INTELLICELL CORP.
REDEEMABLE WARRANT TO PURCHASE COMMON STOCK
This certifies that _________________________________ is the holder of
_________ warrants, each warrant entitling the holder at any time up to and
including 5:00 p.m. California Time on [Insert the date that is three years
following the date of the Final Closing] (the "Expiration Date") to purchase
from Intellicell Corp., a Delaware corporation (hereinafter called the
"Company), two-thirds of a fully paid and nonassessable share of Common Stock of
the Company at a price ("Exercise Price") of One Dollar ($1.00) per share upon
the surrender hereof to the Company at its office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, during its usual business hours of any business
day, with simultaneous payment therefor in lawful money of the United States of
the purchase price set forth above.
THIS WARRANT IS ONE OF A SERIES OF SUBSTANTIALLY IDENTICAL WARRANTS (THE
"WARRANTS") UNDERLYING THREE-YEAR UNSECURED AND SUBORDINATED CONVERTIBLE NOTES
(THE "NOTES") WHICH ARE BEING SOLD BY THE COMPANY IN A PRIVATE PLACEMENT
OFFERING (THE "OFFERING").
1. EXERCISE OF WARRANT. Subject to the terms and conditions hereof, this
Warrant may be exercised in whole or in part, at any time during normal business
hours prior to the Expiration Date, by (i) delivery of a written notice, in the
form of the Notice of Exercise attached hereto, of such holder's election to
exercise this Warrant, which notice shall specify the number of shares to be
purchased upon exercise hereof, (ii) payment to the Company of an amount equal
to the Exercise Price multiplied by the number of shares as to which this
Warrant is being exercised (plus any applicable issue or transfer taxes) in cash
or by bank check, and (iii) the surrender of this Warrant at the principal
office of the Company. If this Warrant is being exercised only in part, the
Company shall issue a new Warrant identical in all respects to this Warrant
except that it shall represent the right to purchase the number of shares as to
which this Warrant is not then being exercised. The Company has the right at its
sole discretion to extend the Expiration Date by notice given to all Warrant
holders. No fractional share shall be issued upon the exercise of rights to
purchase hereunder.
2. REGISTRATION OF COMMON STOCK. Subject to stockholder approval of the
Offering, the Company and the investors in the Offering, as well as the certain
additional holders of Company securities, will enter into a Registration Rights
Agreement pursuant to which the Company will file a registration statement with
the Securities and Exchange Commission ("SEC") within 90 days of the closing of
the Offering (the "Closing") covering the Common Stock issuable upon conversion
of the Notes and the Common Stock underlying the Warrants, and the Company will
use its reasonable best efforts to cause such registration statement to become
effective and to thereafter remain effective for a period of four years from the
Closing. Prior to the Company giving a notice of redemption of Warrants
hereunder, the registration statement filed by the Company must have become
effective.
3. REDEMPTION OF WARRANTS. The Company may call the Warrants for
redemption in whole or in part at a price of $0.01 for each Warrant, by written
notice specifying the redemption date, such notice to be mailed at least 30 days
before such redemption date, to the Warrant holders at their respective
addresses as they appear on the books of the Company; provided, however, that
such notice
1.
may only be mailed following any period of 20 consecutive trading days during
which the closing bid price for the Common Stock on the Nasdaq SmallCap
Market (or such other trading market as the Common Stock may then be trading)
has exceeded $2.00 per share on each such day. If the Company elects to
redeem part, but not all, of the Warrants, then such redemption shall be made
pro rata with respect to all of the Warrants. This Warrant may be exercised
at any time prior to the close of business on the date prior to the
redemption date, and if not then exercised will terminate and be cancelled.
4. ADJUSTMENTS.
(a) The warrant price at which Common Stock shall be purchasable upon the
exercise of the Warrants shall be $1.00 per share or after adjustment, as
provided in this Section, shall be such price as so adjusted (the "Warrant
Price").
(b) The Warrant Price shall be subject to adjustment from time to time as
follows:
(i) In case the Company shall at any time after the date hereof pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock, then upon such dividend or distribution the Warrant Price in effect
immediately prior to such dividend or distribution shall forthwith be reduced to
a price determined by dividing:
(A) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution multiplied
by the Warrant Price in effect immediately prior to such dividend or
distribution, by (B) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance with the
provisions of this Section 4(b)(i), the following provisions shall be
applicable: Common Stock issuable by way of dividend or other distribution on
any stock of the Company shall be deemed to have been issued immediately after
the opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution.
