EXHIBIT 99.4
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
To Purchase __________ Shares of Common Stock of
SPACEDEV, INC.
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for
value received, ____________ (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the "Initial Exercise Date") and on or
prior to the close of business on the five year anniversary of the Initial
Exercise Date (the "Termination Date") but not thereafter, to subscribe for and
purchase from SpaceDev, Inc., a Colorado corporation (the "Company"), up to
______ shares (the "Warrant Shares") of Common Stock, par value $0.0001 per
share, of the Company (the "Common Stock"). The purchase price of one share of
Common Stock under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the "Purchase Agreement"), dated January 12, 2006, among the Company
and the purchasers signatory thereto.
Section 2. Exercise.
(a) Exercise of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date (1) by delivery
to the Company of a duly executed facsimile copy of the Notice of Exercise Form
annexed hereto (or to such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of such
Holder appearing on the books of the Company) and (2) subject to Section 2(c),
by payment in full to the Company of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier's check drawn on a United States
bank. Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company as a condition of
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exercise but the Holder shall, within ten Trading Days after any exercise,
surrender the original Warrant to the Company and the Company shall issue a new
Warrant for the unexercised portion of the Warrant within two (2) Trading Days
after its receipt of an original Warrant. The fact that an original Warrant is
in transit or a remainder Warrant has not been received shall not affect the
Holder's right to exercise the Warrant for the full number of shares remaining
unexercised. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased. The Holder and the Company shall maintain records showing the number
of Warrant Shares purchased and the date of such purchases. The Company shall
deliver any objection to any Notice of Exercise Form within 2 Business Days of
receipt of such notice. In the event of any dispute or discrepancy, the records
of the Company shall be controlling and determinative in the absence of manifest
error. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof. In no event may the Holder exercise this
Warrant in whole or in part unless the Holder is an "accredited investor" as
defined in Rule 501(a) under the Securities Act.
(b) Exercise Price. The exercise price per share of the Common Stock under
this Warrant shall be equal to $1.51 (the "Exercise Price").
(c) Cashless Exercise. If at any time after one year from the date of
issuance of this Warrant there is no effective Registration Statement
registering, or no current prospectus available for, the resale of the Warrant
Shares by the Holder, then this Warrant may also be exercised at such time by
means of a "cashless exercise" in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the positive quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the VWAP on the Trading Day immediately preceding the date of such
election;
(B) = the Exercise Price of this Warrant, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise of this Warrant
in accordance with the terms of this Warrant by means of a cash exercise
rather than a cashless exercise.
Notwithstanding anything herein to the contrary, on the Termination Date,
provided the Holder is an "accredited investor", this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section 2(c). At
the Company's request, the Holder shall within one Trading Day of such request
deliver to the Company a duly executed Warrant Exercise Form in respect of such
automatic exercise.
(d) Exercise Limitations; Xxxxxx's Restrictions. The Company shall not
effect any exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2(c) or otherwise, to
the extent that after giving effect to such exercise, such Holder (together with
such Holder's affiliates, and any other person or entity acting as a group
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together with such Holder or any of such Holder's affiliates), as set forth on
the applicable Notice of Exercise Form, would beneficially own (1) in excess of
4.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to such issuance and (2) if the Holder (together with such
Holder's affiliates, and any other person or entity acting as a group together
with such Holder or any of such Holder's affiliates) beneficially owns in excess
of 4.99% of the number of shares of Common Stock then outstanding, in excess of
9.99% of the number of shares of Common Stock outstanding immediately after
giving effect to such exercise or issuance. For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by such Holder
and its affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, unexercised portion
of this Warrant beneficially owned by such Holder or any of its affiliates and
(B) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company (including, without limitation, any other
Preferred Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder
or any of its affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2(e)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder, it being acknowledged by a Holder that the Company is
not representing to such Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 2(d) applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which a portion of this Warrant is exercisable shall be in the
sole discretion of a Holder, and the submission of a Notice of Exercise shall be
deemed to be each Holder's determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder) and of which portion of
this Warrant is exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3
promulgated thereunder. For purposes of this Section 2(d), in determining the
number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form 10-QSB or Form 10-KSB, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the
Company's Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company shall
within two Trading Days confirm orally and in writing to such Holder the number
of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by such Holder or its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The provisions of this Section
2(d) with respect to either or both of the 4.99% and 9.99% limitations may be
waived by such Holder, at the election of such Holder, upon not less than 61
days' prior notice to the Company, and the applicable provisions of this Section
2(d) shall continue to apply until such 61st day (or such later date, as
determined by such Holder, as may be specified in such notice of waiver). Only
the limitation that is specifically waived shall be waived so that a waiver of
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the 4.99% limitation shall not operate to waive the 9.99% limitation unless
specifically set forth in the Holder's notice of waiver. The provisions of this
paragraph shall be implemented in a manner otherwise than in strict conformity
with the terms of this Section 2(d) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended 4.99% or 9.99%
beneficial ownership limitation herein contained. The limitations contained in
this paragraph shall apply to a successor holder of this Warrant. The provisions
of this Section 2(d) is solely for the benefit of the Holder and cannot be
waived or modified by the Company without the consent of holders of a majority
of its Common Stock.
