NEITHER THIS
SECURITY NOR THE SECURITIES FOR 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 (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 OR
OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE
WARRANT
ADRENALINA
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Warrant Shares:
333,333
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Initial Exercise Date: August 22,
2008
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THIS COMMON STOCK PURCHASE WARRANT (the “
Warrant ”) certifies that, for value received, Enable
Growth Partners, L.P. (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 hereof (the “ Initial Exercise Date ”)
and on or prior to the close of business on the five year
anniversary of the Initial Exercise Date (the “
Termination Date ”) but not thereafter, to subscribe
for and purchase from Adrenalina, a Nevada corporation (the “
Company ”), up to 333,333 shares (the “
Warrant Shares ”) of Common Stock. The purchase price
of one share of Common Stock under this Warrant shall be equal to
the Exercise Price, as defined in Section 2(b).
Section 1 . Definitions . Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain
Securities Purchase Agreement (the “ Purchase
Agreement ”), dated August 22, 2008, among the Company
and the purchasers signatory thereto.
a) Exercise of Warrant . Exercise of the purchase rights represented
by this Warrant may be made, in whole or in part, at any time or
times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office
or agency of the Company as it may designate by notice in writing
to the registered Holder at the address of the Holder appearing on
the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within 3 Trading Days
of the date said Notice of Exercise is delivered to the Company,
the Company shall have received payment of the aggregate Exercise
Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank.
Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which
case, the Holder shall surrender this Warrant to the Company for
cancellation within 3 Trading Days of the date the final Notice of
Exercise is delivered to the Company. 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. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice. In
the event of any dispute or discrepancy, the records of the Holder
shall be controlling and determinative in the absence of manifest
error. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of
this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount
stated on the face hereof.
b) Exercise Price . The exercise price per share of the Common
Stock under this Warrant shall be $2.00, subject
to adjustment hereunder (the “ Exercise Price
”).
c) Cashless Exercise . If at any time after the earlier of (i) the
one year anniversary of the date of the Purchase Agreement and (ii)
the completion of the then-applicable holding period required by
Rule 144, or any successor provision then in effect, there is no
effective Registration Statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the
Holder, then this Warrant may also be exercised at such time by
means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B)
(X)] by (A), where:
(A) = the VWAP on the Trading Day immediately
preceding the date of such election;
(B) = the Exercise Price of this Warrant, as
adjusted; and
(X) = the number of Warrant Shares issuable upon
exercise of this Warrant in accordance with the terms of this
Warrant by means of a cash exercise rather than a cashless
exercise.
Notwithstanding anything herein to the contrary,
on the Termination Date, this Warrant shall be automatically
exercised via cashless exercise pursuant to this Section
2(c).
d) Exercise Limitations . The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other person
or entity acting as a group together with the Holder or any of the
Holder’s Affiliates), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For
purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company
(including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any
of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(d), beneficial ownership
shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not
representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this
Section 2(d) applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and
the submission of a Notice of Exercise shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is
exercisable, in each case subject to the Beneficial Ownership
Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. For purposes of
this Section 2(d), in determining the number of outstanding shares
of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most
recent periodic or annual report, as the case may be, (B) a more
recent public announcement by the Company or (C) any other notice
by the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates since the
date as of which such number of outstanding shares of Common Stock
was reported. The “ Beneficial Ownership Limitation
” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The
Holder, upon not less than 61 days’ prior notice to the
Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(d), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the
number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon
exercise of this Warrant held by the Holder and the provisions of
this Section 2(d) shall continue to apply. Any such increase or
decrease will not be effective until the 61 st day after
such notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(d) to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
e) Mechanics of Exercise .
