Contract
Exhibit
3.4
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS
TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO PRIORITY SOFTWARE, INC., THAT
SUCH
REGISTRATION IS NOT REQUIRED.
Right
to
Purchase 600,000 Shares of Common Stock of
PRIORITY
SOFTWARE, INC.
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Warrant
No.: _____
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Dated: November
__, 2006
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Priority
Software, Inc., a corporation
organized under the laws of the State of Nevada (the “Corporation”) hereby
certifies that, for value received, _________ or its successors or assigns
(the
“Holder”) is entitled to purchase from the Corporation upon the due exercise
hereof, and subject to the terms and conditions herein, from the date of issue
of this warrant (the “Warrant”) until the third anniversary of the issuance
hereof (the "Expiration Date"), all or any part of 60,000 fully paid and
non-assessable shares of common stock, par value $.001 per share (the "Common
Stock") of the Corporation, upon surrender hereof, with the exercise form
annexed hereto duly completed and executed, at the office of the Corporation
and
upon simultaneous payment therefore in cash or by certified or official bank
check, payable to the order of the Corporation, at a price per share of $.25
(the "Exercise Price") as follows: 20,000 shares at a price per share
of $2.00, 20,000 shares at a price per share of $3.00 and 20,000 shares at
a
price per share of $4.0,0 subject to adjustment as provided herein.
1. Restriction
on Transfer. No resale of the Warrant or of any of the
shares of Common Stock underlying the exercise of the Warrant (the “Underlying
Stock”) will be made unless such resale is registered pursuant to a registration
statement filed by the Corporation with the Securities and Exchange Commission
(the "Commission") or an exemption from registration under the Securities Act
of
1933, as amended (the "Securities Act"). By acceptance of this agreement, the
Holder agrees, for itself and all subsequent holders, that prior to making
any
disposition of the Warrant or of any Underlying Stock, the Holder shall give
written notice to the Corporation describing briefly the proposed disposition;
and no such disposition shall be made unless and until (i) the Corporation
has
notified the Holder that, in the opinion of counsel satisfactory to it, no
registration or other action under the Securities Act is required with respect
to such disposition (which opinion may be conditioned upon the transferee's
assuming the Holder's obligation hereunder); or (ii) a registration statement
under the Act has been filed by the Corporation and declared effective by the
Commission or other such similar action has been taken.
2. Expiration
of Warrant. Unless this Warrant and the Exercise price are
tendered as herein provided before the close of business on the Expiration
Date,
this Warrant will become wholly void and all rights and obligations set forth
herein shall expire and terminate.
3. Partial
Exercise. If this Warrant is exercised for less than all the
shares purchasable upon the exercise hereof, the Warrant shall be surrendered
by
the Holder and replaced with a new warrant of like tender in the name of the
Holder providing for the right to purchase the number of shares of Underlying
Stock as to which this Warrant has not yet been exercised.
4. Adjustments. The
Exercise Price and the number of shares of Underlying Stock of the Corporation
issuable pursuant to such exercise is subject to adjustment as
follows:
(a) In
case the Corporation shall at any time declare a stock dividend or stock split
on the outstanding shares of Common Stock in shares of its Common Stock, then
the Exercise Price and number of shares of Underlying Stock shall be
proportionately adjusted so that the holder of any Warrant exercised after
such
time shall be entitled to receive the aggregate number and kind of shares which
if such Warrant had been exercised immediately prior to such time, he or she
would have owned upon such exercise and been entitled to receive by virtue
of
such dividend.
(b) In
any case the Corporation shall at any time subdivide or combine the outstanding
shares of the Common Stock, the Exercise Price, initial or adjusted, in effect
immediately prior to such subdivision or combination shall forthwith be
proportionately decreased in the case of subdivision or increased in the case
of
combination.
(c) In
case of any capital reorganization, sale of substantially all the assets of
the
Corporation, or any reclassification of the shares of Common Stock of the
Corporation, or in case of any consolidation with or merger of the Corporation
into or with another corporation, then as a part of such reorganization sale
reclassification, consolidation or merger, as the case may be, provision shall
be made so that the registered owner of the Warrant evidenced hereby shall
have
the right thereafter to receive upon the exercise thereof the kind and amount
of
shares of stock or other securities or property which he would have been
entitled to receive if immediately prior to such reorganization,
reclassification, consolidation or merger, he had held the number of shares
of
Underlying Stock which were then issuable upon the exercise of the Warrant
evidenced hereby, to the end that the provisions set forth (including provisions
with respect to adjustments of the Exercise Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the exercise of such
Warrants.
