EXHIBIT 10.71
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B)
AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER THAT ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER THAT ACT.
SSP SOLUTIONS, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.:_____________ Number of Shares: ______
Date of Issuance: March 28, 2003
SSP SOLUTIONS, INC., a Delaware corporation (the "COMPANY"), hereby
certifies that, for $10.00 and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, _________, the
registered holder hereof or its permitted assigns, is entitled, subject to the
terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 11:59
P.M. Eastern Standard Time on the Expiration Date (as defined herein), _______
(_______) fully paid nonassessable shares of Common Stock (as defined herein) of
the Company (the "WARRANT SHARES") at the Warrant Exercise Price (as defined
herein).
Definitions.
The following words and terms as used in this Warrant shall have the
following meanings:
(a) "AGREEMENT" means the promissory note issued by the Company to the
holder of this Warrant as of March 28, 2003.
(b) "BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which the Principal Market is authorized or required to be closed to
trading.
(c) "CLOSING SALE PRICE" means, for any security as of any date, the
last closing trade price for such security on the Principal Market as reported
by Bloomberg Financial Markets ("BLOOMBERG"), or, if the Principal Market begins
to operate on an extended hours basis and does not designate the closing trade
price, then the last trade price at 4:00 p.m., New York City Time (or such other
time as the Principal Market publicly announces is the official close of
trading), as reported by Bloomberg, or, if the foregoing do not apply, the last
closing trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
closing trade price is reported for such security by Bloomberg, the last closing
ask price for such security as reported by Bloomberg, or, if no last closing ask
price is reported for such security by Bloomberg, the average of the highest bid
price and the lowest ask price of any market makers for such security as
reported in the "pink sheets" by Pink Sheets LLC. If the Closing Sale Price
cannot be calculated for that security on that date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair
market value as determined by the Company's board of directors in good faith.
(d) "COMMON STOCK" means (i) the Company's common stock, par value
$0.01 per share, and (ii) any capital stock into which the Common Stock has been
changed or any capital stock resulting from a reclassification of the Common
Stock.
(e) "EXPIRATION DATE" means the day immediately preceding the fifth
anniversary of the Warrant Date.
(f) "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(g) "PRINCIPAL MARKET" means The Nasdaq National Market or, if the
Common Stock is not traded on The Nasdaq National Market, then the principal
securities exchange or trading market for the Common Stock.
(h) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(i) "SUBSCRIPTION FORM" means the Subscription Form attached hereto and
incorporated herein as EXHIBIT A.
(j) "WARRANT" means this Warrant and all Warrants issued in exchange,
transfer or replacement of this Warrant.
(k) "WARRANT EXERCISE PRICE" shall be the greater of $.70 per share or
the conversion price of the Shelter Capital Partners financing, not to exceed
$1.30 per share, subject to adjustment as hereinafter provided.
2. EXERCISE OF WARRANT.
2.1 EXERCISE; DELIVERY OF CERTIFICATES. This Warrant may be exercised,
at the option of the holder, at any time and from time to time (a) after
effectiveness of the Registration Statement and (b) prior to the end of business
on the Expiration Date, for all or any part of the Warrant Shares. This Warrant
may be exercised by delivering the payment of the Warrant Exercise Price for the
number of Warrant Shares being purchased and concurrently surrendering this
Warrant to the Company at its principal office (the "DESIGNATED OFFICE"),
together with the Subscription Form attached hereto duly completed and signed.
The Warrant Shares purchased under this Warrant shall be and are deemed to be
issued to the holder as the record owner of those shares as of the close of
business on the date on which this Warrant was surrendered and payment made
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therefor. Certificates for Warrant Shares so purchased shall be delivered to the
holder within three Business Days after this Warrant has been exercised, and, in
case of a purchase of less than all of the Warrant Shares purchasable upon
exercise of this Warrant, the Company shall cancel this Warrant and, within
three Business Days, shall execute and deliver to the holder a new Warrant of
like tenor for the balance of the Warrant Shares. Each stock certificate so
delivered shall be registered in the name of the holder or, subject to
compliance with applicable laws, such other name as shall be designated by the
holder.
2.2 PAYMENT OF WARRANT PRICE. Payment of the Warrant Exercise Price may
be made, at the option of the holder (i) by certified or official bank check,
(ii) by wire transfer, or (iii) by "Cashless Exercise" as described in SECTION
2.4.
2.3 NO FRACTIONAL SHARES. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock issued upon exercise of this Warrant shall be rounded up or down to
the nearest whole number.
2.4 CASHLESS EXERCISE. Notwithstanding anything contained herein to the
contrary, the holder of this Warrant may, at its election exercised in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the "net number" of shares of Common Stock determined according to the
following formula (a "CASHLESS EXERCISE"):
Net Number = (A X B) - (A X C)
-----------------
B
For purposes of the foregoing formula:
A = the total number of shares with respect to which
this Warrant is then being exercised.