(ii) In case the Company shall at any time subdivide or combine the
outstanding Common Stock, the Warrant Price shall forthwith be proportionately
decreased in the case of subdivision or increased in the case of combination to
the nearest one cent. Any such adjustment shall become effective at the time
such subdivision or combination shall become effective.
(iii) Within a reasonable time after the close of each quarterly
fiscal period of the Company during which the Warrant Price has been adjusted as
herein provided, the Company shall:
(A) file with the transfer agent of the Warrants (the "Warrant
Agent") a certificate signed by the President or Vice President of the Company
and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the facts requiring all such
adjustments occurring during such period and the Warrant Price after each such
adjustment; and
(B) the Warrant Agent shall have no duty with respect to any
such certificate filed with it except to keep the same on file and available for
inspection by holders of Warrants during reasonable business hours, and the
Warrant Agent may conclusively rely upon the latest certificate furnished to it
hereunder. The Warrant Agent shall not at any time be under any duty
2.
or responsibility to any holder of a Warrant to determine whether any facts
exist which may require any adjustment of the Warrant Price, or with respect
to the nature or extent of any adjustment of the Warrant Price when made, or
with respect to the method employed in making any such adjustment, or with
respect to the nature or extent of the property or securities deliverable
hereunder. In the absence of a certificate having been furnished, the
Warrant Agent may conclusively rely upon the provisions of the Warrants with
respect to the Common Stock deliverable upon the exercise of the Warrants and
the applicable Warrant Price thereof.
(iv) Notwithstanding anything contained herein to the contrary,
no adjustment of the Warrant Price shall be made if the amount of such
adjustment shall be less than $0.05, but in such case any adjustment that
would otherwise be required then to be made shall be carried forward and
shall be made at the time and together with the next subsequent adjustment
which, together with any adjustment so carried forward, shall amount to not
less than $0.05.
(v) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend payable in subdivision of the
outstanding Common Stock, then, from and after the time at which the adjusted
Warrant Price becomes effective pursuant this Section by reason of such
dividend or subdivision, the Common Stock issuable upon the exercise of each
Warrant shall be increased in proportion to such increase in outstanding
shares. In the event that the number of shares of Common Stock outstanding
is decreased by a combination of the outstanding Common Stock, then, from and
after the time at which the adjusted Warrant Price becomes effective pursuant
to this Section by reason of such combination, the number of shares of Common
Stock issuable upon the exercise of each Warrant shall be decreased in
proportion to such decrease in the outstanding shares of Common Stock.
(vi) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value
to no par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the holder of each Warrant then
outstanding shall thereafter have the right to purchase the kind and amount
of shares of Common Stock and other securities and property receivable upon
such reorganization, reclassification, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock which the
holder of such Warrant shall then be entitled to purchase; such adjustments
shall apply with respect to all such changes occurring after the date of
exercise of such Warrant.
(vii) Subject to the provisions of this Section 4, in case the
Company shall, at any time prior to the exercise of the Warrants, make any
distribution of its assets to holders of its Common Stock as a liquidating or a
partial liquidating dividend, then the holder of Warrants who exercises its
Warrants after the record date for the determination of those holders of Common
Stock entitled to such distribution of assets as a liquidating or partial
liquidating dividend shall be entitled to receive for the Warrant Price per
Warrant, in addition to each share of Common Stock, the amount of such
distribution (or, at the option of the Company, a sum equal to the value of any
such assets at the time of such distribution as determined by the Board of
Directors of the Company in good faith), which would have been payable to such
holder had he been the holder of record of the Common Stock receivable upon
exercise of its Warrant on the record date for the determination of those
entitled to such distribution.
3.
(viii) In case of the dissolution, liquidation or winding up of the
Company, all rights under the Warrants shall terminate on a date fixed by the
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of the Warrants, as
the same shall appear on the books of the Company maintained by the Warrant
Agent, by registered mail at least thirty (30) days prior to such termination
date.
(ix) In case the Company shall, at any time prior to the
expiration of the Warrants and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of
any class of the Company, then the Company shall give written notice thereof
to the last registered holder thereof not less than thirty (30) days prior to
the date on which the books of the Company are closed or a record date is
fixed for the determination of the stockholders entitled to such subscription
rights. Such notice shall specify the date as to which the books shall be
closed or record date fixed with respect to such offer of subscription and
the right of the holder thereof to participate in such offer of subscription
shall terminate if the Warrant shall not be exercised on or before the date
of such closing of the books or such record date.
