Contract
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 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 IPTIMIZE, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
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No.
Issue
Date:
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Right
to Purchase ____________ shares
of Common Stock of IPtimize, Inc. (subject
to adjustment as provided herein)
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IPtimize,
Inc., a corporation organized under the laws of the State of Minnesota (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 at any time after the Issue Date until 5:00 p.m.,
E.S.T. on the _
_______
anniversary of the Issue Date (the “Expiration Date”), up to _________
fully
paid and nonassessable shares of Common Stock at a per share purchase price
of
$
____.
The
aforedescribed purchase price per share, as adjusted from time to time as herein
provided, is referred to herein as the "Purchase Price." The number and
character of such shares of Common Stock and the Purchase Price are subject
to
adjustment as provided herein. The Company may reduce the Purchase Price without
the consent of the Holder.
As
used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:
(a) The
term
“Common Stock” shall mean the Company's Common Stock, par value of $0.001 per
share.
(b) 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 5 or otherwise.
(c) The
term
“Warrant Shares” shall mean the Common Stock issuable upon exercise of this
Warrant.
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
hereof shall be entitled to receive, upon exercise of this Warrant in whole
in
accordance with the terms of subsection 1.2 or upon exercise of this
Warrant in part in accordance with subsection 1.3, shares of Common Stock
of the Company, subject to adjustment pursuant to Section 4.
1.2. Full
Exercise.
This
Warrant may be exercised in full by the Holder hereof by delivery of an original
or facsimile copy of the form of subscription attached as Exhibit A hereto
(the “Subscription Form") duly executed by such Holder and surrender of the
original Warrant within five (5) business days of exercise, to the Company
at
its principal office or at the office of its Warrant Agent (as provided
hereinafter), accompanied by payment, in cash, wire transfer or by certified
or
official bank check payable to the order of the Company, in the amount obtained
by multiplying the number of shares of Common Stock for which this Warrant
is
then exercisable by the Purchase Price then in effect.
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1.3. Partial
Exercise.
This
Warrant may be exercised in part (but not for a fractional share) by surrender
of this Warrant in the manner and at the place provided in subsection 1.2
except that the amount payable by the Holder on such partial exercise shall
be
the amount obtained by multiplying (a) the number of whole shares of Common
Stock designated by the Holder in the Subscription Form by (b) the Purchase
Price then in effect. On any such partial exercise, the Company, at its expense,
will forthwith issue and deliver to or upon the order of the Holder hereof
a new
Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may request, the whole
number of shares of Common Stock for which such Warrant may still be
exercised.
1.4. Fair
Market Value.
Fair
Market Value of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(a) If
the
Company's Common Stock is traded on an exchange or is quoted on the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ"), National
Market System, the NASDAQ SmallCap Market or the American Stock Exchange, LLC,
then the closing or last sale price, respectively, reported for the last
business day immediately preceding the Determination Date;
(b) If
the
Company's Common Stock is not traded on an exchange or on the NASDAQ National
Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc.,
but is traded in the over-the-counter market, then the average of the closing
bid and ask prices reported for the last business day immediately preceding
the
Determination Date;
(c) If
the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided; or
1.5. 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 hereof 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 as aforesaid. As soon
as
practicable after the exercise of this Warrant in full or in part, and in any
event within seven (7) business
days
thereafter, the Company will cause to be issued in the name of and delivered
to
the Holder hereof, 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.
2. Adjustment
for Reorganization, Consolidation, Merger, etc.
2.1. 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 of this Warrant, 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 3.
2.2. Continuation
of Terms.
Upon
any reorganization, consolidation, merger or transfer referred to in this
Section 2, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger, as the case may be, and shall be binding upon the
issuer of any 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 4.
2
3. 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,
(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 Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying
the
then Purchase 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 Purchase Price then in effect. The Purchase 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 3. The number of shares of Common
Stock that the Holder of this Warrant 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 3) be issuable on such
exercise by a fraction of which (a) the numerator is the Purchase Price
that would otherwise (but for the provisions of this Section 4) be in
effect, and (b) the denominator is the Purchase Price in effect on the date
of such exercise.
4. 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 the Warrants, the Company will promptly
cause its Chief Financial Officer or other appropriate designee to compute
such
adjustment or readjustment in accordance with the terms of the 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 number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (b) the Purchase
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 of the
Warrant.
5. Reservation
of Stock.
The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.
6. Assignment;
Exchange of Warrant.
Subject
to compliance with applicable securities laws, this Warrant, and the rights
evidenced hereby, may be transferred by any registered holder hereof (a
"Transferor"). On the surrender for exchange of this Warrant, with the
Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with an opinion of counsel
reasonably satisfactory to the Company that the transfer of this Warrant will
be
in compliance with applicable securities laws, the Company at its expense,
twice, only, but with payment by the Transferor of any applicable transfer
taxes, will issue and deliver to or on the order of the Transferor thereof
a new
Warrant or Warrants of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor.
7. 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, twice only, will execute and deliver, in lieu thereof,
a
new Warrant of like tenor.
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8. 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.
9. Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company to: IPtimize,
Inc., 0000
X.
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000. Attn: Xxxxxxxxxxx
X. Xxxx, telecopier number: (000) 000-0000, with a copy by telecopier only
to:
Berkman, Henoch, Xxxxxxxx & Xxxxx, P.C., Attn: Xxxxxxx X. Xxxxx, Esq.,
telecopier number: (000) 000-0000, and (ii) if to the Holder, to the address
and
telecopier number listed on the first paragraph of this Warrant.
10. 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 construed and enforced in accordance with and governed by the laws of
Colorado. Any dispute relating to this Warrant shall be adjudicated in the
City
and County of Denver in the State of Colorado. 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.
IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
| IPtimize, Inc. | ||
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| By: | ||
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Xxxxx X. Xxxxxx |
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President
and Chief Executive Officer
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4
Exhibit A
FORM
OF SUBSCRIPTION
(to
be
signed only on exercise of Warrant)
TO:
IPtimize, Inc.
The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No._____________), hereby irrevocably elects to purchase __________________ shares
of
Common Stock, par value $.001 per share (the “Common Stock”) of IPtimize,
Inc.,
pursuant
to the terms of the attached Warrant.
The
undersigned herewith makes payment (in lawful money of the United States) of
the
full purchase price for such shares at the price per share provided for in
such
Warrant, which is $______________________.
The
undersigned requests that the certificates for such shares be issued in the
name
of, and delivered to: __________________________________________________________________________,
whose
address is _______________________________________________________________________.
The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant 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.
| 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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5
Exhibit B
FORM
OF TRANSFEROR ENDORSEMENT
(To
be
signed only on transfer of Warrant)
For
value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented
by
the within Warrant to purchase the percentage and number of shares of Common
Stock of IPtimize, Inc. to which the within Warrant relates specified under
the
headings "Percentage Transferred" and "Number Transferred," respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney
to
transfer its respective right on the books of IPtimize, Inc. with full power
of
substitution in the premises.
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Transferees
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Percentage
Transferred
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Number
Transferred
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Dated:
______________, ____________
Signed
in the presence of:
____________________________
(Name)
ACCEPTED
AND AGREED:
[TRANSFEREE]
____________________________
(Name)
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__________________________________________________
(Signature
must conform to name of holder as specified on the face of the
warrant)
__________________________________________________
__________________________________________________
(address)
__________________________________________________
__________________________________________________
(address)
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