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WARRANT
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NO. __________
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CUSTOMER ACQUISITION NETWORK HOLDINGS, INC.
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__________ Shares
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WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:30 P.M., EASTERN
TIME, ON THE EXPIRATION DATE
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
FOR
VALUE RECEIVED, CUSTOMER ACQUISITION NETWORK HOLDINGS, INC., a
Delaware corporation (the “Company”), hereby
agrees to sell upon the terms and on the conditions
hereinafter set forth, but no later than 5:30 p.m., Eastern
Time, on the Expiration Date (as hereinafter defined), to
____________________, or registered assigns (the
“Holder”), under the terms as hereinafter set
forth, _______ fully paid and non-assessable shares of the
Company’s Common Stock, par value $0.001 per share (the
“Warrant Stock”), at a purchase price of $2.50 per
share (the “Warrant Price”), pursuant to this
warrant (this “Warrant”). The number of shares of
Warrant Stock to be so issued and the Warrant Price are
subject to adjustment in certain events as hereinafter set
forth. The term “Common Stock” shall mean, when
used herein, unless the context otherwise requires, the stock
and other securities and property at the time receivable upon
the exercise of this Warrant.
1.
Exercise of Warrant .
a.
The Holder may exercise this Warrant according to its terms by (i)
surrendering this Warrant, properly endorsed, to the Company at the
address set forth in Section 10, (ii) the subscription form
attached hereto having then been duly executed by the Holder, and
(iii) payment of the purchase price being made to the Company for
the number of shares of the Warrant Stock specified in the
subscription form, or as otherwise provided in this Warrant, prior
to 5:30 p.m., Eastern Time, on ________, 2013
(the “
Expiration Date
”).
b.
(i) The aggregate purchase price for the shares of Warrant Stock
being purchased may be paid (1) either by cash, certified check or
bank draft or wire transfer of immediately available funds, or (2)
subject to Section 1b.(ii) below, by surrender of a number of
shares of Warrant Stock having a fair market value equal to the
aggregate purchase price of the Warrant Stock being purchased
(“
Cashless Exercise ”)
as determined herein. If the Holder elects the Cashless Exercise
method of payment, the Company shall issue to the Holder a number
of shares of Warrant Stock determined in accordance with the
following formula:
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with:
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X
=
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the
number of shares of Warrant Stock to be issued to the
Holder ;
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Y
=
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the
number of shares of Warrant Stock with respect to which the
Warrant is being exercised ;
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A
=
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the
fair value per share of Common
Stock on
the date of exercise of this Warrant ;
and
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B
=
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the
then-current Warrant Price of
the Warrant
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For
the purposes of this Section 1b., “fair value” per
share of Common Stock shall mean (A) the average of the
closing sales prices, as quoted on the primary national or
regional stock exchange on which the Common Stock is listed,
or ,
if not listed, the
OTC Bulletin Board if quoted thereon, on the
five
consecutive trading days immediately preceding the date of
exercise, or (B) if the Common Stock is not publicly traded as
set forth above, as reasonably and in good faith determined by
the Board of Directors of the Company as of the date which the
notice of exercise is deemed to have been sent to the
Company.
(ii)
Notwithstanding the foregoing, the Cashless Exercise option
set forth in clause (i) of Section 1b. above shall only be
available so long as the Company shall not have registered the
Warrant Stock in an effective registration statement with the
Securities and Exchange Commission on or prior to the six
month anniversary of the date that this warrant is
issued.
c.
This Warrant may be exercised in whole or in part so long as any
exercise in part hereof would not involve the issuance of
fractional shares of Warrant Stock. If exercised in part, the
Company shall deliver to the Holder a new Warrant, identical in
form, in the name of the Holder, evidencing the right to purchase
the number of shares of Warrant Stock as to which this Warrant has
not been exercised, which new Warrant shall be signed by the
Chairman, Chief Executive Officer, President or any Vice President
of the Company. The term Warrant as used herein shall include any
subsequent Warrant issued as provided herein.
d.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. The Company shall pay
cash in lieu of fractions with respect to the Warrants based upon
the fair market value of such fractional shares of Common Stock
(which shall be the closing price of such shares on the exchange or
market on which the Common Stock is then traded) at the time of
exercise of this Warrant.
e.
