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EXHIBIT 4.1
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS,
OR (2) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
SUCH LAWS IS AVAILABLE AND THE COMPANY HAS RECEIVED EITHER AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY,
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH
SUCH DISPOSITION OR OTHER EVIDENCE THAT IS SATISFACTORY TO THE
COMPANY, WHICH EVIDENCE ESTABLISHES THAT ANY SUCH DISPOSITION
WILL NOT VIOLATE THE SECURITIES ACT, SUCH LAWS OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.
XXXXXXXXXX.XXX CORPORATION
a Delaware Corporation
COMMON STOCK PURCHASE WARRANT
[________] SHARES OF COMMON STOCK
Warrant No. [________]
Exercisable on or before
[____________________________]
FOR VALUE RECEIVED, XXXXXXXXXX.XXX CORPORATION, a corporation organized and
existing under the laws of the State of Delaware (the "COMPANY"), promises to
issue in the name of, and sell and deliver to [_____________________] or its
registered assigns (in each case, the "HOLDER"), a certificate or certificates
for an aggregate of [______________] (______) Shares (the "WARRANT SHARES") of
common stock, $0.0001 par value per share ("COMMON STOCK"), upon compliance with
the terms of this Common Stock Purchase Warrant (the "WARRANT") and payment
therefor of the exercise price, subject to adjustment in certain events (the
"EXERCISE PRICE"), of $[______] per Warrant Share. This Warrant shall be
exercisable at any time after [__________] and prior to [_________________] (the
"EXERCISE PERIOD") and shall be void thereafter.
1. EXERCISE OF WARRANT.
(a) General Method of Exercise. This Warrant may be exercised in
whole or in part at any time during the Exercise Period by delivery to
the Company's principal office (or such other office as the Company may
designate by written notice to the Holder), not later than two (2)
business days before the date on which this Warrant is to be exercised
(the "EXERCISE DATE"), of all of the following:
(i) a Form of Exercise Agreement (the "FORM OF EXERCISE")
annexed
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hereto, duly executed by the Holder and setting forth (A) the
Exercise Date, (B) the number of Warrant Shares as to which this
Warrant is to be exercised on the Exercise Date, and (C) if the
Holder elects to effect a cashless exercise as described in
subsection (b) below, indication of such cashless exercise as
provided in the Form of Exercise;
(ii) if the Holder does not effect a cashless exercise,
either cash, a certified or official bank check payable to the
Company in funds immediately available on the Exercise Date or a
wire transfer for the account of the Company, in an amount equal
to the Exercise Price multiplied by the number of Warrant Shares
of the Company's Common Stock as to which this Warrant is to be
exercised on the Exercise Date; and
(iii) this Warrant.
(b) Cashless Exercise. If the Holder so elects in the Form of
Exercise referred to in subsection (a) to effect a cashless exercise,
this Warrant shall be converted on the Exercise Date, without any
further consideration, into that number of shares of the Company's
Common Stock equal to the total number of Warrant Shares set forth in
such Form of Exercise multiplied by the difference of one minus a
fraction equal to the Exercise Price divided by the Fair Market Value
Per Share of the Company's Common Stock, determined as set forth below.
For purposes of the above calculation, the "Fair Market Value Per Share"
of the Company's Common Stock shall be the average over the fifteen (15)
days preceding the Exercise Date, appropriately adjusted to reflect any
stock split or similar transaction during such relevant period, of (i)
the closing price of the Company's Common Stock quoted on any national
or regional exchange on which the Company's Common Stock is listed or,
if not so listed, (ii) the average of the closing bid and asked prices
of the Company's Common Stock quoted in the OTC Bulletin Board quotation
service. If there is no public market for the Company's Common Stock at
the time of such exercise, the Fair Market Value Per Share of the
Company's Common Stock shall be determined by the Company's Board of
Directors in good faith. Any calculation by the Company of the Fair
Market Value Per Share of the Company's Common Stock shall be conclusive
in the absence of manifest error.
