Exhibit 4.4
Warrant to Purchase
Common Stock
Xxxxx.xxx, Inc.
SELLING AGENT'S WARRANT
Dated as of
THIS CERTIFIES that (herein called the "Holder" and/or the
"Selling Agent") is entitled to purchase from xXxxx.xxx, Inc., a Delaware
corporation (the "Company"), at the price and during the period as hereinafter
specified, shares of the Company's common stock par value $.001 (the
"Shares").
This warrant ("Selling Agent's Warrant") is issued pursuant to a Selling
Agent Agreement between the Company and the Selling Agent (the "Selling Agent
Agreement") in connection with a private offering to accredited investors,
through the Selling Agent, of up to 1,000,000 Shares sold by the Company under
exemptions from registration provided by Section 4(2) and Section 4(6) of the
Securities Act of 1933, as amended (the "1993 Act") and by Rule 506, and in
consideration of $100 paid to the Company by the Selling Agent.
1. The rights represented by the Selling Agent's Warrant shall be
exercised at the price of $4.50 per Share (the "Exercise Price"), subject to
adjustment in accordance with Sections 10 and 11 hereof, for a period of five
years from the date first written above (the "Effective Date") (the end of such
five-year term to be the "Expiration Date"). After the Expiration Date, the
Holder shall have no right to purchase any Shares hereunder.
2. (a) The rights represented by the Selling Agent's Warrant may be
exercised at any time, in whole or in part, by (i) the surrender of the Selling
Agent's Warrant (with the purchase form properly executed in the form attached
hereto as Exhibit A) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Exercise Price then in effect for
the number of Shares specified in the above-mentioned purchase form together
with applicable stock transfer taxes, if any; and (iii) delivery to the Company
of a duly executed agreement signed by the person(s) designated in the purchase
form to the effect that such person(s) agree(s) to be bound by the provisions of
Section 6, Section 7 and Paragraph (b), (c) and (d) of Section 8 hereof.
(b) Payment of the Exercise Price may be made by (i) cash or cash
equivalent, (ii) cashless exercise (as described below), or (iii) any
combination of the above. The Holder may elect to exchange all or some of the
Selling Agent's Warrant in a cashless exercise for Shares equal to the value of
the amount of the Selling Agent's Warrant being exchanged on the date of
the exchange. If Holder elects to exchange this Selling Agent's Warrant as
provided in this Section 2(b), Holder shall tender to the Company the Selling
Agent's Warrant for the amount being exchanged, along with written notice of
Xxxxxx's election to exchange some or all of the Selling Agent's Warrant, and
the Company shall issue to Holder the number of Shares computed using the
following formula:
X = Y(A-B)
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A
Where X = the number of Shares to be issued to Holder.
Y = the number of Shares purchasable under the amount of the Selling
Agent's Warrant being exchanged (as adjusted to the date of such
calculation).
A = the fair market value of one share of the Company's common stock.
B = Exercise Price (as adjusted to the date of such calculation).
All references herein to an "exercise" of the Selling Agent's Warrant shall
include an exchange pursuant to this Section 2(b).
Except as otherwise set forth above, for purposes hereof the fair market
value of the surrendered shares on any relevant date, shall be determined in
accordance with the following provisions:
(i) If the common stock is at the time traded on the Nasdaq
Electronic Bulletin Board or SmallCap Market, then the Fair Market Value
shall be the average of the closing bid and ask price per share of common
stock on the date in question, as such price is reported by the National
Association of Securities Dealers on the Nasdaq Electronic Bulletin Board
or SmallCap Market or any successor system. If there xx.xx closing bid and
ask price for the common stock on the date in question, then the Fair
Market Value shall be the closing bid and ask price on the last preceding
date for which such quotation exists.
