EXHIBIT 10.5
THIS
WARRANT OR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL
FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION
LETTER(S) FROM THE APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR
(iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF
SECTION 7 OF THIS WARRANT.
WARRANT TO PURCHASE SHARES
OF COMMON STOCK (this “WARRANT”)
Brookside Technology Holding Corp., a Florida corporation (the
“COMPANY”), hereby certifies that, for value received,
Dynamic Decisions Strategic Opportunities (the
“HOLDER”) is the registered holder of a warrant (the
“WARRANT”) to subscribe for and purchase 10,000,000
shares of the fully paid and nonassessable Common Stock (as
adjusted pursuant to Section 4 hereof, the
“WARRANT SHARES”) of the Company, at a price per share
equal to $0.114 (the “WARRANT PRICE,” as adjusted
pursuant to Section 4 hereof), subject to the
provisions and upon the terms and conditions hereinafter set
forth.
As used
herein, (a) the term “COMMON STOCK” shall mean the
Company’s presently authorized Common Stock, par value $.001
per share, and any stock into or for which such Common Stock may
hereafter be converted or exchanged and (b) the term
“DATE OF GRANT” shall mean August 30, 2007.
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Term. The purchase right represented by this
Warrant is exercisable, in whole or in part, at any time after the
Date of Grant (the “INITIAL EXERCISE DATE”) and from
time to time thereafter through and including the close of business
on the date five (5) years from the Initial Exercise Date (the
“EXPIRATION DATE”). |
2.
Exercise; Expiration; Redemption .
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a. |
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Method of Exercise; Payment; Issuance of New Warrant .
Subject to Section 1 hereof, the purchase right represented
by this Warrant may be exercised by the holder hereof, in whole or
in part and from time to time after the Initial Exercise Date, by
the surrender of this Warrant (with the notice of exercise form
attached hereto as Exhibit A duly executed) at the
principal office of the Company and by the payment to the Company
of an amount equal to the then applicable Warrant Price multiplied
by the number of Warrant Shares then being purchased. The person or
persons in whose name(s) any certificate(s) representing shares of
Common Stock shall be issuable upon exercise of this Warrant shall
be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the shares
represented thereby (and such shares shall be deemed to have been
issued) immediately prior to the close of business on the |
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date or dates upon which this Warrant is exercised. In the
event of any exercise of the rights represented by this Warrant,
certificates for the shares of stock so purchased shall be
delivered to the holder hereof as soon as possible and in any event
within thirty (30) days after such exercise and, unless this
Warrant has been fully exercised, a new Warrant representing the
portion of the Warrant Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to
the holder hereof as soon as possible and in any event within such
thirty (30) day period. |
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b. |
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Cashless Exercise . If the Company has not registered
the resale of the shares of common stock into which this Warrant
may be exercised within one year of the Date of Grabnt, then, from
and after such time and until the expiration of this Warrant, this
Warrant may be exercised by means of a “cashless
exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where: |
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(A) |
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= the VWAP (as defined below) for the 10 Trading Days
immediately preceding the date of such election; |
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(B) |
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= the Exercise Price of this Warrant, as adjusted; and |
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(X) |
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= the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of a
cash exercise rather than a cashless exercise. |
For purposes of
this Warrant, the term “VWAP” shall mean, for any date,
the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on
Nasdaq or any other national securities exchange on which the
Common stock is then listed or quoted (each such exchange, a
“Trading Market”), the daily volume weighted average
price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then
listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. New York City time to 4:02 p.m. New York City
time); (b) if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on the OTC Bulletin Board;
(c) if the Common Stock is not then listed or quoted on a
Trading Market or the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by
the Holder and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.
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c. |
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Expiration . In the event that any portion of this
Warrant is unexercised as of the Expiration Date, such portion of
this Warrant shall automatically expire, and the Holder shall have
no rights with respect to such unexercised portion of this
Warrant. |
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d. |
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Maximum . In no event shall any holder be entitled to
exercise any Warrant Shares to the extent that, after such
exercise, the sum of the number of shares of Common Stock
beneficially owned by any holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned
through the ownership of the unexercised portion of the Warrant
Shares or any unexercised right held by any holder subject to a
similar limitation), would result in beneficial ownership by any
holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock (after taking into account the shares to be
issued to the holder upon such exercise). For purposes of this
Section 2(c) , beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. Nothing herein shall preclude the holder from
disposing of a sufficient number of other
shares
of Common Stock beneficially owned by the holder so as to
thereafter permit the continued exercise of this Warrant. |
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Stock Fully Paid Reservation of Shares . All
Warrant Shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance pursuant to the
terms and conditions herein, be fully paid and non-assessable, and
free from all taxes (other than any taxes determined with respect
to, or based upon, the income of the person to whom such shares are
issued), liens and charges (other than liens or charges created by
actions of the holder of this Warrant or the person to whom such
shares are issued), and pre-emptive rights with respect to the
issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at
all times have authorized, and reserved for the purpose of the
issue upon exercise of the purchase rights evidenced by this
Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this
Warrant. |
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Adjustment of Warrant Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of
this Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the occurrence of certain events, as
follows: |
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a. |
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Reclassification or Merger. In case of any
reclassification, change or conversion of securities of the class
issuable upon exercise of this Warrant (other than a change in par
value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in
case of any merger of the Company with or into another corporation
(other than a merger with another corporation in which the Company
is the acquiring and the surviving corporation and which does not
result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of
all or substantially all of the assets of the Company, the Company,
or such successor or purchasing corporation, as the case may be,
shall duly execute and deliver to the holder of this Warrant a new
Warrant so that the holder of this Warrant shall have |
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the right to receive, at a total purchase price not to exceed
that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the shares of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable
upon such reclassification, change or merger by a holder of the
number of shares of Common Stock then purchasable under this
Warrant. Such new Warrant shall provide for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 4 . The provisions of this
Section 4(a) shall similarly apply to successive
reclassifications, changes, mergers and transfers. |
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b. |
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Subdivision or Combination of Shares. If at any time
while this Warrant remains outstanding and unexpired the Company
shall subdivide or combine its outstanding shares of Common Stock,
the Warrant Price shall be proportionately decreased in the case of
a subdivision and increased in the case of a combination, effective
at the close of business on the date the subdivision or combination
becomes effective. |
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c. |
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Stock Dividends. If at any time while this Warrant is
outstanding and unexpired the Company shall pay a dividend with
respect to Common Stock payable in Common Stock, then the Warrant
Price shall be adjusted, from and after the date of determination
of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Warrant Price in effect
immediately prior to such date of determination by a fraction
(i) the numerator of which shall be the total number of
shares
of Common Stock outstanding immediately prior to such dividend, and
(ii) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such
dividend. |
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d. |
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Adjustment of Number of Shares . Upon each adjustment in
the Warrant Price, the number of Warrant Shares purchasable
hereunder shall be adjusted, to the nearest whole share, to the
product obtained by multiplying the number of Warrant Shares
purchasable immediately prior to such adjustment in the Warrant
Price by a fraction, the numerator of which shall be the Warrant
Price immediately prior to such adjustment and the denominator of
which shall be the Warrant Price immediately thereafter |
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Notice of Adjustments . Whenever the Warrant
Price or the number of Warrant Shares purchasable hereunder shall
be adjusted pursuant to Section 4 hereof, the Company
shall deliver to the holder of this Warrant a certificate signed by
its chief financial officer setting forth, in reasonable detail,
the event requiring the adjustment, the amount of the adjustment,
the method by which such adjustment was calculated, and the Warrant
Price and the number of Warrant Shares purchasable hereunder after
giving effect to such adjustment |
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Fractional Shares . No fractional shares of
Common Stock will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefor based on the fair market value of a
share of Common Stock on |
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the date of
exercise, or round up to the next whole number of shares, at the
Company’s option. “FAIR MARKET VALUE” of a share
of Common Stock as of a particular date (the “DETERMINATION
DATE”) shall mean (i) if shares of Common Stock are
traded on a national securities exchange (an
“EXCHANGE”), the weighted average of the closing sale
price of a share of the Common Stock of the Company on the last
five (5) trading days prior to the Determination Date reported
on such Exchange as reported in The Wall Street Journal (weighted
with respect to the trading volume with respect to each such day);
(ii) if shares of Common Stock are not traded on an Exchange
but
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