Contract
THIS
NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE ”ACT”),
OR
ANY STATE SECURITIES LAWS. NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE
144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT), OR (iii) AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAWS WHERE PAYEE
HAS FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL THAT AN REGISTRATION
IS
NOT REQUIRED.
ASKMENOW,
INC.
12%
JUNIOR CONVERTIBLE PROMISSORY NOTE
$________________
|
____________,
2007
|
FOR
VALUE
RECEIVED, the undersigned, AskMeNow, Inc., a Delaware corporation (the
“Company”
or
“Payor”),
having its executive office and principal place of business at 00 Xxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxx, XX 00000, hereby promises to pay to
_____________________, a _______________ with its principal place of business
at
__________________ (the “Payee”)
at
such address for Payee (or at such other place as Payee may from time to time
hereafter direct by notice in writing to Payor), the principal sum of
______________ Dollars ($_____), together with interest at the Note Rate set
forth in Section 2 on the principal balance outstanding from time to time.
Any
or all amounts of the amounts outstanding under this 12% Junior Convertible
Promissory Note (this “Note”),
including principal and accrued interest, are convertible into shares of the
Company’s capital stock in accordance with Section 3 hereof.
This
Note
is being issued in connection with a bridge financing (the “Bridge
Offering”)
by the
Company on a “best efforts” no minimum basis, up to a maximum of $1,000,000 of
Bridge Offering units (each a “Bridge
Unit”).
Each
Bridge Unit consists of $1.00 principal amount of 12% Junior Convertible
Promissory Notes and Warrants to purchase Three (3) shares of common stock,
$.01
par value, of the Company at $.50 per share (the “Common
Stock”),
to be
offered on a “best efforts” basis. The Bridge Offering is being made only to
investors who qualify as “accredited investors” as such term is defined in Rule
501 of Regulation D under the Securities Act of 1933, as amended (the
“Act”).
Partial Bridge Units may be sold by the Company in its sole discretion.
All
of
the proceeds of the Bridge Offering will be used by the Company for general
corporate purposes, including working capital.
1. Maturity
Date.
Subject
to the provisions of Section 3 below, the entire outstanding balance of this
Note, including principal and unpaid accrued interest thereon (together, the
“Note
Balance”),
will
be due and payable in a single instalment on _______, 2008 (270 days following
the issue date of this Note) (the “Maturity
Date”).
Notwithstanding the foregoing, the Maturity Date may be extended by an
additional 90 days from the Maturity Date to _________, 2008 (the “Extended
Maturity Date”)
upon
delivery by the Company of written notice thereof to the Payee no later than
12:00 P.M. EST on the business day immediately preceding the Maturity
Date.
1
2. Interest
And Payment; Prepayment.
2.1 The
principal amount of this Note outstanding from time to time shall bear simple
interest at the annual rate (the “Note
Rate”)
of
twelve (12%) percent from the date hereof through the date of repayment or
conversion, payable upon such date of repayment or conversion, as applicable.
2.2 The
principal amount of this Note may be prepaid in whole at any time, or in part
from time to time, without penalty or premium, together with unpaid interest
thereon.
2.3 All
payments made by the Payor on this Note, including all prepayments, shall be
applied first to the payment of accrued unpaid interest on this Note and then
to
the reduction of the unpaid principal balance of this Note.
2.4 All
payments made by the Payor on this Note shall be made in such currency of the
United States as shall be legal tender for the payment of public and private
debts at the time of payment, at the address of the Payee set forth above,
or at
such other place as the Payee shall have designated in advance in writing to
the
Payor.
2.5 In
the
event that the date for the payment of any amount payable under this Note falls
due on a Saturday, Sunday or public holiday under the laws of the State of
California, the time for payment of such amount shall be extended to the next
succeeding business day and interest at the Note Rate shall continue to accrue
on any principal amount so effected until the payment thereof on such extended
due date.
3. Conversion.
3.1
Optional
Conversion at Any Time.
At the
option of the Payee exercised by written notice to the Company at any time
while
this Note remains outstanding, all but not less than all of the Note Balance
may
be converted into shares of the Company’s Common Stock, at a per share price
equal to $.50 per share, with the same rights and preferences as the currently
issued and outstanding shares of Common Stock. The number of shares of Common
Stock to which the Payee will be entitled upon conversion of this Note pursuant
to this Section 3.1 will be determined by dividing the dollar amount of the
Note
Balance on the Conversion Date (as defined below) by $.50 per share.
3.2 Optional
Conversion at Qualified Investment.
If a
person, business entity, or group of persons or business entities acting in
concert (the “Qualified
Investor”),
acting after the date hereof and before the Maturity Date or Extended Maturity
Date, as applicable, acquires, in a single arms-length transaction or in a
series of related arms-length transactions, shares of the Company’s common
stock, $.01 par value (the “Common
Stock”)
or
other equity securities of the Company convertible into or exercisable for
Common Stock, for an aggregate consideration valued at Five Million Dollars
($5,000,000) or more (the “Qualified
Investment”),
then
at the same time the Qualified Investor pays the consideration for the Qualified
Securities (as defined below), the Payee may elect by written notice thereof
to
the Company to convert all but not less than all of the Note Balance into
securities that are the same series and with the same rights and preferences
as
the equity securities purchased by the Qualified Investor (the “Qualified
Securities”),
at a
per share price equal to the per share sale price paid by the Qualified Investor
(the “Conversion
Price”).
For
these purposes, any equity securities of the Company issued in respect of this
Note and any other Notes issued in the Bridge Offering of which this Note is
a
part shall not be counted towards the aforesaid Five Million Dollars
($5,000,000). The number of Qualified Securities to which the Payee will be
entitled upon conversion of this Note pursuant to this Section 3.2 will be
determined by dividing the dollar amount of the Note Balance on the Conversion
Date by the Conversion Price.
2
3.3 Mechanics
of Conversion; No Fractional Shares.
