EXHIBIT 4.3
ANNEX I
TO
SECURITIES PURCHASE AGREEMENT
(PROTOTYPE FOR EACH ISSUANCE)
FORM OF WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
XXXXXXXX TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. ISSUANCE. Inconsideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
XXXXXXXX TECHNOLOGIES, INC., a Florida corporation (the "Company"),
_________________________________________ or registered assigns (the "Holder")
is hereby granted the right to purchase at any time until 5:00 P.M., New York
City time, on _______________, 200__(1) (the "Expiration Date"),
______________________ Thousand (_____________)(2) fully paid and nonassessable
shares of the Company's Common Stock, $0.0001 par value per share (the "Common
Stock"), at an initial exercise price per share (the "Exercise Price") of $1.00
per share, subject to further adjustment as set forth herein. This Warrant is
being issued pursuant to the terms of that certain Securities Purchase
Agreement, dated as of April 2, 2004 (the "Agreement"), to which the Company and
Holder (or Holder's predecessor in interest) are parties. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in t he
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(1) Insert date which is the last calendar day of the month in which the third
anniversary of the Closing Date occurs.
(2) Insert number equal to the number of the Purchased Shares.
Agreement. This Warrant was originally issued to the Holder or the Holder's
predecessor in interest on , 2004(3) (the "Issue Date").
2. EXERCISE OF WARRANTS.
2.1 GENERAL.
(a) This Warrant is exercisable in whole or in part
at any time and from time to time commencing on the Commencement Date (as
defined below). Such exercise shall be effectuated by submitting to the Company
(either by delivery to the Company or by facsimile transmission as provided in
Section 8 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as provided in
this paragraph. The date such Notice of Exercise is faxed to the Company shall
be the "Exercise Date," provided that, if such exercise represents the full
exercise of the outstanding balance of the Warrant, the Holder of this Warrant
tenders t his Warrant Certificate to the Company within five (5) business days
thereafter. The Notice of Exercise shall be executed by the Holder of this
Warrant and shall indicate the number of shares then being purchased pursuant to
such exercise.
(b) The Exercise Price per share of Common Stock for
the shares then being exercised shall be payable to the Company in cash or by
certified or official bank check or by wire transfer in accordance with
instructions provided by the Company at the request of the Holder.
(c) Upon the appropriate payment of the Exercise
Price for the shares of Common Stock purchased, together with the surrender of
this Warrant Certificate (if required), the Holder shall be entitled to receive
a certificate or certificates for the shares of Common Stock so purchased.
(d) The Holder shall be deemed to be the holder of
the shares issuable to it in accordance with the provisions of this Section 2.1
on the Exercise Date.
2.2 LIMITATION ON EXERCISE. Notwithstanding the provisions of
this Warrant, the Agreement or of the ot her Transaction Agreements, in no event
(except (i) as specifically provided in this Warrant as an exception to this
provision, (ii) during the forty-five (45) day period prior to the Expiration
Date, or (iii) while there is outstanding a tender offer for any or all of the
shares of the Company's Common Stock) shall the Holder be entitled to exercise
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(3) Insert the Closing Date.
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this Warrant, or shall the Company have the obligation to issue shares upon such
exercise of all or any portion of this Warrant to the extent that, after such
exercise the sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of
the Warrants or other rights to purchase Common Stock or through the ownership
of the unconverted portion of convertible securities), and (2) the number of
shares of Common Stock issuable upon the exercise of the Warrants with respect
to which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.
2.3 COMMENCEMENT DATE. The term "Commencement Date"
means the earlier of (i) the date which is sixty-five (65) days after the Issue
Date, or (ii) the Effective Date.
3. RESERVATION OF SHARES. The Company hereby agrees that at
all times during the term of this Warrant there shall be reserved for issuance
upon exercise of this Warrant one hundred ten percent (110%) of the Warrant
Shares.
4. MUTILATION OR LOSS OF WARRANT. Upon receipt by the Company
of evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. PROTECTION AGAINST DILUTION AND OTHER ADJUSTMENTS.
