EXHIBIT 10.3
THE SECURITIES REPRESENTED HEREBY
MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN
REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, (II) SUCH SECURITIES MAY BE SOLD WITHOUT RESTRICTION
PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY
LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF
1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS.
THIS WARRANT SHALL BE VOID AFTER
5:00 P.M. EASTERN TIME ON SEPTEMBER 24, 2013 (THE “EXPIRATION
DATE”).
No. A-__________
MEDIA SCIENCES INTERNATIONAL,
INC.
SERIES A WARRANT TO PURCHASE
_______ SHARES OF
COMMON STOCK, PAR VALUE $0.001
PER SHARE
For VALUE RECEIVED,
____________________ (“Warrantholder”), is entitled to
purchase, subject to the provisions of this Warrant, from Media
Sciences International, Inc., a Delaware corporation
(“Company”), at any time not later than 5:00 P.M.,
Eastern time, on the Expiration Date (as defined above), at an
exercise price per share equal to $1.65 (the exercise price in
effect being herein called the “Warrant Price”), ______
shares 1 (“Warrant Shares”) of the
Company’s Common Stock, par value $0.001 per share
(“Common Stock”). The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time as described
herein. This Warrant is being issued pursuant to the Purchase
Agreement, dated as of September 24, 2008 (the “Purchase
Agreement”), among the Company and the initial holders of the
Company Warrants (as defined below). Capitalized terms used herein
have the respective meanings ascribed thereto in the Purchase
Agreement unless otherwise defined herein.
Section 1. Registration
. The Company shall maintain books for the transfer and
registration of the Warrant. Upon the initial issuance of this
Warrant, the Company shall issue and register the Warrant in the
name of the Warrantholder.
Section 2. Transfers .
As provided herein, this Warrant may be transferred only pursuant
to a registration statement filed under the Securities Act of 1933,
as amended (the “Securities Act”), or an exemption from
such registration. Subject to such restrictions, the Company shall
transfer this Warrant from time to time upon the books to be
maintained by the Company for that purpose, upon surrender hereof
for transfer, properly endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be
reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect
_________________________
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50% of the shares into which
the related Notes are convertible.
that such transfer is exempt from
the registration requirements of the Securities Act, to establish
that such transfer is being made in accordance with the terms
hereof, and a new Warrant shall be issued to the transferee and the
surrendered Warrant shall be canceled by the Company.
Section 3. Exercise of
Warrant . Subject to the provisions hereof, the Warrantholder
may exercise this Warrant, in whole or in part, at any time prior
to its expiration upon surrender of the Warrant, together with
delivery of a duly executed Warrant exercise form, in the form
attached hereto as Appendix A (the “Exercise
Agreement”) and payment by cash, certified check or wire
transfer of funds (or, in certain circumstances, by cashless
exercise as provided below) of the aggregate Warrant Price for that
number of Warrant Shares then being purchased, 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
Warrantholder). The Warrant Shares so purchased shall be deemed to
be issued to the Warrantholder or the Warrantholder’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 (or the date evidence of loss, theft or destruction
thereof and security or indemnity satisfactory to the Company has
been provided to the Company), the Warrant Price shall have been
paid and the completed Exercise Agreement shall have been
delivered. Certificates for the Warrant Shares so purchased shall
be delivered to the Warrantholder 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 Warrantholder and shall be
registered in the name of the Warrantholder or such other name as
shall be designated by the Warrantholder, as specified in the
Exercise Agreement. 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 Warrantholder a new Warrant representing the right
to purchase the number of shares with respect to which this Warrant
shall not then have been exercised. As used herein, “business
day” means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of
business. Each exercise hereof shall constitute the re-affirmation
by the Warrantholder that the representations and warranties
contained in Section 5 of the Purchase Agreement are true and
correct in all material respects with respect to the Warrantholder
as of the time of such exercise.
If (1) a certificate representing
the Warrant Shares is not delivered to the Warrantholder within
three (3) Business Days of the due exercise of this Warrant by the
Warrantholder and (2) prior to the time such certificate is
received by the Warrantholder, the Warrantholder, or any third
party on behalf of the Warrantholder or for the
Warrantholder’s account, purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Warrantholder of shares represented
by such certificate (a “Buy-In”), then the Company
shall pay in cash to the Warrantholder (for costs incurred either
directly by such Warrantholder or on behalf of a third party) the
amount by which the total purchase price paid for Common Stock as a
result of the Buy-In (including brokerage commissions, if any)
exceeds the proceeds received by such Warrantholder as a result of
the sale to which such Buy-In relates. The Warrantholder shall
provide the Company written notice indicating the amounts payable
to the Warrantholder in respect of the Buy-In.
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Section 4. Compliance with
the Securities Act of 1933 . Except as provided in the Purchase
Agreement, the Company may cause the legend set forth on the first
page of this Warrant to be set forth on each Warrant, and a similar
legend on any security issued or issuable upon exercise of this
Warrant, unless counsel for the Company is of the opinion as to any
such security that such legend is unnecessary.
Section 5. Payment of
Taxes . The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable
upon the exercise of the Warrant; provided, however, that the
Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance or
delivery of any certificates for Warrant Shares in a name other
than that of the Warrantholder in respect of which such shares are
issued, and in such case, the Company shall not be required to
issue or deliver any certificate for Warrant Shares or any Warrant
until the person requesting the same has paid to the Company the
amount of such tax or has established to the Company’s
reasonable satisfaction that such tax has been paid. The
Warrantholder shall be responsible for income taxes due under
federal, state or other law, if any such tax is due.
Section 6. Mutilated or
Missing Warrants . In case this Warrant shall be mutilated,
lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon surrender and cancellation of the
mutilated Warrant, or in lieu of and substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and for the
purchase of a like number of Warrant Shares, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost,
stolen or destroyed Warrant, reasonable indemnity or bond with
respect thereto, if requested by the Company.
Section 7. Reservation of
Common Stock . The Company hereby represents and warrants that
there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by
this Section 7, out of the authorized and unissued shares of Common
Stock, sufficient shares to provide for the exercise of the rights
of purchase represented by this Warrant. The Company agrees that
all Warrant Shares issued upon due exercise of the Warrant shall
be, at the time of delivery of the certificates for such Warrant
Shares, duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock of the Company.
Section 8. Adjustments
. Subject and pursuant to the provisions of this Section 8, the
Warrant Price and number of Warrant Shares subject to this Warrant
shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall, at
any time or from time to time while this Warrant is outstanding,
pay a dividend or make a distribution on its Common Stock in shares
of Common Stock, subdivide its outstanding shares of Common Stock
into a greater number of shares or combine its outstanding shares
of Common Stock into a smaller number of shares or issue by
reclassification of its outstanding shares of Common Stock any
shares of its capital stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing corporation), then (i) the Warrant Price in effect
immediately prior to the date on which such change shall become
effective shall be adjusted by multiplying such
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Warrant Price by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such change and the denominator of
which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such change and (ii) the number
of Warrant Shares purchasable upon exercise of this Warrant shall
be adjusted by multiplying the number of Warrant Shares purchasable
upon exercise of this Warrant immediately prior to the date on
which such change shall become effective by a fraction, the
numerator of which is shall be the Warrant Price in effect
immediately prior to the date on which such change shall become
effective and the denominator of which shall be the Warrant Price
in effect immediately after giving effect to such change,
calculated in accordance with clause (i) above. Such adjustments
shall be made successively whenever any event listed above shall
occur.
(b) If any capital
reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale,
transfer or other disposition of all or substantially all of the
Company’s assets to another corporation shall be effected,
then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful
and adequate provision shall be made whereby each Warrantholder
shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions herein specified and in
lieu of the Warrant Shares immediately theretofore issuable upon
exercise of the Warrant, such shares of stock, securities or assets
as would have been issuable or payable with respect to or in
exchange for a number of Warrant Shares equal to the number of
Warrant Shares immediately theretofore issuable upon exercise of
the Warrant, had such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition not
taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of each Warrantholder
to the end that the provisions hereof (including, without
limitation, provision for adjustment of the Warrant Price) shall
thereafter be applicable, as nearly equivalent as may be
practicable in relation to any shares of stock, securities or
assets thereafter deliverable upon the exercise hereof. The Company
shall not effect any such consolidation, merger, sale, transfer or
other disposition unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the
corporation purchasing or otherwise acquiring such assets or other
appropriate corporation or entity shall assume the obligation to
deliver to the Warrantholder, at the last address of the
Warrantholder appearing on the books of the Company, such shares of
stock, securities or assets as, in accordance with the foregoing
provisions, the Warrantholder may be entitled to purchase, and the
other obligations under this Warrant. The provisions of this
paragraph (b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or
other dispositions.
