EXHIBIT 10.4
FORM OF WARRANT
THESE
SECURITIES
HAVE NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF
1933, AS
AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED
FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE
SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE
TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SUPERCLICK, INC.
COMMON STOCK PURCHASE WARRANT
1.
Issuance. In
consideration
of good and valuable
consideration,
the
receipt and sufficiency of which is hereby
acknowledged by
SUPERCLICK, INC.,
a
Washington corporation (the "Company"), CHICAGO VENTURE PARTNERS, L.P., an
Illinois limited partnership, or registered assigns (the "Holder") is
hereby
granted the right to purchase at any time, on or after the Issue Date (as
defined below) until 5:00 P.M., Chicago
time, on the Expiration Date (as defined
below), Seven Hundred Forty Eight Thousand
Five Hundred Two (748,502) fully paid
and nonassessable shares of the Company's
Common Stock,
par value $.0006
per
share (the "Common Stock"), at an exercise price per share (the "Exercise
Price") equal to (i) the average
Closing Price for the
forty-five (45)
Trading
Days ending on the Trading Day immediately
before the Exercise
Date (as defined
below), multiplied by (ii) a percentage
equal to (x) one hundred percent (100%),
less (y) the Pre-Maturity Effective Percentage (provided, however, that such
amount shall be recomputed if the
Pre-Maturity Effective
Percentage is adjusted
as contemplated by this Debenture or the Securities Purchase Agreement);
provided, however, that the Exercise Price shall not
be less than Thirty Cents
($0.30) per share; provided, further, that, with respect to each such
amount
referred to in this definition, as that amount may be subsequently
be adjusted
as provided in this Debenture or in the Securities Purchase Agreement. This
Warrant is being issued pursuant to the terms of that certain Securities
Purchase Agreement, dated as of August 1, 2005 (the
"Agreement"), to which
the
Company and Holder (or Holder's predecessor in interest) are parties.
Capitalized terms not otherwise defined herein
shall have the meanings ascribed
to them in the Agreement. This Warrant was originally issued to the Holder or
the Holder's predecessor in interest on
August 1, 2005 (the "Issue Date").
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2.
Exercise of Warrants.
2.1 General.
(a) This Warrant is
exercisable in whole or in part at any time and
from time to time commencing on the Issue Date. Such exercise shall be
effectuated by submitting to the Company
(either by delivery to
the Company or
by facsimile transmission as provided in
Section 8 hereof) a completed and duly
executed Notice of Exercise (substantially in the form
attached to this Warrant
Certificate) as provided in the Notice of
Exercise (or revised
by notice given
by the Company as contemplated by the Section headed "NOTICES" in the
Agreement). The date such Notice of
Exercise is faxed to
the Company shall
be
the "Exercise Date," provided that, if such exercise represents the full
exercise of the outstanding balance of the Warrant,
the Holder of this
Warrant
tenders this Warrant Certificate to the Company within five (5) Trading Days
thereafter. The Notice of Exercise shall be executed by the Holder of this
Warrant and shall indicate (i) the number of shares then being purchased
pursuant to such exercise and (ii) if
applicable (as
provided below),
whether
the exercise is a cashless exercise.
(b) The provisions of
this Section 2.1(b)
shall only be applicable
if, and only if, on the Exercise Date there is no effective Registration
Statement covering the Warrant Shares
(other than during a Permitted Suspension
Period, as defined in the Registration Rights Agreement). If the Notice of
Exercise form elects a "cashless" exercise,
the Holder shall thereby be entitled
to receive a number of shares of
Common Stock
equal to (w) the
excess of the
Current Market Value (as defined
below) over the total
cash exercise price
of
the portion of the Warrant then being
exercised, divided by (x) the Market Price
of the Common Stock. For the purposes of this
Warrant, the terms (y) "Current
Market Value" shall mean an amount equal to the Market Price of the Common
Stock, multiplied by the number of shares of Common
Stock specified in such
Notice of Exercise Form, and (z) "Market Price of the
Common Stock" shall mean
the Closing Price of the Common Stock on
the Exercise Date.
(c) If the Notice of Exercise form elects a "cash" exercise (or if
the cashless exercise referred to in the
immediately preceding
paragraph (b) is
not available in accordance with its terms), the Exercise Price per share of
Common Stock for the shares then being exercised shall be payable, at the
election of the Holder, in cash or by certified or official bank check or by
wire transfer in accordance with instructions provided by the Company at the
request of the Holder.
