EXHIBIT 4.4 - FORM OF COMMON STOCK PURCHASE WARRANT DATED AS OF MARCH 29,
2002
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT
AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED
AS OF MARCH 29, 2002, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN
FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS
SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT. Right to Purchase
_______ Shares of Common Stock, no par value per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, _________________or its registered
assigns, is entitled to purchase form Conectisys Corporation, a Colorado
corporation (the "Company"), at any time or from time to time during the
period specified in Paragraph 2 hereof, _________________________
(__________) fully paid and nonassessable shares of the Company's Common
Stock, no par value per share (the "Common Stock"), at an exercise price
per share equal to the lesser of (i) $.045 and (ii) the average of the
lowest three (3) Trading Prices (as defined below) during the twenty (20)
Trading Days (as defined below) immediately prior to exercise (the
"Exercise Price"). The term "Warrant Shares," as used herein, refers to
the shares of Common Stock purchasable hereunder. The Warrant Shares and
the Exercise Price are subject to adjustment as provided in Paragraph 4
hereof. The term "Warrants" means this Warrant and the other warrants
issued pursuant to that certain Securities Purchase Agreement, dated March
29, 2002, by and among the Company and the Buyers listed on the execution
page thereof (the "Securities Purchase Agreement"), including any
additional warrants issuable pursuant to Section 4(l) thereof. "Trading
Price" means, for any security as of any date, the intraday trading price
on the Over-the-Counter Bulletin Board (the "OTCBB") as reported by
Bloomberg Financial Markets or an equivalent, reliable reporting service
mutually acceptable to and hereafter designated by the Company and the
holder hereof ("Bloomberg") or, if the OTCBB is not the principal trading
market for such security, the intraday trading price of such security on
the principal securities exchange or trading market where such security is
listed or traded as reported by Bloomberg or, if no intraday trading price
of such security is available in any of the foregoing manners, the average
of the intraday trading prices of any market makers for such security that
are listed in the "pink sheets" by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in
the manner provided above, the Trading Price shall be the fair market value
as mutually determined by the Company and the holder hereof. "Trading Day"
shall mean any day on which the Common Sock is traded for any period on the
OTCBB, or on the principal securities exchange or other securities market
on which the Common Stock is then being traded. This Warrant is subject to
the following terms, provisions, and conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this Warrant,
together with a completed exercise agreement in the form attached hereto
(the "Exercise Agreement"), to the Company during normal business hours on
any business day at the Company's principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
holder hereof), and upon (i) payment to the Company in cash, by certified
or official bank check or by wire transfer for the account of the Company
of the Exercise Price for the Warrant Shares specified in the Exercise
Agreement or (ii) if the resale of the Warrant Shares by the holder is not
then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), delivery to the
Company of a written notice of an election to effect a "Cashless Exercise"
(as defined in Section 11(c) below) for the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed to be
issued to the holder hereof or such holder's designee, as the record owner
of such shares, as of the close of business on the date on which this
Warrant shall have been surrendered, the completed Exercise Agreement shall
have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise
Agreement, shall be delivered to the holder hereof within a reasonable
time, not exceeding three (3) business days, after this Warrant shall have
been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be
designated by such holder. If this Warrant shall have been exercised only
in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the
holder a new Warrant representing the number of shares with respect to
which this Warrant shall not then have been exercised. In addition to all
other available remedies at law or in equity, if the Company fails to
deliver certificates for the Warrant Shares within three (3) business days
after this Warrant is exercised, then the Company shall pay to the holder
in cash a penalty (the "Penalty") equal to 2% of the number of Warrant
Shares that the holder is entitled to multiplied by the Market Price for
each day that the Company fails to deliver certificates for the Warrant
Shares. For example, if the holder is entitled to 100,000 Warrant Shares
and the Market Price is $2.00, then the Company shall pay to the holder
$4,000 for each day that the Company fails to deliver certificates for the
Warrant Shares. The Penalty shall be paid to the holder by the fifth day
of the month following the month in which it has accrued. Notwithstanding
anything in this Warrant to the contrary, in no event shall the holder of
this Warrant be entitled to exercise a number of Warrants (or portions
thereof) in excess of the number of Warrants (or portions thereof) upon
exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership
of the unexercised Warrants and the unexercised or unconverted portion of
any other securities of the Company (including the Debentures (as defined
in the Securities Purchase Agreement)) subject to a limitation on
conversion or exercise analogous to the limitation contained herein) and
(ii) the number of shares of Common Stock issuable upon exercise of the
Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 4.9% of the outstanding shares of
Common Stock. For purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder, except as otherwise provided in clause (i) of the preceding
sentence. The holder of this Warrant may waive the limitations set forth
herein by sixty-one (61) days written notice to the Company.
