EXHIBIT 4.1
Form of Warrant
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS
(COLLECTIVELY, THE "LAWS"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
EITHER (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
LAWS, OR (II) AN OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE LAWS.
PAID, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No. 2008--__ Number of Shares: ____
Date of Issuance: April 29, 2008
Paid, Inc., a Delaware corporation (the "Company"), hereby certifies that,
for value received, _____________________, and permitted assigns, the registered
holder hereof ("Holder"), is entitled, subject to the terms set forth below, to
purchase from the Company upon surrender of this Warrant, at any time after the
date hereof, but not after 5:00 P.M. Boston time on the Expiration Date (as
defined herein) ______ fully paid and nonassessable shares of Common Stock (as
defined herein) of the Company (each a "Warrant Share" and collectively the
"Warrant Shares") at a purchase price per share equal to $.25 (the "Warrant
Exercise Price") in lawful money of the United States. The number of Warrant
Shares purchasable hereunder and the Warrant Exercise Price are subject to
adjustment as provided in Section 9 below.
Section 1.
(a) Definitions. The following words and terms used in this Warrant shall
have the following meanings:
"Common Stock" means (a) the Company's common stock and (b) any capital
stock into which such Common Stock shall have been changed or any capital stock
resulting from a reclassification of such Common Stock.
"Expiration Date" means the date which is three (3) years from the date of
this Warrant or, if such date falls on a Saturday, Sunday or other day on which
banks are required or authorized to be closed in the State of Delaware
(a "Holiday"), the next preceding date that is not a Holiday.
"Securities Act" means the Securities Act of 1933, as amended.
"Transfer" shall include any disposition of this Warrant or any Warrant
Shares, or of any interest in either thereof which would constitute a sale
thereof within the meaning of the Securities Act of 1933, as amended, or
applicable state securities laws.
"Warrant" shall mean this Warrant and all Warrants issued in exchange,
transfer or replacement of any thereof.
(b) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references herein (A)
to the Company shall be deemed to include the Company's successors; and
(B) to any applicable law defined or referred to herein, shall be deemed
references to such applicable law as the same may have been or may be
amended or supplemented from time to time.
(ii) When used in this Warrant, unless the otherwise specified in a
particular instance, the words "herein," "hereof," and "hereunder," and
words of similar import, shall refer to this Warrant as a whole and not to
any provision of this Warrant, and the words "Section," "Schedule," and
"Exhibit" shall refer to Sections of, and Schedules and Exhibits to, this
Warrant unless otherwise specified.
(iii) Whenever the context so requires the neuter gender includes
the masculine or feminine, and the singular number includes the plural,
and vice versa.
Section 2. Exercise of Warrant.
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(a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the Holder, as a whole or in part, at any time prior to 5:00 P.M.
Boston Time on the Expiration Date. The rights represented by this Warrant may
be exercised by the Holder, as a whole or from time to time in part (except that
this Warrant shall not be exercisable as to a fractional share) by (i) delivery
of a written notice, in the form attached as Exhibit I hereto (an "Exercise
Form"), of the Holder's election to exercise this Warrant, which notice shall
specify the number of Warrant Shares to be purchased, (ii) payment to the
Company of an amount equal to the Warrant Exercise Price multiplied by the
number of Warrant Shares as to which the Warrant is being exercised (plus any
applicable issue or transfer taxes) in immediately available funds (either by
wire transfer or a certified or cashier's check drawn on a United States bank),
for the number of Warrant Shares as to which this Warrant shall have been
exercised, and (iii) the surrender of this Warrant, properly endorsed, at the
principal office of the Company (or at such other agency or office of the
Company as the Company may designate by notice to the Holder).
The Warrant Shares so purchased shall be deemed to be issued to the Holder
or Holder's designees, as the record owner of such Warrant Shares, as of the
date on which this Warrant shall have been surrendered, the completed Exercise
Form shall have been delivered, and payment shall have been made for such
Warrant Shares as set forth above.