(c) Issuance of Certificates and New Warrant. Within a reasonable
time not in excess of twenty (20) days after the Exercise Date, the
Company shall deliver to the Holder:
(i) if the Holder did not elect to effect a cashless
exercise, (A) a certificate for the number of shares of the
Company's Common Stock such Holder elected to purchase on the
Exercise Date and (B) if this Warrant was not exercised in full,
a new Warrant of like tenor in the name of the Holder evidencing
the right to purchase the number of Warrant Shares as to which
this Warrant has not been exercised, both of which shall be
delivered to the Holder at the address designated in the Form of
Exercise. Any new Warrant shall be dated with this Warrant's
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original issue date; or
(ii) if the Holder did elect to effect a cashless
exercise, (A) a certificate for the number of shares of the
Company's Common Stock referred to in subsection (b) and (B) if
this Warrant was not exercised in full, a new Warrant of like
tenor in the name of the Holder evidencing the right to purchase
the number of Warrant Shares as to which this Warrant has not
been exercised, both of which shall be delivered to the Holder at
the address designated in the Form of Exercise. Any new Warrant
shall be dated with this Warrant's original issue date.
The Company shall deliver to the Holder physical certificates
representing the Warrant Shares so purchased, as described above. Any
certificates so delivered shall be in such denominations as may be
requested by the Holder hereof, shall be registered in the name of such
Holder or such other name as shall be designated by such Holder and
shall bear a restrictive legend.
2. EXERCISE PRICE. Except as otherwise provided in Section 3 hereof,
the initial exercise price of this Warrant shall be $[ ] per Share. The adjusted
exercise price shall be the price which shall result from time to time from any
and all adjustments of the initial exercise price in accordance with the
provisions of Section 3 hereof. The term "EXERCISE PRICE" as used herein shall
mean the initial exercise price or the adjusted exercise price, as the context
requires.
3. ADJUSTMENTS.
(a) Subdivision or Combination of Shares. If the Company is
recapitalized through the subdivision or combination of its outstanding
shares of Common Stock into a larger or smaller number of shares, the
number of Warrant Shares shall be increased or reduced, as of the record
date for such recapitalization, in the same proportion as the increase
or decrease in the outstanding shares of Common Stock, and the Exercise
Price shall be adjusted so that the aggregate amount payable for the
purchase of all of the Warrant Shares issuable hereunder immediately
after the record date for such recapitalization shall equal the
aggregate amount so payable immediately before such record date.
(b) Dividends in Common Stock or Securities Convertible into
Common Stock. If the Company declares a dividend or distribution on
Common Stock payable in Common Stock or securities convertible into
Common Stock, the number of shares of Common Stock for which this
Warrant may be exercised shall be increased, as of the record date for
determining which holders of Common Stock shall be entitled to receive
such dividend, in proportion to the increase in the number of
outstanding shares (and shares of Common Stock issuable upon conversion
of all such securities convertible into Common Stock) of Common Stock as
a result of such dividend or distribution, and the Exercise Price shall
be adjusted so that the aggregate amount payable for the purchase of all
the Warrant Shares issuable hereunder immediately after the record date
for such dividend or distribution shall equal the aggregate amount so
payable immediately before such record date.
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(c) Merger, Sale of Assets. If at any time while this Warrant, or
any portion thereof, is outstanding and unexpired there shall be (i) a
reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which
the Company is not the surviving entity, or a reverse triangular merger
in which the Company is the surviving entity but the shares of the
Company's capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the
form of securities, cash, or otherwise, or (iii) a sale or transfer of
the Company's properties and assets as, or substantially as, an entirety
to any other person, then, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that
the holder of this Warrant shall thereafter be entitled to receive upon
exercise of this Warrant, during the period specified herein and upon
payment of the Exercise Price then in effect, the number of shares of
stock or other securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or
transfer that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been
exercised immediately before such reorganization, merger, consolidation,
sale or transfer, all subject to further adjustment as provided in this
Section 3. The foregoing provisions of this Section 3(c) shall similarly
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that
are at the time receivable upon the exercise of this Warrant.
(d) Reclassification. If the Company, at any time while this
Warrant, or any portion thereof, remains outstanding and unexpired,
shall change any of the securities as to which purchase rights under
this Warrant exist, by reclassification of securities or otherwise, into
the same or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject
to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall
be appropriately adjusted, all subject to further adjustment as provided
in this Section 3.