(c) In case the Company shall
fix a payment date for the making of a distribution to all holders
of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends or
distributions referred to in Section 8(a)), or subscription rights
or warrants, the Warrant Price to be in effect after such payment
date shall be determined by multiplying the Warrant Price in effect
immediately prior to such payment date
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by a fraction, the numerator of
which shall be the total number of shares of Common Stock
outstanding multiplied by the Market Price (as defined below) per
share of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Company’s Board
of Directors in good faith) of said assets or evidences of
indebtedness so distributed, or of such subscription rights or
warrants, and the denominator of which shall be the total number of
shares of Common Stock outstanding multiplied by such Market Price
per share of Common Stock immediately prior to such payment date.
“Market Price” as of a particular date (the
“Valuation Date”) shall mean the following: (a) if the
Common Stock is then listed on the Nasdaq Global Market or the
Nasdaq Capital Market (“Nasdaq”) or any other national
stock exchange, the closing sale price of one share of Common Stock
on such exchange on the last trading day prior to the Valuation
Date; (b) if the Common Stock is then quoted on the National
Association of Securities Dealers, Inc. OTC Bulletin Board (the
“Bulletin Board”) or such similar quotation system or
association, the closing sale price of one share of Common Stock on
the Bulletin Board or such other quotation system or association on
the last trading day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and
the low asked price quoted thereon on the last trading day prior to
the Valuation Date; or (c) if the Common Stock is not then listed
on a national stock exchange or quoted on the Bulletin Board or
such other quotation system or association, the fair market value
of one share of Common Stock as of the Valuation Date, as
determined in good faith by the Board of Directors of the Company
and the Warrantholder. If the Common Stock is not then listed on a
national securities exchange, the Bulletin Board or such other
quotation system or association, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the
Warrantholder prior to the exercise hereunder as to the fair market
value of a share of Common Stock as determined by the Board of
Directors of the Company. In the event that the Board of Directors
of the Company and the Warrantholder are unable to agree upon the
fair market value in respect of subpart (c) of this paragraph, the
Company and the Warrantholder shall jointly select an appraiser,
who is experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall
be borne equally by the Company and the Warrantholder. Such
adjustment shall be made successively whenever such a payment date
is fixed.
(d) An adjustment to the
Warrant Price shall become effective immediately after the payment
date in the case of each dividend or distribution and immediately
after the effective date of each other event which requires an
adjustment.
(e) In the event that, as a
result of an adjustment made pursuant to this Section 8, the
Warrantholder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the
number of such other shares so receivable upon exercise of this
Warrant shall be subject thereafter to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in this
Warrant.
(f) Except as provided in
subsection (g) hereof, if and whenever the Company shall issue or
sell, or is, in accordance with any of subsections (f)(l) through
(f)(7) hereof, deemed to have issued or sold, any Additional Shares
of Common Stock for no consideration or for a consideration per
share less than the Warrant Price in effect immediately prior to
the time
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of such issue or sale, then and in
each such case (a “Trigger Issuance”) the then-existing
Warrant Price, shall be reduced, as of the close of business on the
effective date of the Trigger Issuance, to the lowest price per
share at which any share of Common Stock was issued or sold or
deemed to be issued or sold; provided, however, that in no event
shall the Warrant Price after giving effect to such Trigger
Issuance be greater than the Warrant Price in effect prior to such
Trigger Issuance.
For purposes of this subsection (f),
“Additional Shares of Common Stock” shall mean all
shares of Common Stock issued by the Company or deemed to be issued
pursuant to this subsection (f), other than Excluded Issuances (as
defined in subsection
