Exhibit 10.3

 

 

 

 

 

 

 

WARRANT TO PURCHASE COMMON STOCK

 

 

 

 

 

OF ONE STOP SYSTEMS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

 

1.

Definitions

1

 

1.1

Company.

1

 

1.2

Common Stock.

1

 

1.3

Securities Act.

1

 

1.4

Warrant Holder.

1

2.

Registration Rights

1

3.

Exercise

2

 

3.1

Subscription

2

 

3.2

Investor Certificate.

2

 

3.3

Partial Exercise.

2

 

3.4

Payment

2

 

3.5

Continuing Obligations.

2

4.

Delivery of Stock Certificate

2

5.

Stock Splits and Combinations

3

6.

Reclassifications, exchanges and substitutions

3

7.

Reorganizations, mergers, consolidations, or sale of assets

3

8.

No Impairment

4

9.

Notice of Adjustments

4

10.

Miscellaneous

4

 

10.1

Reservation of Stock

4

 

10.2

No Rights as a Shareholder

4

 

10.3

Modification

5

 

10.4

Governing Law

5

 

10.5

Expiration

5

EXHIBIT A

6

 

 

 

 

 

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WARRANT TO PURCHASE COMMON STOCK

OF ONE STOP SYSTEMS, INC.

 

 

This Warrant issued on _____, 2019, certifies, for value received ________, or
registered assigns, is entitled, subject to the terms set forth below, to
purchase from One Stop Systems, Inc., a Delaware corporation (“Company”),
______________ (_______) fully paid and non-assessable shares of Common Stock of
the Company at the purchase price of  ______________ ($____) per share (“Per
Share Purchase Price”) at any time or from time to time from the date of this
Warrant to and including ______, 2024 such price and number of shares being
subject to adjustment as provided herein.

 

1.

Definitions

 

As used in this warrant, the following terms, unless the context requires
otherwise, have the following meanings:

 

1.1Company.  “Company” includes any corporation that will succeed to or assume
the obligations of the Company under this warrant.

 

1.2Common Stock.  “Common Stock,” when used with reference to stock of the
Company, means all shares, now or hereafter authorized, of the class of the
Common Stock of the Company presently authorized and stock of any other class
into which those shares may later be changed.

 

1.3Securities Act.  “Securities Act” means the Securities Act of 1933, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission (or any other federal agency then administering the
Securities Act) under that legislation, all as they may be in effect at the
time.

 

1.4Warrant Holder.  The terms “warrant holder,” “holder of warrants,” “holder,”
or similar terms when the context refers to a holder of the warrants, mean
anyone who at the time is the registered holder of any of the warrants.

 

2.Registration Rights

 

Notwithstanding any provision of this Warrant to the contrary, each certificate
representing any Common Stock issued pursuant to exercise of warrant hereunder
will bear the following legend:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.

 

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3.Exercise

 

3.1Subscription.  The holder of this Warrant may exercise it in full, or in
part, by surrender of this Warrant, with delivery of a Subscription in the form
attached hereto as Exhibit A, duly executed by the holder, to the Company at its
principal office in Escondido, California accompanied by payment in the amount
obtained by multiplying the Purchase Price by the number of shares of Common
Stock specified on the face of this Warrant.

 

3.2Investor Certificate.  Company may request a written statement that the
holder is purchasing the Common Stock or that the transferee is acquiring the
Warrant or Common Stock for such holder’s or transferee’s own account, for
investment and not with a view to the sale or distribution of the Warrant or
Common Stock nor with any then-present intention of distributing or selling the
Warrant or Common Stock.  Any such Warrant or Common Stock certificate may, at
the Company’s option, include any legend considered necessary or desirable to
comply with the Securities Act.

 

3.3Partial Exercise.  On partial exercise, the Company will promptly issue and
deliver to the holder of this Warrant a new warrant in the name of the Warrant
Holder, providing for the right to purchase that number of shares of Common
Stock (without giving effect to any adjustment of that number) for which this
Warrant has not been exercised.

 

3.4Payment.  Payment may be in cash or by official bank check payable to the
order of the Company.

 

3.5Continuing Obligations. At the time this Warrant is exercised, the Company
will, at the holder’s request, acknowledge in writing its continuing obligation
to afford to that holder any rights to which that holder will continue to be
entitled after such exercise in accordance with this Warrant, provided that, if
the holder fails to make such request, that failure will not affect the
Company’s continuing obligation to afford to such holder any such rights.

 

4.Delivery of Stock Certificate

 

As soon as possible after full or partial exercise of this Warrant, the Company
at its expense will cause to be issued in the name of and delivered to the
holder of this Warrant, a certificate for the number of fully paid and
non-assessable shares of Common Stock to which that holder will be entitled on
such exercise, together with any other securities and property to which that
holder is entitled on such exercise under the terms of this Warrant. No
fractional share will be issued on exercise of rights to purchase under this
Warrant. If on any exercise of this Warrant a fraction of a share results, the
Company will pay the cash value of that fractional share, calculated on the
basis of the exercise price.

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5.Stock Splits and Combinations

 

If the Company at any time subdivides or combines its outstanding shares of
Common Stock, this Warrant will, after that subdivision or combination, be
evidence of the right to purchase the number of shares of Common Stock that
would have been issuable as a result of that change with respect to the shares
of Common Stock that were purchasable under this Warrant immediately before that
subdivision or combination. If the Company at any time subdivides the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before that subdivision will be proportionately decreased, and, if
the Company at any time combines the outstanding shares of Common Stock, the
Purchase Price then in effect immediately before that combination will be
proportionately increased. Any adjustment under this provision will become
effective at the close of business on the date the subdivision or combination
becomes effective.

