EXHIBIT 99.5
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 "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.
XXXXXXXX TECHNOLOGIES, INC.
WARRANT
Warrant No. CS - __ Original Issue Date: ________________, 2005
XXXXXXXX TECHNOLOGIES, INC., a Florida corporation (the "COMPANY"),
hereby certifies that, for value received, _______________________ or its
registered assigns (the "HOLDER"), is entitled to purchase from the Company up
to a total of _________ shares of Common Stock (each such share, a "WARRANT
SHARE" and all such shares, the "WARRANT SHARES"), at any time and from time to
time from the Original Issue Date and through and including _____________, 2010
(the "EXPIRATION DATE"), and subject to the following terms and conditions:
9. DEFINITIONS. As used in this Warrant, the following terms shall have
the respective definitions set forth in this Section 1. Capitalized terms that
are used and not defined in this Warrant that are defined in the Purchase
Agreement (as defined below) shall have the respective definitions set forth in
the Purchase Agreement.
"BUSINESS DAY" means any day except Saturday, Sunday and any day that
is a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.
"COMMON STOCK" means the common stock of the Company, par value $.0001
per share, and any securities into which such common stock may hereafter be
reclassified.
"EXERCISE PRICE" means $.50.
"FUNDAMENTAL TRANSACTION" means any of the following: (1) the Company
effects any merger or consolidation of the Company with or into another Person
in which the Company is not a surviving entity, (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 the Common Stock is effectively
converted into or exchanged for other securities, cash or property.
"ORIGINAL ISSUE DATE" means the Original Issue Date first set forth on
the first page of this Warrant.
"NEW YORK COURTS" means the state and federal courts sitting in the
City of New York, Borough of Manhattan.
"TRADING DAY" means (i) a day on which the Common Stock is traded on a
Trading Market, (ii) if the Common Stock is not quoted on any Trading Market, a
day on which the Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices), or
(iii) in the event that the Common Stock is not listed or quoted as set forth in
(i) or (ii) hereof, a Business Day.
10. 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.
11. 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, 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 of a holder of a Warrant.
12. EXERCISE AND DURATION OF WARRANTS. This Warrant shall be
exercisable by the registered Holder at any time and from time to time after the
Original Issue Date and through and including the Expiration Date. At 6:30 p.m.,
New York City time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value. The Company
may not call or redeem any portion of this Warrant without the prior written
consent of the affected Holder.
13. DELIVERY OF WARRANT SHARES.
(c) To effect exercises hereunder, the Holder shall not be required
to physically surrender this Warrant unless the aggregate Warrant Shares
represented by this Warrant is being exercised. Upon delivery of the Exercise
Notice (in the form attached hereto) to the Company (with the attached Warrant
Shares Exercise Log) by facsimile showing confirmation of receipt and upon
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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.
(d) 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.
(e) 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 Xxxxxx'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
Warrant Shares upon exercise of the Warrant as required pursuant to the terms
hereof.
14. CHARGES, TAXES AND EXPENSES. Issuance and delivery of 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 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.
15. 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 (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.
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16. 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 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.
17. 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.
(c) 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.
(d) FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is
outstanding there is 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
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 new warrant substantially in the form of this Warrant and consistent
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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 insuring that the Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(c) NUMBER OF WARRANT SHARES. Simultaneously with any adjustment to
the Exercise Price pursuant to this Section 9, 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 adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment.
(d) 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.
(e) 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.
(f) 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 (but only to the extent
such disclosure would not result in the dissemination of material, non-public
information to the Holder) at least 10 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 insure 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 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.
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18. PAYMENT OF EXERCISE PRICE. The Holder may pay the Exercise Price in
one of the following manners:
(c) CASH EXERCISE. The Holder may deliver immediately available
funds; or
(d) CASHLESS EXERCISE. If an Exercise Notice is delivered at a time
when a registration statement permitting the Holder to resell the Warrant Shares
is not then effective or the prospectus forming a part thereof is not then
available to the Holder for the resale of the Warrant Shares, then the Holder
may notify the Company in an Exercise Notice of its election to utilize 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 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.
