Contract
EXHIBIT
10.3
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. THIS WARRANT AND THE COMMON SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
VU1
CORPORATION
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Warrant Number
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W-2009A-____
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Issue Date
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June
8, 2009
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Expiration Date
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June
8, 2012
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Name of Warrant Holder
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Full Spectrum Capital, LLC
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Number of Shares of Common Stock
(subject to adjustment as provided herein)
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625,000 shares
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Exercise Price per Share
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$0.75
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Vu1
Corporation, a California corporation (the “Company”), for value received,
hereby certifies that the Warrant Holder identified above or its registered
assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company up to the number of shares of Company common stock, no
par value per share (the “Common Stock”), set forth above at the exercise price
per share set forth above, on the terms and conditions set forth
herein. The number of shares of Common Stock issuable upon exercise
of this Warrant, and the exercise price per share, each as adjusted from time to
time pursuant to the provisions of this Warrant, are hereinafter referred to as
the “Warrant Stock” and the “Exercise Price,” respectively.
1. Manner of
Exercise. This Warrant may be exercised in whole or in part by
delivering to the Company at its principal place of business (i) this
Warrant, (ii) the form of Election to Purchase attached hereto as Exhibit A duly
completed and executed by Holder, and (iii) cash, wire transfer, or bank
check payable to the Company, in the amount of the Exercise Price multiplied by
the number of shares for which this Warrant is being exercised (the “Purchase
Price”). Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided herein or at such
later date as may be specified in the executed form of Election to
Purchase.
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2. Delivery of Stock
Certificate. As soon as practicable after the exercise of this
Warrant, in full or in part, and in any event within 10 days thereafter, the
Company at its expense will cause to be issued in the name of and deliver to the
Holder (a) a certificate or certificates for the number of fully paid and
nonassessable shares of Warrant Stock to which Holder shall be entitled upon
such exercise and (b) if applicable, a new Warrant of like tenor to
purchase up to that number of shares of Warrant Stock, if any, not previously
exercised by Holder. Holder shall for all purposes be deemed to have
become the holder of record of such shares of Warrant Stock on the date on which
this Warrant was properly exercised in accordance with Section 1, irrespective
of the date of delivery of the certificate or certificates representing the
Warrant Stock; provided that, if the date of such exercise is a date when the
stock transfer books of the Company are closed, such person shall be deemed to
have become the holder of record of such shares of Warrant Stock at the close of
business on the next succeeding date on which the stock transfer books are
open.
3. Covenants.
a. Exercise
Shares. The Company covenants and agrees that all Warrant Stock that
may be issued upon the exercise of the rights represented by this Warrant will,
upon issuance, be validly issued and outstanding, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issuance
thereof. The Company further covenants and agrees that the Company
will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this
Warrant. If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
exercise of this Warrant, the Company will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.
b. No
Impairment. Except and to the extent as waived or consented to by the
Holder, the Company will not, by amendment of its Articles 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 to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.
c. Notices
of Record Date. In the event of any taking by the Company of a record
of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
the Company shall mail to the Holder, at least ten (10) days prior to the date
specified herein, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend or distribution.
4. Termination.
To the
extent not earlier exercised, the Warrant evidenced hereby shall be void and of
no effect and all rights hereunder shall cease upon the earlier of
(a) 5:00 p.m. Pacific Time on the Expiration Date set forth above, or
(b) the closing of any merger, consolidation or other reorganization of the
Company with or into any other corporation or other business entity, or the sale
of all or substantially all of its assets, or the liquidation or dissolution of
the Company (each, a “Transaction”). The Company shall provide Holder
with written notice not less than 30 days prior to the closing of any proposed
Transaction. All restrictions set forth herein on the shares of
Warrant Stock issued upon exercise of any rights hereunder shall survive such
exercise and expiration of the rights granted hereunder.
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5. Adjustments to
Warrant.
a.
In the event of changes in the outstanding Common Stock of the Company by reason
of stock dividends, splits, recapitalizations, reclassifications, combinations
or exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the total number,
class, and kind of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment. The form of this Warrant
need not be changed because of any adjustment in the number of Warrant Shares
subject to this Warrant.
b. If
any change in the outstanding shares of Common Stock of the Company or any other
event occurs as to which the other provisions of this Section 5 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder of the Warrant in accordance with such provisions,
then the Board of Directors of the Company shall make an adjustment in the
number and class of securities available under the Warrant, the Exercise Price
or the application of such provisions, so as to protect such purchase rights as
aforesaid. The adjustment shall be such as to give the Holder of the
Warrant upon exercise for the same aggregate Exercise Price the total number,
class and security as he would have owned had the Warrant been exercised prior
to the event and had he continued to hold such securities until after the event
requiring adjustment.
c. Whenever
the Exercise Price or the number of Exercise Shares purchasable hereunder shall
be adjusted pursuant to this Section 5, the Company shall prepare a certificate
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated.
