Warrant
Exhibit
4.1
Warrant
THIS WARRANT AND THE SHARES OF COMMON
STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER EITHER
THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS (THE
"STATE ACTS") AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR
OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT
UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF COUNSEL OR SUBMISSION
TO THE COMPANY OF SUCH EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL TO THE
COMPANY, IN EACH SUCH CASE, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN
VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT
TO PURCHASE 300,000 SHARES OF COMMON STOCK
(a
Colorado Corporation)
Not
Transferable or Exercisable Except
Upon
Conditions Herein Specified
Void
after 5:00 O'Clock p.m.,
Mountain
Standard Time, on May 31, 2013
ART DIMENSIONS, INC., a
Colorado corporation (the "Company") hereby certifies that SPYGLASS INVESTMENT
PARTNERSHIP, a partnership organized under the laws of the State of
Colorado, its registered successors and permitted assigns registered on the
books of the Company maintained for such purposes as the registered holder
hereof (the "Holder"), for value received, is entitled to purchase from the
Company the number of fully paid and non-assessable shares of Common Stock of
the Company (the "Shares"), stated above at the purchase price of $.001 per
Share (the "Exercise Price") (the number of Shares and Exercise Price being
subject to adjustment as hereinafter provided) upon the terms and conditions
herein provided.
Exhibit
4.1 - Page 1
1. Exercise of
Warrants.
(a) Subject to subsection (b) of this
Section 1, upon presentation and surrender of this Warrant Certificate, with the
attached Purchase Form duly executed, at the principal office of the Company at
0000 X. Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at such other
place as the Company may designate by notice to the Holder hereof, together with
a certified or bank cashier's check payable to the order of the Company in the
amount of the Exercise Price times the number of Shares being purchased, the
Company shall deliver to the Holder hereof, as promptly as practicable,
certificates representing the Shares being purchased. This Warrant may be
exercised in whole or in part; and, in case of exercise hereof in part only, the
Company, upon surrender hereof, will deliver to the Holder a new Warrant
Certificate or Warrant Certificates of like tenor entitling the Holder to
purchase the number of Shares as to which this Warrant has not been
exercised.
(b) This Warrant may be exercised in
whole or in part at any time prior to 5:00 o'clock P.M., Mountain Standard Time,
on May 31, 2013.
2. Exchange and Transfer of
Warrant. This Warrant (a) at any time prior to the exercise hereof, upon
presentation and surrender to the Company, may be exchanged, alone or with other
Warrants of like tenor registered in the name of the Holder, for another Warrant
or other Warrants of like tenor in the name of such Holder exercisable for the
same aggregate number of Shares as the Warrant or Warrants surrendered, and (b)
may be sold, transferred, hypothecated or assigned, in whole or in
part.
3. Rights and Obligations of Warrant
Holder.
(a) The Holder of this Warrant
Certificate shall not, by virtue hereof, be entitled to any rights of a
stockholder in the Company, either at law or in equity; provided, however, in
the event that any certificate representing the Shares is issued to the Holder
hereof upon exercise of this Warrant, such Holder shall, for all purposes, be
deemed to have become the holder of record of such Shares on the date on which
this Warrant Certificate, together with a duly executed Purchase Form, was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such Share certificate. The rights of the Holder of this Warrant
are limited to those expressed herein and the Holder of this Warrant, by its
acceptance hereof, consents to and agrees to be bound by and to comply with all
the provisions of this Warrant Certificate, including, without limitation, all
the obligations imposed upon the Holder hereof by Sections 2 and 5 hereof. In
addition, the Holder of this Warrant Certificate, by accepting the same, agrees
that the Company may deem and treat the person in whose name this Warrant
Certificate is registered on the books of the Company maintained for such
purpose as the absolute, true and lawful owner for all purposes whatsoever,
notwithstanding any notation of ownership or other writing thereon, and the
Company shall not be affected by any notice to the contrary.
Exhibit
4.1 - Page 2
(b) No Holder of this Warrant
Certificate, as such, shall be entitled to vote or receive distributions or to
be deemed the holder of Shares for any purpose, nor shall anything contained in
this Warrant Certificate be construed to confer upon any Holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any action by the Company, whether
upon any recapitalization, issue of stock, reclassification of stock, merger,
conveyance or otherwise, receive notice of meetings or other action affecting
stockholders (except for notices provided for herein), receive distributions,
subscription rights, or otherwise, until this Warrant shall have been exercised
and the Shares purchasable upon the exercise thereof shall have become
deliverable as provided herein; provided, however, that any such exercise on any
date when the stock transfer books of the Company shall be closed shall
constitute the person or persons in whose name or names the certificate or
certificates for those Shares are to be issued as the record holder or holders
thereof for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open, and the Warrant surrendered shall
not be deemed to have been exercised, in whole or in part as the case may be,
until the next succeeding day on which stock transfer books are open for the
purpose of determining entitlement to distributions on the Company's common
stock.
