EXHIBIT
10.3
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 OR OTHER LOAN SECURED BY
SUCH SECURITIES.
SERIES B COMMON STOCK PURCHASE
WARRANT
ENTHEOS TECHNOLOGIES,
INC.
Warrant No. B-___
Warrant Shares: ______
Initial Exercise Date:
_______________
THIS SERIES B 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
second year anniversary of the Initial Exercise Date (the “
Termination Date ”) but not thereafter, to subscribe
for and purchase from Entheos Technologies, Inc., a Nevada
corporation (the “ Company ”), up to
___________________ 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
Subscription Agreement (the “ Subscription Agreement
”), the effective date of which is ____________________
between the Company and the subscriber 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 of
a
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duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (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); 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. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within 3
Trading Days of the date the final Notice of Exercise is delivered
to the Company. Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of
Exercise Form within 2 Business Days of receipt of such notice.
The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of
this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount
stated on the face hereof.
b)
Exercise Price . The exercise price per share of the Common
Stock under this Warrant shall be $0.75 , subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Exercise Limitations
.
i.
Holder’s Restrictions
. 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
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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)(i), 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)(i) 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)(i), 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 (x) the Company’s most recent
periodic or annual report, as the case may be, (y) a more recent
public announcement by the Company or (z) any other notice by the
Company or the Company’s 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. The “
Beneficial Ownership Limitation ” shall be 4.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon not
less than 61 days’ prior notice to the Company, may increase
or decrease the Beneficial Ownership Limitation provisions of this
Section 2(d)(i), provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(d)(i) shall continue to
apply. Any such increase or decrease will not be effective
until the 61 st day after
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such notice is delivered to the Company.
The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with
the terms of this Section 2(d)(i) to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.
d)
Mechanics of Exercise
.
i.
Delivery of Certificates Upon
Exercise . Certificates
for shares purchased hereunder shall be transmitted by the transfer
agent of the Company 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 a participant in such
system and there is an effective Registration Statement permitting
the resale of the Warrant Shares by the Holder, 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 (“ 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 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), $5 per
Trading Day (increasing to $10 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.
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,
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which new Warrant shall in all other
respects be identical with this Warrant.
iii.
Rescission Rights
. If the Company fails to cause its
transfer agent to transmit to the Holder a certificate or
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 its transfer agent to
transmit to the Holder a certificate or 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 (1) 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
(A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (B) the price at which the sell order giving rise to such
purchase obligation was executed, and (2) 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 (1) 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,
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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: (A) 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), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a
smaller number of shares, or (D) 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 Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after
such event and the number of shares issuable upon exercise of this
Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged. Any
adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution
and shall become effective immediately af
