Exhibit 10.6
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
_____________
shares
Warrant Number
____
Series C Warrant to
Purchase Common Stock
of
ICP Solar
Technologies, Inc.
THIS CERTIFIES that
______________________, a ______________________________________ or
any subsequent holder hereof ( "Holder" ) has the right to
purchase from ICP Solar Technologies, Inc. , a Nevada
corporation (the "Company" ), up to
___________________________________ (______________) 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).
This Warrant amends and restates the Warrant originally dated as of
June 13, 2008.
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.
1
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 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.
2
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. This Series C Warrant may not be
exercised until after the Series B Warrant of the Holder has been
exercised in full. Thereafter, 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 discrepancy, the records of the Holder
shall be controlling and determinative in the absence of manifest
error.
3
(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.
4
(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 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” ).
5
(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.
(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.
6
(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.
3.
Payment of Warrant
Exercise Price .
The Exercise Price (
“Exercise Price” ) shall initially equal $1.00
per share (the “Initial Exercise Price” ),
provided that as of December 31, 2008, the Exercise Price shall be
reduced, but not increased, to $0.50 per share, all subject
to adjustment pursuant to the terms hereof, including but not
limited to Section 5 below.
7
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 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.
8
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 originally 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 notice it provides to
holders of Common Stock of any transaction described in this
Section 5(b).
9
(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 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.
10
(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
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 rec