In the
event of a conversion pursuant to this Section 3, the Company covenants and
agrees to take any and all actions that may be reasonably necessary or desirable
in order to issue the Qualified Securities or Common Stock under the terms
and
conditions of this Note. Before the Payee shall be entitled to receive a
certificate for the shares of the Qualified Securities or Common Stock into
which this Note has been converted, the Payee shall surrender this Note duly
endorsed, at the office of the Company, and shall execute and deliver to the
Company all other agreements requested by the Company which relate to the
Qualified Securities or Common Stock. The Company shall, as soon as reasonably
practicable thereafter, and in any event within ten (10) business days of the
date of conversion, issue and deliver to the Payee, at the address specified
by
the Payee, a certificate or certificates for the Qualified Securities or Common
Stock to which the Payee shall be entitled. No fractional shares shall be issued
upon conversion of this Note and the number of Qualified Securities or Common
Stock to be issued shall be rounded to the nearest whole share. Any conversion
pursuant to this Section 3 shall be deemed effective as of immediately prior
to
the close of business on the date on which the applicable conversion notice
is
delivered, and this Note is surrendered, by the Payee to the Company (the
“Conversion
Date”).
4. No
Rights as Shareholder.
Nothing
contained in this Note shall be construed as conferring upon the Payee or its
permitted transferees, prior to the conversion of this Note, the right to vote,
receive dividends, consent or receive notice as a shareholder in respect of
any
meeting of shareholders for the election of directors of the Company or of
any
other matter, or any other rights as a shareholder of the Company.
5. Replacement
Of Note.
5.1 In
the
event that this Note is mutilated, destroyed, lost or stolen, Payor shall,
at
its sole expense, execute, register and deliver a new Note, in exchange and
substitution for this Note, if mutilated, or in lieu of and substitution for
this Note, if destroyed, lost or stolen. In the case of destruction, loss or
theft, Payee shall furnish to Payor indemnity reasonably satisfactory to Payor,
and in any such case, Payee shall also furnish to Payor evidence to its
reasonable satisfaction of the mutilation, destruction, loss or theft of this
Note and of the ownership thereof. Any replacement Note so issued shall be
in
the same outstanding principal amount as this Note and dated the date to which
interest shall have been paid on this Note or, if no interest shall have yet
been paid, dated the date of this Note.
5.2 Every
Note issued pursuant to the provisions of Section 5.1 above in substitution
for
this Note shall constitute a contractual obligation of the Payor, whether or
not
this Note shall be found at any time or be enforceable by anyone.
3
6. Covenants
of Payor.
Payor
covenants and agrees that, so long as this Note remains outstanding and unpaid,
in whole or in part:
6.1 Payor
will not sell, transfer or dispose of a material part of its assets;
6.2 Payor
will not make any loan to any person who is or becomes a shareholder or
executive employee of Payor, other than for reasonable advances for expenses
in
the ordinary course of business;
6.3 Payor
will promptly pay and discharge all lawful taxes, assessments and governmental
charges or levies imposed upon it, its income and profits, or any of its
property, before the same shall become in default, as well as all lawful claims
for labor, materials and supplies which, if unpaid, might become a lien or
charge upon such properties or any part thereof; provided,
however,
that
Payor or such subsidiary shall not be required to pay and discharge any such
tax, assessment, charge, levy or claim so long as the validity thereof shall
be
contested in good faith by appropriate proceedings and Payor or such subsidiary,
as the case may be, shall set aside on its books adequate reserves (if required
by generally accepted accounting principles) with respect to any such tax,
assessment, charge, levy or claim so contested;
6.4 Payor
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises and
substantially comply with all laws applicable to Payor as its counsel may
advise;
6.5 Payor
will at all times maintain, preserve, protect and keep its property used or
useful in the conduct of its business in good repair, working order and
condition (except for the effects of reasonable wear and tear in the ordinary
course of business) and will, from time to time, make all necessary and proper
repairs, renewals, replacements, betterments and improvements
thereto;
6.6 Payor
will keep adequately insured, by financially sound reputable insurers, all
property of a character usually insured by similar corporations and carry such
other insurance as is usually carried by similar corporations;
6.7 Payor
will, promptly following the occurrence of an Event of Default or of any
condition or event which, with the giving of notice or the lapse of time or
both, would constitute an Event of Default, furnish a statement of Xxxxx’s Chief
Executive Officer or Chief Financial Officer to Payee setting forth the details
of such Event of Default or condition or event and the action which Payor
intends to take with respect thereto;
6.8 Payor
will, and will cause each of its subsidiaries to, at all times maintain books
of
account in which all of its financial transactions are duly recorded in
conformance with generally accepted accounting principles;
4
6.9 Payor
shall not create, incur, assume or suffer to exist any pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, or security interest,
mortgage, deed of trust, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (except for liens for taxes not yet due and payable or being
contested in good faith, mechanics’ materialmen’s or similar liens, and liens
securing rental or lease payments, together the “Permitted
Liens”)
with
respect to the assets of Payor or such subsidiary; and
6.10 Payor
shall not issue any debt, equity or other instrument which would give the holder
thereof, directly or indirectly, a right in any assets of Payor or such
subsidiary that are pari passu, senior or superior to any right of the Payee
in
or to such assets.
7. Events
of Default.
