<pre>
Exhibit 10.3 Form of Stock Purchase
Warrant dated as of March 28, 2008
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
EXCEPT AS
OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT
DATED AS OF
MARCH 28, 2008, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT
FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN
FORM, SUBSTANCE
AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT
TO RULE 144
OR REGULATION S UNDER SUCH ACT.
Right to Purchase __________ Shares of Common Stock, no par value
per share
STOCK PURCHASE WARRANT THIS CERTIFIES THAT, for value received,
____________________________ or its registered assigns, is entitled
to purchase
from ConectiSys Corporation, a Colorado corporation (the
"Company"), at any time
or from time to time during the period specified in Paragraph 2
hereof,
__________ fully paid and nonassessable shares of the Company's
Common Stock, no
par value per share (the "Common Stock"), at an exercise price per
share equal
to $.0001 (the "Exercise Price"). The term "Warrant Shares," as
used herein,
refers to the shares of Common Stock purchasable hereunder.
The Warrant Shares
and the Exercise Price are subject to adjustment as provided in
Paragraph 4
hereof. The term
"Warrants" means this Warrant and the other warrants issued
pursuant to that certain Securities Purchase Agreement, dated March
28, 2008, by
and among the Company and the Buyers listed on the execution page
thereof (the
"Securities Purchase Agreement").
This Warrant is subject to the following terms, provisions, and
conditions:
1. Manner of
Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by
the holder
hereof, in whole or in part, by the surrender of this Warrant,
together with a
completed exercise agreement in the form attached hereto (the
"Exercise
Agreement"), to the Company during normal business hours on any
business day at
the Company's principal executive offices (or such other office or
agency of the
Company as it may designate by notice to the holder hereof), and
upon (i)
payment to the Company in cash, by certified or official bank check
or by wire
transfer for the account of the Company of the Exercise Price for
the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of
the Warrant
Shares by the holder is not then registered pursuant to an
effective
registration statement under the Securities Act of 1933, as amended
(the
"Securities Act"), delivery to the Company of a written notice of
an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below)
for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so
purchased
shall be deemed to be issued to the holder hereof or such holder's
designee, as
the record owner of such shares, as of the close of business on the
date on
which this Warrant shall have been surrendered, the completed
Exercise Agreement
shall have been delivered, and payment shall have been made for
such shares as
set forth above.
Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement,
shall be
delivered to the holder hereof within a reasonable time, not
exceeding three (3)
business days, after this Warrant shall have been so exercised.
The
certificates so delivered shall be in such denominations as may be
requested by
the holder hereof and shall be registered in the name of such
holder or such
other name as shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired,
the Company
shall, at its expense, at the time of delivery of such
certificates, deliver to
the holder a new Warrant representing the number of shares with
respect to which
this Warrant shall not then have been exercised. In addition to all other
available remedies at law or in equity, if the Company fails to
deliver
certificates for the Warrant Shares within three (3) business days
after this
Warrant is exercised, then the Company shall pay to the holder in
cash a penalty
(the "Penalty") equal to 2% of the number of Warrant Shares that
the holder is
entitled to multiplied by the Market Price (as hereinafter defined)
for each day
that the Company fails to deliver certificates for the Warrant
Shares. For
example, if the holder is entitled to 100,000 Warrant Shares and
the Market
Price is $2.00, then the Company shall pay to the holder $4,000 for
each day
that the Company fails to deliver certificates for the Warrant
Shares. The
Penalty shall be paid to the holder by the fifth day of the month
following the
month in which it has accrued.
Notwithstanding anything in this Warrant to the contrary, in no
event shall the
holder of this Warrant be entitled to exercise a number of Warrants
(or portions
thereof) in excess of the number of Warrants (or portions thereof)
upon exercise
of which the sum of (i) 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
Warrants and
the unexercised or unconverted portion of any other securities of
the Company
(including the Notes (as defined in the Securities Purchase
Agreement)) subject
to a limitation on conversion or exercise analogous to the
limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon
exercise of
the Warrants (or portions thereof) with respect to which the
determination
described herein is being made, would result in beneficial
ownership by the
holder and its affiliates of more than 4.999% of the outstanding
shares of
Common Stock. For
purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities
Exchange Act of 1934, as amended, and Regulation 13D-G thereunder,
except as
otherwise provided in clause (i) of the preceding sentence.
Notwithstanding
anything to the contrary contained herein, the limitation on
exercise of this
Warrant set forth herein may not be amended without (i) the written
consent of
the holder hereof and the Company and (ii) the approval of a
majority of
shareholders of the Company.