Notwithstanding anything to the contrary contained herein, the limitation
on exercise of this Warrant set forth herein may not be amended without (i)
the written consent of the holder hereof and the Company and (ii) the
approval of a majority of shareholders of the Company.
2. Period of Exercise. This Warrant is exercisable at any time or
from time to time on or after the date on which this Warrant is issued and
delivered pursuant to the terms of the Securities Purchase Agreement and
before 6:00 p.m., New York, New York time on the third (3rd) anniversary of
the date of issuance (the "Exercise Period").
3. Certain Agreements of the Company. The Company hereby covenants
and agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid,
and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.
(b) Reservation of Shares. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of
Common Stock to provide for the exercise of this Warrant.
(c) Listing. The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of the Warrant upon each
national securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all shares
of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange
or automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of the same class
shall be listed on such national securities exchange or automated quotation
system.
(d) Certain Actions Prohibited. The Company will not, by amendment of
its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed by it
hereunder, but will at all times in good faith assist in the carrying out
of all the provisions of this Warrant and in the taking of all such action
as may reasonably be requested by the holder of this Warrant in order to
protect the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect,
and (ii) will take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.
(e) Successors and Assigns. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition
of all or substantially all the Company's assets.
4. Antidilution Provisions.
During the Exercise Period, the Exercise Price and the number of Warrant
Shares shall be subject to adjustment from time to time as provided in this
Paragraph 4. In the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise Price shall
be rounded up to the nearest cent.
(a) Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock. Except as otherwise provided in Paragraphs 4(c) and 4(e)
hereof, if and whenever on or after the date of issuance of this Warrant,
the Company issues or sells, or in accordance with Paragraph 4(b) hereof is
deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances
in connection therewith) less than the Market Price (as hereinafter
defined) on the date of issuance (a "Dilutive Issuance"), then immediately
upon the Dilutive Issuance, the Exercise Price will be reduced to a price
determined by multiplying the Exercise Price in effect immediately prior to
the Dilutive Issuance by a fraction, (i) the numerator of which is an
amount equal to the sum of (x) the number of shares of Common Stock
actually outstanding immediately prior to the Dilutive Issuance, plus (y)
the quotient of the aggregate consideration, calculated as set forth in
Paragraph 4(b) hereof, received by the Company upon such Dilutive Issuance
divided by the Market Price in effect immediately prior to the Dilutive
Issuance, and (ii) the denominator of which is the total number of shares
of Common Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance.
(b) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:
(i) Issuance of Rights or Options.
If the Company in any manner issues or grants any warrants, rights or
options, whether or not immediately exercisable, to subscribe for or to
purchase Common Stock or other securities convertible into or exchangeable
for Common Stock ("Convertible Securities") (such warrants, rights and
options to purchase Common Stock or Convertible Securities are hereinafter
referred to as "Options") and the price per share for which Common Stock is
issuable upon the exercise of such Options is less than the Market Price on
the date of issuance or grant of such Options, then the maximum total
number of shares of Common Stock issuable upon the exercise of all such
Options will, as of the date of the issuance or grant of such Options, be
deemed to be outstanding and to have been issued and sold by the Company
for such price per share. For purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise
of all such Options, plus, in the case of Convertible Securities issuable
upon the exercise of such Options, the minimum aggregate amount of
additional consideration payable upon the conversion or exchange thereof at
the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the exercise of all such Options (assuming full conversion of
Convertible Securities, if applicable). No further adjustment to the
Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.
