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Exhibit 10.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH
REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN
CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.
AN INVESTMENT IN THESE SECURITIES INVOLVES A
HIGH DEGREE OF RISK. HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE
INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.
| Warrant to Purchase |
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| 3,333,333 shares |
Warrant Number _____ |
Series A Warrant to Purchase Common Stock
of
ICP Solar Technologies, Inc.
THIS
CERTIFIES that BRIDGEPOINTE MASTER FUND LTD ., a Cayman
Islands Exempted Company or any subsequent holder hereof (
“Holder” ) has the right to purchase from ICP
Solar Technologies, Inc. , a Nevada corporation (the
“Company” ), up to Three Million Three Hundred
Thirty Three Thousand Three Hundred Thirty-Three (3,333,333) fully
paid and nonassessable shares, of the Company's common stock,
$0.00001 par value per share ( “Common Stock” ),
subject to adjustment as provided herein, at a price equal to the
Exercise Price as defined in Section 3 below, at any time during
the Term (as defined below).
Holder
agrees with the Company that this Warrant to Purchase Common Stock
of the Company (this “Warrant” or this
“Agreement” ) is issued and all rights hereunder
shall be held subject to all of the conditions, limitations and
provisions set forth herein.
1.
Date of Issuance and Term.
This
Warrant shall be deemed to be issued on June 13, 2008 (
“Date of Issuance” ). The term of this Warrant
begins on the Date of Issuance and ends at 5:00 p.m., New York City
time, on the date that is six (6) years after the Date of
Issuance (the “Term” ). This Warrant was issued
in conjunction with the issuance of Debentures of the Company
(“the “Debentures” ) to the Holder
pursuant to the terms of the Securities Purchase Agreement (
“Securities Purchase Agreement ”), and the
Registration Rights Agreement ( “Registration Rights
Agreement” ) by and between the Company and Holder dated
on or about June 13, 2008.
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Notwithstanding
anything to the contrary herein, the applicable portion of this
Warrant shall not be exercisable during any time that, and only to
the extent that, the number of shares of Common Stock to be issued
to Holder upon such Exercise (as defined in Section 2(a)), when
added to the number of shares of Common Stock, if any, that the
Holder otherwise beneficially owns (outside of this Warrant, and
not including any other warrants or securities of Holder’s
having a provision substantially similar to this paragraph) at the
time of such Exercise, would exceed 4.99% (the “Maximum
Percentage” ) of the number of shares of Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon Exercise of this Warrant held
by the Holder, as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934 (the “Beneficial
Ownership Limitation” ). The Beneficial Ownership
Limitation shall be conclusively satisfied if the applicable Notice
of Exercise includes a signed representation by the Holder that the
issuance of the shares in such Notice of Exercise will not violate
the Limitation, and the Company shall not be entitled to require
additional documentation of such satisfaction.
Notwithstanding
the above, in the event that the Company receives any purchase,
tender or exchange offer or any offer to enter into a merger with
another entity whereby the Company shall not be the surviving
entity (an “Offer” ), then the Maximum
Percentage shall be increased (but not decreased) to 9.99%, and
“4.99%” shall be automatically revised immediately
after such offer to read “9.99%” each place it occurs
in this Section 1. The Beneficial Ownership Limitation provisions
of this Section 1 may be waived by such Holder, at the election of
such Holder, upon not less than 61 days’ prior notice to the
Company, to change the Beneficial Ownership Limitation to any
amount not in excess of 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 Beneficial Ownership Limitation shall continue to
apply. Upon such a change by a Holder of the Beneficial Ownership
Limitation from such 4.99% limitation to such 9.99% limitation, the
Beneficial Ownership Limitation may not be further waived by such
Holder, provided that, if an Event of Default occurs, thereafter
the Beneficial Ownership Limitation provisions of this Section 1
may be waived by such Holder, at the election of such Holder, upon
not less than 61 days’ prior notice to the Company, to change
the Maximum Percentage to any other percentage (and not limited to
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 the Warrants held by the Holder and the
provisions of this Section 1 shall continue to apply. The
limitations on Exercise set forth in this subsection are referred
to as the “Beneficial Ownership Limitations.”
The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of
this Section 1 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.
Notwithstanding
the above, Holder shall retain the option to either Exercise or not
Exercise its option(s) to acquire Common Stock pursuant to the
terms hereof after an Offer, and, in the event of a cash Exercise
following a tender offer, the Exercise Price per share that would
otherwise be due shall instead be offset against the tender price
per share to be received by the Holder, provided, however, that in
the event a tender offer is not
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completed, Holder, at its option may either (i)
complete any Exercise that was initiated after the Offer by
promptly paying to the Company the Exercise Price that would have
been due at the time the Warrant was Exercised, or (ii) cancel such
Exercise by providing written notice to the Company, in which case
such Exercise shall be deemed void ad initio.
Maximum Exercise of Rights . In the event the Holder
notifies the Company that the Exercise of the rights described
herein would result in the issuance of an amount of Common Stock of
the Company that would exceed the maximum amount that may be issued
to a Holder calculated in the manner described above, then the
issuance of such additional shares of Common Stock of the Company
to such Holder will be deferred in whole or in part until such time
as such Holder is able to beneficially own such Common Stock
without exceeding the maximum amount calculated in the manner
described herein. The determination of when such Common Stock may
be issued shall be made by each Holder as to only such Holder.
2.
Exercise .
(a) Manner of
Exercise. During the Term, this Warrant may be Exercised as to
all or any lesser number of full shares of Common Stock covered
hereby (the “Warrant Shares” or the
“Shares” ) upon surrender of this Warrant, with
the Notice of Exercise Form attached hereto as Exhibit A
(the “Notice of Exercise” ) duly completed and
executed, together with the full Exercise Price (as defined below,
which may be satisfied by either a Cash Exercise or a Cashless
Exercise, as each is defined below) for each share of Common Stock
as to which this Warrant is Exercised, at the office of the
Company, Attn: Sass Peress, President, CEO & Chairman; ICP
Solar Technologies, Inc., 7075 Place Robert-Joncas, Unit 131,
Montreal H4M272, Phone: 514-270-5770, Fax: (514) 270-3677 or at
such other location as the Company may then be located or such
other office or agency as the Company may designate in writing, by
overnight mail, by facsimile (such surrender and payment of the
Exercise Price hereinafter called the “Exercise”
of this Warrant). In the case of a Cashless Exercise, the Exercise
Price is deemed to have been delivered upon the Holder’s
deliver of a Notice of Exercise to the Company.
(b) Date of
Exercise. The “Date of Exercise” of the
Warrant shall be defined as the date that a copy of the Notice of
Exercise Form attached hereto as Exhibit A, completed and executed,
is sent by facsimile to the Company or its transfer agent (
“Transfer Agent” ) (including but not limited to
a scanned “PDF” file which is delivered as an
attachment to an e-mail to the Company), provided that the original
Warrant (if delivery of the original Warrant is required pursuant
to Section 2(l) hereof) and Notice of Exercise Form are received by
the Company and the Exercise Price is satisfied, each as soon as
practicable thereafter. Alternatively, the Date of Exercise shall
be defined as the date the original Notice of Exercise Form is
received by the Company, if Holder has not sent advance notice by
facsimile. Upon delivery of the Notice of Exercise Form to the
Company by facsimile or otherwise, the Holder shall be deemed for
all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are
credited to the Holder's DTC account or the date of delivery of the
certificates evidencing such Warrant Shares as the case may be. The
Company shall deliver any objection to any Notice of Exercise
within 1 Business Day of receipt of such notice. In the event of
any dispute or
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discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error.
(c) Delivery of
Common Stock Upon Exercise. Within 3 Trading Days from the
delivery to the Company of the Notice of Exercise, surrender of
this Warrant (if required) and payment of the aggregate Exercise
Price (which, in the case of a Cashless Exercise, shall be deemed
to have been paid upon the submission by the Holder of a Notice of
Exercise)(the “Warrant Shares Delivery Deadline”
), the Company shall issue and deliver (or cause its transfer agent
so to issue and deliver) in accordance with the terms hereof to or
upon the order of the Holder that number of shares of Common Stock
( “Exercise Shares” ) for the portion of this
Warrant converted as shall be determined in accordance herewith.