19. LIMITATIONS ON EXERCISE.
(c) Notwithstanding anything to the contrary contained herein, the
number of Warrant Shares 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 insure 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 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. 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 Fundamental
Transaction as contemplated in Section 9 of this Warrant. By written notice to
the Company, an Investor may waive the provisions of this Section 11(a) as to
itself but any such waiver will not be effective until the 61st day after
delivery thereof and such waiver shall have no effect on any other Investor.
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(d) Notwithstanding anything to the contrary contained herein, the
number of Warrant Shares 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 insure 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. 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 Fundamental
Transaction as contemplated in Section 9 of this Warrant. This restriction may
not be waived.
20. 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 by the applicable Trading Market on the date of
exercise.
21. 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 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, to Xxxxxxxx Technologies, Inc., 00 Xxxxxxx Xxxx, #000, Xxxxxxxxxx,
XX 00000, Attn: Chief Financial Officer, or to facsimile No.: (000) 000-0000 (or
such other address as the Company shall indicate in writing in accordance with
this Section), 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.
22. WARRANT AGENT. The Company shall serve as warrant agent under this
Warrant. Upon 10 days' 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.
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23. REGISTRATION RIGHTS
(c) DEFINITIONS. For purposes of this Section 15, the following
terms shall have the meanings set forth below:
(i) A "BLACKOUT EVENT" means any of the following: (a) the
possession by the Company of material information that is not ripe for
disclosure in a registration statement or prospectus, as determined reasonably
and in good faith by the Chief Executive Officer or the Board of Directors of
the Company or that disclosure of such information in the Registration Statement
or the prospectus constituting a part thereof would be materially detrimental to
the business and affairs of the Company; or (b) any material engagement or
activity by the Company which would, in the reasonable and good faith
determination of the Chief Executive Officer or the Board of Directors of the
Company, be materially adversely affected by disclosure in a registration
statement or prospectus at such time.
(ii) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
(iii) "INCLUDED SHARES" shall mean any Registrable Shares
included in a Registration.
(iv) "REGISTRABLE SHARES" shall mean the shares of Common
Stock (or such stock or securities as at the time are receivable upon the
exercise of these Warrants) issuable upon exercise of the Warrants and shares or
securities issued as a result of stock split, stock dividend or reclassification
of such shares.
(v) "REGISTRATION" shall mean a registration of securities
under the Securities Act pursuant to Section 15(b) of this Agreement.
(vi) "REGISTRATION PERIOD" with respect to any Registration
Statement the period commencing the effective date of the Registration Statement
and ending upon withdrawal or termination of the Registration Statement.
(vii) "REGISTRATION STATEMENT" shall mean the registration
statement, as amended from time to time, filed with the SEC in connection with a
Registration.
(viii) "SEC" shall mean the Securities and Exchange
Commission.
(d) PIGGYBACK REGISTRATION. Unless the Registrable Shares are then
included in a Registration Statement or can be sold under the provisions of Rule
144 without limitation as to volume, whether pursuant to Rule 144(k) or
otherwise, if the Company shall determine to register any Common Stock under the
Securities Act for sale in connection with a public offering of Common Stock
(other than pursuant to an employee benefit plan or a merger, acquisition or
similar transaction), the Company will give written notice thereof to Holder and
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will include in such Registration Statement any of the Registrable Shares which
Holder may request be included ("INCLUDED Shares") by a writing delivered to the
Company within 15 days after the notice given by the Company to Holder;
PROVIDED, HOWEVER, that if the offering is to be firmly underwritten, and the
representative of the underwriters of the offering refuse in writing to include
in the offering all of the shares of Common Stock requested by the Company and
others, the shares to be included shall be allocated first to the Company and
any shareholder who initiated such Registration and then among the others based
on the respective number of shares of Common Stock held by such persons. If the
Company decides not to, and does not, file a Registration Statement with respect
to such Registration, or after filing determines to withdraw the same before the
effective date thereof, the Company will promptly so inform Xxxxxx, and will not
be obligated to complete the registration of the Included Shares included
therein.