(e) Liquidation, etc. If the Company shall, at any time before
the expiration of this Warrant, dissolve, liquidate or wind up its
affairs, or otherwise declare a dividend, or make a distribution to the
holders of its Common Stock generally, whether in cash, property or
assets of any kind, including any dividend payable in stock or
securities of any other issuer owned by the Company (excluding regularly
payable cash dividends declared from time to time by the Company's Board
of Directors or any dividend or distribution referred to in Section
3(b)), the Exercise Price shall be reduced, without any further action
by the parties hereto, by the Per Share Value (as hereinafter defined)
of the dividend. For purposes of this Section 3(e), the "Per Share
Value" of a cash dividend or other distribution shall be the dollar
amount of the distribution on each share of Common Stock and the "Per
Share Value" of any dividend or distribution other than cash shall be
equal to the fair market value of such non-cash distribution on each
share of Common Stock as determined in good faith by the Board of
Directors of the Company.
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(f) Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of the Warrant or the Exercise Price of
the Warrant Shares is adjusted as provided herein, the Company shall
mail to the Holder a notice of such adjustment or adjustments, prepared
and signed by the Chief Executive Officer, Chief Financial Officer or
Secretary of the Company, which sets forth the number of Warrant Shares
purchasable upon the exercise of the Warrant and the Exercise Price of
such Warrant Shares after such adjustment, a brief statement of the
facts requiring such adjustment, and the computation by which such
adjustment was made. Upon an adjustment described herein, the Company
may elect to issue a new Warrant reflecting such adjustment, and if the
Company so elects, the Holder will return this Warrant to the Company in
exchange for such new Warrant.
(g) Notices to Holder. So long as this Warrant shall be
outstanding (a) if the Company shall pay any dividends or make any
distribution upon the Common Stock otherwise than in cash or (b) if
there shall be any capital reorganization of the Company in which the
Company is not the surviving entity, recapitalization of the capital
stock of the Company, consolidation or merger of the Company with or
into another corporation, sale, lease or other transfer of all or
substantially all of the property and assets of the Company, or
voluntary or involuntary dissolution, liquidation or winding up of the
Company, then in such event, the Company shall cause to be mailed to the
Holder, at least twenty (20) days prior to the relevant date described
below (or such shorter period as is reasonably possible if twenty days
is not reasonably possible), a notice containing a description of the
proposed action and stating the date or expected date on which a record
of the Company's stockholders is to be taken for the purpose of any such
dividend, distribution of rights, or such reclassification,
reorganization, consolidation, merger, conveyance, lease or transfer,
dissolution, liquidation or winding up is to take place, the effect of
the action, to the extent such effect may be known on the date of such
notice, on the Exercise Price and the kind and amount of shares of stock
or other securities or property deliverable on the exercise of the
Warrant, and the date or expected date, if any is to be fixed, as of
which the holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such event. All such notices shall be deemed to have
been received (i) in the case of personal delivery, on the date of such
delivery, and (ii) in the case of mailing, on the fifth (5th) business
day following the date of such mailing.
(h) The provisions of this Section 3 are for the purpose of, and
shall be interpreted to the effect that, upon any exercise of this
Warrant, the Holder shall be entitled to receive the same amount and
kind of securities and other property that it would have been entitled
to receive as the owner at all times subsequent to the date hereof of
the number of shares of Common Stock issuable upon conversion of the
Warrant Shares purchased upon any such exercise.
(i) It is agreed and understood that no adjustments shall be made
hereunder solely as a result of the issuance by the Company of: (i)
Common Stock issued pursuant to any future public or private issuance of
stock; or (ii) Common Stock issued upon the exercise of warrants or
options granted by the Company.
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(j) No adjustment of the Exercise Price shall be made in an
amount of less than 1% of the Exercise Price in effect at the time such
adjustment is otherwise required to be made, but any such lesser
adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(k) Irrespective of any adjustment or change in the Exercise
Price, or the number of shares of Common Stock actually purchasable
under each Warrant of like tenor, the Warrants theretofore and
thereafter issued may continue to express the Exercise Price per Share
and the number of Warrant Shares purchasable thereunder as the Exercise
Price per Share and the number of Warrant Shares purchasable were
expressed on the Warrants when initially issued.
