Exhibit 10.48
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL TO THE HOLDER, IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY (IF AN OPINION OF COUNSEL IS REQUESTED BY
THE COMPANY), THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
180 CONNECT, INC.
Warrant To Purchase
Common Stock
Warrant
No.:
Number of Shares of Common Stock: 356,952 1
Date of Issuance: November 9, 2007 (“ Issuance
Date ”)
180 Connect, Inc., a Delaware
corporation (the “ Company ”), hereby certifies
that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, MAGNETAR CAPITAL
MASTER FUND, LTD, the registered holder hereof or its permitted
assigns (the “ Holder ”), is entitled, subject
to the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, upon exercise of
this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement
hereof, the “ Warrant ”), at any time or times
on or after the Issuance Date, but not after 11:59 p.m., New York
time, on the Expiration Date (as defined below), 356,952
2 fully
paid and nonassessable shares of Common Stock (as defined below)
(the “ Warrant Shares ”). Except as otherwise
defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 16.
1.
EXERCISE OF WARRANT .
(a) Mechanics of
Exercise . Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on
any day on or after the Issuance Date, in whole or in part, by
(i) delivery of a written notice, in the form attached hereto
as Exhibit A (the “ Exercise Notice
”), of the Holder’s election to exercise this Warrant
and (ii) (A) payment to the Company of an amount equal to the
then-applicable Exercise Price multiplied by the number of Warrant
Shares as to which this
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Subject to the reduction set forth in Section 1(h). |
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Subject to the reduction set forth in Section 1(h). |
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Warrant
is being exercised (the “ Aggregate Exercise Price
”) in cash or wire transfer of immediately available funds or
(B) by notifying the Company that this Warrant is being
exercised pursuant to a Cashless Exercise (as defined in
Section 1(d)). The Holder shall not be required to deliver the
original of this Warrant in order to effect an exercise hereunder.
Execution and delivery of the Exercise Notice with respect to less
than all of the Warrant Shares shall have the same effect as
cancellation of the original of this Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of
Warrant Shares. Execution and delivery of the Exercise Notice for
all of the Warrant Shares shall have the same effect as
cancellation of the original of this Warrant after delivery of the
Warrant Shares in accordance with the terms hereof. On or before
the first (1 st ) Business Day
following the date on which the Company has received each of the
Exercise Notice and the Aggregate Exercise Price (or notice of a
Cashless Exercise) (the “ Exercise Delivery Documents
”), the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Company’s transfer agent (the “
Transfer Agent ”). On or before the third (3
rd )
Business Day following the date on which the Company has received
all of the Exercise Delivery Documents (the “ Share
Delivery Date ”), the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust
Company (“ DTC ”) Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with DTC through its Deposit
Withdrawal Agent Commission system, or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and deliver to the Holder or, at
Holder’s instruction pursuant to the Exercise Notice,
Holder’s agent or designee, in each case, sent by reputable
overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee (as indicated in
the Exercise Notice), for the number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Delivery Documents, the Holder shall be
deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares, as the case may
be. If this Warrant is submitted in connection with any exercise
pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than
the number of Warrant Shares being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than
three (3) Business Days after any exercise and at its own
expense, issue and deliver to the Holder (or its designee) a new
Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but rather the number of shares
of Common Stock to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares
upon exercise of th is Warrant.
(b) Exercise Price . For
purposes of this Warrant, “ Exercise Price ”
means $0.01, subject to adjustment as provided herein.
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(c) Company’s Failure
to Timely Deliver Securities . If the Company shall fail, for
any reason or for no reason, to issue and deliver to the Holder,
within three (3) Business Days of receipt of the Exercise
Delivery Documents, a certificate for the number of shares of
Common Stock to which the Holder is entitled and register such
shares of Common Stock on the Company’s share register or to
credit the Holder’s balance account with DTC for such number
of shares of Common Stock to which the Holder is entitled upon the
Holder’s exercise of this Warrant (as the case may be), and
if on or after such third (3 rd ) Business Day
the Holder purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the
Holder of shares of Common Stock issuable upon such exercise that
the Holder anticipated receiving from the Company (a “
Buy-In ”), then, in addition to all other remedies
available to the Holder, the Company shall, within three
(3) Business Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder
in an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common
Stock so purchased (the “ Buy-In Price ”), at
which point the Company’s obligation to deliver such
certificate (and to issue such shares of Common Stock) shall
terminate, or (ii) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such shares
of Common Stock or credit the Holder’s balance account with
DTC for the number of shares of Common Stock to which the Holder is
entitled upon such Holder’s exercise hereunder (as the case
may be) and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock times (B) the VWAP of the
Common Stock for the five (5) Trading Day period immediately
preceding the date of the Exercise Notice.
(d) Cashless Exercise .
Notwithstanding anything contained herein to the contrary (other
than Section 1(f) below), the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price,
elect instead to receive upon such exercise the “Net
Number” of shares of Common Stock determined according to the
following formula (a “ Cashless Exercise
”):
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Net Number =
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(A x B) - (A x C) |
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B |
For purposes of
the foregoing formula:
A= the total
number of shares with respect to which this Warrant is then being
exercised.
B= the VWAP of
the Common Stock for the five (5) Trading Day period
immediately preceding the date of the Exercise Notice.
C= the Exercise
Price then in effect for the applicable Warrant Shares at the time
of such exercise.
(e) Disputes . In the
case of a dispute as to the determination of the Exercise Price or
the arithmetic calculation of the number of Warrant Shares to be
issued pursuant to the terms hereof, the Company shall promptly
issue to the Holder the number of Warrant Shares that are not
disputed and resolve such dispute in accordance with
Section 13.