B = the Closing Sale Price of the Common Stock on the
date immediately preceding the date of the
subscription notice.
C = the Warrant Exercise Price then in effect for the
applicable Warrant Shares at the time of such
exercise.
2.5 EXERCISE RESTRICTIONS.
2.5.1 BENEFICIAL OWNERSHIP LIMITATION. Notwithstanding anything
herein to the contrary, the holder may not exercise, and the Company may not
cause the holder to exercise, this Warrant to the extent such exercise would
result in the holder, together with any affiliate thereof, beneficially owning
(as determined in accordance with Section 13(d) of the Exchange Act and the
rules promulgated thereunder) in excess of 4.999% of the then issued and
outstanding shares of Common Stock, including shares issuable upon conversion or
exercise of this Warrant or any other instrument of the Company (including the
Note which accompanied this Warrant) held by the holder after application of
this SECTION 2.5. Since the holder will not be obligated to report to the
Company the number of shares of Common Stock it may hold at the time of an
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exercise hereunder, unless the exercise at issue would result in the issuance of
shares of Common Stock in excess of 4.999% of the then outstanding shares of
Common Stock without regard to any other shares which may be beneficially owned
by the holder or an affiliate thereof, the holder shall have the authority and
obligation to determine whether the restriction contained in this SECTION 2.5
will limit any particular exercise hereunder and to the extent that the holder
determines that the limitation contained in this SECTION 2.5 applies, the
determination of the amount of this Warrant is exercisable shall be the
responsibility and obligation of the holder. If the holder has delivered a
Subscription Form that, without regard to any other shares that the holder or
its affiliates may beneficially own, would result in the issuance in excess of
the permitted amount hereunder, the Company shall notify the holder of this fact
and shall honor the exercise for the maximum amount permitted to be exercised on
the exercise date in accordance with this SECTION 2.5. If this Warrant was not
surrendered on the exercise date, the Company shall provide the holder written
notice of the amount actually exercised. If the holder surrendered this Warrant
on the exercise date, the Company shall, at the option of the holder, either
retain any portion of the Warrant Exercise Price tendered for exercise in excess
of the permitted amount hereunder for future exercises or return such excess
portion of the Warrant Exercise Price to the holder. The provisions of this
SECTION 2.5 may be waived by the holder (but only as to itself and not to any
other holder of a Note or Warrant) in whole or in part (x) upon not less than 61
days prior notice to the Company and (y) immediately upon written notice to the
Company in the event of the occurrence or notice of an intended or pending
Change of Control. Other holders of Notes and Warrants shall be unaffected by
any such waiver. For purposes of this SECTION 2.5, "CHANGE OF Control" means (i)
the consolidation, merger or other business combination of the Company with or
into another Person (other than (A) a consolidation, merger or other business
combination in which holders of the Company's voting power immediately prior to
the transaction continue after the transaction to hold, directly or indirectly,
the voting power of the surviving entity or entities necessary to elect a
majority of the members of the board of directors (or their equivalent if other
than a corporation) of such entity or entities, or (B) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company), (ii) the sale or transfer of all or substantially
all of the Company's assets, (iii) a purchase, tender or exchange offer made to
and accepted by the holders of more than 50% of the outstanding shares of Common
Stock, or (iv) the execution by the Company of an agreement to which the Company
is a party or by which it is bound providing for any of the events set forth in
(i), (ii) or (iii) above.
3. COVENANTS AS TO COMMON STOCK.
The Company hereby covenants and agrees as follows:
(a) This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.
(b) All Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.
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(c) During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved at least 100% of the number of shares of Common Stock needed to provide
for the exercise of the rights then represented by this Warrant and the par
value of said shares will at all times be less than or equal to the applicable
Warrant Exercise Price.
(d) The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of this 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.
(e) The Company will not, by amendment of its Certificate of
Incorporation 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.
(f) This Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets.
4. TAXES.
The Company shall pay any and all taxes which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant.
5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise specifically provided herein, no holder, as such,
of this Warrant shall be entitled to vote or receive dividends or be deemed the
holder of shares of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which it is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on such holder to purchase any securities (upon
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exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this SECTION 5, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.
6. REPRESENTATIONS OF HOLDER.
The holder of this Warrant, by the acceptance hereof, represents that
it is acquiring this Warrant and the Warrant Shares for its own account and not
with a view towards, or for resale in connection with, the public sale or
distribution of this Warrant or the Warrant Shares, except pursuant to sales
registered or exempted under the Securities Act. The holder of this Warrant
further represents, by acceptance hereof, that, as of this date, the holder is
an "accredited investor" as that term is defined in Rule 501(a)(3) of Regulation
D promulgated by the Securities and Exchange Commission under the Securities
Act. Upon exercise of this Warrant, the holder shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company,
representations concerning the Warrant Shares in substantially the form of the
first sentence of this SECTION 6.
