FORM OF COMMON STOCK PURCHASE WARRANT NOVUME SOLUTIONS, INC.
Exhibit 4.1
NEITHER THIS SECURITY NOR THE
SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED 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 AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT, FINANCING
ARRANGEMENT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
FORM OF COMMON STOCK PURCHASE WARRANT
Warrant
Shares: [_________]
Date of Issuance: [_________],
2019 (the “Issuance
Date”)
THIS COMMON STOCK PURCHASE WARRANT (this
“Warrant”)
certifies that, for value received, [____________________________]
(including its permitted and registered assigns, the
“Holder”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after the date of issuance hereof, to purchase from Novume
Solutions, Inc. (the “Company”)
up to [_________] shares of
Common Stock (as defined below) (the “Warrant
Shares”) at the Exercise
Price per share then in effect.
Capitalized terms used in this Warrant shall have
the meanings set forth in the body of this Warrant or in
Section
20 below. For purposes of this
Warrant, the term “Exercise
Price” shall mean $0.74
per Warrant Share, and the term “Exercise
Period” shall mean the
period commencing on the Issuance Date and ending on the earlier of
(a) 5:00 p.m. Eastern Standard Time on the five (5)-year
anniversary thereof, and (b) the occurrence of a Fundamental
Transaction.
1. EXERCISE OF
WARRANT. Subject to the terms
and conditions hereof, the rights represented by this Warrant may
be exercised in whole or in part at any time or times during the
Exercise Period by delivery of the original Warrant (or an
affidavit of lost warrant and indemnification undertaking in the
case of a lost, stolen or mutilated Warrant as provided in
Section
5(a))
and a written notice, in the form attached hereto
as Exhibit A
(the “Exercise
Notice”), of the
Holder’s election to exercise this Warrant. Partial exercises
of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect
of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant
Shares purchased. On or before the fifth Business Day (the
“Warrant Share Delivery
Date”) following the date
on which the Company shall have received the original Warrant (or
affidavit of lost warrant and indemnification undertaking, as
applicable) and Exercise Notice (which must be received by the
Company prior to 5 p.m. Eastern Standard Time to count as
received on such date), payment of an amount equal to the
applicable Exercise Price multiplied by the number of Warrant
Shares as to which all or a portion of this Warrant is being
exercised (the “Aggregate Exercise
Price” and together with
the Exercise Notice, the “Exercise Delivery
Documents”) in cash or by
wire transfer of immediately available funds (or by cashless
exercise, in which case there shall be no Aggregate Exercise Price
provided), the Company may (or may direct its transfer agent to)
deliver, to the address specified in the Exercise Notice, a notice
indicating the number of shares of Common Stock to which the Holder
is entitled pursuant to such exercise, or otherwise provide
confirmation of such entitlement. Upon delivery of the Exercise
Delivery Documents, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective
of the date of delivery of the notice in respect of such Warrant
Shares. If this Warrant is submitted in connection with any
exercise and the number of Warrant Shares represented by this
Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company
shall as soon as practicable and in no event later than five (5)
Business Days after any exercise and at its own expense, issue a
new Warrant (in accordance with Section
5)
representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant,
less the number of Warrant Shares with respect to which this
Warrant is exercised.
In
the event of a Fundamental Transaction, the Holder shall, and at
any time during the Exercise Period, the Holder may, elect to
receive Warrant Shares pursuant to a cashless exercise, in lieu of
a cash exercise, equal to the value of this Warrant determined in
the manner described below (or of any portion thereof remaining
unexercised) by surrender of this Warrant and a Notice of Exercise,
in which event the Company shall issue to Holder a number of shares
of Common Stock computed using the following formula:
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;
A = the
fair market value of one Warrant Share; and
B = the
Exercise Price.
1
For
purposes of this Section 1, the fair market value of a
Warrant Share shall be the last reported sale price per share of the Common Stock
as reported on the Nasdaq Stock Market (if there are no sales, the
last reported bid price) on the Business Day prior to the date of
exercise, or if the foregoing does not apply, then the price
per share of Common Stock that the Company could obtain from a
willing buyer for such shares sold by the Company from authorized
but unissued shares, as determined in good faith by the
Company’s board of directors; provided, however, that the Holder shall
have the right to dispute such determination of fair market value
by the Company's board of directors by giving written notice of its
dispute to the Company within ten (10) days following such
determination, in which case the Company shall reasonably cooperate
with the Holder to resolve such dispute on a timely
basis.
2. FUNDAMENTAL
TRANSACTIONS. If, at any time
while this Warrant is outstanding, (a) the Company effects any
merger of the Company with or into another entity and the Company
is not the surviving entity (such surviving entity, the
“Successor
Entity”), (b) the Company
effects any sale of all or substantially all of its assets in one
or a series of related transactions, (c) any tender offer or
exchange offer (whether by the Company or by another individual or
entity, and approved by the Company) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their
shares of Common Stock for other securities, cash or property and
the holders of at least 50% of the Common Stock accept such offer,
or (d) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities,
cash or property (other than as a result of a subdivision or
combination of shares of Common Stock) (in any such case, a
“Fundamental
Transaction”), then
immediately prior to the occurrence of such Fundamental
Transaction, this Warrant shall automatically be converted into the
right to receive the number of shares of Common Stock of the
Company for which this Warrant is exercisable at such
time.
