Contract
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS Will HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER. AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.
COMMON STOCK WARRANT
(Nontransferable)
MIP SOLUTIONS, INC.
(a Nevada Corporation)
For value received and relating to that certain Unit Subscription Agreement between _______________________________ and MIP SOLUTIONS, INC.,(the "Corporation"), the Corporation hereby grants to __________________________ (the "Holder"), subject to the terms and conditions hereinafter set forth, a common stock warrant to purchase that number of shares of the common stock of the Corporation (the "Shares") on the terms and conditions set forth below:
1. Warrant Shares. The Corporation issues Holder a warrant to purchase ____________________________(____________________) common shares.
2. Warrant Exercise Price. At the option of the Holder, subject to the Company’s Call Option, the exercise price will be $0.06 Cents per share.
3. Payment of Warrant Price. Payment of the Exercise Price may be made by either of the following, or a combination thereof, at the election of Holder:
(i)
Cash Exercise: cash, bank or cashiers check or wire transfer; or
(ii)
Cashless Exercise: surrender of this Warrant at the principal office of the Company together with notice of cashless election, in which event the Company shall issue Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B)/A where: X = the number of shares of Common Stock to be issued to Holder; Y = the number of shares of Common Stock for which this Warrant is being exercised; A= the market price of the Common Stock; and B= the Exercise Price of [as determined upon exercise in paragraph 2].
For purposes of Rule 144 and this section, it is intended, understood and acknowledged that the Common Stock issuable upon exercise of this Warrant in a cashless exercise transaction shall be deemed to have been acquired at the time this Warrant was issued. Moreover, it is intended, understood and acknowledged that the holding period for the Common Stock issuable upon exercise of this Warrant in a cashless exercise transaction shall be deemed to have commenced on the date this Warrant was issued.
3. Term and Exercise.
(a) The Warrant may be exercised by the Holder for all or part of the shares on any date commencing __________________ extending for a period of twelve (12) months.
(b) The Holder will surrender the Warrant, if at all, by delivering to the Corporation, together with the Purchase Form and Subscription Agreement attached hereto as Exhibits A and B, each duly executed. The Warrant, the Purchase Form and the Subscription Agreement must be accompanied by payment in cash or by certified check of the Warrant Price (as that term is defined in Section 2).
(c) Within thirty (30) business days following the exercise of the Warrant by the Holder as provided in this paragraph, the Corporation will cause to be issued in the name of and delivered to the Holder, a certificate or certificates for the Shares. The Corporation covenants and agrees that all of the Shares will be fully paid and non-assessable upon such issuance and delivery. The Corporation agrees at all times to reserve and hold available a number of shares of the authorized but unissued common stock of the Corporation which is equal to or greater than the number of shares of common stock issuable upon the exercise of the Warrant.
(d) The Holder, by accepting the Warrant, agrees that at the time of exercise, the Holder will sign a written agreement with the Corporation in which the Holder (i) represents that the Holder is an Accredited Investor as that term is defined by Regulation D and that the Holder is acquiring the Shares solely for the Holder's own account, for investment and not with a view to resale or distribute.
e) Call Provision. If, after the Effective Date, (i) the VWAP for each of 5 consecutive Trading Days (the “Measurement Period,” which 5 consecutive Trading Day period shall not have commenced until after the Effective Date) exceeds $0.08 per share (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like after the Initial Exercise Date) and (ii) the Holder is not in possession of any information that constitutes, or might constitute, material non-public information which was provided by the Company, then the Company may, within 1 Trading Day of the end of such Measurement Period, call for cancellation of all or any portion of this Warrant for which a Notice of Exercise has not yet been delivered (such right, a “Call”) for consideration equal to $0.06 per Share. To exercise this right, the Company must deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating therein the portion of unexercised portion of this Warrant to which such notice applies. If the conditions set forth below for such Call are satisfied from the period from the date of the Call Notice through and including the Call Date (as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice of Exercise shall not have been received by the Call Date will be cancelled at 6:30 p.m. (Pacific Standard Time “PST”) on the tenth Trading Day after the date on which the Call Notice is received by the Holder (such date and time, the “Call Date”). Any unexercised portion of this Warrant to which the Call Notice does not pertain will be unaffected by such Call Notice. In furtherance thereof, the Company covenants and agrees that it will honor all Notices of Exercise with respect to Warrant Shares subject to a Call Notice that are tendered through 6:30 p.m. (PST) on the Call Date. The parties agree that any Notice of Exercise delivered following a Call Notice which calls less than all of the Warrants shall first reduce to zero the number of Warrant Shares subject to such Call Notice prior to reducing the remaining Warrant Shares available for purchase under this Warrant. For example, if (A) this Warrant then permits the Holder to acquire 100 Warrant Shares, (B) a Call Notice pertains to 75 Warrant Shares, and (C) prior to 6:30 p.m. (PST) on the Call Date the Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (x) on the Call Date the right under this Warrant to acquire 25 Warrant Shares will be automatically cancelled, (y) the Company, in the time and manner required under this Warrant, will have issued and delivered to the Holder 50 Warrant Shares in respect of the exercises following receipt of the Call Notice, and (z) the Holder may, until the Termination Date, exercise this Warrant for 25 Warrant Shares (subject to adjustment as herein provided and subject to subsequent Call Notices). Subject again to the provisions of this Section 2(f), the Company may deliver subsequent Call Notices for any portion of this Warrant for which the Holder shall not have delivered a Notice of Exercise. Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void), unless, from the beginning of the Measurement Period through the Call Date, (1) the Company shall have honored in accordance with the terms of this Warrant all Notices of Exercise delivered by 6:30 p.m. (PST) on the Call Date, and (2) the Registration Statement shall be effective as to all Warrant Shares and the prospectus thereunder available for use by the Holder for the resale of all such Warrant Shares, and (3) the Common Stock shall be listed or quoted for trading on a FINRA regulated Trading Market, and (4) there is a sufficient number of authorized shares of Common Stock for issuance of all Securities under the Transaction Documents. The Company’s right to call the Warrants under this Section 3(f) shall be exercised ratably among the Holders based on each Holder’s initial purchase of Warrants.