If
any of
the following events (each an “Event
of Default”)
occurs:
7.1 The
dissolution of Payor or any vote in favor thereof by the board of directors
and
shareholders of Payor;
7.2 Payor
makes an assignment for the benefit of creditors, or files with a court of
competent jurisdiction an application for appointment of a receiver or similar
official with respect to it or any substantial part of its assets, or Payor
files a petition seeking relief under any provision of the Federal Bankruptcy
Code or any other federal or state statute now or hereafter in effect affording
relief to debtors, or any such application or petition is filed against Payor,
which application or petition is not dismissed or withdrawn within thirty (30)
days from the date of its filing;
7.3 Payor
fails to pay the principal amount, or interest on, or any other amount payable
under, this Note within ten (10) days of the date such amount becomes due and
payable;
7.4 Payor
admits in writing its inability to pay its debts as they mature;
7.5 Payor
sells all or substantially all of its assets or merges or is consolidated with
or into another corporation, other than a merger with or into a publicly traded
corporation or a merger to change Payor’s jurisdiction of
incorporation;
7.6 A
proceeding is commenced to foreclose a security interest or lien in any property
or assets of Payor as a result of a default in the payment or performance of
any
debt (in excess of $50,000 and secured by such property or assets) of Payor
or
of any subsidiary of Payor;
7.7 A
final
judgment for the payment of money in excess of $50,000 is entered against Payor
by a court of competent jurisdiction, and such judgment is not discharged (nor
the discharge thereof duly provided for) in accordance with its terms, nor
a
stay of execution thereof procured, within thirty (30) days after the date
such
judgment is entered, and, within such period (or such longer period during
which
execution of such judgment is effectively stayed), an appeal therefrom has
not
been prosecuted and the execution thereof caused to be stayed during such
appeal;
5
7.8 An
attachment or garnishment is levied against the assets or properties of Payor
or
any subsidiary of Payor involving an amount in excess of $50,000 and such levy
is not vacated, bonded or otherwise terminated within thirty (30) days after
the
date of its effectiveness;
7.9 Payor
defaults in the due observance or performance of any covenant, condition or
agreement on the part of Payor to be observed or performed pursuant to the
terms
of this Note (other than the default specified in Section 7.3 above) and such
default continues uncured for a period of thirty (30) days;
7.10 Payor
creates, incurs, assumes or suffers to exist any pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, or security interest,
mortgage, deed of trust, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (except permitted Liens) with respect to the assets of Payor or
such
subsidiary; or
7.11 If
Payor
issues any debt, equity or other instrument which would give the holder thereof,
directly or indirectly, a right in any assets of Payor or such subsidiary that
are senior or superior to any right of the Payee in or to such
assets.
8. Suits
for Enforcement and Remedies.
Upon the
occurrence of an Event of Default and Payor’s failure to cure such default, the
Payee shall have the right, at Payee’s option, to declare the Note Balance to be
forthwith due and payable, and, in the case of an Event of Default pursuant
to
Section 7.3 above, the Payee shall automatically be entitled to full and
immediate payment of all amounts due under this Note without any action on
the
part of or declaration by Payee required. If any one or more Events of Default
shall occur and be continuing, the Payee further may proceed to (i) protect
and enforce Payee’s rights either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, condition or
agreement contained in this Note or in any agreement or document referred to
herein or in aid of the exercise of any power granted in this Note or in any
agreement or document referred to herein, (ii) enforce the payment of this
Note, or (iii) enforce any other legal or equitable right of Payee. No
right or remedy herein or in any other agreement or instrument conferred upon
Payee is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and shall be in addition to
every
other right and remedy given hereunder or now or hereafter existing at law
or in
equity or by statute or otherwise.
9. Unconditional
Obligation; Fees, Waivers, Other.
9.1 The
obligations to make the payments provided for in this Note are absolute and
unconditional and not subject to any defense, set-off, counterclaim, rescission,
recoupment or adjustment whatsoever.
9.2 If,
following the occurrence of an Event of Default, Payee shall seek to enforce
the
collection of any amount of principal of and/or interest on this Note, there
shall be immediately due and payable from Payor, in addition to the then unpaid
principal of, and accrued unpaid interest on, this Note, all costs and expenses
incurred by Payee in connection therewith, including, without limitation,
reasonable attorneys’ fees and disbursements.
6
9.3 No
forbearance, indulgence, delay or failure to exercise any right or remedy with
respect to this Note shall operate as a waiver or as an acquiescence in any
default, nor shall any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy.
9.4 This
Note
may not be modified or discharged (other than by payment or exchange) except
by
a writing duly executed by Xxxxx and Payee; provided
that no
material provision of this Note may be amended without the written consent
of
the Company and the holders of at least one-half of the aggregate principal
amount of all of the Notes issued in the Bridge Offering to which this Note
relates.
9.5 Payor
hereby expressly waives demand and presentment for payment, notice of
nonpayment, notice of dishonor, protest, notice of protest, bringing of suit,
and diligence in taking any action to collect amounts called for hereunder,
and
shall be directly and primarily liable for the payment of all sums owing and
to
be owing hereon, regardless of and without any notice, diligence, act or
omission with respect to the collection of any amount called for hereunder
or in
connection with any right, lien, interest or property at any and all times
which
Payee had or is existing as security for any amount called for hereunder.
10. Restriction
on Transfer.
This
Note has been acquired for investment, and this Note has not been registered
under the securities laws of the United States of America or any state thereof,
including the Act. Accordingly, no interest in this Note may be offered for
sale, sold or transferred in the absence of registration and qualification
of
this Note, under applicable federal and state securities laws, including the
Act, or an opinion of counsel of Payee reasonably satisfactory to Payor that
such registration and qualification are not required.
11. Subordination.
The
rights of the Payee hereunder in and to the assets of the Company are hereby
expressly subordinated to the rights in and to such assets of the holders of
the
Company’s Senior Indebtedness, as hereinafter defined. Senior Indebtedness shall
mean those certain 12% Senior Promissory Notes issued by the Company in its
$3,000,000 best efforts, no minimum bridge offering completed in May 2007.
Subject to the rights of the holders of Senior Indebtedness, nothing contained
in this Section 11 shall impair, as between the Payor and the Payee, the
obligation of the Payor, subject to the terms and conditions hereof, to pay
to
the Payee the principal hereof and interest hereon as and when the same become
due and payable, or shall prevent the Payee, upon default hereunder, from
exercising all rights, powers and remedies otherwise provided herein or by
applicable law.
7
12. Piggyback
Registration Rights.