4. REGISTRATION
(a) Piggyback Registration. If the Company proposes to register
under the Securities Act any of its Common Stock (other than a
registration (1) relating to the sale of securities to employees,
officers and directors of, and independent contractors and consultants
to, the Company or a subsidiary pursuant to a stock option, stock
purchase or similar plan which is registered on Form S-8 or otherwise,
(2) relating to an exchange offer or offering of securities solely to
the Company's existing security holders, (3) relating to any business
combination or other transaction in which the Company's securities are
registered on Form S-4 or (4) on any form which does not include
substantially the same information as would be required to be included
in a registration statement covering the sale of Common Stock of the
Company owned by the Holder), the Company shall, at least twenty (20)
days prior to filing such registration statement with the Securities and
Exchange Commission give the Holder written notice of such proposed
filing, and include in such registration statement any or all of the
Warrant Shares as the Holder may request within ten (10) days after the
Company's giving of such notice, subject to the conditions set forth
herein.
(b) Registration Procedures. If, pursuant to Section 4(a) hereof,
the Company is required to include any Warrant Shares in a registration
statement proposed to be filed, the Company will, as expeditiously as
possible:
(i) prepare and file such registration statement under the
Securities Act on an appropriate form and use its best efforts to
cause such registration statement to become effective;
(ii) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may
be necessary to comply with the provisions of the Securities Act
and the Exchange Act of 1934 (the "EXCHANGE ACT") with respect to
the offer of the securities covered by such registration
statement during the period required for distribution of such
securities;
(iii) furnish to the Holder those copies of such
registration statement
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and all amendments thereto and of such prospectus (including each
preliminary, amended or supplemental prospectus) as the Holder
may reasonably request in order to facilitate the sale or
transfer of the securities covered by such registration
statement;
(iv) use its best efforts to register or qualify the
securities covered by any such registration statement in those
states and jurisdictions the Holder may reasonably request;
(v) furnish, at the request of Holder, on the date that
such Warrant Shares are delivered to the underwriters for sale
pursuant to such registration or, if such Warrant Shares are not
being sold through underwriters, on the date such registration
statement becomes effective (1) an opinion, dated such date, in a
form customary to such transactions, of the independent counsel
representing the Company for the purposes of such registration,
addressed to the underwriters, if any, reasonably acceptable in
form and substance to such underwriter, and (2) a letter, dated
such date, from the independent certified public accountants of
the Company, addressed to the underwriters, if any, stating that
they are independent certified public accountants within the
meaning of the Securities Act and that in the opinion of such
accountants, the financial statements and other financial data of
the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto (including, in
each case, documents incorporated by reference thereto), comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act; such opinion of
counsel shall additionally cover such other legal matters with
respect to the registration statement and the Company as the
underwriters, if any, may reasonably request; and such letter
from the independent certified public accountants shall
additionally cover such other financial matters (including
information as to the period ending not more than five (5)
business days prior to the date of such letter) with respect to
the registration statement and the Company as the underwriters,
if any, may reasonably request;
(vi) use its best efforts to keep such registration and
qualification effective until all exercises, sales and
distributions contemplated by the requests made pursuant to
Section 4(a) hereof shall have been completed, but not in any
event for a period in excess of ninety (90) days; and
(vii) pay all expenses incurred by the Company in
complying with this Section 4(b), including without limitation
(1) all registration and filing fees; (2) all printing expenses;
(3) all fees and disbursements of counsel and independent public
accountants for the Company; (4) all Blue Sky fees and expenses
(including fees and expenses of counsel in connection with Blue
Sky surveys); and (5) the entire expense of any special audits
incident to or required by any such registration.
