EXHIBIT 4.3
FORM OF WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
BRILLIANT TECHNOLOGIES CORPORATION
COMMON STOCK PURCHASE WARRANT
1. Issuance. In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by BRILLIANT
TECHNOLOGIES CORPORATION, a Delaware corporation (the "Company"),
______________________ ___________________, or registered assigns (the "Holder")
is hereby granted the right to purchase at any time, during the period (the
"Exercise Period") on or after the Commencement Date (as defined below) until
5:00 P.M., New York City time, on ____________ (the "Expiration Date"),
______________________________________ (__________) fully paid and nonassessable
shares of the Company's Common Stock, $0.001 par value per share (the "Common
Stock"), at an initial exercise price per share (the "Exercise Price) of $.07
per share, subject to further adjustment as set forth herein. This Warrant is
being issued pursuant to the terms of that certain Bridge Loan Agreement, dated
as of ______________, 2006 (the "Agreement"), to which the Company and Holder
(or Xxxxxx's predecessor in interest) are parties. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement. This Warrant was originally issued to the Holder of the Holder's
predecessor in interest on ____________________ (the "Issue Date").
2. Exercise of Warrants.
2.1 General.
(a) This Warrant is exercisable in whole or in part at any time during
the Exercise Period Such exercise shall be effectuated by submitting to the
Company (either by delivery to the Company or by facsimile transmission as
provided in Section 8 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as provided in
the Notice of Exercise (or revised by notice given by the Company as
contemplated by the Section headed "NOTICES" in the Agreement). The date such
Notice of Exercise is faxed to the Company shall be the "Exercise Date,"
provided that, if such exercise represents the full exercise of the outstanding
balance of the Warrant, the Holder of this Warrant tenders this Warrant
Certificate to the Company within five (5) Trading Days thereafter. The Notice
of Exercise shall be executed by the Holder of this Warrant and shall indicate
(i) the number of shares then being purchased pursuant to such exercise and (ii)
if applicable (as provided below), whether the exercise is a cashless exercise.
(b) The provisions of this Section 2.1(b) shall only be applicable (i)
on or after the first anniversary of the Issue Date, and (ii) if, and only if,
on the Exercise Date there is no effective Registration Statement covering the
resale of the Warrant Shares by the Holder (other than during a Permitted
Suspension Period). If the Notice of Exercise form elects a "cashless" exercise,
the Holder shall thereby be entitled to receive a number of shares of Common
Stock equal to (w) the excess of the Current Market Value (as defined below)
over the total cash exercise price of the portion of the Warrant then being
exercised, divided by (x) the Market Price of the Common Stock as of the trading
day immediately prior to the Exercise Date. For the purposes of this Warrant,
the terms (y) "Current Market Value" shall mean an amount equal to the Market
Price of the Common Stock as of the Trading Day immediately prior to the
Exercise Date, multiplied by the number of shares of Common Stock specified in
such Notice of Exercise Form, and (z) "Market Price of the Common Stock" shall
mean the Closing Price (as defined below) of the Common Stock.
(c) If the Notice of Exercise form elects a "cash" exercise (or if the
cashless exercise referred to in the immediately preceding paragraph (b) is not
available in accordance with its terms), the Exercise Price per share of Common
Stock for the shares then being exercised shall be payable, at the election of
the Holder, in cash or by certified or official bank check or by wire transfer
in accordance with instructions provided by the Company at the request of the
Holder.
(d) Upon the appropriate payment, if any, of the Exercise Price for
the shares of Common Stock purchased, together with the surrender of this
Warrant Certificate (if required), the Holder shall be entitled to receive a
certificate or certificates for the shares of Common Stock so purchased. The
Company shall deliver such certificates representing the Warrant Shares in
accordance with the instructions of the Holder as provided in the Notice of
Exercise (the certificates delivered in such manner, the "Warrant Share
Certificates") within three (3) Trading Days (such third Trading Day, a
"Delivery Date") of (i) with respect to a "cashless exercise," the Exercise Date
or, (ii) with respect to a "cash" exercise, the later of the Exercise Date or
the date the payment of the Exercise Price for the relevant Warrant Shares is
received by the Company.