If, at
any time during the two-year period commencing with the issuance of this Note,
the Payor proposes or is required to file a registration statement registering
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than on Form S-4 or Form S-8, or such other forms as the
U.S. Securities and Exchange Commission may hereafter promulgate for
registration of securities in transactions for which Form S-4 or Form S-8 may
be
used as of the date hereof), whether or not for its own account, the Payor
shall
give at least 20 days prior written notice to the Payee of its intention to
do
so. Upon written request by the Payee within 10 days after receipt of such
notice, the Payor shall use its commercially reasonable efforts to include
in
the securities to be registered by such registration statement all shares of
Common Stock issued or issuable upon conversion of this Note (which registration
right with respect to such conversion shares shall be in addition to any
registration rights with respect to any shares underlying that certain Warrant,
dated as of the date hereof, issued by the Payor to the Payee in connection
with
Xxxxx’s participation in the Bridge Offering) that the Payee indicates in such
notice that the Payee desires to sell, subject to the following terms and
conditions: (i) if such registration statement is for a prospective underwritten
offering, the Payee shall agree to (a) enter into an underwriting agreement,
if
required, in customary form with the underwriter or underwriters selected by
the
Company, and (b) sell the Payee’s securities, if the Company so requests, on the
same basis and upon the same terms as the other securities covered by such
registration statement, other than securities proposed to be registered by
the
holders of the Preferred Stock (as defined below), and provided
that if
the number of shares requested by the Payee to be registered in such offering
exceeds the amount of shares which the underwriters reasonably believe is
compatible with the success of such underwritten offering, the Company shall
only be required to include in such offering that number of shares requested
to
be registered by the Payee as the underwriters believe will not jeopardize
the
success of such offering, provided,
however
that any
such decrease in the number of shares sought to be registered by the Payee
shall
occur on a pari
passu
basis
with the other shares being registered, other than any shares proposed to be
registered by the holders of the Preferred Stock; (ii) if the number of shares
the Payor is able to register is limited due to Rule 415 or other SEC shelf
registration rules, Payor shall only be required to register the shares Payee
elects to convert on a pari
passu
basis
with the other shares being registered, other than any shares proposed to be
registered by the holders of the Preferred Stock; and (iii) the Payor may
withdraw any such registration statement before it becomes effective or postpone
the offering of securities contemplated by such registration statement without
any obligation to the Payee or any other Payee. The Payor shall have exclusive
control over the preparation and filing of any registration statement proposed
to be filed under this Section 12 as well as any amendments and supplements
thereto and the withdrawal or revocation thereof. The Payor’s obligations
pursuant to this Section 12 are subject to the Payee’s cooperation with respect
to any such proposed registration, including but not limited to the provision
of
such information as may reasonably be requested by the Payor, the underwriter(s)
or any other authorized parties and the execution and delivery of such
agreements (including indemnification and contribution agreements), instruments
and documents as may be reasonably requested thereby, and the Payee’s compliance
with all applicable laws. The Payor shall pay all reasonable expenses incurred
in connection with the registration contemplated hereby, including without
limitation registration and filing fees, printing expenses, and fees and
expenses of counsel for the Payor. Notwithstanding the foregoing, underwriting
discounts and commissions and transfer taxes relating to the Payee’s registered
securities included in any registration hereunder, and all fees and expenses
for
counsel to the Payee, shall be borne and paid by the Payee. The registration
rights and other rights granted in this Section 12 are not assignable, in whole
or in part, without the prior written consent of the Payor. Notwithstanding
anything to the contrary set forth herein, the Payee hereby expressly agrees
and
acknowledges that any registration rights of the Payee hereunder are subordinate
to those of the holders of the Company’s 10% (PIK) Series A Preferred Stock and
the Company’s 10% (PIK) Series B Preferred Stock (together, the “Preferred
Stock”) and warrants issued to such holders in connection with the purchase and
sale of the Preferred Stock.
8
13. Miscellaneous.
13.1 The
headings of the various paragraphs of this Note are for convenience of reference
only and shall in no way modify any of the terms or provisions of this
Note.
13.2 All
notices required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given when personally delivered or sent by
registered or certified mail (return receipt requested, postage prepaid),
facsimile transmission or overnight courier to the address of the intended
recipient as set forth in the preamble to this Note or at such other address
as
the intended recipient shall have hereafter given to the other party hereto
pursuant to the provisions of this Note. Any such notice shall be deemed
received (i) in the case of personal delivery or delivery by facsimile, on
the
date of such delivery, (ii) in the case of overnight courier, on the next
business day following when sent, and (iii) in the case of mailing, on the
third
business day following the date on which the notice was
post-marked.
13.3 This
Note
and the obligations of Payor and the rights of Payee shall be governed by and
construed in accordance with the substantive laws of the State of California
without giving effect to the choice of laws rules thereof.
13.4 This
Note
shall bind Payor and its successors and assigns. Neither the Payor nor the
Payee
may assign this Note without the prior written consent of the other party,
provided
that
under no circumstances may the Payee assign this Note to any individual or
entity that is a competitor, directly or indirectly, with the
Payor.
ASKMENOW,
INC.
|
|||
By:
|
|||
Name:
|
Xxxxxx
Xxxxx
|
||
Title:
|
CEO
|
9
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR ANY STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT
BE
SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS
AND UNTIL REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR
UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
2007-_____
WARRANT
TO PURCHASE SHARES
OF
THE COMMON STOCK OF
ASKMENOW,
INC.
(Void
after Expiration Date - ____________, 2012)
Issue
Date: __________, 2007
This
certifies that ___________________, a __________________ with a principal
business address of ___________________ (or
any
valid transferee thereof, the “Holder”),
for
value received, shall be entitled to purchase from AskMeNow, Inc., a Delaware
corporation having its principal place of business at 00 Xxxxxxxxx Xxxx,
Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000 (together with its successors and assigns,
the
“Company”),
subject to the terms and conditions set forth herein, _________________ (#)
fully paid and non-assessable shares of the Company’s common stock, par value
$.01 per share (“Common
Stock”),
at a
price equal to $.50 per share, at any time and from time to time commencing
as
of the issue date set forth above (the “Issue
Date”)
and
continuing up to and including 12:00 p.m. (California time) on ___________,
2012
(“Expiration
Date”);
provided,
however,
if such
date is not a Business Day, then on the Business Day immediately following
such
date. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter sometimes referred to as the “Warrant
Shares”
and
the
“Exercise
Price,”
respectively.