(ii) Issuance of Convertible Securities.
If the Company in any manner issues or sells any Convertible Securities,
whether or not immediately convertible (other than where the same are
issuable upon the exercise of Options) and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the
Market Price on the date of issuance, then the maximum total number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. For the purposes of the
preceding sentence, the "price per share for which Common Stock is issuable
upon such conversion or exchange" is determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for
the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii)
the maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities. No further
adjustment to the Exercise Price will be made upon the actual issuance of
such Common Stock upon conversion or exchange of such Convertible
Securities.
(iii) Change in Option Price or Conversion Rate.
If there is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any Options; (ii)
the amount of additional consideration, if any, payable to the Company upon
the conversion or exchange of any Convertible Securities; or (iii) the rate
at which any Convertible Securities are convertible into or exchangeable
for Common Stock (other than under or by reason of provisions designed to
protect against dilution), the Exercise Price in effect at the time of such
change will be readjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities still
outstanding provided for such changed additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued
or sold.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities.
If, in any case, the total number of shares of Common Stock issuable upon
exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option
or to convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the
Exercise Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination
(other than in respect of the actual number of shares of Common Stock
issued upon exercise or conversion thereof), never been issued.
(v) Calculation of Consideration Received.
If any Common Stock, Options or Convertible Securities are issued, granted
or sold for cash, the consideration received therefor for purposes of this
Warrant will be the amount received by the Company therefor, before
deduction of reasonable commissions, underwriting discounts or allowances
or other reasonable expenses paid or incurred by the Company in connection
with such issuance, grant or sale. In case any Common Stock, Options or
Convertible Securities are issued or sold for a consideration part or all
of which shall be other than cash, the amount of the consideration other
than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any
acquisition, merger or consolidation in which the Company is the surviving
corporation, the amount of consideration therefor will be deemed to be the
fair value of such portion of the net assets and business of the non-
surviving corporation as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined in good
faith by the Board of Directors of the Company.
(vi) Exceptions to Adjustment of Exercise Price.
No adjustment to the Exercise Price will be made (i) upon the exercise of
any warrants, options or convertible securities granted, issued and
outstanding on the date of issuance of this Warrant; (ii) upon the grant or
exercise of any stock or options which may hereafter be granted or
exercised under any employee benefit plan, stock option plan or restricted
stock plan of the Company now existing or to be implemented in the future,
so long as the issuance of such stock or options is approved by a majority
of the independent members of the Board of Directors of the Company or a
majority of the members of a committee of independent directors established
for such purpose; or (iii) upon the exercise of the Warrants.
(c) Subdivision or Combination of Common Stock.
If the Company at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise) the shares
of Common Stock acquirable hereunder into a greater number of shares, then,
after the date of record for effecting such subdivision, the Exercise Price
in effect immediately prior to such subdivision will be proportionately
reduced. If the Company at any time combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) the shares
of Common Stock acquirable hereunder into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price
in effect immediately prior to such combination will be proportionately
increased.
(d) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to the provisions of
this Paragraph 4, the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted by multiplying a number equal to
the Exercise Price in effect immediately prior to such adjustment by the
number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product so obtained
by the adjusted Exercise Price.
(e) Consolidation, Merger or Sale.
In case of any consolidation of the Company with, or merger of the Company
into any other corporation, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection
with a plan of complete liquidation of the Company, then as a condition of
such consolidation, merger or sale or conveyance, adequate provision will
be made whereby the holder of this Warrant will have the right to acquire
and receive upon exercise of this Warrant in lieu of the shares of Common
Stock immediately theretofore acquirable upon the exercise of this Warrant,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this
Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to
insure that the provisions of this Paragraph 4 hereof will thereafter be
applicable as nearly as may be in relation to any shares of stock or
securities thereafter deliverable upon the exercise of this Warrant. The
Company will not effect any consolidation, merger or sale or conveyance
unless prior to the consummation thereof, the successor corporation (if
other than the Company) assumes by written instrument the obligations under
this Paragraph 4 and the obligations to deliver to the holder of this
Warrant such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the holder may be entitled to acquire.