(c) Certain Conditions to Registration. The right of the Holder
to have any Warrant Shares included in any registration statement
pursuant to the provisions of
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Section 4(a) hereof shall be subject to the following further
conditions:
(i) Should the request for registration be pursuant to
Section 4(a), and should the registration statement proposed by
the Company relate to an underwritten offering of securities of
the Company, and should the managing underwriter for the Company
render a recommendation to the effect that such registration of
all or a part of the Common Stock would materially impair the
Company's ability to sell the securities being registered by the
Company, then the Holder shall be entitled to participate pro
rata with all other stockholders entitled to registration rights
of equal priority, if any ("OTHER STOCKHOLDER"), based upon the
number of shares owned by or issuable to the Holder and each
Other Stockholder in the maximum amount of shares that such
underwriter determines may be sold without such impairment, after
the Company has included all stock that it desires to sell;
(ii) Should the registration statement proposed by the
Company relate to an underwritten offering of securities of the
Company, on exercise of its registration rights pursuant to this
Section 4, the Holder shall enter into an underwriting agreement
in customary form with the underwriter or underwriters for such
distribution and shall perform its obligations thereunder and, in
addition, the Holder shall bear a pro rata portion of the
underwriting discounts and commissions;
(iii) To the extent requested by any underwriter of the
Company's securities, the Holder shall not sell, loan, grant an
option for the purchase of or otherwise transfer or dispose of
any securities of the Company (including without limitation a
sale pursuant to Rule 144 of the Securities Act) during the
period (not in excess of 180 days) prior to and after the
effective date of a registration statement with respect to a
distribution of the Company's securities, if the officers and
directors of the Company enter into similar agreements. The
Company may impose stop transfer instructions to enforce the
provisions of the foregoing sentence;
(iv) The Holder hereby irrevocably waives and covenants
not to assert any right the Holder might have to obtain or seek
an injunction, administrative order or other action restraining
or otherwise delaying the registration of securities of the
Company in connection with any controversy that may arise with
respect to the interpretation and enforcement of this Section 4;
(v) The Holder shall furnish to the Company in writing
such information and documents as, in the opinion of counsel to
the Company, may be reasonably required to properly prepare and
file such registration statement in accordance with applicable
provisions of the Securities Act; and
(vi) If the Holder desires to sell and distribute
securities over a period of time, or from time to time at the
prevailing market prices pursuant to a registration statement to
be filed by the Company under the Securities Act, then
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the Holder shall execute and deliver to the Company such written
undertakings as the Company and its counsel may reasonably
require to assure full compliance with relevant provisions of the
Securities Act and the Exchange Act.
5. INDEMNIFICATION
(a) Indemnification of Holder. The Company will, and does hereby
undertake to, indemnify and hold harmless each Holder, each of such
Holder's officers, directors, partners and agents, and each person
controlling such Holder, with respect to any registration, qualification
or compliance effected pursuant to Section 4, against all claims,
losses, damages and liabilities (or actions in respect thereto) to which
they may become subject under the Securities Act, the Exchange Act, as
amended, or other federal or state law arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other similar
document (including any related registration statement, notification or
the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and will reimburse, as
incurred, each Holder and each director, officer, partner, agent and
controlling person of the Holder, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action; provided that the Company
will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense, arises out of or is based on any
untrue statement or omission based upon written information furnished to
the Company by an instrument duly executed by any of the Holders or any
underwriter and stated to be specifically for use therein.
(b) Indemnification of Company. Each Holder will, if Shares held
by or issuable to such Holder are included in such registration,
qualification, or compliance, severally and not jointly, indemnify the
Company, each of its directors, and each officer who signs a
registration statement in connection therewith, and each person
controlling the Company, each underwriter, if any, and, each person who
controls any underwriter, of the Company's securities covered by such a
registration statement, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse, as
incurred, the Company, and each such underwriter or other person, for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, in each case only to the extent that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) was made in
such registration statement, prospectus, offering circular or other
document, in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder
and stated to be specifically for use therein; provided, however, that
the liability of each such Holder hereunder shall be limited to the net
proceeds received by such Holder from the sale of securities under such
registration statement. In no event will any Holder be required to enter
into any agreement or
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undertaking in connection with any registration under this Section 5
providing for any indemnification or contribution obligations on the
part of such Holder greater than such Holder's obligations under this
Section 5.
(c) Notice. Each party entitled to indemnification under this
Section 5 (the "INDEMNIFIED PARTY") shall give notice to the party
required to provide such indemnification (the "INDEMNIFYING PARTY") of
any claim as to which indemnification may be sought promptly after such
Indemnified Party has actual knowledge thereof, and the Indemnifying
Party shall assume the defense of any such claim or any litigation
resulting therefrom; provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation, shall be
subject to approval by the Indemnified Party (whose approval shall not
be unreasonably withheld) and the Indemnified Party may participate in
such defense with its separate counsel at the Indemnifying Party's
expense if representation of such Indemnified Party would be
inappropriate due to actual or potential differing interests between
such Indemnified Party and any other party represented by such counsel
in such proceeding; and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Section 5, except
to the extent that such failure to give notice shall materially
adversely affect the Indemnifying Party in the defense of any such claim
or any such litigation. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff therein, to such Indemnified Party,
of a release from all liability in respect to such claim or litigation.
