NEITHER THIS
SECURITY NOR THE SECURITIES 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 (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
To Purchase 95,506,276 Shares of
Common Stock of
OMNIRELIANT HOLDINGS,
INC.
THIS COMMON
STOCK PURCHASE WARRANT (the “ Warrant ”)
certifies that, for value received, VICIS CAPITAL MASTER FUND (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 July 20, 2009 (the
“ Initial Exercise Date ”) and on or prior to
the close of business on the tenth (10 th )
anniversary of the Initial Exercise Date (the “
Termination Date ”) but not thereafter, to subscribe
for and purchase from OMNIRELIANT HOLDINGS, INC., a Nevada
corporation (the “ Company ”), up to 95,506,276
shares (the “ Warrant Shares ”) of Common Stock,
par value $.00001 per share, of the Company (the “ Common
Stock ”).
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 July 20, 2009, among the Company and the Holder.
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 such Holder appearing on the books of the Company); and,
within three (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 three
(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 within two (2) Trading Days
of receipt of such notice. 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 $0.25, subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Mechanics of Exercise .
i.
Authorization of Warrant Shares . The Company
covenants that all Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant will,
upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company
in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).
ii.
Delivery of Certificates Upon Exercise
. Certificates for Warrant Shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s prime broker
with the Depository Trust Company through its Deposit/Withdrawal at
Custodian (“ DWAC ”) system if the Company is a
participant in such system, and otherwise by delivery to the
address specified by the Holder in the Notice of Exercise, within
five (5) 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(d)(vii) prior
to the issuance of such shares, have been paid.
iii.
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.
iv.
Rescission Rights . If the Company fails to cause
its transfer agent to transmit to the Holder a certificate or
certificates representing the Warrant Shares pursuant to Section
2(d)(ii) above by the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise.
v.
Obligation Absolute; Damages . The
Corporation’s obligations to issue and deliver the
certificates representing the Warrant Shares upon exercise of the
Warrant in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the
Corporation or any violation or alleged violation of law by the
Holder or any other person, and irrespective of any other
circumstance which might otherwise limit such obligation of the
Corporation to the Holder in connection with the issuance of such
certificates representing the Warrant Shares. The
Corporation shall issue the certificates representing the Warrant
Shares or, if applicable, cash, upon a properly noticed exercise.
If the Corporation fails to deliver to the Holder such certificate
or certificates pursuant to Section 2(d) within five (5)
Trading Days of the Warrant Share Delivery Date applicable to such
exercise, the Corporation shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of VWAP of
the Common Stock, $10 per Trading Day (increasing to $20 per
Trading Day after ten (10) Trading Days after the Warrant Share
Delivery Date) for each Trading Day after the Warrant Share
Delivery Date until such certificates are delivered.
vi.
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.
vii.
Charges, Taxes and Expenses . Issuance of
certificates for Warrant Shares shall be made without charge to the
Holder or other incidental expense in respect of the issuance of
such certificate, 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; the assignment shall be subject
to Section 4 below, and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
viii.
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.
d)
Cashless Exercise if no Registration Statement
. If at any time after six months from the date of
issuance of this Warrant 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:
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(A) = the VWAP
on the Trading Day immediately preceding the date of such
election;
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(B) = the
Exercise Price of this Warrant, as adjusted; and
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(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.
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Section 3 . Certain Adjustments .
a)
Stock Dividends and Splits . If the Company, at
any time while this Warrant is outstanding: (i) pays a stock
dividend or otherwise makes 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), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares,
or (iv) issues by reclassification of shares of the Common Stock
any shares of capital stock of the Company, then in each case the
Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
b)
Subsequent Equity Sales . If the Company or any Subsidiary
thereof, as applicable, at any time while this Warrant is
outstanding, sells, grants or otherwise issues (or announces any
sale, grant or other issuance related to the foregoing) any Common
Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock, at an effective price per share less than
the then Exercise Price (such lower price, the “ Base
Share Price ” and such issuances collectively, a “
Dilutive Issuance ”) (if the holder of the Common
Stock or Common Stock Equivalents so issued shall at any time,
whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or
otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive
shares of Common Stock at an effective price per share which is
less than the Exercise Price, such issuance shall be deemed to have
occurred for less than the Exercise Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and
only reduced to equal the Base Share Price. Such
adjustment to the Exercise Price shall be made whenever such Common
Stock or Common Stock Equivalents are issued. As a point of
clarification, upon a Dilutive Issuance, the number of Warrant
Shares issuable hereunder shall not be
increased. Notwithstanding the foregoing, no adjustments
shall be made, paid or issued under this Section 3(b) in
respect of an Exempt Issuance or issuances subject to Section
3(a) above. The Company shall notify the Holder in
writing, no later than the third (3 rd )
Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this section, indicating therein the
applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice the
“ Dilutive Issuance Notice ”). For
purposes of clarification, whether or not the Company provides a
Dilutive Issuance Notice p
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