(e) Mechanics of Exercise.
(i) Authorization of Warrant Shares. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
(ii) Delivery of Certificates Upon Exercise. If the Holder has
provided the Company with the name of its prime broker that is a
participant with the Depository Trust Company System through its Deposit
Withdrawal Agent Commission System, certificates for shares purchased
hereunder that are not "restricted securities" shall be transmitted by the
transfer agent of the Company to the Holder by crediting the account of the
Holder's prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission ("DWAC") system (or if the Company is not a
participant in such system, and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise) no later than
the Trading Day which is 5 Trading Days from the date on which latest the
following events occur: (1) the delivery to the Company of the Notice of
Exercise Form, and (2) the receipt in full by the Company of the aggregate
Exercise Price in the manner(s) specified in the Notice of Exercise Form
(such date, the "Warrant Share Delivery Date"). This Warrant shall be
deemed to have been exercised on the date the Exercise Price is received by
the Company. The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be
deemed to have become a holder of record of such shares for all purposes,
as of the date the Warrant has been exercised by payment to the Company of
the Exercise Price and all taxes required to be paid by the Holder, if any,
pursuant to Section 2(e)(vii) prior to the issuance of such shares, have
been paid.
(iii) Delivery of New Warrants Upon Exercise. If this Warrant shall
have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant, deliver to the Holder within two (2)
Trading Days a new Warrant evidencing the rights of the Holder to purchase
the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
(iv) Rescission Rights. If the Company fails to, or fails to cause its
transfer agent to, transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 2(e)(iv) by the
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Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise (1) until such time as the account of the Holder's prime
broker with the Depository Trust Company through its DWAC system is
credited with the certificates, or (2) if the Company is not a participant
in such system, until such time as the certificates are physically
delivered to the address specified by the Holder in the Notice of Exercise.
(v) Compensation for Buy-In on Failure to Timely Deliver Certificates
Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to transmit, or cause its transfer agent to transmit, to
the Holder a certificate or certificates representing the Warrant Shares
pursuant to an exercise on or before the Warrant Share Delivery Date, and
if after such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "Buy-In"), then the Company
shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue times (B)
the price at which the sell order giving rise to such purchase obligation
was executed, and (2) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for which
such exercise was not honored or deliver to the Holder the number of shares
of Common Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common
Stock with an aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (1) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Company. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver certificates representing shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
(vi) No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.
(vii) Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder or in such
name or names as may be directed by the Holder; provided, however, that in
the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder; and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. (viii) Closing of Books. The Company will not close its
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stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.
Section 3. Certain Adjustments.
(a) Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (A) pays a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include (1) any shares of Common Stock issued by
the Company pursuant to this Warrant, or (2) any payment of scheduled dividends
on the Company's Preferred Stock); (B) subdivides outstanding shares of Common
Stock into a larger number of shares; (C) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares;
or (D) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted. Any adjustment
made pursuant to this Section 3(a) shall become effective simultaneously with
the occurrence of the corresponding event described in (A)-(D) of the preceding
sentence.
