EXHIBIT 4.1
Form of Warrant Certificate
THE SECURITIES EVIDENCED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"),
OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE
EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL
TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
Void after 2:00 p.m. New York Time, on August 22, 2005 (the "Expiration Date")
Warrant to Purchase Shares of Common Stock
JAWS TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
Warrant No. ___ 100,000 WARRANTS1/
This is to Certify That, FOR VALUE RECEIVED, STEPHANIE MUZYKA or assigns
("Holder"), is entitled to purchase, subject to the provisions of this Warrant,
from JAWS TECHNOLOGIES, INC., ("Company"),ONE HUNDRED THOUSAND (100,000) of the
fully paid, validly issued and nonassessable shares of common stock, par value
$.001 per share, of the Company ("Common Stock") at any time or from time to
time during the period from the date hereof, through and including August 22,
2005, but not later than 2:00 p.m. New York Time, on the applicable Expiration
Date ("Exercise Period"). The price to be paid for each share of Common Stock
shall be U.S.$5.07 per share or as set out in paragraph a. herein. The shares of
Common Stock deliverable upon such exercise, and as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Shares" and the respective
exercise price of a share of Common Stock in effect at any time and as adjusted
from time to time is hereinafter sometimes referred to as the "Exercise Price."
a. Exercise of Warrant. The Holder may exercise this Warrant in whole or in
part, at any time or from time to time on any Business Day on or prior to
the Expiration Date, by: (A) delivering to the Company a duly executed
notice (a "Notice of Exercise") in the form of Annex A hereto, by payment
to the Company of the Exercise Price per Warrant Share in an
- --------
1/ Each Warrant will entitle the holder to acquire one share of Common Stock.
NY/301448.1
1
amount equal to the product of (i) the Exercise Price times (ii) the number
of Warrant Shares as to which this Warrant is being exercised; or (B)
delivering to the Company a duly executed notice (a "Notice of Exercise")
in the form of Annex A hereto and the Holder, in lieu of purchasing the
entire number of shares as set out in (A) shall have the right to
relinquish all of the then unexercised portion of the Warrant (to the
extent then exercisable) in exchange for that number of shares (the
"Cashless Shares") equal to the balance (the "Balance") obtained by
subtracting the number obtained by multiplying the Exercise Price by the
number of Warrant Shares being exercised (the "Purchase Value") from the
then market value (the "Market Value") of the underlying shares of Common
Stock obtained by multiplying the number of Warrant Shares being exercised
by the average 5 day closing bid price (the "Average Trading Price") for
the Common Stock as traded on the NASDAQ and dividing it by the Average
Trading Price, as follows:
Market Value - Purchase Value = Balance
Balance/Average Trading Price = No. Of Cashless Shares
For example:
Assuming: (i) 20 day Average Trading Price = $7.50
(ii) Exercise Price = $5.07
Market Value - 100,000 X $ 7.50 = $ 750,000
Purchase Value - 100,000 X $ 5.07 = $ 507,000
---------
Balance - $ 243,000
Balance/Average Trading Price = Cashless Shares - 243,000/7.50 = 32,400
No. of Cashless Shares to be Issued - 32,400
(i) As soon as practicable after the Company shall have received such
Notice of Exercise and any required payment, the Company shall
execute and deliver or cause to be executed and delivered, in
accordance with such Notice of Exercise, to the Holder at the address
set forth in such Notice of Exercise a certificate or certificates
representing the number of shares of Common Stock specified in such
Notice of Exercise. The Warrant shall be deemed to have been
exercised and such share certificate or certificates shall be deemed
to have been issued, and the Holder shall be deemed for all purposes
to have become a holder of record of
NY/301448.1
2
shares of Common Stock, as of the date that such Notice of Exercise
and any required payment shall have been received by the Company.
(ii) The Holder shall surrender this Warrant certificate of the Company
when it delivers the Notice of Exercise, and in the event of a
partial exercise of the Warrant, the Company shall execute and
deliver to the Holder, at the time the Company delivers the share
certificate or certificates issued pursuant to such Notice of
Exercise, a new Warrant certificate for the unexercised portion of
the Warrant, but in all other respect identical to this Warrant
certificate.