(d) If
the Corporation at any time makes any spin-off, split-off, or distribution
of
assets upon or with respect to its Common Stock, as a liquidating or partial
liquidating dividend, spin-off, or by way of return of capital, or other than
as
dividend payable out of earnings or any surplus legally available for dividends
under the laws of the State of Nevada, the holder of each Warrant then
outstanding shall, upon the exercise of the Warrant, receive, in addition to
the
shares of Common Stock then issuable on exercise of the Warrant, the amount
of
such assets (or, at the option of the Corporation, a sum equal to the value
thereof at the time of the distributions) which would have been payable to
such
holder had he or she exercised the Warrant immediately prior to the record
date
for such distribution.
(e) When
any adjustment is required to be made to the Exercise Price, the number of
shares of Common Stock issuable shall be determined as provided for in paragraph
(f) hereof. No fractional shares of Common Stock shall be issued upon the
exercise of the Warrant. The Corporation shall round all fractional
shares to the next whole share.
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(f) Whenever
the Exercise Price is adjusted as provided above, the number of shares of
Underlying Stock immediately prior to such adjustment shall be increased,
effective simultaneously with such adjustment, by a number of shares of Common
Stock computed by multiplying such number of shares of Common Stock by a
fraction, the numerator of which is the Exercise Price in effect immediately
prior to such adjustment and the denominator of which is the Exercise Price
in
effect upon such adjustment, and the number of shares of Underlying Stock
arrived at by making said computation shall be added to the number of shares
of
Underlying Stock immediately prior to such adjustment. The total number of
shares arrived at by making the computation provided for in the immediately
preceding sentence shall thereupon be the number of shares of Common Stock
issuable upon exercise or the Warrant and the Corporation shall forthwith
determine the new Exercise Price, and (a) prepare a statement describing in
reasonable detail the method used in arriving at the new Exercise Price; and
(b)
cause a copy of such statement to be mailed to the Holder within twenty (20)
days after the date when the circumstance giving rise to the adjustments
occurred.
5. Delivery
of Underlying Stock. As soon as practicable after the
exercise hereof, the Corporation shall deliver a certificate or certificates
for
the number of full shares of Underlying Stock, all of which shall be fully
paid
and nonassessable, to the person or persons entitled to receive the same
provided no sale, offer to sell or transfer of the Underlying Stock or of this
Warrant, or of any shares or other securities issued in exchange for or in
respect of such shares, shall be made unless a registration statement under
the
Act, with respect to such shares, is in effect or an exemption from the
registration requirements of such Act is applicable to such shares.
6. Condition
of Exercise of Warrant.
(a) Unless
exercised pursuant to an effective registration statement under the Securities
Act which includes the Underlying Stock, it shall be a condition to any exercise
of this Warrant that the Corporation shall have received, at the time of such
exercise, a representation in writing from the recipient in the form attached
hereto as Exhibit A-1, that the Shares being issued upon exercise, are being
acquired for investment and not with a view to any sale or distribution
thereof.
(b) Each
certificate evidencing the Underlying Stock issued upon exercise of this
Warrant, shall be stamped or imprinted with a legend substantially in the
following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT
WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF,
AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION
OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
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Subject
to this Section 6, the
Corporation may instruct its transfer agent not to register the transfer of
all
or a part of this Warrant, or any of the Shares, unless one of the conditions
specified in the above legend is satisfied.
7. Representations
and Warranties of the Corporation. The Corporation
represents and warrants to the Holder as follows:
(a) This
Warrant has been duly authorized and executed by the Corporation and is a valid
and binding obligation of the Corporation enforceable in accordance with its
terms;
(b) The
Underlying Stock has been duly authorized and reserved for issuance by the
Corporation and, when issued in accordance with the terms hereof, will be
validly issued, fully paid and nonassessable;
(c) The
execution and delivery of this Warrant are not, and the issuance of the
Underlying Stock upon exercise of this Warrant in accordance with the terms
hereof will not be, inconsistent with the Corporation's Articles of
Incorporation or By-laws, as amended.
8. Representations
and Warranties by the Holder. The Holder represents and
warrants to the Corporation as follows:
(a) This
Warrant is being acquired for its own account, 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. Upon exercise of
this Warrant, the Holder shall, if so requested by the Corporation, confirm
in
writing, in a form reasonably satisfactory to the Corporation, that the
Underlying Stock issuable upon exercise of this Warrant is being acquired for
investment and not with a view toward distribution or resale.
(b) The
Holder understands that the Warrant and the Underlying Stock have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act pursuant to Section 4(2) thereof, and that they must be held
by
the Holder indefinitely, and that the Holder must therefore bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof
is
registered under the Securities Act or is exempted from such
registration.
(c) The
Holder has such knowledge and experience in financial and business matters
that
it is capable of evaluating the merits and risks of the purchase of this Warrant
and the Underlying Stock and of protecting its interests in connection
therewith.