(b) Subsequent Equity Sales. If the Company, at any time while this Warrant
is outstanding, shall: (1) offer, sell, or grant any option to any Person to
purchase its Common Stock or Common Stock Equivalents; (2) offer, sell or grant
to any Person any right to reprice its Common Stock Equivalents; or (3)
otherwise dispose of or issue any Common Stock or Common Stock Equivalents to
any Person; and in any such case at a price per share or effective price per
share of Common Stock less than the Exercise Price (such lower price, the "Base
Share Price" and such issuances collectively, a "Dilutive Issuance"), as
adjusted hereunder, then the Exercise Price shall be reduced and only reduced to
equal the Base Share Price but the number of Warrant Shares issuable hereunder
shall remain unchanged. Such adjustment, if applicable, shall be made whenever
such Common Stock or Common Stock Equivalents are issued or the Company has
entered into a binding agreement to issue such Common Stock or Common Stock
Equivalents. For purposes of clarification, if the holder of the Common Stock or
Common Stock Equivalents so issued shall at any time (whether by operation of
purchase price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per share
which is issued in connection with such issuance) be entitled to receive shares
of Common Stock at an effective price per share which is less than the Exercise
Price, such issuance shall be deemed to have occurred for less than the Exercise
Price on such date of the Dilutive Issuance. Notwithstanding the foregoing, no
adjustments shall be made, paid or issued under this section 3(b) in respect of
an Exempt Issuance. The Company shall notify the Holder in writing, no later
than 2 Trading Days following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable issuance
price, or of applicable reset price, exchange price, conversion price and other
PAGE 6
pricing terms (such notice the "Dilutive Issuance Notice"). For purposes of
clarification, whether or not the Company provides a Dilutive Issuance Notice
pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance,
after the date of such Dilutive Issuance the Holder is entitled to receive a
number of Warrant Shares based upon the Base Share Price regardless of whether
the Holder accurately refers to the Base Share Price in the Notice of Exercise.
(c) Pro Rata Distributions. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash dividends) or rights or warrants to subscribe for or purchase any
security other than Common Stock (which shall be subject to Section 3(b)), then
in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share
of Common Stock. An adjustment shall be made under this Section 3(c) whenever
any such distribution described in Section 3(c) is made, and such adjustment
shall become effective immediately on the date of such distribution.
(d) Fundamental Transaction. If, at any time while this Warrant is
outstanding, (A) the Company effects any merger or consolidation of the Company
with or into another Person, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive, for each Warrant Share that would
have been issuable upon such exercise immediately prior to the occurrence of
such Fundamental Transaction, at the option of the Holder, (a) upon exercise of
this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the "Alternate Consideration") receivable upon or as a
result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event or (b) if the
Company is acquired in an all cash transaction, cash equal to the value of this
Warrant as determined in accordance with the Black-Scholes option pricing
formula; which calculation shall be made by the Company and, in the event of a
dispute, shall be controlling and determinative in the absence of manifest
error. For purposes of any such exercise, the determination of the Exercise
Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
PAGE 7
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new warrant consistent with the foregoing provisions
and evidencing the Holder's right to exercise such warrant into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this Section 3(d) and insuring
that this Warrant (or any such replacement security) will be similarly adjusted
upon any subsequent transaction analogous to a Fundamental Transaction.
(e) Calculations. All calculations under this Section 3 shall be made to
the nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall exclude treasury shares, if any.
(f) Voluntary Adjustment By Company. The Company may at any time during the
term of this Warrant reduce the then current Exercise Price to any amount and
for any period of time deemed appropriate by the Board of Directors of the
Company.
(g) Notice to Holders.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to this Section 3, the Company shall promptly mail to
each Holder a notice setting forth the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.
If the Company issues a variable rate security, despite the prohibition
thereon in the Purchase Agreement, the Company shall be deemed to have
issued Common Stock or Common Stock Equivalents at the lowest possible
conversion or exercise price at which such securities may be converted or
exercised in the case of a Variable Rate Transaction (as defined in the
Purchase Agreement).
(ii) Notice to Allow Exercise by Xxxxxx. If (A) the Company shall
declare a dividend (or any other distribution) on the Common Stock; (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock (other than the redemption of Common Stock
pursuant to a restricted stock award under one of the Company's equity
compensation arrangements); (C) the Company shall authorize the granting to
all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any shareholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger
to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share
exchange whereby the Common Stock is converted into other securities, cash
or property; (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company; then,
PAGE 8
in each case, the Company shall cause to be mailed to the Holder at its
last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y)
the date on which such dissolution, liquidation, winding-up,
reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the failure to mail such
notice or any defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such notice.