2. Period of
Exercise. This Warrant
is exercisable at any time or from
time to time on or after the date on which this Warrant is issued
and delivered
pursuant to the terms of the Securities Purchase Agreement and
before 6:00 p.m.,
New York, New York time on the seventh (7th) anniversary of the
date of issuance
(the "Exercise Period").
3. Certain
Agreements of the Company. The Company hereby covenants
and
agrees as follows:
(a)
Shares to be Fully Paid. All Warrant Shares will, upon
issuance in
accordance with the terms of this Warrant, be validly issued, fully
paid, and
nonassessable and free from all taxes, liens, and charges with
respect to the
issue thereof.
(b)
Reservation of Shares.
Subject to the Stockholder Approval (as defined
in Section 4(k) of the Securities Purchase Agreement, during the
Exercise
Period, the Company shall at all times have authorized, and
reserved for the
purpose of issuance upon exercise of this Warrant, a sufficient
number of shares
of Common Stock to provide for the exercise of this Warrant.
(c)
Listing. The Company
shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of the Warrant upon each
national securities
exchange or automated quotation system, if any, upon which shares
of Common
Stock are then listed (subject to official notice of issuance upon
exercise of
this Warrant) and shall maintain, so long as any other shares of
Common Stock
shall be so listed, such listing of all shares of Common Stock from
time to time
issuable upon the exercise of this Warrant; and the Company shall
so list on
each national securities exchange or automated quotation system, as
the case may
be, and shall maintain such listing of, any other shares of capital
stock of the
Company issuable upon the exercise of this Warrant if and so long
as any shares
of the same class shall be listed on such national securities
exchange or
automated quotation system.
(d)
Certain Actions Prohibited. The Company will not, by amendment
of its
charter or through any reorganization, transfer of assets,
consolidation,
merger, dissolution, issue or sale of securities, or any other
voluntary action,
avoid or seek to avoid the observance or performance of any of the
terms to be
observed or performed by it hereunder, but will at all times in
good faith
assist in the carrying out of all the provisions of this Warrant
and in the
taking of all such action as may reasonably be requested by the
holder of this
Warrant in order to protect the exercise privilege of the holder of
this Warrant
against dilution or other impairment, consistent with the tenor and
purpose of
this Warrant. Without
limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock
receivable upon
the exercise of this Warrant above the Exercise Price then in
effect, and (ii)
will take all such actions as may be necessary or appropriate in
order that the
Company may validly and legally issue fully paid and nonassessable
shares of
Common Stock upon the exercise of this Warrant.
(e)
Successors and Assigns. This Warrant will be binding upon
any entity
succeeding to the Company by merger, consolidation, or acquisition
of all or
substantially all the Company's assets.
4.
Antidilution Provisions. During the Exercise Period, the
Exercise Price
and the number of Warrant Shares shall be subject to adjustment
from time to
time as provided in this Paragraph 4.
In the event that any adjustment of the Exercise Price as required
herein
results in a fraction of a cent, such Exercise Price shall be
rounded up to the
nearest cent.
(a)
Adjustment of Exercise Price and Number of Shares upon Issuance
of
Common Stock. Except
as otherwise provided in Paragraphs 4(c) and 4(e) hereof,
if and whenever on or after the date of issuance of this Warrant,
the Company
issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have
issued or sold, any shares of Common Stock for no consideration or
for a
consideration per share (before deduction of reasonable expenses or
commissions
or underwriting discounts or allowances in connection therewith)
less than the
Market Price on the date of issuance (a "Dilutive Issuance"), then
immediately
upon the Dilutive Issuance, the Exercise Price will be reduced to a
price
determined by multiplying the Exercise Price in effect immediately
prior to the
Dilutive Issuance by a fraction, (i) the numerator of which is an
amount equal
to the sum of (x) the number of shares of Common Stock actually
outstanding
immediately prior to the Dilutive Issuance, plus (y) the quotient
of the
aggregate consideration, calculated as set forth in Paragraph 4(b)
hereof,
received by the Company upon such Dilutive Issuance divided by the
Market Price
in effect immediately prior to the Dilutive Issuance, and (ii) the
denominator
of which is the total number of shares of Common Stock Deemed
Outstanding (as
defined below) immediately after the Dilutive Issuance.
