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Exhibit 10.3
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
BLINK LOGIC INC.
Warrant Shares: _______
Initial Exercise Date: August 20, 2008
THIS COMMON STOCK PURCHASE WARRANT (the "
Warrant ") certifies that, for value received, _____________
(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 Blink Logic Inc., a Nevada corporation (the "
Company "), up to _____ 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 20, 2008, among the
Company and the purchasers signatory thereto.
Section 2 .
Exercise .
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 of a duly executed facsimile copy of the Notice of Exercise
Form annexed hereto (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);
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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 $1.96
, subject to adjustment hereunder (the " Exercise Price
").
c)
Cashless Exercise . If at any time after
the completion of the then-applicable holding period required by
Rule 144, or any successor provision then in effect, which would
allow "tacking" of the holding period of this Warrant and the
Warrant Shares pursuant to the SEC Manual of Publicly Available
Telephone Interpretations or other Commission rule or guidance,
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).
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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
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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 61st 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 (" 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
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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 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 (1) 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 (A) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise
at issue times (B) the price at which the sell order giving rise to
such purchase obligation was executed, and (2) 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 (1) 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
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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.
Section 3 .
Certain Adjustments .
a)
Stock Dividends and Splits . If the Company, at
any time while this Warrant is outstanding: (A) pays a stock
dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent
securities payable in shares of Common Stock (which, for avoidance
of doubt, shall not include any shares of Common Stock issued by
the Company upon exercise of this Warrant), (B) subdivides
outstanding shares of Common Stock into a larger number of shares,
(C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D)
issues by reclassification of shares of the Common Stock any shares
of c
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