exv4w5



 





Exhibit 4.5




THIS WARRANT IS NOT TRANSFERABLE

EXCEPT AS PROVIDED HEREIN




NITROSECURITY, INC.




WARRANT




Issued to




 






Exercisable to Purchase




                     UNITS




of




NITROSECURITY, INC.




Void after                                         , 2012





 









 







     This Warrant Certificate is to certify that, for value received and subject to the terms and
conditions set forth below, the Warrantholder (hereinafter defined) is entitled to purchase, and
the Company promises and agrees to sell and issue to the Warrantholder, at any time on or after the
first anniversary of the Final Prospectus Date (hereinafter defined) and on or before the fifth
anniversary of the Final Prospectus Date, in the aggregate up to                      Units (hereinafter
defined) at the Exercise Price (hereinafter defined).



     This Warrant Certificate is issued subject to the following terms and conditions:



     1. DEFINITIONS OF CERTAIN TERMS. Except as may be otherwise clearly required by the context,
the following terms have the following meanings:



          (a) “Act” means the Securities Act of 1933, as amended.




          (b) “Cashless Exercise” means an exercise of the Warrant in which, in lieu of payment
of the Exercise Price, the Holder elects to receive a lesser number of Securities such that the
value of the Securities that such Holder would otherwise have been entitled to receive but has
agreed not to receive, as determined by the closing price of such Securities on the date of
exercise or, if such date is not a trading day, on the next prior trading day, is equal to the
Exercise Price with respect to such exercise. A Holder may only elect a Cashless Exercise if
Securities issuable by the Company on such exercise are publicly traded securities.




          (c) “Common Stock” means the common stock, $0.01 par value per share, of the Company.




          (d) “Company” means NitroSecurity, Inc., a Delaware corporation.




          (e) “Company’s Expenses” means any and all expenses payable by the Company or the
Warrantholder in connection with an offering described in Section 6 hereof, except Warrantholder’s
Expenses.




          (f) “Exercise Price” means the price at which the Warrantholder may purchase one Unit
upon exercise of the Warrant as determined from time to time pursuant to the provisions hereof. The
initial Exercise Price is $                      per Unit.




          (g) “Final Prospectus Date” means the date of the final prospectus relating to the
Offering, or                      , 2007.




          (h) “Offering” means the public offering of Units made pursuant to the Registration
Statement.




          (i) “Participating Underwriter” means any underwriter participating in the sale of the
Securities pursuant to a registration statement under Section 6 of this Warrant Certificate.




          (l) “Public Warrant” means the publicly traded redeemable Common Stock purchase
warrants having an exercise price of $                      per share designated by CUSIP number 65480X 117.




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          (j) “Registration Statement” means the Company’s registration statement of Form SB-2
(File No. 333-145304), as amended.




          (k) “Securities” means the securities obtained or obtainable upon exercise of the
Warrant or securities obtained or obtainable upon exercise, exchange, or conversion of such
securities.




          (l) “Unit” means one share of Common Stock and one Public Warrant.




          (m) “Warrant Certificate” means a certificate evidencing the Warrant.




          (n) “Warrantholder” means a record holder of the Warrant or Securities. The initial
Warrantholder is                                          .




          (o) “Warrantholder’s Expenses” means the sum of (i) the aggregate amount of cash
payments made to an underwriter, underwriting syndicate, or agent in connection with an offering
described in Section 6 hereof multiplied by a fraction the numerator of which is the aggregate
sales price of the Securities sold by such underwriter, underwriting syndicate, or agent in such
offering and the denominator of which is the aggregate sales price of all of the securities sold by
such underwriter, underwriting syndicate, or agent in such offering and (ii) all out-of-pocket
expenses of the Warrantholder, except for the fees and disbursements of one firm retained as legal
counsel for the Warrantholder that will be paid by the Company.




          (p) “Warrant” means the warrant evidenced by this certificate, any similar certificate
issued in connection with the Offering, or any certificate obtained upon transfer or partial
exercise of the Warrant evidenced by any such certificate.