This
Warrant is being issued to the Holder in connection with the Company’s
$1,000,000 bridge note offering (the “Bridge
Offering”)
of 12%
junior convertible promissory notes due and payable 270 days (unless extended
by
the Company for up to an additional 90 days) from the date of issuance (the
“Notes”).
This
Warrant is one of several that will be issued in the Bridge Offering, all
identical except for names and amounts. An aggregate of 3,000,000 warrants
will
be issued by the Company if the full $1,000,000 Bridge Offering is completed.
Such warrants are being issued on the basis of three (3) warrants for every
$1.00 principal amount of Notes issued by the Company.
10
1. Exercise;
Issuance of Certificates; Payment for Shares.
1. General.
This
Warrant is exercisable upon the surrender to the Company at its principal
place
of business (or at such other location as the Company may advise the Holder
in
writing) of this Warrant properly endorsed with an exercise notice in
substantially the form attached hereto as Schedule
A
duly
completed and signed and, if applicable, upon payment in cash, certified
or bank
check or other immediately available funds of the aggregate Exercise Price
for
the number of Warrant Shares for which this Warrant is being exercised as
determined in accordance with the provisions hereof. This Warrant is exercisable
in whole or in part, in increments of 5,000 shares, and in no event shall
any
exercise hereof be for fewer than 5,000 Warrant Shares unless fewer than
5,000
Warrant Shares are then purchasable under this Warrant. In
the
case of the exercise for less than all of the Warrant Shares represented
by this
Warrant, the Company shall cancel this Warrant certificate upon the surrender
hereof and shall execute and deliver a new Warrant certificate or certificates
of like tenor for the balance of the Warrant Shares for which this Warrant
has
not yet been exercised. The
Company agrees that the shares of Common Stock purchased under this Warrant
shall be deemed to be issued to the Holder hereof, and the Holder deemed
to be
the record owner of such shares, as of immediately prior to the close of
business on the date on which the exercise notice attached hereto as
Schedule
A
is
delivered, and this Warrant surrendered, to the Company as provided herein
(such
date, the “Exercise
Date”).
Certificates for the shares of Common Stock purchased upon exercise, together
with any other securities or property to which the Holder is entitled upon
such
exercise, shall be delivered to the Holder by the Company at the Company’s
expense within a reasonable time after the rights represented by this Warrant
have been so exercised, and in any event within 10 business days of the Exercise
Date. Each Common Stock certificate so delivered shall be in such denominations
as may be requested by the Holder hereof and shall be registered on the
Company’s books in the name designated by such Holder.
1.2 Exercise
for Cash.
This
Warrant may be exercised, in whole at any time or in part from time to time,
commencing on the Issue Date and prior to 12:00 P.M. (California time) on
the
Expiration Date, for cash by delivery of the exercise notice attached hereto
as
Schedule
A
and
surrender of this Warrant to the Company, together with proper payment of
the
aggregate Exercise Price payable hereunder for the Warrant Shares being
purchased upon such exercise for cash. Payment for the Warrant Shares shall
be
made by cash, certified or bank check or wire transfer of immediately available
funds to the Company. If this Warrant is exercised for cash in part, this
Warrant must be exercised for a number of whole shares of the Common Stock,
and
the Holder is entitled to receive a new Warrant covering the shares for which
this Warrant has not yet been exercised, in accordance with Section 1.1 above.
Upon surrender of this Warrant and payment in full of the aggregate Exercise
Price for the Warrant Shares then being purchased upon such exercise for
cash,
the Company will issue a certificate or certificates in the name of the Holder
for the largest number of whole shares of the Common Stock to which the Holder
shall be entitled, and deliver the other securities and properties receivable
upon the exercise of this Warrant, or the proportionate part thereof if this
Warrant is exercised in part, pursuant to the provisions of this Warrant,
in
accordance with Section 1.1 above.
11
1.3 Cashless
Exercise.
In lieu
of exercising this Warrant for cash as set forth in Section 1.2 above, the
Holder may at any time and from time to time elect to receive, without the
payment by the Holder of any additional consideration, shares of Common Stock
equal to the value of this Warrant (or portion thereof) through a cashless
exercise (a “Cashless
Exercise”),
as
hereinafter provided. The Holder may effect a Cashless Exercise by surrendering
this Warrant to the Company and noting on the Holder’s duly executed exercise
notice attached hereto as Schedule
A that
the
Holder wishes to effect a Cashless Exercise, upon which the Company shall
issue
to the Holder the number of shares determined as follows:
X
= Y *
(A-B) / A
where:
X
= the
number of Warrant Shares to be issued to the Holder upon the Cashless
Exercise;
Y
= the
number of Warrant Shares with respect to which this Warrant is being
exercised;
A
= the
Market Price (as defined below) of one share of Common Stock as of the Exercise
Date; and
B
=
the Exercise Price (as adjusted, if
applicable).
|
“Market
Price”
means,
for any date, the average of the daily Closing Prices per share of Common
Stock
for the 10 consecutive trading days immediately prior to such date. The
“Closing
Price”
per
share of Common Stock for each day shall be the last sale price, regular
way,
or, in case no such sale takes place on such day, the average closing bid
and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or
admitted to trading on the “Over the Counter Market” (“OTC
BB”),
the
NASDAQ National Market System, the New York Stock Exchange or the American
Stock
Exchange, as applicable. If on any such trading day or days such securities
are
not quoted by any such organization, such trading day or days shall be replaced
for purposes of the foregoing calculation by the requisite trading day or
days
preceding the commencement of such 10 trading day period on which such
securities are so quoted. If shares of Common Stock are not so listed or
traded,
the Market Price shall mean the fair value per share of Common Stock as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a notice to the Holder, based on (a)
the
most recently completed arm’s-length transaction between the Company and a
person other than an existing shareholder or other affiliate of the Company,
the
closing of which occurred on such date or within the three-month period
preceding such date, or (b) if no such transaction shall have occurred on
such
date or within such three-month period, the good faith reasonable judgment
of
the Board of Directors.
