EXHIBIT 4.1
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR THE
SECURITIES LAWS OF ANY STATE; THEREFORE, THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE
OR TRANSFER.
WARRANT TO PURCHASE COMMON STOCK
OF
APPLIED VOICE RECOGNITION, INC., d/b/a x-XXXX.xxx
VOID AFTER AUGUST 31, 2003
This certifies that XXXXX X. XXXXXXXXX ("Xxxxxxxxx") is entitled to
purchase One Million (1,000,000) Shares of fully paid and nonassessable shares
of Common Stock, $0.001 par value (the "Common Stock"), of Applied Voice
Recognition, Inc., a Delaware corporation doing business as x-XXXX.xxx (the
"Company"), at a price equal to $0.15 per share. Shares may be purchased at any
time, in whole or in part, until the expiration of this Warrant. This Warrant is
issued to Xxxxxxxxx in connection with Geneva Capital Corp's service as
placement agent with respect to the private placement of One Million Dollars
($1,000,000) in shares of Common Stock of the Company. This Warrant and the
Common Stock issuable upon exercise of this Warrant are subject to the terms of
a Registration Rights Agreement dated effective September 1, 2000, between
Xxxxxxxxx and the Company, which agreement provides certain registration rights
in favor of Xxxxxxxxx.
The purchase price per share of Common Stock from time to time in
effect under this Warrant, and the number and character of shares covered
hereby, shall be subject to adjustments from time to time in certain instances
as follows, and the term "Exercise Price" shall mean the price per share
originally set forth in this Warrant or any price resulting from adjustments
pursuant to the terms hereof. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Stock". The term "Holder" shall refer to Xxxxxxxxx or any person
or entity holding this Warrant in accordance with the terms hereof.
(a) Exercise of Warrant. Subject to and in accordance with the provisions
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hereof, this Warrant may be exercised in whole or in part after the date
appearing above the signature of the Company below (the "Effective Date"), but
not later than 5:00 p.m., Houston time, on August 31, 2003; or if such day is a
day on which United States government offices are closed, then on the next
succeeding day which shall not be such a day, by presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, with
the Purchase Form annexed hereto duly executed and accompanied by payment of the
Exercise Price for the number of shares specified in
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such form, together with all applicable federal and state taxes. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the right
of the Holder to purchase the balance of the shares purchasable hereunder. Upon
receipt by the Company of this Warrant at the office or agency of the Company,
in proper form for exercise and pursuant to compliance herewith, together with
payment of the Exercise Price, the Holder shall be deemed to be the holder of
record, for all purposes, of the shares of Common Stock issuable upon such
exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to the Holder. Upon receipt of the required
deliveries, the Company shall, as promptly as practicable, and in any event
within ten (10) days thereafter, cause to be issued and delivered to the Holder
hereof or the transferee designated in the Purchase Form a certificate or
certificates representing the aggregate number of full shares of Common Stock
issuable upon such exercise registered in the name of the Holder hereof, or the
name of the transferee so designated, as the case may be.
(b) No Impairment. The Company hereby agrees that (i) at all times there
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shall be reserved for issuance and delivery upon exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance and
delivery upon exercise of this Warrant, and (ii) it will take all action as may
be necessary in order that all shares of Common Stock as may be issued pursuant
to this Warrant shall, upon issuance, be duly and validly issued, fully paid,
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof.
(c) Fractional Shares. No fractional shares or scrip representing
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fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, after
payment of the Exercise Price for such fractional share by the Holder, the
Company shall round the number of shares issued upon the exercise of this
Warrant to the next highest full share.
(d) Assignment of Warrant or Warrant Stock or Loss of Warrant.
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(1) This Warrant may not be sold, transferred, assigned or
hypothecated at any time after its execution and delivery, except upon
compliance with the requirements of this Warrant and any applicable state
or federal securities laws.
(2) Any sale, assignment, transfer or hypothecation of this Warrant
shall be made by surrender of this Warrant to the Company or at the office
of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and accompanied with funds sufficient to pay any
transfer tax; whereupon, the Company shall, after first receiving such
evidence as the Company may reasonably require as to compliance with this
Warrant, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled.
(3) The term "Warrant" as used herein includes any Warrant issued in
substitution for or replacement of this Warrant. Upon receipt by the
Company of evidence of the loss, theft, destruction or mutilation of this
Warrant, and upon surrender and cancellation of this Warrant, if mutilated,
the Company will at its expense execute and
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deliver a new Warrant of like tenor and date. When authorizing the
execution and delivery of a new Warrant to replace a Warrant lost, stolen
or destroyed, the Board of Directors of the Company may, in its sole
discretion and as a condition precedent thereto, require the Holder to
deliver an affidavit in a form satisfactory to the Board of Directors of
the Company and to indemnify the Company against any claim that may be made
against the Company with respect to such lost, stolen or destroyed Warrant.
(e) Anti-dilution and Adjustment Provisions. The purchase price per share
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of Common Stock from time to time in effect under this Warrant, and the number
and character of shares covered hereby, shall be subject to adjustments from
time to time in certain instances as follows.
(1) In case the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares or shall issue in exchange for
its outstanding shares of Common Stock a greater number of shares of Common
Stock, then in each such case from and after the record date for such
subdivision or exchange, the number of shares of Common Stock covered by
this Warrant shall be increased in proportion to such increase in the
number of outstanding shares of Common Stock and the Exercise Price then in
effect shall be correspondingly decreased; and in the case the Company
shall reduce the number of shares of its Common Stock by a combination of
shares or shall issue in exchange for its outstanding shares of Common
Stock a lesser number of shares of Common Stock, then in each such case
from and after the record date for such combination or exchange, the number
of shares of Common Stock covered by this Warrant shall be decreased in
proportion to such reduction in the number of outstanding shares of Common
Stock, and the then prevailing Exercise Price shall be correspondingly
increased.
(2) In case the Company shall declare and pay a dividend upon its
Common Stock payable in Common Stock, then in each such case from and after
the record date for determining the stockholders entitled to receive such
dividend, the number of shares of Common Stock covered by this Warrant
shall be increased in proportion to the increase in the number of
outstanding shares of Common Stock through such stock dividend, and the
then prevailing Exercise Price shall be correspondingly decreased.
(3) In case of any reclassification or change of outstanding shares
of Common Stock (other than as a result of a subdivision, combination or
stock dividend) or in case of the consolidation or merger of the Company
with or into any other corporation (other than a merger in which the
Company is the continuing corporation and which does not result in any
reclassification or change in its outstanding shares of Common Stock), or
in case of any sale by the Company of all or substantially all of its
assets to another corporation (as determined in accordance with the
Delaware General Corporation Law), the Holder shall have the right
thereafter to receive upon exercise of this Warrant the amount and kind of
shares of capital stock and other securities and property entitled to be
received upon such reclassification, change, consolidation, merger or sale
by a holder of the number of shares of Common Stock of the Company covered
by this Warrant at the then prevailing Exercise Price, subject to
subsequent adjustments as provided herein.
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(f) Notices to Holder. So long as this Warrant shall be outstanding and
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unexercised (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation (as determined in accordance with Delaware General Corporation Law),
or voluntary or involuntary dissolution, liquidation or winding up of the
Company shall be effected, then, in any such case, the Company shall cause to be
delivered to the Holder, at least ten days prior to the date specified in (x)
and at least thirty days prior to the date specified in (y) below, as the case
may be, a notice containing a brief description of the proposed action and
stating the date on which (x) a record is to be taken for the purpose of such
dividend, distribution or rights, or (y) such reclassification reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or winding up
is to take place and at least twenty days prior notice as to the date, if any is
to be fixed, as of which the holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation, or winding up.
(g) Transfer to Comply with the Securities Act.
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(1) This Warrant or the Warrant Stock or any other security issued or
issuable upon exercise of this Warrant may not be offered or sold except in
conformity with the Securities Act, and then only against receipt of an
agreement of such person to whom such offer of sale is made to comply with
the provisions of this Section (g) with respect to any resale or other
disposition of such securities.
(2) The Company may cause the legends set forth at the top of the
first page hereof to be set forth on each Warrant and the following legends
to be set forth on each certificate representing Warrant Stock, unless
counsel for the Company is of the opinion as to any such certificate that
such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE OR THE SECURITIES LAWS OF ANY
STATE. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR
SUCH SALE OR TRANSFER.
(h) Applicable Law. This Warrant shall be governed by, and construed in
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accordance with, the laws of the State of Delaware.
(i) Notice. Any notices or certificates by the Company to the Holder and
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by the Holder to the Company shall be deemed delivered if in writing and
delivered personally or five (5) days
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after being sent by certified mail or registered mail, return receipt requested,
to the Holder. For purposes hereof, the address of the Holder shall be 100
United Nations Plaza, East 48/th/ Street, Apt. 24G, Xxx Xxxx, XX 00000,
Attention: Xxxxx X. Xxxxxxxxx, and the address of the Company shall be 0000 Xx.
Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attention: President; provided,
however, either address may be changed by notice given in accordance herewith.
(j) Nonwaiver. No course of dealing or any delay or failure to exercise
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any right, power or remedy hereunder on the part of the Holder hereof shall
operate as a waiver of or otherwise prejudice such Holder's rights, powers or
remedies.
(k) Holder Not a Stockholder. Prior to the exercise of this Warrant as
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hereinbefore provided, the Holder hereof shall not, by virtue of its ownership
of this Warrant, except as specifically provided herein, be entitled to any of
the rights of a stockholder of the Company including, without limitation, the
right as a stockholder to (a) vote on or consent to any proposed action of the
Company, or (b) receive notice of or attend any meetings of stockholders of the
Company or notice of any other proceedings of the Company.
(l) Successors and Assigns. This Warrant and the rights evidenced hereby
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shall inure to the benefit of and be binding upon the successors and assigns of
the Company, the Holder hereof and the Holder of the shares of Common Stock
issued upon the exercise hereof, and shall be enforceable by any such Holder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
effective as of September 1, 2000.
APPLIED VOICE RECOGNITION, INC.,
d/b/a x-XXXX.xxx
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Chairman
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PURCHASE FORM
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by said Warrant for, and to
purchase thereunder, ________ shares of Common Stock, $0.001 par value per
share, of Applied Voice Recognition, Inc., d/b/a x-XXXX.xxx and herewith makes
payment of $___________ in cash therefor and requests that the certificates for
such shares be issued in the name of _____________________________________ and
delivered to ________________________________________________, whose address is
_____________________________________________________ and, if such shares shall
not be all of the shares purchasable hereunder, that a new Warrant of like tenor
for the balance of the shares purchasable hereunder be delivered to the
undersigned.
Dated: _________________ _________________________________
Name:____________________________
Title:___________________________
Address:_________________________
_________________________
_________________________
Social Security
or Tax I.D. No. _________________
ASSIGNMENT IN FULL
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto _______________________________ the within Warrant
and all rights evidenced thereby and does irrevocably constitute and appoint
______________________________, attorney, to transfer the said Warrant on the
books of the within named Company.
Dated: _________________ _________________________________
_________________________________
Address: _________________________
_________________________
_________________________
Social Security
or Tax I.D. No. __________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________________ a portion of the
within Warrant and the rights evidenced thereby, to wit: the right to purchase
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______ shares of Common Stock of Applied Voice Recognition, Inc., d/b/a e-
XXXX.xxx and does irrevocably constitute and appoint _________________________,
attorney, to transfer to such extent the said Warrant on the books of the within
named Corporation.
Dated: _________________ _________________________________
_________________________________
Address: ________________________
________________________
________________________
Social Security
or Tax I.D. No. _________________