6. CONTRIBUTION. In order to provide for just and equitable
contribution in any case in which (i) the Holder or any of Holder's officers,
directors, partners, agents or any controlling persons makes a claim for
indemnification pursuant to Section 5 hereof but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that the express provisions of Section 5 hereof provide for indemnification in
such case or (ii) contribution may be required on the part of any Holder or any
of Holder's officers, directors, partners, agents or any controlling persons,
then the Company and the Holder or any of Holder's officers, directors,
partners, agents or any controlling persons shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (which
shall, for all purposes of this Agreement, include, but not be limited to, all
costs of defense and investigation and all attorneys' fees), in either such case
(after contribution from others) on the basis of relative fault as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the Holder or any of Holder's officers, directors, partners, agents or any
controlling persons on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Holder agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method which does not take account of the equitable
considerations referred to in this Section 6. The amount paid or payable
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by an Indemnified Party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 6
shall be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11 of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
7. COVENANTS OF THE COMPANY. The Company hereby covenants and agrees
that, prior to the expiration of this Warrant by exercise or by its term:
(a) The Company will not by amendment of its Certificate of
Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act or deed,
avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed
hereunder by the Company, but will at all times in good faith assist,
insofar as it is able, in the carrying out of all provisions of this
Warrant and in the taking of all other actions that may be necessary to
protect the rights of the Holder against dilution.
(b) The Company shall at all times reserve and keep available,
out of its authorized and unissued capital stock, such numbers of shares
of Common Stock as shall, from time to time, be sufficient for the
exercise of the Warrants.
(c) All Warrant Shares that may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be validly
issued, fully paid and non-assessable, and free from all taxes, liens
and charges with respect to the issue thereof (other than taxes in
respect of any transfer contemporaneously with such issue).
8. HOLDER'S REPRESENTATIONS AND WARRANTIES. The Holder hereby
represents and warrants that:
(a) Holder is an "accredited investor" as that term is defined in
Rule 501(a) of the Securities Act;
(b) Holder, either alone or with the assistance of the Holder's
professional advisors, has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and
risks of the Holder's investment in the Company;
(c) Holder has either spoken or met with, or been given
reasonable opportunity to speak with or meet with, representatives of
the Company for the purpose of asking questions of, and receiving
answers and information from, such representatives concerning the
Holder's investment in the Company;
(d) Holder has sufficient financial resources to be able to bear
the risk of the Holder's investment in the Company; and
(e) Holder is acquiring this Warrant (and will acquire any
securities issuable on exercise of this Warrant) for its own account for
investment purposes and not with a view toward the sale or distribution
of all or any part of this Warrant or such securities.
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No one other than the Holder has any beneficial interest in this Warrant
or the securities issuable on exercise of this Warrant.
9. COVENANTS OF THE HOLDER.
(a) Securities Laws. The Holder, by acceptance hereof, agrees
that, absent both an effective registration statement under the
Securities Act and qualification under applicable state law covering the
disposition of this Warrant or the Warrant Shares, Holder will not sell
or transfer any or all of such Warrant or the Warrant Shares, without
first providing the Company with either an opinion of counsel reasonably
acceptable to the Company and its counsel to the effect that such sale
or transfer will be exempt from both the registration requirements of
the Securities Act and the qualification requirements of applicable
state law, or other evidence that is satisfactory to the Company
establishing that any such disposition will not violate the Securities
Act or applicable state law.
(b) Restrictions on Transfer. By acceptance hereof, the Holder
consents to (A) the placing of the legend substantially similar to that
set forth on this Warrant on the Warrant Shares, stating that such
securities have not been registered under the Securities Act and setting
forth the restriction on transfer contemplated hereby and (B) the
placing of a stop transfer order on the books of the Company and with
any transfer agents against this Warrant and such securities, as deemed
necessary by the Company to comply with such restrictions. The Holder
understands that, except pursuant to Section 4, the Company has no
obligation to the Holder to register this Warrant or any securities
issuable on exercise hereof, and has not represented to the Holder that
it will register this Warrant or such securities. The Holder understands
that there is no assurance that the Company will make filings under the
1934 Act, or that a public market for any securities of the Company will
exist, and as a result the Holder understands that Rule 144 may not be
available for the resale or distribution of any securities of the
Company by the Holder.
(c) If, at the time of the surrender of this Warrant in
connection with any exercise, transfer, or exchange of this Warrant,
this Warrant or the Warrant Shares are not registered under both the
Securities Act and applicable state securities laws, the Company may
require, as a condition of allowing such exercise, transfer or exchange,
a representation by the Holder that the transferee of this Warrant, in
whole or in part, or any Warrant Shares, is an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act; provided
that no such representation shall be required in connection with a
transfer pursuant to Rule 144 of the Securities Act.
10. TRANSFER AND EXCHANGE.
(a) Transfer. This Warrant is not transferable without the
Company's prior written consent. Upon receipt of such consent, this
Warrant is transferable on the books of the Company at its principal
office by the registered Holder hereof only upon surrender of this
Warrant properly endorsed. The Company shall issue and deliver to the
transferee a new Warrant or Warrants representing the Warrant so
transferred. Upon any partial transfer, the Company will issue and
deliver to the Holder a new Warrant or Warrants with respect to the
Warrants not so transferred. Until due presentment for
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registration of transfer on the books of the Company, the Company may
treat the registered Holder hereof as the owner and Holder hereof for
all purposes, and the Company shall not be affected by any notice to the
contrary.
(b) Exchange. This Warrant, at any time prior to the exercise
hereof, upon presentation and surrender to the Company may be exchanged,
along with other Warrants of like tenor registered in the name of the
same Holder, for another Warrant or other Warrants of like tenor in the
name of such Holder exercisable for the same aggregate number of Warrant
Shares as the Warrant or Warrants surrendered.
11. LOSS, THEFT, DESTRUCTION OR MUTILATION. In case this Warrant
shall become mutilated or defaced or be destroyed, lost or stolen, the Company
shall execute and deliver a new Warrant in exchange for and upon surrender and
cancellation of such mutilated or defaced Warrant or in lieu of and substitution
for such Warrant so destroyed, lost or stolen, upon the Holder of such Warrant
filing with the Company such evidence satisfactory to it that such Warrant has
been so mutilated, defaced, destroyed, lost or stolen and of the ownership
thereof by the Holder; provided, however, that the Company shall be entitled, as
a condition to the execution and delivery of such new Warrant, to demand
indemnity satisfactory to it and payment of expenses and charges incurred in
connection with the delivery of such new Warrant. All Warrants so surrendered to
the Company shall be canceled.
12. RECORD OWNER. At the time of the surrender of this Warrant,
together with the form of subscription properly executed and payment of the
Exercise Price, the person exercising this Warrant shall be deemed to be the
holder of record of the shares of Common Stock deliverable upon such exercise,
in whole or in part, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to such person.
13. FRACTIONAL SHARES. No fractional Warrant Shares or scrip
representing fractional Warrant Shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a Share called for on such exercise,
the Holder may elect to receive, and the Company shall pay to the Holder, an
amount in cash equal to such fraction multiplied by the Exercise Price. In the
alternative, the Holder may elect to remit to the Company an amount in cash
equal to the difference between such fraction and one, multiplied by the
Exercise Price, and the Company will issue the Holder one share of Common Stock
in addition to the number of whole Warrant Shares required by the exercise of
the Warrant.
14. MAILING OF NOTICES. All notices and other communications from the
Company to the Holder of this Warrant shall be sent by registered or certified
mail, (return receipt requested) or delivered personally or by courier or by
confirmed telecopy, and shall be effective five (5) days after being placed in
the mail, if mailed, or upon receipt or refusal of receipt, if delivered
personally or by courier, or by confirmed telecopy, in each case addressed to a
party. The addresses for such communications shall be:
If to the Company:
XxxXxxxxxx.xxx Corporation
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Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxxx Xxxxxx
With a Copy to:
Xxxxx & Xxxxxx, LLP
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxx X. Call
Or such other addresses as the Company furnishes by notice to the Holder
in accordance with this Section 14.
