VERITEC, INC. WARRANT TO PURCHASE COMMON STOCK
Exhibit 10.3
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES 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
“ACT”) AND APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (II) AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.
VERITEC, INC.
| Warrant No. | Original Issue Date: , 2009 |
Veritec, Inc., a Nevada corporation (the “Company”), hereby certifies that, for value received,
or its permitted registered assigns (the “Holder”), is entitled to purchase from
the Company up to a total of shares of common stock (the “Common Stock”), of the Company
(each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price
per share equal to $2.00 (as adjusted from time to time as provided in Section 7 herein, the
“Exercise Price”), at any time and from time to time from on or after the date hereof (the “Trigger
Date”) and through and including 5:30 P.M., Minneapolis time, on , 2014 (the “Expiration
Date”), and subject to the following terms and conditions:
This Warrant (this “Warrant”) is being issued in connection with a private placement of
convertible promissory notes and warrants to purchase common stock pursuant to a Subscription
Agreement and Letter of Investment Intent dated , 2009, by and among the Company and the
Holder (the “Subscription Agreement”). This Warrant (this “Warrant”) is one of the Warrants issued
pursuant to Section 2 of the Subscription Agreement.
1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Subscription Agreement.
2. Exercise and Duration of Warrants.
| (a) | All or any part of this Warrant shall be exercisable by the registered Holder at any time
and from time to time on or after the Trigger Date and through and including 5:30 P.M. Central time
on the Expiration Date. At 5:30 P.M., Central time, on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall
be terminated and no longer outstanding; |
| (b) | The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice,
in the form attached as Schedule 1 hereto (the “Exercise Notice”), appropriately completed and duly
signed, (ii) payment of the Exercise Price for the number of Warrant Shares as to which this
Warrant is being exercised, and the date such items are delivered to the Company (as determined in
accordance with the notice provisions hereof) is an “Exercise Date.” The delivery by (or on behalf
of) the Holder of the Exercise Notice and the applicable Exercise Price as provided above shall
constitute the Holder’s certification to the Company that its representations contained in Section
4 of the Subscription Agreement are true and correct as of the Exercise Date as if remade in their
entirety. Execution and delivery of the Exercise Notice shall have the same effect as cancellation
of the original Warrant and issuance of a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares. |
3. Delivery of Warrant Shares. Upon exercise of this Warrant, the Company shall promptly
issue or cause to be issued and cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise, free of restrictive legends, unless a registration statement covering
the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not
then effective or the Warrant Shares are not freely transferable without volume restrictions
pursuant to Rule 144 under the Act. The Holder shall be deemed to have become the holder of record
of such Warrant Shares as of the Exercise Date.
4. Charges, Taxes and Expenses. The Holder shall be responsible for all charges, taxes and
expenses that may arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
5. 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 (in such case)
and, in each case, a customary and reasonable indemnity (which shall not include a surety bond), 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.
6. Reservation of Warrant Shares. As of the date hereof, the Company does not have a
sufficient number of authorized but unissued shares of Common Stock to enable it to issue Warrant
Shares upon the exercise of this Warrant as herein provided. The Company covenants that it will,
as soon as is practicable, increase the number of its authorized but unissued shares of Common
Stock so that it can at all times have reserved and available 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 Company covenants that all Warrant Shares so 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.
7. 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 7.
| (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 its outstanding
shares of Common Stock into a larger number of shares, or (iii) combines its 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, the numerator of which shall be the number of shares of Common Stock
outstanding immediately before such event and the denominator of which 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.
|
| (b) | Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraph (a) of this Section, the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of
Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to
such adjustment.
|
| (c) | Calculations. All calculations under this Section 7 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 sale or issuance of any such shares shall be considered an issue or sale of
Common Stock.
|
8. Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately
available funds
9. No Fractional Shares. No fractional 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
number of Warrant Shares to be issued shall be rounded down to the next whole number.
10. 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 prior to 5:30 p.m. (Central time) on a business day, (ii) the next business
day after the date of transmission, if such notice or communication is delivered via facsimile on a
day that is not a business day or later than 5:30 p.m. (Central time) on any business day, (iii)
the business day following the date of mailing, if sent by nationally recognized overnight courier
service specifying next business day delivery, or (iv) upon actual receipt by the party to whom
such notice is required to be given, if by hand delivery. The address and facsimile number of a
party for such notices or communications shall be as set forth in the Subscription Agreement unless
changed by such party by two business days’ prior notice to the other party in accordance with this
Section 10.
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11. Miscellaneous.
| (a) | The Holder, solely in such Person’s capacity as a holder of this Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share capital of
the Company for any purpose, nor shall anything contained in this Warrant be construed
to confer upon the Holder, solely in such Person’s capacity as the Holder of this
Warrant, any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, amalgamation, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person
is then entitled to receive upon the due exercise of this Warrant. |
| (b) | This Warrant may be only be assigned by the Holder upon receipt of the Company’s
prior written consent to such assignment. 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 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, or their successors and assigns. |
| (c) | This Warrant shall be governed by the laws of the State of Minnesota without
regard to its conflicts-of-law principles. Any judicial action to enforce any right of
any party under this Warrant may be brought and maintained in Minnesota state or federal
courts located in Hennepin County. Accordingly, the parties hereby submit to the
process, jurisdiction and venue of any such court. Each party hereby waives, and agrees
not to assert, any claim that it is not personally subject to the jurisdiction of the
foregoing courts in the State of Minnesota or that any action or other proceeding
brought in compliance with this Section is brought in an inconvenient forum. |
| (d) | 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. |
| (e) | 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. |
| (f) | Except as otherwise set forth herein, prior to exercise of this Warrant, the
Holder hereof shall not, by reason of by being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares. |
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.
| VERITEC, INC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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SCHEDULE 1
FORM OF EXERCISE NOTICE
FORM OF EXERCISE NOTICE
(To be
executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant)
Ladies and Gentlemen:
(1) The undersigned is the Holder of Warrant No. (the “Warrant”) issued by Veritec, Inc.
a Nevada corporation (the “Company”). Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.
(2) The
undersigned hereby exercises its right to purchase Warrant Shares pursuant to the Warrant.
(3) The Holder shall pay the sum of $ in immediately available funds to the Company in accordance with the terms of the Warrant.
(3) The Holder shall pay the sum of $ in immediately available funds to the Company in accordance with the terms of the Warrant.
(4) Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant
Shares in accordance with the terms of the Warrant.
Dated: ,
Name of Holder:
By: |
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| Name: | ||||||
| Title: | ||||||
| (Signature must conform in all respects to name of Xxxxxx as specified on the face of the Warrant) | ||||||
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