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(e) The Holder shall be deemed to be the holder of the shares issuable
to it in accordance with the provisions of this Section 2.1 on the Exercise
Date.
2.2 Limitation on Exercise. Notwithstanding the provisions of this
Warrant, the Agreement or of the other Transaction Agreements, in no event
(except (i) as specifically provided in this Warrant as an exception to this
provision, (ii) during the forty-five (45) day period prior to the Expiration
Date, or (iii) while there is outstanding a tender offer for any or all of the
shares of the Company's Common Stock) shall the Holder be entitled to exercise
this Warrant, or shall the Company have the obligation to issue shares upon such
exercise of all or any portion of this Warrant to the extent that, after such
exercise the sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of
the Warrants or other rights to purchase Common Stock or through the ownership
of the unconverted portion of convertible securities), and (2) the number of
shares of Common Stock issuable upon the exercise of the Warrants with respect
to which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.
2.3 Certain Definitions. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:
(a) "Commencement Date" means the the Certificate of Incorporation
Amendment Filing Date
(b) "Closing Price" means the 4:00 P.M. closing bid price of the
Common Stock on the Principal Trading Market on the relevant Trading Day(s), as
reported by the Reporting Service for the relevant date.
(c) "Reporting Service" means Bloomberg LP or if that service is not
then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by a Majority in Interest of
the Holders and reasonably acceptable to the Company.
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(d) "Majority in Interest of the Holders" means, as of the relevant
date, one or more Holders whose respective outstanding principal amounts of the
Notes held by each of them, as of such date, aggregate more than fifty percent
(50%) of the aggregate outstanding principal amounts of the outstanding Notes
held by all Holders on that date.
3. Reservation of Shares. The Company hereby agrees that at all times
during the Exercise Period there shall be reserved for issuance upon exercise of
this Warrant one hundred percent (100%) of the number of shares of its Common
Stock as shall be required for issuance of the Warrant Shares for the then
unexercised portion of this Warrant. For the purposes of such calculations, the
Company should assume that the outstanding portion of this Warrants were
exercisable in full at any time, without regard to any restrictions which might
limit the Holder's right to exercise any portion of this Warrant held by the
Holder.
4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to this Section 6 (other than pursuant to Section 6.4), the
Holder shall be entitled to purchase such number of shares of Common Stock as
will cause (i) (x) the total number of shares of Common Stock Holder is entitled
to purchase pursuant to this Warrant following such adjustment, multiplied by
(y) the adjusted Exercise Price per share, to equal the result of (ii) (x) the
dollar amount of the total number of shares of Common Stock Holder is entitled
to purchase before adjustment, multiplied by (y) the total Exercise Price before
adjustment.(1)
6.2 Capital Adjustments. In case of any stock split or reverse stock
split, stock dividend, reclassification of the Common Stock or recapitalization,
the provisions of this Section 6 shall be applied as if such capital adjustment
event had occurred immediately prior to the date of this Warrant and the
original Exercise Price had been fairly allocated to the stock resulting from
such capital adjustment; and in other respects the provisions of this Section
shall be applied in a fair, equitable and reasonable manner so as to give
effect, as nearly as may be, to the purposes hereof. A rights offering to
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(1) Example: Assume 10,000 shares remain under Warrant at original stated
Exercise Price of US$0.07. Total exercise price (clause (y) in text) is (i)
10,000 x (ii) US$0.07, or US$700. Company effects 2:1 stock split. Exercise
Price is adjusted to US$0.035. Number of shares covered by Warrant is adjusted
to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.035 =
US$700.
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stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights. If, for as long as this Warrant remains
outstanding, the Company enters into a merger (other than where the Company is
the surviving entity) or consolidation with another corporation or other entity
(collectively, a "Sale"), and the holders of the Common Stock are entitled to
receive stock, securities or property in respect of or in exchange for Common
Stock, then as a condition of such Sale, the Company and any such successor or
transferee will agree that this Warrant may thereafter be converted on the terms
and subject to the conditions set forth above into the kind and amount of stock,
securities or property receivable upon such merger or consolidation by a holder
of the number of shares of Common Stock into which this Warrant might have been
converted immediately before such merger or consolidation, subject to
adjustments which shall be as nearly equivalent as may be practicable.