4. Shares Underlying Warrants.
The Company covenants and agrees that all Shares delivered upon exercise of this
Warrant shall, upon delivery and payment therefore, be duly and validly
authorized and issued, fully-paid and non-assessable, and free from all stamp
taxes, liens, and charges with respect to the purchase thereof. In addition, the
Company agrees at all times to reserve and keep available an authorized number
of Shares sufficient to permit the exercise in full of this
Warrant.
5. Disposition of Warrants or
Shares.
(a) The holder of this Warrant
Certificate and any transferee hereof or of the Shares issuable upon the
exercise of the Warrant Certificate, by their acceptance hereof, hereby
understand and agree that the Warrant, and the Shares issuable upon the exercise
hereof, have not been registered under either the Securities Act of 1933 (the
"Act") or applicable state securities laws (the "State Acts") and shall not be
sold, pledged, hypothecated, donated, or otherwise transferred (whether or not
for consideration) except upon the issuance to the Company of a favorable
opinion of counsel or submission to the Company of such evidence as may be
satisfactory to counsel to the Company, in each such case, to the effect that
any such transfer shall not be in violation of the Act and the State Acts. It
shall be a condition to the transfer of this Warrant that any transferee thereof
deliver to the Company its written agreement to accept and be bound by all of
the terms and conditions of this Warrant Certificate.
Exhibit
4.1 - Page 3
(b) The stock certificates of the
Company that will evidence the shares of Common Stock with respect to which this
Warrant may be exercisable will be imprinted with conspicuous legend in
substantially the following form:
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"The
securities represented by this certificate have not been registered under
either the Securities Act of 1933 (the "Act") or applicable state
securities laws (the "State Acts") and shall not be sold, pledged,
hypothecated, donated or otherwise transferred (whether or not for
consideration) by the holder except upon the issuance to the Company of a
favorable opinion of its counsel or submission to the company of such
other evidence as may be satisfactory to counsel of the Company, in each
such case, to the effect that any such transfer shall not be in violation
of the Act and the State Acts."
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The
Company does not file, and does not in the foreseeable future contemplate
filing, periodic reports with the Securities and Exchange Commission ("SEC")
pursuant to the provisions of the Securities Exchange Act of 1934, as amended.
Except as provided in Section 8 of this Warrant, the Company has not agreed to
register any of the holder's shares of Common Stock of the Company with respect
to which this Warrant may be exercisable for distribution in accordance with the
provisions of the Act or the State Acts and, the Company has not agreed to
comply with any exemption from registration under the Act or the State Acts for
the resale of the holder's shares of Common Stock of the Company with respect to
which this Warrant may be exercised. Hence, it is the understanding of the
holders of this Warrant that by virtue of the provisions of certain rules
respecting "restricted securities" promulgated by the SEC, the shares of Common
Stock of the Company with respect to which this Warrant may be exercisable may
be required to be held indefinitely, unless and until registered under the Act
and the State Acts, unless an exemption from such registration is available, in
which case the holder may still be limited as to the number of shares of Common
Stock of the Company with respect to which this Warrant may be exercised that
may be sold.
6. Adjustments. The number of
Shares purchasable upon the exercise of each Warrant is subject to adjustment
from time to time upon the occurrence of any of the events enumerated
below.
(a) In case the Company shall: (i) pay
a dividend in Shares, (ii) subdivide its outstanding Shares into a greater
number of Shares, (iii) combine its outstanding Shares into a smaller number of
Shares, or (iv) issue, by reclassification of its Shares, any shares of its
capital stock, the amount of Shares purchasable upon the exercise of each
Warrant immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive upon exercise of the Warrant that number of Shares which
such Holder would have owned or would have been entitled to receive after the
happening of such event had such Holder exercised the Warrant immediately prior
to the record date, in the case of such dividend, or the effective date, in the
case of any such subdivision, combination or reclassification. An adjustment
made pursuant to this subsection (a) shall be made whenever any of such events
shall occur, but shall become effective retroactively after such record date or
such effective date, as the case may be, as to Warrants exercised between such
record date or effective date and the date of happening of any such
event.
