EXHIBIT 4.1
FORM OF WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
CELL POWER TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions. In consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by CELL POWER TECHNOLOGIES, INC., a Florida corporation (the
"Company"), ____________________________ or registered assigns (the "Holder") is
hereby granted the right to purchase at any time until 5:00 P.M., New York City
time, on the Expiration Date (as defined below),_________________ Thousand
__________ (____________) fully paid and nonassessable shares of the Company's
Common Stock, no par per share (the "Common Stock"), at an initial exercise
price per share (the "Exercise Price") of $1.25 per share, subject to further
adjustment as set forth herein. This Warrant is being issued pursuant to the
terms of that certain Subscription Agreement, dated as of _____, 2004 (the
"Agreement"), to which the Company and Holder (or Holder's predecessor in
interest) are parties.
2. Exercise of Warrants.
2.1 General.
(a) This Warrant is exercisable in whole or in part
at any time and from time to time. Such exercise shall be effectuated by
submitting to the Company (either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and duly executed
Notice of Exercise (substantially in the form attached to this Warrant
Certificate) as provided in this paragraph. The date such Notice of Exercise is
faxed to the Company shall be the "Exercise Date," provided that the Holder of
this Warrant tenders this Warrant Certificate to the Company within five (5)
business days thereafter. The Notice of Exercise shall be executed by the Holder
of this Warrant and shall indicate the number of shares then being purchased
pursuant to such exercise. Upon surrender of this Warrant Certificate, together
with appropriate payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased.
(b) The Exercise Price per share of Common Stock for
the shares then being exercised shall be payable in cash or by certified or
official bank check.
(c) The Holder shall be deemed to be the holder of
the shares issuable to it in accordance with the provisions of this Section 2.1
on the Exercise Date.
2.2 Certain Definitions. As used herein, each of
the following terms has the meaning set forth below, unless the context
otherwise requires:
(a) "Closing Price" means the closing price during
regular trading hours of the Common Stock (in U.S. Dollars) on the Principal
Trading Market, as reported by the Reporting Service.
(b) "Expiration Date" means the earlier of _______,
2009 or the Early Expiration Date (as defined below).
(c) "Principal Trading Market" means the Over the
Counter Bulletin Board Market.
(d) "Reporting Service" means Bloomberg LP or if that
service is not then reporting the relevant information regarding the Common
Stock, a comparable reporting service of national reputation selected by the
Holder and reasonably acceptable to the Company.
(e) "Target Price" means $2.75 per share, subject to
further adjustment in the same manner as adjustments to the Exercise Price are
made herein.
(f) "Trading Day" means any day during which the
Principal Trading Market shall be open for business.
2.3 Early Expiration Date. So long as an effective
registration statement exists with respect to the resale of the shares issuable
on exercise of this Warrant, if the Closing Price for the Common Stock is more
than the Target Price for each of ten (10) consecutive Trading Days (the tenth
of such consecutive Trading Days, the "Target Trading Day"), then the Company
will have the right to give the Holder a written notice (an "Early Expiration
Date Notice") within ten (10) Trading Days after the Target Trading Day. The
Early Expiration Date Notice shall state that the Expiration Date shall be a
date specified in such notice (the "Early Expiration Date"), which date shall
not be earlier than thirty (30) days after the Target Trading Day.
3. Reservation of Shares. The Company hereby agrees that at
all times during the term of this Warrant there shall be reserved for issuance
upon exercise of this Warrant such number of shares of its Common Stock as shall
be required for issuance upon exercise of this Warrant (the "Warrant Shares").
4. Mutilation or Loss of Warrant. Upon receipt by 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) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in this
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the
Exercise Price is required pursuant to this Section 6, the Holder shall be
entitled to purchase such number of shares of Common Stock as will cause (i) (x)
the total number of shares of Common Stock Holder is entitled to purchase
pursuant to this Warrant following such adjustment , multiplied by (y) the
adjusted Exercise Price per share, to equal the result of (ii) (x) the dollar
amount of the total number of shares of Common Stock Holder is entitled to
purchase before adjustment, multiplied by (y) the total Exercise Price before
adjustment.(1)
6.2 Capital Adjustments. In case of any stock split
or reverse stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation (where the Company is not the
surviving entity), the provisions of this Section 6 shall be applied as if such
capital adjustment event had occurred immediately prior to the date of this
Warrant and the original Exercise Price had been fairly allocated to the stock
resulting from such capital adjustment; and in other respects the provisions of
this Section shall be applied in a fair, equitable and reasonable manner so as
to give effect, as nearly as may be, to the purposes hereof. A rights offering
to stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights.
