INTELLIGENTIAS, INC. WARRANT
EXHIBIT
4.1
NEITHER
THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE
OF
THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR
OTHER LOAN SECURED BY SUCH SECURITIES.
WARRANT
|
Warrant
No. ____________
|
Dated:
October 19, 2007
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Intelligentias,
Inc., a Nevada corporation (the “Company”), hereby certifies that, for value
received, ______________ or
its
registered assigns (the “Holder”), is entitled to purchase from the Company up
to a total of _____________ shares
of
common stock, $0.0001 par value per share (the “Common Stock”), of the Company
(each such share, a “Warrant Share” and all such shares, the “Warrant Shares”)
at an exercise price initially equal to $1.25 per share (as adjusted from time
to time as provided in Section 9,
the
“Exercise Price”), at any time on or after the date hereof (the “Initial
Exercise Date”) and through and including the date that is five (5) years after
the date hereof (the “Expiration Date”), and subject to the following terms and
conditions. This Warrant (this “Warrant”) is one of a series of similar warrants
issued pursuant to that certain Securities Purchase Agreement, dated as of
the
date hereof, by and among the Company and the Investors identified therein
(the
“Purchase Agreement”). All such warrants are referred to herein, collectively,
as the “Warrants.”
1. Definitions.
In
addition to the terms defined elsewhere in this Warrant, capitalized terms
that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.
2. Registration
of Warrant.
The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in the name of the Holder of
record hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes,
absent actual notice to the contrary. The Warrant Shares shall be afforded
the
registration rights set forth in Article VI of the Purchase
Agreement.
3. Registration
of Transfers.
The
Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Transfer Agent or to the
Company at its address specified herein. Upon any such registration of transfer,
a new warrant to purchase Common Stock, in substantially the form of this
Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant
by
the transferee thereof shall be deemed the acceptance by such transferee of
all
of the rights and obligations of a holder of a Warrant.
4. Exercise
and Duration of Warrants.
(a) This
Warrant shall be exercisable by the registered Holder at any time and from
time
to time on or after the Initial Exercise Date to and including the Expiration
Date. At 6:30 P.M., New York City time on the Expiration Date, the portion
of this Warrant not exercised prior thereto shall be and become void and of
no
value; provided
that, if
the average of the Closing Prices for the five (5) Trading Days immediately
prior to (but not including) the Expiration Date exceeds the Exercise Price
on
the Expiration Date, then this Warrant shall be deemed to have been exercised
in
full (to the extent not previously exercised) on a “cashless exercise” basis at
6:30 p.m., New York City time, on the Expiration Date.
(b) A
Holder
may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise Notice”), appropriately
completed and duly signed, and (ii) payment of the Exercise Price for the
number of Warrant Shares as to which this Warrant is being exercised (which
may
take the form of a “cashless exercise” if so indicated in the Exercise Notice),
and the date such items are delivered to the Company (as determined in
accordance with the notice provisions hereof) is an “Exercise Date.” The Holder
shall not be required to deliver the original Warrant in order to effect an
exercise hereunder. Execution and delivery of the Exercise Notice in respect
of
less than all the Warrant Shares issuable upon exercise of this Warrant shall
have the same effect as cancellation of the original Warrant and issuance of
a
New Warrant evidencing the right to purchase the remaining number of Warrant
Shares.
5. Delivery
of Warrant Shares.
(a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later
than
three (3) Trading Days after the Exercise Date) issue or cause to be issued
and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise, free of restrictive legends unless a registration
statement covering the resale of the Warrant Shares and naming the Holder as
a
selling stockholder thereunder is not then effective or the Warrant Shares
are
not freely transferable without volume restrictions pursuant to Rule 144
under the Securities Act. The Holder, or any Person so designated by the Holder
to receive Warrant Shares, shall be deemed to have become the holder of record
of such Warrant Shares as of the Exercise Date. The Company shall, upon request
of the Holder, use reasonable commercial efforts to deliver Warrant Shares
hereunder electronically through The Depository Trust Company or another
established clearing corporation performing similar functions.
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(b) This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. Upon surrender of this Warrant
following one or more partial exercises, the Company shall issue or cause to
be
issued, at its expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares.