(e) CERTAIN COVENANTS. In connection with any Registration:
(i) the Company shall take all lawful action such that the
Registration Statement, any amendment thereto and the prospectus forming a part
thereof does not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading. Upon becoming aware of the occurrence of any event or the discovery
of any facts during the Registration Period that make any statement of a
material fact made in the Registration Statement or the related prospectus
untrue in any material respect or which material fact is omitted from the
Registration Statement or related prospectus that requires the making of any
changes in the Registration Statement or related prospectus so that it will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading (taking into account any prior amendments or
supplements), the Company shall promptly notify Holder, and, subject to the
provisions of Section 9.5, as soon as reasonably practicable prepare (but,
subject to Section 9.5, in no event more than five business days in the case of
a supplement or seven business days in the case of a post-effective amendment)
and file with the SEC a supplement or post-effective amendment to the
Registration Statement or the related prospectus or file any other required
document so that, as thereafter delivered to a purchaser of Shares from Holder,
such prospectus will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(ii) At least three business days prior to the filing with the
SEC of the Registration Statement (or any amendment thereto) or the prospectus
forming a part thereof (or any supplement thereto), the Company shall provide
draft copies thereof to Holder and shall consider incorporating into such
documents such comments as Holder (and its counsel) may propose to be
incorporated therein. Notwithstanding the foregoing, no prospectus supplement,
the form of which has previously been provided to Holder, need be delivered in
draft form to Holder.
(iii) the Company shall promptly notify Holder upon the
occurrence of any of the following events in respect of the Registration
Statement or the prospectus forming a part thereof: (i) the receipt of any
request for additional information from the SEC or any other federal or state
governmental authority, the response to which would require any amendments or
supplements to the Registration Statement or related prospectus; (ii) the
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issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; or (iii) the receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(iv) the Company shall furnish to Holder with respect to the
Included Shares registered under the Registration Statement (and to each
underwriter, if any, of such Shares) such number of copies of prospectuses and
such other documents as Holder may reasonably request, in order to facilitate
the public sale or other disposition of all or any of the Included Shares by
Holder pursuant to the Registration Statement.
(v) In connection with any registration pursuant to Section
9.2, the Company shall file or cause to be filed such documents as are required
to be filed for normal Blue Sky clearance in states specified in writing by
Holder; PROVIDED, HOWEVER, that the Company shall not be required to qualify to
do business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented.
(vi) the Company shall bear and pay all expenses incurred by
it and Holder (other than underwriting discounts, brokerage fees and commissions
and fees and expenses of more than one law firm) in connection with the
registration of the Shares pursuant to the Registration Statement.
(vii) As a condition to including Registrable Shares in a
Registration Statement, Holder must provide to the Company such information
regarding itself, the Registrable Shares held by it and the intended method of
distribution of such Shares as shall be required to effect the registration of
the Registrable Shares and, if the offering is being underwritten, Holder must
provide such powers of attorney, indemnities and other documents as may be
reasonably requested by the managing underwriter.
(viii) Following the effectiveness of the Registration
Statement, upon receipt from the Company of a notice that the Registration
Statement contains an untrue statement of material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made,
Holder will immediately discontinue disposition of Included Shares pursuant to
the Registration Statement until the Company notifies Holder that it may resume
sales of Included Shares and, if necessary, provides to Holder copies of the
supplemental or amended prospectus.
(f) BLACKOUT EVENT. The Company shall not be obligated to file a
post-effective amendment or supplement to the Registration Statement or the
prospectus constituting a part thereof during the continuance of a Blackout
Event; provided, however, that no Blackout Event may be deemed to exist for more
than 60 days. Without the express written consent of Holder, if required to
permit the continued sale of Shares by Xxxxxx, a post-effective amendment or
supplement to Registration Statement or the prospectus constituting a part
thereof must be filed no later than the 61st day following commencement of a
Blackout Event.
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(g) RULE 144. With a view to making available to Holder the
benefits of Rule 144, the Company agrees, until Xxxxxx can sell all remaining
Registrable Shares under the provisions Rule 144(k), to:
a) comply with the provisions of paragraph (c)(1) of Rule 144;
and
b) file with the SEC in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of a Purchaser, make available other information as required
by, and so long as necessary to permit sales of its Shares pursuant to, Rule
144.
