Attached files
EXHIBIT 10.2
FORM OF WARRANT
NO. ___ Shares _________
WARRANT TO PURCHASE COMMON STOCK
VOID AFTER 5:30 P.M., EASTERN
TIME, ON THE EXPIRATION DATE
THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE NOT 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, 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 AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
FOR VALUE RECEIVED, Cell Source, Inc., f/k/a Ticket to See, Inc., a Nevada
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 (the "Common Stock"), par value $.001 per share (the
"Warrant Stock"), at a purchase price of $0.75 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 and Redemption of Warrant.
a. The Holder may exercise this Warrant according to its terms by
surrendering this Warrant to the Company at the address set forth in Section 10,
the Notice of Exercise attached hereto having then been duly executed by the
Holder, accompanied by cash, certified check or bank draft in payment of the
purchase price, in lawful money of the United States of America, for the number
of shares of the Warrant Stock specified in the Notice of Exercise, or as
otherwise provided in this Warrant, prior to 5:30 p.m., Eastern Time, on June
_____, 2019 (the "Expiration Date").
Notwithstanding anything to the contrary herein, if at any time commencing
beginning after the date of this Warrant, there is no effective registration
statement registering, or no current prospectus available for the resale of the
Warrant Stock by the Holder, then this Warrant may also be exercised at the
Holder's election, in whole or in part, at such time by means of a "cashless
exercise" in which the Holder shall be entitled to receive a number of Warrant
Stock equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
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(A)= the 3 day VWAP on the Trading Day immediately preceding the date
on which Holder elects to exercise this Warrant by means of a
"cashless exercise," as set forth in the applicable Notice of
Exercise;
(B)= the Warrant Price of this Warrant, as adjusted hereunder; and
(X)= the number of Warrant Stock that would be issuable upon exercise
of this Warrant in accordance with the terms of this Warrant if
such exercise were by means of a cash exercise rather than a
cashless exercise.
"VWAP" means, 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 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 or OTCQB, 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 for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the "Pink Sheets" published by Pink OTC
Markets, Inc. (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
Board of Directors of the Company.
"Trading Day" means a day on which the principal Trading Market is open for
trading.
"Trading Market" means the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange, the OTC Bulletin Board, the OTCQB or
the OTCQX.
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 or President and the Secretary or Assistant Secretary of the
Company. The term Warrant as used herein shall include any subsequent Warrant
issued as provided herein.
b. 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.
c. 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 three (3)
trading days after such rights shall have been so exercised (the "Warrant Stock
Delivery Date"). 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. 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.
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d. In addition to any other rights available to the Holder, if the Company
fails to cause its transfer agent to transmit to the Holder a certificate or the
certificates representing the Warrant Stock pursuant to an exercise on or prior
to the Warrant Stock Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
or the Holder's brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Stock which the
Holder anticipated receiving upon such exercise (a "Buy-In"), then the Company
shall (A) pay in cash to the Holder the amount, if any, by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (1) the number of shares of Warrant Stock that the Company was
required to deliver to the Holder in connection with the exercise at issue times
(2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of shares of Warrant Stock for which such
exercise was not honored (in which case such exercise shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and delivery
obligations hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss. Nothing herein shall limit a Holder's right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
e. Redemption of Warrant
(i) General. Prior to the Expiration Date, the Company shall have the
option, subject to the conditions set forth herein, to redeem all of the
Warrants then outstanding upon not less than thirty (30) days nor more than
sixty (60) days prior written notice to the Warrant Holders at any time provided
that, at the time of delivery of such notice (i) there is an effective
registration statement covering the resale of the Warrant Shares, and (ii) the
average trading price of the Company's Common Stock, or shares into which the
Common Stock have been exchanged, for each of the twenty (20) consecutive
trading days prior to the date of the notice of redemption is at least $2.50, as
proportionately adjusted to reflect any stock splits, stock dividends,
combination of shares or like events, with an average daily trading volume
during such period of 100,000 shares.
(ii) Notice. Notice of redemption will be effective upon mailing in
accordance with this Section and such date may be referred to below as the
"Notice Date." Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than 30 days prior to the date fixed for
redemption to the Holders of the Warrants to be redeemed at their last addresses
as they shall appear on the registration books. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given whether
or not the Holder received such notice.
(iii) Redemption Date and Redemption Price. The notice of redemption shall
state the date set for redemption, which date shall be not less than thirty (30)
days, or more than sixty (60) days, from the Notice Date (the "Redemption
Date"). The Company shall not mail the notice of redemption unless all funds
necessary to pay for redemption of the Warrants to be redeemed shall have first
been set aside by the Company for the benefit of the Warrant Holders so as to be
and continue to be available therefor. The redemption price to be paid to the
Warrant Holders will be $2.50 for each share of Common Stock of the Company to
which the Warrant Holder would then be entitled upon exercise of the Warrant
being redeemed, as adjusted from time to time as provided herein (the
"Redemption Price").
