Exhibit 4.4
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
65,000 SHARES OF COMMON
STOCK
AND
22,750 WARRANTS,
EACH TO PURCHASE ONE SHARE OF
COMMON STOCK
of
ICOP DIGITAL, INC.
Void after July 8, 2010
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 on or before July 8, 2010, up to 65,000 shares
of Common Stock and 22,750 Underlying Warrants at the Exercise
Price.
This Purchase 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 the Purchase Warrant 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 prices 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) “Exercise Price”
means the price at which the Warrantholder may purchase one share
of Common Stock and 0.35 Underlying Warrants. The Exercise Price
initially is $5.92.
(i) “Offering” means the
private offering of Common Stock and warrants by the Company made
pursuant to a Securities Purchase Agreement dated as of
December 1, 2005.
(j) “Rules and
Regulations” means the rules and regulations of the
Commission adopted under the Act.
(k) “Securities” means
the securities obtained or obtainable upon exercise of the Purchase
Warrant or securities obtained or obtainable upon exercise,
exchange, or conversion of such securities.
Purchase Warrant – December 8,
2005
(l) “Public Warrants”
means the publicly-traded warrants subject to a Warrant Agreement,
dated as of July 13, 2005, by and between the Company and
ComputerShare Trust Company, Inc.
(m) “Purchase Warrant
Certificate” means this certificate evidencing the Purchase
Warrant.
(n) “Warrantholder”
means a record holder of the Purchase Warrant or Securities. The
initial Warrantholder is Paulson Investment Company,
Inc.
(o) “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.
(p) “Purchase 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
Purchase Warrant evidenced by any such certificate.
(q) “Underlying Warrant”
means a warrant to purchase one share of Common Stock at a price of
$6.19 per share, and identical in form to the warrants sold in the
Offering.
2. EXERCISE OF PURCHASE WARRANT. All
or any part of the Purchase Warrant represented by this Purchase
Warrant Certificate may be exercised until 5:00 p.m. Pacific Time
on July 8, 2010 by surrendering this Purchase 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 W. 116
th
Street, Lenexa, Kansas
66219, Attention: President; 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 Purchase 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 Purchase Warrant, such
certificates shall not bear a legend with respect to the Securities
Act of 1933, as amended.
If fewer than all the Securities
purchasable under the Purchase Warrant are purchased, the Company
will, upon such partial exercise, execute and deliver to the
Warrantholder a new
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Purchase Warrant – December 8,
2005
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Purchase Warrant Certificate (dated the date
hereof), in form and tenor similar to this Purchase Warrant
Certificate, evidencing that portion of the Purchase Warrant not
exercised. The Securities to be obtained on exercise of the
Purchase 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 Purchase
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 Purchase 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 Purchase 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
Purchase Warrant 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 Purchase Warrant
Certificate will have the right thereafter to receive upon the
exercise of the Purchase 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 Purchase 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 Purchase 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 Purchase Warrant Certificate, if not the Company, agrees to be
bound by and comply with the