COMMON STOCK PURCHASE WARRANT To Purchase ____________ Shares of Common Stock of Passport Restaurants, Inc.
Exhibit
4.7
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
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 July 1, 2007 (the
“Initial
Exercise Date”)
and on
or prior to the close of business on March 23, 2012, the five year anniversary
of the Initial Exercise Date (the “Termination
Date”)
but
not thereafter, to subscribe for and purchase from Passport Restaurants, Inc.,
a
Texas corporation (the “Company”),
_____________ shares
(the “Warrant
Shares”)
of
Common Stock, no par value, 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
March 23, 2007, between the Company and the purchaser signatory
thereto.
Section
2. Exercise.
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a)
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Exercise
of Warrant.
Exercise of the purchase rights represented by this Warrant may be
made at
any time or times on or after the Initial Exercise Date and on or
before
the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or
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); provided,
however,
within 5 Trading Days of the date said Notice of Exercise is delivered
to
the Company, the Holder shall have surrendered this Warrant to the
Company
and the Company shall have received payment of the aggregate Exercise
Price of the shares thereby purchased by wire transfer or cashier’s check
drawn on a United States bank.
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b)
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Exercise
Price.
The exercise price of the Common Stock under this Warrant shall be
$0.0001, subject to adjustment hereunder (the “Exercise
Price”).
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c)
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Cashless
Exercise.
If there is no registration statement covering the resale of the
Warrant
Shares, this Warrant may also be exercised 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 quotient obtained by
dividing [(A-B) (X)] by (A), where:
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(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.
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d)
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Exercise
Limitations;
Xxxxxx’s
Restrictions.
The 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 issuance after exercise, the Holder (together
with
the Holder’s affiliates), as set forth on the applicable Notice of
Exercise, would beneficially own in excess of 4.99% of the number
of
shares of the Common Stock outstanding immediately after giving effect
to
such issuance. For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the 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, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its
affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including,
without limitation, any other Notes or Warrants) subject to a limitation
on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its affiliates. Except as
set forth in the preceding sentence, for purposes of this Section
2(d),
beneficial ownership shall be calculated in accordance with Section
13(d)
of the Exchange Act, it being acknowledged by Holder that the Company
is
not representing to Holder that such calculation is in compliance
with
Section 13(d) of the Exchange Act and 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 the Holder) and of which a portion of this Warrant is exercisable
shall be in the sole discretion of such Xxxxxx, and the submission
of a
Notice of Exercise shall be deemed to be such 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. For purposes of this Section 2(d), in determining
the
number of outstanding shares of Common Stock, the 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 the Holder, the Company shall within two Trading Days confirm
orally
and in writing to the 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
the
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) may be waived by the Holder upon, at the election of
the
Holder, not less than 61 days’ prior notice to the Company, and the
provisions of this Section 2(d) shall continue to apply until such
61st
day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver).
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2
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e)
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Mechanics
of Exercise.
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| 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).
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 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.
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| ii) |
Delivery
of Certificates Upon Exercise.
Certificates for shares purchased hereunder 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 if the Company is a participant in such system, and otherwise
by
physical delivery to the address specified by the Holder in the Notice
of
Exercise within 3 Trading Days from the delivery to the Company of
the
Notice of Exercise Form, surrender of this Warrant and payment of
the
aggregate Exercise Price as set forth above (“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.
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3
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| iii) |
Delivery
of New Warrants Upon Exercise.
If this Warrant shall have been exercised in part, the Company shall,
at
the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights
of
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.
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| iv) |
Rescission
Rights.
If the Company 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 Warrant Share Delivery Date, then the
Holder
will have the right to rescind such
exercise.
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| 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 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.
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4
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| 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.
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| 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.
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| viii) |
Closing
of Books.
The Company will not close its stockholder books or records in any
manner
which prevents the timely exercise of this Warrant, pursuant to the
terms
hereof.
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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 any shares of Common Stock issued by the Company pursuant
to
this Warrant), (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 before such event and of which the denominator shall
be the
number of shares of Common Stock outstanding 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 immediately after the record date for
the
determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or
re-classification.
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5
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b)
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Reserved.
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c)
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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 or rights or warrants
to
subscribe for or purchase any security other than the 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 Holders of the portion
of
assets or evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment shall
be
made whenever any such distribution is made and shall become effective
immediately after the record date mentioned
above.
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d)
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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. The number of
shares
of Common Stock outstanding at any given time shall not includes
shares of
Common Stock owned or held by or for the account of the Company,
and the
description of any such shares of Common Stock shall be considered
on
issue or sale of Common Stock. 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 be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and
outstanding.
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| e) |
Notice
to Holders.
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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), or the lowest possible adjustment price in the case of an MFN
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; (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 stockholders 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, in each case, the Company shall cause to
be
mailed to the Holder at its last addresses 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 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 the date of such notice to the effective date of the
event triggering such notice.
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of 15
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f)
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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 absent such Fundamental Transaction upon exercise
of
this Warrant 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
(the
“Alternate
Consideration”).
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 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 paragraph (f) and insuring
that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
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7
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g)
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Exempt
Issuance.
Notwithstanding the foregoing, no adjustments, Alternate Consideration
nor
notices shall be made, paid or issued under this Section 3 in respect
of
an Exempt Issuance.
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h)
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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.
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Section
4. Transfer
of Warrant.
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a)
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Transferability.
Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 5(a) and 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.
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b)
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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.
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8
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c)
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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.
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d)
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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 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) 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.
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Section
5. Miscellaneous.
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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.
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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.
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|
c)
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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.
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9
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d)
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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.
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|
e)
|
Authorized
Shares.
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 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.
|
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 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 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.
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.
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f)
|
Jurisdiction.
All questions concerning the construction, validity, enforcement
and
interpretation of this Warrant shall be determined in accordance
with the
provisions of the Purchase
Agreement.
|
|
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.
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10
of 15
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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 Holder’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
stockholder 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
with the written consent 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, 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.
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11
of 15
********************
12
of 15
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated:
March 23, 2007
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|
|
Name:
Title:
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13
of 15
NOTICE
OF EXERCISE
(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 subsection 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 subsection 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:
_______________________________
Tax
ID
Number
_______________________________
The
Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4)
Accredited
Investor.
The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of
Investing Entity:
________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_________________________________________________
Name
of
Authorized Signatory:
___________________________________________________________________
Title
of
Authorized Signatory:
____________________________________________________________________
Date:
________________________________________________________________________________________
14
of 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.
15
of 15
