EXHIBIT 4.4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
EITHER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
DISTRIBUTED FOR VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT, OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
WARRANT
TO PURCHASE 35,000 SHARES OF COMMON STOCK
OF
EQUITEX, INC.
THIS CERTIFIES THAT, for good and valuable consideration,
__________________ (together with its registered assigns, the "HOLDER") is
entitled to subscribe for and purchase from Equitex, Inc., a Delaware
corporation (the "COMPANY"), at any time after the date hereof up to and
including 5:00 p.m. Minneapolis, Minnesota time on October 10, 2005 (the
"EXPIRATION DATE"), ______________________ (______) fully paid and nonassessable
shares of the Common Stock of the Company at the price of Thirty Nine Cents
($0.39) per share (the "WARRANT EXERCISE PRICE"), subject to the antidilution
provisions of this Warrant. The shares which may be acquired upon exercise of
this Warrant are referred to herein as the "WARRANT SHARES." This Warrant
constitutes one of the "Warrants" issued pursuant to that certain Series J 6%
Convertible Preferred Stock Purchase Agreement dated October 10, 2002 by and
among the Company and the "Buyers" identified therein.
This Warrant is subject to the following provisions, terms and
conditions:
1. EXERCISE: TRANSFERABILITY. Subject to the provisions of Section 3
hereof, the rights represented by this Warrant may be exercised by the Holder
hereof at any time after the Warrant is exercisable, but prior to its
expiration, in whole or in part (but not as to a fractional share of Common
Stock), by written notice of exercise (in the form attached hereto) delivered to
the Company at the principal office of the Company prior to the Expiration Date
and accompanied or preceded by the surrender of this Warrant along with a check
in payment of the Warrant Exercise Price for such shares.
2. EXCHANGE AND REPLACEMENT. Subject to Sections 1 and 7 hereof, this
Warrant is exchangeable upon the surrender hereof by the Holder to the Company
at its office for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant. This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange or replacement. The Company shall pay all expenses,
taxes (other than stock transfer taxes), and other charges payable in connection
with the preparation, execution, and delivery of Warrants pursuant to this
Section 2.
3. ISSUANCE OF THE WARRANT SHARES.
(a) The Company agrees that the shares of Common Stock purchased hereby
shall be and are deemed to be issued to the Holder as of the close of business
on the date on which this Warrant shall have been surrendered and the payment
made for such Warrant Shares as aforesaid. Subject to the provisions of the next
section, certificates for the Warrant Shares so purchased shall be delivered to
the Holder within a reasonable time, not exceeding fifteen (15) days after the
rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the right to purchase the
number of Warrant Shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be delivered to the Holder within such time.
(b) Notwithstanding the foregoing, however, the Company shall not be
required to deliver any certificate for Warrant Shares upon exercise of this
Warrant except in accordance with exemptions from the applicable securities
registration requirements or registrations under applicable securities laws.
Such Holder shall also provide the Company with written representations from the
Holder and the proposed transferee satisfactory to the Company regarding the
transfer or, at the election of the Company, an opinion of counsel reasonably
satisfactory to the Company to the effect that the proposed transfer of this
Warrant or disposition of shares may be effected without registration or
qualification (under any Federal or State law) of this Warrant or the Warrant
Shares. Upon receipt of such written notice and either such representations or
opinion by the Company, such Holder shall be entitled to transfer this Warrant,
or to exercise this Warrant in accordance with its terms and dispose of the
Warrant Shares, all in accordance with the terms of the notice delivered by such
Holder to the Company, provided that an appropriate legend, if any, respecting
the aforesaid restrictions on transfer and disposition may be endorsed on this
Warrant or the certificates for the Warrant Shares. Nothing herein, however,
shall obligate the Company to effect a registration under federal or state
securities laws, except as provided in that certain Registration Rights
Agreement dated on or about October 10, 2002 by and between the Company and
certain "Initial Investors" identified therein. If a registration is not in
effect and if an exemption is not available when the Holder seeks to exercise
the Warrant, the Warrant exercise period will be extended, if need be, to
prevent the Warrant from expiring, until such time as either registration become
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effective or an exemption is available, and the Warrant shall then remain
exercisable for a period of at least thirty (30) calendar days from the date the
Company delivers to the Holder written notice of the availability of such
registration or exemption. The Holder agrees to execute such documents and make
such representations, warranties, and agreements as may be required solely to
comply with the exemption relied upon by the Company, or the registration made,
for the issuance of the Warrant Shares.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees that all
Warrant Shares will, upon issuance, be duly authorized and issued, fully paid,
nonassessable, and free from all taxes, liens, and charges with respect to the
issue thereof except for all taxes, liens and charges imposed by the Holder. The
Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant a sufficient
number of shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.