4. The Corporation's Merger, Reorganization, Etc. If, during the exercise period, but before Holder has exercised all of the Warrant rights with regard to the total number of Shares available for purchase by Holder, the Shares of the Corporation's common stock are changed into or exchanged for a different number or different kind of shares or other securities, either the Corporation's or those of another company, this Agreement will remain in force. However, there will be substituted for each of the Shares the number and kind of shares or other securities for which each Share of the Corporation's common stock was exchanged or into which each Share was changed. The shares or securities substituted for each Share of the Corporation's common stock may be purchased by Holder under this Agreement for the price set for each of the Shares in Paragraph 2.
5. Declaration of Stock Dividends. If the Corporation issues a common stock dividend on the Corporation's common stock, the number of Shares that may be purchased by Holder thereafter will be adjusted as follows: To each of the unpurchased Shares, there will be added the number of Shares issued as a dividend on each Share of outstanding common stock; each of the Shares together with the additional Shares applicable to that Share will be bought as one unit for the price set out for each of the Shares in Paragraph 5.
6. Other Changes in the Corporation's Stock. If there are any changes in the number or kind of Shares outstanding that affect the Corporation's common stock or the stock or other securities into which the Corporation's common stock has been changed, other than those described herein, a majority of the Corporation's Board of Directors may make such changes in the Shares available for purchase under this Agreement as the Board of Directors deems appropriate. Any adjustment in the Shares available for purchase made in accordance with this Paragraph will be binding upon Holder.
7. The Corporation's Liquidation, Dissolution. If the Corporation liquidates or dissolves, the Corporation will give Holder at least 3 months' notice prior to the liquidation or dissolution. Holder will have the right to exercise the Warrant in full, to the extent that applicable exercise events have occurred. To the extent that Holder=s Warrant rights have not been exercised on the effective date of the liquidation or dissolution, they will terminate.
8. Violation of Law. The Warrant issued by this Agreement may not be exercised if its exercise would violate any applicable state securities law, any registration under or any requirements of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules of an exchange on which the Shares may be traded, any other federal law, or any state securities laws.
9. Unregistered Stock. If a registration statement for the Shares is not in effect or if Holder's attorneys require a writing from Holder to avoid violation of the Securities Act of 1933, as amended, the Corporation may require a written commitment from the person exercising the Warrant before delivery of the certificate or certificates for the Shares. The Commitment will be in a form prescribed by the Corporation. It will state that it is the intent of the person exercising the Warrant to acquire the Shares for investment only and not with the intent of transferring or reselling them; that the person exercising the Warrant has been told that the Shares may be "restricted shares" pursuant to Rule 144 of the Securities and Exchange Commission and that any resale, transfer, or other distribution of the Shares may only be made in conformity with Rule 144, the Securities Act of 1933, as amended, or any other federal statute, rule, or regulation. The Corporation may place a legend on the face of the certificate or certificates in accordance with this Commitment and may refuse to permit transfer of the Shares unless it receives satisfactory evidence that the transfer will not violate Rule 144, the Securities Act of 1933, as amended, or any other federal statute, rule, or regulation.
10. Manner in Which Warrant Is Exercised After Holder's Death. If Holder has not fully exercised the Warrant rights before Holder,s death, then the persons designated by Holder in writing on file with Employer or, if no such persons have been designated, Holder's executor or administrator, may exercise any of Holder's Warrant rights during the Warrant period. The rights will be exercised in the same manner as provided herein except that the person entitled to exercise the rights will be substituted for Holder or Holder's personal representative.
11. Modification. No modifications will be effective unless signed by all parties.
12. Transferability. The Holder may pledge, hypothecate, sell, assign or otherwise transfer, or encumber the Warrant.
13. Notices. Any notice, offer, acceptance, demand, request, consent, or other communication required or permitted under the Warrant must be in writing and will be deemed to have been duly given or made either (1) when delivered personally to the party to whom it is directed (or any officer or agent of such party), or (2) three (3) days after being deposited in the United States' mail, certified or registered, postage prepaid, return receipt requested, and properly addressed to the party to whom it is directed. A communication will be deemed to be properly addressed if sent to a party at the address provided below:
If to the Corporation:
MIP Solutions, Inc.
0000 Xxxx Xx. #00-000,
Xx Xxxxxx Xxxxx, XX 00000
If to the Holder:
Name:__________________________
Address:________________________
City/State/Zip:___________________
14. Governing Law. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Washington.
15. Successors. All of the provisions of this Agreement will bind the Corporation, its successors and the Holder, unless inconsistent with the provisions of this agreement
IN WITNESS OF THE PARTIES' AGREEMENT, MIP SOLUTIONS, INC. has caused this Agreement to be executed in its corporate name by its duly appointed and authorized officer, as of this ______ day of August, 2011.
CORPORATION: HOLDER:
MIP SOLUTIONS, INC.
______________________
By: Xxxx Xxxxxxxxx
By:
Title: President
Title:
WARRANT: 1
