Exhibit 4.2
This Warrant and the
underlying shares of Common Stock represented by this Certificate
have not been registered under the Securities Act of 1933 (the
“Act”), and are “restricted securities” as
that term is defined in Rule 144 under the Act. The securities may
not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act, or
pursuant to an exemption from registration under the Act, the
availability of which is to be established to the reasonable
satisfaction of the Company.
Warrant No. A-2007-__
WARRANT TO PURCHASE SHARES OF COMMON
STOCK
Warrant to Purchase [__________] Shares
(subject to adjustment as set forth herein)
Exercise Price $4.75 Per Share
(subject to adjustment as set forth herein)
VOID AFTER 5:00 P.M., MOUNTAIN TIME, ON
MARCH 26, 2011
THIS
CERTIFIES THAT
[________________________________________________________]
is entitled to purchase from Security With Advanced Technology,
Inc., a Colorado corporation (hereinafter called the
“Company”), with its principal office located at 10855
Dover Street, Suite 1100, Westminster, Colorado 80021, at any time
beginning on September 26, 2007 but before 5:00 P.M., Mountain
Time, on March 26, 2011, at the purchase price of $4.75 per share
(the “Exercise Price”), the number of shares (the
“Shares”) of the Company’s Common Stock (the
“Common Stock”) set forth above. The number of Shares
purchasable upon exercise of this Warrant and the Exercise Price
per Share shall be subject to adjustment from time to time as set
forth in Section 4 below.
Section 1.
Definitions.
The
following terms used in this agreement (this
“Agreement”) shall have the following meanings (unless
otherwise expressly provided herein):
The "Act." The Securities Act of 1933, as
amended.
The "Commission." The Securities and Exchange
Commission.
The "Company." Security With Advanced Technology,
Inc.
“Common Stock.” The Company’s Common
Stock.
"Current Market Price." The Current Market Price shall be
determined as follows:
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(a)
if the security at issue is listed on a national securities
exchange or admitted to unlisted trading privileges on such an
exchange or quoted on either the Global Market, Global Select
Market or the Capital Market of the automated quotation service
operated by The Nasdaq Stock Market, Inc. (“Nasdaq”),
the current value shall be the last reported sale price of that
security on such exchange or system on the day for which the
Current Market Price is to be determined or, if no such sale is
made on such day, the average of the highest closing bid and lowest
asked price for such day on such exchange or system; or
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(b)
if the security at issue is not so listed or quoted or admitted to
unlisted trading privileges, the Current Market Value shall be the
average of the last reported highest bid and lowest asked prices
quoted on the Nasdaq Electronic Bulletin Board, or, if not so
quoted, then by the National Quotation Bureau, Inc. on the last
business day prior to the day for which the Current Market Price is
to be determined; or
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(c)
if the security at issue is not so listed or quoted or admitted to
unlisted trading privileges and bid and asked prices are not
reported, the current market value shall be determined in such
reasonable manner as may be prescribed from time to time by the
Board of Directors of the Company, subject to the objection and
arbitration procedure as described in Section 7 below.
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“Expiration Date.” March 26, 2011.
“
Holder ” or “Warrantholder.” The person to
whom this Warrant is issued, and any valid transferee thereof
pursuant to Section 3.1 below.
"NASD." The National Association of Securities Dealers,
Inc.
"Nasdaq." The automated quotation system operated by the
Nasdaq Stock Market, Inc.
“Person” means any individual, sole
proprietorship, partnership, joint venture, trust, incorporated
organization, association, corporation, limited liability company,
institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division,
agency, body or department thereof).
“Termination of Business.” Any sale, lease or
exchange of all, or substantially all, of the Company’s
assets or business or any dissolution, liquidation or winding up of
the Company.
“Warrants.” The warrants issued in accordance
with the terms of this Agreement and any Warrants issued in
substitution for or replacement of such warrants, including those
evidenced by a certificate or certificates originally issued or
issued upon division, exchange, substitution or transfer pursuant
to this Agreement.
