EXHIBIT 4.3
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
(COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT UNDER THE ACT WITH RESPECT TO THE SECURITIES OR DELIVERY TO THE
COMPANY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144 UNDER
THE ACT.
Date of Issuance: _________________
FORM OF WARRANT TO PURCHASE COMMON STOCK
OF
JMAR TECHNOLGIES, INC.
JMAR Technologies, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, __________________________ (including any
successors and assigns, the "Holder"), is entitled, subject to the terms set
forth below, to purchase from the Company at any time or from time to time,
before 5:00 PM, Eastern time on January ___, 2010 (the "Expiration Date") up to
_____________ shares of Common Stock of the Company (the "Warrant Shares"),
subject to adjustment as provided herein. The purchase price per share of such
Common Stock upon exercise of this Warrant shall be $1.38 (the "Exercise
Price"), subject to adjustment as provided herein.
This Warrant has been issued concurrently with certain shares of the
Company's Common Stock pursuant to a certain Securities Purchase Agreement of
even date herewith (the "Purchase Agreement") by and among the Company and the
Holder.
1. Exercise Period. This Warrant may be exercised by the Holder at
any time or from time to time after the Date of Issuance noted above but before
5:00 PM, Eastern time on the Expiration Date.
2. Exercise of Warrant.
2.1 Exercise. This Warrant may be exercised in full or in part
by the Holder with respect to any or all of the Warrant Shares by surrender of
this Warrant, together with the form of subscription attached hereto as
Schedule 1, duly executed by the Holder, to the Company at its principal
office, accompanied by payment, in cash or by certified or official bank check
payable to the order of the Company, of the aggregate Exercise Price for the
Warrant Shares to be purchased hereunder. For any partial exercise hereof, the
Holder shall designate in a notice of exercise or net issue election notice
that number of shares of Common Stock that such Holder wishes to purchase. On
any such partial exercise, the Company at its expense shall forthwith
issue and deliver to the Holder a new warrant of like tenor, in the name of the
Holder, which shall be exercisable for such number of shares of Common Stock
represented by this Warrant which have not been purchased upon such exercise.
2.2 Net Exercise. This Warrant may be exercised by the Holder
through a cashless exchange by delivery and surrender of this Warrant with the
form of subscription attached hereto as Schedule 1 duly executed. In such
event, Holder shall receive that number of Warrant Shares in exchange for the
Warrant, or portion thereof, computed using the following formula:
X = Y (A - B)
---------
A
where: X = the number of shares of Warrant Shares to be issued to
the Holder;
Y = the number of shares of Warrant Shares requested to be
exercised under this Warrant;
A = the Market Value (as defined below) of one (1) share of
the Warrant Shares on the date of exercise; and
B = the Exercise Price (as adjusted pursuant to the terms
of this Warrant).
For purposes hereof, the "Market Value" of the Warrant Shares as of a
particular date shall be determined as follows: (i) if traded on a national
securities exchange or through the Nasdaq Stock Market, the Market Value shall
be deemed to be the volume weighted average trading price of the Warrant Shares
on such exchange for the five (5) trading days immediately prior to the date of
exercise indicated in the form of subscription (or if no reported sales took
place on such day, the last date on which any such sales took place prior to
the date of exercise); and (ii) if traded over-the-counter only and not on the
Nasdaq Stock Market, the Market Value shall be deemed to be the average of the
closing bid and asked prices over the five (5) trading days immediately prior
to the date of exercise indicated in the form of subscription (or if no
reported sales took place on such day, the last date on which any such sales
took place prior to the date of exercise). If the Warrant Shares are not
traded on the over-the-counter market or through the Nasdaq Stock Market or on
an exchange, this Warrant may be exercised by the Holder through a cashless
exchange as described above but the Market Value per share of the Warrant
Shares shall be the price per share of the Warrant Shares that the Company
could obtain from a willing buyer for Warrant Shares sold by the Company as
such price shall be determined in good faith by the Company's Board of
Directors (the "Board").
3. Effective Date of Exercise. The exercise of this Warrant pursuant
to Section 2 shall be deemed to have been effected immediately prior to the
close of business on the business day on which this Warrant is surrendered to
the Company as provided in Section 2, or on such later date as is specified in
the form of subscription, and at such time the person in whose name any
certificate for shares of Common Stock shall be issuable upon such exercise, as
provided in Section 4, shall be deemed to be the record holder of such Common
Stock for all purposes.
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4. Delivery on Exercise. As soon as practicable after the exercise of
this Warrant in full or in part pursuant to Section 2, the Company at its
expense (including the payment by it of any applicable issue taxes) will cause
to be issued in the name of and delivered to the Holder, or as the Holder may
direct, a certificate or certificates for the number of fully paid and
nonassessable full shares of Common Stock to which the Holder shall be entitled
on such exercise, together with cash, in lieu of any fraction of a share, equal
to such fraction of the Market Value of one full share of Common Stock.