Upon the Exercise of this Warrant or any part thereof, the Company
shall, at its own cost and expense, take all necessary action,
including obtaining and delivering, an opinion of counsel to assure
that the Company's transfer agent shall issue stock certificates in
the name of Holder (or its nominee) or such other persons as
designated by Holder and in such denominations to be specified at
Exercise representing the number of shares of Common Stock issuable
upon such Exercise. The Company warrants that no instructions other
than these instructions have been or will be given to the transfer
agent of the Company's Common Stock and that, unless waived by the
Holder, the Exercise Shares will be free-trading, and freely
transferable, and will not contain a legend restricting the resale
or transferability of the Exercise Shares if the Unrestricted
Conditions (as defined below) are met. 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 Shares
Delivery Deadline (a “Warrant Shares Delivery
Failure” ), 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 (as
defined below) 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 Shares
Delivery Deadline until such certificates are delivered
(“Warrant Shares Delivery Failure Payments”
).
(d) Payment of
Accrued Warrant Shares Delivery Failure Payments. The Company
shall pay any payments incurred under this Section in cash or cash
equivalent upon demand or, if not demanded sooner, on or before the
fifth (5th) day of each month following a month in which they
accrue. Warrant Shares Delivery Failure Payments are in addition to
any Shares that the Holder is entitled to receive upon Exercise of
this Warrant. Nothing herein shall limit the Holder's right to
pursue actual damages (to the extent in excess of the Warrant
Shares Delivery Failure Payments) for the Company's Warrant Shares
Delivery Failure, and the Holder shall have the right to pursue all
remedies available at law or in equity (including a decree of
specific performance and/or injunctive relief).
(e) Maximum Interest
Rate. Nothing contained herein or in any document referred to
herein or delivered in connection herewith shall be deemed to
establish or require the payment of a rate of interest or other
charges in excess of the maximum permitted by applicable law. In
the event that the rate of interest or dividends required to be
paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Holder and thus refunded
to the Company.
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(f) Revocation of
Exercise Upon Delivery Failure. In addition to any other
remedies which may be available to the Holder, in the event that
the Company fails for any reason to effect delivery of the Exercise
Shares by the Warrant Shares Delivery Deadline, the Holder will be
entitled to revoke all or part of the relevant Notice of Exercise
by delivery of a notice to such effect to the Company whereupon the
Company and the Holder shall each be restored to their respective
positions immediately prior to the delivery of such notice, except
that the liquidated damages described above shall be payable
through the date notice of revocation or rescission is given to the
Company.
(g)
Legends.
(i)
Restrictive Legend . The Holder understands that the Warrant
and, until such time as Exercise Shares have been registered under
the 1933 Act as contemplated by the Registration Rights Agreement
or otherwise may be sold pursuant to Rule 144 or Rule 144(k) under
the 1933 Act without any restriction as to the number of securities
as of a particular date that can then be immediately sold, the
Exercise Shares may bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against
transfer of the certificates for such securities):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF
COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
COUNSEL TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.”
(ii)
Removal of Restrictive Legends . Certificates evidencing the
Exercise Shares shall not contain any legend restricting the
transfer thereof (including the legend set forth above in
subsection 2(g)(i)): (i) while a registration statement (including
the Registration Statement, as defined in the Registration Rights
Agreement) covering the resale of such security is effective under
the Securities Act, or (ii) following any sale of such Exercise
Shares pursuant to Rule 144, or (iii) if such Exercise Shares are
eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by
the staff of the Commission) (collectively, the
“Unrestricted Conditions” ). The Company shall
cause its counsel to issue a legal opinion to the Company’s
transfer agent promptly after the Effective Date (as defined below)
of the Registration Statement if required by the Company’s
transfer agent to effect the issuance of Exercise Shares without a
restrictive legend or removal of the legend hereunder. If the
Unrestricted Conditions are met at the time of issuance or resale
of Exercise Shares, then such Exercise Shares shall be issued free
of all legends. The Company agrees that following the Effective
Date or at such time as the Unrestricted Conditions are met or such
legend is otherwise no longer required under
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this Section 2(g), it will, no later than three
(3) Trading Days following the delivery (the “Unlegended
Shares Delivery Deadline” ) by the Holder to the Company
or the Company’s transfer agent of a certificate representing
Exercise Shares, as applicable, issued with a restrictive legend
(such third Trading Day, the “Legend Removal
Date” ), deliver, or cause the Transfer Agent to deliver
at the Company’s expense, to such Holder a certificate (or
electronic transfer) representing such shares that is free from all
restrictive and other legends. For purposes hereof,
“Effective Date” shall mean the date that the
Registration Statement that the Company is required to file
pursuant to the Registration Rights Agreement has been declared
effective by the Securities and Exchange Commission (the
“Commission” ).