In the event of any exercise of the rights represented by this Warrant in
compliance with this Section 2(a), a certificate or certificates for the Warrant
Shares so purchased, registered in the name of, or as directed by, the Holder,
shall be delivered to, or as directed by, the Holder within three (3) business
days after such rights shall have been so exercised.
(b) Unless this Warrant shall have expired or shall have been fully
exercised, the Company shall issue a new Warrant identical in all respects to
the Warrant exercised except (i) it shall represent rights to purchase the
number of Warrant Shares purchasable immediately prior to such exercise under
the Warrant exercised, less the number of Warrant Shares with respect to which
such Warrant is exercised, and (ii) the holder thereof shall be deemed to have
become the holder of record of such Warrant Shares immediately prior to the
close of business on the date on which the Warrant is surrendered and payment of
the amount due in respect of such exercise and any applicable taxes is made,
irrespective of the date of delivery of such share certificate, except that, if
the date of such surrender and payment is a date when the stock transfer books
of the Company are properly closed, such person shall be deemed to have become
the holder of such Warrant Shares at the opening of business on the next
succeeding date on which the stock transfer books are open.
(c) In the case of any dispute with respect to an exercise, the Company
shall promptly issue such number of Warrant Shares as are not disputed in
accordance with this Section. The Company shall submit the disputed calculations
to the Company's independent accounting firm within five (5) business days of
receipt of the Exercise Form. The accountant shall audit the calculations and
notify the Company and the Holder of the results no later than ten (10) business
days from the date it receives the disputed calculations. The accountant's
calculation shall be deemed conclusive absent manifest error. The Company shall
then issue the appropriate number of shares of Common Stock in accordance with
this Section.
Section 3. Covenants as to Common Stock. The Company covenants and agrees
that all Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance and upon payment by the holder
of the Warrant Exercise Price, be validly issued, fully paid and nonassessable.
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 a sufficient number of shares of Common Stock
to provide for the exercise of the rights then represented by this Warrant and
that the par value of said shares will at all times be less than or equal to the
applicable Warrant Exercise Price.
Section 4. Taxes. The Company shall not be required to pay any tax or
taxes attributable to the initial issuance of the Warrant Shares or any
permitted transfer involved in the issue or delivery of any certificates for
Warrant Shares in a name other than that of the registered holder hereof or upon
any permitted transfer of this Warrant.
Section 5. Warrant Holder Not Deemed a Stockholder. 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 he or she is then entitled to receive upon the due exercise of this
Warrant. Notwithstanding the foregoing, 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.
Section 6. No Limitation on Corporate Action. No provisions of this
Warrant and no right or option granted or conferred hereunder shall in any way
limit, affect or abridge the exercise by the Company of any of its corporate
rights or powers to recapitalize, amend its Certificate of Incorporation,
reorganize, consolidate or merge with or into another corporation, or to
transfer all or any part of its property or assets, or the exercise of any other
of its corporate rights and powers.
Section 7. 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 for investment and not with a view to, or for sale in
connection with, any distribution hereof or of any of the shares of Common Stock
or other securities issuable upon the exercise thereof, and not with any present
intention of distributing any of the same. Upon exercise of this Warrant, the
holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the holder's own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale. If
such holder cannot make such representations because they would be factually
incorrect, it shall be a condition to such holder's exercise of the Warrant that
the Company receive such other representations as the Company considers
reasonably necessary to assure the Company that the issuance of its securities
upon exercise of the Warrant shall not violate any United States or state
securities laws. The holder of this Warrant, by the acceptance hereof,
represents that it is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act.
Section 8. Transfer; Opinions of Counsel; Restrictive Legends. The holder
of this Warrant understands that (i) this Warrant and the Warrant Shares have
not been and are not being registered under the Securities Act or any state
securities laws (other than as herein), and may not be offered for sale, sold,
assigned or transferred unless (a) subsequently registered thereunder, or (b)
pursuant to an exemption from such registration; (ii) any sale of such
securities made in reliance on Rule 144 promulgated under the Securities Act may
be made only in accordance with the terms of said Rule and further, if said Rule
is not applicable, any resale of such securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the Securities and Exchange Commission thereunder; and (iii)
neither the Company nor any other person is under any obligation to register
such securities (other than as described herein) under the Securities Act or any
state securities laws or to comply with the terms and conditions of any
exemption thereunder. The Warrant Shares receivable upon exercise of this
Warrant shall contain (or not) such restrictive legend(s) as may be required by
applicable law.