(c) In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Warrant Shares by the third
Trading Day after the date on which delivery of such certificate is required
by
this Warrant, and if after such third Trading Day the Holder purchases (in
an
open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares that the Holder
anticipated receiving from the Company (a “Buy-In”), then the Company shall,
within five (5) Trading Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including reasonable brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess (if any)
of
the Buy-In Price over the product of (A) such number of shares of Common Stock,
times (B) the Closing Price on the date of the event giving rise to the
Company’s obligation to deliver such certificate.
(d) The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or
any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to
the
Holder in connection with the issuance of Warrant Shares. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing shares of Common Stock upon exercise
of
this Warrant as required pursuant to the terms hereof.
6. Charges,
Taxes and Expenses.
Issuance and delivery of certificates for shares of Common Stock upon exercise
of this Warrant shall be made without charge to the Holder for any issue or
transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes
and
expenses shall be paid by the Company; provided,
however,
that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance, delivery or registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
-3-
7. Replacement
of Warrant.
If this
Warrant is mutilated, lost, stolen or destroyed, the Company, at no cost to
Holder, shall issue or cause to be issued in exchange and substitution for
and
upon cancellation hereof, or in lieu of and substitution for this Warrant,
a New
Warrant, but only upon receipt of an affidavit of such loss, theft or
destruction and customary indemnity, if requested.
8. Reservation
of Warrant Shares.
The
Company covenants that it will at all times reserve and keep available out
of
the aggregate of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which
are then issuable and deliverable upon the exercise of this entire Warrant,
free
from preemptive rights or any other contingent purchase rights of persons other
than the Holder (after giving effect to the adjustments and restrictions of
Section 9,
if
any). The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable. The Company will use reasonable commercial efforts
to take all such action to assure that such shares of Common Stock may be issued
as provided herein without violation of any applicable law or regulation, or
of
any requirements of any securities exchange or automated quotation system upon
which the Common Stock may be listed, in each case, applicable to the
Company.
9. Certain
Adjustments.
The
Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this
Section 9.
(a) Special
Definitions.
For
purposes of this Section
9,
the
following definitions shall apply:
(i) “Additional
Shares of Common Stock” shall mean all shares of Common Stock issued or deemed
to be issued by the Company after the Initial Exercise Date, other
than:
(A)
shares
of
Common Stock issued or issuable by reason of a dividend or other distribution
on
shares of Common Stock
that
is
covered by Section
9(e)
or
Section
9(f)
below;
(B)
shares
of
Common Stock issued or issuable upon exercise of the Warrants or conversion
of
the Company’s Series A
Convertible
Preferred Stock, par value $0.0001 per share, issued on the date hereof;
(C)
shares
of
Common Stock issued or issuable upon conversion or exercise of any Option or
Convertible Security
outstanding
on the Initial Exercise Date;
-4-
(D)
shares
of
Common Stock issued or issuable to employees, directors or consultants pursuant
to equity incentive plans maintained by the Company and registered with the
Securities and Exchange Commission on Form S-8;
(E)
shares
of
Common Stock issued or deemed issued in the Private Placement (as defined
below); or
(F)
shares
of
Common Stock designated as exempt from the definition of Additional Shares
of
Common Stock by the holders of the then outstanding Warrants to acquire at
least
a majority of the Warrant Shares then issuable on exercise of all then
outstanding Warrants (the “Required Holders”).
(ii) “Appraisal
Procedure” shall be the procedure to determine fair market value of any security
or other property (in either case, the “valuation amount”). If the Required
Holders and the Board of Directors are not able to agree on the valuation amount
within a reasonable period of time (not to exceed twenty (20) days), the
valuation amount shall be determined by an investment banking firm of national
recognition, which firm shall be unaffiliated with the Company and shall be
reasonably acceptable to the Board of Directors and the Required Holders. If
the
Board of Directors and the Required Holders are unable to agree upon an
acceptable investment banking firm within ten (10) days after the date either
party proposed that one be selected, the investment banking firm will be
selected by an arbitrator located in Boston, Massachusetts, selected by the
American Arbitration Association (or if such organization ceases to exist,
the
arbitrator shall be chosen by a court of competent jurisdiction). The arbitrator
shall select the investment banking firm (within ten (10) days of his
appointment) from a list, jointly prepared by the Required Holders and the
Board
of Directors, of not more than six (6) investment banking firms of national
standing in the United States, of which no more than three (3) may be named
by
the Board of Directors and no more than three (3) may be named by the Required
Holders. The arbitrator may consider, within the ten-day period allotted,
arguments from the parties regarding which investment banking firm to choose,
but the selection by the arbitrator shall be made in its sole discretion from
the list of six (6). The Board of Directors and the Required Holders shall
submit their respective valuations and other relevant data to the investment
banking firm, and the investment banking firm shall as soon as practicable
thereafter make its own determination of the valuation amount. The final
valuation amount for purposes hereof shall be the average of the two valuation
amounts closest together, as determined by the investment banking firm, from
among the valuation amounts submitted by the Company and the Required Holders
and the valuation amount calculated by the investment banking firm. The
determination of the final valuation amount by such investment banking firm
shall be final and binding upon the parties. The Company shall pay the fees
and
expenses of the investment banking firm and arbitrator (if any) used to
determine the valuation amount. If required by any such investment banking
firm
or arbitrator, the Company shall execute a retainer and engagement letter
containing reasonable terms and conditions, including, without limitation,
customary provisions concerning the rights of indemnification and contribution
by the Company in favor of such investment banking firm or arbitrator and its
officers, directors, partners, employees, agents and affiliates. If the
valuation amount is for Common Stock of the Company, the valuation amount shall
not include a discount for minority ownership or illiquidity or a control
premium.
-5-
(iii) “As-Converted
Basis” shall mean, for the purpose of determining the number of shares of Common
Stock outstanding, a basis of calculation which takes into account (a) the
number of shares of Common Stock actually issued and outstanding at the time
of
such determination, and (b) the number of shares of Common Stock that is then
issuable upon the exercise and conversion of all outstanding Options and
Convertible Securities, including without limitation, the Warrants.
(iv) “Convertible
Securities” shall mean any evidences of indebtedness, shares (other than Common
Stock) or other securities directly or indirectly convertible into or
exchangeable for Common Stock.
(v) “Option”
shall mean rights, options or warrants to subscribe for, purchase or otherwise
acquire Common Stock or Convertible Securities.
(vi) “Private
Placement” shall mean a private placement (i) consummated within sixty (60) days
of the date hereof, (ii) involving up to but not more than $5,000,000 of
proceeds to Company from the sale of Common Stock and warrants of the Company,
(iii) on the terms described in the Confidential Private Placement Memorandum
dated September 4, 2007 with Regal Securities, Inc. and X.X. Xxxxxx &
Company, L.L.C. as placement agents, and (iv) in which the Company sells to
investors up to 6,250,000 shares of Common Stock at a price per share of $0.80
and investors receive warrants to purchase fifty percent (50%) of the number
of
such shares of Common Stock purchased by them at an exercise price of $1.00
per
share for three (3) years after the date of issuance.
(b) Adjustments
to Exercise Price for Diluting Issues.
(i)
No
Adjustment of Exercise Price.
No
adjustment in the Exercise Price shall be made unless the consideration per
share for an Additional Share of Common Stock issued or deemed to be issued
by
the Company is less than the applicable Exercise Price for the Warrant Shares
in
effect on the date of, and immediately prior to, the issue of such Additional
Shares.
(ii)
Full
Ratchet.
If any
Additional Shares of Common Stock are issued (including Additional Shares of
Common Stock deemed to be issued pursuant to Section
9(b)(iii)
below
and excluding shares issued as stock split or combination as provided in
Section
9(e)
below or
upon a dividend or distribution as provided in Section
9(f)
below)
for consideration per share lower than the Exercise Price in effect on the
date
of and immediately prior to such issue during the first 18 months after the
Initial Exercise Date of the Warrant Shares, the Exercise Price for such Warrant
Shares shall be lowered to equal such consideration per share (for purposes
of
this clause, any Additional Shares of Common Stock issued for no consideration
shall be deemed to be issued for a consideration per share of $0.001, subject
to
adjustments for Common Stock splits, dividends and combinations).
(iii)
Issue
of Securities, Deemed Issue of Additional Shares of Common Stock.
If the
Company at any time or from time to time after the Initial Exercise Date shall
issue any Options or Convertible Securities or shall fix a record date for
the
determination of holders of any class of securities entitled to receive any
such
Options or Convertible Securities, then the maximum number of shares of Common
Stock (as set forth in the instrument relating thereto without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible Securities
and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time
of
such issue or, in case such a record date shall have been fixed, as of the
close
of business on such record date, provided
that in
any such case in which Additional Shares of Common Stock are deemed to be
issued:
| (A) |
No
further adjustment in the Exercise Price shall be made upon the subsequent
issue of Convertible Securities or shares of Common Stock upon (i)
the
exercise or conversion of any Options or Convertible Securities
outstanding as of the date hereof; (ii) the exercise of any Options
by
employees, directors, or consultants pursuant to equity incentive
plans
maintained by the Company and registered with the Securities and
Exchange
Commission on Form S-8; or (iii) the exercise of the
Warrants;
|
| (B) |
If
such Options or Convertible Securities by their terms provide, with
the
passage of time or otherwise, for any increase or decrease in the
consideration payable to the Company, upon the exercise, conversion
or
exchange thereof, the Exercise Price of the Warrant Shares computed
upon
the original issue thereof (or upon the occurrence of a record date
with
respect thereto), and any subsequent adjustments based thereon, shall,
upon any such increase or decrease becoming effective, be recomputed
to
reflect such increase or decrease insofar as it affects such Options
or
the rights of conversion or exchange under such Convertible
Securities;
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| (C) |
Upon
the expiration of any such Options or any rights of conversion or
exchange
under such Convertible Securities which shall not have been exercised,
the
Exercise Price of the Warrant Shares computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon such expiration,
be recomputed as if:
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| (i) |
in
the case of Convertible Securities or Options for Common Stock, the
only
Additional Shares of Common Stock issued were the shares of Common
Stock,
if any, actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received
by
the Company for the issue of all such Options, whether or not exercised,
plus the consideration actually received by the Company upon such
exercise, or for the issue of all such Convertible Securities which
were
actually converted or exchanged, plus the additional consideration,
if
any, actually received by the Company upon such conversion or exchange;
and
|
-6-
| (ii) |
in
the case of Options for Convertible Securities, only the Convertible
Securities, if any, actually issued upon the exercise thereof were
issued
at the time of issue of such Options, and the consideration received
by
the Company for the Additional Shares of Common Stock deemed to have
been
then issued was the consideration actually received by the Company
for the
issue of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Company upon the
issue
of the Convertible Securities with respect to which such Options
were
actually exercised;
|
| (D) |
In
the event of any change in the number of shares of Common Stock issuable
upon the exercise, conversion or exchange of any Option or Convertible
Security, including, but not limited to, a change resulting from
the
anti-dilution provisions thereof, the Exercise Price then in effect
shall
forthwith be readjusted to such Exercise Price as would have obtained
had
the adjustment which was made upon the issuance of such Option or
Convertible Security not exercised or converted prior to such change
been
made upon the basis of such change;
and
|
| (E) |
No
readjustment pursuant to clause (B), (C) or (D) above shall have the
effect of increasing the Exercise Price to an amount which exceeds
the
lower of (i) the Exercise Price on the original adjustment date, or
(ii) the Exercise Price that would have resulted from any issuances
of Additional Shares of Common Stock between the original adjustment
date
and such readjustment date.
|
In
the
event the Company, after the Initial Exercise Date, amends any Options or
Convertible Securities (whether such Options or Convertible Securities were
outstanding on the Initial Exercise Date or were issued after the Initial
Exercise Date) to increase the number of shares issuable thereunder or decrease
the consideration to be paid upon exercise or conversion thereof, then such
Options or Convertible Securities, as so amended, shall be deemed to have been
issued after the Initial Exercise Date and the provisions of this Section
9(b)(iii)
shall
apply.
(c) Adjustment
of Exercise Price Upon Issuance of Additional Shares of Common
Stock.
In the
event the Company shall, at any time after the first eighteen (18) months
following the Initial Exercise Date, issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Section
9(b)(iii)
above
and excluding shares issued as a stock split or combination as provided in
Section
9(e)
below or
upon a dividend or distribution as provided in Section
9(f)
below),
without consideration or for a consideration per share less than the applicable
Exercise Price of Warrant Shares in effect on the date of and immediately prior
to such issue, then and in such event, such Exercise Price shall be reduced,
concurrently with such issue, to a price determined by multiplying such Exercise
Price by a fraction, (A) the numerator of which shall be the sum of
(1) the number of shares of Common Stock outstanding immediately prior to
such issue (on an As-Converted Basis) plus (2) the number of shares of
Common Stock which the aggregate consideration received or to be received by
the
Company for the total number of Additional Shares of Common Stock so issued
would purchase at such Exercise Price; and (B) the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior
to
such issue (on an As-Converted Basis) plus the number of such Additional Shares
of Common Stock so issued and/or deemed to be issued.
-7-
(d) Determination
of Consideration.
For
purposes of this Section
6,
the
consideration received by the Company for the issue of any Additional Shares
of
Common Stock shall be computed as follows:
(i)
Cash
and Property:
Such
consideration shall:
(A)
insofar
as it consists of cash, be computed at the aggregate of cash received by the
Company, excluding amounts paid or payable for accrued interest;
(B)
insofar
as it consists of property other than cash, be computed at the fair market
value
thereof at the time of such issue, as determined in good faith by the Board
of
Directors, or if requested by the Required Holders, by agreement of the Board
of
Directors and the Required Holders, and if the Board of Directors and the
Required Holders do not agree on such fair market value, in accordance with
the
procedures set forth in the definition of Appraisal Procedure; and
(C)
in
the
event Additional Shares of Common Stock are issued together with other shares
or
securities or other assets of the Company for consideration which covers both,
be the proportion of such consideration so received, computed as provided in
clauses (A) and (B) above, as determined in good faith by the Board of
Directors.
(ii)
Options
and Convertible Securities.
The
consideration per share received by the Company for Additional Shares of Common
Stock deemed to have been issued pursuant to Section
9(b)(iii)
above,
relating to Options and Convertible Securities, shall be determined by
dividing:
(A)
the
total
amount, if any, received by the Company as consideration for the issue of such
Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a potential subsequent
adjustment of such consideration) payable to the Company upon the exercise
of
such Options or the conversion or exchange of such Convertible Securities,
or in
the case of Options for Convertible Securities, the exercise of such Options
for
Convertible Securities and the conversion or exchange of such Convertible
Securities, by
(B) the
maximum number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
potential subsequent adjustment of such number) issuable upon the exercise
of
such Options or the conversion or exchange of such Convertible
Securities.
-8-
(e) Stock
Dividends, Issuances and Splits.
If the
Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class
of
capital stock that is payable in shares of Common Stock, (ii) issues
additional Common Stock, (iii) subdivides outstanding shares of Common Stock
into a larger number of shares, or (iv) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction of which the numerator shall
be
the number of shares of Common Stock outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend
or
distribution, and any adjustment pursuant to clause (ii), (iii), or (iv) of
this paragraph shall become effective immediately after the effective date
of
such issuance, subdivision or combination.
(f) Pro
Rata Distributions.
If the
Company, at any time while this Warrant is outstanding, distributes to holders
of Common Stock (i) evidences of its indebtedness, (ii) any security
(other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or
(iv) any other asset (in each case, “Distributed Property”), then in each
such case the Holder shall be entitled upon exercise of this Warrant for the
purchase of any or all of the Warrant Shares, to receive the amount of
Distributed Property which would have been payable to the Holder had such Holder
been the holder of such Warrant Shares on the record date for the determination
of stockholders entitled to such Distributed Property. The Company will at
all
times set aside in escrow and keep available for distribution to such holder
upon exercise of this Warrant a portion of the Distributed Property to satisfy
the distribution to which such Holder is entitled pursuant to the preceding
sentence.
(g) Fundamental
Transactions.
If any
capital reorganization, reclassification of the capital stock of the Company,
consolidation or merger of the Company with another corporation in which the
Company is not the survivor, or sale, transfer or other disposition of all
or
substantially all of the Company’s assets to another corporation shall be
effected (all such transactions being hereinafter referred to as a “Fundamental
Transaction”), then the Company shall ensure that lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to purchase
and
receive upon the basis and upon the terms and conditions herein specified and
in
lieu of the Warrant Shares immediately theretofore issuable upon exercise of
this Warrant, such shares of stock, securities or assets as would have been
issuable or payable with respect to or in exchange for a number of Warrant
Shares equal to the number of Warrant Shares immediately theretofore issuable
upon exercise of this Warrant, had such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition not taken place,
and
in any such case appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the provisions hereof (including,
without limitation, provision for adjustment of the Exercise Price) shall
thereafter be applicable, as nearly equivalent as may be practicable in relation
to any share of stock, securities or assets thereafter deliverable upon the
exercise thereof. The Company shall not effect any such consolidation, merger,
sale, transfer or other disposition unless prior to or simultaneously with
the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing
or
otherwise acquiring such assets or other appropriate corporation or entity
shall
assume the obligation to deliver to the Holder, at the last address of the
Holder appearing on the books of the Company, such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase, and the other obligations under this Warrant. The
provisions of this Section 9(c)
shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers or other dispositions, each of which
transactions shall also constitute a Fundamental Transaction. Notwithstanding
the foregoing, if any Fundamental Transaction constitutes or results in
(a) a “going private” transaction as defined in Rule 13e-3 under the
Securities Exchange Act of 1934 (the “Exchange Act”), (b) an acquisition of
the Company primarily for cash, or (c) an acquisition, merger or sale with
or into a Person not traded on an eligible Trading Market, then the Company
shall not enter into or consummate such a Fundamental Transaction without the
prior written consent of the Required Holders.
-9-
(h) Number
of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant to this
Section
9,
the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased (as the case may be), proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the
decreased or increased (as the case may be) number of Warrant Shares shall
be
the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.
(i) Calculations.
All
calculations under this Section 9
shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable.
The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common
Stock.
(j) Notice
of Adjustments.
Upon
the occurrence of each adjustment pursuant to this Section 9,
the
Company at its expense will promptly compute such adjustment in accordance
with
the terms of this Warrant and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted
number or type of Warrant Shares or other securities issuable upon exercise
of
this Warrant (as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such adjustment is based.
Upon written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Transfer Agent.
(k) Notice
of Corporate Events.
If the
Company (i) declares a dividend or any other distribution of cash,
securities or other property in respect of its Common Stock, including without
limitation any granting of rights or warrants to subscribe for or purchase
any
capital stock of the Company, (ii) enters into any agreement contemplating,
or solicits stockholder approval for, any Fundamental Transaction or
(iii) authorizes the voluntary dissolution, liquidation or winding up of
the affairs of the Company, then the Company shall deliver to the Holder a
notice describing the material terms and conditions of such transaction, at
least fifteen calendar days prior to the applicable record or effective date
on
which a Person would need to hold Common Stock in order to participate in or
vote with respect to such transaction, and the Company will take all steps
reasonably necessary in order to ensure that the Holder is given the practical
opportunity to exercise this Warrant prior to such time so as to participate
in
or vote with respect to such transaction; provided,
however,
that
the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.
-10-
10. Payment
of Exercise Price.
The
Holder shall pay the Exercise Price in immediately available funds; provided,
however,
that
the Holder may satisfy its obligation to pay the Exercise Price through a
“cashless exercise,” in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:
X
= Y
[(A-B)/A]
where:
X
= the
number of Warrant Shares to be issued to the Holder.
Y
= the
number of Warrant Shares with respect to which this Warrant is being
exercised.
A
= the
average of the Closing Prices for the five Trading Days immediately prior to
(but not including) the Exercise Date.
B
= the
Exercise Price.
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced,
on
the date this Warrant was originally issued pursuant to the Purchase
Agreement.
11. Limitation
on Exercise.
Notwithstanding anything to the contrary contained herein, except for Holders
whose beneficial ownership of Common Stock already exceeds the Maximum
Percentage (as defined below) of the total number of issued and outstanding
shares of Common Stock immediately prior to exercise of this Warrant, at any
time the Common Stock is registered pursuant to Section 12 of the Exchange
Act,
the number of shares of Common Stock that may be acquired by the Holder upon
any
exercise of this Warrant (or otherwise in respect hereof) shall be limited
to
the extent necessary to ensure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned
by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not equal or exceed ten percent
(10%) (the “Maximum Percentage”) of the total number of issued and outstanding
shares of Common Stock (including for such purpose the shares of Common Stock
issuable upon such exercise). For such purposes, beneficial ownership shall
be
determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. Each delivery of an Exercise
Notice hereunder will constitute a representation by the Holder that it has
evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph, and the Company shall have no liability
with
respect to this Section 11.
