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COMMON STOCK PURCHASE

Warrant Agreement

COMMON STOCK PURCHASE | Document Parties: BREKFORD INTERNATIONAL CORP. You are currently viewing:
This Warrant Agreement involves

BREKFORD INTERNATIONAL CORP.

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Title: COMMON STOCK PURCHASE
Governing Law: Delaware     Date: 3/23/2009

COMMON STOCK PURCHASE, Parties: brekford international corp.
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EXHIBIT 4.10

NEITHER THIS SECURITY NOR THE SECURITY INTO WHICH THIS SECURITY IS EXERCISABLE 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, 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.

 

#W-2008-_____

 

__________Warrants

 

 

Void after 5:00 p.m., Eastern Standard Time on May 14, 2013

 

COMMON STOCK PURCHASE

 

WARRANT

 

OF

 

BREKFORD INTERNATIONAL CORP.

 

Brekford International Corp., a Delaware corporation (the “ Company ”), hereby certifies that, for value received, Birch Systems, LLC, a Georgia limited liability corporation (“ Birch ” or “ Warrant Holder ” and together with other holders hereunder as a result of permitted transfers hereof, collectively, “ Holders ”) is the owner of the number of common stock purchase warrants (“ Warrants ”) specified above, each of which entitles the Holder to purchase, at any time during the period commencing on the Commencement Date (as defined herein) and ending on the Expiration Date (as defined herein), one fully paid and non-assessable share of common stock, par value $0.0001 per share (“ Common Stock ”), of the Company at a purchase price equal to the Exercise Price of $____ per share in lawful money of the United States of America in cash, subject to adjustment as hereinafter provided.  

1.

WARRANT; EXERCISE PRICE .

1.1

Each Warrant shall entitle the Warrant Holder the right to purchase one share of Common Stock of the Company (individually, a “ Warrant Share ” severally, the “ Warrant Shares ”).

 


1.2

The purchase price payable upon exercise of each Warrant (“ Exercise Price ”) shall be $_____ per Warrant Share. The Exercise Price and number of Warrant Shares purchasable pursuant to each Warrant are subject to adjustment as provided in Section 8.

2.

EXERCISE OF  WARRANT; EXPIRATION DATE .

2.1

This Warrant is exercisable at any time and from time to time commencing the date hereof (“ Commencement Date ”) and ending at 5:00 p.m., Eastern Standard Time on May 14, 2013, or if such date shall in the State of Delaware be a holiday or a day on which banks are authorized to close, then 5:00 p.m., Eastern Standard Time the next following day which in the State of Delaware is not a holiday or a day on which banks are authorized to close (the “ Expiration Date ”), in whole or from time to time in part, at the option of the Warrant Holder, upon surrender of this Warrant to the Company together with a duly completed Notice of Exercise in the form attached hereto and payment of an amount equal to the then applicable Exercise Price multiplied by the number of Warrant Shares then being purchased upon such exercise.  

2.2

Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 2.1.  At such time, the person or persons in whose name or names any certificates for Warrant Shares shall be issuable upon such exercise as provided in subsection 2.3 below shall be deemed to have become the holder or holders of record of the Warrant Shares represented by such certificates.

2.3

Within three business days after the exercise of the purchase right represented by this Warrant, the Company at its expense will use its best efforts to cause to be issued in the name of, and delivered to, the Warrant Holder, or, subject to the terms and conditions hereof, to such other individual or entity as such Warrant Holder (upon payment by such Warrant Holder of any applicable transfer taxes) may direct:

(a)

a certificate or certificates for the number of full Warrant Shares to which such Warrant Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which such Warrant Holder would otherwise be entitled, cash in an amount determined pursuant to Section 2.4 hereof, and

(b)

in case such exercise is in part only, a new Warrant or Warrants (dated the date hereof) of like tenor, stating on the face or faces thereof the number of shares currently stated on the face of this Warrant minus the number of such shares purchased by the Warrant Holder upon such exercise as provided in subsection 2.1 ( in each case prior to any adjustments made thereto pursuant to the provisions of this Warrant).

2.4

The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment thereof in cash on the basis of the “last sale price” (as defined below) of the Company's Common Stock on the trading day immediately prior to the date of exercise.  For purposes of Sections 2.1 and 2.4, “last sale price” shall mean (i) if the Common Stock is listed on an Exchange or quoted on the Nasdaq markets or NASD OTC

 


Bulletin Board (or successor such as the Bulletin Board Exchange), the last sale price of the Common Stock in the principal trading market for the Common Stock as reported by the Exchange, Nasdaq or the NASD, as the case may be; (ii) if the Common Stock is not listed on an Exchange or quoted on the Nasdaq markets, or the NASD OTC Bulletin Board (or successor such as the Bulletin Board Exchange), but is traded in the over-the-counter market, the closing bid price for the Common Stock on the last trading day preceding the date in question for which such quotations are reported by the Pink OTC Markets Inc. or similar publisher of such quotations; and (iii) if the fair market value of the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such price as the Board of Directors of the Company shall determine, in good faith, in the Board’s sole discretion.  

