Exhibit 4.1
INVESTOR WARRANT
Warrant No.: CS-1
NEITHER THIS SECURITY NOR THE
SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT.
COMMON STOCK PURCHASE
WARRANT
GETFUGU, INC.
Warrant Shares:
1,500,000
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Initial
Exercise Date: September 18, 2009
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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 the date hereof (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 GetFugu, Inc., a Nevada corporation (the
“ Company ”), up to 1,500,000 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).
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 of even date herewith, among the
Company and the Investors 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. If the exercise is for less than all of
the Warrant Shares, then the Company shall return to the Holder,
together with the certificate(s) for the Warrant Shares, a new
Warrant certificate for the balance of the Warrant
Shares.
(b)
Exercise Price . The exercise price per share of
the Common Stock under this Warrant shall be $0.01, subject to
adjustment hereunder (the “ Exercise Price
”).
(c)
Cashless Exercise . If, at any time after the
six-month anniversary of the date that this Warrant is issued,
there is no effective Registration Statement registering, or no
current prospectus available for, the resale of the Warrant Shares
by the Holder, 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:
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(A)
=
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the VWAP on the
Trading Day immediately preceding the date of such
election;
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(B)
=
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the Exercise
Price of this Warrant, as adjusted; and
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(X)
=
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the number of
Warrant Shares issuable upon exercise of this Warrant in accordance
with the terms of this Warrant by means of a cash exercise rather
than a cashless exercise.
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(d)
Exercise Limitations . 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 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 to 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 periodic or
annual report, 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.
(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 permitting the resale of the Warrant Shares
by the Holder or (B) the shares are eligible for resale without
volume or manner-of-sale limitations pursuant to Rule 144, 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. If the Company fails for any reason
to deliver to the Holder certificates evidencing the Warrant Shares
subject to a Notice of Exercise by the Warrant Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages
and not as a penalty, for each $1,000 of Warrant Shares subject to
such exercise (based on the VWAP of the Common Stock on the date of
the applicable Notice of Exercise), $10 per Trading Day (increasing
to $20 per Trading Day on the fifth Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such
Warrant Share Delivery Date until such certificates are delivered.
For purposes hereof, the term “ VWAP ”
shall mean, for any date, the price determined by the
first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P.
(based on a Trading Day from 9:30 a.m. New York City time to 4:02
p.m. New York City time); (b) if the OTC Bulletin Board is not a
Trading Market, the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (c) if the Common Stock is not then listed or
quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets “
published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported; or (d) in all
other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by
the Investors of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
(ii)
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.
(iii)
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 Warrant Share Delivery Date, then, the Holder will
have the right to rescind such exercise.
(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 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 (A) 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 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 the Common Stock
any shares of capital stock of the Company, then in each case the
Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Comm
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