(ii) If the common stock is at the time listed on the Nasdaq National
Market System or on any Stock Exchange, then the Fair Market Value shall be
the closing selling price per share of common stock on the date in question
on the Nasdaq National Market System or the Stock Exchange that is the
primary market for the common stock, as such price is officially quoted on
such system or exchange. If there is no closing selling price for the
common stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
(iii) If the common stock is not traded on any market, system, or
exchange set forth above, and if the Company has sold shares of common
stock to an independent third party within the six month period prior to
the exercise, then the Fair Market Value shall be the price per share paid
by such third party. If there has been no such sale, the Fair Market Value
shall be the value agreed to between the Company and the Holder.
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(c) The Selling Agent's Warrant shall be deemed to have been
exercised, in whole or in part to the extent specified, immediately prior to the
close of business on the date the Selling Agent's Warrant is surrendered and
payment is made in accordance with the foregoing provisions of this Section 2,
and the person or persons in whose name or names the certificates for Shares
shall be issuable upon such exercise shall become the holder or holders of
record of such Shares at that time and date. No fractional shares shall be
issuable upon exercise. The certificates for the Shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding 10 days after
the rights represented by this Selling Agent's Warrant shall have been so
exercised.
3. (a) The Selling Agent's Warrant may not be sold, assigned, pledged,
hypothecated or otherwise transferred except to (a) an officer or employee of
Selling Agent, (b) any parent or successor of Selling Agent, (c) any person
listed on Exhibit B or to their officers or partners, (d) to the extent
permitted by law, to any person who acts as a finder in connection with this
offering or any future financing for the Company, or any officers or partners of
any of the above, or (e) any transferee who received this Selling Agent's
Warrant by operation of law as a result of death, incapacity or dissolution of
any holder permitted by this Section 3. Any such assignment shall be effected by
the Holder by (i) executing an assignment and (ii) surrendering the Selling
Agent's Warrant for cancellation at the office or agency of the Company referred
to in Section 2 hereof; whereupon the Company shall issue, in the name or names
specified by the Holder (including the Holder) a new Selling Agent's Warrant of
like tenor and representing in the aggregate rights to purchase the same number
of Shares as are purchasable hereunder.
(b) The Holder, by acceptance hereof, agrees that, absent an
effective registration statement filed with the SEC under the 1933 Act, covering
the disposition or sale of this Selling Agent's Warrant or the common stock
issued or issuable upon exercise hereof and registration or qualification under
applicable state securities laws, such Holder will not sell, transfer, pledge,
or hypothecate any or all such Selling Agent's Warrant or common stock unless
either (i) to the Company has received an opinion of counsel, in form and
substance reasonably satisfactory the Company, to the effect that such
registration is not required in connection with such disposition or (ii) the
sale of such securities is made pursuant to Rule 144.
4. The Company covenants and agrees that all Shares issued hereunder will,
upon issuance, be duly and validly issued, fully paid and nonassessable, and no
personal liability will attach to the holder thereof. The Company further
covenants and agrees that, during the periods within which the Selling Agent's
Warrant may be exercised, the Company will at all times have authorized and
reserved a sufficient number of Shares.
5. The Selling Agent's Warrant shall not entitle the Holder to any voting
rights or other rights as a shareholder of the Company.