5. ANTIDILUTION ADJUSTMENTS. The provisions of this Warrant are subject
to adjustment as provided in this Section 5.
(a) The Warrant Exercise Price shall be adjusted from time to time such
that in case the Company shall hereafter:
(i) pay any dividends on any class of stock of the Company payable
in Common Stock or securities convertible into Common Stock;
(ii) subdivide its then outstanding shares of Common Stock into a
greater number of shares; or
(iii) combine outstanding shares of Common Stock, by
reclassification or otherwise;
then, in any such event, the Warrant Exercise Price in effect immediately prior
to such event shall (until adjusted again pursuant hereto) be adjusted
immediately after such event to a price (calculated to the nearest full cent)
determined by dividing (a) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Warrant
Exercise Price, by (b) the total number of shares of Common Stock outstanding
immediately after such event (including the maximum number of shares of Common
Stock issuable in respect of any securities convertible into Common Stock), and
the resulting quotient shall be the adjusted Warrant Exercise Price per share.
An adjustment made pursuant to this Subsection shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this Subsection, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors (whose determination shall be conclusive)
shall determine the allocation of the adjusted Warrant Exercise Price between or
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among shares of such classes of capital stock or shares of Common Stock and
other capital stock. All calculations under this Subsection shall be made to the
nearest cent or to the nearest 1/100 of a share, as the case may be. If, at any
time as a result of an adjustment made pursuant to this Subsection, the Holder
of any Warrant thereafter surrendered for exercise shall become entitled to
receive any shares of the Company other than shares of Common Stock, thereafter
the Warrant Exercise Price of such other shares so receivable upon exercise of
any Warrant 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
Common Stock contained in this Section 5.
(b) Upon each adjustment of the Warrant Exercise Price pursuant to
Section 5(a) above, the Holder of each Warrant shall thereafter (until another
such adjustment) be entitled to purchase at the adjusted Warrant Exercise Price
the number of shares, calculated to the nearest full share, obtained by
multiplying the number of shares specified in such Warrant (as adjusted as a
result of all adjustments in the Warrant Exercise Price in effect prior to such
adjustment) by the Warrant Exercise Price in effect prior to such adjustment and
dividing the product so obtained by the adjusted Warrant Exercise Price.
(c) In case of any consolidation or merger to which the Company is a
party other than a merger or consolidation in which the Company is the
continuing corporation, 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, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), there shall be no adjustment under
Subsection (a) of this Section but the Holder of each Warrant then outstanding
shall have the right thereafter to convert such Warrant into the kind and amount
of shares of stock and other securities and property which such Holder would
have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale, or conveyance had such Warrant
been converted immediately prior to the effective date of such consolidation,
merger, statutory exchange, sale, or conveyance and in any such case, if
necessary, appropriate adjustment shall be made in the application of the
provisions set forth in this Section with respect to the rights and interests
thereafter of any Holders of the Warrant, to the end that the provisions set
forth in this Section shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock and other
securities and property thereafter deliverable on the exercise of the Warrant.
The provisions of this Subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.
(d) Upon any adjustment of the Warrant Exercise Price, then and in each
such case, the Company shall within ten (10) days after the date when the
circumstances giving rise to the adjustment occurred give written notice
thereof, by first-class mail, postage prepaid, addressed to the Holder as shown
on the books of the Company, which notice shall state the Warrant Exercise Price
resulting from such adjustment and the increase or decrease, if any, in the
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number of shares of Common Stock purchasable at such price upon the exercise of
this Warrant, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
6. NO VOTING RIGHTS. This Warrant shall not entitle the Holder to any
voting rights or other rights as a shareholder of the Company.