6.3 Adjustment for Spin Off. If, for any reason, prior to the exercise
of this Warrant in full, the Company spins off or otherwise divests itself of a
part of its business or operations or disposes all or of a part of its assets in
a transaction (the "Spin Off") in which the Company does not receive
compensation for such business, operations or assets, but causes securities of
another entity (the "Spin Off Securities") to be issued to security holders of
the Company, then the Company shall cause (i) to be reserved Spin Off Securities
equal to the number thereof which would have been issued to the Holder had all
of the Holder's unexercised Warrants outstanding on the record date (the "Record
Date") for determining the amount and number of Spin Off Securities to be issued
to security holders of the Company (the "Outstanding Warrants") been exercised
as of the close of business on the Trading Day immediately before the Record
Date (the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on
the exercise of all or any of the Outstanding Warrants, such amount of the
Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares, multiplied
by (y) a fraction, of which (I) the numerator is the amount of the Outstanding
Warrants then being exercised, and (II) the denominator is the amount of the
Outstanding Warrants.
6.4 Adjustment for Certain Transactions. Reference is made to the
provisions of Appendix A to this Warrant, the terms of which are incorporated
herein by reference. The Exercise Price shall be adjusted as provided in the
applicable provisions of said Appendix A.
7. Transfer to Comply with the Securities Act; Registration Rights.
7.1 Transfer. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of
counsel satisfactory to the Company that registration is not required under the
Act. Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
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7.2 Registration Rights. Reference is made to the provisions of
Section 4(h) of the Agreement, the terms of which are incorporated herein by
reference.
8. Notices. Any notice required or permitted hereunder shall be given in
manner provided in the Section headed "NOTICES" in the Agreement, the terms of
which are incorporated herein by reference.
9. Supplements and Amendments; Whole Agreement. This Warrant may be amended
or supplemented only by an instrument in writing signed by the Company and the
Holder. This Warrant contains the full understanding of the Company and, by its
acceptance of this Note, the Holder with respect to the subject matter hereof
and thereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract made under
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the Company and, by its acceptance of this Note, the Holder
consents to the jurisdiction of the federal courts whose districts encompass any
part of the County of New York or the state courts of the State of New York
sitting in the County of New York in connection with any dispute arising under
this Warrant and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. To the extent determined
by such court, the Company shall reimburse the Holder for any reasonable legal
fees and disbursements incurred by the Holder in enforcement of or protection of
any of its rights under any of the Transaction Agreements.
11. JURY TRIAL WAIVER. The Company and, by its acceptance of this Note, the
Holder hereby waive a trial by jury in any action, proceeding or counterclaim
brought by either of them against the other in respect of any matter arising out
or in connection with this Warrant.
12. Remedies. The Company stipulates that the remedies at law of the Holder
of this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any
of the terms hereof or otherwise.
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13. Descriptive Headings. Descriptive headings of the several Sections of
this Warrant are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
th day of July , 2006.
BRILLIANT TECHNOLOGIES CORPORATION
By: ______________________________
__________________________________
(Print Name)
__________________________________
(Title)
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APPENDIX A
TO
COMMON STOCK PURCHASE WARRANT
OF
BRILLIANT TECHNOLOGIES CORPORATION
1. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Agreement or in the Warrant.
2. (a) The term "Lower Price Transaction" means a New Transaction offered or
consummated during the New Transaction Period (as defined below), where the
lowest fixed exercise price (but not including any such exercise price based on
a percentage of the market price of the Common Stock) of any New Transaction
Warrants (as defined below) is, or by its terms or by an existing understanding
of the Company and the New Investor, could subsequently be adjusted or revised
to be, lower than the then effective Exercise Price of the Warrants (such
Exercise Price, in each case, subject to adjustment in the same manner as the
initial Exercise Price of the Warrant is adjusted, other than as a result of the
application of this Appendix A) (and, if no minimum exercise price is set, it
shall be assumed that such minimum exercise price is $.01).
