Exhibit 4.14
THIS WARRANT HAS NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF 1933
AND IS NOT TRANSFERABLE
EXCEPT AS PROVIDED HEREIN
ICOP DIGITAL, INC.
PURCHASE WARRANT
Issued to:
PAULSON INVESTMENT COMPANY,
INC.
Exercisable to Purchase
125,000 SHARES OF COMMON
STOCK
of
ICOP DIGITAL, INC.
Void after
, 2013
1
This is to certify that, for value
received and subject to the terms and conditions set forth below,
the Warrantholder (hereinafter defined) is entitled to purchase,
and the Company promises and agrees to sell and issue to the
Warrantholder, at any time on or after
, 2009 and on or before
, 2013, up to 125,000 shares of the Company’s Common Stock at
the Exercise Price (hereinafter defined).
This Warrant Certificate is issued
subject to the following terms and conditions:
1. DEFINITIONS OF CERTAIN TERMS.
Except as may be otherwise clearly required by the context, the
following terms have the following meanings:
(a) “Act” means the
Securities Act of 1933, as amended.
(b) “Cashless Exercise”
means an exercise of Warrants in which, in lieu of payment of the
Exercise Price, the Holder elects to receive a lesser number of
Securities such that the value of the Securities that such Holder
would otherwise have been entitled to receive but has agreed not to
receive, as determined by the closing price of such Securities on
the date of exercise or, if such date is not a trading day, on the
next prior trading day, is equal to the Exercise Price with respect
to such exercise. A Holder may only elect a Cashless Exercise if
Securities issuable by the Company on such exercise are publicly
traded securities.
(c) “Closing Date” means
the date on which the Offering is closed.
(d) “Commission” means
the Securities and Exchange Commission.
(e) “Common Stock” means
the common stock, no par value, of the Company.
(f) “Company” means ICOP
Digital, Inc., a Colorado corporation.
(g) “Company’s
Expenses” means any and all expenses payable by the Company
or the Warrantholder in connection with an offering described in
Section 6 hereof, except Warrantholder’s
Expenses.
(h) “Corporate Financing
Rule” means Rule 2710 of the rules of the Financial Industry
Regulatory Authority.
(i) “Effective Date”
means the date on which the Registration Statement is declared
effective by the Commission.
(j) “Exercise Price”
means the price at which the Warrantholder may purchase one share
of Common Stock upon exercise of Warrants as determined from time
to time pursuant to the provisions hereof. The initial Exercise
Price is $
per share.
(k) “Offering” means the
public offering of Shares made pursuant to the Registration
Statement.
(l) “Participating
Underwriter” means any underwriter participating in the sale
of the Securities pursuant to a registration under Section 6
of this Warrant Certificate.
(m) “Registration
Statement” means the Company’s registration statement
(File No. 333-
) as amended on the Closing Date.
(n) “Rules and
Regulations” means the rules and regulations of the
Commission adopted under the Act.
(o) “Securities” means
the securities obtained or obtainable upon exercise of the Warrant
or securities obtained or obtainable upon exercise, exchange, or
conversion of such securities.
(p) “Shares” means the
1,250,000 shares of the Company’s Common Stock being offered
to the public pursuant to an effective Registration
Statement.
(q) “Warrant
Certificate” means a certificate evidencing the
Warrant.
(r) “Warrantholder”
means a record holder of the Warrant or Securities. The initial
Warrantholder is Paulson Investment Company, Inc.
(s) “Warrantholder’s
Expenses” means the sum of (i) the aggregate amount of
cash payments made to an underwriter, underwriting syndicate, or
agent in connection with an offering described in Section 6
hereof multiplied by a fraction the numerator of which is the
aggregate sales price of the Securities sold by such underwriter,
underwriting syndicate, or agent in such offering and the
denominator of which is the aggregate sales price of all of the
securities sold by such underwriter, underwriting syndicate, or
agent in such offering and (ii) all out-of-pocket expenses of
the Warrantholder, except for the fees and disbursements of one
firm retained as legal counsel for the Warrantholder that will be
paid by the Company.