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6.1 ADJUSTMENT MECHANISM. If an adjustment of the
Exercise Price is required pursuant to this Section 6, the Holder shall be
entitled to purchase such number of shares of Common Stock as will cause (i) (x)
the total number of shares of Common Stock Holder is entitled to purchase
pursuant to this Warrant following such adjustment, multiplied by (y) the
adjusted Exercise Price per share, to equal the result of (ii) (x) the dollar
amount of the total number of shares of Common Stock Holder is entitled to
purchase before adjustment, multiplied by (y) the total Exercise Price before
adjustment.(4)
6.2 CAPITAL ADJUSTMENTS. In case of any stock split
or reverse stock split, stock dividend, or reclassification of the Common Stock,
the provisions of this Section 6 shall be applied as if such capital adjust ment
event had occurred immediately prior to the date of this Warrant and the
original Exercise Price had been fairly allocated to the stock resulting from
such capital adjustment; and in other respects the provisions of this Section
shall be applied in a fair, equitable and reasonable manner so as to give
effect, as nearly as may be, to the purposes hereof. A rights offering to
stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights. By way of illustration, and not in limitation,
of the foregoing, (i) if the Company effectuates a 2:1 split of its Common
Stock, thereafter, with respect to any conversion for which the Company issues
shares after the record date of such split, the Exercise Price shall be deemed
to be one-half of what it had been immediately prior to such split; (ii) if the
Company effectuates a 1:10 reverse split of its Common Stock, thereafter, with
respect to any exercise for which the Company issues shares after the record
date of such reverse split, the Exercise Price shall be deemed to be ten times
what it had been calculated to be immediately prior to such split; and (iii) if
the Company declares a stock dividend of one share of Common St ock for every 10
shares outstanding, thereafter, with respect to any exercise for which the
Company issues shares after the record date of such dividend, the Exercise Price
shall be deemed to be such amount multiplied by a fraction, of which the
numerator is the number of shares (10 in the example) for which a dividend share
will be issued and the denominator is such number of shares plus the dividend
share(s) issuable or issued thereon (11 in the example).
6.3 ADJUSTMENT FOR MERGERS AND SALES. If the Company
enters into a merger (other than where the Company is the surviving entity) or
consolidation with anot her corporation or other entity or a sale or transfer of
all or subst ant ially all of the assets of the
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(4) Example: Assume 10,000 shares remain under Warrant at original stated
Exercise Price of $1.00. Total exercise price (clause (y) in text) is (i) 10,000
x (ii) $1.25, or $10,000. Company effects 2:1 stock split. Exercise Price is
adjusted to $0.50. Number of shares covered by Warrant is adjusted to 20,000,
because (applying clause (x) in text) (i) 20,000 x (ii) $0.50 = $10,000.
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Company to another person (collectively, a "Sale"), the Company will require, in
the agreements reflecting such transaction, that the surviving entity expressly
assume the obligations of the Company hereunder. Notwithstanding the foregoing,
if the Company enters into a Sale and the holders of the Common Stock are
entitled to receive stock, securities or property in respect of or in exchange
for Common Stock, then as a condition of such Sale, the Company and any such
successor, purchaser or transferee will agree that this Warrant may thereafter
be exercised on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Warrant might have been exercised immediately before such
merger, consolidation, sale or transfer, subject to adjustments which shall be
as nearly equivalent as may be practicable. In the event of any such proposed
Sale, (i) the Holder hereof shall have the right to exercise this Warrant by
delivering a Notice of Exercise to the Company within fifteen (15) days of
receipt of notice of such Sale from the Company, except that Section 2.2 shall
not apply to such conversion.
