EXHIBIT 4.1
THIS WARRANT HAS BEEN, AND THE SHARES OF COMMON STOCK WHICH MAY BE RECEIVED
PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ACQUIRED SOLELY FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF. NEITHER THIS WARRANT NOR SUCH SHARES (TOGETHER, THE "SECURITIES") HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR QUALIFICATION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH DISPOSITION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT AND ANY
REGISTRATION OR QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE SECURITIES
LAWS.
No. 2005-_____ Issued: June ___, 2005
WARRANT TO PURCHASE COMMON STOCK
EXPIRES JUNE __, 2008
This warrant (this "WARRANT") certifies that, for good and valuable
consideration, _____________, a ___________ ______________ (the "HOLDER") is
entitled to purchase from Protocall Technologies Incorporated, a Nevada
corporation (the "COMPANY"), [AMOUNT IN WORDS] (___________) fully paid and
nonassessable shares of Common Stock, par value $0.001 per share ("COMMON
STOCK"), of the Company (as adjusted pursuant to Section 3) (the "WARRANT
SHARES") at a price per share equal to ONE DOLLAR ($1.00) (as adjusted pursuant
to Section 3) (the "EXERCISE PRICE"), upon the terms and subject to the
conditions hereinafter set forth.
1. EXERCISE; PAYMENT.
(a) Exercise Period. This Warrant may be exercised in whole or part by the
Holder during the term (as set forth in Section 10) and in compliance with the
provisions of this Warrant at any time after the date of issuance set forth
above (the "WARRANT DATE"), by the surrender of this Warrant (with the notice of
exercise form attached hereto as Exhibit A (the "NOTICE OF EXERCISE") or the
notice of cashless exercise form attached hereto as Exhibit B (the "NOTICE OF
CASHLESS EXERCISE") duly executed) at the principal office of the Company. If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant, or
at the request of the Holder, appropriate notation may be made on this Warrant
and the same returned to the Holder.
(b) Exercise. Upon exercise of this Warrant, the Holder shall pay to the Company
an amount equal to the product of (x) the Exercise Price multiplied by (y) the
total number of Warrant Shares purchased pursuant to this Warrant, by wire
transfer or cashier's check payable to the order of the Company. The Holder
shall be deemed to have become the holder of record of, and shall be treated for
all purposes as the record holder of, the Warrant Shares represented thereby
(and such Warrant Shares shall be deemed to have been issued) immediately prior
to the close of business on the date upon which this Warrant is exercised.
Notwithstanding the foregoing, the Holder shall have the right (the "RIGHT OF
CASHLESS EXERCISE"), at its election, in lieu of delivering the Exercise Price
in cash, to instruct the Company in the Notice of Cashless Exercise to retain,
in payment of the Exercise Price, that number of Warrant Shares that have an
aggregate Fair Market Value (as defined below) equal to the Exercise Price (the
"PAYMENT SHARES") from the number of Warrant Shares as to which this Warrant is
then being exercised. In the event the Holder elects to exercise its Right of
Cashless Exercise, the Holder shall surrender this Warrant pursuant to the terms
and conditions herein, together with the Notice of Exercise attached hereto,
duly executed, and the Payment Shares shall be deducted from the Warrant Shares
to be delivered to the Holder. "FAIR MARKET VALUE" means, as of any date, (i) if
Warrant Shares are listed on a national securities exchange, the average of the
closing sale price per share therefor on the securities exchange on which the
greatest average volume of such shares are traded over the last ten (10) trading
days before such date, (ii) if such shares are listed on The Nasdaq National
Market but not on any national securities exchange, the average of the average
of the closing bid and asked prices per share therefor over The Nasdaq National
Market, for the last ten (10) trading days before such date, (iii) if such
shares are not listed on either a national securities exchange or The Nasdaq
National Market, the average of the closing bid and asked prices per share
therefor in the over the counter market over the last twenty (20) trading days
before such date or, (iv) if no such sales or bid and asked prices are
available, the fair market value of the Company per share of outstanding Common
Stock as of such date, as determined in good faith by the Board of Directors of
the Company.
(c) Stock Certificates. In the event of the exercise of this Warrant,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder promptly after exercise but in no event more than ten (10) business days
after such exercise.
2. STOCK FULLY PAID; RESERVATION OF SHARES. All of the Warrant Shares issuable
upon the exercise of this Warrant will, upon issuance in accordance with the
terms of this Warrant, be fully paid and nonassessable, and free from all
preemptive rights, rights of first refusal or first offer, taxes, liens and
charges with respect to the issuance thereof. During the period within which the
rights represented by this Warrant may be exercised, the Company shall at all
times have authorized and reserved for issuance a sufficient number of shares of
its Common Stock to provide for the exercise of this Warrant.
3. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number and kind of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price payable therefor shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) Reclassification, Consolidation or Reorganization. In case of any
reclassification of the Common Stock (other than a change in par value, or as a
result of a subdivision or combination),
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or in case of any consolidation or merger of the Company with or into another
corporation (other than a Change of Control, as defined below) (any of which is
a "REORGANIZATION TRANSACTION"), the Company, or such successor corporation as
the case may be, shall execute a new warrant, providing that the Holder shall
have the right to exercise such new warrant, and procure upon such exercise and
payment of the same aggregate Exercise Price, in lieu of the Warrant Shares
theretofore issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property as would be payable for
the Warrant Shares issuable upon exercise of this Warrant as if such Warrant
Shares were outstanding immediately prior to the consummation of the
Reorganization Transaction. For purposes of this Warrant, the term "CHANGE OF
CONTROL" shall mean (i) any acquisition of the Company by means of merger,
acquisition, or other form of corporate reorganization in which outstanding
shares of the Company are exchanged for securities or other consideration
issued, or caused to be issued, by the acquiring corporation or its subsidiary
or parent (other than a reincorporation transaction or change of domicile) and
pursuant to which the holders of the outstanding voting securities of the
Company immediately prior to such consolidation, merger or other transaction
fail to hold equity securities representing a majority of the voting power of
the Company or surviving entity immediately following such consolidation, merger
or other transaction (excluding voting securities of the acquiring corporation
held by such holders prior to such transaction) or (ii) a sale of all or
substantially all of the assets of the Company.
(b) Stock Splits, Dividends and Combinations. In the event that the Company
shall at any time subdivide the outstanding shares of Common Stock, or shall
issue a stock dividend on its outstanding shares of Common Stock, the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
subdivision or to the issuance of such stock dividend shall be proportionately
increased, and the Exercise Price shall be proportionately decreased, and in the
event that the Company shall at any time combine the outstanding shares of
Common Stock, the number of Warrant Shares issuable upon exercise of this
Warrant immediately prior to such combination shall be proportionately
decreased, and the Exercise Price shall be proportionately increased, effective
at the close of business on the date of such subdivision, stock dividend or
combination, as the case may be.
(c) Adjustment Upon Issuance of Shares of Common Stock Below Exercise Price.
(i) If the Company, at any time or from time to time, issues
or sells any Additional Shares of Common Stock (as defined
below), other than as provided in the foregoing subsections of
this Section 3, for a price per share (the "PER SHARE PRICE")
(which, in the case of options, warrants, convertible
securities or other rights, includes the amounts paid therefor
plus the exercise price, conversion price or other such
amounts payable thereunder) that is less than the then
applicable Exercise Price, then and in each such case, the
then applicable Exercise Price shall automatically be reduced
as of the opening of business on the date of such issue or
sale, to the Per Share Price. "ADDITIONAL SHARES OF COMMON
STOCK" shall mean all shares of Common Stock, and all options,
warrants, convertible securities or other rights to purchase
or acquire shares of Common Stock, issued by the Company other
than (A) shares of Common Stock and/or options, warrants or
other Common Stock purchase rights, where such options,
warrants or other rights are issued both (i) with exercise
prices per share of Common Stock at the
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then-current fair market value of a share of Common Stock, as
determined in good faith by the Board of Directors of the
Company, and (ii) to employees, officers or directors of, or
consultants to, the Company or any subsidiary pursuant to
stock purchase or stock option plans or other arrangements
that are approved by the Company's Board of Directors and (B)
shares of Common Stock issued pursuant to the exercise of
options, warrants or convertible securities outstanding as of
the date hereof.
(ii) In the event that the exercise price, conversion price,
purchase price or other price at which shares of Common Stock
are purchasable pursuant to any options, warrants, convertible
securities or other rights to purchase or acquire Common Stock
is reduced at any time or from time to time (other than under
or by reason of provisions designed to protect against
dilution), then, upon such reduction becoming effective, the
Exercise Price then in effect hereunder shall forthwith be
decreased to such Exercise Price as would have been obtained
had the adjustments made and required under this Section 3
upon the issuance of such options, warrants, convertible
securities or other rights been made upon the basis of (and
the total consideration received therefor) (A) the issuance of
the number of shares of Common Stock theretofore actually
delivered upon the exercise, conversion or exchange of such
options, warrants, convertible securities or other rights, (B)
the issuance of all of the Common Stock and all other options,
warrants, convertible securities and other rights to purchase
or acquire Common Stock issued after the issuance of the
modified options, warrants, convertible securities or other
rights, and (C) the original issuance at the time of the
reduction of any such options, warrants, convertible
securities or other rights then still outstanding.
(iii) In no event shall an adjustment under this Section 3(c)
be made if it would result in an increase in the then
applicable Exercise Price.
(iv) The provisions of this Section 3(c) shall terminate and
be of no further force or effect on June __, 2006.
