No. 2005-10 Void after September 14, 2010

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED.

 

 

 

 

 

This Warrant is issued to Glenn Bergenfield (the “Holder”) by CampusTech, Inc., a Delaware corporation (the “Company”), pursuant to the purchase of the 10% Convertible Promissory Note dated September 14, 2005, by and between the Company and the Holder (the “Note”).

 

1.  Purchase of Shares. Subject to the terms and conditions hereinafter set forth and set forth in the Note, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company, in whole or in part, up to the number of fully paid and nonassessable Shares of Common Stock that equals the quotient obtained by dividing (a) the Warrant Coverage Amount (as defined below) by (b) the Exercise Price (as defined below).

 

2.  Definitions.

 

(a)  Change of Control. The term “Change of Control” shall mean (i) any consolidation or merger involving the Company pursuant to which the Company’s stockholders immediately prior to the transaction or series of transactions, as the case may be, own less than fifty percent (50%) of the voting securities of the surviving entity or (ii) the sale of all or substantially all of the assets of the Company.

 

(b)  Exercise Period. The term “Exercise Period” means the period commencing on the first to occur of (i) September 14, 2005 or (ii) the first date that any notice is required to be delivered pursuant to the provisions of Section 14(b) hereof and ending on the expiration of this Warrant pursuant to Section 14 hereof.

 

(c)  Exercise Price. The exercise price for the Shares shall be $0.25 per share (such applicable price, as adjusted from time to time, is herein referred to as the “Exercise Price”).

 

(d)  Warrant Coverage Amount. The term “Warrant Coverage Amount” shall mean $50,000.00.

 

3.  Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:

 

(i)  the surrender of the Warrant, together with a notice of exercise to the Secretary of the Company at its principal offices; and

 

(ii)  the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.

 

4.  Net Exercise. In lieu of exercising this Warrant by payment of cash to the Company in accordance with Section 3 above, the holder of this Warrant may elect to receive shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the holder hereof a number of Shares computed using the following formula:

 

	Y (A - B)
X =	A

 

 

Where

 

X --

The number of Shares to be issued to the holder of this Warrant.

 

Y --

The number of Shares purchasable under this Warrant.

 

A --

The fair market value of one Share.

 

B --

The Exercise Price (as adjusted to the date of such calculations).

 

For purposes of this Section 4, the fair market value of a Share shall mean the price per Share that the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued Shares, as determined in good faith by the Company’s Board of Directors.

 

5.  Certificates for Shares. Upon the exercise of the purchase rights evidenced by this Warrant, one or more certificates for the number of Shares so purchased shall be issued as soon as practicable thereafter, and in any event within thirty (30) days of the delivery of the subscription notice.

 

6.  Issuance of Shares; No Impairment. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. The Company will not, by amendment of its organizational documents, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.

 

7.  Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

(a)  Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide the Shares, by split or otherwise, or combine its Shares, or issue additional shares of its Shares as a dividend, then the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

 

(b)  Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization, or change in the capital stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 7(a) above), then the Company shall make appropriate provision so that the holder of this Warrant shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of Shares as were purchasable by the holder of this Warrant immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the holder of this Warrant so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same.

 

(c)  Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant.

 

8.  No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

9.  Representations of the Company. The Company represents that all corporate actions on the part of the Company, its officers, directors and stockholders necessary for the sale and issuance of this Warrant, and the issuance of the Shares upon exercise hereof, have been taken.

 

10.  Representations and Warranties by the Holder. The Holder represents and warrants to the Company as follows:

 

(a)  This Warrant and the Shares issuable upon exercise thereof are being acquired for its own account, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended (the “Act”). Upon exercise of this Warrant, the Holder shall, if so requested by the Company, confirm in writing, in a form satisfactory to the Company, that the securities issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution or resale.

 

(b)  The Holder understands that the Warrant and the Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Act pursuant to Section 4(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is exempted from such registration. The Holder further understands that such exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent expressed above.

 

(c)  The Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of this Warrant and the Shares purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith.

 

(d)  The Holder is able to bear the economic risk of the purchase of the Shares pursuant to the terms of this Warrant.

 

(e)  The Holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act.

 

11.  Restrictive Legend.

 

The Shares (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

 

12.  Rights of Stockholders. No holder of this Warrant shall be entitled, as a Warrant holder, to vote or receive dividends or be deemed the holder of the Shares or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.

 

13.  Expiration of Warrant; Notice of Certain Events Terminating This Warrant.

 

This Warrant shall expire and shall no longer be exercisable upon the earlier to occur of: (i) 5:00 p.m., Pacific Time, on September 14, 2010; (ii) a Change of Control; or (iii) the closing of an initial public offering of the Company’s Common Stock.

 

The Company shall provide at least ten (10) days prior written notice of any event set forth in Section 14(a)(ii) or (iii). If such notice is not provided timely, the expiration date relating to any such event shall be extended to the date that is ten (10) days after delivery by the Company of such notice.

 

14.  Notices. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one (1) business day after the business day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to the Holder, at the Holder’s address , and (ii) if to the Company, at the address of its principal corporate offices or at such other address as a party may designate by ten (10) days advance written notice to the other party pursuant to the provisions above.

 

Governing Law. This Warrant and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware or of any other state.

 

[Remainder of this Page Intentionally Left Blank]

 

 

 

Issued this 14th day of September, 2005.

 

CAMPUSTECH, INC., a Delaware corporation

 

Name: Robert S. Frank

Title: President

 

 

 

TO:	CampusTech, Inc.

Attention: President

 

1. The undersigned hereby elects to purchase __________ Shares of Common Stock pursuant to the terms of the attached Warrant.

 

2. Method of Exercise (Please initial the applicable blank):

 

___

The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased, together with all applicable transfer taxes, if any.

 

___

The undersigned elects to exercise the attached Warrant by means of the net exercise provisions of Section 4 of the Warrant.

 

3. Please issue a certificate or certificates representing said Shares in the name of the undersigned or in such other name as is specified below:

 

_________________________________

(Name)

 

_________________________________

 

_________________________________

(Address)

 

4. The undersigned hereby represents and warrants that the aforesaid Shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in Section 10 of the attached Warrant (including Section 10 (e) thereof) are true and correct as of the date hereof.

 

 

		(Signature)
		(Name)
(Date)		(Title)