6. By acceptance of this Selling Agent's Warrant, the Holder hereby
represents, warrants and covenants that any shares of stock purchased upon
exercise of this Selling Agent's Warrant shall be acquired for investment only
and not with a view to, or for sale in connection with, any distribution
thereof; that the Holder has had such opportunity as such Holder has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Holder to evaluate the merits and risks of its
investment in the Company;
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that the Holder is able to bear the economic risk of holding such shares as may
be acquired pursuant to the exercise of this Selling Agent's Warrant for an
indefinite period, that the Holder understands that the shares of stock acquired
pursuant to the exercise of this Selling Agent's Warrant will not be registered
under the 1933 Act and will be "restricted securities" within the meaning of
Rule 144 under the 1933 Act and that the exemption from registration under Rule
144 will not be available for at least one year from the date of exercise of
this Selling Agent's Warrant and even then will not be available unless a public
market then exists for the stock, adequate information concerning the Company is
then available to the public, and other terms and conditions of Rule 144 are
complied with; and that all stock certificates representing shares of stock
issued to the Holder upon exercise of this Selling Agents Warrant may have
affixed thereto a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
MAY BE. REQUIRED TO BEAR THE FINANCIAL RISKS OF TIES INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
7. The Company shall advise the Holder or its transferee, whether the
Holder holds the Selling Agent's Warrant or has exercised the Selling Agent's
Warrant and holds Shares by written notice at least four weeks prior to the
filing of any new registration statement under the Act covering any securities
of the Company, for its own account or for the account of others, except for any
registration statement filed on Form S-4, S-8, or such other registration form
the terms of which do not allow for the registration of the Shares, and will,
for a period of five years from the Effective Date, upon the request of the
Holder, include in any such new registration statement such information as may
be required to permit a public offering of the Shares underlying the Selling
Agent's Warrant (the "Registrable Securities"). Registrable Securities shall
cease to be such when they have been distributed to the public pursuant to a
registration statement, sold through a broker-dealer or to a market maker in
compliance with Rule 144, or are eligible for sale pursuant to Rule 144 without
limitation as to volume. The Company shall supply prospectuses and such other
documents as the Holder may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities, use its best efforts to
register and qualify any of the Registrable Securities for sale in such states
as such Holder designates and do any and all other acts and things which may be
necessary or desirable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities, all at no expense to the
Holder, and furnish indemnification in the manner provided in
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Section 8 hereof. The Holder shall also furnish information and indemnification
as set forth in Section 8.
8. (a) Whenever pursuant to Section 7 a registration statement relating
to any of the Registrable Securities is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
securities covered by such registration statement, amendment or supplement (such
Holder being hereinafter called the "Distributing Holder"), and each person, if
any, who controls (within the meaning of the Act) the Distributing Holder, and
each Selling Agent (within the meaning of the Act) of such securities and each
person, if any, who controls (within the meaning of the Act) any such Selling
Agent, against any losses, claims, damages or liabilities, joint or several, to
which the Distributing Holder, any such controlling person or any such Selling
Agent may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities, or actions in respect thereof, arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any such registration statement or any preliminary prospectus
or final prospectus constituting a part thereof or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and will reimburse the Distributing
Holder or such controlling person or Selling Agent in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in said registration statement, said preliminary prospectus, said
final prospectus or said, amendment or supplement in reliance upon and in
conformity with written information furnished by such Distributing Holder or any
other Distributing Holder for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
registration statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims, damages or liabilities, joint or several, to which the
Company or any such director, officer or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in said
registration statement, said preliminary prospectus, said final prospectus, or
said amendment or supplement, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder for use in the preparation thereof-, and will
reimburse the Company or any such director, officer or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however that indemnification by any Distributing Holder shall be
limited in amount to the net proceeds to such Distributing Holder from any sales
of securities under such registration statement and such amendments and
supplements thereto.
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(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Section 8.
(d) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the extent that it
may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No settlement shall be made without the consent of the
indemnifying party.
9. In connection with any registration in which Registrable Securities
have a right to be included pursuant to Section 7 and which involve an
underwriting of securities being issued by the Company, the Company shall not be
required under Section 7 to include any of the Holders' securities in such
underwriting unless that Xxxxxx accepts the terms of the underwriting as
reasonably (e.g. consistent with customary terms) agreed upon between the
Company and the underwriters selected by it, and then only in such quantity as
will not, in the opinion of the underwriters, jeopardize the success of the
offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters reasonably believe compatible with the success of the offering,
then the Company shall be required to include in the offering only that number
of such securities, including Registrable Securities, which the underwriters
believe will not jeopardize the success of the offering. In the event of any
limitations hereunder of the number of securities owned by selling stockholders
included in any offering, the number of shares or securities, including
Registrable Securities, that may be included in the registration and
underwriting shall be allocated in the following manner: shares, other than
Registrable Securities and shares held by other holders of registration rights,
and other securities requested to be included in such registration by
stockholders shall be excluded, and if a limitation on the number of shares is
still required, the number of Registrable Securities and shares held by other
holders of registration rights that may be included in the registration shall be
allocated among the Holders of Registrable Securities and other holders of
registration rights in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities and shares held by other holders of
registration rights held by each such Holder or holder at the time of filing the
Registration Statement. For purposes of this paragraph, shares held by the
founders and current officers and directors shall be treated the same as
Registrable Securities.