(x) Any adjustment pursuant to the aforesaid provisions of this
section 4 shall be made on the basis of the number of shares of Common Stock
which the holder thereof would have been entitled to acquire by the exercise
of the Warrant immediately prior to the event giving rise to such adjustment.
(xi) Irrespective of any adjustments in the Warrant Price or the
number or kind of shares purchasable upon exercise of the Warrants, Warrants
previously or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant Agreement.
(xii) The Company may retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Section 4, and any certificate setting forth
such computation signed by such firm shall be conclusive evidence of the
correctness of any computation made under this Section 4.
(xiii) If at any time, as a result of an adjustment made pursuant
to Section 4(b)(vi) above, the holders of a Warrant or Warrants shall become
entitled to purchase any securities other than shares of Common Stock,
thereafter the number of such securities so purchasable upon exercise of each
Warrant and the Warrant Price for such shares shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock contained in Section 4(b)(ii)
through (v).
5. NOTICES TO WARRANT HOLDERS.
(a) Upon any adjustment of the Warrant Price and the number of shares of
Common Stock issuable upon exercise of a Warrant, then and in each such case the
Company shall give written notice thereof to the Warrant Agent, which notice
shall state the Warrant Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. The Company
shall also mail such notice to the holders of the Warrants at their addresses
appearing in the Warrant register. Failure to give or mail such notice, or any
defect therein, shall not affect the validity of the adjustments.
4.
(b) In case at any time:
(i) the Company shall pay dividends payable in stock upon its
Common Stock or make any distribution (other than regular cash dividends) to
the holders of its Common Stock; or
(ii) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or
other rights; or
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of substantially all of its assets to, another
corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then in any one or more of such
cases, the Company shall give written notice in the manner set forth in
Section 5(a) of the date on which (A) a record shall be taken for such
dividend, distribution or subscription rights, or (B) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of Common Stock of record shall
participate in such dividend, distribution or subscription rights, or shall
be entitled to exchange their Common Stock for securities or other 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 thirty (30) days prior to the action in
question and not less than thirty (30) days prior to the record date in
respect thereof. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of any of the matters set forth in this
Section 5(b).
(c) The Company shall cause copies of all financial statement and reports,
proxy statements and other documents that are sent to its stockholders to be
sent by first-class mail, postage prepaid, on the date of mailing to such
stockholders, to each registered holder of Warrants at his address appearing in
the warrant register as of the record date for the determination of the
stockholders entitled to such documents.
6. WARRANT HOLDER. Prior to the due presentment for registration of
transfer hereof, the Company and the Warrant Agent may deem and treat the
registered holder as the absolute owner hereof and of each Warrant represented
hereby (notwithstanding any notations of ownership or writing hereon made by
anyone other than a duly authorized officer of the Company or the transfer
agent) for all purposes and shall not be affected by any notice to the contrary.
7. NO RIGHTS AS STOCKHOLDER. Prior to the exercise of this Warrant the
holder of this Warrant shall not be entitled to any rights of a stockholder of
the Company, including, without limitation, the right to vote, to receive
dividends or other distributions, or to receive notice of meetings of
stockholders.
8. LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If this Warrant is
lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as it may in its discretion impose (which in the case of
a mutilated Warrant shall include the surrender thereof), issue a new Warrant of
like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
5.
9. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
Person or holder hereof against which enforcement of such change, waiver,
discharge or termination is sought. The headings in this Warrant are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the day and
year first above written.
Dated: INTELLICELL CORP.
------------------
By
------------------------------------
, President
6.
NOTICE OF EXERCISE
TO BE EXECUTED BY THE REGISTERED HOLDER
IN ORDER TO EXERCISE THIS WARRANT
INTELLICELL CORP.
The undersigned hereby exercises the right to purchase
_____________________________ shares of Common Stock covered by this Warrant
according to the conditions thereof and herewith makes payment of
$______________________________, the aggregate Exercise Price of such shares of
Common Stock.
[Print or type name(s) of Holder. If
Holder is a trust, partnership,
corporation or other entity, print name
and title of authorized signatory.]
Signature(s) of Holder or authorized signatory
7.
