Exhibit 4.5
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
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. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
SMARTSERV ONLINE, INC.
NON-CALLABLE WARRANT
Warrant No. [ ] Date of Original Issuance:[]
SmartServ Online, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, [Name of Holder] or its registered assigns
(the "Holder"), is entitled to purchase from the Company up to a total of [ ]
shares of common stock, $.01 par value per share (the "Common Stock"), of the
Company (each such share, a "Warrant Share" and all such shares, the "Warrant
Shares") at an exercise price equal to $[ ] per share (as adjusted from time to
time as provided in Section 9, the "Exercise Price"), at any time and from time
to time from and after the date hereof and through and including May [ ], 2007
(the "Expiration Date"), and subject to the following terms and conditions.
1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein shall have the meanings
given to such terms in the Securities Purchase Agreement, dated as of May 20,
2002 between the Company and the original Holder (the "Purchase Agreement").
2. Registration of Warrant. 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.
3. Registration of Transfers. The Company shall register the transfer of
any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Company at its
address specified herein. Upon any such registration or transfer, an exchange
Warrant to purchase Common Stock, in substantially the form of this Warrant (any
such exchange Warrant, a "New Warrant"), evidencing the portion of this Warrant
so transferred shall be issued to the transferee and a New Warrant evidencing
the remaining portion of this Warrant not so transferred, if any, shall be
issued to the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance by such transferee of all of
the rights and obligations of a holder of a Warrant. Warrants and Warrant Shares
may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of Warrant Shares other than pursuant to an
effective registration statement, to the Company, to an Affiliate of a Holder or
in connection with a bona pledge as contemplated in this Section 3, the Company
may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration under the Securities Act. The Company
acknowledges and agrees that a Holder may from time to time pledge pursuant to a
bona fide margin agreement or grant a security interest in some or all of the
Warrant and Warrant Shares and, if required under the terms of such arrangement,
such Holder may transfer a pledged or secured Warrant and Warrant Shares to the
pledgees or secured parties. Such a pledge or transfer is not subject to
approval of the Company and no legal opinion of the pledgee, secured party or
pledgor shall be required in connection therewith. Further, no notice shall be
required of such pledge.
4. Exercise and Duration of Warrants. This Warrant shall be exercisable by
the registered Holder at any time and from time to time on or after the date
hereof to and including 6:30 p.m., New York City time, on the Expiration Date.
At 6:30 p.m., New York City time on the Expiration Date, the portion of this
Warrant available for exercise and not exercised prior thereto shall be and
become void and of no value, provided, that if the closing sales price of the
Common Stock on the Expiration Date is greater than 102% of the Exercise Price
on the Expiration Date, then this Warrant shall be deemed to have been exercised
in full (to the extent not previously exercised) on a "cashless exercise" basis
at 6:30 P.M. New York City time on the Expiration Date. The Company may not call
or redeem all or any portion of this Warrant without the prior written consent
of the Holder.
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5. Delivery of Warrant Shares.
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(a) Upon delivery of the Form of Election to Purchase to the Company
(with the attached Warrant Shares Exercise Log) at its address for notice set
forth in Section 13 and upon payment of the Exercise Price multiplied by the
number of Warrant Shares that the Holder intends to purchase hereunder, the
Company shall promptly (but in no event later than three Trading Days after the
Date of Exercise (as defined herein)) issue and deliver to the Holder, a
certificate for the Warrant Shares issuable upon such exercise with the
appropriate legend. Any Person so designated by the Holder to receive Warrant
Shares shall be deemed to have become holder of record of such Warrant Shares as
of the Date of Exercise of this Warrant. The Company shall, upon request of the
Holder, if available, use its reasonable efforts to deliver Warrant Shares
hereunder electronically through the Depository Trust Corporation or another
established clearing corporation performing similar functions, provided, that,
the Company will not be required to change its transfer agent if its current
transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust Corporation. As used in this Agreement, a "Date of Exercise"
means the date on which the Holder shall have delivered to the Company (i) the
Form of Election to Purchase attached hereto (with the Warrant Exercise Log
attached to it), appropriately completed and duly signed and (ii) payment of the
Exercise Price for the number of Warrant Shares so indicated by the Holder to be
purchased. To effect exercises hereunder, the Holder shall not be required to
physically surrender this Warrant unless the Warrant has been fully exercised or
following the Expiration Date, in which event, the Holder shall deliver the
Warrant promptly to the Company (it being understood that such delivery is not a
condition precedent to the Company's obligations to deliver Warrant Shares in
accordance with the terms hereof).