     2. EXERCISE OF WARRANT. All or any part of the Warrant represented by this Warrant Certificate
may be exercised commencing one year after the Final Prospectus Date and ending at 5:00 p.m.
Eastern Time on the fifth anniversary of the Final Prospectus Date by surrendering this Warrant
Certificate, together with appropriate instructions, duly executed by the Warrantholder or by its
duly authorized attorney, at the office of the Company at NitroSecurity, Inc., 230 Commerce Way,
Suite 325, Portsmouth, New Hampshire 03801, Attention: Chief Executive Officer; or at such other
office or agency as the Company may designate. The date on which such instructions are received by
the Company shall be the date of exercise. If the Holder has elected a Cashless Exercise, such
instructions shall so state. Upon receipt of notice of exercise, the Company shall immediately
instruct its transfer agent to prepare certificates for the Securities to be received by the
Warrantholder upon completion of the Warrant exercise. When such certificates are prepared, the
Company shall notify the Warrantholder and deliver such certificates to the Warrantholder or as per
the Warrantholder’s instructions immediately upon payment in full by the Warrantholder, in lawful
money of the United States, of the Exercise Price payable with respect to the Securities being
purchased, if any. If the Warrantholder shall represent and warrant that all applicable
registration and prospectus delivery requirements for their sale have been complied with upon sale
of the Securities received upon exercise of the Warrant, such certificates shall not bear a legend
with respect to the Act.



     If fewer than all the Securities purchasable under the Warrant are purchased, the



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Company will, upon such partial exercise, execute and deliver to the Warrantholder a new
Warrant Certificate (dated the date hereof), in form and tenor similar to this Warrant Certificate,
evidencing that portion of the Warrant not exercised. The Securities to be obtained on exercise of
the Warrant will be deemed to have been issued, and any person exercising the Warrant will be
deemed to have become a holder of record of those Securities, as of the date of the payment of the
Exercise Price.




     3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class, and price of Securities for which this
Warrant Certificate may be exercised are subject to adjustment from time to time upon the happening
of certain events as follows:



          (a) If the outstanding shares of the Company’s Common Stock are divided into a greater number
of shares or a dividend in stock is paid on the Common Stock, the number of shares of Common Stock
for which the Warrant is then exercisable will be proportionately increased and the Exercise Price
will be proportionately reduced; and, conversely, if the outstanding shares of Common Stock are
combined into a smaller number of shares of Common Stock, the number of shares of Common Stock for
which the Warrant is then exercisable will be proportionately reduced and the Exercise Price will
be proportionately increased. The increases and reductions provided for in this Section 3(a) will
be made with the intent and, as nearly as practicable, the effect that neither the percentage of
the total equity of the Company obtainable on exercise of the Warrant nor the price payable for
such percentage upon such exercise will be affected by any event described in this Section 3(a).




          (b) In case of any change in the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation, purchase of substantially all the assets of the
Company, or other change in the capital structure of the Company, other than changes in par value,
then, as a condition of such change, lawful and adequate provision will be made so that the holder
of this Warrant Certificate will have the right thereafter to receive upon the exercise of the
Warrant the kind and amount of shares of stock or other securities or property to which he would
have been entitled if, immediately prior to such event, he had held the number of shares of Common
Stock obtainable upon the exercise of the Warrant. In any such case, appropriate adjustment will be
made in the application of the provisions set forth herein with respect to the rights and interest
thereafter of the Warrantholder, to the end that the provisions set forth herein will thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of the Warrant. The Company will not permit any change in
its capital structure to occur unless the issuer of the shares of stock or other securities to be
received by the holder of this Warrant Certificate, if not the Company, agrees to be bound by and
comply with the provisions of this Warrant Certificate.