7. OWNERSHIP AND TRANSFER.
(a) 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. The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but
in all events recognizing any transfers made in accordance with the terms of
this Warrant.
(b) This Warrant and the rights granted hereunder shall be assignable
by the holder hereof without the consent of the Company.
(c) The Company is obligated to register the Warrant Shares for resale
under the Securities Act pursuant to the Agreement and the initial holder of
this Warrant (and certain assignees thereof) is entitled to the registration
rights in respect of the Warrant Shares as set forth in the Agreement.
8. ADJUSTMENT OF WARRANT EXERCISE PRICE AND NUMBER OF SHARES.
The Warrant Exercise Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be adjusted from time to time as
follows:
8.1 ADJUSTMENT OF WARRANT EXERCISE PRICE UPON SUBDIVISION OR COMBINATION OF
COMMON STOCK. If the Company at any time after the date of issuance of this
Warrant subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Warrant Exercise Price in effect immediately prior
to such subdivision will be proportionately reduced and the number of shares of
Common Stock obtainable upon exercise of this Warrant will be proportionately
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increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, the
Warrant Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of shares of Common Stock obtainable
upon exercise of this Warrant will be proportionately decreased. Any adjustment
under this SECTION 8.1 shall become effective at the close of business on the
date the subdivision or combination becomes effective
8.2 DISTRIBUTION OF ASSETS. If the Company declares or makes any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a "Distribution"), at any time
after the issuance of this Warrant, then, in each such case:
(a) the Warrant Exercise Price in effect immediately prior to the close
of business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying such
Warrant Exercise Price by a fraction of which (A) the numerator shall be the
Closing Sale Price of the Common Stock on the trading day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Company's Board of Directors) applicable to one share of Common
Stock, and (B) the denominator shall be the Closing Sale Price of the Common
Stock on the trading day immediately preceding such record date; and
(b) either (A) the number of Warrant Shares obtainable upon exercise of
this Warrant shall be increased to a number of shares equal to the number of
shares of Common Stock obtainable immediately prior to the close of business on
the record date fixed for the determination of holders of Common Stock entitled
to receive the Distribution multiplied by the reciprocal of the fraction set
forth in the immediately preceding clause (a), or (B) if the Distribution is of
common stock of a company whose common stock is traded on a national securities
exchange or a national automated quotation system, then the holder of this
Warrant shall receive an additional warrant to purchase Common Stock, the terms
of which shall be identical to those of this Warrant, except that such warrant
shall be exercisable into the amount of the assets that would have been payable
to the holder of this Warrant pursuant to the Distribution had the holder
exercised this Warrant immediately prior to such record date and with an
exercise price equal to the amount by which the exercise price of this Warrant
was decreased with respect to the Distribution pursuant to the terms of the
immediately preceding clause (a).
8.3 CERTAIN EVENTS. If any event occurs of the type contemplated by the
provisions of this SECTION 8 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), then the Company's
Board of Directors will make an appropriate adjustment in the Warrant Exercise
Price and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holder of this Warrant; provided that
no such adjustment will increase the Warrant Exercise Price or decrease the
number of shares of Common Stock obtainable as otherwise determined pursuant to
this SECTION 8.
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8.4 NOTICES.
(a) Immediately upon any adjustment of the Warrant Exercise Price, the
Company will give written notice thereof to the holder of this Warrant, setting
forth in reasonable detail, and certifying, the calculation of such adjustment.
(b) The Company will give written notice to the holder of this Warrant
at least 20 days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any Organic Change
(as defined below), dissolution or liquidation, provided that such information
shall be made known to the public prior to or in conjunction with such notice
being provided to such holder.
(c) The Company will also give written notice to the holder of this
Warrant at least 20 days prior to the date on which any Organic Change,
dissolution or liquidation will take place, provided that such information shall
be made known to the public prior to or in conjunction with such notice being
provided to such holder.
9. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
(a) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction which is effected in such a way that
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "ORGANIC Change." Prior to
the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person or (ii) other Organic Change following which the
Company is not a surviving entity, the Company will secure from the Person
purchasing the assets or the successor resulting from the Organic Change (in
each case, the "ACQUIRING ENTITY") written agreement to deliver to the holder of
this Warrant in exchange for this Warrant, a security of the Acquiring Entity
evidenced by a written instrument substantially similar in form and substance to
this Warrant (including, an adjusted warrant exercise price equal to the value
for the Common Stock reflected by the terms of such consolidation, merger or
sale, and exercisable for a corresponding number of shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on exercises), if the value so reflected is less than the Warrant
Exercise Price in effect immediately prior to such consolidation, merger or
sale). Prior to the consummation of any other Organic Change, the Company shall
make appropriate provision to insure that the holder of this Warrant will
thereafter have the right to acquire and receive in lieu of or in addition to
(as the case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the exercise of the Warrant (without regard to
any limitations on exercises), such shares of stock, securities or assets that
would have been issued or payable in such Organic Change with respect to or in
exchange for the number of shares of Common Stock which would have been
acquirable and receivable upon the exercise of the Warrant as of the date of the
Organic Change (without taking into account any limitations or restrictions on
the exercisability of the Warrant).
