RXBIDS FORM OF CLASS A COMMON STOCK PURCHASE WARRANT
Exhibit
4.3
NEITHER
THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A
FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT.
FORM
OF CLASS A COMMON STOCK PURCHASE WARRANT
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Warrant
No.___________
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Original Issue
Date: __________, 2011
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Initial
Holder: [ ]
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No. of Shares Subject to
Warrant:
[ ]
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Initial Exercise Price Per
Share: $0.375 (subject to the adjustment pursuant to Section
9)
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Expiration
Time: 5:00 p.m., New York time, on __________,
2014
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RXBIDS, a Nevada corporation (to be
renamed Xsovt Brands, Inc.) (the “Company”), hereby certifies
that, for value received, the Initial Holder shown above, or its permitted
registered assigns (the “Holder”), is entitled to purchase from the Company up
to the number of shares of its common stock, par value $.01 per share (the
“Common Stock”), shown
above (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at the exercise price shown above (as may be adjusted from time
to time as provided herein, the “Exercise Price”), at any time
and from time to time on or after the original issue date indicated above (the
“Original Issue Date”)
and through and including the expiration time shown above (the “Expiration Time”), and subject
to the following terms and conditions:
This
Warrant is being issued pursuant to a Subscription Agreement, dated __________,
2011 (the “Subscription
Agreement”), by and among the Company and the Initial
Holder.
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.
List of Warrant
Holders. 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 (which shall include the Initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder 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.
List of Transfers;
Restrictions on Transfer. The Company shall register any transfer of all
or 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, a new Warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new 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 in respect of the New Warrant
that the Holder has in respect of this Warrant.
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4.
Exercise and Duration of
Warrant.
(a)
All or any part of this Warrant
shall be exercisable by the registered Holder in any manner permitted by this
Section 4 at any time and from time to time on or after the Original Issue Date
and through and including the Expiration Time. At the Expiration
Time, 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 shall no
longer be outstanding.
(b)
The Holder may exercise this Warrant by delivering to the Company: (i) an
exercise notice, in the form attached hereto (the “Exercise Notice”), completed
and duly signed, and (ii) payment by wire transfer of immediately available
funds to an account designated by the Company of the Exercise Price for the
number of Warrant Shares as to which this Warrant is being
exercised. The Holder shall be required to deliver the original
Warrant in order to effect an exercise hereunder. The date such items
are delivered to the Company (as determined in accordance with the notice
provisions hereof) is an “Exercise
Date.” 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.
(c)
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.
5.
Delivery of Warrant
Shares.
(a)
Upon exercise of this
Warrant, the Company shall promptly (but in no event later than ten (10) Trading
Days after the Exercise Date) 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. The Holder, or any Person permissibly so designated by the Holder
to receive Warrant Shares, shall be deemed to have become the holder of record
of such Warrant Shares as of the Exercise Date. If as of the time of
exercise the Warrant Shares constitute restricted or control securities, the
Holder, by exercising, agrees not to resell them except in compliance with all
applicable securities laws.
(b)
To the extent permitted
by law, 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 that 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.
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(c)
If the Company fails to
cause its transfer agent to transmit to the Holder a certificate or the
certificates (either physical or electronic) representing the Warrant Shares
pursuant to the terms hereof by applicable delivery date, then, the Holder will
have the right to rescind such exercise.
6.
Charges, Taxes and
Expenses. Issuance and delivery of certificates for Warrant Shares 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 that may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or the 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 us its
best efforts to 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 that 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 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 to
Exercise Price. 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 Splits and
Dividends. If the outstanding shares of Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in
respect of Common Stock, the Exercise Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend be proportionately reduced. If outstanding shares of Common
Stock shall be combined into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When
any adjustment is required to be made in the Exercise Price, the number of
shares of Warrant Shares purchasable upon the exercise of this Warrant shall be
changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Exercise Price in effect immediately prior to
such adjustment, by (ii) the Exercise Price in effect immediately after
such adjustment.