3. FRACTIONAL
SHARES. The Company shall not
be required to issue fractions of shares upon exercise of this
Warrant or to distribute certificates which evidence fractional
shares. In lieu of fractional shares, the Company shall make
payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction
multiplied by the Current Market Price of a share of Common Stock
on the date of Warrant exercise.
4. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided
herein, this Warrant, in and of itself, shall not entitle the
Holder to any voting rights or other rights as a stockholder of the
Company. In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a
stockholder of the Company, whether such liabilities are asserted
by the Company or by creditors of the Company.
(a) Lost, Stolen or Mutilated
Warrant. If this Warrant is
lost, stolen, mutilated or destroyed, the Company will, on such
terms as to indemnity or otherwise as it may reasonably impose
(which shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new Warrant of like denomination and
tenor as this Warrant so lost, stolen, mutilated or
destroyed.
(b) Issuance
of New Warrants. Whenever the
Company is required to issue a new Warrant pursuant to the terms of
this Warrant, such new Warrant shall be of like tenor with this
Warrant, and shall have an issuance date, as indicated on the face
of such new Warrant which is the same as the Issuance
Date.
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(a) Notice
of Transfer. By acceptance of
this Warrant, the Holder agrees to give written notice to the
Company before transferring this Warrant or transferring any
Warrant Shares of such Xxxxxx’s intention to do so,
describing briefly the manner of any proposed transfer. As a
condition to such transfer, the Holder shall furnish the Company
with the original Warrant and such certificates, representations,
agreements and other information, including an opinion of counsel,
as the Company or the Company's transfer agent may reasonably
require to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, unless such
transfer is with respect to the Warrant Shares at a time when they
are transferred pursuant to an effective registration statement. An
appropriate legend may be endorsed on this Warrant respecting
restrictions upon transfer thereof necessary or advisable in the
opinion of counsel and satisfactory to the Company to prevent
further transfers which would be in violation of Section 5 of the
Securities Act and applicable state securities laws. As a condition
to transfer the prospective transferee or purchaser shall execute
the Assignment of Warrant attached hereto as Exhibit B
and such other documents and make such
representations, warranties, and agreements as may be required
solely to comply with the exemptions relied upon by the Company for
the transfer or disposition of this Warrant or the Warrant
Shares.
(b) If
the proposed transfer or disposition of this Warrant or such
Warrant Shares described in the written notice given pursuant to
this Section
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may not be effected without
registration or qualification of this Warrant or such Warrant
Shares, the Holder will limit its activities in respect to such
transfer or disposition as are permitted by
law.
7. COVENANTS
OF THE COMPANY.
(a) Covenants
as to Shares. The Company shall
procure that all Warrant Shares that may be issued upon the
exercise of the rights represented by this Warrant are, upon
issuance, validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with
respect to the issuance thereof. The Company shall, at all times
during the Exercise Period, have authorized and reserved, free from
preemptive rights, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant
(without regard to any limitations on exercise). If at any time
during the Exercise Period the number of authorized but unissued
shares of Common Stock shall not be sufficient to permit exercise
of this Warrant, the Company shall take such corporate action as
may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number as
shall be sufficient for such purposes. During the Exercise Period,
the Company shall not at any time increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect.
(b) No
Impairment. Except and to the
extent as waived or consented to by the Holder, the Company shall
not, by amendment of its certificate of incorporation or bylaws, or
through any reorganization, transfer of assets, consolidation,
merger, scheme of arrangement, 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 hereunder by the Company, but shall at all times in good
faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder
against impairment.
(c) Notices
of Record Date. In the event of
(i) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution; or (ii) the consummation of a Fundamental
Transaction, then the Company shall provide to the Holder, at least
ten (10) Business Days prior to the date of any such event, a
notice pursuant to Section
11,
specifying the date on which any such action is to be taken or any
such event is to occur.
8. REPRESENTATIONS
AND WARRANTIES. The Company
hereby confirms the representations and warranties of the Company
set forth in the Note Purchase Agreement dated on or around the
Issuance Date among the Company, the guarantors from time to time
party thereto, U.S. Bank National Association as Agent, the
Purchasers from time to time party thereto and Cedarview Capital
Management, LP as sole lead arranger and bookrunner (the
“NPA”). By acceptance of this Warrant, the
Holder hereby confirms the representations and warranties of the
Holder set forth in the NPA.
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9. TERMINATION
OF WARRANT. This Warrant shall
expire and shall no longer be exercisable upon the expiration of
the Exercise Period.