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10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT.
If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall promptly, on receipt of an indemnification undertaking (or in the case of
a mutilated Warrant, the Warrant), issue a new warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.
11. NOTICE.
Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Warrant must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
SSP Solutions, Inc.
17861 Cartwright Road
Irvine, California 92614
Telephone: 949-851-1085
Facsimile: 949-851-8679
Attention: Chief Financial Officer
With copy to:
Rutan & Tucker, LLP
611 Anton Boulevard, Fourteenth Floor
Costa Mesa, California 92626-1998
Telephone: 714-641-5100
Facsimile: 714-546-9035
Attention: Gregg Amber, Esq.
If to a holder of this Warrant, to it at the address and facsimile
number set forth on the Company's records, or at such other address and
facsimile as is delivered to the Company upon the issuance or transfer of this
Warrant. Each party shall provide five days' prior written notice to the other
party of any change in address or facsimile number. Written confirmation of
receipt (A) given by the recipient of the notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender's
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of the transmission or (C) provided by a nationally
recognized overnight delivery service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
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12. AMENDMENTS.
This Warrant and any term hereof may be changed, waived, discharged, or
terminated only by an instrument in writing signed by the party or holder hereof
against which enforcement of such change, waiver, discharge or termination is
sought.
13. DATE.
The date of this Warrant is the date of issuance first set forth above
(the "WARRANT DATE"). This Warrant, in all events, shall be wholly void and of
no effect after the close of business on the Expiration Date, except that
notwithstanding any other provisions hereof, the provisions of SECTION 6 shall
continue in full force and effect after such date as to any Warrant Shares or
other securities issued upon the exercise of this Warrant.
14. AMENDMENT AND WAIVER.
Except as otherwise provided herein, the provisions of this Warrant may
be amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the holder of this Warrant.
15. SECTION DESCRIPTIVE HEADINGS; GOVERNING LAW.
The descriptive headings of the several sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant. The corporate laws of the State of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California. In any action, dispute, litigation or other proceeding
concerning this Warrant (including arbitration), exclusive jurisdiction shall be
with the courts of California, with the County of Orange being the sole venue
for the bringing of the action or proceeding.
16. WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, AND
UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO, THIS WARRANT, THE AGREEMENT AND/OR ANY
RELATED AGREEMENT OR THE TRANSACTIONS COMPLETED HEREBY OR THEREBY.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as
of the date first above written.
SSP SOLUTIONS, INC.
By: /S/ MARVIN J. WINKLER
------------------------------------------
Marvin J. Winkler, Chief Executive Officer
By: /S/ THOMAS E. SCHIFF
------------------------------------------
Thomas E. Schiff, Chief Financial Officer
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EXHIBIT A TO WARRANT
--------------------
SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
SSP SOLUTIONS, INC.
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of SSP
Solutions, Inc., a Delaware corporation (the "COMPANY"), evidenced by the
attached Warrant (the "WARRANT"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. FORM OF WARRANT EXERCISE PRICE. The holder intends that payment of
the Warrant Exercise Price shall be made as:
____________ "CASH EXERCISE" with respect to
_________________ Warrant Shares; and/or
____________ "CASHLESS EXERCISE" with respect to
_________________ Warrant Shares (to the extent
permitted by the terms of the Warrant).
2. PAYMENT OF WARRANT EXERCISE PRICE. If the holder has elected a Cash Exercise
with respect to some or all of the Warrant Shares to be issued pursuant hereto,
the holder shall pay the sum of $___________________ to the Company in
accordance with the terms of the Warrant.
3. DELIVERY OF WARRANT SHARES. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
______________________________
Name of Registered Holder
By: __________________________
Name: ________________________
Title: _______________________
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ACKNOWLEDGMENT
The Company hereby acknowledges this Subscription Form and hereby
directs [TRANSFER AGENT] to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated __________, 200__
from the Company and acknowledged and agreed to by [TRANSFER AGENT].
SSP SOLUTIONS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
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EXHIBIT B TO WARRANT
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FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of SSP Solutions, Inc., a Delaware
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.
Dated: _________, 200_ ___________________________________
By:________________________________
Its:____________________________
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