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(b) Merger Sale,
Reclassification, etc. In case of any (i)
consolidation or merger (including a merger in which the Company is the
surviving entity), (ii) sale or other disposition of all or substantially all of
the Company’s assets or distribution of property to shareholders (other than
distributions payable out of earnings or retained earnings), or
reclassification, change or conversion of the outstanding securities of the
Company or of any reorganization of the Company (or any other corporation the
stock or securities of which are at the time receivable upon the exercise of
this Warrant) or any similar corporate reorganization on or after the date
hereof, then and in each such case the holder of this Warrant, upon the exercise
hereof at any time thereafter shall be entitled to receive, in lieu of the stock
or other securities and property receivable upon the exercise hereof prior to
such consolidation, merger, sale or other disposition, reclassification, change,
conversion or reorganization, the stock or other securities or property to which
such holder would have been entitled upon such consummation if such holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in Section 9(a), and in each such case, the terms of this
Section 9 shall be applicable to the shares of stock or other securities
properly receivable upon the exercise of this Warrant after such consolidation,
merger, sale or other disposition, reclassification, change, conversion or
reorganization.
(c) Weighted Average
Adjustment. Except for Excluded Issuances (as defined below), if the
Company Issues (as defined below) Additional Common Shares (as defined below)
after the Original Issue Date and the consideration per Additional Common Share
is less than the then applicable Exercise Price (a “Diluting Issuance”), the
Exercise Price in effect immediately before such Diluting Issuance shall be
reduced, concurrently with such Diluting Issuance, to a price (calculated to the
nearest hundredth of a cent) determined by multiplying the Exercise Price by a
fraction:
(i) the
numerator of which is the number of shares of Common Stock outstanding
immediately before such Diluting Issuance plus the number
shares of Common Stock that the aggregate consideration received by Company for
the Additional Common Shares would purchase at such current market price per
share of Common Stock, and
(ii) the
denominator of which is the number of shares of Common Stock outstanding
immediately before such Diluting Issuance plus the number of
such Additional Common Shares.
For
purposes of clarity, the exercise shall be determined in accordance with the
following formula:
EP2
= EP1 x ((A + B) / (A + C))
For
purposes of the foregoing formula, the following definitions shall
apply:
“EP2” shall mean the Exercise
Price in effect immediately after such Diluting Issuance of Additional Common
Shares;
“EP1” shall mean the Exercise
Price in effect immediately prior to such Diluting Issuance of Additional Common
Shares;
“A” shall mean the number of
shares of Common Stock outstanding and deemed outstanding immediately prior to
such Diluting Issuance of Additional Common Shares;
“B” shall mean the number of
shares of Common Stock that would have been issued if such Additional Common
Shares had been issued at such current market price (determined by dividing the
aggregate consideration received or receivable by the Company in respect of such
issue by such current market price); and
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“C” shall mean the number of
such Additional Common Shares issued in such transaction.
The term
“Issue” means to grant,
issue or sell Additional Common Shares, whichever of the foregoing is the first
to occur.
The term
“Additional Common
Shares” means all Common Stock (including reissued shares), Options and
Convertible Securities Issued after the date of the Warrant during the term of
the Warrant.
The term
“Options” means rights,
options or warrants to subscribe for, purchase or otherwise acquire either
Common Stock or Convertible Securities.
The term
“Convertible Securities”
means any evidence of indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for Common Stock.
The term
“Excluded Issuance”
means any of the following:
(i) Shares
of Series A 6% Cumulative Convertible Preferred Stock of the Company (the “Series A Stock”) and shares of
Common Stock, Options or Convertible Securities issued upon conversion of or as
a dividend or distribution on the Series A Stock or any Convertible
Securities issued pursuant to the Subscription Agreement;
(ii) Shares
of a to-be-designated Series B Convertible Stock which shall rank senior to the
Series A Stock;
(iii) shares
of Common Stock, Options or Convertible Securities issued to officers, directors
or employees of, or consultants, advisors or agents to, the Company or any of
its subsidiaries pursuant to stock agreements, purchase plans, benefit plans,
employee incentive programs, stock options or warrants;
(iv) shares
of Common Stock or Convertible Securities issued upon the exercise of Options or
shares of Common Stock issued upon the conversion or exchange of Convertible
Securities, in each case provided such issuance is pursuant to the terms of such
Option or Convertible Security;
(v) shares
of Common Stock, Options or Convertible Securities issued as all or part of the
consideration for the acquisition (whether by merger, consolidation, acquisition
or otherwise) by the Company of stock, business, or assets of any other entity
or person in a transaction (including, without limitation, Xsovt,
LLC);
(vi) shares
of Common Stock, Options or Convertible Securities issued to banks, equipment
lessors or other financial institutions, or to real property lessors, pursuant
to a debt financing, equipment leasing or real property leasing
transaction;
(vii) shares
of Common Stock, Options or Convertible Securities issued to suppliers or third
party service providers in connection with the provision of goods or services to
the Company;
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(viii) shares
of Common Stock, Options or Convertible Securities issued pursuant to licensing,
partnerships joint venture and other strategic business transactions, (the
primary purpose of which is not to raise equity capital); and
(ix) shares
of Common Stock issued pursuant to any Options or Convertible Securities issued
or to be issued as of the date hereof, including Class C and Class D warrants of
the Company to purchase Common Stock.