(iii)
Sale of Unlegended Shares . Holder agrees that the removal
of the restrictive legend from certificates representing Securities
as set forth in this Section 2(g)(i) above is predicated upon the
Company’s reliance that the Holder will sell any Exercise
Shares pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are
sold pursuant to a Registration Statement, they will be sold in
compliance with the plan of distribution set forth therein.
(h) Cancellation
of Warrant. This Warrant shall be canceled upon the full
Exercise of this Warrant, and, as soon as practical after the Date
of Exercise, Holder shall be entitled to receive Common Stock for
the number of shares purchased upon such Exercise of this Warrant,
and if this Warrant is not Exercised in full, Holder shall be
entitled to receive a new Warrant (containing terms identical to
this Warrant) representing any unexercised portion of this Warrant
in addition to such Common Stock.
(i) Holder of
Record. Each person in whose name any Warrant for shares of
Common Stock is issued shall, for all purposes, be deemed to be the
Holder of record of such shares on the Date of Exercise of this
Warrant, irrespective of the date of delivery of the Common Stock
purchased upon the Exercise of this Warrant. Nothing in this
Warrant shall be construed as conferring upon Holder any rights as
a stockholder of the Company.
(j) Delivery of
Electronic Shares. In lieu of delivering physical certificates
representing the unlegended shares of Common Stock issuable upon
Exercise (the “Unlegended Shares” ), provided
the Company’s transfer agent is participating in the
Depository Trust Company ( “DTC” ) Fast
Automated Securities Transfer ( “FAST” )
program, upon written request of the Holder, so long as the
certificates therefor do not bear a legend, are not required to
bear a legend, and the Holder is not obligated to return such
certificate for the placement of a legend thereon, the Company
shall cause its transfer agent to electronically transmit the
Unlegended Shares to the Holder by crediting the account of the
Holder's prime broker with DTC identified in the written request
through its Deposit Withdrawal Agent Commission (
“DWAC” ) system. Otherwise, delivery of the
Common Stock shall be by physical delivery to the address specified
by the Holder in the Notice of Exercise. The time periods for
delivery and liquidated damages described herein shall apply to the
electronic transmittals described herein, or to physical delivery,
whichever is applicable.
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(k) Buy-In.
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 Exercise Shares
pursuant to an Exercise on or before the Warrant Shares Delivery
Deadline, 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 Exercise 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
Exercise 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 Exercise 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, together with applicable confirmations and other evidence
reasonably requested by the Company. 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.
(l) Surrender of
Warrant Upon Exercise; Book-Entry. Notwithstanding anything to
the contrary set forth herein, upon Exercise of this Warrant in
accordance with the terms hereof, the Holder shall not be required
to physically surrender the original Warrant Certificate to the
Company unless all of this Warrant is Exercised, in which case such
Holder shall deliver the original Warrant being Exercised to the
Company promptly following the Date of Exercise at issue. 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 amount of this Warrant that is so
Exercised and the dates of such Exercises or shall use such other
method, reasonably satisfactory to the Holder and the Company, so
as not to require physical surrender of this original Warrant upon
each such Exercise. In the event of any dispute or discrepancy,
such records of the Holder shall be controlling and determinative
in the absence of manifest error. 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.
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3.
Payment of Warrant Exercise Price .
The
Exercise Price ( “Exercise Price” ) shall
initially equal $0.50 per share (the
“Initial Exercise Price” ), subject to
adjustment pursuant to the terms hereof, including but not limited
to Section 5 below.
Payment
of the Exercise Price may be made by either of the following, or a
combination thereof, at the election of Holder:
(i)
Cash Exercise : The Holder may exercise this Warrant
in cash, bank or cashiers check or wire transfer (a “Cash
Exercise” ); or
(ii)
Cashless Exercise : The Holder, at its option, may
exercise this Warrant in one or more cashless exercise transactions
anytime that there is not a current and effective Registration
Statement (as defined in the Registration Rights Agreement) then in
effect covering the resale of the Warrant Shares issuable upon such
exercise. In order to effect a Cashless Exercise, the Holder shall
surrender of this Warrant at the principal office of the Company
together with notice of cashless election, in which event the
Company shall issue Holder a number of shares of Common Stock
computed using the following formula (a “Cashless
Exercise” ):
X = Y (A-B)/A
where: X = the number of shares of Common
Stock to be issued to Holder.