(f) Distribution of Assets.
In case the Company shall declare or make any distribution of its assets
(including cash) to holders of Common Stock as a partial liquidating
dividend, by way of return of capital or otherwise, then, after the date of
record for determining stockholders entitled to such distribution, but
prior to the date of distribution, the holder of this Warrant shall be
entitled upon exercise of this Warrant for the purchase of any or all of
the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the
determination of stockholders entitled to such distribution.
(g) Notice of Adjustment.
Upon the occurrence of any event which requires any adjustment of the
Exercise Price, then, and in each such case, the Company shall give notice
thereof to the holder of this Warrant, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease
in the number of Warrant Shares purchasable at such price upon exercise,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based. Such calculation shall be certified
by the Chief Financial Officer of the Company.
(h) Minimum Adjustment of Exercise Price.
No adjustment of the Exercise Price shall be made in an amount of less than 1%
of the Exercise Price in effect at the time such adjustment is otherwise
required to be made, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward, shall
amount to not less than 1% of such Exercise Price.
(i) No Fractional Shares.
No fractional shares of Common Stock are to be issued upon the exercise of
this Warrant, but the Company shall pay a cash adjustment in respect of any
fractional share which would otherwise be issuable in an amount equal to
the same fraction of the Market Price of a share of Common Stock on the
date of such exercise.
(j) Other Notices.
In case at any time: (i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (including dividends or distributions payable in cash out of
retained earnings) to the holders of the Common Stock; (ii) the Company
shall offer for subscription pro rata to the holders of the Common Stock
any additional shares of stock of any class or other rights; (iii)
there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or (iv) there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company; then, in
each such case, the Company shall give to the holder of this Warrant (a)
notice of the date on which the books of the Company shall close or a
record shall be taken for determining the holders of Common Stock entitled
to receive any such dividend, distribution, or subscription rights or for
determining the holders of Common Stock entitled to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take
place. Such notice shall also specify the date on which the holders of
Common Stock shall be entitled to receive such dividend, distribution, or
subscription rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30
days prior to the record date or the date on which the Company's books are
closed in respect thereto. Failure to give any such notice or any defect
therein shall not affect the validity of the proceedings referred to in
clauses (i), (ii), (iii) and (iv) above.
(k) Certain Events.
If any event occurs of the type contemplated by the adjustment provisions
of this Paragraph 4 but not expressly provided for by such provisions, the
Company will give notice of such event as provided in Paragraph 4(g)
hereof, and the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of the holder
shall be neither enhanced nor diminished by such event.
(l) Certain Definitions.
(i) "Common Stock Deemed Outstanding" shall mean the number of shares of
Common Stock actually outstanding (not including shares of Common Stock
held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable
upon the exercise of Options, as of the date of such issuance or grant of
such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the
maximum total number of shares of Common Stock issuable upon conversion or
exchange of Convertible Securities, as of the date of issuance of such
Convertible Securities, if any.
(ii) "Market Price," as of any date, (i) means the average of the last
reported sale prices for the shares of Common Stock on the OTCBB for the
five (5) Trading Days immediately preceding such date as reported by
Bloomberg, or (ii) if the OTCBB is not the principal trading market for the
shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period as
reported by Bloomberg, or (iii) if market value cannot be calculated as of
such date on any of the foregoing bases, the Market Price shall be the fair
market value as reasonably determined in good faith by (a) the Board of
Directors of the Company or, at the option of a majority- in-interest of
the holders of the outstanding Warrants by (b) an independent investment
bank of nationally recognized standing in the valuation of businesses
similar to the business of the corporation. The manner of determining the
Market Price of the Common Stock set forth in the foregoing definition
shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder. (iii) "Common
Stock," for purposes of this Paragraph 4, includes the Common Stock, no par
value per share, and any additional class of stock of the Company having no
preference as to dividends or distributions on liquidation, provided that
the shares purchasable pursuant to this Warrant shall include only shares
of Common Stock, no par value per share, in respect of which this Warrant
is exercisable, or shares resulting from any subdivision or combination of
such Common Stock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in Paragraph
4(e) hereof, the stock or other securities or property provided for in such
Paragraph.
