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Exhibit 4.4
COMMON STOCK PURCHASE WARRANT
(William R. Falcon)
VOID AFTER 5:00 P.M., EASTERN STANDARD
TIME ON APRIL 1, 2015
THE SECURITIES REPRESENTED BY THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED
OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
SECURITIES LAWS OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO
AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS.
Right
to Purchase up to 4,000,000 Shares of
No:
W-2
Common Stock, no par value
Date: April 1, 2005
VILLAGEEDOCS
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, WILLIAM R. FALCON, or
his registered assigns (the " Holder "), is entitled to
purchase from VILLAGEEDOCS, a California corporation (the "
Company "), at any time or from time to time during the
period specified in Section 2 hereof, 4,000,000 (subject to the
Vesting Schedule and increase as described below) fully paid and
nonassessable shares of the Company's Common Stock, no par value
(the " Common Stock "), at an exercise price of $.15 per
share (the " Exercise Price "). This Warrant is one of two
Warrants being issued pursuant to that certain Stock Purchase
Agreement dated April 1, 2005 among the Company, VillageEDOCS
Acquisition Corp., Phoenix Forms, Inc., Alexander Riess and William
R. Falcon (the " Securities Purchase Agreement ").
The number of shares of Common Stock
purchasable hereunder (the " Warrant Shares ") and the
Exercise Price are subject to adjustment as provided in Section 4
hereof.
This Warrant is subject to the
following terms, provisions, and conditions:
1.
Mechanics of Exercise . This Warrant may be exercised
as follows:
(a)
Vesting Schedule. Warrants shall vest according to
the following schedule (the " Vesting Schedule
"):
(i) 800,000 Warrants on
June 30, 2005 , so long
as no event has occurred since the Closing Date (as defined in that
certain Stock Purchase Agreement dated as of April 1, 2005) that
has a Material Adverse Effect (also as defined in said Stock
Purchase Agreement) on the business or property of Phoenix Forms,
Inc.;
(ii) 1,200,000 Warrants on
April 1, 2006;
(iii) 800,0000 Warrants on April 1,
2007; and
(iv) 1,200.000 Warrants on April1,
2008.
Notwithstanding the foregoing Vesting Schedule, all Warrants will
immediately vest upon the death or disability of William R. Falcon,
but only if he is the Holder at the time of death or
disability. For purposes of this Warrant, Falcon shall
be deemed to have a "disability" if he meets the definitions set
forth under Section 22(e)(3) of the Internal Revenue
Code.
(b)
Manner of Exercise . Subject to the Vesting Schedule,
this Warrant may be exercised by the Holder, in whole or in part,
by the surrender of this Warrant (or evidence of loss, theft,
destruction or mutilation thereof in accordance with Section 7(c)
hereof), together with a completed exercise agreement in the Form
of Exercise Agreement attached hereto as Exhibit 1 (the "
Exercise Agreement "), to the Company at the Company's
principal executive offices (or such other office or agency of the
Company as it may designate by notice to the Holder), and upon (i)
payment to the Company in cash, by certified or official bank check
or by wire transfer for the account of the Company, of the Exercise
Price for the Warrant Shares specified in the Exercise Agreement or
(ii) if the Holder elects to effect a Cashless Exercise (as defined
in Section 11(c) below), delivery to the Company of a written
notice of an election to effect a Cashless Exercise for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so
purchased shall be deemed to be issued to the Holder or Holder's
designees, as the record owner of such shares, as of the date on
which this Warrant shall have been surrendered, the completed
Exercise Agreement shall have been delivered, and payment (or
notice of an election to effect a Cashless Exercise) shall have
been made for such shares as set forth above.
(c)
Issuance of Certificates . Certificates for the
Warrant Shares so purchased, representing the aggregate number of
shares specified in the Exercise Agreement, shall be delivered to
the Holder within a reasonable time, not exceeding fifteen (15)
business days, after this Warrant shall have been so exercised (the
" Delivery Period "). The certificates so delivered
shall be in such denominations as may be requested by the Holder
and shall be registered in the name of Holder or such other name as
shall be designated by such Holder.
(d)
Fractional Shares . No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but the
Company shall pay a cash adjustment in respect of any fractional
share which would otherwise be issuable in an amount equal to the
same fraction of the fair market value of a share of Common Stock
(as determined by the Board of Directors in good faith); provided
that in the event that sufficient funds are not legally available
for the payment of such cash adjustment any fractional shares of
Common Stock shall be rounded up to the next whole
number.
2.
Period of Exercise . This Warrant is exercisable at
any time or from time to time on or after the date hereof and
before 5:00 P.M., Eastern Standard Time on April1, 2015 (the "
Exercise Period ").
3.
Certain Agreements of the Company . The Company hereby
covenants and agrees as follows:
(a)
Shares to be Fully Paid . All Warrant Shares will,
upon issuance in accordance with the terms of this Warrant, be
validly issued, fully paid, and non-assessable and free from all
taxes, liens, claims and encumbrances.
(b)
Reservation of Shares . During the Exercise Period,
the Company shall at all times have authorized, and reserved for
the purpose of issuance upon exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of
this Warrant.
(c)
Certain Actions Prohibited . The Company will not, by
amendment of its charter or through any reorganization, transfer of
assets, consolidation, merger, 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 by it hereunder, but will 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 actions as may reasonably be
requested by the Holder of this Warrant in order to protect the
exercise privilege of the Holder of this Warrant, consistent with
the tenor and purpose of this Warrant. Without limiting the
generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect,
and (ii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.
4.
Adjustments .
(a)
Subdivision or Combination of Common Stock . If the
Company, at any time after the initial issuance of this Warrant,
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of Common
Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced. If the Company, at any time after the initial
issuance of this Warrant, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise)
its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the
Exercise Price in effect immediately prior to such combination will
be proportionately increased.
(b)
Adjustment in Number of Shares . Upon each adjustment
of the Exercise Price pursuant to the provisions of this Section 4,
the number of shares of Common Stock issuable upon exercise of this
Warrant shall be adjusted by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by
the number of shares of Common Stock issuable upon exercise of this
Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
(c)
Major Transactions . If the Company shall consolidate
or merge with any other corporation or entity or there shall occur
any share exchange pursuant to which all of the outstanding shares
of Common Stock are converted into other securities or property or
any reclassification or change of the outstanding shares of Common
Stock or the Company shall sell all or substantially all of its
assets (each of the foregoing being a " Major Transaction
"), then the holder of this Warrant may, at its option, either (a)
in the event that the Common Stock remains outstanding and
continues to be held immediately following the transactions by
those persons holding Common Stock immediately prior to such
transactions, or holders of Common Stock receive any substantially
similar equity interest, retain this Warrant and this Warrant shall
continue to apply to such Common Stock or shall apply, as nearly as
practicable, to such other equity interest, as the case may be
(with such equitable adjustments to the Exercise Price and number
of shares issuable as may be appropriate), or (b) regardless of
whether (a) applies, receive consideration, in exchange for this
Warrant, the number of shares of stock or securities or property of
the Company, or of the entity resulting from such Major Transaction
(the " Major Transaction Consideration "), to which a holder
of the number of shares of Common Stock delivered upon the exercise
of this Warrant (pursuant to the cashless exercise feature hereof)
would have been entitled upon such Major Transaction had such
holder so exercised this Warrant on the trading date immediately
preceding the public announcement of the transaction resulting in
such Major Transaction and had such Common Stock been issued
a
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