(d) Notice of Corporate Action. If at any time (i) the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend (other than a cash dividend payable out of earnings or earned
surplus legally available for the payment of dividends under the laws of State
of Nevada) or other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right; (ii) there shall be any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any consolidation or merger of the
Company with, or any sale, transfer or other disposition of all or substantially
all the property, assets or business of the Company to, another corporation; or
(iii) there shall be a voluntary or involuntary dissolution,
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liquidation or winding up of the Company, then, in any one or more of such
cases, the Company shall give to the Holder (i) at least 10 business days prior
written notice of the date on which a record date shall be selected for such
dividend, distribution or right or for determining rights to vote in respect of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, and (ii) in the
case of any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10
business days prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause also shall specify (i) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 11(d).
4. TRANSFER OF WARRANT AND RESALE OF WARRANT SHARES.
(a) This Warrant may only be transferred in compliance with federal and state
securities laws.
(b) At the time of the surrender of this Warrant in connection with any transfer
of this Warrant or the resale of the Warrant Shares, the Company may require, as
a condition of allowing such transfer (i) that the Holder or transferee of this
Warrant or the Warrant Shares as the case may be, furnish to the Company a
written opinion of counsel that is reasonably acceptable to the Company to the
effect that such transfer may be made without registration under the Securities
Act or qualification under any state securities laws, (ii) that the Holder or
transferee execute and deliver to the Company an investment representation
letter in form and substance acceptable to the Company containing among other
provisions representations and warranties similar to those set forth in Section
5 and (iii) that the transferee be an "accredited investor" as defined in Rule
501(a) promulgated under the Securities Act. Transfer of this Warrant and all
rights hereunder, in whole or in part, in accordance with the foregoing
provisions, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company or the office or agency designated by the Company, together with a
written assignment of this Warrant substantially in the form of Exhibit C hereto
duly executed by the Holder or its attorney-in-fact and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination specified in such instrument of assignment, and shall issue to the
Holder a new warrant evidencing the portion of this Warrant not so assigned, and
this Warrant shall be deemed cancelled. This Section 4 shall survive the
exercise or expiration of the Warrant.
5. REPRESENTATIONS AND WARRANTIES OF HOLDER.
(a) EXEMPT TRANSACTION; RESTRICTED SECURITIES. The Holder understands that this
Warrant is being offered and sold in reliance on one or more exemptions from
registration provided for under the Securities Act, and that the Company's
reliance upon such exemptions is predicated, in
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part, upon the Holder's representations and warranties set forth in this
Warrant. The Holder understands that this Warrant and the Warrant Shares are
"restricted securities" as such term is defined in Rule 144 promulgated under
the Securities Act ("RULE 144"). The Holder understands that the Holder may
resell the Warrant Shares pursuant to Rule 144 only after the satisfaction of
certain requirements, including the requirement that the Warrant Shares be held
for at least one year prior to resale.
(b) INVESTMENT INTENT; ACCREDITATION; AUTHORITY. The Holder is acquiring this
Warrant for investment for the Holder's own account, not as nominee or agent,
for investment and not with a view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act. The Holder is an "accredited investor" within the meaning of the Securities
Act. The Holder has the full right, power, authority and capacity to enter into
and perform this Warrant and the terms of this Warrant constitute valid and
binding obligations of the Holder enforceable in accordance with its terms,
except as the same may be limited by equitable principles and by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors' rights.
(c) KNOWLEDGE AND EXPERIENCE. The Holder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the Holder's investment in this Warrant and has the ability to bear the
economic risks of such investment.
(d) DOMICILE. The Holder is a bona fide resident and domiciliary (not a
temporary or transient resident) of the jurisdiction indicated on the signature
page to this Warrant and the Holder has no present intention of becoming a
resident of any other state or jurisdiction.
6. CONDITIONS TO EXERCISE OF WARRANT.
(a) Each certificate evidencing the Warrant Shares issued upon exercise of this
Warrant shall be stamped or imprinted with a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH AN
EXEMPTION THEREWITH.
(b) REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend endorsed on a
certificate pursuant to this Section 6 shall be removed, and the Company shall
issue a certificate without such legend to the holder of such Warrant Shares if
(i) such Warrant Shares are resold pursuant to a registration statement under
the Securities Act and a prospectus meeting the requirements of Section 11 of
the Securities Act is delivered or deemed delivered to the purchaser of such
Warrant Shares, (ii) if such holder satisfies the requirements of Rule 144(k)
under the Securities Act or (iii) if such holder provides the Company with an
opinion of counsel for such holder of the Warrant Shares, reasonably
satisfactory to the Company, to the effect that a sale, transfer or
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assignment of such Warrant Shares may be made without registration and that upon
such sale, transfer or assignment such Warrant Shares will not be deemed
"restricted securities," as such term is defined in Rule 144 under the
Securities Act.
7. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection
with any exercise of this Warrant, but in lieu of such fractional shares the
Company shall make a cash payment therefor upon the basis of the Exercise Price
then in effect.
8. NO RIGHTS OF STOCKHOLDERS. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Warrant Shares or any other
securities of the Company which may at any time be issuable on the exercise of
this Warrant for any purpose, nor shall anything contained herein be construed
to confer upon the Holder any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive dividends or subscription rights or
otherwise with respect to the Warrant Shares until this Warrant shall have been
exercised and the Warrant Shares purchasable upon the exercise of this Warrant
shall have become deliverable, as provided in this Warrant.
9. REGISTRATION RIGHTS. The Holder shall have the registration rights set forth
in Section 8 of the Securities Purchase Agreement, dated as of the date hereof
(the "PURCHASE AGREEMENT"), between the Company and the Holder.
10. TERM OF WARRANT. This Warrant shall become exercisable on the Warrant Date
and shall no longer be exercisable as of the earlier of (i) 5:00 p.m., Eastern
time, on May __, 2008; and (ii) immediately prior to the consummation of a
Change of Control.
11. MISCELLANEOUS.
(a) This Warrant shall be construed and enforced in accordance with and governed
by the laws of the State of New York, without giving effect to principles of
conflicts of laws.
(b) The headings in this Warrant are for purposes of reference only, and shall
not limit or otherwise affect any of the terms of this Warrant.
(c) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of the Company and of the Holder and of the
Warrant Shares issued or issuable upon the exercise of this Warrant.
(d) Any notice provided for or permitted under this Warrant shall be given in
accordance with the terms of Section 9(d) of the Purchase Agreement.
(e) This Warrant constitutes the full and entire understanding and agreement
between the parties with regard to the subject of this Warrant.
(f) Upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction,
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upon delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company at the Holder's expense will execute
and deliver to the holder of record, in lieu thereof, a new Warrant of like date
and tenor.
(g) This Warrant and any provision of this Warrant may be amended, waived or
terminated only by an instrument in writing signed by the Company and the
Holder.
[Remainder of page intentionally left blank]
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SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
Warrant Date.
PROTOCALL TECHNOLOGIES INCORPORATED
By:
---------------------------------------------
Xxxxxx X. Xxxxxxxx
Vice President and Chief Operating Officer
SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK
EXHIBIT A
NOTICE OF EXERCISE
TO: Protocall Technologies Incorporated
1. The undersigned hereby elects to purchase ______________ Warrant
Shares pursuant to the terms of Section 1(b) of the Warrant to Purchase Common
Stock dated June __, 2005 (the "WARRANT"), issued by Protocall Technologies
Incorporated (the "COMPANY"), and tenders herewith payment of the aggregate
Exercise Price of such Warrant Shares in full.
2. Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:
Name: _________________________________
Address: _________________________________
_________________________________
3. ____________________ hereby represents and warrants that the
aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale, in connection
with the distribution thereof, and that the undersigned has no present intention
of distributing or reselling such shares, and that all representations and
warranties of the undersigned set forth in Section 5 of the Warrant were true
and correct as of the Warrant Date (as defined in the Warrant) and are true and
correct as of the date hereof.
------------------------------------------
Name:
Date:
-------------------------------------
EXHIBIT B
NOTICE OF CASHLESS EXERCISE
TO: Protocall Technologies Incorporated
1. The undersigned hereby elects to exchange its Warrants for
______________ Warrant Shares pursuant to the terms of Section 1(b) of the
Warrant to Purchase Common Stock dated June __, 2005 (the "Warrant"), issued by
Protocall Technologies Incorporated (the "COMPANY").
2. Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:
Name: _________________________________
Address: _________________________________
_________________________________
3. ____________________ hereby represents and warrants that the
aforesaid shares of Common Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale, in connection
with the distribution thereof, and that the undersigned has no present intention
of distributing or reselling such shares, and that all representations and
warranties of the undersigned set forth in Section 5 of the Warrant were true
and correct as of the Warrant Date (as defined in the Warrant) and are true and
correct as of the date hereof.
------------------------------------------
Name:
Date:
-------------------------------------
EXHIBIT C
ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________ (the "HOLDER"), party to the
Warrant to Purchase Common Stock, dated _____________, 2005 (the "WARRANT"),
with Protocall Technologies Incorporated (the "COMPANY"), hereby sells, assigns
and transfers unto the assignee named below all of the rights of the Holder
under the Warrant, with respect to the number of shares of Common Stock set
forth below:
---------------------------------------
---------------------------------------
---------------------------------------
(Name and Address of Assignee)
---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:
--------------------------------
--------------------------------------
(Print Name and Title)
--------------------------------------
(Signature)
--------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