5. Issue Tax.
The issuance of certificates for Warrant Shares upon the exercise of this
Warrant shall be made without charge to the holder of this Warrant or such
shares for any issuance tax or other costs in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
6. No Rights or Liabilities as a Shareholder.
This Warrant shall not entitle the holder hereof to any voting rights or
other rights as a shareholder of the Company. No provision of this
Warrant, in the absence of affirmative action by the holder hereof to
purchase Warrant Shares, and no mere enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability of such
holder for the Exercise Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
7. Transfer, Exchange, and Replacement of Warrant.
(a) Restriction on Transfer.
This Warrant and the rights granted to the holder hereof are transferable,
in whole or in part, upon surrender of this Warrant, together with a
properly executed assignment in the form attached hereto, at the office or
agency of the Company referred to in Paragraph 7(e) below, provided,
however, that any transfer or assignment shall be subject to the conditions
set forth in Paragraph 7(f) hereof and to the applicable provisions of the
Securities Purchase Agreement. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
holder hereof as the owner and holder hereof for all purposes, and the
Company shall not be affected by any notice to the contrary.
Notwithstanding anything to the contrary contained herein, the registration
rights described in Paragraph 8 are assignable only in accordance with the
provisions of that certain Registration Rights Agreement of even date
herewith by and among the Company and the other signatories thereto (the
"Registration Rights Agreement").
(b) Warrant Exchangeable for Different Denominations.
This Warrant is exchangeable, upon the surrender hereof by the holder
hereof at the office or agency of the Company referred to in Paragraph 7(e)
below, for new Warrants of like tenor representing in the aggregate the
right to purchase the number of shares of Common Stock which may be
purchased hereunder, each of such new Warrants to represent the right to
purchase such number of shares as shall be designated by the holder hereof
at the time of such surrender.
(c) Replacement of Warrant.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft, or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company, or, in
the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses.
Upon the surrender of this Warrant in connection with any transfer,
exchange, or replacement as provided in this Paragraph 7, this Warrant
shall be promptly canceled by the Company. The Company shall pay all taxes
(other than securities transfer taxes) and all other expenses (other than
legal expenses, if any, incurred by the holder or transferees) and charges
payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Paragraph 7.
(e) Register.
The Company shall maintain, at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall
record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each
prior owner of this Warrant.
(f) Exercise or Transfer Without Registration.
If, at the time of the surrender of this Warrant in connection with any
exercise, transfer, or exchange of this Warrant, this Warrant (or, in the
case of any exercise, the Warrant Shares issuable hereunder), shall not be
registered under the Securities Act of 1933, as amended (the "Securities
Act") and under applicable state securities or blue sky laws, the Company
may require, as a condition of allowing such exercise, transfer, or
exchange, (i) that the holder or transferee of this Warrant, as the case
may be, furnish to the Company a written opinion of counsel, which opinion
and counsel are acceptable to the Company, to the effect that such
exercise, transfer, or exchange may be made without registration under said
Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act; provided that no such opinion, letter
or status as an "accredited investor" shall be required in connection with
a transfer pursuant to Rule 144 under the Securities Act. The first holder
of this Warrant, by taking and holding the same, represents to the Company
that such holder is acquiring this Warrant for investment and not with a
view to the distribution thereof.
8. Registration Rights.
The initial holder of this Warrant (and certain assignees thereof) is
entitled to the benefit of such registration rights in respect of the
Warrant Shares as are set forth in Section 2 of the Registration Rights
Agreement.