(b) If by the third Trading Day after a Date of Exercise the Company
fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 5(a), then the Holder will have the right to rescind such
exercise.
(c) If by the third Trading Day after a Date of Exercise the Company
fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 5(a), and if after such third Trading Day and prior to the
receipt of such Warrant Shares the Holder purchases (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 by (B) the closing bid price of the Common Stock at the time
of the obligation giving rise to such purchase obligation 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
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Common Stock with a market price on the date of exercise totaled $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.
(d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. 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.
6. Charges, Taxes and Expenses. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company's obligation to issue the New Warrant.
8. Reservation of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company covenants
that all Warrant Shares so
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issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.
(a) Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.
(b) Pro Rata Distributions. If the Company, at any time while this
Warrant is outstanding, distributes to all holders of Common Stock (i) evidences
of its indebtedness, (ii) any security (other than a distribution of Common
Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case,
"Distributed Property"), then, at the request of any Holder delivered before the
90th day after the record date fixed for determination of stockholders entitled
to receive such distribution, the Company will deliver to such Holder, within
five Trading Days after such request (or, if later, on the effective date of
such distribution), the Distributed Property that such Holder would have been
entitled to receive in respect of the Warrant Shares for which such Xxxxxx's
Warrant could have been exercised immediately prior to such record date. If such
Distributed Property is not delivered to a Holder pursuant to the preceding
sentence, then upon any exercise of the Warrant that occurs after such record
date, such Holder shall be entitled to receive, in addition to the Warrant
Shares otherwise issuable upon such conversion, the Distributed Property that
such Holder would have been entitled to receive in respect of such number of
Warrant Shares had the Holder been the record holder of such Warrant Shares
immediately prior to such record date.
(c) Fundamental Transactions. If, at any time while this Warrant is
outstanding, (1) the Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (3)
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 (4) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which
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the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a "Fundamental Transaction"),
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant (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 or its successor or the surviving
entity following such Fundamental Transaction 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. At the Holder's option and
request, any successor to the Company or surviving entity in such Fundamental
Transaction shall, either (1) issue to the Holder a Exchange Warrant
substantially in the form of this Warrant and consistent with the foregoing
provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof, or (2)
purchase the Warrant from the Holder for a purchase price, payable in cash
within five Trading Days after such request (or, if later, on the effective date
of the Fundamental Transaction), equal to the Black Scholes value of the
remaining unexercised portion of this Warrant on the date of such request. 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 (c) and ensuring that the Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(d) Subsequent Equity Sales.
(i) If, at any time after the Original Issue Date, the Company or
any Subsidiary issues additional shares of Common Stock or rights, warrants,
options or other securities or debt convertible, exercisable or exchangeable for
shares of Common Stock or otherwise entitling any Person to acquire shares of
Common Stock, (collectively, "Common Stock Equivalents") at an effective price
per share of Common Stock (the "Effective Price") less than the Exercise Price,
then the Exercise Price shall be reduced to equal the Effective Price. For
purposes of the foregoing adjustment, in connection with any issuance of any
Common Stock Equivalents, (x) the maximum number of shares of Common Stock
potentially issuable at any time upon conversion, exercise or exchange of such
Common Stock Equivalents (the "Deemed Number") shall be deemed to be outstanding
upon issuance of such Common Stock Equivalents, (y) the Effective Price
applicable to such Common Stock shall equal the minimum dollar value of
consideration payable to the Company to purchase such Common Stock Equivalents
and to convert, exercise or exchange them into Common Stock, divided by the
Deemed Number, and (z) no further adjustment shall be made to the Exercise Price
upon the actual issuance of Common Stock upon conversion, exercise or exchange
of such Common Stock Equivalents.