Y = the number of shares
of Common Stock for which this Warrant is being Exercised.
A = the Market Price of
one (1) share of Common Stock (for purposes of this Section 3(ii),
where “Market Price,” as of any date, means the
Volume Weighted Average Price (as defined herein) of the
Company’s Common Stock during the five (5) consecutive
trading day period immediately preceding the date of Exercise, or
other applicable date.
B = the
Exercise Price.
As used
herein, the “Volume Weighted Average Price” or
“VWAP” for any security as of any date means the
volume weighted average sale price on the Over the Counter
Electronic Bulletin Board (the “OTC-BB” ) as
reported by, or based upon data reported by, Bloomberg L.P. or an
equivalent, reliable reporting service mutually acceptable to and
hereafter designated by holders of a majority in interest of the
Warrants and the Company ( “Bloomberg” ) or, if
the OTC-BB is not the principal trading market for such security,
the volume weighted average sale price of such security on the
principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or, if no volume
weighted average sale price is reported for such security, then the
last closing trade price of such security as reported by Bloomberg,
or, if no last closing trade price is
8
reported for such
security by Bloomberg, the average of the bid prices of any market
makers for such security that are listed in the “pink
sheets” by the National Quotation Bureau, Inc. If the
Volume Weighted Average Price cannot be calculated for such
security on such date in the manner provided above, the volume
weighted average price shall be the fair market value as mutually
determined by the Company and the holders of a majority in interest
of the Warrants being Exercised for which the calculation of the
volume weighted average price is required in order to determine the
Exercise Price of such Warrants. “Trading Day”
shall mean any day on which the Common Sock is traded for any
period on the OTC-BB, or on the principal securities exchange or
other securities market on which the Common Stock is then being
traded.
For
purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is
intended, understood and acknowledged that the Common Stock
issuable upon Exercise of this Warrant in a cashless Exercise
transaction shall be deemed to have been acquired at the time this
Warrant was issued. Moreover, it is intended, understood and
acknowledged that the holding period for the Common Stock issuable
upon Exercise of this Warrant in a cashless Exercise transaction
shall be deemed to have commenced on the date this Warrant was
issued.
4.
Transfer and Registration .
(a) Transfer
Rights. Subject to the provisions of Section 8 of this
Warrant, this Warrant may be transferred on the books of the
Company, in whole or in part, in person or by attorney, upon
surrender of this Warrant properly completed and endorsed. This
Warrant shall be canceled upon such surrender and, as soon as
practicable thereafter, the person to whom such transfer is made
shall be entitled to receive a new Warrant or Warrants as to the
portion of this Warrant transferred, and Holder shall be entitled
to receive a new Warrant as to the portion hereof retained.
(b) Registrable
Securities. The Common Stock issuable upon the Exercise of
this Warrant has registration rights pursuant to that certain
Registration Rights Agreements between the Company and the Holder
dated even herewith.
5.
Anti-Dilution Adjustments; Additional Adjustments; Purchase
Rights .
(a) [Omitted] .
(b) Recapitalization or
Reclassification. If the Company shall at any time effect a
recapitalization, reclassification or other similar transaction of
such character that the shares of Common Stock shall be changed
into or become exchangeable for a larger or smaller number of
shares, then upon the effective date thereof, the number of shares
of Common Stock which Holder shall be entitled to purchase upon
Exercise of this Warrant shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease in
the number of shares of Common Stock by reason of such
recapitalization, reclassification or similar transaction, and the
Exercise Price shall be, in the case of an increase in the number
of shares, proportionally decreased and, in the case of decrease in
the number of shares, proportionally increased. The Company shall
give Holder the same
9
notice it provides to holders of Common Stock of
any transaction described in this Section 5(b).
(c) Exercise
Price Adjusted. As used in this Warrant, the term
“Exercise Price” shall mean the purchase price
per share specified in Section 3 of this Warrant, until the
occurrence of an event stated in this Section 5 or otherwise set
forth in this Warrant, and thereafter shall mean said price as
adjusted from time to time in accordance with the provisions of
said subsection. No such adjustment under this Section 5 shall be
made unless such adjustment would change the Exercise Price at the
time by $.01 or more; provided, however, that all adjustments not
so made shall be deferred and made when the aggregate thereof would
change the Exercise Price at the time by $.01 or more. No
adjustment made pursuant to any provision of this Section 5 shall
have the net effect of increasing the Exercise Price in relation to
the split adjusted and distribution adjusted price of the Common
Stock.