9. Notices.
All notices, requests, and other communications required or permitted to be
given or delivered hereunder to the holder of this Warrant shall be in
writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid
and addressed, to such holder at the address shown for such holder on the
books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and
other communications required or permitted to be given or delivered
hereunder to the Company shall be in writing, and shall be personally
delivered, or shall be sent by certified or registered mail or by
recognized overnight mail courier, postage prepaid and addressed, to the
office of the Company at 00000 Xxxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other communication
may be sent by facsimile, but shall in such case be subsequently confirmed
by a writing personally delivered or sent by certified or registered mail
or by recognized overnight mail courier as provided above. All notices,
requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive
such notice at the address of such person for purposes of this Paragraph 9,
or, if mailed by registered or certified mail or with a recognized
overnight mail courier upon deposit with the United States Post Office or
such overnight mail courier, if postage is prepaid and the mailing is
properly addressed, as the case may be.
10. Governing Law.
THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW
YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER
AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL
BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN
ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES
AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR
ALL FEES AND EXPENSES, INCLUDING ATTORNEYS' FEES, INCURRED BY THE
PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.
11. Miscellaneous.
(a)Amendments.
This Warrant and any provision hereof may only be amended by an instrument
in writing signed by the Company and the holder hereof.
(b) Descriptive Headings.
The descriptive headings of the several paragraphs of this Warrant are
inserted for purposes of reference only, and shall not affect the meaning
or construction of any of the provisions hereof.
(c) Cashless Exercise.
Notwithstanding anything to the contrary contained in this Warrant, if the
resale of the Warrant Shares by the holder is not then registered pursuant
to an effective registration statement under the Securities Act, this
Warrant may be exercised by presentation and surrender of this Warrant to
the Company at its principal executive offices with a written notice of the
holder's intention to effect a cashless exercise, including a calculation
of the number of shares of Common Stock to be issued upon such exercise in
accordance with the terms hereof (a "Cashless Exercise"). In the event of
a Cashless Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of Common
Stock determined by multiplying the number of Warrant Shares to which it
would otherwise be entitled by a fraction, the numerator of which shall be
the difference between the then current Market Price per share of the
Common Stock and the Exercise Price, and the denominator of which shall be
the then current Market Price per share of Common Stock. For example, if
the holder is exercising 100,000 Warrants with a per Warrant exercise price
of $0.75 per share through a cashless exercise when the Common Stock's
current Market Price per share is $2.00 per share, then upon such Cashless
Exercise the holder will receive 62,500 shares of Common Stock.
(d) Remedies.
The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under
this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that
the holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to
an injunction or injunctions restraining, preventing or curing any breach
of this Warrant and to enforce specifically the terms and provisions
thereof, without the necessity of showing economic loss and without any
bond or other security being required.
IN WITNESS WHEREOF, the Company has caused this Warrant to
be signed by its duly authorized officer.
CONECTISYS CORPORATION
By: _____________________________
Xxxxxx X. Xxxxxx
Chief Executive Officer
Dated as of March 29, 2002
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 200_
To: Conectisys Corporation
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered
by such Warrant, and makes payment herewith in full therefor at the price
per share provided by such Warrant in cash or by certified or official bank
check in the amount of, or, if the resale of such Common Stock by the
undersigned is not currently registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended, by
surrender of securities issued by the Company (including a portion of the
Warrant) having a market value (in the case of a portion of this Warrant,
determined in accordance with Section 11(c) of the Warrant) equal to
$_________. Please issue a certificate or certificates for such shares of
Common Stock in the name of and pay any cash for any fractional share to:
Name: ______________________________
Signature:
Address:____________________________
_____________________________
Note: The above signature should correspond exactly with the name on the
face of the within Warrant, if applicable.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the
name of said undersigned covering the balance of the shares purchasable
thereunder less any fraction of a share paid in cash.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to
the number of shares of Common Stock covered thereby set forth hereinbelow,
to:
Name of Assignee Address No of Shares
, and hereby irrevocably constitutes and appoints
___________________________________ as agent and attorney-in-fact to
transfer said Warrant on the books of the within-named corporation, with
full power of substitution in the premises.
Dated: ________ __, 200_
In the presence of:
______________________________
Name:______________________________
Signature:_________________________
Title of Signing Officer or Agent (if any):
______________________________
Address: ______________________________
______________________________
Note: The above signature should correspond exactly with the name on the
face of the within Warrant, if applicable.