5. Adjustments. The number and kind of shares of Common Stock (or any
shares of stock or other securities which may be) issuable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment from time to
time upon the happening of certain events, as follows:
5.1 Dividends, Distributions, Stock Splits or Combinations. If
the Company shall at any time or from time to time after the date hereof (a)
make or issue, or fix a record date for the determination of holders of Common
Stock (or any shares of stock or other securities which may be issuable upon
the exercise of this Warrant) entitled to receive, a dividend or other
distribution payable in additional shares of common or preferred stock (as the
case may be), (b) subdivide its outstanding shares of Common Stock (or any
shares of stock or other securities which may be issuable upon the exercise of
this Warrant) into a larger number of shares of Common Stock (or any shares of
stock or other securities which may be issuable upon the exercise of this
Warrant) or (c) combine its outstanding shares of Common Stock (or any shares
of stock or other securities which may be issuable upon the exercise of this
Warrant) into a smaller number of shares of Common Stock (or any shares of
stock or other securities which may be issuable upon the exercise of this
Warrant), then and in each such event the Exercise Price then in effect and the
number of shares issuable upon exercise of this Warrant shall be appropriately
adjusted.
5.2 Reclassification or Reorganization. If the Common Stock (or
any shares of stock or other securities which may be) issuable upon the
exercise of this Warrant shall be changed into the same or different number of
shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of
shares or stock dividend provided for in Section 5.1 above, or a
reorganization, merger, consolidation or sale of assets provided for in
Section 5.3 below), then and in each such event the Holder shall be entitled to
receive upon the exercise of this Warrant the kind and amount of shares of
stock and other securities and property receivable upon such reorganization,
reclassification or other change to which a holder of the number of shares of
Common Stock (or any shares of stock or other securities which may be) issuable
upon the exercise of this Warrant would have received if this Warrant had been
exercised immediately prior to such reorganization, reclassification or other
change, all subject to further adjustment as provided herein.
5.3 Merger, Consolidation or Sale of Assets. If at any time or
from time to time there shall be a capital reorganization of the Common Stock
(other than a subdivision, combination, reclassification or exchange of shares
provided for elsewhere in this Section 5) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all of the Company's assets and properties to any other person or entity, then
as a
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part of such reorganization, merger, consolidation or sale, provision shall be
made so that the Holder shall thereafter be entitled to receive upon the
exercise of this Warrant, the number of shares of stock or other securities or
property of the Company, or of the successor corporation resulting from such
reorganization, merger, consolidation or sale, to which a holder of the number
of shares of Common Stock (or any shares of stock or other securities which may
be) issuable upon the exercise of this Warrant would have received if this
Warrant had been exercised immediately prior to such reorganization, merger,
consolidation or sale.
5.4 Notice of Adjustments and Record Dates. The Company shall
promptly notify the Holder in writing of each adjustment or readjustment of the
Exercise Price and the number of shares of Common Stock (or any shares of stock
or other securities which may be) issuable upon the exercise of this Warrant.
Such notice shall state the adjustment or readjustment and show in reasonable
detail the facts on which that adjustment or readjustment is based. In the
event of any taking by the Company of a record of the holders of Common Stock
(or any shares of stock or other securities which may be issuable upon the
exercise of this Warrant) for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, the Company
shall notify Holder in writing of such record date at least twenty (20) days
prior to the date specified therein.
5.5 When Adjustments to be Made. No adjustment in the Exercise
Price shall be required by this Section 5 if such adjustment either by itself
or with other adjustments not previously made would require an increase or
decrease of less than one percent (1%) in such price. Any adjustment
representing a change of less than such minimum amount which is postponed shall
be carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 5 and not previously made, would result in
a minimum adjustment. Notwithstanding the foregoing, any adjustment carried
forward shall be made no later than ten (10) business days prior to the
Expiration Date. All calculations under this Section 5.5 shall be made to the
nearest cent. 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.
5.6 Certain Other Events. If any change in the outstanding
Common Stock (or any shares of stock or other securities which may be issuable
upon the exercise of this Warrant) or any other event occurs as to which the
other provisions of this Section 5 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holder of the
Warrant in accordance with such provisions, then the Board shall make an
adjustment in the number and class of shares available under this Warrant, the
Exercise Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder, upon exercise of this Warrant, the same aggregate Exercise Price and
the same total number, class and kind of shares as the Holder would have owned
had this Warrant been exercised prior to the event and had the Holder continued
to hold such shares until after the event requiring adjustment.
6. Replacement of Warrants. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and (a) in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or (b) in the case of any
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such mutilation, on surrender and cancellation of such Warrant, the Company at
its expense will execute and deliver to the Holder, in lieu thereof, a new
warrant of like tenor.
7. No Rights or Liability as a Stockholder. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder to purchase Common Stock, and no enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder as a
stockholder of the Company.