 

6.Reclassifications, exchanges and substitutions

 

If the Common Stock issuable on exercise of this Warrant is changed into the
same or a different number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares, provided for above), the holder of this
Warrant, will on its exercise, be entitled to purchase, in lieu of the Common
Stock that that holder would have become entitled to purchase but for such
change, a number of shares of such other class or classes of stock equivalent to
the number of shares of Common Stock that would have been subject to purchase by
the holder on exercise of this Warrant immediately before that change.

 

7.Reorganizations, mergers, consolidations, or sale of assets

 

If at any time there is a capital reorganization of the Company’s Common Stock
(other than a combination, reclassification, exchange, or subdivision of shares
provided for elsewhere in this Warrant) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all the Company’s properties and assets as, or substantially as, an entirety to
another person, then, as a part of such reorganization, merger, consolidation,
or sale, lawful provision will be made so that the holder of this Warrant will
thereafter be entitled to receive on exercise of this Warrant, during the period
specified in this Warrant and on payment of the Purchase Price then in effect,
the number of shares of stock or other securities or property of the Company, or
of the successor corporation resulting from such merger or consolidation, to
which a holder of the Common Stock deliverable on exercise of this Warrant would
have been entitled on that event if this Warrant had been exercised immediately
before that event. In any such case, appropriate adjustment (as determined by
the Company’s board of directors) will be made in applying this Warrant to the
rights and interests of the holder of this Warrant after the reorganization,
merger, consolidation, or sale to the end that this Warrant (including
adjustment of the Purchase Price then in effect and number of shares purchasable
on exercise of this warrant) will be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event on exercise of this Warrant. The Company will, within thirty (30)
days after making such adjustment, give written notice (by first-class mail,
postage prepaid) to the Warrant Holder.

 

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The notice will set forth, in reasonable detail, the event requiring the
adjustment and the method by which the adjustment was calculated and will
specify the Purchase Price then in effect after the adjustment and the increased
or decreased number of purchasable shares on exercise of this Warrant. When
appropriate, advance notice may be given and included as part of the notice
required under other provisions of this Warrant.

 

8.No Impairment

 

The Company covenants that it will not, by voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but it
will at all times in good faith assist in carrying out all those terms and take
all action necessary or appropriate to protect the rights of the holder of this
Warrant against impairment.

 

9.Notice of Adjustments

 

The Company will promptly give written notice of each adjustment or readjustment
of the Purchase Price or the number of shares of Common Stock or other
securities issuable on exercise of this Warrant, by first-class mail, postage
prepaid, to the registered holder of this Warrant at that holder’s address as
shown on the Company’s books.

 

The notice will state the amount of that adjustment or readjustment and show in
reasonable detail the facts on which that adjustment or readjustment is based,
including a statement of (1) the consideration received or to be received by the
Company for any additional shares of Common Stock issued or sold or deemed to
have been issued or sold, (2) the number of shares of Common Stock outstanding
or deemed to be outstanding, and (3) the Purchase Price in effect immediately
before that issue or sale and as adjusted or readjusted because of that issue or
sale.

 

The form of this Warrant need not be changed because of any adjustment in the
Purchase Price or in the number of shares of Common Stock purchasable on its
exercise. A Warrant issued after any such adjustment on any partial exercise or
in replacement may continue to express the same Purchase Price and the same
number of shares of Common Stock (appropriately reduced in the case of partial
exercise) as are stated on the face of this Warrant as initially issued, and
that Purchase Price and number of shares will be considered to have been so
changed as of the close of business on the date of adjustment.

 

10.Miscellaneous

 

10.1Reservation of Stock.  The Company covenants that it will at all times
reserve and keep available, solely for issuance on exercise of this Warrant, all
shares of Common Stock or other securities from time to time issuable on
exercise of this Warrant.

 

10.2No Rights as a Shareholder.  No holder of this Warrant, as such, will be
entitled to vote or receive dividends or be considered a shareholder of the
Company for any purpose, nor will anything in this Warrant be construed to
confer on any holder of this Warrant, as such, any rights of a shareholder of
the Company or any right to vote, to give or withhold consent to corporate
action, to receive notice of meetings of shareholders, or to receive dividends
or subscription rights or otherwise.

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10.3Modification.  This Warrant and any of its terms may be changed, waived, or
terminated only by a written instrument signed by the party against which
enforcement of that change, waiver, or termination is sought.

 

10.4Governing Law.  This Warrant will be governed by, construed, and enforced in
accordance with the laws of the State of California as applied to contracts
executed, delivered, and performed solely in that state.

 

10.5Expiration.  The right to exercise this Warrant will expire on _____, 2024.

 

In WITNESS WHEREOF, this Warrant is signed on the day and year first above
written.

 

 

One Stop Systems, Inc., a Delaware corporation

 

 

 

 

 

 

By:  

 

 

Stephen D. Cooper, President and CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:  

 

 

 

 

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EXHIBIT A

 

SUBSCRIPTION

 

 

To:  One Stop Systems, Inc.

 

The undersigned, the holder of the attached Warrant, hereby irrevocably elects
to exercise the purchase right represented by that Warrant for, and to purchase
under that Warrant ____ shares of Common Stock of One Stop Systems, Inc., a
Delaware corporation and herewith makes payment of $____ for those shares, and
requests that the certificates for those shares be issued in the name of, and
delivered to ____________ at the address below.

 

Date:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

print name

 

 

 

 

 

 

 

Address: