Contract
Exhibit 10.29
EXECUTION COPY
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, OR ANY STATE
SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO 180 CONNECT INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase 150,000 Shares of Common Stock of
180 Connect Inc.
(subject to adjustment as provided herein)
180 Connect Inc.
(subject to adjustment as provided herein)
AMENDED AND RESTATED COMMON STOCK PURCHASE WARRANT
| No. 002 | Issue Date: as of July 2, 2007 |
180 Connect Inc., a Delaware corporation (“180 Connect”), hereby certifies that, for value
received, LAURUS MASTER FUND, LTD. or assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company (as defined herein) from and after the Issue Date of this
Warrant and at any time or from time to time before 5:00 p.m., New York time, on July 2, 2012 (the
“Expiration Date”), up to 150,000 fully paid and nonassessable shares of Common Stock (as
hereinafter defined), at the applicable Exercise Price (as defined below) per share. The number
and character of such shares of Common Stock and the applicable Exercise Price per share are
subject to adjustment as provided herein. The Company (as defined herein) will have no obligation
to pay the Holder any cash or other consideration or otherwise “net cash settle” the Warrant.
Accordingly, the Warrant may expire or be redeemed unexercised and may be deprived of any value.
As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:
(a) The term “Company” shall include 180 Connect and any corporation which shall
succeed, or assume the obligations of, 180 Connect hereunder.
(b) The term “Common Stock” includes (i) the issued and outstanding common shares in
the capital of the Company and (ii) any other securities into which or for which any of the
securities described in the preceding clause (i) may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or otherwise.
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(c) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise)
which the Holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.
(d) The “Exercise Price” applicable under this Warrant shall be a price of US$3.00 per
share.
(e) The term “Purchase Agreement” means that certain Security and Purchase Agreement
dated as of July 31, 2006 between 180 Connect Inc., Mountain Center, Inc., JJ&V
Communications, Inc., Tumbleweed HS Inc., Piedmont Telecommunications, Inc., 180 Digital
Interiors, Inc., HD Complete, Inc., Ironwood Communications Inc., and Queens Cable
Contractors, Inc. and the Holder, as such may be amended, supplemented, modified or restated
from time to time.
(f) The term “Exchange Rate” means, in relation to any amount of currency to be
converted into US dollars pursuant to this Warrant, the US dollar exchange rate as published
in the Wall Street Journal from time to time.
All other defined terms have the meaning attributed to them in the Purchase Agreement.
All amounts owing under this Warrant, the Purchase Agreement or any related agreement shall be
paid in US dollars. All amounts denominated in other currencies shall be converted in the US
dollar equivalent amount in accordance with the Exchange Rate on the relevant date of calculation.
1. Exercise of Warrant.
1.1 Number of Shares Issuable upon Exercise. From and after the date hereof through
and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this
Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the
form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.
1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of
Common Stock as of a particular date (the “Determination Date”) shall mean:
(a) If the Company’s Common Stock is traded on a stock exchange, then the volume
weighted average of the closing or last sale price reported for the twenty (20) trading days
immediately preceding the Determination Date.
(b) If the Company’s Common Stock is not traded on a stock exchange but is quoted on
the NASD OTC Bulletin Board, then the mean of (i) the average of the closing bid price and
(ii) the average of the closing ask price, in each case reported for the twenty (20) trading
days immediately preceding the Determination Date.
(c) Except as provided in clause (d) below, if the Company’s Common Stock is not
publicly traded, then as the Holder and the Company agree or in the absence of agreement by
arbitration in accordance with the rules then in effect of the American
Arbitration Association before a single arbitrator to be chosen from a panel of persons
qualified by education and training to pass on the matter to be decided.
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(d) If the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s
charter, then all amounts to be payable per share to holders of the Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock
then issuable upon exercise of the Warrant are outstanding at the Determination Date.
1.3 Company Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its continuing obligation to
afford to such Holder any rights to which such Holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any
such request, such failure shall not affect the continuing obligation of the Company to afford to
such Holder any such rights.
1.4 Limitation on Sale of Common Stock. Holder shall not on or before July 2, 2008
sell any of the Common Stock issuable upon exercise of this Warrant.
2. Procedure for Exercise.
2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder as the owner of record of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares in accordance herewith. As
soon as practicable after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) shall instruct its transfer agent for the Common Stock to issue in the name
of and deliver to the Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities laws, a certificate or
certificates for the number of duly and validly issued, fully paid and non-assessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise bearing
a legend substantially in the form of the legend set forth on the first page of this Warrant, plus,
in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to
such fraction multiplied by the then Fair Market Value of one full share, together with any other
stock or other securities and property (including cash, where applicable) to which such Holder is
entitled upon such exercise pursuant to Section 1 or otherwise.
2.2 Exercise. Payment may be made either (i) in cash or by certified or official bank
cheque payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii)
by surrender of all or a portion of this Warrant in accordance with the formula set forth below in
this Section 2.2, or (iii) by a combination of any of the foregoing methods, for the number of
Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to the Holder in
accordance with the terms of this Warrant) and the Holder shall thereupon be entitled to receive
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the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein. Notwithstanding any provisions herein
to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash,
the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being exercised) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Exercise Notice in which event the Company shall issue
to the Holder a number of shares of Common Stock computed using the following formula:
X=Y x
|
(A-B) A |
Where X =
|
the number of shares of Common Stock to be issued to the Holder | |
Y =
|
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation) | |
A =
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the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation) | |
B =
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Exercise Price (as adjusted to the date of such calculation) |
3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.
3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or from time to
time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other
person, or (c) transfer all or substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and adequate provision shall
be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in
Section 1 at any time after the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, the Holder shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to which such Holder
would have been entitled upon such consummation or in connection with such dissolution, as the case
may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.
3.2 Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company, concurrently with
any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be
delivered to the holder the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrant pursuant to Section 3.1, net of the aggregate
Exercise Price.
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3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer
(and any dissolution following any transfer) referred to in this Section 3, this Warrant
shall continue in full force and effect and the terms hereof shall be applicable to the shares
of stock and other securities and property receivable on the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant
does not continue in full force and effect after the consummation of the transactions described in
this Section 3, then the Company’s securities and property (including cash, where applicable)
receivable by the Holders of the Warrant will be delivered to the Holder as contemplated by Section
3.2.
4. Extraordinary Events Regarding Common Stock.
In the event that the Company shall (a) issue additional shares of the Common Stock as a
dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of
Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be the Exercise Price
then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4. The number of
shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof as
provided in Section 1, be entitled to receive shall be adjusted to a number determined by
multiplying the number of shares of Common Stock that would otherwise (but for the provisions of
this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the
Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and
(b) the denominator is the Exercise Price in effect immediately after the adjustment referred to in
the first sentence of this Section 4.
5. Certificate as to Adjustments.
In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of the Warrant, the Company at its expense will promptly cause its Chief
Financial Officer or other appropriate designee to compute such adjustment or readjustment in
accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) stock, securities and other property to be received or received by
holders of Common Stock upon a transaction contemplated by Section 3.1 or a dissolution
contemplated by Section 3.2 in the ratio of subdivision or combination contemplated by Section 4
or the number of shares and Common Stock issued as a dividend or distribution as contemplated by
Section 4, (a) the number of shares of Common Stock (or Other Securities) outstanding or deemed to
be outstanding, and (b) the Exercise Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and
as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the
Warrant.
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6. Reservation of Stock, Etc. Issuable on Exercise of Warrant.
The Company is authorized to issue an unlimited number of shares of Common Stock. If after the
Closing Date, the Company amends its articles or certificate of incorporation or similar charter
document to limit the number of shares of Common Stock that the Company is authorized to issue, it
shall at all times reserve and keep available, solely for issuance and delivery on the exercise of
the Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the
exercise of the Warrant.
7. Assignment; Exchange of Warrant.
Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced
hereby, may be transferred by any registered Holder hereof (a “Transferor”) in whole or in part.
On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”), together with evidence reasonably
satisfactory to the Company demonstrating compliance with applicable securities laws (which shall
include, without limitation, the provision of a legal opinion from the Transferor’s counsel
reasonably acceptable to the Company’s counsel that such transfer is exempt from the prospectus and
registration or equivalent requirements of applicable securities laws) and with payment by the
Transferor of any applicable transfer taxes, the Company will issue and deliver to or on the order
of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock called for on the
face or faces of the Warrant so surrendered by the Transferor. Each new Warrant evidencing this
Warrant so transferred shall bear a legend substantially in the form of the legend set forth on the
first page of this Warrant unless such legend has, by its terms, expired.
8. Replacement of Warrant.
On 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 of this Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
9. Maximum Exercise.
Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to
convert pursuant to the terms of this Warrant an amount that would be convertible into that number
of shares of Common Stock which, when added to the number of shares of Common Stock otherwise
beneficially owned by the Holder including those issuable upon exercise of convertible securities,
warrants or options held by the Holder, would exceed 9.99% of the outstanding shares of Common
Stock of the Company at the time of exercise. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Regulation 13d-3
thereunder.
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10. Transfer on the Company’s Books.
Until this Warrant is transferred on the books of the Company, the Company may treat the registered
holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
11. Notices, Etc.
All notices and other communications from the Company to the Holder of this Warrant shall be
personally delivered, sent by confirmed telex or facsimile or delivered by nationally recognized
overnight courier at such address as may have been furnished to the Company in writing by such
Holder or, until any such Holder furnishes to the Company an address, then to, and at the address
of, the last Holder of this Warrant who has so furnished an address to the Company.
12. Miscellaneous.
This Warrant and any term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought and, if registered, with the approval of the stock exchange on
which the Common Stock is listed for trading. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles of conflicts of
laws. Any action brought concerning the transactions contemplated by this Warrant may be brought
in the state courts of New York or in the federal courts located in the state of New York. The
individuals executing this Warrant on behalf of the Company agree to submit to the non-exclusive
jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorney’s fees and costs. In the event that any
provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any
other provision of this Warrant. The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or enforceability of
any other provision hereof. Nothing contained herein shall be deemed or operate to preclude the
Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder or to enter a judgment or other
court ruling in favour of the Holder. The Company acknowledges that legal counsel participated in
the preparation of this Warrant and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied in the
interpretation of this Warrant to favour any party against the other party.
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13. Rights of the Holder
Prior to the exercise of this Warrant, the Holder shall not, by virtue hereof, be entitled to
any rights of a shareholder of the Company, including, without limitation, the right to vote, to
receive dividends or other distributions or to receive any notice of meeting of shareholders
or any notice of any proceedings of the Company except as may be specifically provided for herein.
14. Amendment and Restatement
This Amended and Restated Common Stock Purchase Warrant amends and restates in its entirety,
and is given in substitution for and not in satisfaction of, that certain Common Stock Purchase
Warrant No. 002, dated July 2, 2007 issued by the Company in favor of Laurus Master Fund, Ltd.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
| 180 Connect Inc., a Delaware corporation |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Common Stock Purchase Warrant Signature Page
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EXHIBIT A
FORM OF SUBSCRIPTION
(To Be Signed Only On Exercise Of Warrant)
(To Be Signed Only On Exercise Of Warrant)
TO: 180 Connect Inc.
Attention: Chief Financial Officer
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.___),
hereby irrevocably elects to purchase (check applicable box):
_________
|
_________shares of the Common Stock covered by such Warrant; or | |
_________
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the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2. |
The undersigned herewith makes payment of the full Exercise Price for such shares at the price
per share provided for in such Warrant, which is US$______. Such payment takes the form of
(check applicable box or boxes):
_________
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US$______in lawful money of the United States; and/or | |
_________
|
the cancellation of such portion of the attached Warrant as is exercisable for a total of _________shares of Common Stock (using a Fair Market Value of US$_________ per share for purposes of this calculation); and/or | |
_________
|
the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2.2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2. |
The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to _________whose address is _________.
The undersigned represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made in reliance upon available
exemptions from the prospectus and registration or equivalent requirements of applicable securities
legislation.
Dated: |
||||||
| (Signature must conform to name of Holder as specified on the face of the Warrant) | ||||||
| Address: | ||||||
A-1
EXHIBIT B
FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)
(To Be Signed Only On Transfer Of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto the person(s)
named below under the heading “Transferees” the right represented by the within Warrant to purchase
the percentage and number of shares of Common Stock of 180 Connect Inc. into which the within
Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of 180 Connect Inc. with full power of substitution in
the premises.
| Percentage | Number | |||||
| Transferees | Address | Transferred | Transferred | |||
Dated: |
||||||
| (Signature must conform to name of Holder as specified on the face of the Warrant) | ||||||
| Address: | ||||||
| SIGNED IN THE PRESENCE OF: | ||||||
| (Name) | ||||||
| ACCEPTED AND AGREED: | ||||||
| [TRANSFEREE] | ||||||
B-1