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(ii) If, at any time while this Warrant is outstanding, the
Company or any Subsidiary issues Common Stock Equivalents with an Effective
Price that floats or resets or otherwise varies or is subject to adjustment
based on market prices of the Common Stock (a "Floating Price Security"), then
for purposes of applying the preceding paragraph in connection with any
subsequent exercise, the Effective Price will be determined separately on each
Exercise Date and will be deemed to equal the lowest Effective Price at which
any holder of such Floating Price Security is entitled to acquire shares of
Common Stock on such Exercise Date (regardless of whether any such holder
actually acquires any shares on such date).
(iii) Notwithstanding the foregoing, no adjustment will be made
under this Section (d) in respect of any grant of options to employees, officers
or directors of the Company pursuant to any stock option plan duly adopted by
the Company's board of directors or in respect of the issuance of Common Stock
upon exercise of any such options.
(e) Number of Warrant Shares. Simultaneously with any adjustment to
the Exercise Price pursuant this Section, the number of Warrant Shares that may
be purchased upon exercise of this Warrant shall be increased proportionately,
so that after such adjustment the aggregate Exercise Price payable hereunder for
the increased number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.
(f) Calculations. All calculations under this Section 9 shall be made
to the nearest cent or the nearest 1/100th of a share, as applicable. The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.
(g) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's Transfer Agent.
(h) Notice of Corporate Events. If the Company (i) declares a dividend
or any other distribution of cash, securities or other property in respect of
its Common Stock, including without limitation any granting of rights or
warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least 20 calendar days
prior to the applicable record or effective date on which a Person would need to
hold Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order
to ensure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the
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failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.
10. Payment of Exercise Price. The Holder shall pay the Exercise Price in
one of the following manners:
(a) Cash Exercise. The Holder may deliver immediately available funds;
or
(b) Cashless Exercise. At any time after the earlier to occur of the
Effectiveness Date and the Effective Date (each as defined in the Registration
Rights Agreement) of the initial Registration Statement required to be filed and
declared effective in accordance with the Registration Rights Agreement, when a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder (or the prospectus included
thereunder) may not be utilized by the Holders to resell Warrant Shares, the
Holder may surrender this Warrant to the Company together with a notice of
cashless exercise, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
A = the average of the closing bid prices for the five
Trading Days immediately prior to (but not including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued pursuant to the
Purchase Agreement.
11. Limitation on Exercise.
----------------------
(a) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to ensure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Exchange Act, does not exceed 4.999% of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such
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exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will
constitute a representation by the Holder that it has evaluated the limitation
set forth in this paragraph and determined that issuance of the full number of
Warrant Shares requested in such Exercise Notice is permitted under this
paragraph. By written notice to the Company, the Holder may waive the provisions
of this Section but (i) any such waiver will not be effective until the 61st day
after such notice is delivered to the Company, and (ii) any such waiver will
apply only to the Holder and not to any other holder of Warrants.
(b) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to ensure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph. This provision shall not restrict the number
of shares of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration that such
Holder may receive in the event of a merger or other business combination or
reclassification involving the Company as contemplated in Section 9 of this
Warrant.
(c) If the Company has not previously obtained the Shareholder
Approval (as defined below), then the Company may not issue in excess of the
Issuable Maximum (as defined below) upon exercise of this Warrant at a price per
share that is less than the closing sales price prior to date of the first
issuance of the Warrant (the "Threshold Price") (other than to the extent the
Threshold Price is reached due to adjustments due solely to stock splits of the
Common Stock). The "Issuable Maximum" means a number of shares equal to
1,260,000 (which equals 19.99% of the number of shares of Common Stock
outstanding on the Trading Day immediately preceding the Closing Date, less a
number of shares equal to all shares of Common Stock previously issued upon
exercise of all other Non-Callable Warrants issued to Purchasers at Closing and
upon exercise of Callable Warrants at price per share that is less than the
Threshold Price (other than to the extent such Threshold Price is reached solely
due to adjustments due to stock splits of the Common Stock). If any Holder shall
no longer holds this Warrant, then such Holder's remaining portion of the
Issuable Maximum shall be allocated pro-rata among the remaining Holders. If on
any Date of Exercise, (A) the Exercise Price then in effect is less than the
Threshold Price (other than solely due to adjustments resulting from stock
splits of the Common Stock) and (B) the aggregate number of Warrant Shares that
would then be issuable upon exercise in full of this Warrant, together with any
Warrant Shares previously issued upon such exercise at less than the Threshold
Price per share, would exceed the Issuable Maximum, and (C) the Company shall
not have previously obtained the vote of shareholders, as
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may be required by the applicable rules and regulations of the Nasdaq (or any
successor entity) applicable to approve the issuance of Warrant Shares in excess
of the Issuable Maximum at less than the Threshold Price (the "Shareholder
Approval"), then the Company shall issue to the Holder upon such exercise a
number of Warrant Shares equal to such Holder's pro-rata portion (which shall be
calculated pursuant to the terms hereof) of the Issuable Maximum and, with
respect to the remaining Warrant Shares whose issuance is in excess of the
Issuable Maximum, the Holder shall have the right to require the Company to
obtain the Shareholder Approval applicable to such issuance as soon as is
possible, but in any event by the 90th day following such request.