(d) Notwithstanding
anything to the contrary herein, if the Company creates a new class of common
stock into which the current issued and outstanding shares of Common Stock of
the Company may be exchanged, no anti-dilution rights set forth in this Article
2 of this Warrant shall be triggered.
(e) Notwithstanding
anything to the contrary herein, the Exercise Price and the number of Warrant
Shares issuable upon exercise hereof shall remain unchanged in connection with
the first reverse stock split of the Company’s issued and outstanding Common
Stock which is to occur promptly following the closing of the Transactions (as
such term is defined in the Subscription Agreement) (the “Stock Split”), it being
acknowledged that this Warrant shall be interpreted in every respect as if the
Stock Split occurred prior to the issuance of this Warrant.
(f) No Net-Cash
Settlement. In no event will any Holder of this Warrant be
entitled to receive a net-cash settlement in lieu of physical settlement in
shares of Common Stock, regardless of whether any of such holder’s Warrant
Shares are registered pursuant to an effective registration
statement.
10.
No Fractional
Shares. No fractional Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any fractional shares
that 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 by the applicable trading market on the Exercise Date or round up such
fractional share to a whole number.
11.
Notices. Any
and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be delivered in accordance with
the procedures set forth in the Subscription Agreement.
10.
Warrant Agent. The
Company shall serve as warrant agent under this Warrant. At any time
upon written notice to the Holder, the Company may appoint a new warrant
agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new 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.
11.
Miscellaneous.
(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 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 holders of a majority in interest of the Class A Warrants and
Class B Warrants of the Company voting as a single class, or their successors
and assigns.
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(b)
Each party agrees that
all legal proceedings concerning the interpretations, enforcement and defense of
the transactions contemplated by this Warrant (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be shall be settled by arbitration in accordance with
the provisions of Section 6(e) of the Subscription Agreement. EACH
PARTY HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND
EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
(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 therefore, and
upon so agreeing, shall incorporate such substitute provision in this
Warrant.
(e)
Prior to exercise of this
Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled
to any rights of a stockholder with respect to the Warrant Shares.
(f)
No provision hereof, in
the absence of any affirmative action by Holder to exercise this Warrant to
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.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
Company has caused this Class A Warrant to be duly executed by its authorized
officer as of the date first indicated above.
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By:
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Name: Xxx
Xxxxxxxxxx
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Title:
President and Chief Executive
Officer
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8
EXERCISE
NOTICE
Ladies
and Gentlemen:
(1)
The undersigned hereby elects to exercise the above-referenced Warrant with
respect to [ ]
shares of Common Stock. Capitalized terms used herein and not otherwise
defined herein have the respective meanings set forth in the
Warrant.
(2)
The holder shall pay the sum of
$ ______________ to the Company in accordance
with the terms of the Warrant.
(3)
Pursuant to this Exercise Notice, the Company shall deliver to the Holder
________________ Warrant Shares determined in accordance with the terms of the
Warrant.
A
certificate or certificates representing said Warrant Shares in the name of the
undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited
Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as
amended.
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Dated:
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HOLDER:
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Print
name
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By:
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Title:
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9
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 to which the within Warrant relates and appoints __________________
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.
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Dated:
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TRANSFEROR:
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name
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By:
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Title:
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TRANSFEREE:
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Print
name
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By:
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Title:
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WITNESS:
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Address
of Transferee:
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Print
name
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