Exhibit 4.17
NEITHER THESE
SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
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 APPLICABLE
STATE SECURITIES LAWS 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. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
WARRANT AGREEMENT
Warrant Agreement (the “Warrant”),
dated as of March ___, 2009, between Cicero, Inc. (the
“Company”) and ______________ (the
“Holder”).
WITNESSETH:
WHEREAS, the Company has entered into a series
of loans with several lenders, one of which is the Holder, each
loan governed by terms set forth in a secured loan note (together
the “Loan”) of even date, and the Loan provides for the
issuance of this Warrant, which is one of several Warrants issued
to the lenders, one of which is the Holder, each Warrant being
alike in their terms other than the number of shares of common
stock of the Company, $.001 par value (“Common Stock”),
subject thereto; and
WHEREAS, this Warrant is being issued on a
private placement basis on the terms provided herein, and the
Holder understands the limitations and responsibilities of
acquiring the restricted securities comprising the Warrant and the
underlying shares of Common Stock (“Warrant Shares”)
and the registration rights provided herein.
NOW, THEREFORE, in consideration of the premises
contained herein, including the portion of the Loan by the Holder
to the Company, the agreements set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1.
Grant and Period.
1.1
Grant . The Holder is
hereby granted the right to purchase from the Company, at any time
during the exercise period, up to an aggregate
of _______ Warrant Shares of the Company at an initial
exercise price (subject to adjustment as provided in Section 5
hereof) of $0.20 per Warrant Share (the “Exercise
Price”), such exercise to be subject to the terms and
conditions of this Warrant.
1.2
Period . The Warrant will be
exercisable commencing on March ____, 2009, and expire at 5:00 PM
on March ________, 2014 (“Expiration
Time”). If the Expiration Time is not a business
day in the City of New York, then the expiration date will be
extended to 5:00 PM on the next business day in the City of New
York. Days on which banks are generally closed for
business and financial transactions in the City of New York,
Saturdays and Sundays will be considered a non-business
day.
Exhibit 4.17
2.
Exercise of Warrant .
2.1
Full Exercise . Except as provided
in Section 2.3 below, the Holder shall effect an exercise of
the Warrant by surrendering to the Company this Warrant, together
with a Subscription in the form of Exhibit A attached thereto, duly
executed by such Holder, at any time prior to the Expiration Time,
at the Company’s principal office, accompanied by payment in
cash or by certified or official bank check payable to the order of
the Company in the amount of the aggregate purchase price (the
“Aggregate Price”), subject to any adjustments provided
for in the Warrant. The Aggregate Price shall be the amount that is
the result of the Exercise Price multiplied by the number of
Warrant Shares that are the subject of the Warrant (as adjusted as
hereinafter provided) being purchased by the Holder.
2.2
Partial Exercise . The
Warrant may also be exercised from time to time in part by
surrendering the Warrant in the manner specified in Sections 2.1 or
2.3 hereof, except that the Purchase Price payable shall be the
amount that is the result of the number of Warrant Shares being
purchased hereunder multiplied by the Exercise Price, subject to
any adjustments provided for in the Warrant. Upon any such partial
exercise, the Company, at its expense, will forthwith issue to the
Holder a new Warrant of like tenor for the aggregate number of
securities (as constituted as of the date hereof) for which the
Warrant shall not have been exercised, issued in the name of the
Holder or as the Holder (upon payment by such Holder of any
applicable transfer taxes) may direct.
2.3
Conversion Right . The
Holder may effect an exercise of the Warrants and pay the Exercise
Price through a conversion of the Warrant (“Conversion
Right”); provided, that such right shall exist only at such
time that the Company has the obligation to provide a resale
registration statement for the underlying securities of the Warrant
and the Company does not have a registration statement effective
and currently the available for the resale by the Holder of the
underlying securities of the Warrant as provided in Section 6
hereof. The Holder may effect a Conversion Right of the Warrant by
surrendering to the Company this Warrant, together with a
Subscription in the form of Exhibit B attached hereto, duly
executed by such Holder, prior to the Expiration Time, at the
Company’s principal office, upon which the Company shall
issue to the Holder the number of Warrant Shares determined as
follows:
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X
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Y x
(A-B)/A
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where
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X
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=
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the number of
Warrant Shares to be issued to the Holder;
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Y
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=
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the number of
Warrant Shares with respect to which this Warrant is being
exercised;
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A
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=
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the Market
Price of a share of Common Stock as of the Date of Exercise;
and
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B
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=
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the Exercise
Price.
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2.4
Call of Warrant . The Company reserves the right
to call the Warrant for redemption at any time prior to its
exercise, with a notice of call in writing to the Holder of record
of the Warrant, giving 30 days’ advance notice of the call at
any time if the Market Price of a share of Common Stock has been at
least 150% of the then Exercise Price of the Warrant, on each of 20
trading days within a 30 trading day period ending on the third
business day prior to the date on which notice of the call is
given. The call price of the Warrant is to be $.005 per Warrant
Share that may be then acquired upon exercise of the Warrant. Any
Warrant either not exercised or tendered back to the Company by the
end of the date specified in the notice of call shall be canceled
on the books of the Company and have no further value except for
the $.005 call price per Warrant Share.
