Contract
Exhibit
4.2
THESE
SECURITIES AND ANY SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY HAVE
NOT
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 AN OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
NOTWITHSTANDING THE FOREGOING, THESE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THESE SECURITIES.
Right
to
Purchase up to [ ] Shares of
Common Stock of
Neoview
Holdings Inc. (subject to adjustment as provided herein)
FORM
OF COMMON STOCK PURCHASE WARRANT
|
No.
[ ]
|
Issue
Date: May ___, 2007
|
Neoview
Holdings Inc. (the “Company”), hereby certifies that, for value received,
_______________, or its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company (as defined herein) from
and
after the Issue Date and at any time or from time to time before 5:00 p.m.,
New
York time, through the close of business on the date that is four years from
the
Issue Date set forth above (the “Expiration Date”), up to
[ ]
fully paid and nonassessable shares of Common Stock (as hereinafter defined),
$0.001 par value per share, at the applicable Exercise Price per share (as
defined below). The number and character of such shares of Common Stock and
the
applicable Exercise Price per share are subject to adjustment as provided
herein.
As
used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:
(a) The
term
“Company” shall include Neoview Holdings Inc. and any corporation which shall
succeed, or assume the obligations of, Neoview Holdings Inc.
hereunder.
(b) The
term
“Common Stock” includes (i) the Company’s Common Stock, par value $0.001 per
share; and (ii) any other securities into which or for which any of the
securities described in the preceding clause (i) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
(c) The
“Exercise Price” applicable under this Warrant shall be $6.00 on the date of
issuance.
(d) The
“Fair
Market Value” of a share of Common Stock as of a particular date (the
“Determination Date”) shall mean (a) if the Common Stock is then listed or
quoted on a national trading market, the volume weighted average price of the
Common Stock for the 20 trading days preceding such Determination Date, (b)
if
the Common Stock is not then listed or quoted on a national trading market
and
if prices for the Common Stock are then quoted on the OTC Bulletin Board, the
volume weighted average price of the Common Stock for the 20 trading days
preceding such Determination Date on the OTC Bulletin Board, (c) if the Common
Stock is not then listed or quoted 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 average bid price per share of the Common Stock for
the
20 trading days preceding such Determination Date as so reported, or (d) in
all
other cases, the value of the Common Stock as determined in good faith by the
Company’s Board of Directors.
(e) The
term
“Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which
the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant
to
Section 3 or otherwise.
1. Exercise
of Warrant.
1.1. Number
of Shares Issuable upon Exercise.
From
and after the Issue Date through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole or in
part,
by delivery of an original or fax copy of an exercise notice in the form
attached hereto as Exhibit A (the “Exercise Notice”), up to that number of
shares of Common Stock of the Company referred to above, subject to adjustment
pursuant to Section 4 and subject to the Company having sufficient authorized
shares of Common Stock, provided,
however,
within
5 Trading Days of the date said Exercise Notice 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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1.2. Limitation
on Exercise.
The
Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section
2.3
or otherwise, to the extent that after giving effect to such issuance after
exercise, such Holder (together with such Holder’s affiliates, and any other
person or entity acting as a group together with such Holder or any of such
Holder’s affiliates), as set forth on the applicable Exercise Notice, would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by such 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 such 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 Preferred Stock or Warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by such Holder or any of its affiliates. Except
as set forth in the preceding sentence, for purposes of this Section 1.2,
beneficial ownership shall be calculated in accordance with Section 13(d) of
the
Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by a Holder that the Company is not representing to such Holder
that such calculation is in compliance with Section 13(d) of the Exchange Act
and such Holder is solely responsible for any schedules required to be filed
in
accordance therewith. To the extent that the limitation contained in this
Section 1.2 applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder) and of which a portion
of
this Warrant is exercisable shall be in the sole discretion of a Holder, and
the
submission of an Exercise Notice shall be deemed to be each 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. In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of
the
Exchange Act and the rules and regulations promulgated thereunder. For purposes
of this Section 1.2, in determining the number of outstanding shares of Common
Stock, a 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, 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
a Holder, the Company shall within two Trading Days confirm orally and in
writing to such 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 such Holder or its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of
this
Warrant. The provisions of this paragraph shall be implemented in a manner
not
otherwise than in strict conformity with the terms of this Section 1.2 to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply
to a
successor holder of this Warrant.
2. Procedure
for Exercise.
2.1. Delivery
of Stock Certificates, Etc., on Exercise.
The
Company agrees that the shares of Common Stock purchased upon exercise of this
Warrant shall be deemed to be issued to the Holder as the record owner of such
shares as of the close of business on the date on which this Warrant shall
have
been surrendered and payment made for such shares in accordance herewith. As
soon as practicable after the exercise of this Warrant in full or in part,
and
in any event within five (5) business days thereafter, the Company at its
expense (including the payment by it of any applicable issue taxes) will cause
to be issued in the name of and delivered to the Holder, or as such Holder
(upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares
of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or
otherwise.
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2.2. Exercise.
Payment
may be made either in cash or by check payable to the order of the Company
equal
to the applicable aggregate Exercise Price for the number of Common Shares
specified in such Exercise Notice (as such exercise number shall be adjusted
to
reflect any adjustment in the total number of shares of Common Stock issuable
to
the Holder per the terms of this Warrant) and the Holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock (or Other Securities) determined as
provided herein.
2.3. Cashless
Exercise.
(a) Notwithstanding
anything contained herein to the contrary, the holder of this Warrant may,
at
its election exercised in its sole discretion, exercise this Warrant in whole
or
in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the aggregate Exercise
Price, elect instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (a “Cashless
Exercise”):
Net
Number = (A x (B - C))/B
(b)For
purposes of the foregoing formula:
A
= the
total number shares of Common Stock with respect to which this Warrant is then
being exercised;
B
= the
Fair Market Value of a share of Common Stock on the date immediately preceding
the date of the Exercise Notice; and
C
= the
Exercise Price then in effect at the time of such exercise.
(c) The
holder of this Warrant agrees not to elect for a period of six (6) months a
Cashless Exercise. The holder of this Warrant also agrees not to elect a
Cashless Exercise so long as there is an effective registration statement for
the shares underlying this Warrant.
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3. Effect
of Reorganization, Etc.; Adjustment of Exercise Price.
3.1. Reorganization,
Consolidation, Merger, Etc.
In case
at any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any
plan
or arrangement contemplating the dissolution of the Company, then, in each
such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation
of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock
(or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash)
to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.
3.2. Continuation
of Terms.
Upon
any reorganization, consolidation, merger or transfer (and any dissolution
following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable
to
the shares of stock and other securities and property receivable on the exercise
of this Warrant after the consummation of such reorganization, consolidation
or
merger or the effective date of dissolution following any such transfer, as
the
case may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether
or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 3.1. In the event this Warrant does not continue in full
force and effect after the consummation of the transactions described in this
Section 3, then the Company’s securities and property (including cash, where
applicable) receivable by the Holder will be delivered to the
Holder.
4. Extraordinary
Events Regarding Common Stock.
In the
event that the Company shall (a) issue additional shares of the Common Stock
as
a dividend or other distribution on outstanding Common Stock or any preferred
stock issued by the Company (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator
of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of shares of Common Stock that the Holder shall thereafter, on the exercise
hereof as provided in Section 1, be entitled to receive shall be adjusted to
a
number determined by multiplying the number of shares of Common Stock that
would
otherwise (but for the provisions of this Section 4) be issuable on such
exercise by a fraction of which (a) the numerator is the Exercise Price that
would otherwise (but for the provisions of this Section 4) be in effect, and
(b)
the denominator is the Exercise Price in effect on the date of such exercise
(taking into account the provisions of this Section 4).
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5. Subsequent
Equity Sales.
If the
Company, at any time while this Warrant is outstanding, shall issue shares
of
Common Stock or Common Stock equivalents entitling any Person to acquire shares
of Common Stock, at a price per share less than the then current Exercise Price
(if the holder of the Common Stock or Common Stock equivalent 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 issued in connection with such issuance, be entitled
to receive shares of Common Stock at a price 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 multiplied by a fraction, the numerator of which shall be the number
of
shares of Common Stock outstanding immediately prior to the issuance of such
shares of Common Stock or such Common Stock Equivalents plus the number of
shares of Common Stock which the offering price for such shares of Common Stock
or Common Stock Equivalents would purchase at the Exercise Price, and the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to such issuance plus the number of shares of
Common Stock so issued or issuable. 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 third Trading Day following the
issuance of any Common Stock or Common Stock Equivalent subject to this section,
indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms.
For
purposes of this Section 5, the following subsections (i) to (v) shall also
be
applicable:
(i) Issuance
of Rights or Options.
In case
at any time the Company shall in any manner grant (directly and not by
assumption in a merger or otherwise) any warrants or other rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable for Common Stock (such
warrants, rights or options being called “Options”
and such
convertible or exchangeable stock or securities being called “Convertible
Securities”) whether or not such Options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per
share
for which Common Stock is issuable upon the exercise of such Options or upon
the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of (x)
the
total amount, if any, received or receivable by the Company as consideration
for
the granting of such Options, plus (y) the aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus
(z), in the case of such Options which relate to Convertible Securities, the
aggregate amount of additional consideration, if any, payable upon the issue
or
sale of such Convertible Securities and upon the conversion or exchange thereof,
by (ii) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be
less
than the Exercise Price in effect immediately prior to the time of the granting
of such Options, then the total number of shares of Common Stock issuable upon
the exercise of such Options or upon conversion or exchange of the total amount
of such Convertible Securities issuable upon the exercise of such Options shall
be deemed to have been issued for such price per share as of the date of
granting of such Options or the issuance of such Convertible Securities and
thereafter shall be deemed to be outstanding for purposes of adjusting the
Exercise Price. Except as otherwise provided below, no adjustment of the
Exercise Price shall be made upon the actual issue of such Common Stock or
of
such Convertible Securities upon exercise of such Options or upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities.
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(ii) Issuance
of Convertible Securities.
In case
the Company shall in any manner issue (directly and not by assumption in a
merger or otherwise) or sell any Convertible Securities, whether or not the
rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (i) the sum (which sum
shall
constitute the applicable consideration) of (x) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than
the Exercise Price in effect immediately prior to the time of such issue or
sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issue or sale
of
such Convertible Securities and thereafter shall be deemed to be outstanding
for
purposes of adjusting the Exercise Price, provided that (a) except as otherwise
provided in subsection below, no adjustment of the Exercise Price shall be
made
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities and (b) no further adjustment of the Exercise Price
shall be made by reason of the issue or sale of Convertible Securities upon
exercise of any Options to purchase any such Convertible Securities for which
adjustments of the Exercise Price have been made pursuant to the other
provisions of subsection 9(c).
(iii) Change
in Option Price or Conversion Rate.
Upon
the happening of any of the following events, namely, if the purchase price
provided for in any Option referred to above, the additional consideration,
if
any, payable upon the conversion or exchange of any Convertible Securities
referred to above, or the rate at which Convertible Securities referred to
above
are convertible into or exchangeable for Common Stock shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the
time
of such event shall forthwith be readjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the termination of any Option for which any
adjustment was made pursuant to this Section 5 or any right to convert or
exchange Convertible Securities for which any adjustment was made pursuant
to
this Section 5 (including without limitation upon the redemption or purchase
for
consideration of such Convertible Securities by the Company), the Exercise
Price
then in effect hereunder shall forthwith be changed to the Exercise Price which
would have been in effect at the time of such termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
termination, never been issued.
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(iv) Consideration
for Stock.
In case
any shares of Common Stock, Options or Convertible Securities shall be issued
or
sold for cash, the consideration received therefor shall be deemed to be the
net
amount received by the Company therefor, after deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash received by
the
Company shall be deemed to be the fair value of such consideration as determined
in good faith by the Board of Directors of the Company, after deduction of
any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any Options shall be issued
in
connection with the issue and sale of other securities of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed
to have been issued for such consideration as determined in good faith by the
Board of Directors of the Company. If Common Stock, Options or Convertible
Securities shall be issued or sold by the Company and, in connection therewith,
other Options or Convertible Securities (the “Additional
Rights”)
are
issued, then the consideration received or deemed to be received by the Company
shall be reduced by the fair market value of the Additional Rights (as
determined using a method mutually agreed to by the Company and the Holder).
The
Board of Directors of the Company shall respond promptly, in writing, to an
inquiry by the Holders as to the fair market value of the Additional Rights.
In
the event that the Board of Directors of the Company and the Holders are unable
to agree upon the fair market value of the Additional Rights, the Company and
the Holders shall jointly select an appraiser, who is experienced in such
matters. The decision of such appraiser shall be final and conclusive, and
the
cost of such appraiser shall be borne evenly by the Company and the
Holder.
(v) Record
Date.
In case
the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Options or Convertible Securities or (ii) to subscribe
for or purchase Common Stock, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the shares
of
Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting
of
such right of subscription or purchase, as the case may be.
Notwithstanding
the foregoing, no adjustment will be made under this paragraph 5 in respect
of:
(1) the issuance of securities upon the exercise or conversion of any Common
Stock equivalents issued by the Company prior to the Original Issue Date of
this
Warrant (but will apply to any amendments, modifications, and reissuances
thereof and as a result of any changes, resets or adjustments to a conversion
or
exercise price thereunder whether or not as a result of any amendment,
modification or reissuance), or (2) the grant of options or warrants, or the
issuance of additional securities, under any duly authorized Company stock
option, stock incentive plan, restricted stock plan or stock purchase or similar
plan in existence on the Closing Date.
8
6. Pro
Rata Distributions.
If the
Company, at any time prior to the Expiration Date, shall distribute to all
holders of Common Stock (and not to Holders of the Warrants) evidences of its
indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security), 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
Fair Market Value determined as of the record date mentioned above, and of
which
the numerator shall be such Fair Market Value 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
Holder 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.
7. Certificate
as to Adjustments.
In each
case of any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable on the exercise of this Warrant, the Company at its expense
will promptly cause its Chief Financial Officer or other appropriate designee
to
compute such adjustment or readjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment
is
based, including a statement of (a) the consideration received or
receivable by the Company for any additional shares of Common Stock (or Other
Securities) issued or sold or deemed to have been issued or sold, (b) the
number of shares of Common Stock (or Other Securities) outstanding or deemed
to
be outstanding, and (c) the Exercise Price and the number of shares of Common
Stock to be received upon exercise of this Warrant, in effect immediately prior
to such adjustment or readjustment and as adjusted or readjusted as provided
in
this Warrant. The Company will forthwith mail a copy of each such certificate
to
the Holder and any Warrant agent of the Company (appointed pursuant to Section
11 hereof)..
8. Registration
Rights.
The
Holder of this Warrant or its transferee(s) shall have the registration rights
set forth in Registration Rights Agreement entered into in connection with
the
private placement, the provisions of which are incorporated by reference herein
in their entirety.
9. Redemption.
(a) At
any
time after the date on which there is a currently effective registration
statement registering the resale of the shares of Common Stock for which this
Warrant is exercisable as contemplated by the Registration Rights Agreement
dated as of the date hereof (unless the holder hereof shall have declined to
participate in such registration statement or it shall be unavailable due to
restrictions imposed by the Securities and Exchange Commission relating to
its
then-current position regarding Rule 415 promulgated pursuant to the Securities
Act) and on not less than 20 days’ written notice (the “Redemption Notice”) to
the registered holders of the Warrants (the “Registered Holders”), the Warrants
may be redeemed, at the option of the Company, at a price of $0.01 per Warrant
(the “Call Price”), provided (i) Fair Market Value shall exceed 200% of the
Exercise Price for the 20 consecutive trading days ending on the fifth trading
day prior to the date of the Redemption Notice (the “Trading Period”) and (ii)
the Warrants are then exercisable.
9
(b) If
the
conditions set forth in Section 9(a) are met, and the Company desires to
exercise its right to redeem the Warrants, it shall mail a Redemption Notice
to
each of the Registered Holders, first class, postage prepaid, not later than
the
thirtieth day before the date fixed for redemption, at their last address as
shall appear on the Company’s records. Any notice mailed in the manner provided
herein shall be conclusively presumed to have been duly given whether or not
the
Registered Holder receives such notice.
