Contract
Exhibit 4.2
THIS WARRANT
AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS
OR VEMICS, INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT
REGISTRATION OF SUCH SECURITIES
UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES
LAWS IS NOT REQUIRED.
WARRANT
TO PURCHASE
SHARES OF
COMMON STOCK
OF
Expires
________, ______
| No. | Number of. Shares: |
| Date of Issuance: |
FOR VALUE RECEIVED,
subject to the provisions hereinafter set forth,
the undersigned, Vemics
Inc., a Nevada corporation
(together with its successors and assigns, the
"Issuer"), hereby
certifies that _______________ or its
registered assigns is
entitled to subscribe for
and purchase, during
the period specified in this Warrant, up to
_____________ (______________) shares (subject to adjustment as
hereinafter provided) of the duly authorized, validly issued, fully paid and
non- assessable
Common Stock of the Issuer, at an
exercise price per share equal to the Warrant Price then
in effect, subject, however, to the
provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this
Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 9 hereof.
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1.
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Term. The right to subscribe for
and purchase shares of Warrant
Stock represented hereby shall
commence on the date of issuance set forth
above and shall expire at 5:00 p.m., eastern time, on the
Third (3rd) anniversary of such date of issuance (such period
being
the "Term").
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2.
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Method of Exercise Payment; Issuance of New
Warrant; Transfer and
Exchange.
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(a)
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Time of
Exercise. The Holder hereof may exercise this
Warrant, in whole or in part, at any time or from time to time during the
Term.
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(b)
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Method of
Exercise. The Holder hereof may exercise this Warrant,
in whole or in part, by
the surrender of this Warrant (with the exercise form attached hereto duly
executed) at the principle of the Issuer, and by the payment to
the Issuer of an amount of
consideration therefore equal to the Warrant Price in effect on the date of such exercise multiplied by the
number of shares of Warrant Stock with respect to which this Warrant is
then being exercised, payable by certified or
official bank check or by wire
transfer to
an account designated by
the Issuer.
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(c)
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Issuance of Stock Certificates. In
the event of any
exercise of the rights represented
by this Warrant in accordance with and subject to the terms and conditions
hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such
exercise and delivered to the Holder hereof within a reasonable time, not exceeding three (3) Trading Days after such exercise, and (ii)
unless this Warrant has expired,
a new Warrant representing the number of shares of
Warrant Stock, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the Holder
hereof at the Issuer's expense within
such time.
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(d)
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Transferability of
Warrant. Subject to
compliance with applicable law, this Warrant may be transferred by a
Holder without the consent of the Issuer. If transferred
pursuant to this paragraph and subject to the provisions of
subsection (e) of this Section 2, this
Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the
Issuer, properly endorsed (by the Holder executing an
assignment in the form attached hereto) and upon
payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This
Warrant is exchangeable at the principal office of the Issuer for Warrants
for the purchase of the same aggregate number
of shares of Warrant Stock, each new Warrant to represent the right to
purchase such number of shares of Warrant Stock as the Holder hereof shall
designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue
Date and shall be identical with this Warrant except as to the number of
shares of Warrant Stock issuable pursuant
hereto.
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(e)
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Representation of
Holder. The holder of this Warrant, by the acceptance
hereof, represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment
only and not with a view towards, or for resale in connection with, the
public sale
or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided,
however, that by making the representations herein, the holder does not agree to
hold this Warrant or any of the Warrant Shares for any minimum
or other specific term and reserves the right to dispose of this Warrant
and the
Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.
The holder of this Warrant further represents, by acceptance hereof, that, as of this date, such holder is an
“accredited investor” as such term is defined in Rule 501(a)(1)
of Regulation D promulgated by the Securities and Exchange Commission
under
the Securities Act (an “Accredited Investor”). Upon
exercise of this Warrant, the holder
shall, if requested by the Issuer, confirm in
writing, in a form satisfactory to the Issuer, that the
Warrant Shares so purchased are being acquired solely for the
holder’s own account and not as a nominee for any other party,
for investment and not with a view toward distribution or resale and that
such holder is an Accredited Investor. If such holder
cannot make such representations because they would be
factually incorrect, it shall be a condition to such holder’s exercise of
this Warrant
that the Issuer receive such other representations as the Issuer considers reasonably necessary to assure
the Issuer that the issuance of its securities upon exercise of this
Warrant shall not violate any United States or state securities
laws.