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(1) Example: Assume 100,000 shares remain under Warrant at original stated
Exercise Price of $1.50. Total exercise price (clause (y) in text) is (i)
100,000 x (ii) $1.50, or $150,000. Company effects 2:1 stock split.
Exercise Price is adjusted $0.75. Number of shares covered by Warrant is
adjusted to 200,000, because (applying clause (x) in text) (i) 200,000 x
(ii) $0.75 = $150,000.
7. Transfer to Comply with the Securities Act; Registration
Rights.
7.1 Transfer. This Warrant has not been registered
under the Securities Act of 1933, as amended, (the "Act") and has been issued to
the Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of
counsel satisfactory to the Company that registration is not required under the
Act. Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
7.2 Registration Rights. (a) Reference is made to the
Registration Rights Agreement entered into by the Company and the Holder as of
_________, 2004. The Company's obligations under the Registration Rights
Agreement and the other terms and conditions thereof with respect to the Warrant
Shares, including, but not necessarily limited to, the Company's commitment to
file a registration statement including the Warrant Shares, to have the
registration of the Warrant Shares completed and effective, and to maintain such
registration, are incorporated herein by reference.
(b) In addition to the registration rights referred
to in the preceding provisions of Section 7.2(a), effective after the expiration
of the effectiveness of the Registration Statement as contemplated by the
Registration Rights Agreement, the Holder shall have piggy-back registration
rights with respect to the Warrant Shares then held by the Holder or then
subject to issuance upon exercise of this Warrant (collectively, the "Remaining
Warrant Shares"), subject to the conditions set forth below. If, at any time
after the Registration Statement has ceased to be effective, the Company
participates (whether voluntarily or by reason of an obligation to a third
party) in the registration of any shares of the Company's stock (other than a
registration on Form S-8 or on Form S-4), the Company shall give written notice
thereof to the Holder and the Holder shall have the right, exercisable within
ten (10) business days after receipt of such notice, to demand inclusion of all
or a portion of the Holder's Remaining Warrant Shares in such registration
statement. If the Holder exercises such election, the Remaining Warrant Shares
so designated shall be included in the registration statement at no cost or
expense to the Holder (other than any costs or commissions which would be borne
by the Holder under the terms of the Registration Rights Agreement). The
Holder's rights under this Section 7 shall expire at such time as the Holder can
sell all of the Remaining Warrant Shares under Rule 144 without volume or other
restrictions or limit.
8. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
return receipt requested, postage pre-paid. Any such notice shall be deemed
given when so delivered personally, or sent by confirmed and acknowledged
facsimile transmission, or, if so mailed, two days after the date of deposit in
the United States mails, as follows:
(i) if to the Company, to:
CELL POWER TECHNOLOGIES, INC.
1428 36TH Street
Brooklyn, New York 11218
Attn: President
Telephone No.: (718) 436-7931
Telecopier No.: (718)
with a copy to:
Aboudi & Brounstein
Attn: David Aboudi, Esq.
Rechov Gavish 3, POB 2432
Kfar Saba Industrial Zone 44641 Israel
Telephone No.: (011-972-9) 764-4833
Telecopier No.: (011-972-9) 764-4834
(ii) if to the Holder, to:
Attn:
Telephone No.: ( ) -
Telecopier No.: ( ) -
with a copy to:
Any party may, by notice given in accordance with this Section to the other
parties, designate another address or person for receipt of notices hereunder.
9. Supplements and Amendments; Whole Agreement. This Warrant
may be amended or supplemented only by an instrument in writing signed by the
parties hereto. This Warrant contains the full understanding of the parties
hereto with respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a
contract made under the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass New York County or the state
courts of the State of New York sitting in New York County in connection with
any dispute arising under this Warrant and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions. To the
extent determined by such court, the Company shall reimburse the Holder for any
reasonable legal fees and disbursements incurred by the Buyer in enforcement of
or protection of any of its rights under any of the Transaction Agreements.
11. JURY TRIAL WAIVER. The Company and the Holder hereby waive
a trial by jury in any action, proceeding or counterclaim brought by either of
the Parties hereto against the other in respect of any matter arising out or in
connection with this Warrant.
12. Counterparts. This Warrant may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
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13. Descriptive Headings. Descriptive headings of the several
Sections of this Warrant are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the day of _______________, 2004.
CELL POWER TECHNOLOGIES, INC.
By: /s/ Jacob Herskovits
Jacob Herskovits
(Print Name)
President
(Title)