Exhibit
4.1 - Page 4
(b) In case the Company shall issue
rights or warrants to all holders of its Shares entitling them to subscribe for
or to purchase Shares at a price per Share which, when added to the amount of
consideration received or receivable by the Company for such rights or warrants,
is less than the Current Market Price (as hereinafter defined) per Share at the
record date, the number of Shares purchasable upon the exercise of this Warrant
shall be adjusted so that thereafter, until further adjusted, each Warrant shall
entitle the Holder to purchase that number of Shares determined by multiplying
the number of Shares purchasable hereunder by a fraction, the numerator of which
shall be the number of additional Shares issuable upon the exercise of such
rights or warrants, and the denominator of which shall be the number of Shares
which an amount equal to the sum of (i) the aggregate exercise price of the
total number of Shares issuable upon the exercise of such rights or warrants,
and (ii) the aggregate amount of consideration, if any, received, or receivable
by the Company for such rights or warrants, would purchase at such Current
Market Price. Such adjustment shall be made whenever such rights or warrants are
issued, but shall also be effective retroactively as to Warrants exercised
between the record date for the determination of stockholders entitled to
receive such rights or warrants and the date such rights or warrants are
issued.
(c) For the purpose of any computation
under subsection (b) above, the Current Market Price per Share at any date shall
be: (i) if the Shares are listed on any national securities exchange, the
average of the daily closing prices for the 15 consecutive business days
commencing 20 business days before the day in question (the "Trading Period");
(ii) if the Shares are not listed on any national securities exchange but are
quoted on the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), the average of the high and low bids as reported by
NASDAQ for the Trading Period; and (iii) if the Shares are neither listed on any
national securities exchange nor quoted on NASDAQ, the higher of (x) the
exercise price then in effect, or (y) the tangible book value per Share as of
the end of the Company's immediately preceding fiscal year.
(d) No adjustment shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the number of Shares purchasable hereunder; provided, however, that any
adjustments which by reason of this subsection (d) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 6 shall be made to the nearest one-hundredth
of a Share.
(e) No adjustment shall be made in any
of the following cases:
(i) Upon the grant or exercise of
stock options now or hereafter granted, or under any employee stock option or
stock purchase plan now or hereafter authorized, to the extent that the
aggregate of the number of Shares which may be purchased under such options and
the number of Shares issued under such employee stock purchase plan is less than
or equal to 10% of the number of Shares outstanding on January 1 of the year of
the grant or exercise;
(ii) Shares issued upon the conversion
of any of the Company's convertible or exchangeable securities;
Exhibit
4.1 - Page 5
(iii) Shares issued in connection with
the acquisition by the Company or by any subsidiary of the Company of 80% or
more of the assets of another corporation or entity, and Shares issued in
connection with the acquisition by the Company or by any subsidiary of the
Company of 80% or more of the voting shares of another corporation (including
Shares issued in connection with such acquisition of voting shares of such other
corporation subsequent to the acquisition of an aggregate of 80% of such voting
shares), Shares issued in a merger of the Company or a subsidiary of the Company
with another corporation in which the Company or the Company's subsidiary is the
surviving corporation, and Shares issued upon the conversion of other securities
issued in connection with any such acquisition or in any such merger;
and
(iv) Shares issued pursuant to this
Warrant and pursuant to all stock options and warrants outstanding on the date
hereof.
(f) Notice to Warrant Holders of
Adjustment. Whenever the number of Shares purchasable hereunder is
adjusted as herein provided, the Company shall cause to be mailed to the Holder
in accordance with the provisions of this Section 6 a notice (i) stating that
the number of Shares purchasable upon exercise of this Warrant have been
adjusted, (ii) setting forth the adjusted number of Shares purchasable upon the
exercise of a Warrant, and (iii) showing in reasonable detail the computations
and the facts, including the amount of consideration received or deemed to have
been received by the Company, upon which such adjustments are
based.
7. Fractional Shares. The
Company shall not be required to issue any fraction of a Share upon the exercise
of Warrants. If more than one Warrant shall be surrendered for exercise at one
time by the same Holder, the number of full Shares which shall be issuable upon
exercise thereof shall be computed on the basis of the aggregate number of
Shares with respect to which this Warrant is exercised. If any fractional
interest in a Share shall be deliverable upon the exercise of this Warrant, the
Company shall make an adjustment therefor in cash equal to such fraction
multiplied by the Current Market Price of the Shares on the business day next
preceding the day of exercise.
8. Registration
Rights.
(a) (i) If the Company at any time
elects or proposes to register any of its Shares (the "Registration Shares")
under the Securities Act of 1933 (the "Act") on Forms X-0, X-0, X-0 or S-18, or
any successor registration statement forms in effect at such time (a
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") pursuant to which Shares owned by any shareholder of the Company may be
registered, the Company shall give prompt written notice (the "Registration
Notice") to the Holder of its intention to register the Registration
Shares.
