FORM OF COMMON STOCK PURCHASE WARRANTWarrant Agreement |
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EXHIBIT 4.1
COMMON STOCK PURCHASE WARRANT
MEDIS TECHNOLOGIES LTD.
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 December 19, 2008 (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 Medis Technologies Ltd., a Delaware 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). Notwithstanding anything herein to the
contrary, in the event that Stockholder Approval has not been
obtained and deemed effective prior to the Initial Exercise
Date, this Warrant shall only be exercisable into ________
1 Warrants
Shares until such date that Stockholder Approval is obtained
and deemed effective and, as to such portion of this Warrant
not exercisable until such date, the Termination Date shall be
extended for a number of days equal to the number days that
elapse after the Initial Exercise Date until the date that
Stockholder Approval is obtained and deemed
effective.
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 June 19, 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
(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
1
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 2
Business 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 $5.50 , subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Cashless Exercise . If at any time during the
term of this Warrant there is no effective Registration Statement
registering, or no current prospectus available for, the issuance
of the Warrant Shares by the Company, or after December __, 2008 if
by such date Stockholder Approval has not been obtained and deemed
effective until such date that Stockholder Approval is obtained and
deemed effective, 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:
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)
Holder’s Restrictions . 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
2
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
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
quarterly report on Form 10-Q or annual report on Form 10-K, 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
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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.
Nothing contained in this Section 2(d) shall be inferred as
obviating any filing requirements that the Holder may have under
the Securities Exchange Act of 1934, as amended. Any such filing
requirements will be the obligation and responsibility of the
Holder.
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 for the
issuance of the Warrant Shares by the Company or (B) this Warrant
is being exercised via cashless exercise, 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.
ii.
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 7 th
Trading Day following the Warrant Share Delivery Date, then the
Holder will have the right to rescind such exercise.
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.
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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 7 th
Trading Day following 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 (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 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
5
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: (i) 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), (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 Common Stock any shares of capital
stock of the Compa
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