(c) The
Redemption Notice shall specify (i) the Call Price, (ii) the date fixed for
redemption (the “Redemption Date”), (iii) the place where the Warrant
Certificates shall be delivered and the Call Price paid, and (iv) that the
right
to exercise the Warrant shall terminate at 5:00 P.M. (New York time) on the
business day immediately preceding the Redemption Date. No failure to mail
such
notice nor any defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to a Registered Holder
(a) to whom notice was not mailed or (b) whose notice was defective. An
affidavit of the Warrant Agent or of the Secretary or an Assistant Secretary
of
the Company that notice of redemption has been mailed shall, in the absence
of
fraud, be prima facie evidence of the facts stated therein.
(d) Any
right
to exercise a Warrant shall terminate at 5:00 P.M. (New York time) on the
business day immediately preceding the Redemption Date. On and after the
Redemption Date, the Registered Holders shall have no further rights except
to
receive, upon surrender of the Warrant, the Call Price.
(e) From
and
after the Redemption Date, the Company shall, at the place specified in the
Redemption Notice, upon presentation and surrender to the Company by or on
behalf of the Registered Holder thereof of one or more warrant certificates
evidencing Warrants to be redeemed, deliver or cause to be delivered to or
upon
the written order of such Registered Holder a sum in cash equal to the Call
Price of each such Warrant. From and after the Redemption Date and upon the
deposit or setting aside by the Company of a sum sufficient to redeem all the
Warrants called for redemption, such Warrants shall expire and become void
and
all rights hereunder and under the warrant certificates, except the right to
receive payment of the Call Price, shall cease.
10. Status
of Stock Issuable on Exercise of Warrant.
The
Company covenants that all shares of Common Stock which may be issued upon
the
exercise of this Warrant will, upon exercise, 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).
10
11. Assignment;
Exchange of Warrant.
Subject
to compliance with any applicable securities laws and the conditions set forth
in any restrictive legend appearing on the face 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 as Exhibit
B 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.
12. Replacement
of Warrant.
On
receipt 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 of this Warrant, on delivery of an indemnity agreement
or
security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this Warrant,
the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
13. Warrant
Agent.
The
Company may, by written notice to the each Holder of the Warrant, appoint an
agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 1, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.
14. Transfer
on the Company’s Books.
Until
this Warrant is transferred on the books of the Company, the Company may treat
the registered Holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
15. 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.
16. 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.
17. Notices,
Etc.
All
notices and other communications from the Company to the Holder shall be mailed
by first class registered or certified mail, postage prepaid, at such address
as
may have been furnished to the Company in writing by such Holder or, until
any
such Holder furnishes to the Company an address, then to, and at the address
of,
the last Holder who has so furnished an address to the Company.
11
18. Miscellaneous.
This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING
THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN THE
STATE
COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK;
PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND BRING
AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this Warrant
on behalf of the Company agree to submit to the jurisdiction of such courts
and
waive trial by jury. The prevailing party shall be entitled to recover from
the
other party its reasonable attorneys’ fees and costs. In the event that any
provision of this Warrant is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to
the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid
or
unenforceable under any law shall not affect the validity or enforceability
of
any other provision of this Warrant. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of
the
terms hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision hereof.
The Company acknowledges that legal counsel participated in the preparation
of
this Warrant and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Warrant to favor any party against the other
party.
[BALANCE
OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
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WITNESS:
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By:
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Name:
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Title:
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13
Exhibit
A
FORM
OF SUBSCRIPTION
(To
Be
Signed Only On Exercise Of Warrant)
TO: [Shellco]
Attention: Chief
Financial Officer
The
undersigned, pursuant to the provisions set forth in the attached Warrant hereby
irrevocable elects to purchase ___ shares of Common Stock covered by such
Warrant.
The
undersigned herewith makes payment of the full Exercise Price for such shares
at
the price per share provided for in such Warrant, which is $___________. Such
payment takes the form of lawful money of the United States.
The
undersigned is an “accredited investor” as defined in Regulation D, as
promulgated under the Securities Act of 1933, as amended.
The
undersigned represents and warrants that all offers and sales by the undersigned
of the shares of Common Stock shall be made pursuant to registration of the
Common Stock under the Securities Act of 1933, as amended (the “Securities Act”)
or pursuant to an exemption from registration under the Securities
Act.
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Dated:______________________________
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(Signature
must conform to name of holder as specified on the face of the
Warrant)
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|
Address:
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Exhibit
B
FORM
OF ASSIGNMENT
(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.