(iv) Exercise. Following the Notice Date, the Warrant Holders may exercise
their Warrants in accordance with Section 1 of this Warrant between the Notice
Date and 5:00 p.m. Eastern Time on the Redemption Date and such exercise shall
be timely if the form of election to purchase duly executed and the Warrant
Exercise Price for the shares of Common Stock to be purchased are actually
received by the Company at its principal offices prior to 5:00 p.m. Eastern Time
on the Redemption Date.
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(v) Mailing. If any Warrant Holder does not wish to exercise any Warrant
being redeemed, he should mail such Warrant to the Company at its principal
offices after receiving the notice of redemption. On and after 5:00 p.m. Eastern
Time on the Redemption Date, notwithstanding that any Warrant subject to
redemption shall not have been surrendered for redemption, the obligation
evidenced by all Warrants not surrendered for redemption or effectively
exercised shall be deemed no longer outstanding, and all rights with respect
thereto shall forthwith cease and terminate, except only the right of the holder
of each Warrant subject to redemption to receive the Redemption Price for each
share of Common Stock to which he would be entitled if he exercised the Warrant
upon receiving notice of redemption of the Warrant subject to redemption held by
him.
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 Securities Act of 1933, as amended (the "Securities Act"), on the ground
that the issuance of this Warrant is exempt from registration under Section
4a(2) of the Securities 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
4a(2) exemption of the Act, as the case may be, 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 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, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder) to
the effect that the proposed sale or transfer may be made without registration
under the Securities 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 Securities 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 Securities 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 legends reading substantially as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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,
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 AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY. THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES."
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.
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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 exercise price, 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. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
5. Capital Adjustments. This Warrant is subject to the following further
provisions:
a. Share Issuance. For so long as any Warrants remain outstanding, other
than in connection with (i) full or partial consideration in connection with a
strategic merger, acquisition, consolidation or purchase of substantially all of
the securities or assets of a corporation or other entity which holders of such
securities or debt are not at any time granted registration rights equal to or
greater than those granted to the Holder, (ii) the Company's issuance of
securities in connection with strategic license agreements and other partnering
arrangements so long as such issuances are not primarily for the purpose of
raising capital and which holders of such securities or debt are not at any time
granted registration rights equal to or greater than those granted to the
Holder, (iii) the Company's issuance of Common Stock or the issuances or grants
of options to purchase Common Stock to employees, directors, and consultants,
pursuant to plans that have been approved by a majority of the stockholders and
a majority of the independent members of the board of directors of the Company
or in existence as such plans are constituted on the date of this Agreement,
(iv) securities issued upon the exercise or exchange of or conversion of any
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Warrant on the terms in effect
on the date of this Warrant, (v) as a result of the exercise of Warrants issued
pursuant to the subscription agreement between Cell Source Ltd. (the Company's
subsidiary) and the parties to such subscription agreement on the terms in
effect on the date of this Warrant, (vi) the Company's issuance of Common Stock
or the issuances or grants of options to purchase Common Stock to consultants
and service providers providing the holders of at least a majority of the shares
of Common Stock have approved such issuance, (vii) up to 3,000,000 shares of
Common Stock of the Company or options or warrants to purchase Common Stock of
the Company issuable to certain founders of Cell Source Ltd., (viii) securities
including Common Stock, options, and or warrants of the Company issued, issuable
or to be issued in connection with the certain Share Exchange Agreement between
the Company, Cell Source Ltd. and the shareholders of Cell Source Ltd. who are
parties to such agreement, (ix) securities issued or issuable pursuant to this
Warrant, (x) shares of Common Stock of the Company, warrants and/or options
issued or issuable to Itamar Shimrat and/or Yoram Drucker pursuant to or in
connection with employment agreements (and/or stock option agreements or warrant
agreements and the shares of Common Stock issuable under such warrants or
options) to be entered into by the Company and/or Itamar Shimrat and/or Yoram
Drucker (xi) Common Stock, warrants and/or options issued in exchange for
ordinary shares, warrants and/or options or similar or equivalent securities of
Cell Source Ltd provided such securities of Cell Source Ltd were issued or
issuable as of the date of the Share Exchange Agreement between the Company,
Cell Source Ltd and the shareholders of Cell Source Ltd who are parties to such
agreement, provided such issuances are on the same economic terms as in the
aforementioned Share Exchange Agreement and (xii) any and all securities
required to be assumed by the Company by the terms thereof as a result of any of
the foregoing even if issued by a predecessor acquired in connection with a
business combination, merger or share exchange (collectively, the foregoing (i)
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through (xii) are "Excepted Issuances"), if the Company shall issue any Common
Stock except for the Excepted Issuances prior to the complete exercise of this
Warrant, for a consideration less than the Warrant Price that would be in effect
at the time of such issuance, then, and thereafter successively upon each such
issuance, the Warrant Price shall be reduced to such other lower price for then
outstanding Warrants. For purposes of this adjustment, any agreement entered for
or the issuance of any security or debt instrument of the Company carrying the
right to convert such security or debt instrument into Common Stock or of any
warrant, right or option to purchase Common Stock shall result in an adjustment
to the Warrant Price upon the issuance of the above-described security, debt
instrument, warrant, right, or option if such issuance is at a price lower than
the Warrant Price in effect upon such issuance and again at any time upon any
actual, permitted, optional, or allowed issuances of shares of Common Stock upon
any actual, permitted, optional, or allowed exercise of such conversion or
purchase rights if such issuance is at a price lower than the Warrant Price in
effect upon any actual, permitted, optional, or allowed such issuance. Common
Stock issued or issuable by the Company for no consideration will be deemed
issuable or to have been issued for $0.001 per share of Common Stock.