Section 9. Adjustments.
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(a) Reclassification and Reorganization. In case of any reclassification,
capital reorganization or other change of outstanding shares of the Common
Stock, or in case of any consolidation or merger of the Company with or 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,
capital reorganization or other change of outstanding shares of Common Stock),
the Company shall cause effective provision to be made so that the Holder shall
have the right thereafter, by exercising this Warrant, to purchase the kind and
number of shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that
could have been purchased upon exercise of the Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation or
merger. Any such provision shall include provision for adjustments that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Section 9. The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations and other changes of outstanding
shares of Common Stock and to successive consolidations or mergers. If the
consideration received by the holders of Common Stock is other than cash, the
value shall be as determined by the Board of Directors of the Company acting in
good faith.
(b) Dividends and Stock Splits. If and whenever the Company shall effect a
stock dividend, a stock split, a stock combination, or a reverse stock split of
the Common Stock, the number of Warrant Shares purchasable hereunder and the
Warrant Exercise Price shall be proportionately adjusted in the manner
determined by the Company's Board of Directors acting in good faith. The number
of shares, as so adjusted, shall be rounded down to the nearest whole number and
the Warrant Exercise Price shall be rounded to the nearest cent.
Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen or destroyed, the Company shall, on receipt of an
indemnification undertaking reasonably satisfactory to the Company, issue a new
Warrant of like denomination and tenor as the Warrant so lost, stolen or
destroyed. In the event the holder hereof asserts such loss, theft or
destruction of this Warrant, the Company may require such holder to post a bond
issued by a surety reasonably satisfactory to the Company with respect to the
issuance of such new Warrant.
Section 11. Notice. Any notices required or permitted to be given under
the terms of this Warrant shall be sent by mail or delivered personally or by
courier and shall be effective five days after
being placed in the mail, if mailed, certified or registered, return receipt
requested, or upon receipt, if delivered personally or by courier or by
facsimile, in each case properly addressed to the party to receive the same. The
Company's address is 4 Brussels Street, Worcester, MA 01610. The Holder's notice
address shall be as set forth on the signature line below. Each party shall
provide notice to the other party of any change in address.
Section 12. Miscellaneous. 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. This Warrant shall be governed by
and interpreted under the laws of the State of Delaware. Headings are for
convenience only and shall not affect the meaning or construction of any of the
provisions hereof. This Warrant shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Holder and its
successors and assigns. The Holder may not assign this Warrant except in
accordance with applicable federal and state securities laws. The Holder shall
immediately notify the Company with respect to any permitted assignment of this
Warrant.
Section 13. 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 8 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.
PAID, INC.
By:
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Greg Rotman, Chief Executive Officer
EXHIBIT I TO WARRANT
EXERCISE FORM TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
PAID, INC.
The undersigned hereby exercises the right to purchase the number of
Warrant Shares covered by the Warrant attached hereto as specified below
according to the conditions thereof and herewith makes payment of
U.S. $_____________, the aggregate Warrant Exercise Price of such Warrant Shares
in full pursuant to the terms and conditions of the Warrant.
(i) The undersigned agrees not to offer, sell, transfer or otherwise
dispose of any Common Stock obtained upon exercise of the Warrant, except under
circumstances that will not result in a violation of the 1933 Act or applicable
state securities laws.
(ii) The undersigned requests that the stock certificates for the Warrant
Shares be issued, and a Warrant representing any unexercised portion hereof be
issued, pursuant to the terms of the Warrant in the name of the Holder (or such
other person(s) indicated below) and delivered to the undersigned
(or designee(s)) at the address or addresses set forth below.
Dated:_____________, 20___.
HOLDER: _____________________
By: ________________________________________
Name: _____________________________________
Title: ___________________________________
Address: _____________________________
Number of Warrant Shares
Being Purchased: ________________________