“Warrant Securities .” The Common Stock
purchasable upon exercise of a Warrant including the Common Stock
underlying unexercised portions of a Warrant.
Section 2. Term of
Warrants; Exercise of Warrant.
2.1.
Exercise of Warrant. Subject to the terms of this Agreement,
the Holder shall have the right, at any time beginning on
September 26, 2007 prior to 5:00 p.m., Mountain Time, on the
Expiration Date, to purchase from the Company up to the number of
fully paid and nonassessable Shares to which the Holder may at the
time be entitled to purchase pursuant to this Agreement, upon
surrender to the Company, at its principal office, of the Warrant
to be exercised, together with the purchase form, attached hereto
as Exhibit 1, duly filled in and signed, and upon payment to the
Company of the Exercise Price for the number of Shares in respect
of which such Warrants are then exercised, but in no event for less
than 100 Shares (unless fewer than an aggregate of 100 shares are
then purchasable under all outstanding Warrants held by a
Holder).
2.2.
Exercise Price. The exercise price (“Exercise
Price”) is $4.75 per Share, as modified in accordance with
Section 4, below.
2.3.
Issuance of Shares. Upon such surrender of the Warrants and
payment of such Exercise Price as aforesaid, the Company shall
issue and cause to be delivered within three business days to or
upon the written order of the Holder and in such name or names as
the Holder may designate, a certificate or certificates for the
number of full Shares so purchased upon the exercise of the
Warrant, together with cash, as provided in Section 13 hereof, in
respect of any fractional Shares otherwise issuable upon such
surrender. If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or
certificates representing Warrant Securities, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase the
unpurchased Warrant Securities called for by this Warrant, which
new Warrant shall in all other respects be identical with this
Warrant, or at the request of the Holder, appropriate notation may
be made on this Warrant and the same returned to the
Holder.
2.4.
Effect of Exercise . Upon receipt of the Warrant by the
Company as described in Sections 2.1 above, the Holder shall be
deemed to be the holder of record of the Shares issuable upon such
exercise, notwithstanding that the transfer books of the Company
may then be closed or that certificates representing such Shares
may not have been prepared or actually delivered to the
Holder.
2.5
Restrictions on Exercise Amount.
(i)
Unless Vision Opportunity Master Fund, Ltd. (“ Vision
”) delivers to the Company irrevocable written notice prior
to the date of issuance hereof or sixty-one days prior to the
effective date of such notice that this Section 2.5(i) shall not
apply to Vision, Vision may not acquire a number of shares of
Common Stock upon exercise of this Warrant to the extent that, upon
such exercise, the number of shares of Common Stock then
beneficially owned by such holder and its affiliates and any other
persons or entities whose beneficial ownership of Common Stock
would be aggregated with Vision’s for purposes of Section
13(d) of the Exchange Act (including shares held by any
“group” of which the holder is a member, but excluding
shares beneficially owned by virtue of the ownership of securities
or rights to acquire securities that have limitations on the right
to convert, exercise or purchase similar to the limitation set
forth herein) exceeds 9.99% of the total number of shares of Common
Stock of the Company then issued and outstanding. For purposes
hereof, “group” has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the
Commission, and the percentage held by Vision shall be determined
in a manner consistent with the provisions of Section 13(d) of the
Securities Exchange Act of 1934, as amended. Each delivery of a
notice of exercise by Vision will constitute a representation by
Vision that it has evaluated the limitation set forth in this
paragraph and determined, based on the most recent public filings
by the Company with the Commission, that the issuance of the full
number of shares of Common Stock requested in such notice of
exercise is permitted under this paragraph.
(ii)
In the event the Company is prohibited from issuing shares of
Warrant Stock as a result of any restrictions or prohibitions under
applicable law or the rules or regulations of any stock exchange,
interdealer quotation system or other self-regulatory organization,
the Company shall as soon as possible seek the approval of its
stockholders and take such other action to authorize the issuance
of the full number of shares of Common Stock issuable upon exercise
of this Warrant.
Section 3.
Transferability and Form
of Warrant
3.1.
Limitation on Transfer. Any assignment or transfer of a
Warrant shall be made by the presentation and surrender of the
Warrant to the Company at its principal office or the office of its
transfer agent, if any, accompanied by a duly executed Assignment
Form. Upon the presentation and surrender of these items to the
Company, the Company, at its sole expense, shall execute and
deliver to the new Holder or Holders a new Warrant or Warrants, in
the name of the new Holder or Holders as named in the Assignment
Form, and the Warrant presented or surrendered shall at that time
be canceled.
3.2.
Exchange of Certificate. Any Warrant may be exchanged for
another certificate or certificates entitling the Warrantholder to
purchase a like aggregate number of Shares as the certificate or
certificates surrendered then entitled such Warrantholder to
purchase. Any Warrant holder desiring to exchange a Warrant shall
make such request in writing delivered to the Company, and shall
surrender, properly endorsed, with signatures guaranteed, the
certificate evidencing the Warrant to be so exchanged. Thereupon,
the Company shall execute and deliver to the person entitled
thereto a new Warrant as so requested.
3.3.
Mutilated, Lost, Stolen, or Destroyed Certificate . In case
the certificate or certificates evidencing the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall, at the
request of the Warrantholder, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated certificate
or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant or
certificates of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the
Company of such loss, theft or destruction of such Warrant and a
bond of indemnity, if requested, also satisfactory in form and
amount, at the applicant’s cost. Applicants for such
substitute Warrant shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company
may prescribe.
Section 4. Adjustment
of Number of Shares.
The
number and kind of securities purchasable upon the exercise of the
Warrants and the Warrant Price shall be subject to adjustment from
time to time upon the happening of certain events, as
follows:
4.1.
Adjustments. The number of Shares purchasable upon the
exercise of the Warrants shall be subject to adjustments as
follows:
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(a)
In case the Company shall (i) pay a dividend in Common Stock or
make a distribution to its stockholders in Common Stock, (ii)
subdivide its outstanding Common Stock, (iii) combine its
outstanding Common Stock into a smaller number of shares of Common
Stock, or (iv) issue by reclassification of its Common Stock other
securities of the Company, the number of Shares purchasable upon
exercise of the Warrants immediately prior thereto shall be
adjusted so that the Warrant holder shall be entitled to receive
the kind and number of Shares or other securities of the Company
which it would have owned or would have been entitled to receive
immediately after the happening of any of the events described
above, had the Warrants been exercised immediately prior to the
happening of such event or any record date with respect thereto.
Any adjustment made pursuant to this subsection 4.1(a) shall become
effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
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(b)
No adjustment in the number of Shares purchasable pursuant to the
Warrants shall be required unless such adjustment would require an
increase or decrease of at least one percent in the number of
Shares then purchasable upon the exercise of the Warrants or, if
the Warrants are not then exercisable, the number of Shares
purchasable upon the exercise of the Warrants on the first date
thereafter that the Warrants become exercisable; provided, however,
that any adjustments which by reason of this subsection 4.1(b) are
not required to be made immediately shall be carried forward and
taken into account in any subsequent adjustment.
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(c)
Whenever the number of Shares purchasable upon the exercise of the
Warrant is adjusted, as herein provided, the Exercise Price payable
upon exercise of the Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction,
of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to
such adjustment, and of which the denominator shall be the number
of Warrant Shares so purchasable immediately thereafter.
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(d)
Whenever the number of Shares purchasable upon exercise of the
Warrants is adjusted as herein provided, the Company shall cause to
be promptly mailed to the Warrantholder by first class mail,
postage prepaid, notice of such adjustment and a certificate of the
chief financial officer of the Company setting forth the number of
Shares purchasable upon the exercise of the Warrants after such
adjustment, a brief statement of the facts requiring such
adjustment and the computation by which such adjustment was
made.
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(e)
For the purpose of this Section 4.1, the term “Common
Stock” shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii)
any other class of stock resulting from successive changes or
reclassifications of
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