(b)
Effect on Exercise Price of Certain Events. For purposes of determining
the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be
applicable:
(i)
Issuance of Rights or Options. If the Company in any manner
issues or
grants any warrants, rights or options, whether or not immediately
exercisable,
to subscribe for or to purchase Common Stock or other securities
convertible
into or exchangeable for Common Stock ("Convertible Securities")
(such warrants,
rights and options to purchase Common Stock or Convertible
Securities are
hereinafter referred to as "Options") and the price per share for
which Common
Stock is issuable upon the exercise of such Options is less than
the Market
Price on the date of issuance or grant of such Options, then the
maximum total
number of shares of Common Stock issuable upon the exercise of all
such Options
will, as of the date of the issuance or grant of such Options, be
deemed to be
outstanding and to have been issued and sold by the Company for
such price per
share. For purposes of
the preceding sentence, the "price per share for which
Common Stock is issuable upon the exercise of such Options" is
determined by
dividing (i) the total amount, if any, received or receivable by
the Company as
consideration for the issuance or granting of all such Options,
plus the minimum
aggregate amount of additional consideration, if any, payable to
the Company
upon the exercise of all such Options, plus, in the case of
Convertible
Securities issuable upon the exercise of such Options, the minimum
aggregate
amount of additional consideration payable upon the conversion or
exchange
thereof at the time such Convertible Securities first become
convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock
issuable upon the exercise of all such Options (assuming full
conversion of
Convertible Securities, if applicable). No further adjustment to the
Exercise
Price will be made upon the actual issuance of such Common Stock
upon the
exercise of such Options or upon the conversion or exchange of
Convertible
Securities issuable upon exercise of such Options.
(ii)
Issuance of Convertible Securities. If the Company in any manner
issues
or sells any Convertible Securities, whether or not immediately
convertible
(other than where the same are issuable upon the exercise of
Options) and the
price per share for which Common Stock is issuable upon such
conversion or
exchange is less than the Market Price on the date of issuance,
then the maximum
total number of shares of Common Stock issuable upon the conversion
or exchange
of all such Convertible Securities will, as of the date of the
issuance of such
Convertible Securities, be deemed to be outstanding and to have
been issued and
sold by the Company for such price per share. For the purposes of the
preceding
sentence, the "price per share for which Common Stock is issuable
upon such
conversion or exchange" is determined by dividing (i) the total
amount, if any,
received or receivable by the Company as consideration for the
issuance or sale
of all such Convertible Securities, plus the minimum aggregate
amount of
additional consideration, if any, payable to the Company upon the
conversion or
exchange thereof at the time such Convertible Securities first
become
convertible or exchangeable, by (ii) the maximum total number of
shares of
Common Stock issuable upon the conversion or exchange of all such
Convertible
Securities. No further
adjustment to the Exercise Price will be made upon the
actual issuance of such Common Stock upon conversion or exchange of
such
Convertible Securities.
(iii) Change in
Option Price or Conversion Rate. If there is a change at any
time in (i) the amount of additional consideration payable to the
Company upon
the exercise of any Options; (ii) the amount of additional
consideration, if
any, payable to the Company upon the conversion or exchange of any
Convertible
Securities; or (iii) the rate at which any Convertible Securities
are
convertible into or exchangeable for Common Stock (other than under
or by reason
of provisions designed to protect against dilution), the Exercise
Price in
effect at the time of such change will be readjusted to the
Exercise Price which
would have been in effect at such time had such Options or
Convertible
Securities still outstanding provided for such changed additional
consideration
or changed conversion rate, as the case may be, at the time
initially granted,
issued or sold.
(iv)
Treatment of Expired Options and Unexercised Convertible
Securities.
If, in any case, the total number of shares of Common Stock
issuable upon
exercise of any Option or upon conversion or exchange of any
Convertible
Securities is not, in fact, issued and the rights to exercise such
Option or to
convert or exchange such Convertible Securities shall have expired
or
terminated, the Exercise Price then in effect will be readjusted to
the Exercise
Price which would have been in effect at the time of such
expiration or
termination had such Option or Convertible Securities, to the
extent outstanding
immediately prior to such expiration or termination (other than in
respect of
the actual number of shares of Common Stock issued upon exercise or
conversion
thereof), never been issued.
(v)
Calculation of Consideration Received. If any Common Stock, Options
or
Convertible Securities are issued, granted or sold for cash, the
consideration
received therefor for purposes of this Warrant will be the amount
received by
the Company therefor, before deduction of reasonable commissions,
underwriting
discounts or allowances or other reasonable expenses paid or
incurred by the
Company in connection with such issuance, grant or sale.
In case any Common
Stock, Options or Convertible Securities are issued or sold for a
consideration
part or all of which shall be other than cash, the
