This Warrant Agreement involves
Title: WARRANT TO PURCHASE COMMON STOCK
Governing Law: New York Date: 2/4/2005
Industry: Software and Programming Sector: Technology
Void after 5:00 p.m., New York Time on ______ ___, 200__
Warrant to Purchase _________ Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"),
AND ARE BEING OFFERED AND SOLD PURSUANT
TO RULE 506 OF REGULATION D
FOR VALUE RECEIVED, eAutoclaims, Inc., a Nevada corporation (the
"Company"), grants the following rights to _____________________ ("Holder"):
ARTICLE 1. DEFINITIONS.
As used herein, the following terms shall have the following meanings, unless
the context shall otherwise require:
(a) "Common Stock" shall mean the common stock, par value $0.001 per share,
of the Company.
(b) "Corporate Office" shall mean the office of the Company (or its
successor) at which at any particular time its principal business shall be
(c) "Closing" shall have mean the date the Company receives funds from the
Units as described in the Confidential Private Offering Term Sheet and
(d) "Exercise Date" shall mean any date upon which the Holder shall give
the Company a Notice of Exercise.
(e) "Exercise Price" shall mean the price to be paid to the Company for
each share of Common Stock to be purchased upon exercise of this Warrant in
accordance with the terms hereof. The Exercise Price is $.30 per Share, subject
to the anti-dilution provisions of Section 2.5.
(f) "Expiration Date" shall mean 5:00 p.m. (New York time) on __________,
(g) "SEC" shall mean the United States Securities and Exchange Commission.
(h) ""Underlying Shares" shall mean the shares of the Common Stock issuable
upon exercise of the Warrant.
ARTICLE 2. EXERCISE AND AGREEMENTS.
2.1 Exercise of Warrant. This Warrant shall entitle Holder to purchase up
to ____________________________________________ (______________) shares of
Common Stock (the "Shares") at the Exercise Price. This Warrant shall be
exercisable at any time and from time to time prior to the Expiration Date (the
"Exercise Period"). This Warrant and the right to purchase Shares hereunder
shall expire and become void at the Expiration Date.
2.2 Manner of Exercise.
(a) Holder may exercise this Warrant at any time, starting at the time of
closing and from time to time during the Exercise Period, in whole or in part
(but not in denominations of fewer than 1,000 Shares, except upon an exercise of
this Warrant with respect to the remaining balance of Shares purchasable
hereunder at the time of exercise), by delivering to the Company (i) a duly
executed Notice of Exercise in substantially the form attached as Appendix 1
hereto, and (ii) a wire transfer or check for the aggregate Exercise Price of
the Shares being purchased.
(b) From time to time upon exercise of this Warrant, in whole or part, in
accordance with its terms, the Company will instruct its transfer agent to
deliver stock certificates to the Holder representing the number of Shares being
purchased pursuant to such exercise, subject to adjustment as described herein.
(c) Promptly following any exercise of this Warrant, if the Warrant has not
been fully exercised and has not expired, the Company will deliver to the Holder
a new Warrant for the balance of the Shares covered hereby.
2.3 Termination. All rights of the Holder in this Warrant, to the extent
they have not been exercised, shall terminate on the Expiration Date.
2.4 No Rights Prior to Exercise. Prior to its exercise pursuant to Section
2.2 above, this Warrant shall not entitle the Holder to any voting or other
rights as holder of Shares.
(a) Dilutive Issuances. Subject to the provisions and exclusions set forth
herein, the Warrant is subject to "full ratchet" anti-dilution protection
relating to the issuance of any future equity securities or common stock
equivalents that are not currently outstanding, which contain a purchase,
conversion or exercise price below the Warrant exercise price of $.30 per Share
(collectively "Dilutive Issuance"). If the Company issues any equity securities
or common stock equivalents that equate to a Dilutive Issuance because the
issuance, conversion or exercise price of such security is less than the
Exercise Price, then the Exercise Price shall be immediately adjusted downward
to equal the price in the Dilutive Issuance. Notwithstanding the foregoing, it
is understood that the conversion of currently outstanding Series A Preferred
Stock and currently outstanding convertible notes are excluded from the
definition of a Dilutive Issuance. The issuance of equity securities pursuant to
employee/consultant/director equity compensation arrangements shall apply to
this anti-dilution provision only if they are issued below the common stock
current market value at the time of issuance and the issuance has not been
approved by the Placement Agent, which approval shall not be unreasonably
(b) Reclassification. In case of any reclassification, stock split, or
reverse stock split, capital reorganization, stock dividend or other change of
outstanding shares of Common Stock, the Company shall cause effective provision
to be made so that the Holder shall have the right thereafter, by exercising
this Warrant, to purchase the kind and number of shares of stock or other
securities or property (including cash) receivable upon such capital
reorganization, stock dividend, stock split, or reverse stock split, as the
Holder would have been entitled to receive had the Holder exercised this Warrant
in full immediately before such reclassification, capital reorganization, stock
dividend, stock split, or reverse stock split, or conveyance. Any such provision
shall include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 2.5. The
foregoing provisions shall similarly apply to successive reclassifications,
capital reorganizations, stock dividends, stock split, or reverse stock split,
and other changes of outstanding shares of Common Stock.
(c) Merger. In the case of any consolidation or merger of the Company with
or into another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification, capital reorganization, stock dividend or other change of
outstanding change of outstanding common stock), or in the case of any sale or
conveyance to another corporation of the property of the corporation as, or
substantially as, an entirety (collectively "Sale of the Business") the Company
shall give the warrant holder at least twenty (20) business days advance notice
of the material terms and conditions of the Sale of Business transaction. The
Warrant Holder shall notify the Company within five (5) business days of the
expected closing date of the Sale of Business as disclosed in the notification
by the Company to the Warrant Holder of the Warrant Holder's intent to exercise
this Warrant, which exercise shall include the notice of exercise and a bank
cashier's or certified check for the aggregate Exercise Price of the underlying
Shares being purchased. If the Warrant Holder does not timely elect to exercise
the Warrant in accordance with these provisions the Warrant shall terminate and
be null and void.
2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise
of this Warrant and the number of Shares to be issued shall be rounded up to the
nearest whole Share. If a fractional Share interest arises upon any exercise of
the Warrant, the Company shall eliminate such fractional Share interest by
issuing Holder an additional full Share.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows: