THIS WARRANT AND THE WARRANT SHARES (AS DEFINED BELOW) ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION....
Exhibit
10.46.3
THIS
WARRANT AND THE WARRANT SHARES (AS DEFINED BELOW) ISSUABLE UPON EXERCISE
HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION. THIS WARRANT AND THE WARRANT SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED, RENOUNCED OR OTHERWISE TRANSFERRED
IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS
OF
ANY FOREIGN JURISDICTION, OR AN EXEMPTION FROM REGISTRATION AVAILABLE SO
THAT
SUCH REGISTRATION IS NOT REQUIRED AND SUCH FOREIGN JURISDICTION LAWS HAVE
BEEN
SATISFIED. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH BONA FIDE
MARGIN
TRANSACTIONS.
WARRANT
TO
PURCHASE COMMON STOCK
OF
SMART
ONLINE, INC.
(void
after February 21, 2010)
No.
W-___
THIS
CERTIFIES THAT, for value received, __________________________, or
its
permitted transferees or permitted assigns (the “Holder”), from and after the
date hereof, and subject to the terms and conditions herein set forth, is
entitled to purchase from Smart Online, Inc., a Delaware corporation (the
“Company”), at any time before 5:00 p.m. New York City time on February 21, 2010
(the “Termination Date”), Seven Hundred Eighty Four Thousand Three Hundred and
Fourteen (784,314) shares (as adjusted from time to time pursuant to Section
2
hereof, the “Warrant Shares”) of the Company’s common stock, $0.001 par value
per share (the “Common Stock”), at a price per share equal to the Warrant Price
(as defined below) upon exercise of this Warrant pursuant to Section 5 hereof.
The number of Warrant Shares is subject to adjustment under Section
2.
1. Definitions.
As used
in this Warrant, the following terms have the definitions ascribed to them
below:
1
(a) “Black
Scholes Warrant Value” shall mean as
of any
date the value of one Warrant to purchase one Warrant Share using the Black
Scholes method to determine the value of the Warrant based upon a term equal
to
the duration of the then remaining exercise period under this Warrant, a
strike
price equal to the then Warrant Price, and a volatility of 50. In the event
that
the Company’s (or any successor’s) common stock ceases to be quoted on the
Over-the-Counter Bulletin Board or traded on any national exchange or on
Nasdaq
Global Market (or such calculation is not available via the Bloomberg page
for
any other reason), the Black Scholes Warrant Value shall be calculated using
assumptions determined in good faith by the Company’s Board of
Directors.
(b) “Issuance
Date” means February 21, 2007.
(c) “Offering
Warrants” shall have the meaning ascribed to such term in Section
8.
(d) “Person”
means any individual, corporation, partnership, limited liability company,
trust, incorporated or unincorporated association, joint venture, joint stock
company, governmental authority or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
(e) “Purchase
Agreement” means that certain Securities Purchase Agreement dated as of February
21, 2007 between the Company and the initial Holder of this
Warrant.
(f) “Warrant
Price” means $3.00 subject to adjustment under Section 2.
2. Adjustments
and Notices.
The
Warrant Price and/or the Warrant Shares shall be subject to adjustment from
time
to time in accordance with this Section 2. The Warrant Price and/or the Warrant
Shares shall be adjusted to reflect all of the following events that occur
on or
after the Issuance Date.
(a) Subdivision,
Stock Dividends or Combinations.
In case
the Company shall at any time subdivide the outstanding shares of the Common
Stock (through a stock split or otherwise), the Warrant Price in effect
immediately prior to such subdivision shall be proportionately decreased,
and
the number of Warrant Shares for which this Warrant may be exercised immediately
prior to such subdivision shall be proportionately increased. In case the
Company shall at any time combine the outstanding shares of the Common Stock
(through a reverse stock split or otherwise), the Warrant Price in effect
immediately prior to such combination shall be proportionately increased,
and
the number of Warrant Shares for which this Warrant may be exercised immediately
prior to such combination shall be proportionately decreased. In each of
the
foregoing cases, the adjustment shall be effective automatically upon, and
simultaneously with, the effectiveness of the subdivision or combination
giving
rise to the adjustment. If the Company at any time pays a dividend, or makes
any
other distribution, to holders of Common Stock payable in shares of Common
Stock, or fixes a record date for the determination of holders of Common
Stock
entitled to receive a dividend or other distribution payable in shares of
Common
Stock, then the
2
number
of
Warrant Shares in effect immediately prior to such action shall be
proportionately increased so that the Holder hereof may receive upon exercise
of
the Warrant the aggregate number of shares of Common Stock which he or it
would
have owned immediately following such action if the Warrant had been exercised
immediately prior to such action. The adjustment shall become effective
immediately as of the date the Company shall take a record of the holders
of its
Common Stock for the purpose of receiving such dividend or distribution (or
if
no such record is taken, as of the effectiveness of such dividend or
distribution).
(b) Reclassification,
Exchange, Substitution, In-Kind Distribution.
Upon
any capital reorganization, reclassification, exchange, substitution or other
event (other than an event described in Section 2(a) above) that results
in a
change of the number and/or class of the securities issuable upon exercise
or
conversion of this Warrant or upon the payment of a dividend in securities
or
property other than shares of the Common Stock, the Holder shall be entitled
to
receive, upon exercise of this Warrant, the number and kind of securities
and
property that Holder would have received if this Warrant had been exercised
immediately before the record date for such reclassification, exchange,
substitution, or other event or immediately prior to the record date for
such
dividend. The adjustment shall become effective immediately as of the date
the
Company shall take a record of the holders of its Common Stock for the purpose
of receiving such dividend or distribution (or if no such record is taken,
as of
the effectiveness of such dividend or distribution), and the Company or its
successor shall promptly issue to Holder a new warrant for such new securities
or other property. The new warrant shall provide for adjustments which shall
be
as nearly equivalent as may be practicable to the adjustments provided for
in
this Section 2 including, without limitation, adjustments to the Warrant
Price
and to the number of securities or property issuable upon exercise or conversion
of the new warrant. The provisions of this Section 2(b) shall similarly apply
to
successive reclassifications, exchanges, substitutions, or other events and
successive dividends.
(c) Reorganization,
Merger etc.
In case
of any merger or consolidation of the Company into or with another corporation
where the Company is not the surviving corporation, or a merger or consolidation
which results in the termination of the Company’s registration under the
Exchange Act, or sale, transfer or lease (but not including a transfer or
lease
by pledge or mortgage to a bona fide lender as collateral in connection with
the
incurrence of indebtedness by the Company) of all or substantially all of
the
assets of the Company (collectively, a “Reorganization”), the Company or such
successor entity shall on or before the date of consummation of the
Reorganization (the “Closing Date”), at its option, either:
(i) deliver
to the Holder a notice of redemption (the “Redemption Notice”),
which
shall be binding on the Company and on the Holder, stating the Company’s
intent to redeem the Warrants at a price per Warrant equal to the Black
Scholes
Warrant Value for each such Warrant measured as of the date immediately
to
the
Closing Date; or
3
(ii)
execute
and deliver to the Holder an agreement, which shall be binding
on the Holder, that the Holder shall have the right thereafter upon payment
of
the Warrant Price in effect immediately prior to such action (after giving
to
any applicable adjustments hereunder) to purchase upon exercise of each Warrant
the kind and amount of shares and other securities and property (including
cash)
which the Holder would have owned or have been entitled to receive after
the
happening of such consolidation or merger had such Warrant been exercised
immediately prior to such action. The Company shall at expense mail by first
class mail, postage prepaid, to the Holder notice of the execution of any
such
agreement. Such agreement shall provide for adjustments, which shall be
substantially identical to the adjustments provided herein.
(d) Certificate
of Adjustment.
In each
case of an adjustment or readjustment of the Warrant Price or an adjustment
of
the kind or number of securities issuable upon exercise of the Warrant, or
both,
the Company, at its own expense, shall cause its principal financial officer
to
compute such adjustment or readjustment in accordance with the provisions
hereof
and prepare a certificate showing such adjustment or readjustment, and shall
mail such certificate, by first class mail, postage prepaid, to the Holder
at
the address provided in or pursuant to Section 13 hereof not later than 20
days
following the event prompting such adjustment or readjustment. Such certificate
shall set forth such adjustment or readjustment, showing in reasonable detail
the facts upon which such adjustment or readjustment is based (including
a
description of the basis on which the Board of Directors of the Company made
any
determination hereunder). No adjustment of the Warrant Price shall be required
to be made unless it would result in an increase or decrease of at least
one
cent ($0.01), but any adjustments not made because of this sentence shall
be
carried forward and taken into account in any subsequent adjustment otherwise
required hereunder.
(e) No
Impairment.
The
Company shall not, by amendment of its Certificate of Incorporation, by-laws
or
other organizational documents, or through a reorganization, transfer of
assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of
the terms to be observed or performed under this Warrant by the Company,
but
shall subject to Section 10 at all times in good faith assist in carrying
out
all of the provisions of this Section 2 and in taking all such action as
may be
necessary or appropriate to protect the Holder’s rights under this Section 2
against impairment.
(f) Fractional
Shares.
No
fractional shares shall be issuable upon exercise or conversion of the Warrant
and the number of shares to be issued shall be rounded down to the nearest
whole
share. If a fractional share interest arises upon any exercise or conversion
of
the Warrant, the Company shall eliminate such fractional share interest by
paying the Holder an amount computed by multiplying the fractional interest
by
the fair market value of a full share.
3. No
Stockholder Rights.
This
Warrant, by itself, as distinguished from any shares purchased hereunder,
shall
not (i) entitle the Holder to any of the rights of a stockholder of the Company
or (ii) impose any liabilities on the Holder to purchase any securities or
as a
stockholder of the Company, whether such liabilities are asserted by the
Company
or by creditors of the Company.
4
4. Reservation
of Stock.
The
Company covenants and agrees that it will reserve at all times from its
authorized and unissued stock a sufficient number of shares to provide for
the
issuance of the Warrant Shares upon the exercise of this Warrant. The Company
further covenants and agrees that this Warrant is, and any Warrants issued
in
substitution for or replacement of this Warrant and all Warrant Shares, will
upon issuance be duly authorized and validly issued and, in the case of Warrant
Shares, upon issuance will be fully paid and non-assessable and free from
all
preemptive rights of any stockholder, and from all taxes, liens and charges
with
respect to the issue thereof (other than transfer taxes) and, if the Common
Stock of the Company is then listed on any national securities exchanges
(as
defined in the Exchange Act) shall be, subject to the restrictions set forth
in
Section 11, duly listed or quoted thereon, as the case may be. In the event
that
the number of authorized but unissued shares of such Common Stock shall not
be
sufficient to effect the exercise of this entire Warrant into Warrant Shares,
then in addition to such other remedies as shall be available to the Holder
of
this Warrant, the Company shall promptly take such corporate action as may
be
necessary to increase its authorized but unissued shares of such Common Stock
to
such number of shares as shall be sufficient for such purpose. The duly
authorized issuance of this Warrant and duly authorized approval of the Purchase
Agreement by the Company shall constitute full authority to the Company’s
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares issuable
upon the exercise of this Warrant.
5. Exercise
of Warrant.
(a) This
Warrant may be exercised by the Holder hereof, in whole or in part, at any
time
from and after the Issuance Date and prior to the termination of this Warrant,
at the election of the Holder hereof with the notice of exercise substantially
in the form attached hereto as Attachment
1
duly
completed, executed and delivered at the principal office of the Company
or
Transfer Agent (the addresses of each of which are set forth in Section 13
hereof) and the payment to the Company, by certified or bank check, or by
wire
transfer to an account designated by the Company of an amount equal to the
then
applicable Warrant Price multiplied by the number of Warrant Shares then
being
purchased. This Warrant shall be deemed to have been exercised immediately
prior
to the close of business on the date of its surrender and payment for exercise
as provided above, and the person entitled to receive the Warrant Shares
issuable upon such exercise shall be treated for all purposes as the holder
of
such shares of record as of the close of business on such date. As promptly
as
practicable after such date, the Company shall issue and deliver to the person
or persons entitled to receive the same a certificate or certificates for
the
number of full Warrant Shares issuable upon such exercise.
(b) In
lieu
of exercising this Warrant for cash, the Holder may elect to receive shares
equal to the value of this Warrant (or the portion thereof being exercised)
by
surrender of this Warrant at the principal office of the Company or the Transfer
Agent together with notice of such election substantially in the form attached
hereto as Attachment
1
duly
completed and executed (a “Net Exercise”). The Company shall issue to a Holder
who Net Exercises a number of Warrant Shares computed using the following
formula:
5
Y
(A -
B)
X
= A
Where
|
X
=
|
The
number of Warrant Shares to be issued to the
Holder.
|
|
Y
=
|
The
number of Warrant Shares purchasable under this Warrant or, if
only a
portion of the Warrant is being exercised, the portion of the Warrant
being cancelled (at the date of such
calculation).
|
|
A
=
|
The
fair market value of one (1) Warrant Share (at the date of such
calculation).
|
B
= The
Warrant Price (as adjusted to the date of such calculation).
For
purposes of this Section 5, the fair market value of a Warrant Share shall
mean:
| (i) |
If
traded on a securities exchange, the fair market value of the Common
Stock
shall be deemed to be the five-day-trailing average closing price
of the
Common Stock on such exchange or market on the trading days immediately
prior to the date of exercise by the
Holder;
|
| (ii) |
If
traded over-the-counter, the fair market value of the Common Stock
shall
be deemed to be the five-day-trailing average closing bid price
of the
Common Stock on the trading days immediately prior to the date
of
exercise; and
|
|
(iii)
|
If
there is no public market for the Common Stock, the fair market
value
shall be the price per Warrant Share that the Company could obtain
from a
willing buyer for Warrant Shares sold by the Company from authorized
but
unissued Warrant Shares, as such prices shall be determined in
good faith
by the Company’s Board of
Directors.
|
In
the
event that this Warrant is exercised pursuant to this Section 5 in
connection with the consummation of the Company’s sale of its Common Stock or
other securities pursuant to a registration statement under the Act (other
than
a registration statement relating either to sale of securities to employees
of
the Company pursuant to its stock option, stock purchase or similar plan
or a
Rule 145 transaction) (a “Public Offering”), the fair market value per Warrant
Share shall be the per share offering price to the public of the Public
Offering.
(c) The
Holder shall not be entitled to exercise this Warrant for a number of Warrant
Shares in excess of that number of Warrant Shares which, upon giving effect
to
such exercise, would cause the aggregate number of shares of Common Stock
beneficially owned by the Holder to exceed 9.9% of the outstanding shares
of the
Common Stock
6
following
such exercise. For purposes of the foregoing proviso, the aggregate number
of
shares of Common Stock beneficially owned by the Holder shall include the
number
of shares of Common Stock issuable upon exercise of this Warrant with respect
to
which determination of such proviso is being made, but shall exclude the
shares
of Common Stock which would be issuable upon (i) exercise of the remaining,
unexercised Warrants beneficially owned by the Holder and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities
of
the Company beneficially owned by the Holder subject to a limitation on
conversion or exercise analogous to the limitation contained herein. Except
as
set forth in the preceding sentence, for purposes of this Section 5(c),
beneficial ownership shall be calculated in accordance with Section 13(d)
of the
Exchange Act. The Holder may waive the foregoing limitation by written notice
to
the Company upon not less than 61 days prior written notice (with such waiver
taking effect only upon the expiration of such 61 day notice period). For
purposes of this Section 5(c), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding shares
of
Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form
10-K, as the case may be, filed with the SEC on the date thereof, (y) a more
recent public announcement by the Company or (z) any other notice by the
Company
or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written request of the Holder, the Company shall within
three trading days confirm in writing or by electronic mail to the Holder
the
number of shares of Common Stock then outstanding.
6. Transfer
of Warrant.
This
Warrant may be transferred or assigned by the Holder hereof as a whole or
in
part, provided that the transferor provides, at the Company’s request, an
opinion of counsel reasonably satisfactory to the Company that such transfer
does not require registration under the Securities Act.
7. Legends.
Upon
issuance, the certificate or certificates evidencing any Warrant Shares shall
bear legends as set forth in the Purchase Agreement.
8. Purchase
Agreement.
This
Warrant and any other Warrants that may be issued pursuant to Sections 2,
10 or
14 hereof are issued pursuant to and in connection with the Purchase Agreement,
and constitute one or more, as applicable, of a number of warrants (the
“Offering Warrants”) issued pursuant to and in connection with the Offering (as
defined in the Purchase Agreement). The Warrant Shares shall be entitled
to the
rights conferred thereon under the Purchase Agreement, including without
limitation the registration rights provided in Section 5 thereof.
9. Termination.
This
Warrant shall terminate at 5:00 p.m. New York City time on the Termination
Date.
10.
Warrant
Exchangeable for Different Denominations and Reissuable Upon Partial
Exercise.
This
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company or transfer agent, for new Warrants of like
tenor representing in the aggregate the purchase rights hereunder, and each
of
such new Warrants shall represent such portion of such rights as is designated
by the Registered
7
Holder
at
the time of such surrender. At the request of the Holder (pursuant to a transfer
of Warrants or otherwise), this Warrant may be exchanged for one or more
Warrants to purchase Common Stock. In the event of a partial exercise of
this
Warrant by the Holder, this Warrant shall be cancelled and the Company shall
issue a new Warrant to the Holder representing purchase rights with respect
to
an amount of Warrant Shares equal to (x) the number of Warrant Shares
represented hereby on the date of such partial exercise minus (y) the number
of
Warrant Shares exercised on the date of such partial exercise. The date the
Company initially issues this Warrant shall be deemed to be the date of issuance
hereof regardless of the number of times new certificates representing the
unexpired and unexercised rights formerly represented by this Warrant shall
be
issued. Each warrant representing a portion of the rights hereunder constitutes
a Warrant as defined herein.
11.
Ownership
of Warrants.
(a) The
Company may treat the person in whose name any Warrant is registered on the
register kept at the principal office of the Company as the owner and Holder
thereof for all purposes, notwithstanding any notice to the contrary, but
in all
events recognizing any transfers made in accordance with the terms of this
Warrant.
(b) THE
HOLDER OF THIS WARRANT IS ENTITLED TO CERTAIN REGISTRATION RIGHTS WITH RESPECT
TO THE WARRANT SHARES ISSUABLE UPON EXERCISE HEREOF. SAID REGISTRATION RIGHTS
ARE SET FORTH IN THE PURCHASE AGREEMENT BY AND BETWEEN THE INITIAL HOLDER
AND
THE COMPANY. If the registration statement contemplated in the Purchase
Agreement is not effective at the time of any issuance and the shares are
not
exempt from registration under Rule 144, the Warrant Shares shall be issued
in
certificated form and shall bear the restrictive legend set forth in Section
3.2
of the Purchase Agreement.
12.
Warrant
Register.
The
Company shall maintain at its principal executive offices books for the
registration and the registration of transfer of the Warrant. The Company
may
deem and treat the Holder so registered as the absolute owner hereof
(notwithstanding any notation of ownership or other writing thereon made
by
anyone) for all purposes and shall not be affected by any notice to the
contrary, other than a notice in conformity with Section 13 hereof signed
by the
previous registered Holder indicating that the warrant has been transferred
or
assigned pursuant to Section 6 hereof. The initial registered Holder is Magnetar
Capital Master Fund, Ltd.
13.
Notices.
Any
notices, consents, waivers or other communications required or permitted
to be
given under the terms of this Warrant must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending
party);
or (iii) one trading day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive
the
same. The addresses and facsimile numbers for such communications shall
be:
8
If
to the
Company, to:
Smart
Online, Inc.
0000
Xxxxxxxx Xxxxxxx, 0xx
Xxxxx
Xxxxxx,
XX 00000
Attention:
Xxxxx Xxxxxx, Corporate Counsel
Telephone:
(000) 000-0000
with
a
copy to:
Smith,
Anderson, Blount, Dorsett, Xxxxxxxx & Xxxxxxxx, LLP
0000
Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxx,
XX 00000-0000
Attention:
Xxxxxxxx X. Xxxxxxxxx
Telephone:
(000) 000-0000
If
to the
Holder, to:
________________________
________________________
________________________
________________________
________________________
or
such
other address provided to the Company pursuant to Section 12 hereof
If
to the
Transfer Agent, to:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx
Xxxx
Xxxx, Xxx Xxxx 10004
Telephone:
000.000.0000
or
at
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party three (3) trading days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, and
recipient facsimile number or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt
by
facsimile or receipt from a nationally recognized overnight delivery service
in
accordance with clause (i), (ii) or (iii) above, respectively.
9
14.
Miscellaneous.
This
Warrant shall be governed by the laws of the State of Delaware, as such laws
are
applied to contracts to be entered into and performed entirely in Delaware
by
Delaware residents. The headings in this Warrant are for purposes of convenience
and reference only, and shall not be deemed to constitute a part hereof.
Initially capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement. Neither this Warrant nor
any
term hereof may be changed or waived orally, but only by an instrument in
writing signed by the Company and the
Holder. Upon receipt of evidence reasonably satisfactory to the Company of
the
ownership of and the loss, theft, destruction or mutilation of any Warrant
and,
in the case of any such loss, theft or destruction, upon receipt of indemnity
or
security reasonably satisfactory to the Company or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Company
will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
aggregate number of Warrant Shares. This Warrant may be amended with, and
only
with, the written consent of the Company and the Holder. Any waiver of any
term,
covenant, agreement or condition contained in this Warrant shall not be deemed
a
waiver of any other term, covenant, agreement or condition, and any waiver
of
any default in any such term, covenant, agreement or condition shall not
be
deemed a waiver of any later default thereof or of any default of any other
term, covenant, agreement or condition. All representations, warranties and
covenants contained herein shall survive the execution and delivery of this
Warrant and the issuance of any Warrant Shares upon the exercise hereof.
In the
event that any court or any governmental authority or agency declares all
or any
part of any Section of this Warrant to be unlawful or invalid, such unlawfulness
or invalidity shall not serve to invalidate any other Section of this Warrant,
and in the event that only a portion of any Section is so declared to be
unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate the balance of such Section. All provisions of this Warrant shall
be
binding upon and inure to the benefit of the parties and their respective
heirs,
legatees, executors, administrators, legal representatives, successors, and
permitted transferees and assigns. No person other than the holder of this
Warrant and the Company shall have any legal or equitable right, remedy or
claim
under or in respect of, this Warrant.
15
Attorneys’
Fees.
If any
suit or action is instituted or attorneys employed to enforce this Warrant
or
any part hereof, the Company agrees to pay all reasonable costs and expenses
associated with such action, including reasonable attorneys’ fees and court
costs.
ISSUED: February
21, 2007
SMART
ONLINE, INC.
By:__________________________________
Name:________________________________
Title:_________________________________
10
Attachment
1
NOTICE
OF
EXERCISE
TO:
SMART
ONLINE, INC.
| 1. |
The
undersigned hereby:
|
| q |
elects
to purchase
shares of Common Stock of the Company pursuant to the terms of
the
attached Warrant, and tenders herewith payment of the purchase
price of
such shares in full, or
|
| q |
elects
to exercise its net issuance rights pursuant to Section 5(b) of the
attached Warrant with respect to
shares of Common Stock.
|
| 2. |
Please
issue a certificate or certificates representing said Warrant Shares
in
the name of the undersigned or in such other name as is specified
below:
|
______________________________________
(Name
in
which certificate(s) are to be issued)
______________________________________
(Address)
|
______________________________
(Name
of Warrant Holder)
By:___________________________
Title:_________________________
Date
signed:___________________
|
