WARRANT TO PURCHASE SHARES OF THE COMMON STOCK OF ASKMENOW, INC. (Void after Expiration Date - ____________, 2013) Issue Date: __________, 2008
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR ANY STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS
AND UNTIL REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR
UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
2008-_____
WARRANT
TO PURCHASE SHARES
OF
THE COMMON STOCK OF
ASKMENOW,
INC.
(Void
after Expiration Date - ____________, 2013)
Issue
Date: __________, 2008
This
certifies that ___________________, a __________________ with a principal
business address of ___________________ (or
any
valid transferee thereof, the “Holder”),
for
value received, shall be entitled to purchase from AskMeNow, Inc., a Delaware
corporation having its principal place of business at 00 Xxxxxxxxx Xxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000 (together with its successors and assigns, the
“Company”),
subject to the terms and conditions set forth herein, _________________ (#)
fully paid and non-assessable shares of the Company’s common stock, par value
$.01 per share (“Common
Stock”),
at a
price equal to $.10 per share, at any time and from time to time commencing
as
of the issue date set forth above (the “Issue
Date”)
and
continuing up to and including 12:00 p.m. (California time) on ___________,
2013
(“Expiration
Date”);
provided,
however,
if such
date is not a Business Day, then on the Business Day immediately following
such
date. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter sometimes referred to as the “Warrant
Shares”
and
the
“Exercise
Price,”
respectively.
This
Warrant is being issued to the Holder in connection with the Company’s
$1,000,000 offering (the “Offering”)
of up
to 1,000,000 shares of Series D Convertible Preferred Stock, $.01 par value,
of
the Company (the “Series
D Stock”)
that
are automatically convertible into shares of the Company’s Common Stock upon the
earlier to occur of the six month anniversary of the date of the final sale
of
shares of Series D Stock in the Offering (the “Closing
Date”)
or a
Change of Control Transaction (as such term is defined in the Certificate of
Designations, Preferences, Privileges, Powers and Rights for the Series D
Stock). This Warrant is one of several that will be issued in the Offering,
all
identical except for names and amounts. An aggregate of 2,000,000 warrants
will
be issued by the Company if the full $1,000,000 Offering is completed. Such
warrants are being issued on the basis of two (2) warrants for every one (1)
dollar invested.
1. Exercise;
Issuance of Certificates; Payment for Shares.
1. Mechanics
of Exercise.
This
Warrant is exercisable, in whole at any time or in part from time to time,
commencing on the Issue Date and prior to 12:00 P.M. (California time) on the
Expiration Date, upon the surrender to the Company at its principal place of
business (or at such other location as the Company may advise the Holder in
writing) of this Warrant properly endorsed and delivery of an exercise notice
in
substantially the form attached hereto as Schedule
A
duly
completed and signed, accompanied by payment in full of the aggregate Exercise
Price for the number of Warrant Shares for which this Warrant is being exercised
as determined in accordance with the provisions hereof. Payment shall be made
by
cash, certified or bank check or wire transfer of immediately available funds
to
the Company. This Warrant is exercisable in whole or in part, in increments
of
5,000 shares, and in no event shall any exercise hereof be for fewer than 5,000
Warrant Shares unless fewer than 5,000 Warrant Shares are then purchasable
under
this Warrant. In
the
case of the exercise for less than all of the Warrant Shares represented by
this
Warrant, the Company shall cancel this Warrant certificate upon the surrender
hereof and shall execute and deliver a new Warrant certificate or certificates
of like tenor for the balance of the Warrant Shares for which this Warrant
has
not yet been exercised. The
Company agrees that the shares of Common Stock purchased under this Warrant
shall be deemed to be issued to the Holder hereof, and the Holder deemed to
be
the record owner of such shares, as of immediately prior to the close of
business on the date on which the exercise notice attached hereto as
Schedule
A
is
delivered, and this Warrant surrendered, to the Company as provided herein
(such
date, the “Exercise
Date”).
Certificates for the shares of Common Stock purchased upon exercise, together
with any other securities or property to which the Holder is entitled upon
such
exercise, shall be delivered to the Holder by the Company at the Company’s
expense within a reasonable time after the rights represented by this Warrant
have been so exercised, and in any event within 10 business days of the Exercise
Date. Each Common Stock certificate so delivered shall be in such denominations
as may be requested by the Holder hereof and shall be registered on the
Company’s books in the name designated by such Holder.
1.2 Shares
to be Fully Paid; Reservation of Shares.
The
Company covenants and agrees that all shares of Common Stock which may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any shareholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issue or transfer upon exercise of the subscription
rights evidenced by this Warrant, a sufficient number of shares of authorized
but unissued Common Stock when and as required to provide for the exercise
of
the rights represented by this Warrant. The Company will take all such action
as
may be reasonably necessary 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 domestic securities exchange upon which the Common
Stock or other securities may be listed; provided,
however,
that
the Company shall not be required to effect a registration under federal or
state securities laws with respect to any exercise hereunder.
2
2. Determination
or Adjustment of Exercise Price and Number of Shares.
The
Exercise Price and the number of Warrant Shares purchasable upon the exercise
of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 2. Upon each adjustment
of the Exercise Price, the Holder of this Warrant shall thereafter be entitled
to purchase, at the Exercise Price resulting from such adjustment, the number
of
shares obtained by multiplying the Exercise Price in effect immediately prior
to
such adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the Exercise
Price
resulting from such adjustment.
2.1 Subdivision
or Combination of Common Stock.
If at
any time after the Issue Date hereof and prior to the exercise or Expiration
Date hereof the Company shall subdivide or reclassify its outstanding shares
of
Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced, and
conversely, in case the outstanding shares of Common Stock of the Company shall
be combined or reclassified into a smaller number of shares, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased. Any adjustment under this Subsection 2.1 shall become effective
at
the close of business on the date the subdivision or combination becomes
effective.
2.2 Dividends
in Common Stock or Other Stock or Securities.
If at
any time or from time to time after the Issue Date hereof and prior to the
exercise or Expiration Date hereof the holders of Common Stock (or any shares
of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor, shares of Common Stock or any shares of capital stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution, then and in each such case, the Holder shall, upon the exercise
of
this Warrant, be entitled to receive, in addition to the number of shares of
Common Stock or other capital stock receivable thereupon, and without payment
of
any additional consideration therefor, the amount of stock and other securities
which such Holder would hold on the date of such exercise had the Holder been
the holder of record of such Common Stock as of the date on which holders of
Common Stock received or became entitled to receive such shares or all other
additional stock and other securities.
2.3 Reorganization,
Reclassification, Consolidation, Merger or Sale.
If at
any time after the Issue Date hereof and prior to the exercise or Expiration
Date hereof any
recapitalization, reclassification or reorganization of the capital stock of
the
Company, or any consolidation or merger of the Company with another corporation,
or the sale of all or substantially all of its assets or other transaction
shall
be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities, or other assets or property (an “Organic
Change”),
then,
as a condition of such Organic Change, lawful and adequate provisions shall
be
made by the Company whereby the Holder hereof shall thereafter have the right,
upon exercise of this Warrant, to purchase and receive (in lieu of the shares
of the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented by this Warrant) such
shares of stock, securities or other assets or property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by this Warrant. In the event of any Organic Change, appropriate
provision shall be made by the Company with respect to the rights and interests
of the Holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Exercise Price and of
the
number of shares purchasable and receivable upon the exercise of this Warrant)
shall thereafter be applicable, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof.
3
2.4 No
Adjustments in Certain Cases.
No
adjustment in the number of Warrant Shares purchasable pursuant to this Warrant
shall be required unless the adjustment would require an increase or decrease
of
at least one percent (1.0%) in the number of Warrant Shares then purchasable
upon the exercise of this Warrant. Except as provided in this Section 2, no
other adjustments in the number, kind or price of shares constituting Warrant
Shares shall be made during the term, or upon the exercise, of this Warrant.
Further, no adjustments shall be made pursuant to this Section 2 hereof in
connection with the grant or exercise of presently authorized or outstanding
options to purchase, or the issuance of shares of Common Stock under, the
Company’s director or employee benefit, option and incentive plans.
3. Issue
Tax. The
issuance of certificates for shares of Common Stock issuable upon the exercise
of this Warrant shall be made without charge to the Holder for any issue tax
(other than any applicable income taxes) in respect thereof; provided,
however,
that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer of this Warrant or any Warrant Shares.
4. No
Voting or Dividend Rights; Limitation of Liability.
Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote, give consent or receive notices as a shareholder
of
the Company. No dividends or interest shall be payable or accrued in respect
of
this Warrant, the interest represented hereby, or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of
the
rights or privileges of the Holder hereof, shall give rise to any liability
of
such Holder for the Exercise Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by its creditors.
5. Representations
and Covenants of the Holder.
This
Warrant has been entered into by the Company in reliance upon the following
representations and covenants of the Holder:
5.1 Investment
Purpose.
This
Warrant and, if exercised, the Warrant Shares issuable upon exercise of this
Warrant, will be acquired for the Holder’s own account for investment only and
not with a view to the sale or distribution of any part hereof or thereof,
and
the Holder has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption
therefrom under the Securities Act of 1933, as amended (the “Act”).
5.2 Private
Issue.
The
Holder understands that (a) this Warrant and the Warrant Shares issuable upon
exercise of this Warrant are not registered under the Act or qualified under
applicable state securities laws on the ground that the issuance contemplated
by
this Warrant will be exempt from the registration and qualifications
requirements thereof, and (b) that the Company’s reliance on such exemption is
predicated on the representations set forth in this Section 5.
4
5.3 Disposition
of Holder’s Rights.
In no
event will the Holder make a disposition of this Warrant or the Warrant Shares
issuable upon exercise of this Warrant unless and until (a) the Holder shall
have notified the Company of the proposed disposition, and (b) if requested
by
the Company, the Holder shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the Holder)
satisfactory to the Company and its counsel to the effect that (i) appropriate
action necessary for compliance with the Act has been taken, or (ii) an
exemption from the registration requirements of the Act is available.
Notwithstanding the foregoing, the restrictions imposed upon the transferability
of any of its rights to acquire Common Stock issuable on the exercise of such
rights do not apply to transfers from the beneficial owner of any of the
aforementioned securities to its nominee or from such nominee to its beneficial
owner, and shall terminate as to any particular share of stock when (1) such
security shall have been effectively registered under the Act and sold by the
Holder thereof in accordance with such registration or (2) such security shall
have been sold without registration in compliance with Rule 144 under the Act,
or (3) a letter shall have been issued to the Holder at its request by the
staff
of the Securities and Exchange Commission or a ruling shall have been issued
to
the Holder at its request by such Commission stating that no action shall be
recommended by such staff or taken by such Commission, as the case may be,
if
such security is transferred without registration under the Act in accordance
with the conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Holder or holder of a share of stock then outstanding as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense to such Holder, one or more new certificates for the Warrant
or
for such shares of stock not bearing any restrictive legend.
5.4 Financial
Risk.
The
Holder has such knowledge and experience in financial and business matters
as to
be capable of evaluating the merits and risks of an investment in the Company,
and has the ability to bear the economic risks of such investment.
5.5 Accredited
Investor or Non-U.S. Person.
The
Holder is either an “accredited investor” within the meaning of Regulation D
promulgated under the Act or not a “U.S. person” as defined in Rule 902 of
Regulation S promulgated under the Act.
6. Modification
and Waiver.
This
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
7. Transfer;
Legends.
(a) The
Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant
or the Warrant Shares, in whole or in part, so long as such sale or other
disposition is made pursuant to an effective registration statement or an
exemption from the registration requirements of the Act and applicable state
securities laws and compliance with Section 5.3 above, and provided
that no
sale, transfer, pledge or other disposition may be made to a competitor, direct
or indirect, of the Company at any time. Upon such transfer or other disposition
(other than a pledge), the Holder shall deliver this Warrant to the Company
together with a written notice to the Company, substantially in the form of
the
transfer notice attached hereto as Schedule
B,
indicating the person or persons to whom this Warrant shall be transferred
and,
if less than all of this Warrant is transferred, the number of Warrant Shares
to
be covered by the part of this Warrant to be transferred to each such person.
Within ten (10) business days of receiving a transfer notice and the original
of
this Warrant, the Company shall deliver to the each transferee designated by
the
Holder another Warrant(s) of like tenor and terms for the appropriate number
of
Warrant Shares and, if less than all this Warrant is transferred, shall deliver
to the Holder another Warrant for the remaining number of Warrant Shares not
so
transferred. Until this Warrant is transferred on the books of the Company
(with
the Company’s consent), the Company may treat the person in whose name this
Warrant is issued as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.
5
(b) Each
Warrant and certificate representing Warrant Shares shall bear a legend
substantially in the following form:
“THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR ANY STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS
AND UNTIL REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR
UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.”
The
foregoing legend shall be removed from the certificates representing any Warrant
Shares, at the request of the holder thereof, at such time as they become
eligible for resale pursuant to Rule 144 under the Act.
8. Notices.
Any
notice required or permitted hereunder shall be given in writing (unless
otherwise specified herein) and shall be deemed effectively given upon (a)
personal delivery, against written receipt thereof, (b) delivery via facsimile
with written confirmation, (c) one business day after deposit with Federal
Express or another nationally recognized overnight courier service, or (d)
five
business days after being mailed, postage paid, via certified or registered
mail, return receipt requested, addressed to each of the other parties thereunto
entitled, at the addresses set forth on in the introductory paragraph hereof
or
at such other addresses as a party may designate by 10 days advance written
notice.
9. Binding
Effect.
This
Warrant shall be binding upon and inure to the benefit of the parties hereto
and
their respective heirs, personal representatives, successors and permitted
assigns.
10. Descriptive
Headings and Governing Law.
The
description headings of the several sections and paragraphs of this Warrant
are
inserted for convenience only and do not constitute a part of this Warrant.
This
Warrant shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by the laws of the State of Delaware.
6
11. Lost
Warrants.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity agreement or bond reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of this Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
12. Fractional
Shares.
No
fractional shares shall be issued upon exercise of this Warrant. The Company
shall,
in
lieu
of issuing any fractional share, pay the Holder entitled to such fraction a
sum
in cash equal to such fraction multiplied by the then-effective Market
Price.
13. Redemption.
The
Company may, at any time subsequent to the earlier of the third anniversary
of
the Closing Date and the date the Common Stock trades at or above $1.00 per
share for twenty (20) consecutive trading days, redeem this Warrant in whole
or
in part at a price of $0.01 per share (the “Redemption
Price”).
The
Company may exercise such redemption right by written notice thereof delivered
to the Holder in accordance with Section 8 above, which notice shall indicate
the portion of this Warrant the Company is electing to redeem. No later than
ten
(10) business days following delivery of such exercise notice, the Holder
shall surrender
to the Company at its principal place of business (or at such other location
as
the Company may advise the Holder in writing) this Warrant for redemption.
The
Company shall thereafter promptly remit payment to the Holder in full of the
aggregate Redemption Price for the number of Warrant Shares for which this
Warrant is being redeemed. Payment shall be made by cash, certified or bank
check or wire transfer of immediately available funds. In
the
case of the redemption for less than all of the Warrant Shares represented
by
this Warrant, the Company shall cancel this Warrant certificate upon the
surrender hereof and shall execute and deliver a new Warrant certificate or
certificates of like tenor for the balance of the Warrant Shares for which
this
Warrant has not yet been redeemed.
7
In
Witness Whereof, the
Company has caused this Warrant to be duly executed by its officers, thereunto
duly authorized this ______ day of ____________, 2008.
AskMeNow,
Inc.,
a
Delaware corporation
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|
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By: | ||
Name: Xxxxxx Xxxxx |
||
Title: President and CEO | ||
Address:
AskMeNow,
Inc.
00
Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
XX 00000
Phone: (000)
000-0000
Fax:
(000) 000-0000
E-mail:
xxxxxx@xxxxxxxx.xxx
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8
SCHEDULE
A
EXERCISE
NOTICE
Date:
_________________, _______
AskMeNow,
Inc.
Attn:
Chief Executive Officer
Ladies
and Gentlemen:
The
undersigned hereby elects to exercise the Warrant issued to it by AskMeNow,
Inc.
(“Company”)
dated
___________ __, 2008 (Warrant No. _____), which Warrant shall be surrendered
herewith, and pursuant to the terms thereof hereby elects to exercise rights
represented by said Warrant for, and to purchase thereunder, __________________
shares of the Company’s Common Stock covered by said Warrant, at an Exercise
Price of $____ per share, and tenders herewith payment of the purchase price
in
full for such shares of $_________, by cash, through the delivery of a certified
or official bank check, or wire transfer or immediately available
funds.
The
undersigned hereby requests that certificates for such shares (or any other
securities or other property issuable upon such exercise) be issued in the
name
of and delivered to the undersigned at the address set forth below, or as
otherwise set forth below.
Very
truly yours,
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Name:
Address:
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SCHEDULE
B
TRANSFER
NOTICE
To
Be
Executed by the Holder
in
Order
to Assign Warrants
FOR
VALUE
RECEIVED, ________________________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No.
____) with respect to the number of shares of Common Stock of AskMeNow, Inc.
covered thereby set forth below, unto:
Name
of Assignee
|
Address
|
No.
of Shares
|
||
The
undersigned hereby irrevocably constitutes and appoints the Chief Executive
Officer of the Company as the undersigned’s attorney to transfer this Warrant
certificate on the books of the Company, with full power of substitution in
the
premises.
Dated:
_____________________ Signature:
_____________________________
Signature
Guaranteed:
By:
_______________________
The
signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in
an approved signature guarantee medallion program) pursuant to Rule 17A
under the Securities Exchange Act of 1934, as amended.