For
purposes of Rule 144, it is intended and acknowledged that the Warrant Shares
issued in a Cashless Exercise transaction shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares required by
Rule
144 shall be deemed to have been commenced, on the Issue Date.
12
1.4 Shares
to be Fully Paid; Reservation of Shares.
The
Company covenants and agrees that all shares of Common Stock which may be
issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free
from
all preemptive rights of any shareholder and free of all taxes, liens and
charges with respect to the issue thereof. The
Company further covenants and agrees that, during the period within which
the
rights represented by this Warrant may be exercised, the Company will at
all
times have authorized and reserved, for the purpose of issue or transfer
upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock when and as required
to
provide for the exercise of the rights represented by this Warrant. The
Company will take all such action as may be reasonably necessary to assure
that
such shares of Common Stock may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Common Stock or other securities may be
listed; provided,
however,
that
the Company shall not be required to effect a registration under federal
or
state securities laws with respect to any exercise hereunder.
2. Determination
or Adjustment of Exercise Price and Number of Shares.
The
Exercise Price and the number of Warrant Shares purchasable upon the exercise
of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 2. Upon each adjustment
of the Exercise Price, the Holder of this Warrant shall thereafter be entitled
to purchase, at the Exercise Price resulting from such adjustment, the number
of
shares obtained by multiplying the Exercise Price in effect immediately prior
to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the Exercise
Price
resulting from such adjustment.
2.1 Subdivision
or Combination of Common Stock.
If at
any time after the Issue Date hereof and prior to the exercise or Expiration
Date hereof the Company shall subdivide or reclassify its outstanding shares
of
Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock of the Company
shall
be combined or reclassified into a smaller number of shares, the Exercise
Price
in effect immediately prior to such combination shall be proportionately
increased. Any adjustment under this Subsection 2.1 shall become effective
at
the close of business on the date the subdivision or combination becomes
effective.
2.2 Dividends
in Common Stock or Other Stock or Securities.
If at
any time or from time to time after the Issue Date hereof and prior to the
exercise or Expiration Date hereof the holders of Common Stock (or any shares
of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor, shares of Common Stock or any shares of capital stock or other
securities which are at any time directly or indirectly convertible into
or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or
other
distribution, then and in each such case, the Holder shall, upon the exercise
of
this Warrant, be entitled to receive, in addition to the number of shares
of
Common Stock or other capital stock receivable thereupon, and without payment
of
any additional consideration therefor, the amount of stock and other securities
which such Holder would hold on the date of such exercise had the Holder
been
the holder of record of such Common Stock as of the date on which holders
of
Common Stock received or became entitled to receive such shares or all other
additional stock and other securities.
13
2.3 Reorganization,
Reclassification, Consolidation, Merger or Sale.
If at
any time after the Issue Date hereof and prior to the exercise or Expiration
Date hereof any
recapitalization, reclassification or reorganization of the capital stock
of the
Company, or any consolidation or merger of the Company with another corporation,
or the sale of all or substantially all of its assets or other transaction
shall
be effected in such a way that holders of Common Stock shall be entitled
to
receive stock, securities, or other assets or property (an “Organic
Change”),
then,
as a condition of such Organic Change, lawful and adequate provisions shall
be
made by the Company whereby the Holder hereof shall thereafter have the right,
upon exercise of this Warrant, to purchase and receive (in lieu of the shares
of the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented by this Warrant) such
shares of stock, securities or other assets or property as may be issued
or
payable with respect to or in exchange for a number of outstanding shares
of
such Common Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by this Warrant. In the event of any Organic Change, appropriate
provision shall be made by the Company with respect to the rights and interests
of the Holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Exercise Price and
of the
number of shares purchasable and receivable upon the exercise of this Warrant)
shall thereafter be applicable, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof.
2.4 No
Adjustments in Certain Cases.
No
adjustment in the number of Warrant Shares purchasable pursuant to this Warrant
shall be required unless the adjustment would require an increase or decrease
of
at least one percent (1.0%) in the number of Warrant Shares then purchasable
upon the exercise of this Warrant. Except as provided in this Section 2,
no
other adjustments in the number, kind or price of shares constituting Warrant
Shares shall be made during the term, or upon the exercise, of this Warrant.
Further, no adjustments shall be made pursuant to this Section 2 hereof in
connection with the grant or exercise of presently authorized or outstanding
options to purchase, or the issuance of shares of Common Stock under, the
Company’s director or employee benefit, option and incentive plans.
3. Issue
Tax. The
issuance of certificates for shares of Common Stock issuable upon the exercise
of this Warrant shall be made without charge to the Holder for any issue
tax
(other than any applicable income taxes) in respect thereof; provided,
however,
that
the Company shall not be required to pay any tax which may be payable in
respect
of any transfer of this Warrant or any Warrant Shares.
4. No
Voting or Dividend Rights; Limitation of Liability.
Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote, give consent or receive notices as a shareholder
of
the Company. No dividends or interest shall be payable or accrued in respect
of
this Warrant, the interest represented hereby, or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by
the
Holder to purchase shares of Common Stock, and no mere enumeration herein
of the
rights or privileges of the Holder hereof, shall give rise to any liability
of
such Holder for the Exercise Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by its creditors.
14
5. Representations
and Covenants of the Holder.
This
Warrant has been entered into by the Company in reliance upon the following
representations and covenants of the Holder:
5.1 Investment
Purpose.
This
Warrant and, if exercised, the Warrant Shares issuable upon exercise of this
Warrant, will be acquired for the Holder’s own account for investment only and
not with a view to the sale or distribution of any part hereof or thereof,
and
the Holder has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption
therefrom under the Securities Act of 1933, as amended (the “Act”).
5.2 Private
Issue.
The
Holder understands that (a) this Warrant and the Warrant Shares issuable
upon
exercise of this Warrant are not registered under the Act or qualified under
applicable state securities laws on the ground that the issuance contemplated
by
this Warrant will be exempt from the registration and qualifications
requirements thereof, and (b) that the Company’s reliance on such exemption is
predicated on the representations set forth in this Section 5.
5.3 Disposition
of Xxxxxx’s Rights.
