this Warrant, the Holder shall, if so requested by the Company,
confirm in writing, in a form satisfactory to the Company,
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that the securities issuable upon exercise of this Warrant are being acquired
for investment and not with a view toward distribution or resale.
(b) The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Act by reason of their issuance in a transaction
exempt from the registration and prospectus delivery requirements of the Act
pursuant to Section 4(2) thereof, and that they must be held by the Holder
indefinitely, and that the Holder must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Act or is exempted from such registration.
(c) The Holder has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Warrant and the Warrant Shares purchasable pursuant to the
terms of this Warrant and of protecting its interests in connection therewith.
(d) The Holder is able to bear the economic risk of the purchase of the
Warrant Shares pursuant to the terms of this Warrant.
8. RESTRICTIVE LEGEND. The Warrant Shares (unless registered under the Act)
shall be stamped or imprinted with a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
9. RESTRICTIONS UPON TRANSFER AND REMOVAL OF LEGEND.
(a) The Company need not register a transfer of this Warrant or Warrant
Shares bearing the restrictive legend set forth in Section 8 hereof, unless the
conditions specified in such legend are satisfied. The Company may also instruct
its transfer agent not to register the transfer of the Warrant Shares, unless
one of the conditions specified in the legend referred to in Section 8 hereof is
satisfied.
(b) Notwithstanding the provisions of paragraph (a) above, no opinion of
counsel shall be necessary for a transfer without consideration by any holder
(i) if such holder is a partnership, to a partner or retired partner of such
partnership who retires after the date hereof or to the estate of any such
partner or retired partner, or (ii) if such holder is a corporation, to a
shareholder of such corporation, or to any other corporation under common
control, direct or indirect, with such holder.
10. RIGHTS OF SHAREHOLDERS. No holder of this Warrant shall be entitled as a
Warrant holder, to vote or receive dividends or be deemed the holder of any
Warrant Shares or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action
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(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, consolidation, merger, conveyance, or otherwise) or
to receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein. The holder of this Warrant will not be entitled to share in the assets
of the Company in the event of a liquidation, dissolution or the winding up of
the Company.
11. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given upon receipt or, if earlier, (a) five (5) days after
deposit with the U.S. Postal Service or other applicable postal service, if
delivered by first class mail, postage prepaid, (b) upon delivery, if delivered
by hand, (c) one business day after the business day of deposit with Federal
Express or similar overnight courier, freight prepaid or (d) one business day
after the business day of facsimile transmission, if delivered by facsimile
transmission with copy by first class mail, postage prepaid, and shall be
addressed (i) if to the Holder, at the Holder's address as set forth on the
books of the Company, and (ii) if to the Company, at the address of its
principal corporate offices (attention: Chief Executive Officer), or at such
other address as a party may designate by ten days advance written notice to the
other party pursuant to the provisions above.
12. REGISTRATION RIGHTS AGREEMENT. The shares of Common Stock underlying the
Warrant Shares carry the registration rights as described in and pursuant to the
Stockholders Agreement dated approximately August 4, 2004 by and among the
Company and the Holder, among others.
13. ANTI-DILUTION PROTECTION. The holder of this Warrant shall be entitled to
the benefit of all adjustments in the number of shares Common Stock of the
Company issuable upon conversion of the Series B-2 Preferred Stock of the
Company that occur prior to the exercise of this Warrant, including without
limitation, any increase in the number of shares of Common Stock issuable upon
conversion as a result of a dilutive issuance of capital stock.
14. DEFINITION OF "ACQUISITION." An Acquisition means (i) a sale of all or
substantially all of the assets of the Company, or (ii) a merger, consolidation
or other transaction or series of related transactions in which the Company's
shareholders immediately prior thereto own less than a majority of the voting
stock of the Company (or its successor or parent) immediately thereafter,
provided however that neither (a) a merger effected exclusively for the purpose
of changing the domicile of the Company, or (b) an equity financing in which the
Company is the surviving corporation shall be deemed to be an Acquisition.
15. GOVERNING LAW. This Warrant and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflicts of law
provisions of the State of New York or of any other state; provided, however,
that the corporate law provisions of the Revised Statutes of the State of
Nevada, shall govern the enforceability of the terms set forth herein with
respect to the preferences, rights and other aspects of the Company's Series B-2
Preferred Stock and Common Stock.
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Issued as of the __th day of ________ 2004.
WARP TECHNOLOGY HOLDINGS, INC.
_____________________________________
Name: Xxx Xxxxxxxx
Title: President; Chief Executive Officer
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EXHIBIT A
NOTICE OF EXERCISE
TO: WARP Technology Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
1. The undersigned hereby elects to purchase __________ Warrant Shares
of WARP Technology Holdings, Inc. pursuant to the terms of the attached Warrant.
2. 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:
_________________________________
(Name)
_________________________________
_________________________________
(Address)
3. The undersigned hereby represents and warrants that the aforesaid
Warrant Shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the
distribution thereof, and that the undersigned has no present intention of
distributing or reselling such shares and all representations and warranties of
the undersigned set forth in Section 7 of the attached Warrant are true and
correct as of the date hereof.
HOLDER
_____________________________
Name:
Title:
Date: ___________________________
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