(d) Upon the appropriate payment, if any, of the Exercise
Price for
the shares of Common Stock purchased, together with the surrender of this
Warrant Certificate (if required), the Holder shall be entitled to
receive a
certificate or certificates for the shares of Common Stock so
purchased. The
Company shall deliver such certificates representing the Warrant Shares in
accordance with the instructions of the Holder as provided in the Notice of
Exercise (the certificates delivered in such manner, the "Warrant Share
Certificates") within three (3) Trading
Days (such third Trading Day, a "Warrant
Share Delivery Date") of (i) with respect
to a "cashless exercise," the Exercise
Date or, (ii) with respect to a "cash"
exercise, the later of
the Exercise Date
or the date the payment of the Exercise
Price for the relevant Warrant Shares is
received by the Company.
<PAGE>
(e) The Holder
shall be deemed to be the holder of the shares
issuable to it in accordance with the provisions of this Section 2.1 on the
Exercise Date.
(f) The Holder
may elect to
exercise a portion of this Warrant
without electing to redeem the balance of
this Warrant.
2.2 Limitation on Exercise. Notwithstanding the provisions of this
Warrant, the Agreement or of the other Transaction Agreements, in no event
(except (i) as specifically provided in this Warrant as an exception to this
provision, (ii) during the forty-five (45) day period prior to the
Expiration
Date, or (iii) while there is
outstanding a tender
offer for any or all of the
shares of the Company's Common Stock) shall the Holder be
entitled to exercise
this Warrant, or shall the Company have the
obligation to issue shares upon such
exercise of all or any portion of this
Warrant to the extent
that, after such
exercise the sum of (1) the number of
shares of Common Stock
beneficially owned
by the Holder and its affiliates (other
than shares of Common Stock which may be
deemed beneficially owned through the ownership of the
unexercised portion
of
the Warrants or other rights to purchase
Common Stock or
through the
ownership
of the unconverted portion of convertible
securities),
and (2) the number
of
shares of Common Stock issuable upon the exercise of the Warrants
with respect
to which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its
affiliates of more than 4.99% of the
outstanding shares of Common Stock (after
taking into account
the shares to be
issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such
sentence.
The Holder, by its acceptance of this
Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which
would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the
provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.
2.3 Certain Definitions. As used herein, each of the following
terms
has the meaning set forth below, unless the
context otherwise requires:
(a) "Expiration
Date" means the date
on which the last calendar of
the month in which the fifth anniversary of
the Effective Date occurs.
3.
Reservation
of Shares.
The Company
hereby agrees that at all times
during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant, the Reservation
Percentage of the
number of shares of
its Common Stock as shall be required for
issuance of the Warrant Shares for the
then unexercised portion of this Warrant.
For the purposes of such calculations,
the Company should assume that the outstanding portion of this Warrants were
exercisable in full at any time,
without regard to any
restrictions which might
limit the Holder's right to exercise any portion of this Warrant held by the
Holder.
3
<PAGE>
4.
Mutilation or Loss of Warrant. Upon receipt by the Company of
evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or
destruction) receipt
of reasonably
satisfactory indemnification, and (in the
case of mutilation) upon surrender and
cancellation of this Warrant, the Company
will execute and deliver a new Warrant
of like tenor and date and any such lost,
stolen, destroyed or mutilated Warrant
shall thereupon become void.
5. Rights
of the Holder. Except as set forth in this Section 5, the
Holder
shall not, by virtue hereof, be entitled to any rights of a
stockholder in the
Company, either at law or equity,
and the rights of the
Holder are limited
to
those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein.
Notwithstanding
the provisions of this
Warrant, the Agreement or of the other
Transaction
Agreements, if the
Company
shall declare a dividend upon the Common
Stock (whether payable
out of earnings
or earned surplus or otherwise), then the Company shall pay to the Holder an
amount equal to the dividend payment which would have been paid to the
Holder
had all of the Holder's unexercised Warrants outstanding
on the record date for
determining the amount of dividend
payments to be paid to
security holders
of
the Company been exercised as of the close of business on the Trading Day
immediately before such record date.
6.
Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the Exercise
Price is
required pursua
