EXHIBIT 10.1
THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO BIGSTRING
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED
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Right to
Purchase 560,000 shares of Common Stock of BigString
Corporation (subject to adjustment as provided herein)
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COMMON STOCK PURCHASE
WARRANT
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No. 0001
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Issue Date: August 25,
2008
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BIGSTRING CORPORATION, a corporation organized
under the laws of the State of Delaware (the
“Company”), hereby certifies that, for value received,
Dwight Lane Capital, LLC, a limited liability company with an
address of c/o TMRIB, LLC, 183 Madison Avenue, Suite #505, New
York, NY 10016 (the “Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company at any time
after the Issue Date until 5:00 p.m., E.S.T on the tenth (10
th ) anniversary of the Issue Date (the
“Expiration Date”), up to Five Hundred and Sixty
Thousand (560,000) fully paid and nonassessable shares of Common
Stock (as defined below) at a per share exercise price of $0.08,
subject to adjustment from time to time as herein provided (the
“Exercise Price”). The Company in its
discretion may reduce the Exercise Price without the consent of the
Holder.
As used herein, the following terms have, unless
the context otherwise requires, the following respective
meanings:
(a) The
term “Company” shall include BigString Corporation and
any corporation which shall succeed or assume the obligations of
BigString Corporation hereunder.
(b) The
term “Common Stock” includes (i) the Company's
Common Stock, $0.0001 par value per share, and (ii) any other
securities into which or for which any of the securities described
in (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.
(c) The
term “Other Securities” refers to any stock (other than
Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the holder of this Warrant at
any time shall be entitled to receive, or shall have received, on
the exercise of this Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
(d) The
term “Warrant Shares” shall mean the Common Stock
issuable upon exercise of this Warrant.
1.
Exercise of Warrant .
1.1.
Number of Shares Issuable upon Exercise . From
and after the Issue Date through and including the Expiration Date,
the Holder shall be entitled to receive, upon exercise of this
Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the
Company, subject to adjustment pursuant to
Section 4.
1.2.
Full Exercise . This Warrant may be exercised in
full by the Holder hereof by delivery of this Warrant with an
original or facsimile copy of the form of subscription, attached
hereto as Exhibit A (the “Subscription
Form”), duly executed by such Holder and delivery within two
(2) days thereafter of payment, in cash, wire transfer or by
certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares
of Common Stock for which this Warrant is then exercisable by the
Exercise Price then in effect.
1.3.
Partial Exercise . This Warrant may be exercised
in part (but not for a fractional share) by the Holder hereof by
delivery of this Warrant with an original or facsimile copy of the
Subscription Form duly executed by such Holder and payment, in
cash, wire transfer or by certified or official bank check payable
to the order of the Company. The amount payable by the
Holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of whole shares of Common Stock
designated by the Holder in the Subscription Form by (b) the
Exercise Price then in effect. On any such partial
exercise, provided that the Holder has surrendered the original
Warrant, the Company, at its expense, will forthwith issue and
deliver to the Holder hereof a new warrant of like tenor, in the
name of the Holder hereof or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may request in compliance
with applicable securities laws, the whole number of shares of
Common Stock for which such warrant may still be
exercised.
1.4.
Fair Market Value . Fair Market Value of a share
of Common Stock as of a particular date (the “Determination
Date”) shall mean:
(a) If
the Company’s Common Stock is traded on an exchange or is
quoted on the NASDAQ Global Market, NASDAQ Global Select Market,
the NASDAQ Capital Market, the New York Stock Exchange or the
American Stock Exchange, then the closing or last sale price,
respectively, reported for the last business day immediately
preceding the Determination Date;
(b) If
the Company’s Common Stock is not traded on an exchange or on
the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ
Capital Market or the American Stock Exchange, but is traded in the
over-the-counter market, then the average of the closing bid and
ask prices reported for the last business day immediately preceding
the Determination Date;
(c) Except
as provided in clause (d) below and Section 3.1, if the
Company’s Common Stock is not publicly traded, then as the
Holder and the Company agree, or in the absence of such an
agreement, by arbitration in accordance with the rules then
standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided;
or
(d) If
the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or
winding up pursuant to the Company’s charter, then all
amounts to be payable per share to holders of the Common Stock
pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all
of the shares of Common Stock then issuable upon exercise of all of
the Warrants are outstanding at the Determination Date.