(iii) The Company shall not be require to issue fractional shares of Common
Stock upon an exercise of the Warrant. If any fraction of a share
would, but for this restriction, be issuable upon an exercise of the
Warrant, in lieu of delivering such fractional share, the Company
shall pay to the Holder, in cash, an amount equal to the same
fraction times the Current Market Value (as defined in Sections
c.(1), c.(2), and c.(3) below, as applicable) for the
Common Stock immediately prior to the date of such
exercise. The Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, issuance and delivery of
certificates for the Warrant Shares and any new Warrant certificates.
b. Reservation of Shares. The Company shall at all times reserve for issuance
and/or delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issuance and delivery upon exercise
of the Warrants.
c. Fractional Shares. No fractional shares or script representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to
any fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied
by the Current Market Value of a share, which shall have the following
meaning:
(1) If the Common Stock is listed on a National Securities Exchange or
admitted to unlisted trading privileges on such exchange or
included for quotation on the NASDAQ system, the Current Market
Value shall be the last reported sale price of the Common Stock on
such exchange or automated quotation system on the last business
day prior to the date of exercise of this Warrant or if no such
sale is made (or reported) on such day, the average closing bid and
asked prices for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the Current Market Value shall be the mean of
the last reported bid and asked prices reported by the Electronic
Bulletin Board or National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of this Warrant; or
NY/301448.1
3
(3) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported,
the Current Market Value shall be an amount, not less than book
value thereof as at the end of the most recent fiscal year of the
Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the
Board of Directors of the Company (the "Board").
d. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company for other warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder.
Upon surrender of this Warrant to the Company at its principal office, with
the Assignment Form annexed hereto duly executed and funds sufficient to
pay any transfer tax, the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such instrument
of assignment and this Warrant shall promptly be canceled. This Warrant may
be divided or combined with other warrants which carry the same rights upon
presentation hereof at the principal office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued and signed by the Holder hereof. The term"Warrant" as used
herein includes any warrants into which this Warrant may be divided or
exchanged. Upon receipt of the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like tenor
and date. Any such new Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the Company, whether or
not this Warrant so lost, stolen, destroyed, or mutilated shall be at any
time enforceable by anyone.
e. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled
to any rights of a shareholder in the Company, either at law or equity, and
the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth
herein.
f. Anti-Dilution Provisions. The respective Exercise Price in effect at any
time and the number and kind of securities purchasable upon the exercise of
the Warrants shall be subject to adjustment from time to time upon the
happening of certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares
of Common Stock into a greater number of shares, or (iii) combine
or reclassify its outstanding shares of Common Stock into a smaller
number of shares, the respective Exercise Price in effect at the
time of
NY/301448.1
4
the record date for such dividend or distribution or of the
effective date of such subdivision, combination or reclassification
shall be adjusted so that it shall equal the price determined by
multiplying the respective Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock
Outstanding (as defined below) after giving effect to such action,
and the numerator of which shall be the number of shares of Common
Stock Outstanding immediately prior to such action. Such adjustment
shall be made successively whenever any event listed above shall
occur.
(2) In the event that the Company shall distribute to all holders of
shares of Common Stock (including any such distribution made to the
shareholders of the Company in connection with a consolidation or
merger in which the Company is the surviving or continuing
corporation) evidences of its indebtedness, cash or assets (other
than distributions and dividends payable in Shares of Common
Stock), or rights, options or warrants to subscribe for or purchase
shares of Common Stock or securities convertible or exchangeable
into shares of Common Stock, then, in each case, the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of
shareholders entitled to receive such distribution by a fraction,
the numerator of which shall be the Current Market Value of a share
of Common Stock for the twenty (20) days ending on the seventh
trading day proceeding such distribution on such record date, less
the fair market value (as determined by the Board) of the portion
of the evidences of indebtedness or assets to be distributed, or of
such rights, options or warrants or convertible or exchangeable
securities, or the amount of such cash, applicable to one share of
Common Stock Outstanding on such record date and the denominator of
which shall be such Current Market Value per share. Such adjustment
shall become effective at the close of business on such record
date.
(3) Whenever there shall be adjustment as provided in this Section f,
the Company shall within 30 days thereafter cause written notice
thereof to be sent by registered mail, postage prepaid, to the
Holder, at its address as it shall appear in the Warrant Register,
which notice shall be accompanied by an officer's certificate
setting forth the adjusted number of Warrant Shares issuable
hereunder and the exercise price thereof after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment and the computation thereof, which officer's certificate
shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.
g. Officer's Certificate. Whenever the respective Exercise Price shall be
adjusted as required by the provisions of the foregoing Section f, the
Company shall forthwith file in the custody of its Secretary or
an Assistant Secretary at its principal office, an officer's certificate
showing the adjusted respective Exercise Price determined as herein
provided,
NY/301448.1
5
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of related additional shares of Common
Stock, if any, and such other facts as shall be necessary to show the
reason for and the manner of computing such adjustment. Each such officer's
certificate shall be made available at all reasonable times for inspection
by the holder or any holder of a Warrant executed and delivered pursuant to
Section a. and the Company shall, forthwith after each such adjustment,
mail a copy by certified mail of such certificate to the Holder or any such
holder.