3.

REGISTRATION AND TRANSFER ON COMPANY BOOKS .

3.1

The Company (or an agent of the Company) will maintain a register containing the names and addresses of the Warrant Holders.  Any Warrant Holder may change its, his or her address as shown on the warrant register by written notice to the Company requesting such change.

3.2

The Company shall register upon its books any transfer of a Warrant upon surrender of same as provided in Section 5.  

4.

RESERVATION OF SHARES .  The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, such Warrant Shares and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant.  As long as the Warrant shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Warrant Shares issuable upon exercise of the Warrants to be listed (subject to official notice of issuance) on each Exchange (or, if applicable on Nasdaq, NASD OTC Bulletin Board or Pink OTC Markets Inc. or any successor electronic quotation service and trading market) on which the Common Stock is then listed and/or quoted, if any.

5.

EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OR MUTILATION OF  WARRANTS .  This Warrant is exchangeable, without expense, at the option of the Warrant Holder, upon presentation and surrender hereof to the Company for other warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder.  Subject to the terms of Section 6, upon surrender of this Warrant to the Company at its principal office or at the office of its transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall be promptly canceled.  This Warrant may be divided or combined with other warrants which carry the same rights upon presentation hereof at the principal office of the Company together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Warrant Holder hereof.  The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or exchanged.  Upon receipt by the Company of reasonable evidence of the ownership of and the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the

 


Company, or, in the case of mutilation, upon surrender and cancellation of the mutilated Warrant, the Company shall execute and deliver in lieu thereof a new Warrant of like tenor and date representing an equal number of Warrants.

6.

LIMITATION ON EXERCISE AND SALES .  

(a)

Each holder of this Warrant acknowledges that this Warrant and the Warrant Shares have not been registered under the Securities Act, as of the date of issuance hereof.  This Warrant only may be transferred to a transferee who certifies in writing to the Warrant Holder and to the Company that such transferee is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated by the Commission under the Securities Act. The Company shall be under no obligation to issue the shares covered by such exercise unless and until the Warrant Holder shall have executed the form of exercise annexed hereto that states that at the time of such exercise that it is then an “accredited investor” within the meaning of Rule 501 of Regulation D, is acquiring such shares for its own account, and will not transfer the Warrant Shares unless pursuant to an effective and current registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and any other applicable restrictions, in which event the Warrant Holder shall be bound by the provisions of a legend or legends to such effect that shall be endorsed upon the certificate(s) representing the Warrant Shares issued pursuant to such exercise.  In such event, the Warrant Shares issued upon exercise hereof shall be imprinted with a legend in substantially the form provided in Section 7(b).

(b)

Warrant Holder represents and warrants that it is acquiring this Warrant for its own account, for purposes of investment, and not with a view to, or for sale in connection with, any distribution thereof within the meaning of the Securities Act and the rules and regulations promulgated thereunder.  Warrant Holder represents, warrants and agrees that it will not sell, exercise, transfer or otherwise dispose of this Warrant (or any interest therein) or any of the Common Stock purchasable upon exercise hereof, except pursuant to (i) an effective registration statement under the Securities Act and applicable state securities laws or (ii) an opinion of counsel, satisfactory to Company, that an exemption from registration under the Securities Act and such laws is available.  Warrant Holder further acknowledges and agrees that Company is not required, legally or contractually, so to register or qualify the Warrant or such Common Stock or to take any action to make such an exemption available.  Warrant Holder understands that Company will be relying upon the truth and accuracy of the representations and warranties contained in this Section 6 in issuing this Warrant and such Common Stock without first registering the issuance thereof under the Securities Act or qualifying or registering the issuance thereof under any state securities laws that may be applicable.

(c)

Warrant Holder acknowledges that (i) there is not now, and there will not be in the future, any public market for the Warrant, (ii) although there currently is a public trading market for the Common Stock, there can be no assurance that any such market will be sustained, and (iii) there can be no assurance that Warrant Holder will be able to liquidate its investment in Company.  Warrant Holder represents and warrants that it is familiar with and understands the terms and conditions of Rule 144 promulgated under the Securities Act.

 

 


(d)

Warrant Holder represents and warrants to Company that (i) it has such knowledge and experience in financial and business matters as is necessary to enable it to evaluate the merits and risks of any investments in Company and is not utilizing any other person to be a purchaser representative in connection with evaluation of such merits and risks; and (ii) it has no need for liquidity in an investment in Company and is able to bear the risk of that investment for an indefinite period and to afford a complete loss thereof.

(e)

Warrant Holder represents and warrants that it has had access to, and has been furnished with, all of the information it has requested from Company and has had an opportunity to review the books and records of Company and to discuss with management and members of the board of directors of Company the business and financial affairs of Company.

(f)

Warrant Holder agrees that at the


 
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