12. No Fractional Shares. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported on the Trading Market on the date of exercise.
13. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent for next day delivery by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, Smartserv Online, Inc., Xxx
Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000, Facsimile No.: (000) 000-0000, Attn: Chief
Financial Officer, or (ii) if to the Holder, to the address or facsimile number
appearing on the Warrant Register or such other address or facsimile number as
the Holder may provide to the Company in accordance with this Section.
14. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a Exchange
Warrant agent. Any corporation into which the Company or any Exchange Warrant
agent may be merged or any corporation resulting from any consolidation to which
the Company or any Exchange Warrant agent shall be a party or any corporation to
which the Company or any Exchange Warrant agent transfers substantially all of
its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed (by first class mail, postage prepaid) to the Holder at the Holder's
last address as shown on the Warrant Register.
15. Miscellaneous.
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(a) This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any
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legal or equitable right, remedy or cause of action under this Warrant. This
Warrant may be amended only in writing signed by the Company and the Holder and
their successors and assigns.
(b) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement 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 interpretation, 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) (each, a "Proceeding") shall be exclusively commenced in
the state and federal courts sitting in the City of New York, Borough of
Manhattan (the "New York Courts"). Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for any Proceeding, and
hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or such
New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any 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. Each of the Company and
the Holder hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any Proceeding. If any
party shall commence an action or proceeding to enforce any provisions of this
Warrant, then the prevailing party in such Proceeding shall be reimbursed by the
other party for its attorneys fees and other costs and expenses incurred with
such Proceeding.
(c) The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
(d) In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
-11-
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
SMARTSERV ONLINE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
-12-
FORM OF ELECTION TO PURCHASE
To SMARTSERV ONLINE, INC.:
In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of common stock ("Common Stock"), $.01 par value per share, of SMARTSERV
ONLINE, INC. and encloses herewith $________ in cash, certified or official bank
check or checks or other immediately available funds, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares of
Common Stock to which this Form of Election to Purchase relates, together with
any applicable taxes payable by the undersigned pursuant to the Warrant.
By its delivery of this Form of Election To Purchase, the Holder represents
and warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder will not beneficially own in excess of the number of shares of
Common Stock (determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to
which this notice relates.
| | The Holder hereby represents, warrants and covenants that it has or will
sell the shares of Common Stock issuable upon this exercise pursuant to the
Company's registration statement covering the resale by the Holder of such
shares and, in connection therewith, has or will comply with its prospectus
delivery requirements under Federal securities laws.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
(Please print name and address)
Warrant Shares Exercise Log
---------------------------
--------------------------------------------------------------------------------------------------------------------
Date Number of Warrant Number of Warrant Shares Number of
Shares Available to be Exercised Warrant Shares
Exercised Remaining to
be Exercised
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase ____________ shares of Common Stock of SMARTSERV
ONLINE, INC. to which the within Warrant relates and appoints ________________
attorney to transfer said right on the books of SMARTSERV ONLINE, INC. with full
power of substitution in the premises.
Dated: _______________, ____
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(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
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Address of Transferee
--------------------------------------------------
--------------------------------------------------
In the presence of:
--------------------------