6.4 ADJUSTMENT FOR SPIN OFF. If, for any reason,
prior to the exercise of this Warrant in full, the Company spins off or
otherwise divests itself of a material part of its business or operations or
disposes all or of a part of its assets in a transaction (the "Spin Off") in
which the Company does not receive compensation for such business, operations or
assets, but causes securities of another entity (the "Spin Off Securities") to
be issued to security holders of the Company, then the Company shall cause (i)
to be reserved Spin Off Securities equal to the number thereof which would have
been issued to the Holder had all of the Holder's unexercised Warrants
outstanding on the record date (the "Record Date") for determining the amount
and number of Spin Off Securities to be issued to security holders of the
Company (the "Outstanding Warrants") been exercised as of the close of business
on the trading day immediately before the Record Date (the "Reserved Spin Off
Shares"), and (ii) to be issued to the Holder on the exercise of all or any of
the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to
(x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the
numerator is the amount of the Outstanding Warrants then being exercised, and
(II) the denominator is the amount of the Outstanding Warrants.
6.5 ADJUSTMENT FOR CERTAIN TRANSACTIONS. Reference is
made to the provisions of Section 4(g) of the Agreement, the terms of which are
incorporated herein by reference. The number of shares covered by this Warrant
and the Exercise Price shall be adjusted as provided in the applicable
provisions of said Section 4(g) of the Agreement.
7. TRANSFER TO COMPLY WITH THE SECURITIES ACT; REGISTRATION
RIGHTS.
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7.1 TRANSFER. This Warrant has not been registered
under the Securities Act of 1933, as amended, (the "Act") and has been issued to
the Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of
counsel satisfactory to the Company that registration is not required under the
Act. Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
7.2 REGISTRATIONRIGHTS. (a)
ReferenceismadetotheRegistration Rights Agreement. The Company's obligations
under the Registration Rights Agreement and the other terms and conditions
thereof with respect to the Warrant Shares, including, but not necessarily
limited to, the Company's commitment to file a registration statement including
the Warrant Shares, to have the registration of the Warrant Shares completed and
effective, and to maintain such registration, are incorporated herein by
reference.
(b) In addition to the registration rights referred
to in the preceding provisions of Section 7.2(a), effective after the expiration
of the effectiveness of the Registration Statement as contemplated by the
Registration Rights Agreement, the Holder shall have piggy-back registration
rights with respect to the Warrant Shares then held by the Holder or then
subject to issuance upon exercise of this Warrant (collectively, the "Remaining
Warrant Shares"), subject to the conditions set forth below. If, at any time
after the Registration Statement has ceased to be effective, the Company
participates (whether voluntarily or by reason of an obligation to a third
party) in the registration of any shares of the Company's stock (other than a
registration on Form S-8 or on Form S-4), the Company shall give writ t en not
ice thereof to the Holder and the Holder shall have the right, exercisable
within ten (10) business days after receipt of such notice, to demand inclusion
of all or a portion of the Holder's Remaining Warrant Shares in such
registration statement. If the Holder exercises such election, the Remaining
Warrant Shares so designated shall be included in the registration statement at
no cost or expense to the Holder (other than any costs or commissions which
would be borne by the Holder under the terms of the Registration Rights
Agreement). The Holder's rights under this Section 7 shall expire at such time
as the Holder can sell all of t he Remaining Warrant Shares under Rule 144
without volume or other restrictions or limit.
8. NOTICES. Any notice required or permitted hereunder shall
be given in manner provided in the Section headed "NOTICES" in the Agreement,
the terms of which are incorporated herein by reference.
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9. SUPPLEMENTS AND AMENDMENTS; WHOLE AGREEMENT. This Warrant
may be amended or supplemented only by an instrument in writing signed by the
parties hereto. This Warrant contains the full understanding of the parties
hereto with respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. GOVERNING LAW. This Warrant shall be deemed to be a
contract made under the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the County of New
York or the state courts of the State of New York sitting in the County of New
York in connection with any dispute arising under this Warrant and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on FORUM NON CONVENIENS, to the bringing of any such p roceeding
in such jurisdictions. To the extent determined by such court, the Company shall
reimburse the Holder for any reasonable legal fees and disbursements incurred by
the Buyer in enforcement of or protection of any of its rights under any of the
Transaction Agreements.
11. JURY TRIAL WAIVER. The Company and the Holder hereby waive
a trial by jury in any action, proceeding or counterclaim brought by either of
the Parties hereto against the other in respect of any matter arising out or in
connection with this Warrant.