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3.
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Stock Fully Paid and
Non-Assessable
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(a)
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Stock Fully Paid. The Issuer
represents, warrants, covenants and agrees that all shares of
Warrant Stock which may be
issued upon the exercise of this Warrant
or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and
non-assessable and free from all
taxes, liens and charges created by or
through Issuer. The Issuer
further covenants and agrees that during the period within
which this Warrant may be exercised, the Issuer will
at all times have authorized and reserved for the purpose of the issue
upon exercise of this Warrant a sufficient number of shares of Common
Stock to provide for the exercise of
this Warrant.
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(b)
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Reservation. If any shares of
Common Stock required to be reserved for issuance upon exercise of this
Warrant or as otherwise provided hereunder require registration or
qualification with any governmental authority under any federal or state
law before such shares may be so issued, the Issuer will in good faith use
its reasonable best efforts at its expense to cause such shares to be duly
registered or qualified. If the Issuer shall list any shares of
Common Stock on any securities exchange or cause any shares of Common
Stock to be quoted on Nasdaq or any interdealer
quotation system or other market, it will, at its expense, list or cause
to be quoted thereon, maintain and increase when necessary such listing or
quotation, of, all shares of Warrant Stock from time to time issued upon
exercise of this Warrant or as otherwise
provided hereunder, and, to the extent permissible
under the applicable securities exchange rules, all
unissued shares of Warrant Stock which are at any time issuable hereunder,
so long as any shares of Common Stock shall be so listed or quoted. The
Issuer will also so list on each securities exchange or cause to be quoted
on Nasdaq or any interdealer quotation system or other market, and will
maintain such listing or quotation of, any other securities which the
Holder of this Warrant shall be entitled to receive upon the exercise of
this Warrant if at the time any securities of the same class shall be
listed on such securities exchange or caused to be quoted on such other
market by the Issuer.
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(c)
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Loss, Theft, Destruction of
Warrants. Upon receipt of
evidence reasonably satisfactory to the Issuer of the ownership
of and the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such
loss, theft or destruction, upon
receipt of indemnity or security reasonably
satisfactory to the Issuer or,
in the case of any such mutilation,
upon surrender and cancellation of such Warrant, the Issuer
will make and deliver, in lieu of such lost, stolen, destroyed
or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common
Stock.
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4.
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Adjustment of Warrant
Price and Warrant Share Number. The number of shares of
Common Stock for which this Warrant is exercisable, and the price at which
such shares may be purchased upon exercise of this Warrant,
shall be subject to adjustment from time to time as set
forth in this Section 4. The Issuer shall give the Holder notice of any
event described below which requires an adjustment pursuant to
this Section 4 in accordance with Section
5.
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(a)
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Recapitalization,
Reorganization, Reclassification, Consolidation or
Merger
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(i)
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In case
the Issuer after the Original
Issue Date shall
do any of
the following (each, a
"Triggering Event"): (a) consolidate with
or merge into any other
Person and the Issuer shall not
be the continuing or surviving
corporation of such consolidation or merger, or (b) permit any
other Person to consolidate with or merge into
the Issuer and the Issuer shall be the continuing
or
surviving Person but, in connection
with such consolidation or merger, any Capital Stock of the Issuer shall
be changed into or
exchanged for Securities of any
other Person or cash or
any other property, or (c)
transfer all or substantially all of its properties or assets to any other
Person, or (d)
effect a capital reorganization or reclassification
of its Capital Stock, then, and in
the case of each such Triggering Event, proper
provision shall be made so that, upon the basis and the terms and in the
manner provided in this Warrant, the Holder of this Warrant shall
be entitled (x) upon the exercise
hereof at any time after the consummation
of such Triggering Event, to the extent this Warrant
is not exercised prior to such Triggering
Event, to receive at the Event in lieu of the Common Stock
issuable upon such exercise of this Warrant prior to such
Triggering Event, the Securities, cash and property to which such Holder
would have been
entitled upon the consummation
of such Triggering Event if such Holder had
exercised the rights
represented by this Warrant immediately
prior thereto, subject to adjustments (subsequent to such corporate
action) as nearly equivalent as possible to
the adjustments provided for elsewhere in this Section 4
or (y) to sell this Warrant (or, at
such Holder's election, a portion hereof)
concurrently with the Triggering Event to the Person continuing after or surviving such
Triggering Event, or to
the Issuer (if Issuer is the
continuing or
surviving Person) at a sales price equal
to the amount of cash, property and/or Securities to which a holder of the
number
of shares of Common Stock which would otherwise have been delivered upon the exercise of this
Warrant
would have been entitled upon the effective date or
closing of any such
Triggering Event (the "Event Consideration"),
less the amount or portion
of such Event Consideration having a
fair value equal to
the aggregate Warrant Price applicable to
this Warrant or the portion hereof so
sold.
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| (ii) | Notwithstanding anything contained in this Warrant to the contrary, the Issuer may effect any Triggering Event if, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall not release the Issuer from, any continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property as, in accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to such Holder, stating that this Warrant shall thereafter continue in full force and effect and the terms hereof (including, without limitation, all of the provisions of this subsection (a)) shall be applicable to the Securities, cash or property which such Person may be required to deliver upon any exercise of this Warrant or the exercise of any rights pursuant hereto. |
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(iii)
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If with
respect to any Triggering
Event, the Holder of this Warrant has exercised its
right as provided in clause (y) of subparagraph (i) of this subsection (a)
to sell this Warrant or a portion thereof, the Issuer agrees that as a
condition to the consummation of any such Triggering Event the
Issuer shall secure such right of Holder to sell this Warrant to the
Person continuing after or surviving such Triggering Event
and the Issuer shall not effect any such Triggering Event
unless upon or prior to the consummation
thereof the amounts of cash, property and/or Securities required
under such clause (y) are delivered to the Holder of this Warrant. The
obligation of the Issuer to secure such right of
the Holder to sell this
Warrant shall be subject
to such Holder’s cooperation with the Issuer, including,
without limitation, the giving of customary representations and warranties
to the purchaser in connection with any such sale. Prior notice of any
Triggering Event shall be given to the Holder of this Warrant in
accordance with Section 14 hereof.
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(b)
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Stock Dividends,
Subdivisions and Combinations. If at any time the Issuer
shall:
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(i)
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take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend payable in, or other distribution of,
Additional Shares of Common Stock,
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(ii)
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subdivide
its outstanding shares of Common Stock into a larger number
of shares of Common Stock,
or
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(iii)
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combine
its outstanding shares of Common Stock into a smaller number
of shares of Common
Stock
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then (1) the
number of shares of Common Stock for which this
Warrant is exercisable immediately after the
occurrence of any such event shall be adjusted to equal the
number of shares of Common Stock which a record holder of
the same number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to the adjustment divided by
(B) the number of shares of Common Stock for which this
Warrant is exercisable immediately after such adjustment.
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(c)
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Certain Other Distributions. If
at any time the Issuer shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive any dividend or
other distribution of:
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(i)
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cash
(other than a cash dividend payable out of earnings or earned
surplus legally available for the payment
of dividends under the laws of the jurisdiction of incorporation of the
Issuer)
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(ii)
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any
evidences of its indebtedness, any shares of stock of any class or
any other securities or property of any nature whatsoever
(other than cash), or
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(iii)
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any
warrants or other rights to subscribe for or purchase any evidences
of its indebtedness, any shares
of stock of any class or any other securities or property
of any nature whatsoever (other than
cash),
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then
(1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to
such adjustment multiplied by a fraction (A) the numerator of which shall
be the Per Share Market Value of Common Stock at the date of taking such
record and (B) the denominator of which shall be such Per Share
Market Value minus the amount allocable to one share
of Common Stock of any such cash so distributable and of the fair value
(as determined in good faith by the Board
of Directors of the Issuer) of any and all such evidences
of indebtedness, shares of stock,
other securities or property or warrants or
other subscription or purchase rights so distributable, and (2)
the Warrant Price then in effect shall be adjusted to
equal (A) the Warrant Price then in
effect multiplied by the number of shares
of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment
divided by (B) the number
of shares of Common Stock for which this Warrant is
exercisable immediately after such adjustment. A
reclassification of the
Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par
value) into shares of Common Stock and shares of any other class of stock
shall be deemed a distribution by the Issuer to the holders of its Common
Stock of such shares of such other class of stock within
the meaning of this
Section 4(c) and, if the outstanding shares of
Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or
combination, as the case may be of the outstanding shares of Common Stock
within the meaning of Section 4(b).
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(d)
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Other Provisions applicable to Adjustments under this Section. The following
provisions
shall be applicable to the making of adjustments of the number of shares
of Common Stock for which this Warrant is exercisable and
the Warrant Price then in effect provided for in this Section
4:
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(i)
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When Adjustments to Be
Made. The adjustments required by this Section
4 shall
be made whenever and as often as any specified event requiring an adjustment shall occur,
except that any adjustment of the number of shares of Common Stock for which this Warrant is exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of the Common Stock,
as provided for in Section 4(b) up to, but
not beyond the date of exercise if such adjustment either by
itself or with other adjustments not previously made adds or subtracts
less than one percent (1%) of the shares of Common Stock for
which this Warrant is
exercisable immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum
amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and
not previously made, would result in a
minimum adjustment or on the date of exercise. For the purpose
of any adjustment, any specified
event shall be deemed to have occurred at
the close of business on the date of its
occurrence.
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(ii)
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Fractional Interests. In
computing adjustments under this Section 4, fractional interests in Common
Stock shall be taken into account to the nearest
one-tenth (1/10th)
of a share.
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(iii)
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When Adjustment
Not Required. If the Issuer shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a
dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof,
legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights, then thereafter
no adjustment shall be
required by reason of the taking
of such record and any such adjustment previously made in
respect thereof shall be rescinded and
annulled.
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(e)
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Form of Warrant after Adjustments. The form of this Warrant need not be
changed
because of any adjustments in the Warrant Price or the number and kind of
Securities purchasable upon the exercise of this
Warrant.
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Notice
of Adjustments.
Whenever the Warrant Price or Warrant
Share Number shall be adjusted pursuant to Section 4 hereof (for
purposes of this Section 5, each an
“adjustment"), the Issuer shall cause its
Chief Financial Officer to prepare and
execute a certificate setting forth, in reasonable
detail, the event requiring
the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including
a description of the basis on which
the Board made any
determination hereunder), and the Warrant Price
and Warrant Share
Number after giving effect to
such adjustment, and shall cause a
copy of such certificate to be
delivered to the Holder of this Warrant
promptly after each adjustment. For
purposes of this Section 5, all calculations which have been determined in
accordance with Section 4 hereof shall be final and conclusive on the
Holder, absent manifest error.
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6.
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Fractional Shares. No fractional shares of Warrant Stock will be issued in
connection
with any exercise hereof, but in lieu of such fractional shares, the
Issuer shall make a cash payment therefore equal in amount to
the product of the applicable fraction multiplied by the Per
Share Market Value then in effect.
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7.
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Registration Rights.
If at any time after the Issuer’s initial public offering and
prior to the expiration of this Warrant, the Issuer proposes to file a
registration statement under the Securities Act with respect to
an underwritten offering of Common Stock (except on Form S- 4 or Form S-8
or any successor forms thereto) for its own account,
then the Issuer shall give written notice of such
proposed filing to the holders of this Warrant or of the Warrant Shares as
far in advance of the anticipated filing date as is practicable (the
"Piggyback Notice").
The Piggyback Notice shall offer
such holders the opportunity
to register such amount of Warrant Shares
as each such holder may request (a "Piggyback Registration"); subject in
all events to the agreement of the underwriter or
underwriters of the offering contemplated by such
registration statement that such Warrant Shares can
be included in such registration
statement without adversely affecting
such offering. Any reduction in the number
of securities to be so offered shall be
(i) first, pro-rata among all security holders who are exercising
"piggyback" registration rights, based on the
number of registrable securities originally
proposed to be sold by each of them, and
(ii) second, pro-rata among all security holders who are exercising
"demand" registration rights
pursuant to a registration rights agreement with the
Issuer, based on the number of registrable
securities originally proposed to be sold by each of
them
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8.