(d) The
Holder is able to bear the economic risk of the purchase of the Underlying
Stock
pursuant to the terms of this Warrant.
9. Rights
of Stockholders. No holder of this Warrant shall be
entitled, as a warrant- holder, to vote or receive dividends or
be deemed the holder of Common Stock or any other securities of the Corporation
which may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the holder of this
Warrant, as such, any of the rights of a stockholder of the Corporation 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 notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have
been
exercised and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein.
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10. Miscellaneous.
(a) This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
(b) This
Warrant shall be governed by and construed in accordance with the laws of State
of Nevada without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall
be
brought only in the state courts of New York or in the federal courts located
in
the state of New York; provided, however, that the Corporation may choose to
waive this provision and bring an action outside the state of New
York.
(c) The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
(d) The
headings in this Warrant are for purposes of reference only, and shall not
limit
or otherwise affect any of the terms hereof.
(e) The
terms of this Warrant shall be binding upon and shall inure to the benefit
of
any successors or assigns of the Corporation and of the holder or holders hereof
and of the Underlying Stock.
(f) This
Warrant and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
(g) Upon
receipt of evidence reasonably satisfactory to the Corporation of the loss,
theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Corporation or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Corporation
at
its expense will execute and deliver to the holder of record, in lieu thereof,
a
new Warrant of like date and tenor.
(h) This
Warrant and any provision hereof may be amended, waived or terminated only
by an
instrument in writing signed by the Corporation and the Holder.
(i)
Receipt of this Warrant by the Holder hereof shall constitute acceptance of
and
agreement to the foregoing terms and conditions.
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IN
WITNESS WHEREOF,
the Corporation has caused this Warrant to be signed by its duly authorized
officer.
Dated:
November __, 2006
PRIORITY
SOFTWARE, INC.
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By:
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Name: Xxx
Xxxxxxxxx
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Title: Chief
Executive Officer
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Warrant
Holder:
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Address:
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City:
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State:
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Zip
Code:
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6
EXHIBIT
A
NOTICE
OF EXERCISE
TO: PRIORITY
SOFTWARE, INC.
1. The
undersigned hereby elects to purchase ________ shares of Common Stock of
Priority Software, Inc. pursuant to the terms of this Warrant, and tenders
herewith payment of the purchase price of such shares in full.
2. Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
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(Name)
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(Address)
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3. The
undersigned 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 all representations and warranties of the undersigned set forth
in Section 8 of the attached Warrant are true and correct as of the date
hereof. In support thereof, the undersigned agrees to execute an
Investment Representation Statement in a form substantially similar to the
form
attached to the Warrant as EXHIBIT A-1.
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(Signature)
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By:
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Title:
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Date:
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200
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EXHIBIT
A-1
INVESTMENT
REPRESENTATION STATEMENT
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PURCHASER:
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SELLER:
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PRIORITY
SOFTWARE, INC.
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SECURITIES:
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COMMON
STOCK ISSUED UPON EXERCISE OF THE WARRANTS ISSUED ON NOVEMBER __,
200_
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AMOUNT:
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__________
SHARES
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DATE:
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____________,
200_
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In
connection with the purchase of the above-listed Securities, I, the Purchaser,
represent to the Seller and to the Corporation the following:
(a) I
am aware of the Company’s business affairs and financial condition, and have
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. I am purchasing
these Securities for my own account for investment purposes only and not with
a
view to, or for the resale in connection with, any "distribution" thereof for
purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I
understand that the Securities have not been registered under the Securities
Act
in reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of my investment intent as expressed
herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "Commission"), the statutory basis
for
such exemption may be unavailable if my representation was predicated solely
upon a present intention to hold these Securities for the minimum capital gains
period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period
of
one year or any other fixed period in the future.
(c) I
further understand that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
registration is otherwise available. Moreover, I understand that the
Company is under no obligation to register the Securities. In
addition, I understand that the certificate evidencing the Securities will
be
imprinted with a legend which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of
counsel for the Company.
(d) I
am familiar with the provisions of Rule 144, promulgated under the Securities
Act, which, in substance, permits limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof, in a
non-public offering subject to the satisfaction of certain
conditions.
The
Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain public
information about the Company, (2) the resale occurring not less than one year
after the party has purchased, and made full payment for, within the meaning
of
Rule 144, the securities to be sold; and, in the case of an affiliate, or of
a
non-affiliate who has held the securities less than two years, (3) the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934) and the amount of securities being sold during
any three month period not exceeding the specified limitations stated therein,
if applicable.
(e) I
further understand that in the event all of the applicable requirements of
Rule
144 are not satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the
Commission has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or sales,
and
that such persons and their respective brokers who participate in such
transactions do so at their own risk.
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(Signature)
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By:
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Title:
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Date:
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,
200
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