8. Representations of Holder.
The Holder hereby represents, covenants and acknowledges to the Company
that:
(1) this Warrant and the Warrant Shares are "restricted
securities" as such term is used in the rules and regulations under the Act,
and that this Warrant and the Warrant Shares have not been registered under the
Securities Act of 1933, as amended;
(2) the Holder has read, and fully understands, the terms
of this Warrant set forth on its face and the attachments hereto, including the
restrictions on transfer contained herein;
(3) the Holder is purchasing for investment for his, her or
its own account and not with a view to or for sale in connection with any
distribution of this Warrant or the Warrant Shares and he, she or it has no
intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws;
(4) the Holder is an "accredited investor" within the
meaning of paragraph (a) of Rule 501 of Regulation D promulgated by the
Securities and Exchange Commission and/or has such knowledge and experience in
financial and business matters such that the Holder is capable of evaluating
the merits and risks of the investment in this Warrant and the Warrant Shares;
and
(5) the Holder (i) has received all information the Holder
has requested from the Company and considers necessary or appropriate for
deciding whether to acquire this Warrant and the Warrant Shares, and (ii) has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of this Warrant and the Warrant Shares and
to obtain any additional information necessary to verify the accuracy of the
information given to the Holder.
9. Reservation of Common Stock. The Company hereby covenants that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of shares of Common Stock or other shares of capital
stock of the Company as are from time to time issuable upon exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Certificate of Incorporation to provide sufficient reserves of shares of
Warrant Shares issuable upon exercise of this Warrant. All such shares shall
be duly authorized, and when issued upon such exercise, shall be validly
issued, fully paid and non-assessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights, except encumbrances or restrictions arising
under federal
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or state securities laws. Issuance of this Warrant shall constitute full
authority to the Company's officers who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of
Warrant Shares upon the exercise of this Warrant.
10. Registration Rights. The Common Stock (or any shares of stock or
other securities which may be) issuable upon the exercise of this Warrant shall
be deemed to be Registrable Securities (as such term is defined in that certain
Registration Rights Agreement by and among the Company and the Holder, dated
January 25, 2005, as amended from time to time (the "Rights Agreement")) and
the Holder (including any successors and assigns) shall be added as a party to
the Rights Agreement.
11. Miscellaneous.
11.1 Transfer of Warrant. This Warrant shall not be transferable
or assignable by the Holder without the express written consent of the Company.
Notwithstanding the foregoing, Holder may assign or transfer this Warrant (but
only with all related obligations) to (a) one or more of Holder's "affiliates"
(as such term is defined in Rule 501 of Regulation D promulgated under the Act)
or (b) to a Permissible Transferee (as such term is defined in the Purchase
Agreement); provided, however, that (i) Holder provides the Company with
written notice of the transfer within a reasonable time after such transfer,
which notice shall include the name and address of such transferee or assignee
and (ii) such transferee or assignee agrees in writing to be bound by and
subject to the terms and conditions of the Warrant. Upon such transfer in
accordance with this Section 11.1, such transferee or assignee shall have the
rights and obligations of Holder under this Warrant.
11.2 Notices. Any and all notices or other communications or
deliveries require or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective when delivered in the manner set forth
in Section 6(c) of the Purchase Agreement.
11.3 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Warrant, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and disbursements
in addition to any other relief to which such party may be entitled.
11.4 Amendments and Waivers. Any term of this Warrant may be
amended and the observance of any other term of this Warrant may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and holders of a
majority in interest of the Warrant Shares issuable upon exercise of Warrants
issued pursuant to the Purchase Agreement, provided, that (x) any such
amendment or waiver must apply to all Warrants issued pursuant to the Purchase
Agreement; and (y) neither the number of Warrant Shares subject to this
Warrant, the Exercise Price nor the Expiration Date may be amended, nor may the
right to exercise this Warrant be altered or waived, without the written
consent of the Holder. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Holder of any Warrant Shares issued
or issuable pursuant to the Purchase Agreement.
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11.5 No Impairment. Except and to the extent as waived or
consented to by the Holder, the Company will not, by amendment of its
Certificate 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 to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder against
impairment.
11.6 Severability. If one or more provisions of this Warrant are
held to be unenforceable under applicable law, such provision shall be excluded
from this Warrant and the balance of the Warrant shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
11.7 Governing Law. This Warrant shall be governed by and
construed and in accordance with, the laws of the State of Delaware.
11.8 Counterparts. This Warrant may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.9 Headings. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the undersigned have caused this Warrant to be
executed by its officers thereunto duly authorized.
COMPANY: JMAR TECHNOLOGIES, INC.,
a Delaware corporation
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
HOLDER: POINTSOURCE TECHNOLOGIES, LLC
By: _________________________________
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK OF JMAR TECHNOLOGIES, INC.]
SCHEDULE 1
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
To: JMAR TECHNOLOGIES, INC.
The undersigned, the holder of the Warrant attached hereto, hereby
irrevocably elects to exercise the purchase rights represented by such Warrant
for, and to purchase thereunder, ____________* shares of common stock of JMAR
Technologies, Inc., and herewith makes payment of $__________ therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to ________________________________, whose address is
____________________________.
____________________________________
(Signature must conform in all
respects to name of the Holder as
specified on the face of the Warrant)
____________________________________
(Print Name)
____________________________________
(Address)
Dated:_______________________
________________
* Insert here the number of share as to which the Warrant is being exercised.