(t) “Warrant” means the
warrant evidenced by this certificate, any similar certificate
issued in connection with the Offering, or any certificate obtained
upon transfer or partial exercise of the Warrant evidenced by any
such certificate.
2. EXERCISE OF WARRANT. All or any
part of the Warrant represented by this Warrant Certificate may be
exercised commencing one year after the Effective Date and ending
at 5:00 p.m. Eastern Time on the fifth anniversary of the Effective
Date by surrendering this Warrant Certificate, together with
appropriate instructions, duly executed by the Warrantholder or by
its duly authorized attorney, at the office of the Company at ICOP
Digital, Inc., 16801 West 116th Street, Lenexa, Kansas 66219,
Attention: Chief Executive Officer; or at such other office or
agency as the Company may designate. The date on which such
instructions are received by the Company shall be the date of
exercise. If the Holder has elected a Cashless Exercise, such
instructions shall so state. Upon receipt of notice of exercise,
the Company shall immediately instruct its transfer agent to
prepare certificates for the Securities to be received by the
Warrantholder upon completion of the Warrant exercise. When such
certificates are prepared, the Company shall notify the
Warrantholder and deliver such certificates to the Warrantholder or
as per the Warrantholder’s instructions immediately upon
payment in full by the Warrantholder, in lawful money of the United
States, of the Exercise Price payable with respect to the
Securities being purchased, if any. If the Warrantholder shall
represent and warrant that all applicable registration and
prospectus delivery requirements for their sale have been complied
with upon sale of the Securities received upon exercise of the
Warrant, such certificates shall not bear a legend with respect to
the Securities Act of 1933, as amended.
3
If fewer than all the Securities
purchasable under the Warrant are purchased, the Company will, upon
such partial exercise, execute and deliver to the Warrantholder a
new Warrant Certificate (dated the date hereof), in form and tenor
similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised. The Securities to be obtained on exercise of
the Warrant will be deemed to have been issued, and any person
exercising the Warrants will be deemed to have become a holder of
record of those Securities, as of the date of the payment of the
Exercise Price.
3. ADJUSTMENTS IN CERTAIN EVENTS.
The number, class, and price of Securities for which this Warrant
Certificate may be exercised are subject to adjustment from time to
time upon the happening of certain events as follows:
(a) If the outstanding shares of the
Company’s Common Stock are divided into a greater number of
shares or a dividend in stock is paid on the Common Stock, the
number of shares of Common Stock for which the Warrant is then
exercisable will be proportionately increased and the Exercise
Price will be proportionately reduced; and, conversely, if the
outstanding shares of Common Stock are combined into a smaller
number of shares of Common Stock, the number of shares of Common
Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be
proportionately increased. The increases and reductions provided
for in this Section 3(a) will be made with the intent and, as
nearly as practicable, the effect that neither the percentage of
the total equity of the Company obtainable on exercise of the
Warrants nor the price payable for such percentage upon such
exercise will be affected by any event described in this
Section 3(a).
(b) In case of any change in the
Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation, purchase of
substantially all the assets of the Company, or other change in the
capital structure of the Company, other than changes in par value,
then, as a condition of such change, lawful and adequate provision
will be made so that the holder of this Warrant Certificate will
have the right thereafter to receive upon the exercise of the
Warrant the kind and amount of shares of stock or other securities
or property to which he would have been entitled if, immediately
prior to such event, he had held the number of shares of Common
Stock obtainable upon the exercise of the Warrant. In any such
case, appropriate adjustment will be made in the application of the
provisions set forth herein with respect to the rights and interest
thereafter of the Warrantholder, to the end that the provisions set
forth herein will thereafter be applicable, as nearly as reasonably
may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of the Warrant. The
Company will not permit any change in its capital structure to
occur unless the issuer of the shares of stock or other securities
to be received by the holder of this Warrant Certificate, if not
the Company, agrees to be bound by and comply with the provisions
of this Warrant Certificate.
(c) Whe