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(f) Limitations on
Exercises . Notwithstanding anything to the contrary contained
in this Warrant, this Warrant shall not be exercisable by the
Holder hereof to the extent (but only to the extent) that, if
exercisable by the Holder, the Holder or any of its affiliates
would beneficially own in excess of 9.90% (the “ Maximum
Percentage ”) of the outstanding shares of Common Stock.
To the extent the above limitation applies, the determination of
whether this Warrant shall be exercisable (vis-a-vis other
convertible, exercisable or exchangeable securities owned by the
Holder) and of which warrants shall be exercisable (as among all
warrants owned by the Holder) shall, subject to such Maximum
Percentage limitation, be determined on the basis of the first
submission to the Company for conversion, exercise or exchange (as
the case may be). No prior inability to exercise this Warrant
pursuant to this paragraph shall have any effect on the
applicability of the provisions of this paragraph with respect to
any subsequent determination of exercisability. For the purposes of
this paragraph, beneficial ownership and all determinations and
calculations (including, without limitation, with respect to
calculations of percentage ownership) shall be determined by the
Holder in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “ 1934 Act ”), and
the rules and regulations promulgated thereunder. The provisions of
this paragraph shall be implemented in a manner otherwise than in
strict conformity with the terms of this paragraph to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Maximum Percentage beneficial
ownership limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such
Maximum Percentage limitation. The limitations contained in this
paragraph shall apply to a successor Holder of this Warrant. The
holders of Common Stock shall be third party beneficiaries of this
paragraph and the Company may not waive this paragraph without the
consent of holders of a majority of its Common Stock. For any
reason at any time, upon the written or oral request of the Holder,
the Company shall within one (1) Business Day confirm orally
and in writing to the Holder the number of shares of Common Stock
then outstanding, including by virtue of any prior conversion or
exercise of convertible or exercisable securities into Common
Stock, including, without limitation, pursuant to this
Warrant.
(g) Insufficient Authorized
Shares . The Company shall at all times keep reserved for
issuance under this Warrant a number of shares of Common Stock as
shall be necessary to satisfy the Company’s obligation to
issue shares of Common Stock hereunder (without regard to any
limitation otherwise contained herein with respect to the number of
shares of Common Stock that may be acquirable upon exercise of this
Warrant). If, notwithstanding the foregoing, and not in limitation
thereof, at any time while this Warrant remains outstanding the
Company does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of this Warrant at least a
number of shares of Common Stock equal to the maximum number of
shares of Common Stock as shall from time to time be necessary to
effect the exercise of all this Warrant (without regard to any
limitations on exercise contained herein) (the “ Required
Reserve Amount ”) (an “ Authorized Share
Failure ”), then the Company shall immediately take all
action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to
reserve the Required Reserve Amount for this entire Warrant.
Without limiting the generality
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of the
foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later
than sixty (60) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall
provide each stockholder with a proxy statement and shall use its
best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its
board of directors to recommend to the stockholders that they
approve such proposal.
(h) Net Exercise;
Withholding . Notwithstanding anything to the contrary
contained in this Warrant, (i) the Company shall withhold, on
behalf of Holder, 90,559 Warrant Shares that are subject to this
Warrant in full satisfaction of all of Holder’s United States
income tax obligations relating to the matters set forth in the
letter agreement, dated as of the date hereof, by and between the
Company and the Holder, (ii) the Company shall, within 1
business day after the date hereof, remit $202,960.83 in cash to
the Internal Revenue Service on Holder’s behalf in full
satisfaction of such income tax obligations and (iii) as a
result of the withholding and payment contemplated by this
paragraph, this Warrant shall only be exercisable by Holder for
266,393 Warrant Shares (subject to the adjustments set forth in
Section 2 hereof).
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES .
The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 2.
(a) Stock Dividends and
Splits . If the Company, at any time on or after the date
hereof, (i) pays a stock dividend on one or more classes of
its then outstanding shares of Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes
of its then outstanding shares of Common Stock into a larger number
of shares or (iii) combines (by combination, reverse stock split or
otherwise) one or more classes of its then outstanding shares of
Common Stock into a smaller number of shares, then in each such
case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of
this paragraph shall become effective immediately after the
effective date of such subdivision or combination. If any event
requiring an adjustment under this paragraph occurs during the
period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately
to reflect such event.
(b) Number of Warrant
Shares . Simultaneously with any adjustment to the Exercise
Price pursuant to paragraph (a) of this Section 2, the
number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable
hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to
such adjustment (without regard to any limitations on exercise
contained herein).
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(c) Other Events . In
the event that the Company (or any direct or indirect subsidiary
thereof) shall take any action to which the provisions hereof are
not strictly applicable, or, if applicable, would not operate to
protect the Holder from dilution or if any event occurs of the type
contemplated by the provisions of this Section 2 but not
expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom
stock rights or other rights with equity features), then the
Company’s Board of Directors shall in good faith determine
and implement an appropriate adjustment in the Exercise Price and
the number of Warrant Shares (if applicable) so as to protect the
rights of the Holder; provided that no such adjustment pursuant to
this Section 2(c) will increase the Exercise Price or decrease the
number of Warrant Shares as otherwise determined pursuant to this
Section 2, provided further that if the Holder does not accept
such adjustments as appropriately protecting its interests
hereunder against such dilution, then the Company’s Board of
Directors and the Holder shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to
make such appropriate adjustments, whose determination shall be
final and binding and whose fees and expenses shall be borne by the
Company.
(d) Calculations . All
calculations under this Section 2 shall be made to the nearest
cent or the nearest 1/100 th of a share, as
applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares
shall be considered an issue or sale of Common Stock.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS . If the Company shall
declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a “ Distribution ”),
at any time after the issuance of this Warrant, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Maximum Percentage) immediately before the
date on which a record is taken for such Distribution, or, if no
such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that to the extent that
the Hold
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