If to the Holder, at such address as such Holder shall have provided in
writing to the Company, or at such other address as such Holder furnishes by
notice given in accordance with this Section 14.
15. NO REGISTRATION UNDER THE SECURITIES ACT. Because this Warrant
has not been registered under the Securities Act, it and all replacement
Warrants and the Warrant Shares shall bear the following legend:
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF
THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED ( THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND SUCH LAWS, OR
(2) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
SUCH LAWS IS AVAILABLE AND THE COMPANY HAS RECEIVED EITHER AN
OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED
IN CONNECTION WITH THE DISPOSITION OR SUCH OTHER EVIDENCE AS MAY
BE SATISFACTORY TO THE COMPANY, WHICH EVIDENCE ESTABLISHES THAT
ANY SUCH DISPOSITION WILL NOT VIOLATE THE SECURITIES ACT, SUCH
LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
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16. GOVERNING LAW; JURISDICTION. This Warrant shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. Each of the Company
and the Holder irrevocably consents to the jurisdiction of the United States
federal courts and state courts located in the State of Delaware in any suit or
proceeding based on or arising under this Warrant and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. Each of the Company and the Holder irrevocably waives any objection to
the laying of venue and the defense of an inconvenient forum to the maintenance
of such suit or proceeding. Each of the Company and the Holder further agrees
that service of process upon the company or the Holder mailed by certified or
registered mail to the address set forth in Section 14 shall be deemed in every
respect effective service of process upon the Company or the Holder in any such
suit or proceeding. Nothing herein shall affect the Holder's or the Company's
right to serve process in any other manner permitted by law. Each of the Company
and the Holder agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
17. ENTIRE AGREEMENT AND INTEGRATION. The Company and the Holder of
this Warrant hereby represent and warrant that this Warrant is intended to and
does contain and embody all of the understandings and agreements, both written
and oral, of the parties hereto with respect to the subject matter of this
Warrant, and that there exists no oral agreement or understanding, express or
implied, whereby the absolute, final and unconditional character and nature of
this Warrant shall be in any way invalidated, empowered or affected.
18. AMENDMENT; NO WAIVERS. Any provision of this Warrant may be
amended or waived only if such amendment or waiver is in writing and signed, in
the case of an amendment, by the Company and the Holder or, in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
19. HEADINGS. The headings and captions in this Warrant are included
for convenience of reference only and shall be ignored in the construction and
interpretation thereof.
20. NO RIGHTS AS SHAREHOLDER. This Warrant shall not entitle the
Holder to any rights as a stockholder of the Company, either at law or in
equity. The rights of the Holder are limited to those expressed in this Warrant
and are not enforceable against the Company except to the extent set forth
herein.
21. SURVIVAL. The provisions of, and representations, warranties,
agreements and obligations of the Company and the Holder under this Warrant
shall survive the expiration of this Warrant, by exercise, transfer or by its
terms.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this Warrant on this [____] day of [________________].
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XXXXXXXXXX.XXX CORPORATION,
a Delaware corporation
By:
Its:
Address: Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
ATTEST:
[__________________________]
By:
Its:
Address: [__________________]
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FORM OF EXERCISE AGREEMENT
To: XxxXxxxxxx.xxx Corporation
Telephone No.
Facsimile No.
Attention:
The undersigned hereby irrevocably exercises the right to purchase
_________________ shares of the Common Stock of XxxXxxxxxx.xxx Corporation, a
corporation organized under the laws of the State of Delaware (the "COMPANY"),
and either
______ tenders herewith payment of the Exercise Price in full, in the amount of
$____________, in cash, by certified or official bank check or by wire
transfer for the account of the Company; or
______ elects pursuant to Section 1 of the Warrant to convert such Warrant into
Common Stock on a cashless exercise basis.
The undersigned agrees not to offer, sell, transfer or otherwise dispose
of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.
Exercise Date:____________________ ______________________________________
Signature of Holder
______________________________________
Name of Holder (Print)
Address:
______________________________________
______________________________________
______________________________________
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Warrant to purchase __________ Warrant Shares of XxxXxxxxxx.xxx
Corporation, a Delaware corporation (the "COMPANY"), together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
_______________________________ attorney, to transfer the Warrant on the books
of the Company, with full power of substitution in the premises.
DATED:________________________ _______________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
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