In no
event will the Holder make a disposition of this Warrant or the Warrant Shares
issuable upon exercise of this Warrant unless and until (a) the Holder shall
have notified the Company of the proposed disposition, and (b) if requested
by
the Company, the Holder shall have furnished the Company with an opinion
of
counsel (which counsel may either be inside or outside counsel to the Holder)
satisfactory to the Company and its counsel to the effect that (i) appropriate
action necessary for compliance with the Act has been taken, or (ii) an
exemption from the registration requirements of the Act is available.
Notwithstanding the foregoing, the restrictions imposed upon the transferability
of any of its rights to acquire Common Stock issuable on the exercise of
such
rights do not apply to transfers from the beneficial owner of any of the
aforementioned securities to its nominee or from such nominee to its beneficial
owner, and shall terminate as to any particular share of stock when (1) such
security shall have been effectively registered under the Act and sold by
the
Holder thereof in accordance with such registration or (2) such security
shall
have been sold without registration in compliance with Rule 144 under the
Act,
or (3) a letter shall have been issued to the Holder at its request by the
staff
of the Securities and Exchange Commission or a ruling shall have been issued
to
the Holder at its request by such Commission stating that no action shall
be
recommended by such staff or taken by such Commission, as the case may be,
if
such security is transferred without registration under the Act in accordance
with the conditions set forth in such letter or ruling and such letter or
ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the
restrictions imposed hereunder shall terminate, as hereinabove provided,
the
Holder or holder of a share of stock then outstanding as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense to such Holder, one or more new certificates for the Warrant
or
for such shares of stock not bearing any restrictive legend.
5.4 Financial
Risk.
The
Holder has such knowledge and experience in financial and business matters
as to
be capable of evaluating the merits and risks of an investment in the Company,
and has the ability to bear the economic risks of such investment.
5.5 Accredited
Investor.
The
Holder is an “accredited investor” within the meaning of Regulation D
promulgated under the Act.
15
6. Piggyback
Registration Rights.
If, at
any time during the two-year period commencing with the issuance of the final
Note under the Bridge Offering, the Company proposes or is required to file
a
registration statement registering any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than on Form S-4
or
Form S-8, or such other forms as the U.S. Securities and Exchange Commission
may
hereafter promulgate for registration of securities in transactions for which
Form S-4 or Form S-8 may be used as of the date hereof), whether or not for
its
own account, the Company shall give at least 20 days prior written notice
to the
Holder of its intention to do so. Upon written request by the Holder within
10
days after receipt of such notice, the Company shall use its commercially
reasonable efforts to include in the securities to be registered by such
registration statement all Warrant Shares (which registration rights with
respect to such Warrant Shares shall be in addition to any registration rights
with respect to any shares issued or issuable upon conversion of that certain
12% Junior Convertible Promissory Note in the principal amount of $300,000
made
by the Company in favor of the Holder as of the date hereof in connection
with
the Holder’s participation in the Bridge Offering) that
the
Holder indicates in such notice that the Holder desires to sell, subject
to the
following terms and conditions: (a) if such registration statement is for
a
prospective underwritten offering, the Holder shall agree to (i) enter into
an
underwriting agreement, if required, in customary form with the underwriter
or
underwriters selected by the Company, and (ii) sell the Holder’s securities, if
the Company so requests, on the same basis and upon the same terms as the
other
securities covered by such registration statement, other than securities
proposed to be registered by the holders of the Preferred Stock (as defined
below), and provided
that if
the number of shares requested by the Holder to be registered in such offering
exceeds the amount of shares which the underwriters reasonably believe is
compatible with the success of such underwritten offering, the Company shall
only be required to include in such offering that number of shares requested
to
be registered by the Holder as the underwriters believe will not jeopardize
the
success of such offering, provided,
however
that any
such decrease in the number of shares sought to be registered by the Holder
shall occur on a pari
passu
basis
with the other shares being registered, other than any shares proposed to
be
registered by the holders of the Preferred Stock; (b) if
the
number of shares the Company is able to register is limited due to Rule 415
or
other SEC shelf registration rules, the Company shall only be required to
register the Warrant Shares the Holder elects to include on a pari
passu basis
with the other shares being registered, other than any shares proposed to
be
registered by the holders of the Preferred Stock; and (c) the Company may
withdraw any such registration statement before it becomes effective or postpone
the offering of securities contemplated by such registration statement without
any obligation to the Holder or any other holder. The Company shall have
exclusive control over the preparation and filing of any registration statement
proposed to be filed under this Section 6 as well as any amendments and
supplements thereto and the withdrawal or revocation thereof. The Company’s
obligations pursuant to this Section 6 are subject to the Holder’s cooperation
with respect to any such proposed registration, including but not limited
to the
provision of such information as may reasonably be requested by the Company,
the
underwriter(s) or any other authorized parties and the execution and delivery
of
such agreements (including indemnification and contribution agreements),
instruments and documents as may be reasonably requested thereby, and the
Holder’s compliance with all applicable laws. The Company shall pay all
reasonable expenses incurred in connection with the registration contemplated
hereby, including without limitation registration and filing fees, printing
expenses, and fees and expenses of counsel for the Company. Notwithstanding
the
foregoing, underwriting discounts and commissions and transfer taxes relating
to
the Holder’s registered securities included in any registration hereunder, and
all fees and expenses for counsel to the Holder, shall be borne and paid
by the
Holder. The registration rights and other rights granted in this Section
6 are
not assignable, in whole or in part, without the prior written consent of
the
Company. Notwithstanding anything to the contrary set forth herein, the Holder
hereby expressly agrees and acknowledges that any registration rights of
the
Holder hereunder are subordinate to those of the holders of the Company’s 10%
(PIK) Series A Preferred Stock and the Company’s 10% (PIK) Series B Preferred
Stock (together, the “Preferred Stock”) and warrants issued to such holders in
connection with the purchase and sale of the Preferred Stock.
16
7. Modification
and Waiver.