The
Company’s obligation to issue shares of Common Stock in excess of the limitation
referred to in this Section shall be suspended (and shall not terminate or
expire notwithstanding any contrary provisions hereof) until such time, if
any,
as such shares of Common Stock may be issued in compliance with such limitation,
but in no event later than the Expiration Date. By written notice to the
Company, the Holder may waive the provisions of this Section or increase or
decrease the Maximum Percentage to any other percentage specified in such
notice, but (i) any such waiver or increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the Company, and
(ii) any such waiver or increase or decrease will apply only to the Holder
and not to any other holder of Warrants.
-11-
12. Fractional
Shares.
The
Company shall not be required to issue or cause to be issued fractional Warrant
Shares on the exercise of this Warrant. If any fraction of a Warrant Share
would, except for the provisions of this Section, be issuable upon exercise
of
this Warrant, the number of Warrant Shares to be issued will be rounded down
to
the nearest whole share.
13. Notices.
Any and
all notices or other communications or deliveries hereunder (including without
limitation any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in the Purchase Agreement prior to 6:30 p.m. (New York City time)
on a Trading Day, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in the Purchase Agreement on a day that is not a Trading Day
or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the
Trading Day following the date of delivery to the courier service, if sent
by
nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices or communications shall be as set forth in the Purchase
Agreement.
14. Warrant
Agent.
The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or
any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
stockholder services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.
15. Miscellaneous.
(a) Subject
to the restrictions on transfer set forth on the first page hereof, this Warrant
may be assigned by the Holder. This Warrant may not be assigned by the Company
except to a successor in the event of a Fundamental Transaction. This Warrant
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence, nothing
in
this Warrant shall be construed to give to any Person other than the Company
and
the Holder any legal or equitable right, remedy or cause of action under this
Warrant. This Warrant may be amended only in writing signed by the Company
and
the Holder and their successors and assigns.
(b) The
Company (i) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise and (ii) will not close its
stockholder books or records in any manner which interferes with the timely
exercise of this Warrant, other than in connection with a business combination
transaction.
-12-
(c) GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL.
EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH
ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT
TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT AND
THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN
ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES
THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE
HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.
(d) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In
case
any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
[SIGNATURE
PAGE FOLLOWS]
-13-
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its
authorized officer as of the date first indicated above.
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|
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| By: | ||
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Name:
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|
Title:
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-14-
FORM
OF
EXERCISE NOTICE
(To
be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)
The
undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by
INTELLIGENTIAS, INC., a Nevada corporation (the “Company”). Capitalized terms
used herein and not otherwise defined have the respective meanings set forth
in
the Warrant.
|
1.
|
The
Warrant is currently exercisable to purchase a total of ______________
Warrant Shares.
|
|
2.
|
The
undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the
Warrant.
|
|
3.
|
The
Holder intends that payment of the Exercise Price shall be made as
(check
one):
|
____ “Cash
Exercise” under Section 10
____ “Cashless
Exercise” under Section 10
|
4.
|
If
the holder has elected a Cash Exercise, the holder shall pay the
sum of
$____________ to the Company in accordance with the terms of the
Warrant.
|
|
5.
|
Pursuant
to this exercise, the Company shall deliver to the holder _______________
Warrant Shares in accordance with the terms of the
Warrant.
|
|
6.
|
Following
this exercise, the Warrant shall be exercisable to purchase a total
of
______________ Warrant Shares.
|
|
Dated:
____________________, ______
|
Name
of Holder:
|
|
|
(Print)
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
(Signature
must conform in all respects to name of holder as specified on the
face of
the Warrant)
|
||
FORM
OF
ASSIGNMENT
[To
be
completed and signed only upon transfer of Warrant]
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant
to
purchase ____________ shares of Common Stock of INTELLIGENTIAS, INC. to which
the within Warrant relates and appoints ________________ attorney to transfer
said right on the books of INTELLIGENTIAS, INC. with full power of substitution
in the premises.
|
Dated:
____________________, ______
|
||
|
(Signature
must conform in all respects to name of holder as specified on the
face of
the Warrant)
|
||
|
Address
of Transferee
|
||
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In
the presence of:
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