The Holder is entitled to exercise this Warrant during the 20-day period
commencing on the date of such notice to the effective date of the event
triggering such notice.
Section 4. Transfer of Warrant.
(a) Transferability. Subject to compliance with any applicable securities
laws and the conditions set forth in Section 5(a) and Section 4(d) hereof and to
the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
(c) Warrant Register. The Company shall register this Warrant, upon records
to be maintained by the Company for that purpose (the "Warrant Register"), in
the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
(d) Transfer Restrictions. If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration statement under
PAGE 9
the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions and
reasonably acceptable to the Company) to the effect that such transfer may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an "accredited investor" as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the
Securities Act or a qualified institutional buyer as defined in Rule 144A(a)
under the Securities Act.
Section 5. Miscellaneous.
(a) Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 4 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.
(b) No Rights as Shareholder Until Exercise. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price (or by means of a cashless exercise), the
Warrant Shares so purchased shall be and be deemed to be issued to such Holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment.
(c) Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
(d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.
(e) Authorized Shares.
(i) The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock
a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The
PAGE 10
Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or
of any requirements of the Trading Market upon which the Common Stock may
be listed.
(ii) Except and to the extent as waived or consented to by the Holder,
the Company shall not by any action, including, without limitation,
amending its articles of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company
will (a) not increase the par value of any Warrant Shares above the amount
payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
(iii) Before taking any action which would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in
the Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any
public regulatory body or bodies having jurisdiction thereof.
(f) Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Warrant), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
PAGE 11
The parties hereby waive all rights to a trial by jury. If either party shall
commence an action or proceeding to enforce any provisions of this Warrant, then
the prevailing party in such action or proceeding shall be reimbursed by the
other party for its attorneys' fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such action or proceeding.
(g) Restrictions. The Holder acknowledges that the Warrant Shares acquired
upon the exercise of this Warrant, if not registered, will have restrictions
upon resale imposed by state and federal securities laws.
(h) Nonwaiver and Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Xxxxxx's rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
(i) Notices. Any notice, request or other document required or permitted to
be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement.
(j) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(k) Remedies. Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
(l) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(m) Amendment. This Warrant may be modified or amended or the provisions
hereof waived by a written instrument signed by each of the Company and the
Holder.
(n) Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
PAGE 12
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
(o) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
PAGE 13
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated: January 13, 2006
SPACEDEV, INC.
By:
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Financial Officer
PAGE 14
NOTICE OF EXERCISE
TO: SPACEDEV, INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in Section 2(c), to exercise this Warrant
with respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in Section 2(c).
(3) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:
-----------------------------------------------
The Warrant Shares shall be delivered to the following:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
(4) Accredited Investor; Investor Representation. The undersigned is an
"accredited investor" as defined in Regulation D promulgated under the
Securities Act of 1933, as amended. The undersigned represents and warrants that
the shares of Common Stock to be issued upon exercise hereof are being acquired
solely for the account of the undersigned and not as a nominee for another
Person and that the undersigned will not offer, sell or otherwise dispose of any
such shares of Common Stock except under circumstances that are not in violation
of the Securities Act of 1933, as amended or any applicable state securities
laws.
[SIGNATURE OF HOLDER]
Name of Investing Entity:
---------------------------------------------------
Signature of Authorized Signatory of Investing Entity:
---------------------------------------------------
Name of Authorized Signatory:
---------------------------------------------------
Title of Authorized Signatory:
---------------------------------------------------
Date:
---------------------------------------------------
PAGE 15
ASSIGNMENT FORM
(TO ASSIGN THE FOREGOING WARRANT, EXECUTE
THIS FORM AND SUPPLY REQUIRED INFORMATION.
DO NOT USE THIS FORM TO EXERCISE THE WARRANT.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
-----------------------------------------------------
whose address is
--------------------------------------------------------------------------------
Dated:
--------------------------------------------
Holder's Signature:
----------------------------------
Holder's Address:
----------------------------------
Signature Guaranteed:
----------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
PAGE 16