b. Subdivision or Combination of Shares. If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
Common Stock, the number of shares of Warrant Stock purchasable upon exercise of
this Warrant and the Warrant Price shall be proportionately adjusted.
c. Stock Dividends and Distributions. If the Company at any time while this
Warrant is outstanding and unexpired shall issue or pay the holders of its
Common Stock, or take a record of the holders of its Common Stock for the
purpose of entitling them to receive, a dividend payable in, or other
distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in
accordance with Section 5(f) and (ii) the number of shares of Warrant Stock
purchasable upon exercise of this Warrant shall be adjusted to the number of
shares of Common Stock that the Holder would have owned immediately following
such action had this Warrant been exercised immediately prior thereto.
d. Stock and Rights Offering to Shareholders. If the Company shall at any
time after the date of issuance of this Warrant distribute to all holders of its
Common Stock any shares of capital stock of the Company (other than Common
Stock) or evidences of its indebtedness or assets (excluding cash dividends or
distributions paid from retained earnings or current year's or prior year's
earnings of the Company) or rights or warrants to subscribe for or purchase any
of its securities (excluding those referred to in the immediately preceding
paragraph) (any of the foregoing being hereinafter in this paragraph called the
"Securities"), then in each such case, the Company shall reserve shares or other
units of such Securities for distribution to the Holder upon exercise of this
Warrant so that, in addition to the shares of the Common Stock to which such
Holder is entitled, such Holder will receive upon such exercise the amount and
kind of such Securities which such Holder would have received if the Holder had,
immediately prior to the record date for the distribution of the Securities,
exercised this Warrant.
e. Intentionally Omitted.
f. Warrant Price Adjustment. Except as otherwise provided herein, whenever
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
is adjusted, as herein provided, the Warrant Price payable upon the exercise of
this Warrant shall be adjusted to that price determined by multiplying the
Warrant Price immediately prior to such adjustment by a fraction (i) the
numerator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately prior to such adjustment, and (ii) the
denominator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately thereafter.
g. Certain Shares Excluded. The number of shares of Common Stock
outstanding at any given time for purposes of the adjustments set forth in this
Section 5 shall exclude any shares then directly or indirectly held in the
treasury of the Company.
h. Deferral and Cumulation of De Minimis Adjustments. The Company shall not
be required to make any adjustment pursuant to this Section 5 if the amount of
such adjustment would be less than one percent (1%) of the Warrant Price in
effect immediately before the event that would otherwise have given rise to such
adjustment. In such case, however, any adjustment that would otherwise have been
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required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to not less than one percent (1%) of the Warrant
Price in effect immediately before the event giving rise to such next subsequent
adjustment.
i. Duration of Adjustment. Following each computation or readjustment as
provided in this Section 5, the new adjusted Warrant Price and number of shares
of Warrant Stock purchasable upon exercise of this Warrant shall remain in
effect until a further computation or readjustment thereof is required.
6. Limitation on Exercises.
a. Notwithstanding anything to the contrary set forth in this Warrant, at
no time may all or a portion of the Warrant be exercised if the number of shares
of Common Stock to be issued pursuant to such exercise would exceed, when
aggregated with all other shares of Common Stock owned by the Holder at such
time, the number of shares of Common Stock which would result in the Holder
beneficially owning (as determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
thereunder) more than 4.99% of all of the Common Stock outstanding at such time;
provided, however, that upon the Holder providing the Corporation with sixty-one
(61) days' advance notice (the "4.99% Waiver Notice") that the Holder would like
to waive this Section 6 (a) with regard to any or all shares of Common Stock
issuable upon exercise of this Warrant, this Section 6 (a) will be of no force
or effect with regard to all or a portion of this Warrant referenced in the
4.99% Waiver Notice.