i. Delivery of Certificates Upon
Exercise . Certificates
for shares purchased hereunder shall be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s
prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission (“ DWAC ”) system if
the Company is then a participant in such system and either (A)
there is an effective Registration Statement permitting the resale
of the Warrant Shares by the Holder or (B) the shares are eligible
for resale without volume or manner-of-sale limitations pursuant to
Rule 144, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise
Form, surrender of this Warrant (if required) and payment of the
aggregate Exercise Price as set forth above (the “ Warrant
Share Delivery Date ”). This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by
the Company. The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 2(e)(vi) prior to the
issuance of such shares, have been paid. If the Company fails for
any reason to deliver to the Holder certificates evidencing the
Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading
Day after such Warrant Share Delivery Date until such certificates
are delivered.
ii. Delivery of New Warrants Upon
Exercise . If this
Warrant shall have been exercised in part, the Company shall, at
the request of a Holder and upon surrender of this Warrant
certificate, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii. Rescission Rights . If the Company fails to cause the Transfer
Agent to transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to Section 2(e)(i) by the
Warrant Share Delivery Date, then, the Holder will have the right
to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely
Deliver Certificates Upon Exercise . In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “
Buy-In ”), then the Company shall (A) pay in cash to
the Holder the amount by which (x) the Holder’s total
purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the
exercise at issue times (2) the price at which the sell order
giving rise to such purchase obligation was executed, and (B) at
the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such
exercise was not honored or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the Company
shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall
limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or Scrip
. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of
such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole
share.
vi. Charges, Taxes and Expenses
. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any
issue or transfer tax or other incidental expense in respect of the
issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in
the name of the Holder or in such name or names as may be directed
by the Holder; provided , however , that in the event
certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto.
vii. Closing of Books . The Company will not close its stockholder
books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
f) Call Provision . Subject to the provisions of Section 2(d) and
this Section 2(f), if, after the Effective Date, (i) the VWAP for
20 out of any 30 consecutive Trading Days (the “
Measurement Period ,” which period shall not have
commenced until after the Effective Date) exceeds $4.00 (subject to
adjustment for forward and reverse stock splits, recapitalizations,
stock dividends and the like after the Initial Exercise Date), (ii)
the average daily volume of the Common Stock for such Measurement
Period exceeds 75,000 shares of Common Stock per Trading Day
(subject to adjustment for forward and reverse stock splits,
recapitalizations, stock dividends and the like after the Initial
Exercise Date), (iii) the Holder is not in possession of any
information that constitutes, or might constitute, material
non-public information which was provided by the Company, and (iv)
there is either (A) an effective Registration Statement pursuant to
which the Holder is permitted to utilize the prospectus thereunder
to resell all of the shares issuable pursuant to the Transaction
Documents (and the Company believes, in good faith, that such
effectiveness will continue uninterrupted for the foreseeable
future) or (B) the shares are eligible for resale pursuant to Rule
144 without volume or manner-of-sale restrictions or current public
information requirements as determined by the counsel to the
Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Transfer Agent and the Holder, then
the Company may, within 1 Trading Day of the end of such
Measurement Period, call for cancellation of all or any portion of
this Warrant for which a Notice of Exercise has not yet been
delivered (such right, a “ Call ”) for
consideration equal to $.001 per Share. To exercise this right, the
Company must deliver to the Holder an irrevocable written notice (a
“ Call Notice ”), indicating therein the portion
of unexercised portion of this Warrant to which such notice
applies. If the conditions set forth below for such Call are
satisfied from the period from the date of the Call Notice through
and including the Call Date (as defined below), then any portion of
this Warrant subject to such Call Notice for which a Notice of
Exercise shall not have been received by the Call Date will be
cancelled at 6:30 p.m. (New York City time) on the tenth Trading
Day after the date the Call Notice is received by the Holder (such
date and time, the “ Call Date ”). Any
unexercised portion of this Warrant to which the Call Notice does
not pertain will be unaffected by such Call Notice. In furtherance
thereof, the Company covenants and agrees that it will honor all
Notices of Exercise with respect to Warrant Shares subject to a
Call Notice that are tendered through 6:30 p.m. (New York City
time) on the Call Date. The parties agree that any Notice of
Exercise delivered following a Call Notice which ca
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