h. Notices to Warrant Holders. So long as this Warrant shall be outstanding,
(i) if the Company shall pay any dividend or make any distribution upon the
Common Stock or (ii) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any share of any class or any
other rights or (iii) if the capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
transfer of all or substantially all of the property and assets of the
Company to another corporation, or voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be effected, then in any
such case, the Company shall cause to be mailed by certified mail to the
Holder, at least fifteen days prior the date specified in (x) or (y) below,
as the case may be, a notice containing a brief description of the proposed
action and stating the date on which (x) action is to be taken for the
purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other
securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up. The failure to give such notice
shall not otherwise effect the action taken by the Company.
i. Reclassification, Reorganization or Merger. In case of any
reclassification, capital reorganization or other change of outstanding
shares of Common Stock of the Company, or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger
with a subsidiary in which merger the Company is the continuing corporation
and which does not result in any reclassification, capital reorganization
or other change of outstanding shares of Common Stock of the class issuable
upon exercise of this Warrant) or in case of any sale, lease or conveyance
to another corporation of the property of the Company as an entirety, the
Company shall, as a condition precedent to such transaction, cause
effective provisions to be made so that the Holder shall have the right
thereafter by exercising this Warrant at any time prior to the expiration
of the Warrant, to purchase the kind and amount of shares of stock and
other securities and property receivable upon such reclassification,
capital reorganization and other change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock which might
have been purchased upon exercise of this Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or
NY/301448.1
6
conveyance. Any such provision shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section i. shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. In the event that in
connection with any such capital reorganization or reclassification,
consolidation, merger, sale or conveyance, additional shares of Common
Stock shall be issued in exchange, conversion, substitution or payment, in
whole or in part, for a security of the Company other than Common Stock,
any such issue shall be treated as an issue of Common Stock covered by the
provisions of Subsection (1) of Section f hereof.
j. Venue. The terms of this Agreement shall be construed in accordance with
the laws of the State of New York. The exclusive venue with respect to any
claims or disputes under this Agreement shall be the appropriate State or
Federal Courts located in New York, New York.
[Signature page follows]
NY/301448.1
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
attested by the Undersigned, each being duly authorized, as of the date below.
JAWS TECHNOLOGIES, INC.
By:
-------------------------------
Its:
-------------------------------
Dated:
ATTEST:
--
- ---------------- -------
Secretary
- ------------------,
NY/301448.1
8
EXERCISE FORM
(1) The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing Shares of Common Stock of Jaws
Technologies, Inc. at $ 5.07 USD per share (for an aggregate of
$______); or
(2) The undersigned hereby irrevocably elects to exercise the cashless
exercise provisions as set out in paragraph a. hereto. In
accordance with paragraph a., the Average Trading Price is _______
and the number of Cashless Shares to be issued is __________
calculated as follows:
Market Value _______________________;
Purchase Value $507,000 USD;
Balance _______________________.
Balance/Average Trading Price = No. of Cashless Shares
No. of Cashless Shares to be Issued _______________________.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _________________________________________________
(Please typewrite or print in block letters)
Address ______________________________________________________
Social Security of Federal I.D. Number: ______________________
THE UNDERSIGNED REPRESENTS AND WARRANTS TO JAWS TECHNOLOGIES, INC. THAT THE
CONDITIONS FOR EXERCISE OF THE WITHIN WARRANT SET FORTH IN THE FIRST SENTENCE OF
THE FIRST PARAGRAPH ABOVE HAVE BEEN FULLY COMPLIED WITH.
Payment of $__________ enclosed
Signature _________________________________________________________
(Sign exactly as your name appears on the first page of this Warrant)
NY/301448.1
9
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________________hereby sells,
assigns and transfers unto
Name __________________________________________ _______________________
(Please typewrite or print in block letters) Address
Social Security of Federal I.D. Number: _________________________
the right to purchase shares of Common Stock of Jaws Technologies, Inc.
represented by this Warrant as to which such right is exercisable and does
hereby irrevocably constitute and appoint_______________________________________
_____________________________________Attorney, to transfer the same on the books
of Jaws Technologies, Inc. with full power of substitution in the premises.
Date:
Signature ______________________________________________________
(Sign exactly as your name appears on the first page of this Warrant)
NY/301448.1
10