Exhibit 4.17
2.5
Certain Defined Terms
. “Market Price” of a share of Common Stock
on any date shall mean, (i) if the shares of Common Stock are
traded on the Nasdaq Global Market, Nasdaq Global Select Market or
the Nasdaq Capital Market, the last bid price reported on that
date; (ii) if the shares of Common Stock are not quoted on a Nasdaq
market and are listed on any other national securities exchange,
the last sale price of the Common Stock reported by such exchange
on that date; (iii) if the shares of Common Stock are not quoted on
any such market or listed on any such exchange and the shares of
Common Stock are traded in the over-the-counter market, the last
price reported on such day by the OTC Bulletin Board; (iv) if the
shares of Common Stock are not quoted on a any such market, listed
on any such exchange or quoted on the OTC Bulletin Board, then the
last price quoted on such day in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any
similar organization or agency succeeding its functions of
reporting prices); or (v) if none of clauses (i)-(iv) are
applicable, then as determined, in good faith, by the Board of
Directors of the Company and the Holders. “Date of
Exercise” means the date on which the Holder shall have
delivered to the Company (i) the Warrant, (ii) the applicable
Subscription form attached thereto, appropriately completed and
duly signed, and (iii) if applicable, payment of the Exercise
Price.
3.
Issuance of
Certificates . Upon the exercise of the Warrant, the
issuance of certificates for Warrant Shares shall be made promptly
(and, in any event within five business days thereafter) without
charge to the Holder thereof including, without limitation, any tax
which may be payable in respect of the issuance thereof, and such
certificates shall (subject to the provisions of Section 4 and
Section 5 hereof) be issued in the name of, or in such names as may
be directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of
any such certificates in a name other than that of the Holder and
the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company
that such tax has been paid.
4.
Restriction on Transfer . The
Warrant and the Warrant Shares may be transferred only pursuant to
a registration statement filed under the Securities Act of 1933, as
amended (the “Securities Act”) and the applicable state
securities laws or an exemption from such
registrations. Subject to such restrictions, the Company
shall transfer the Warrant and the Warrant Shares, from time to
time, upon the books to be maintained by the Company for that
purpose, upon surrender thereof, for transfer properly endorsed or
accompanied by appropriate instructions for transfer and such other
documents as may be reasonably required by the Company, including,
if required by the Company, an opinion of its counsel to the effect
that such transfer is exempt from the registration requirements of
the Securities Act, and to establish that such transfer is being
made in accordance with the terms hereof. Upon such
surrender to the Company of this Warrant for its transfer, the
Company shall execute and deliver a new Warrant, representing the
new Warrant or Warrants in the name of the transferee or
transferees and in the denomination or denominations specified in
such instructions, and shall issue to the transferor a new Warrant
evidencing the portion of the Warrant not so transferred, and this
Warrant shall promptly be cancelled. A Warrant, if
properly transferred, may be exercised by a new holder without
having a new Warrant issued.
5.
Adjustments to
Exercise Price and Number of Securities .
5.1
Stock Dividends and Splits
. If the Company, (i) pays a stock dividend on its
Common Stock, (ii) subdivides outstanding shares of Common Stock
into a greater number of shares, or (iii) combines outstanding
shares of Common Stock into a lesser number of shares, then in each
such case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of
shareholders entitled to receive such dividend, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision
or combination.
Exhibit 4.17
5.2
Extraordinary Transactions
. If, (i) the Company effects any merger or
consolidation of the Company with or into another Person and the
Company is not the surviving entity, or (ii) the Company effects
any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, (in either such
case, an “Extraordinary Transaction”), then the Warrant
will become the right thereafter to receive, upon exercise, the
same amount and kind of securities as the Holder would have been
entitled to receive upon the occurrence of such Extraordinary
Transaction if it had been, immediately prior to such Extraordinary
Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of the Warrant (the “Alternate
Consideration”) in lieu of the Warrant Shares. The aggregate
Exercise Price for each Warrant will not be affected by any such
Extraordinary Transaction, but the Company shall apportion such
aggregate Exercise Price to the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, to be received in
a Extraordinary Transaction, then each Holder, to the extent
practicable, shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of the Warrant
following such Extraordinary Transaction. In addition, at the
request of the Holder, upon surrender of the Warrant, any successor
to the Company or surviving entity in such Extraordinary
Transaction shall issue to the Holder a new Warrant consistent with
the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise
Price upon exercise thereof. Each Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent
transaction analogous to a Extraordinary Transaction.
5.3
Adjustment in Number of Securities
. Upon each adjustment of the Exercise Price pursuant to
the provisions of Sections 5.1 and 5.2, the number of securities
issuable upon the exercise of the Warrant shall be adjusted to the
nearest full amount by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number
of securities issuable upon exercise of the Warrant immediately
prior to such adjustment and dividing the product so obtained by
the adjusted Exercise Price.
5.4
No Adjustment of Exercise Price in
Certain Cases . No adjustment of the Exercise Price
shall be made if the amount of said adjustment shall be less than
$.01 per Warrant Share; provided, however, that in such case any
adjustment that would o