(b) The term "New Transaction Warrants" means any warrant, option or other
right (howsoever denominated) issued to the New Investor in the New Transaction
to purchase shares of Common Stock.
(c) The term "New Transaction Period" means the period commencing on the
Issue Date and continuing until the earlier of (i) the Expiration Date or (ii)
the date on which this Warrant has been fully exercised.
3. The Company covenants and agrees that, if there is a Lower Price Transaction
during the New Transaction Period, then the Exercise Price on the unexercised
portion of this Warrant shall be adjusted to equal the lowest Exercise Price
applicable to the Lower Price Transaction.
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NOTICE OF EXERCISE OF WARRANT
TO: Brilliant Technologies Corporation VIA TELECOPIER TO:
000 Xxxxxxx Xxxxxx (000) 000-0000
New York, New York
Attn: President
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate, dated as of ________________, 20___ , to
purchase ___________ shares of the Common Stock, $0.001 par value ("Common
Stock"), of BRILLIANT TECHNOLOGIES CORPORATION and tenders herewith payment in
accordance with Section 2 of said Common Stock Purchase Warrant, as follows:
__ CASH: $__________________________ = (Exercise Price x Exercise Shares)
Payment is being made by:
__ enclosed check
__ wire transfer
__ other
__ CASHLESS EXERCISE [if available pursuant to Section 2.1(b)]:
Net number of Warrant Shares to be issued to Holder: _________*
* based on: Current Market Value - (Exercise Price x Exercise Shares)
---------------------------------------------------------
Market Price of Common Stock
where:
Market Price of Common Stock ["MP"] = $_______________
Current Market Value [MP x Exercise Shares] = $_______________
It is the intention of the Holder to comply with the provisions of Section
2.2 of the Warrant regarding certain limits on the Holder's right to exercise
thereunder. Based on the analysis on the attached Worksheet Schedule, the Holder
believes this exercise complies with the provisions of said Section 2.2.
Nonetheless, to the extent that, pursuant to the exercise effected hereby, the
Holder would have more shares than permitted under said Section, this notice
should be amended and revised, ab initio, to refer to the exercise which would
result in the issuance of shares consistent with such provision. Any exercise
above such amount is hereby deemed void and revoked.
As contemplated by the Warrant and the Bridge Loan Agreement, this Notice
of Conversion is being sent by facsimile to the telecopier number and officer
indicated above.
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If this Notice of Exercise represents the full exercise of the outstanding
balance of the Warrant, the Holder either (1) has previously surrendered the
Warrant to the Company or (2) will surrender (or cause to be surrendered) the
Warrant to the Company at the address indicated above by express courier within
five (5) Trading Days after delivery or facsimile transmission of this Notice of
Exercise.
The certificates representing the Warrant Shares should be transmitted by
the Company to the Holder
via express courier, or
by electronic transfer
after receipt of this Notice of Exercise (by facsimile transmission or
otherwise) to:
_________________________________
_________________________________
_________________________________
Dated: ______________________
_____________________________
[Name of Holder]
By: _________________________
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NOTICE OF EXERCISE OF WARRANT
WORKSHEET SCHEDULE
1. Current Common Stock holdings of Holder and Affiliates _____________
2. Shares to be issued on current exercise _____________
3. Other shares to be issued on other current exercise(s) and
other current conversion(s)(2) _____________
4. Other shares eligible to be acquired within next 60 days
without restriction _____________
5. Total [sum of Lines 1 through 4] _____________
6. Outstanding shares of Common Stock(3) _____________
7. Adjustments to Outstanding
a. Shares known to Holder as previously issued
to Holder or others but not included in Line 6 _____________
b. Shares to be issued per Line(s) 2 and 3 _____________
c. Total Adjustments [Lines 7a and 7b] _____________
8. Total Adjusted Outstanding [Lines 6 plus 7c] _____________
9. Holder's Percentage [Line 5 divided by Line 8] _____________%
[Note: Line 9 not to be above 4.99%]
----------
(2) Includes shares issuable on conversion of convertible securities (including
assumed payment, if relevant, of interest or dividends) or exercise of other
rights, including other warrants or options
(3) Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent
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