Exhibit
4.1 - Page 6
(ii) Within 15 days after the
Registration Notice shall have been given to the Holder, the Holder shall give
written notice to the Company (the "Holder Notice"), stating the number of
Shares to be registered (the "Holder Shares") and the states in which the Holder
wishes to register the Shares. In the event the Registration Notice is given by
the Company prior to the time that this Warrant is otherwise exercisable
pursuant to Section l(b) hereof, the Holder Notice shall be accompanied by this
Warrant Certificate together with a duly executed Purchase Form and payment of
the Exercise Price for the Holder Shares in accordance with Section 1
hereof.
(iii) The Company shall use reasonable
efforts to register the Holder Shares under the Act and the applicable state
securities laws (the "State Acts") designated by the Holder in the Holder
Notice. Anything contained herein to the contrary notwithstanding, the Company
shall have the right to withdraw and discontinue registration of the Holder
Shares at any time prior to the effective date of such Registration Statement if
the registration of the Registration Shares is withdrawn or
discontinued.
(iv) The Company shall not be required
to include any of the Holder Shares in any Registration Statement unless the
Holder agrees, if so requested by the Company, to: (A) offer and sell the Holder
Shares to or through an underwriter selected by the Company and, to the extent
possible, on substantially the same terms and conditions under which the
Registration Shares are to be offered and sold; (B) comply with any
arrangements, terms and conditions with respect to the offer and sale of the
Shares to which the Company may be required to agree; and (C) enter into any
underwriting agreement containing customary terms and conditions, including
provisions for the indemnification of the underwriters.
(b) If the offering of the Registration
Shares by the Company is, in whole or in part, an underwritten public offering,
and if the managing underwriter determines and advises the Company in writing
that the inclusion in such Registration Statement of all of the Holder Shares,
together with the Shares of other persons who have exercised their right to
include their Shares in the Registration Statement (collectively referred to as
the "Aggregate Shares") would adversely affect the marketability of the offering
of the Registration Shares, then the Holder shall be entitled to register a
proportion, as determined in Subsection (b)(i) below, of such number of
Aggregate Shares as the managing underwriter determines may be included without
such adverse effects ("Aggregate Underwriter Shares"), subject to the terms,
exceptions and conditions of this Section 8.
(i) The proportion of the Aggregate
Underwriter Shares which the Holder shall be entitled to register shall be equal
to the ratio which the Holder Shares bears to the Aggregate Shares.
(c) The Company shall bear all costs
and expenses of registration of the Registration Shares; provided, however, that
the Holder shall bear all costs and expenses directly related to registration of
the Holder Shares.
Exhibit
4.1 - Page 7
(d) It shall be a condition precedent
to the Company's obligation to register any Holder Shares pursuant to this
Section 9 that the Holder provide the Company with all information and
documents, and shall execute, acknowledge, seal and deliver all documents
reasonably necessary, to enable the Company to comply with the Act, the State
Acts, and all applicable laws, rules and regulations of the SEC or of any State
Securities Commission.
9. Loss or Destruction. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant Certificate and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement or bond
satisfactory in form, substance and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of this Warrant Certificate,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
10. Survival. The various rights
and obligations of the Holder hereof as set forth herein shall survive the
exercise of the Warrants represented hereby and the surrender of this Warrant
Certificate.
11. Notices. Whenever any notice,
payment of any purchase price, or other communication is required to be given or
delivered under the terms of this Warrant, it shall be in writing and delivered
by hand delivery or United States registered or certified mail, return receipt
requested, postage prepaid, and will be deemed to have been given or delivered
on the date such notice, purchase price or other communication is so delivered
or posted, as the case may be; and, if to the Company, it will be addressed to
the address specified in Section 1 hereof, and if to the Holder, it will be
addressed to the registered Holder at its, his or her address as it appears on
the books of the Company.
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By:__Kathy
Xxxxxxx ______________________
Its:__Treasurer _____________________________
Date:____June 1,
2008 _______________
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Exhibit
4.1 - Page 8
PURCHASE
FORM
______________,
20__
The undersigned hereby irrevocably
elects to exercise the attached Warrant Certificate to the extent of __________
shares of the Common Stock, of ART DIMENSIONS, INC. and hereby makes payment of
$__________ in accordance with the provisions of Section 1 of the Warrant
Certificate in payment of the purchase price thereof.
INSTRUCTIONS
FOR REGISTRATION OF STOCK
Name: ________________________________________
(Please typewrite or print in block
letters)
Address: ________________________________________
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SPYGLASS
INVESTMENT PARTNERSHIP
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By:____________________________________
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Its:____________________________________
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Date:__________________________________
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Exhibit 4.1 - Page 9