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Redemption. The Issuer may, at
its option, redeem up to one hundred percent (100%) of this Warrant upon the occurrence of
a Market Value Event upon thirty (30) days written notice to
the Holder of this Warrant pursuant to Section 13 (the “Redemption
Notice”). The rights and privileges granted pursuant to
this Warrant with respect to the shares of
Warrant Stock subject to the Redemption Notice (the "Redeemed Warrant Shares") shall expire on the 30th
day after the date of the Redemption Notice (the “Termination Date”) if
this Warrant is not exercised with respect to such Redeemed
Warrant Shares prior to such Termination Date. In
the event this Warrant is not exercised with
respect to the Redeemed Warrant Shares, the Issuer
shall remit to the Holder of this Warrant (i) $.10 per
Redeemed Warrant Share and (ii) a new Warrant representing the
number of shares of Warrant Stock, if any, which shall not have been
subject to
the Redemption Notice upon the Holder tendering to the Issuer the applicable Warrant certificate.
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9.
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Definitions. For the purposes of this Warrant, the following terms have the
following
meanings:
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“Board" shall mean the
Board of Directors of the Issuer.
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"Capital Stock" means and
includes (i) any and all shares, interests, participations or
other equivalents of or interests in (however designated) corporate stock,
including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether
general or limited) in any Person which is a partnership, (iii) all
membership interests or limited liability company interests in
any limited liability company, and (iv) all equity
or ownership interests in any Person of any other
type.
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"Certificate of
Incorporation" means the Certificate of Incorporation of the Issuer
as in effect on the Original Issue Date, and as hereafter from time to
time amended, modified, supplemented or restated in accordance with the
terms hereof and thereof and pursuant to applicable
law.
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"Common Stock" means the
Common Stock, par value $.001 per share, of the Issuer and any
other Capital Stock into which such stock may hereafter be
changed.
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"Governmental Authority"
means any governmental, regulatory or self-regulatory entity,
department, body, official, authority, commission, board, agency
or instrumentality, whether federal, state or
local, and whether domestic or
foreign.
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"Holders" mean the
Persons who shall from time to time own any
Warrant. The term "Holder" means one of the
Holders.
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"Issuer" means Vemics,
Inc., a Delaware corporation, and its
successors.
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"Majority Holders" means
at any time the Holders of Warrants exercisable for a majority
of the shares of Warrant Stock issuable under the Warrants at the
time outstanding.
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“Market Value Event”
means, at any time after 270 days following the
Issuer’s initial public offering, the Per Share Market Value of
the Common Stock has been equal to or greater than
200% of the then current Warrant Price for a period of ten
(10) consecutive Trading Days immediately prior to the date of
the applicable
Redemption Notice.
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"Nasdaq" means the Nasdaq
National Market or the Nasdaq SmallCap
Market.
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"Original Issue Date"
means ______________.
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"OTC Bulletin Board"
means the over-the-counter electronic bulletin
board.
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"Person" means an
individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated
organization, joint venture, Governmental Authority or other
entity of whatever nature.
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"Per Share Market Value"
means on any particular date (a) the closing sale price per
share of the Common Stock on such date on a national securities exchange
or Nasdaq, or if there is no such price on such date, then the
closing sale price on such exchange or quotation system on the
date nearest preceding such date, or (b) if the Common Stock
is not listed then on a national securities exchange or
Nasdaq, the average of the closing bid and asking prices for a
share of Common Stock in the relevant interdealer
quotation system or other over-the-counter market, as
reported by the OTC Bulletin Board or in the National Quotation
Bureau Incorporated or similar organization or agency succeeding
to its functions of reporting prices) at the close of
business on such date, or if there are no such prices on such
date, then the average of the closing bid and ask prices on
such market on the date nearest preceding such date
or (c) if the Common Stock is not then reported by the OTC
Bulletin Board or the National Quotation Bureau Incorporated
(or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Pink Sheet"
closing bid and ask prices on such date, or if there are
no such prices on such date, then the average
of the closing bid and ask prices on the “Pink Sheets” on the
date nearest preceding such date, or (d) if the Common Stock is not
then publicly traded the fair market value of a share of Common
Stock as determined in good faith by the Board, provided that
such fair market value shall not, in any event, be
less than the price per share of the Common Stock
paid in connection with the then most recent
issuance of Common Stock by the Issuer. All determinations of the Per
Share Market Value shall be appropriately adjusted for any
stock dividends, stock splits or other similar transactions
during such period.
