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EXHIBIT 4.3
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 IDO SECURITY INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.
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Right to Purchase
________ shares of Common Stock of IDO |
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Security Inc.
(subject to adjustment as provided herein) |
FORM OF CLASS A, CLASS B AND FINDER’S
COMMON STOCK PURCHASE WARRANT
| No. 2007-001 |
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Issue
Date:_________________ |
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IDO
SECURITY INC., a corporation organized under the laws of the
State of Nevada (the “Company”), hereby certifies
that, for value received, __________________________,
__________________________________________________________, or
its assigns (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 fifth anniversary of the Issue Date: [ Actual Effective Date (as
defined in Section 11.1(iv) of the Subscription
Agreemen t) for Class A Warrants,
and Issue Date for Class B W arrants] (the
“Expiration Date”), ________ fully paid and
nonassessable shares of Common Stock at a per share purchase
price of $______ [ $ 2. 0 0 for Class A
Warrants
,
$
3.00
for Class B
Warrants , $ 1. 0 0 for Finder
’
s
Warrants ]. The
aforedescribed purchase price per share, as adjusted from time
to time as herein provided, is referred to herein as the
“Purchase Price.” The number and
character of such shares of Common Stock and the Purchase
Price are subject to adjustment as provided
herein. The Company may reduce the Purchase Price
without the consent of the Holder. Capitalized
terms used and not otherwise defined herein shall have the
meanings set forth in that certain Subscription Agreement (the
“ Subscription
Agreement ”), dated _______________, entered into
by the Company and Holders.
As
used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The
term “Company” shall mean IDO Security Inc.
and any corporation which shall succeed or assume the
obligations of IDO Security Inc. hereunder.
(b) The
term “Common Stock” includes (a) the
Company’s common stock, $0.001 par value per share, as
authorized on the date of the Subscription Agreement, and (b)
any Other Securities into which or for which any of the
securities described in (a) 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 the
Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of the 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 5 or otherwise.
(d) The
term “Warrant Shares” shall mean the Common Stock
issuable upon exercise of this Warrant.
1.
Exercise
o f Warrant
.
1.1.
Number of Shares
Issuable upon Exercise . From and after the
Issue Date through and including the Expiration Date, the
Holder hereof 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, 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 an original or
facsimile copy of the form of subscription attached as
Exhibit A hereto (the “Subscription Form”)
duly executed by such Holder and delivery within two 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
Purchase Price then in effect. The original Warrant
is not required to be surrendered to the Company until it has
been fully exercised.
1.3.
Partial
Exercise . This Warrant may be exercised in
part (but not for a fractional share) by surrender of this
Warrant in the manner and at the place provided in
subsection 1.2 except that 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 Purchase Price then in effect. On any
such partial exercise provided the Holder has surrendered the
original Warrant, the Company, at its expense, will forthwith
issue and deliver to or upon the order of 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, the whole number of shares of
Common Stock for which such Warrant may still be exercised for
the balance of.
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 National Association of Securities Dealers,
Inc. Automated Quotation (“NASDAQ”), National
Market System, the NASDAQ Capital Market or the American Stock
Exchange, Inc., 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 National Market System, the NASDAQ Capital
Market or the American Stock Exchange, Inc., 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, 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 the Warrant, upon the request of the Holder hereof
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 qualified bank or
trust company shall have been appointed as trustee for the
Holder of the Warrants pursuant to Subsection 3.2, such
bank or trust company shall 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. As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not
as a penalty) to the Holder for late issuance of Warrant
Shares upon exercise of this Warrant the amount of $100 per
business day after the Warrant Share Delivery Date for each
$10,000 of Purchase Price of Warrant Shares for which this
Warrant is exercised which are not timely
delivered. The Company shall pay any payments
incurred under this Section in immediately available funds
upon demand. Furthermore, in addition to any other
remedies which may be available to the Holder, in the event
that the Company fails for any reason to effect delivery of
the Warrant Shares by the Warrant Share Delivery Date,
the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company
whereupon the Company and the Holder shall each be restored to
their respective positions immediately prior to the exercise
of the relevant portion of this Warrant, except that the
liquidated damages described above shall be payable through
the date notice of revocation or rescission is given to the
Company.
2.
Cashless
Exercise .
(a) Commencing
six months after the Closing Date (as defined in the
Subscription Agreement), payment upon exercise may be
made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the
order of the Company equal to the applicable aggregate
Purchase Price, (ii) by cashless exercise in accordance with
Section (b) below or (iii) by a combination of
any of the foregoing methods, for the number of shares 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) If
the Fair Market Value of one share of Common Stock is greater
than the Purchase 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
determined below) of this Warrant (or the portion thereof
being cancelled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed
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