(h) INDEMNIFICATION BY THE COMPANY. the Company agrees to indemnify
and hold harmless Holder, and its officers, directors and agents, and each
person, if any, who controls Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities caused by (i) any violation or alleged
violation by the Company of the Securities Act, Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
Exchange Act or any state securities laws, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Included Shares (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or (iii) caused by any omission or alleged omission to
state therein a material fact required to be stgggated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by Xxxxxx or on Xxxxxx's behalf expressly for use therein.
(i) INDEMNIFICATION BY HOLDER. Holder agrees to indemnify and hold
harmless the Company, its officers, directors and agents and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to Holder, but only with respect to
information furnished in writing by Xxxxxx or on Xxxxxx's behalf expressly for
use in any registration statement or prospectus relating to the Registrable
Shares, or any amendment or supplement thereto, or any preliminary prospectus.
(j) INDEMNIFICATION PROCEDURES. In case any proceeding (including
any governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to this Section 15, such
person (an "INDEMNIFIED PARTY") shall promptly notify the person against whom
such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent (and only to the extent
that) that the Indemnifying Party is materially prejudiced by such failure to
notify. In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
11
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties (including in the case of Holder, all of its
officers, directors and controlling persons) and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate firm
for the Indemnified Parties, the Indemnified Parties shall designate such firm
in writing to the Indemnifying Party. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
(k) CONTRIBUTION. To the extent any indemnification by an
Indemnifying Party is prohibited or limited by law, the Indemnifying Party
agrees to make the maximum contribution with respect to any amounts for which,
he, she or it would otherwise be liable under this Section 15(i) to the fullest
extent permitted by law; provided, however, that (i) no contribution shall be
made under circumstances where a party would not have been liable for
indemnification under this Section 10.6 and (ii) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning used in
the Securities Act) shall be entitled to contribution from any party who was not
guilty of such fraudulent misrepresentation. If the Company shall determine to
register any Common Stock under the Securities Act for sale in connection with a
public offering of Common Stock (other than pursuant to an employee benefit plan
or a merger, acquisition or similar transaction), the Company will give written
notice thereof to Holder and will include in such registration any of the
Registrable Shares which Holder may request be included ("INCLUDED SHARES") by a
writing delivered to the Company within 15 days after the notice given by the
Company to Holder; provided, however, that if the offering is to be firmly
underwritten, and the representative of the underwriters of the offering refuse
in writing to include in the offering all of the shares of Common Stock
requested by the Company and others, the shares to be included shall be
allocated first to the Company and any shareholder who initiated such
registration and then among the others based on the respective number of shares
of Common Stock held by such persons. If the Company decides not to, and does
not, file a registration statement with respect to such registration, or after
filing determines to withdraw the same before the effective date thereof, the
Company will promptly so inform Xxxxxx, and the Company will not be obligated to
complete the registration of the Included Shares included therein. The Company
will pay all costs and expenses of such registration other than underwriting
discounts or brokerage fees or commissions in connection with the sale of the
Included Shares and fees and costs of accountants, attorneys or others retained
by Xxxxxx. For purposes of this Agreement, "REGISTRABLE SHARES" shall mean the
shares of Common Stock (or such stock or securities as at the time are
12
receivable upon the exercise of these Warrants) issuable upon exercise of the
Warrants and any shares issued as a result of stock split, stock dividend or
reclassification of such shares; PROVIDED, HOWEVER, that any share shall cease
to be a Registrable Share if and when (a) it has been effectively registered
under the Securities Act and disposed of pursuant thereto, or (b) the holder may
sell such share (or in the case of a share not yet issued under this Warrant,
the holder may exercise this Warrant, including pursuant to Section 1.4, and
sell such share issued upon such exercise) in the market on which the Company
common stock is then traded without registration under the Securities Act.
(l) In connection with any registration under this Section 15, the
Company will:
(i) furnish to Holder a copy of the registration statement and
each amendment to the registration statement and such number of copies of the
final prospectus included in the registration statement as Holder may reasonably
request in order to facilitate the distribution of the Included Shares owned by
Holders; and
(ii) notify Holder of the issuance of any stop order by the
Securities and Exchange Commission in connection with the registration
statement.