In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Stock so
purchased, registered in the name of the Holder, shall be delivered
to the Holder within a reasonable time after such rights shall have
been so exercised. The person or entity in whose name any
certificate for the Warrant Stock is issued upon exercise of the
rights represented by this Warrant shall for all purposes be deemed
to have become the holder of record of such shares immediately
prior to the close of business on the date on which the Warrant was
surrendered and payment of the Warrant Price and any applicable
taxes was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment
is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such
shares at the opening of business on the next succeeding date on
which the stock transfer books are open. Except as provided in
Section 4 hereof, the Company shall pay any and all documentary
stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this
Warrant; provided, however, that the Company shall not be required
to pay any tax that may be payable in respect of any issuance and
delivery of shares of Warrant Stock to any Person other than the
Holder or with respect to any income tax due by the Holder with
respect to any shares of Warrant Stock. “Person” shall
mean any natural person, corporation, division of a corporation,
partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or
government or any agency or political subdivision
thereof.
2.
Disposition of Warrant Stock and Warrant .
a.
The Holder hereby acknowledges that this Warrant and any Warrant
Stock purchased pursuant hereto are, as of the date hereof, not
registered: (i) under the Act on the ground that the issuance of
this Warrant is exempt from registration under Section 4(2) of the
Act as not involving any public offering or (ii) under any
applicable state securities law because the issuance of this
Warrant does not involve any public offering; and that the
Company’s reliance on the Section 4(2) exemption of the Act
and under applicable state securities laws is predicated in part on
the representations hereby made to the Company by the Holder that
it is acquiring this Warrant and will acquire the Warrant Stock for
investment for its own account, with no present intention of
dividing its participation with others or reselling or otherwise
distributing the same, subject, nevertheless, to any requirement of
law that the disposition of its property shall at all times be
within its control.
The
Holder hereby agrees that it will not sell or transfer all or
any part of this Warrant and/or Warrant Stock, except pursuant
to an effective registration statement under the Act, unless
and until it shall first have given notice to the Company
describing such sale or transfer and furnished to the Company
either (i) an opinion of counsel for the Company, which the
Company shall obtain at its own expense, to the effect that
the proposed sale or transfer may be made without registration
under the Act and without registration or qualification under
any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no
enforcement action will be recommended if the proposed sale or
transfer is made without registration under the
Act.
b.
If, at the time of issuance of the shares issuable upon exercise of
this Warrant, no registration statement is in effect with respect
to such shares under applicable provisions of the Act, the Company
may at its election require that the Holder provide the Company
with written reconfirmation of the Holder’s investment intent
and that any stock certificate delivered to the Holder of a
surrendered Warrant shall bear a legend reading substantially as
follows:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS
CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT.”
In addition, so long as the foregoing legend may remain on any
stock certificate delivered to the Holder, the Company may maintain
appropriate “stop transfer” orders with respect to such
certificates and the shares represented thereby on its books and
records and with those to whom it may delegate registrar and
transfer functions.
3.
Reservation of Shares .
The Company hereby agrees that at all times there shall be reserved
for issuance upon the exercise of this Warrant such number of
shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all
shares which may be issued upon the exercise of the rights
represented by this Warrant will be duly authorized and will, upon
issuance and against payment of the Warrant Price therefor, be
validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and preemptive rights with respect to the issuance
thereof, other than taxes, if any, in respect of any transfer
occurring contemporaneously with such issuance and other than
transfer restrictions imposed by federal and state securities
laws.
4.
Exchange, Transfer or Assignment of Warrant
.
a.
This Warrant is exchangeable, without expense, at the option of the
Holder, upon presentation and surrender hereof to the Company or
at
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