b. Notwithstanding anything to the contrary set forth in this Warrant, at
no time may all or a portion of this Warrant be exercised if the number of
shares of Common Stock to be issued pursuant to such exercise, when aggregated
with all other shares of Common Stock owned by the Holder at such time, would
result in the Holder beneficially owning (as determined in accordance with
Section 13(d) of the Exchange Act and the rules thereunder) in excess of 9.99%
of the then issued and outstanding shares of Common Stock outstanding at such
time (the "9.99% Beneficial Ownership Limitation" and the lower of the 9.99%
Beneficial Ownership Limitation and the 4.99% Beneficial Ownership Limitation
then in effect, the "Maximum Percentage").
c. By written notice to the Company, the Holder may from time to time
decrease the Maximum Percentage to any other percentage specified in such notice
d. For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in (1) the Company's most recent Form 10-K, Form
10-Q, Current Report on Form 8-K or other public filing with the Securities and
Exchange Commission, as the case may be, (2) a more recent public announcement
by the Company or (3) any other notice by the Company setting forth the number
of shares of Common Stock outstanding. For any reason at any time, upon the
written or oral request of the Holder, the Company shall within one (1) business
day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder and its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms
of this Section 6 to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.
7. Notice to Holders.
a. Notice of Record Date. In case:
(i) the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time receivable upon the exercise of this
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Warrant) for the purpose of entitling them to receive any dividend (other than a
cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right;
(ii) of any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation with or merger of the
Company into another corporation, or any conveyance of all or substantially all
of the assets of the Company to another corporation; or
(iii) of any voluntary dissolution, liquidation or winding-up of the
Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date, provided, however, failure to provide any
such notice shall not affect the validity of such transaction.
b. Certificate of Adjustment. Whenever any adjustment shall be made
pursuant to Section 5 hereof, the Company shall promptly make a certificate
signed by its Chairman, Chief Executive Officer, President, Vice President,
Chief Financial Officer or Treasurer, 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 number of shares
of Warrant Stock purchasable upon exercise of this Warrant after giving effect
to such adjustment, and shall promptly cause copies of such certificates to be
mailed (by first class mail, postage prepaid) to the Holder of this Warrant.
8. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of
evidence satisfactory to it, in the exercise of its reasonable discretion, of
the ownership and the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like tenor dated the date
hereof.
9. Warrant Holder Not a Stockholder. The Holder of this Warrant, as such,
shall not be entitled by reason of this Warrant to any rights whatsoever as a
stockholder of the Company.
10. Notices. Any notice required or contemplated by this Warrant shall be
deemed to have been duly given if transmitted by registered or certified mail,
return receipt requested, or nationally recognized overnight delivery service,
to the Company at its principal executive offices located at ______, Attn: Chief
Executive Officer, or to the Holder at the name and address set forth in the
Warrant Register maintained by the Company.
11. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
12. Jurisdiction and Venue. The Company and Holder hereby agree that any
dispute which may arise between them arising out of or in connection with this
Warrant shall be adjudicated before a court located in New York County, New York
and they hereby submit to the exclusive jurisdiction of the federal and state
courts of the State of York located in New York County with respect to any
action or legal proceeding commenced by any party, and irrevocably waive any
objection they now or hereafter may have respecting the venue of any such action
or proceeding brought in such a court or respecting the fact that such court is
an inconvenient forum, relating to or arising out of this Warrant or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
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service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
herein or such other address as either party shall furnish in writing to the
other.
13. Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent signed by both (a) the Company and (b)
holders of Warrants representing a majority of the Warrant Stock then
outstanding and not exercised
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed
on its behalf, in its corporate name and by its duly authorized officers, as of
this __ day of June ___, 2014.
By: _______________________________
Name:
Title:
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NOTICE OF EXERCISE
TO:
Tel: (___) ___-____
Fax: (___) ___-____
(1) The undersigned hereby elects to purchase ______________ shares of
Warrant Stock of the Company pursuant to the terms of the attached Warrant to
Purchase Common Stock, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of:
[ ] in lawful money of the United States
[ ] the cancellation of such number of Warrant Stock as is necessary, in
accordance with the formula set forth in Section 1(a) to exercise this
Warrant with respect to the maximum number of Warrant Stock purchasable
pursuant to the cashless exercise procedure set forth in subsection 1(a).
Please issue a certificate or certificates representing said shares of Warrant
Stock in the name of the undersigned or in such other name as is specified
below:
________________________________________________________________________________
The shares of Warrant Stock shall be delivered to the following DWAC
Account Number, if permitted, or by physical delivery of a certificate to:
________________________________________________________________________________
(3) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name and Title of Authorized Signatory:
Date:
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, all of or _________ shares of the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
________________________________whose address is
________________________________________________
________________________________________________
Dated: _________, ____
Holder's Name:
Holder's Signature:
Name and Title of Signatory:
Holder's Address:
Signature Guaranteed:
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
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