10. RESTRICTIVE
LEGEND. The Warrant Shares
shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR
QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
11. NOTICES.
Any notice or other communication to be given under this Warrant
shall be in writing and may either be delivered by hand, made by
facsimile transmission, sent by electronic mail transmission,
disclosed in all material respects and filed on XXXXX pursuant to
Exchange Act, sent by overnight courier, or sent by registered
mail, return receipt requested, postage prepaid, as follows: (a) if
to the Holder, at the Holder’s address, facsimile number or
electronic mail address set forth on the signature page hereof, or
at such other address as the Holder shall have furnished to the
Company in writing; and (b) if to the Company, at the
Company’s address, facsimile number or electronic mail
address set forth on the signature page hereof, or at such other
address as the Company shall have furnished to the Holder in
writing.
12. AMENDMENT
AND WAIVER. The terms of this
Warrant may be amended or waived (either generally or in a
particular instance and either retroactively or prospectively) only
with the written consent of the Company and the
Holder.
13. GOVERNING
LAW; JURISDICTION. This Warrant
and all actions arising out of or in connection with 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
law (whether of the State of New York or any other
jurisdiction). EACH PARTY HERETO HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
WITHIN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, STATE OF NEW
YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS WARRANT SHALL BE LITIGATED IN SUCH
COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS.
14. JURY
TRIAL WAIVER. THE COMPANY AND
THE HOLDER HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH
THIS WARRANT.
15. ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance
of and agreement to all of the terms and conditions contained
herein.
16. RIGHTS
AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. Unless otherwise provided in this Warrant, the
rights and obligations of the Company, of the Holder and of the
holder of the Warrant Shares issued upon exercise of this Warrant
hereunder shall survive the exercise of this
Warrant.
17. SUCCESSORS
AND ASSIGNS. The terms and
provisions of this Warrant shall inure to the benefit of, and be
binding upon, the Company, the Holder and their respective
successors and assigns.
18. TITLES
AND SUBTITLES. The titles and
subtitles used in this Warrant are used for convenience only and
are not to be considered in construing or interpreting this
Warrant.
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19. SEVERABILITY.
In the event any one or more of the provisions of this Warrant
shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Warrant shall be unimpaired, and the
invalid, illegal or unenforceable provision shall be replaced by a
mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the
invalid, illegal or unenforceable provision.
20. CERTAIN
DEFINITIONS. For purposes of
this Warrant, the following terms shall have the following
meanings:
(a) “Business
Day” means all days other
than Saturdays, Sundays and any other days on which commercial
banks in New York City are authorized or required by law to be
closed for business.
(b) “Common
Stock” means the
Company’s common stock, par value $0.0001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
[Signature
page follows]
5
IN
WITNESS WHEREOF, the Company has caused this Common Stock Purchase
Warrant to be duly executed as of the Issuance Date set forth
above.
By:
Name:
Title:
Address:
Facsimile:
Email:
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EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder to exercise this Common
Stock Purchase Warrant)
The
Undersigned holder hereby
exercises the right to purchase _________________ of the shares of
Common Stock (“Warrant Shares”) of Novume Solutions,
Inc., a Delaware corporation (the “Company”), evidenced
by the attached copy of the Common Stock Purchase Warrant
(the “Warrant”). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth
in the Warrant.
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1.
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Form of
Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as (check one):
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☐
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a cash
exercise with respect to _________________ Warrant Shares;
or
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☐
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by
cashless exercise pursuant to the Warrant for _________ Warrant
Shares.
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2.
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Payment
of Exercise Price. If cash exercise is selected above, the holder
shall pay the applicable Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of
the Warrant.
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3.
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Delivery
of Warrant Shares. The Company shall deliver to the holder
__________________ Warrant Shares in accordance with the terms of
the Warrant.
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Date:
(Print Name of Registered Holder)
By: _________________________________________
Name:______________________________________
Title: ________________________________________
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EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer of the
Warrant)
For Value
Received, the undersigned
hereby sells, assigns, and transfers unto ____________________ the
Common Stock Purchase Warrant for _______________ shares of common
stock of Novume Solutions, Inc., and appoints ____________________,
as attorney-in-fact, to transfer said Common Stock Purchase Warrant
on the books of Novume Solutions, Inc. with full power of
substitution and re-substitution in the premises. By accepting such
transfer, the transferee acknowledges that it has reviewed the
within Common Stock Purchase Warrant and has agreed to be bound in
all respects by its terms and conditions; and such transferee
represents and warrants that it is an “accredited
investor” as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as
amended.
Holder
Date:
____________________________________
(Signature) *
____________________________________
(Name)
____________________________________
(Address)
____________________________________
(Social Security or Tax Identification No.)
* The signature on this Assignment of Warrant must correspond to
the name as written upon the face of the Common Stock Purchase
Warrant in every particular without alteration or enlargement or
any change whatsoever. When signing on behalf of a corporation,
partnership, trust or other entity, please indicate your
position(s) and title(s) with such entity.
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Transferee
Date:
____________________________________
(Signature)
____________________________________
(Name)
____________________________________
(Address)
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