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"Securities" means any
debt or equity securities of the Issuer, whether now
or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option,
warrant or other right to purchase or acquire any
Security. "Security" means one of the
Securities.
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"Securities Act" means
the Securities Act of 1933, as amended, or any similar federal
statute then in effect.
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"Subscription
Agreement" means the
Subscription Agreement dated as of ___________ __, 2009 among
the Issuer and the investors a party
thereto.
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"Subsidiary" means any
corporation at least 50% of whose outstanding Voting Stock
shall at the time be owned directly or indirectly by the Issuer or by one
or more of its Subsidiaries, or by the Issuer and one or more
of its Subsidiaries.
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"Term" has the meaning
specified in Section 1 hereof.
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"Trading Day" means (a) a
day on which the Common Stock is traded on Nasdaq, or (b) if
the Common Stock is not listed on Nasdaq, a day on which the Common Stock
is traded on any registered national stock exchange, or (c) if
the Common Stock is not traded on any registered national stock exchange,
a day on which the Common Stock is traded on the OTC Bulletin
Board, or (d) if the Common Stock is not traded on the
OTC Bulletin Board, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, however, that
in the event that the Common Stock is not listed or quoted as set forth in
(a), (b) and (c) hereof, then Trading Day shall mean any day
except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government
action to close.
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"Voting Stock" means, as
applied to the Capital Stock of any corporation, Capital Stock
of any class or classes (however designated) having ordinary voting power
for the election of a majority of the members of the Board of
Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of
the happening of a
contingency.
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"Warrants" means the
Warrants issued and sold pursuant to the
Subscription Agreement, including, without limitation, this
Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions
of Section 2(c), 2(d) or 2(e) hereof or of any of such other
Warrants.
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"Warrant Price" initially
means U.S. $0.05 until the first anniversary or the Warrant, $0.15 from
the first anniversary to the second anniversary of the Warrant, $0.30 from
the second anniversary to the third anniversary of the Warrant, $0.50 from
the third anniversary to the fourth anniversary of the Warrant and $1.00
from the fourth anniversary to until the expiration of the
Warrant. Such prices may be adjusted from time
to time as shall result from the adjustments specified in this Warrant,
including Section 4
hereto.
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"Warrant Share Number"
means at any time the aggregate number of shares of Warrant
Stock which may at such time be purchased upon exercise of this Warrant,
after giving effect to all prior adjustments and increases to
such number made or required to be made under the terms
hereof.
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"Warrant Stock" means
Common Stock issuable upon exercise of any Warrant or Warrants or
otherwise issuable pursuant to any Warrant or
Warrants.
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10.
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Other
Notices. In case at any
time:
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(a)
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the
Issuer shall make any distributions to the holders of
Common Stock; or
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(b)
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the
Issuer shall authorize the granting to all holders of its
Common Stock of rights to
subscribe for or purchase any shares of
Capital Stock of any class or of any Common Stock Equivalents
or other rights; or
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(c)
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there shall be any reclassification of the Capital Stock of the Issuer;
or
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(d)
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there
shall be any capital reorganization by the Issuer;
or
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| (e) | there shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of the Issuer's property, assets or business (except for a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or |
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(f)
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there
shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Issuer or any partial liquidation of the
Issuer or distribution to holders of Common
Stock;
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then,
in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record
shall be taken for such dividend, distribution or subscription rights or
(ii) such reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding-up, as the case may be,
shall take place. Such notice also shall specify the date as of which the
holders of Common Stock of record shall participate in such
dividend, distribution or subscription rights, or shall be entitled to
exchange their certificates for Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, disposition, dissolution, liquidation or
winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than twenty (20)
days prior to the record date or the date on which the Issuer’s transfer
books are closed in respect thereto.
Except as otherwise specifically provided herein, no
holder, as such, of this Warrant shall be entitled to vote or receive
dividends or be deemed the holder of shares of the Issuer for any purpose,
nor shall anything contained in this Warrant
be construed
to confer upon the
holder hereof, as such, any of the rights of a
stockholder of the Issuer or any right to vote, give or withhold consent
to any corporate action (whether
any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the holder of
this Warrant of the Warrant Shares which he or she is
then entitled to
receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed
as imposing any liabilities on such holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the
Issuer, whether such liabilities are asserted by the Issuer or by
creditors of the Issuer. Notwithstanding this Section 10, the
Issuer will provide the holder of this Warrant with copies of the same
notices and other information given to the stockholders of the Issuer
generally, contemporaneously with the giving thereof to the
stockholders.