(d) Adjustments:
Additional Shares, Securities or Assets. In the event that at
any time, as a result of an adjustment made pursuant to this
Section 5 or otherwise, Holder shall, upon Exercise of this
Warrant, become entitled to receive shares and/or other securities
or assets (other than Common Stock) then, wherever appropriate, all
references herein to shares of Common Stock shall be deemed to
refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or
assets shall be subject to adjustment from time to time in a manner
and upon terms as nearly equivalent as practicable to the
provisions of this Section 5.
(e) Adjustment
Upon Issuance of Shares of Common Stock or Common Stock
Equivalents . If the Company issues or sells, or in accordance
with this Section 5(e) is deemed to have issued or sold, any shares
of Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company, but
excluding shares of Common Stock deemed to have been issued by the
Company in connection with an Exempt Issuance (as defined in the
Securities Purchase Agreement) for a consideration per share (the "
New Issuance Price" ) less than a price (the "Applicable
Price" ) equal to the Exercise Price in effect immediately
prior to such issue or sale or deemed issuance or sale (the
foregoing a "Dilutive Issuance" ), then immediately after
such Dilutive Issuance, the Exercise Price then in effect shall be
reduced to an amount equal to the New Issuance Price. Upon each
such adjustment of the Exercise Price hereunder, the number of
Warrant Shares shall be adjusted in accordance with Section 5(k)
below. The adjustments required by this paragraph and by Sections
5(e)(i)-(iv) below are referred to in the singular, as a
“Subsequent Issuance Adjustment,“ and
collectively as “Subsequent Issuance
Adjustments.” For purposes of determining the adjusted
Exercise Price under this Section 5(e), the following shall be
applicable:
(i) Issuance
of Options. If the Company in any manner grants any Options and the
lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon conversion,
exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option is less than the Applicable Price, then
such share of Common Stock shall be deemed to be outstanding and to
have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share. For
purposes of this Section 5(e)(i), the "lowest price per
10
share for which one share of Common Stock is
issuable upon exercise of such Options or upon conversion, exercise
or exchange of such Convertible Securities" shall be equal to the
sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common
Stock upon the granting or sale of the Option, upon exercise of the
Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option.
(ii)
Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange thereof is less than the
Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company
at the time of the issuance or sale of such Convertible Securities
for such price per share. For the purposes of this Section
5(e)(ii), the "lowest price per share for which one share of Common
Stock is issuable upon the conversion, exercise or exchange" shall
be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of
Common Stock upon the issuance or sale of the Convertible Security
and upon conversion, exercise or exchange of such Convertible
Security. In the case of a Convertible Security which is
accompanied Options (collectively, a “Unit” ),
the "lowest price per share for which one share of Common Stock is
issuable upon the conversion, exercise or exchange of such
Convertible Security” shall equal (i) the consideration
deemed received in exchange for the Convertible Security, as
determined in accordance with subsection 5(e)(iv) below, divided by
(ii) the total number of shares into which such Convertible
Security is convertible or exchangeable (without regard to any
contractual limitation on the timing or amount of conversions).
(iii) Change
in Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion, exercise or exchange of any
Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for
shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the
time of such increase or decrease shall be adjusted to the Exercise
Price and the number of Warrant Shares which would have been in
effect at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the
case may be, at the time initially granted, issued or sold. For
purposes of this Section 5(e)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the date of
issuance of this Note are increased or decreased in the manner
described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section 5(e)(iii) shall be
made if such adjustment would result in an increase of the Exercise
Price then in effect or a decrease in the number of Warrant
Shares.
(iv) Calculation
of Consideration Received. In case any Option is issued in
connection with the issue or sale of other securities of the
Company, together comprising one integrated transaction, the
Options will be deemed to have been issued for
11
their Black Scholes value, and the other
securities issued or sold in such integrated transaction will be
deemed to have been issued or sold for the balance of the
consideration received by the Company. If any shares of Common
Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount received by
the Company therefor. If any shares of Common Stock, Options or
Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company
will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company will be the Weighted Average
Price of such security on the date of receipt. If any shares of
Common Stock, Options or Convertible
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