7. NOTICE OF TRANSFER OF WARRANT OR RESALE OF THE WARRANT SHARES.
(a) Subject to the sale, assignment, hypothecation, or other transfer
restrictions set forth in Section 1 hereof, the Holder, by acceptance hereof,
agrees to give written notice to the Company before transferring this Warrant or
transferring any Warrant Shares of such Holder's intention to do so, describing
briefly the manner of any proposed transfer. Promptly upon receiving such
written notice, the Company shall present copies thereof to the Company's
counsel and to counsel to the original purchaser of this Warrant. If in the
opinion of each such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the Holder shall be entitled to transfer this Warrant or to dispose of
Warrant Shares received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by the Holder to the Company;
provided that an appropriate legend may be endorsed on this Warrant or the
certificates for such Warrant Shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel to the Company and
satisfactory to the Company to prevent further transfers which would be in
violation of Section 5 of the Securities Act of 1933, as amended (the "1933
ACT") and applicable state securities laws; and provided further that the Holder
and prospective transferee or purchaser shall execute such documents and make
such representations, warranties, and agreements as may be required solely to
comply with the exemptions relied upon by the Company for the transfer or
disposition of the Warrant or Warrant Shares.
(b) If, in the opinion of either of the counsel referred to in this
Section 7, the proposed transfer or disposition of this Warrant or such Warrant
Shares described in the written notice given pursuant to this Section 7 may not
be effected without registration or qualification of this Warrant or such
Warrant Shares the Company shall promptly give written notice thereof to the
Holder, and the Holder will limit its activities in respect to such as, in the
opinion of both such counsel, are permitted by law.
8. FRACTIONAL SHARES. Fractional shares shall not be issued upon the
exercise of this Warrant, but in any case where the Holder would, except for the
provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Company shall, upon the exercise of this Warrant for the
largest number of whole shares then called for, pay a sum in cash equal to the
sum of (a) the excess, if any, of the Fair Market Value (as defined in Section
10(d)) of such fractional share over the proportional part of the Warrant
Exercise Price represented by such fractional share, plus (b) the proportional
part of the Warrant Exercise Price represented by such fractional share.
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9. MISCELLANEOUS. (a) Whenever reference is made herein to the issue or
sale of shares of Common Stock, the term "Common Stock" shall include any stock
of any class of the Company other than preferred stock with a fixed limit on
dividends and a fixed amount payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company.
(b) The Company will not, by amendment of its Certificate of
Incorporation or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act or deed, avoid or seek to avoid
the observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company, but will, at
all times in good faith, assist, insofar as it is able, in the carrying out of
all provisions hereof and in the taking of all other action which may be
necessary in order to protect the rights of the Holder hereof against dilution.
(c) Upon written request of the Holder of this Warrant, the Company
will promptly provide such holder with a then current written list of the names
and addresses of all Holders of warrants originally issued under the terms of,
and concurrent with, this Warrant.
(d) This Common Stock Purchase Warrant shall be interpreted under the
laws of the State of Delaware.
(e) All shares of Common Stock or other securities issued upon the
exercise of the Warrant shall be validly issued, fully paid and non-assessable,
and the Company will pay all taxes due and payable by the issuer in respect of
the issuance thereof.
(f) Notwithstanding anything contained herein to the contrary, the
holder of this Warrant shall not be deemed a Shareholder of the Company for any
purpose whatsoever until and unless this Warrant is duly exercised.
(g) Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by
the part against which enforcement of the change, waiver, discharge or
termination is sought.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, Equitex, Inc. has caused this Warrant to be signed
by its duly authorized officer as of October 10, 2002.
"COMPANY"
EQUITEX, INC.
By ______________________________________
Thomas B. Olson
Secretary
To: EQUITEX, INC.
NOTICE OF EXERCISE OF WARRANT -- To Be Executed by the Registered Holder in
- ----------------------------- Order to Exercise the Warrant
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, __________________ of the shares issuable upon the exercise
of such Warrant, and requests that certificates for such shares (together with a
new Warrant to purchase the number of shares, if any, with respect to which this
Warrant is not exercised) shall be issued in the name of
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(Print Name)
Please insert social security
or other identifying number
of registered Holder of
certificate (_____________) Address:
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Dated: ____________ __________________________________________
Signature*
*The signature on the Notice of Exercise of Warrant must correspond to the name
as written upon the face of the Warrant in every particular without alteration
or enlargement or any change whatsoever. When signing on behalf of a
corporation, partnership, trust or other entity, PLEASE indicate your
position(s) and title(s) with such entity.
ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrants.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto _______________________________ the right to purchase the
securities of Equitex, Inc. to which the within Warrant relates and appoints
______________________, attorney, to transfer said right on the books of
Equitex, Inc. with full power of substitution in the premises.
Dated: ____________ __________________________________________
(Signature)
Address:
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