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11.
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Amendment
and Waiver. Any term, covenant, agreement or
condition in this Warrant may be amended, or
compliance therewith may be waived
(either generally or in a particular instance and
either retroactively or prospectively), by a written instrument or
written instruments executed by the
Issuer and the
Majority Holders; provided, however, that no
such amendment or waiver shall reduce
the Warrant Share
Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify
any provision of this Section 11 without the consent of the Holder of this
Warrant
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12.
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Governing
Law. THIS WARRANT SHALL
BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.
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13.
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Notices. Any and all notices or other communications or deliveries required or
permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number specified for notice prior to 5:00 p.m.,
eastern
time, on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified for
notice later than 5:00 p.m., eastern time, on any date and
earlier than 11:59 p.m., eastern time, on
such date, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight
courier service or (iv) actual receipt by the party to whom such notice is
required to
be given. The addresses for such communications shall be with respect to the Holder of this Warrant
or of Warrant Stock issued pursuant hereto, addressed to such Holder at
its last known address or facsimile number appearing on the books of the
Issuer maintained for such purposes, or with respect to the
Issuer, addressed to:
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Vemics,
Inc
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000
Xxxxxx Xxxxxxx Xxxxx
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Xxxxxx,
XX 00000
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Attention: Chief
Executive Officer
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000-000-0000
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000-000-0000
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With
a Courtesy Copy to:
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Any party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other party
hereto
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14.
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Warrant
Agent. The Issuer may, by written notice to each Holder
of this Warrant, appoint
an agent having an office in New York, New York for the purpose of issuing
shares
of Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of Section 2 hereof, exchanging
this Warrant pursuant to subsection (d) of Section 2 hereof or replacing
this Warrant pursuant to subsection (d) of Section 3 hereof, 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.
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15.
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Successors and
Assigns. This Warrant and the rights evidenced hereby
shall inure to the
benefit of and be binding upon the successors and assigns of the Issuer,
the Holder hereof
and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holder of Warrant
Stock.
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16.
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Modification and Severability. If, in any action before any court or agency
legally
empowered to enforce any provision contained herein, any provision hereof
is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable
by such court or agency. If any such provision is not
enforceable as set forth in the preceding sentence, the
unenforceability of such provision shall not affect the other provisions
of this Warrant, but this Warrant shall be construed as if
such unenforceable provision had never been
contained herein.
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17.
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Headings. The headings of the Sections of this Warrant are for convenience of
reference
only and shall not, for any purpose, be deemed a part of this
Warrant.
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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the Date of Issuance.
_______________________________________________________________________
Xxxx
Xxxxx Date
CEO
Vemics,
Inc
PAGE
INTENTIONALLY LEFT BLANK
_________________________________________
WARRANT
EXERCISE FORM
The undersigned _________________________, pursuant to the provisions of the within Warrant, hereby elects to purchase _____________ shares of Common Stock of Vemics, Inc.
covered by the within Warrant.
Dated: Signature:
Address
ASSIGNMENT
FOR VALUE RECEIVED, __________________________ hereby sells, assigns and transfers unto
__________________________ the within Warrant and all rights evidenced thereby
and does irrevocably constitute and appoint __________________________,
attorney, to transfer the said Warrant on the books of the within named
corporation.
Dated: Signature:
Address:
PARTIAL
ASSIGNMENT
FOR VALUE RECEIVED, __________________________ hereby sells, assigns and transfers unto __________________________ the right to purchase ________________ shares of Warrant Stock evidenced by the
within Warrant together with all rights therein, and does irrevocably constitute
and
appoint __________________________, attorney, to transfer that part of the said Warrant on the books of the within
named corporation.
Dated: Signature:
Address:
FOR USE
BY THE ISSUER ONLY
This
Warrant No. 070109-0 cancelled (or transferred or exchanged) this ________ day
of
________,
_____, shares of Common Stock Issued therefore in the name
_________________.
