EXHIBIT 10.4
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, 2011 (THE “EXPIRATION
DATE”).
No. B-__________
MEDIA SCIENCES INTERNATIONAL,
INC.
SERIES B WARRANT TO
PURCHASE
10% CONVERTIBLE
NOTES
AND
SERIES C WARRANTS TO ACQUIRE
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), (i) up to
$_________________ 1 of the Company’s 10%
Convertible Notes (the “Additional Notes”) and (ii)
Series C Warrants (“Series C Warrants”) to acquire up
to _________________ shares 2 of the
Company’s Common Stock, par value $0.001 per share
(“Common Stock”) at an exercise price (the
“Exercise Price”) equal to the face amount of the
Additional Notes for which this Warrant is exercised from time to
time. Each Additional Note shall be in the form of Exhibit A
attached to the Purchase Agreement referred to below, shall have an
initial Conversion Price equal to the Conversion Price then in
effect with respect to the Notes issued pursuant to the Purchase
Agreement (or, if no such Notes are then outstanding, the
Conversion Price that would have been in effect had such Notes been
outstanding at all times prior to the exercise of this Warrant),
shall be dated the effective date of the exercise of this Warrant
and shall bear interest from and after the effective date of the
exercise of this Warrant. Each Series C Warrant shall be in the
form of Exhibit D attached to the Purchase Agreement and shall be
exercisable for a period of five years from the date that this
Warrant is exercised. 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
_________________________
1
Equal to the principal amount
of Initial Notes purchased at Closing.
2
50% of the Additional
Conversion Shares issuable upon the conversion of the Additional
Notes issuable upon the exercise of this Warrant.
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 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 of the aggregate Exercise Price for that portion
of this Warrant then being exercised, 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 Additional
Notes and Series C Warrants so purchased shall be deemed to be
issued to the Warrantholder or the Warrantholder’s designee,
as the record owner thereof, 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 Exercise Price shall have been paid and the completed
Exercise Agreement shall have been delivered. An Additional Note,
dated the date of exercise of this Warrant, in the principal amount
for which this Warrant has been exercised and a Series C Warrant
covering a number of shares of Common Stock equal to 50% of the
number of shares of Common Stock into which the Additional Note is
then convertible 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 securities 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 securities, deliver to the Warrantholder a new
Warrant representing the right to purchase the Additional Notes and
Series C Warrants 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
-2-
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.
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 securities issuable upon the exercise of this
Warrant in a name other than that of the Warrantholder in respect
of which such securities are issued, and in such case, the Company
shall not be required to issue or deliver any such securities 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 amount of Additional Notes and Series C
Warrants, 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 8. Adjustments
. Subject and pursuant to the provisions of this Section 8, the
Exercise Price and securities subject to this Warrant shall be
subject to adjustment from time to time as set forth
hereinafter.
(a) 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 securities immediately theretofore issuable upon
exercise of