Such certificate shall be signed by its chief financial officer and shall be
delivered to the Holder.
6. Restrictions on
Transfer. Neither this Warrant nor the Warrant Stock have been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
or any applicable state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a) there is an
effective registration statement under the Securities Act and applicable state
securities laws covering any such transaction involving said securities,
(b) the Company receives an opinion of legal counsel for Holder (concurred
in by legal counsel for the Company) stating that such transaction is exempt
from registration, or (c) the Company otherwise satisfies itself that such
transaction is exempt from registration.
7. Legend. A
legend setting forth or referring to the restrictions stated in Section 6
shall be placed on this Warrant, any replacement hereof and any certificates
representing Warrant Stock, and a stop transfer restriction or order shall be
placed on the books of the Company and with any transfer agents against this
Warrant and shares of Warrant Stock until they may be legally sold or otherwise
transferred.
8. Fractional
Shares. No fractional shares shall be issued upon the exercise
of the Warrant. In lieu of fractional shares, the Company shall round
the number of shares to be issued upon exercise of this Warrant to the nearest
whole share.
9. Holder as
Owner. Unless this Warrant is transferred or assigned, the
Company may deem and treat the Holder at all times as the absolute owner of the
Warrant evidenced hereby for all purposes regardless of any notice to the
contrary.
10. No Rights as
Shareholder. This Warrant shall not entitle Holder to any
voting rights or any other rights as a shareholder of the Company, or to any
other rights whatsoever except the rights stated herein; and no dividend or
interest shall be payable or shall accrue in respect of this Warrant or the
shares purchasable hereunder unless, and until, and except to the extent that,
this Warrant shall be exercised.
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11. Exchange or Destruction of
Warrant. This Warrant is exchangeable, without expense to
Holder and upon delivery hereof to the Company, for Warrants of different
denominations entitling Holder to purchase shares of Warrant Stock equal in
total number and identical in type to the shares of Warrant Stock covered by
this Warrant. In addition, upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of an affidavit and indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant, the Company at its expense will make and deliver a
new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant.
12. Notices. Unless
otherwise provided, any notice, request or other document required or permitted
to be given or delivered to Holder hereof or the Company shall be given in
writing and shall be deemed effectively given (a) upon personal delivery to
the party to be notified, (b) upon confirmation of receipt by fax by the
party to be notified, or (c) upon receipt if delivered by prepaid overnight
delivery, courier service or registered or certified mail addressed, (i) if
to Holder, to the address of Holder most recently furnished in writing to the
Company and (ii) if to the Company, to the address set forth below, or in
either case at such other address as such party may designate by five days’
advance written notice to the other party given in the foregoing
manner.
13. Successors and
Assigns. The terms and provisions of this Warrant shall be
binding upon the Company and Holder and their respective successors and assigns,
subject at all times to the restrictions set forth herein.
14. Applicable
Law. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of Washington.
EXECUTED
as of the day and year first above written.
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VU1
CORORATION
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By:
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Xxxx
XxXxxxx
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Chief
Financial Officer
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Address:
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000
Xxx Xxxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxxxxxxx, 00000
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Exhibit A to Common Stock
Purchase Warrant
ELECTION
TO PURCHASE
Vu1
Corporation
0000
Xxxxxx Xxx X., Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx, 00000
Attention: Corporate
Secretary
The
undersigned hereby irrevocably elects to purchase __________ shares of Common
Stock of Vu1 Corporation, a California corporation (the “Company”), issuable
upon the exercise of the attached Warrant, and requests that certificates for
such shares be issued in the name of and delivered to the undersigned at the
address stated below. If said number of shares shall not be all the
shares which may be purchased pursuant to the attached Warrant, the Company
shall issue a new Warrant to the Holder evidencing the right of the Holder to
purchase the balance of such shares under terms identical to the attached
Warrant.
The
undersigned hereby agrees with and represents to the Company that such shares of
Common Stock are acquired for investment and not with a view to, or for sale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended, and that the undersigned has no
present intention of distributing or reselling such shares. The
undersigned acknowledges and agrees that the exercise of the attached Warrant
and the issuance and transfer of the Common Stock to be purchased are subject to
Sections 6 and 7 of the attached Warrant.
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Payment
enclosed in the amount of:
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$_________________
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Dated: ______________,
20__
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Name
of Holder of Warrant (please
print):
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________________________________
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Address:
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________________________________
________________________________
________________________________
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Signature:
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________________________________
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