(m) As a condition to including Registrable Shares in the
registration statement, Holder must provide to the Company such information
regarding itself, the Registrable Shares held by it and the intended method of
distribution of such Shares as shall be required to effect the registration of
the Registrable Shares and, if the offering is being underwritten, Holder must
provide such powers of attorney, indemnities and other documents as may be
reasonably requested by the managing underwriter.
(n) Following the effectiveness of the registration statement, upon
receipt from the Company of a notice that the registration statement contains an
untrue statement of material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances under which they were made, Holder will
immediately discontinue disposition of Included Shares pursuant to the
registration statement until the Company notifies Holder that it may resume
sales of Included Shares and, if necessary, provides to Holder copies of the
supplemental or amended prospectus. In such event, Xxxxxx will deliver to the
Company all copies, other than permanent file copies then in Holder's
possession, of the most recent prospectus covering the Included Shares.
(o) The Company agrees to indemnify and hold harmless Holder, and
its officers, directors and agents, and each person, if any, who controls Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") from and
against any and all losses, claims, damages and liabilities caused by (i) any
violation by the Company of the Securities Act, Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
Exchange Act or any state securities laws, (ii) any materially untrue statement
of a material fact contained in any registration statement or prospectus
relating to the Included Shares (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or (iii) caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information furnished in writing to the Company by Holder or
on Xxxxxx's behalf expressly for use therein.
13
(p) Xxxxxx agrees to indemnify and hold harmless the Company, its
officers, directors and agents and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to Holder, but only with respect to information furnished in writing by Holder
or on Xxxxxx's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Shares, or any amendment or supplement
thereto, or any preliminary prospectus.
(q) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 10, such person (an
"INDEMNIFIED Party") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent (and only to the extent
that) that the Indemnifying Party is materially prejudiced by such failure to
notify. In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the reasonable judgment of such Indemnified Party representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties (including in the case of Holder, all of its
officers, directors and controlling persons) and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate firm
for the Indemnified Parties, the Indemnified Parties shall designate such firm
in writing to the Indemnifying Party. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such proceeding.
14
24. MISCELLANEOUS.
(c) 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 and their successors and
assigns.
(d) All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York (except for matters governed by corporate law in the State of Delaware),
without regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and
defense of this Warrant and the transactions herein contemplated ("PROCEEDINGS")
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York Courts. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, 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 New York Court, or that
such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such 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 party hereto
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. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(e) 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.
(f) 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.
(g) 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.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
15
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
XXXXXXXX TECHNOLOGIES, INC.
By:
------------------------------------
Name:
Title:
16
EXERCISE NOTICE
XXXXXXXX TECHNOLOGIES, INC.
WARRANT DATED [ ], 2005
The undersigned Holder hereby irrevocably elects to purchase _____________
shares of Common Stock pursuant to the above referenced Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.
(1) The undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the Warrant.
(2) The Holder intends that payment of the Exercise Price shall be made as
(check one):
____ "Cash Exercise" under Section 10
____ "Cashless Exercise" under Section 10
(3) If the holder has elected a Cash Exercise, the holder shall pay the sum of
$____________ 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.
(5) By its delivery of this Exercise Notice, the undersigned 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.
Dated: ______________, ____ Name of Holder:
(Print)_________________________________
By:_____________________________________
Name:___________________________________
Title:__________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
17
WARRANT SHARES EXERCISE LOG
---------------------------
----------------- ------------------ ----------------- --------------------
Date Number of Warrant Number of Warrant Number of Warrant
Shares Available Shares Exercised Shares Remaining to
to be Exercised be Exercised
----------------- ------------------ ----------------- --------------------
----------------- ------------------ ----------------- --------------------
18
XXXXXXXX TECHNOLOGIES, INC.
WARRANT ORIGINALLY ISSUED [ ], 2005
WARRANT NO. [ ]
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
above-captioned Warrant to purchase ____________ shares of Common Stock to which
such Warrant relates and appoints ________________ attorney to transfer said
right on the books of the Company with full power of substitution in the
premises.
Dated: _______________, ____
________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
________________________________________
Address of Transferee
________________________________________
________________________________________
In the presence of:
________________________________________
19