10. In case of any reclassification, capital reorganization or other
change of the Company's outstanding shares of common stock, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification, capital,
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reorganization or other change of outstanding shares of common stock), or in
case of any sale or conveyance to another corporation of the property of the
Company as, or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of this Selling Agent's Warrant shall
have the tight thereafter, by exercising such Selling Agent's Warrant, to
purchase the kind and number of Shares or other securities or property
(including cash) receivable upon such reclassification, capital reorganization
or other change, consolidation, merger, sale or conveyance by a holder of the
number of shares of common stock that might have been purchased upon exercise of
such Selling Agent's Warrant, immediately prior to such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance. The foregoing provision shall similarly apply to successive
reclassifications, capital reorganizations and other changes of outstanding
shares of common stock and to successive consolidations, mergers, sales or
conveyances.
11. If, prior to the expiration of this Warrant by exercise or by its
terms the Company shall issue any of its shares of common stock as a share
dividend or subdivide the number of outstanding shares of common stock into a
greater number of shares, then, in either such case, the Exercise Price per
Share shall be proportionately reduced, and the number of Shares at the time
purchasable pursuant to this Selling Agent's Warrant shall be proportionately
increased; and conversely, if the Company shall contract the number of
outstanding shares of common stock by combining such shares into a smaller
number of shares, then, in such case, the Exercise Price per Share in effect at
the time of such action shall be proportionately increased and the number of
Shares at that time purchasable pursuant to this Selling Agent's Warrant shall
be proportionately decreased. If the Company shall, at any time during the life
of this Selling Agent's Warrant declare a dividend payable in cash on its shares
of common stock and shall at substantially the same time offer to its
shareholders a right to purchase new shares of common stock from the proceeds of
such dividend or for an amount substantially equal to the dividend, all shares
of common stock so issued shall, for the purpose of this Selling Agent's
Warrant, be deemed to have been issued as a share dividend. Any dividend paid or
distributed upon the shares of common stock in shares of any other class of
securities convertible into shares of common stock shall be treated as a
dividend paid in shares of common stock to the extent that shares of common
stock are issuable upon the conversion thereof.
12. This Agreement shall be governed by and construed in accordance with
the internal substantive laws of the State of Arizona, without regard for the
conflict of laws.
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IN WITNESS WHEREOF, xXxxx.xxx, Inc. has caused this Selling Agent's Warrant
to be signed by its duly authorized officers under its corporate seal and this
Selling Agent's Warrant to be dated .
xXxxx.xxx, Inc.
By
President
Attest:
Secretary
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EXHIBIT A
PURCHASE FORM
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(To be signed only upon exercise of Selling Agent's Warrant)
The undersigned, the holder of the foregoing Selling Agent's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Selling Agent's Warrant for, and to purchase thereunder, __________ shares of
common stock of xXxxx.xxx, Inc. and herewith makes payment of $________ therefor
and requests that the share certificate(s) be issued in the name(s) of, and
delivered to ___________________, whose address(es) is (are):
______________________________________________________________________________.
Dated:
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By:
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TRANSFER FORM
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(To be signed only upon transfer of Selling Agent's Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto _____________ the right to purchase _____________ shares of common stock
represented by the foregoing Selling Agent's Warrants and appoints
____________________ attorney to transfer such rights on the books of xXxxx.xxx,
Inc., with full power of substitution in the premises.
Date:
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By:
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A-1