1.5.
Company Acknowledgment . The Company will, at the
time of the exercise of this Warrant, upon the request of the
Holder acknowledge in writing its continuing obligation to afford
to such Holder any rights to which such Holder shall continue to be
entitled after such exercise in accordance with the provisions of
this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.
1.6.
Trustee for Warrant Holders . In the event that a
bank or trust company shall have been appointed as trustee for the
Holder of this Warrant pursuant to Subsection 3.2, such bank
or trust company shall, to the extent permitted by applicable law,
have all the powers and duties of a warrant agent (as hereinafter
described) and shall accept, in its own name for the account of the
Company or such successor person as may be entitled thereto, all
amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this
Section 1.
1.7
Delivery of Stock Certificates, etc. on Exercise
. The Company agrees that the shares of Common Stock
purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares as
aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within three (3)
business days thereafter (“Warrant Share Delivery
Date”), the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the Holder hereof, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct
in compliance with applicable securities laws, a certificate or
certificates for the number of duly and validly issued, fully paid
and nonassessable shares of Common Stock (or Other Securities) to
which such Holder shall be entitled on such exercise, plus, in lieu
of any fractional share to which such Holder would otherwise be
entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any
other stock or other securities and property (including cash, where
applicable) to which such Holder is entitled upon such exercise
pursuant to Section 1 or otherwise. The Company
understands that a delay in the delivery of the Warrant Shares
after the Warrant Share Delivery Date could result in economic loss
to the Holder.
1.8
Buy-In . In addition to any other rights
available to the Holder, if the Company fails to deliver to a
Holder the Warrant Shares as required pursuant to this Warrant,
within seven (7) business days after the Warrant Share Delivery
Date and the Holder or a broker on the Holder’s behalf,
purchases (in an open market transaction or otherwise) shares of
common stock to deliver in satisfaction of a sale by such
Holder of the Warrant Shares which the Holder was entitled to
receive from the Company (a “Buy-In”), then the Company
shall pay in cash to the Holder (in addition to any remedies
available to or elected by the Holder) the amount by which (A) the
Holder’s total purchase price (including brokerage
commissions, if any) for the shares of common stock so purchased
exceeds (B) the aggregate Exercise Price of the Warrant Shares
required to have been delivered together with interest thereon at a
rate of fifteen percent (15%) per annum, accruing until such amount
and any accrued interest thereon is paid in full (which amount
shall be paid as liquidated damages and not as a
penalty). For example, if a Holder purchases shares of
Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to $10,000 of Exercise Price of Warrant Shares
to have been received upon exercise of this Warrant, the Company
shall be required to pay the Holder $1,000, plus interest. The
Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In.
2.
Cashless Exercise .
(a) Payment
upon exercise may be made at the option of the Holder either
(i) in cash, wire transfer or by certified or official bank
check payable to the order of the Company equal to the applicable
aggregate Exercise Price, (ii) by delivery of Common Stock issuable
upon exercise of the Warrants in accordance with
Section (b) below, or (iii) by a combination of any
of the foregoing methods, for the number of Common Stock specified
in such form (as such exercise number shall be adjusted to reflect
any adjustment in the total number of shares of Common Stock
issuable to the holder per the terms of this Warrant) and the
holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of
Common Stock (or Other Securities) determined as provided
herein.
(b) Subject
to the provisions herein to the contrary, if the Fair Market Value
of one share of Common Stock is greater than the Exercise Price (at
the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, the holder may elect to receive shares equal
to the value (as