12. COUNTERPARTS. This Warrant may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[Balance of page intentionally left blank]
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13. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the day of , 200__.
XXXXXXXX TECHNOLOGIES, INC.
By: _______________________
___________________________
(Print Name)
___________________________
(Title)
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NOTICE OF EXERCISE OF WARRANT
TO: XXXXXXXX TECHNOLOGIES, INC. VIA FAX: (000) 000-0000
#207 Attn: CFO
00 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of , 20, to purchase shares of
the Common Stock, $0.0001 p ar value, ofM ARKLAND TECHNOLOGIES, INC. and tenders
herewith payment in accordance with Section 1 of said Common Stock Purchase
Warrant.
[ ] CASH: $_________________________ = (Exercise Price x Exercise Shares)
Payment is being made by :
[ ] enclosed check
[ ] wire transfer
[ ] other____________________
It is the intention of the Holder to comply with the provisions of
Section 2.2 of the Warrant regarding certain limits on the Holder's right to
exercise thereunder. Based on the analysis on Part II of the attached Worksheet
Schedule, the Holder believe this exercise comp lies with the provisions of said
Section 2.2. Nonetheless, to the extent that, pursuant to the exercise effected
hereby, the Holder would have more shares than permitted under said Section,
this notice shouldbe amended and revised, ab initio, to refer to the exercise
which would result in the issuance of shares consistent with such provision. Any
exercise above such amount is hereby deemed void and revoked.
As contemplated by the Warrant, this Notice of Conversion is being
sent by facsimile to the telecopier number and officer indicated above.
If this Notice of Exercise represents the full exercise of the
outstanding balance of the Warrant, the Holder either (1) has previously
surrendered the Warrant to the Company or (2) will surrender (or cause to be
surrendered) the Warrant to the Company at the address indicated above
by express courier within five (5) business days after delivery or facsimile
transmission of this Notice of Exercise.
The certificates representing the Warrant Shares should be
transmitted by the Company to the Holder
[ ] via express courier, or
[ ] by electronic transfer
after receipt of this Notice of Exercise (by facsimile transmission or
otherwise) to:
_________________________________
_________________________________
_________________________________
Dated:__________________________
________________________________
[Name of Holder]
By:_____________________________
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NOTICE OF EXERCISE OF WARRANT WORKSHEET SCHEDULE
Part I
STATUS OF OUTSTANDING WARRANT
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1.1 Original number of shares subject to exercise of this Warrant(1) ___________
1.2 Warrant Shares being exercised currently ___________
1.3 Warrant Shares previously exercised(1) ___________
1.4 Total Warrant Shares exercised [sum of Lines 1.2 and 1.3] ___________
1.5 Warrant Shares remaining after current exercise
[Line 1.1 less Line 1.4] ___________
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(1) Adjusted for any adjustments contemplated by this Warrant
Part II
SECTION 2.2 ANALYSIS
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2.1. Current Common Stock holdings of Holder and Affiliates ____________
2.2. Warrant Shares to be issued on current exercise ____________
2.3. Other shares to be issued on other current exercise(s) and
other current conversion(s)(2) ____________
2.4. Other shares eligible to be acquired within next 60 days
without restriction 2.5. Total [sum of Lines 2.1 through 2.4] ____________
2.6. Outstanding shares of Common Stock(3) ____________
2.7. Adjustments to Outstanding ____________
a. Shares known to Holder as previously issued
to Holder or others but not included in Line 2.6 ____________
b. Shares to be issued per Line(s) 2.2 and 2.3 ____________
c. Total Adjustments [Lines 2.7a and 2.7b] ____________
2.8. Total Adjusted Outstanding [Lines 2.6 plus 2.7c] ____________
2.9. Holder's Percentage [Line 2.5 divided by Line 2.8] ___________%
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(2) Includes shares issuable on conversion of convertible securities (including
assumed payment of interest or dividends) or exercise of other rights, including
other warrants or options
(3) Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent
[Note: Line 2.9 not to be above 4.99%]