This
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by (a) the party against
which enforcement of the same is sought or (b) the Company and the holders
of at
least a majority of the number of shares into which all Warrants issued in
connection with the Bridge Offering are exercisable (without regard to any
limitation contained herein or otherwise on such exercise), it being understood
that upon the satisfaction of the conditions described in (a) and (b) above,
each Warrant (including any Warrant held by the Holder who did not execute
the
agreement specified in (b) above) shall be deemed to incorporate any amendment,
modification, change or waiver effected thereby as of the effective date
thereof. Notwithstanding the foregoing, no modification to this Section 7
will
be effective against any Holder without such Holder’s consent.
8. Transfer;
Legends.
(a) The
Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant
or the Warrant Shares, in whole or in part, so long as such sale or other
disposition is made pursuant to an effective registration statement or an
exemption from the registration requirements of the Act and applicable state
securities laws and compliance with Section 5.3 above, and provided
that no
sale, transfer, pledge or other disposition may be made to a competitor,
direct
or indirect, of the Company at any time. Upon such transfer or other disposition
(other than a pledge), the Holder shall deliver this Warrant to the Company
together with a written notice to the Company, substantially in the form
of the
transfer notice attached hereto as Schedule
B,
indicating the person or persons to whom this Warrant shall be transferred
and,
if less than all of this Warrant is transferred, the number of Warrant Shares
to
be covered by the part of this Warrant to be transferred to each such person.
Within ten (10) business days of receiving a transfer notice and the original
of
this Warrant, the Company shall deliver to the each transferee designated
by the
Holder another Warrant(s) of like tenor and terms for the appropriate number
of
Warrant Shares and, if less than all this Warrant is transferred, shall deliver
to the Holder another Warrant for the remaining number of Warrant Shares
not so
transferred. Until this Warrant is transferred on the books of the Company
(with
the Company’s consent), the Company may treat the person in whose name this
Warrant is issued as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.
17
(b) Each
Warrant and certificate representing Warrant Shares shall bear a legend
substantially in the following form:
“THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR ANY STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT
BE
SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS
AND UNTIL REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR
UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.”
The
foregoing legend shall be removed from the certificates representing any
Warrant
Shares, at the request of the holder thereof, at such time as they become
eligible for resale pursuant to Rule 144 under the Act.
9. Notices.
Any
notice required or permitted hereunder shall be given in writing (unless
otherwise specified herein) and shall be deemed effectively given upon (a)
personal delivery, against written receipt thereof, (b) delivery via facsimile
with written confirmation, (c) one business day after deposit with Federal
Express or another nationally recognized overnight courier service, or (d)
five
business days after being mailed, postage paid, via certified or registered
mail, return receipt requested, addressed to each of the other parties thereunto
entitled, at the addresses set forth on in the introductory paragraph hereof
or
at such other addresses as a party may designate by 10 days advance written
notice.
10. Binding
Effect.
This
Warrant shall be binding upon and inure to the benefit of the parties hereto
and
their respective heirs, personal representatives, successors and permitted
assigns.
11. Descriptive
Headings and Governing Law.
The
description headings of the several sections and paragraphs of this Warrant
are
inserted for convenience only and do not constitute a part of this Warrant.
This
Warrant shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by the laws of the State of Delaware.
12. Lost
Warrants.
Upon
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, upon receipt of an indemnity agreement or bond reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of this 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.
13. Fractional
Shares.
No
fractional shares shall be issued upon exercise of this Warrant. The Company
shall,
in
lieu
of issuing any fractional share, pay the Holder entitled to such fraction
a sum
in cash equal to such fraction multiplied by the then-effective Market
Price.
18
In
Witness Whereof, the
Company has caused this Warrant to be duly executed by its officers, thereunto
duly authorized this ______ day of ____________, 2007.
AskMeNow,
Inc.,
a
Delaware corporation
By:
Name:
Xxxxxx Xxxxx
Title:
President and CEO
Address:
AskMeNow,
Inc.
00
Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
XX 00000
Phone: (000)
000-0000
Fax:
(000) 000-0000
E-mail:
xxxxxx@xxxxxxxx.xxx
|
19
SCHEDULE
A
EXERCISE
NOTICE
Date:
_________________, _______
AskMeNow,
Inc.
Attn:
Chief Executive Officer
Ladies
and Gentlemen:
The
undersigned hereby elects to exercise the Warrant issued to it by AskMeNow,
Inc.
(“Company”)
dated
___________ __, 2007, which Warrant shall be surrendered herewith, and pursuant
to the terms thereof hereby elects to exercise rights represented by said
Warrant for, and to purchase thereunder, __________________ shares of the
Company's Common Stock covered by said Warrant, at an Exercise Price of $____
per share, and tenders herewith payment of the purchase price in full for
such
shares of $_________, by:
|
(a)
|
cash,
through the delivery of a certified or official bank check, or
wire
transfer or immediately available funds; or
|
(b)
|
exercising
the Cashless Exercise right provided under Section 1.3 of the Warrant
by
the surrender of said Xxxxxxx.
|
The
undersigned hereby requests that certificates for such shares (or any other
securities or other property issuable upon such exercise) be issued in the
name
of and delivered to the undersigned at the address set forth below, or as
otherwise set forth below.
Very
truly yours,
Name:
Address:
20
SCHEDULE
B
TRANSFER
NOTICE
To
Be
Executed by the Holder
in
Order
to Assign Warrants
FOR
VALUE
RECEIVED, ________________________________________ hereby sells, assigns
and
transfers all of the rights of the undersigned under the attached Warrant
(No.
____) with respect to the number of shares of Common Stock of AskMeNow, Inc.
covered thereby set forth below, unto:
Name
of Assignee
|
Address
|
No.
of Shares
|
The
undersigned hereby irrevocably constitutes and appoints the Chief Executive
Officer of the Company as the undersigned’s attorney to transfer this Warrant
certificate on the books of the Company, with full power of substitution
in the
premises.
Dated:
_____________________Signature:
________________________________
Signature
Guaranteed:
By:
_______________________
The
signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in
an approved signature guarantee medallion program) pursuant to Rule 17A
under the Securities Exchange Act of 1934, as amended.
21