          (c) When any adjustment is required to be made in the number of shares of Common Stock, other
securities, or the property purchasable upon exercise of the Warrant, the Company will promptly
determine the new number of such shares or other securities or property purchasable upon exercise
of the Warrant and (i) prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the new number of such shares or other securities or property
purchasable upon exercise of the Warrant and (ii) cause a copy of




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such statement to be mailed to the Warrantholder within 30 days after the date of the event
giving rise to the adjustment.




          (d) No fractional shares of Common Stock or other securities will be issued in connection with
the exercise of the Warrant, but the Company will pay, in lieu of fractional shares, a cash payment
therefor on the basis of the mean between the bid and asked prices of the Common Stock in the
over-the-counter market or the last sale price of the Common Stock on the principal exchange or
other trading facility on which the Common Stock is traded on the day immediately prior to
exercise.




          (e) If securities of the Company or securities of any subsidiary of the Company are
distributed pro rata to holders of Common Stock, such number of securities will be distributed to
the Warrantholder or its assignee upon exercise of its rights hereunder as such Warrantholder or
assignee would have been entitled to if this Warrant Certificate had been exercised prior to the
record date for such distribution. The provisions with respect to adjustment of the Common Stock
provided in this Section 3 will also apply to the securities to which the Warrantholder or its
assignee is entitled under this Section 3(e).




          (f) Notwithstanding anything herein to the contrary, there will be no adjustment made
hereunder on account of the sale by the Company of the Common Stock or other Securities purchasable
upon exercise of the Warrant.




          (g) If, immediately prior to any exercise of the Warrant, there shall be outstanding no
securities of a class or series that, but for the provisions of this Section 3, would be issuable
upon such exercise (the “Formerly Issuable Securities”), then, upon such exercise, and in
lieu of the Formerly Issuable Securities, the Company shall issue that number and kind of other
securities or property for which the Formerly Issuable Securities were most recently exercisable or
into which the Formerly Issuable Securities were most recently convertible, as the case may be.




     4. RESERVATION OF SECURITIES. The Company agrees that the number of shares of Common Stock or
other Securities sufficient to provide for the exercise of the Warrant upon the basis set forth
above will at all times during the term of the Warrant be reserved for exercise.



     5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise of the Warrant will be
duly and validly issued in accordance with their terms, and the Company will pay all documentary
and transfer taxes, if any, in respect of the original issuance thereof upon exercise of the
Warrant.



6. REGISTRATION OF SECURITIES ISSUABLE ON EXERCISE OF WARRANT CERTIFICATE.




          (a) Provided that the Securities cannot otherwise be publicly sold, the Company will register
the Securities on Form S-3 or any successor form (or such other registration statement form for
which the Company qualifies) with the Securities and Exchange Commission pursuant to the Act so as
to allow the unrestricted sale of the Securities to the public from time to time commencing one
year after the Final Prospectus Date and ending at 5:00 p.m.




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Eastern Time on the fifth anniversary of the Final Prospectus Date (the “Registration
Period”). The Company will also file such applications and other documents necessary to permit
the sale of the Securities to the public during the Registration Period in those states in which
the Warrantholder resides or such other states as to which the Company and the Warrantholder agree.
In order to comply with the provisions of this Section 6(a), the Company is not required to file
more than one registration statement. No registration right of any kind, “piggyback” or otherwise,
will last longer than five years from the Final Prospectus Date.




          (b) The Company will pay all of the Company’s Expenses, and the Warrantholder will pay all of
the Warrantholder’s Expenses relating to the registration, offer, and sale of the Securities.




          (c) Except as specifically provided herein, the manner and conduct of the registration,
including the contents of the registration statement, will be entirely in the control and at the
discretion of the Company. The Company will file such post-effective amendments and supplements as
may be necessary to maintain the currency of the registration statement during the period of its
use. In addition, if the Warrantholder participating in the registration is advised by counsel that
the registration statement, in their opinion, is deficient in any material respect, the Company
will use commercially reasonable efforts to cause the registration statement to be amended to
eliminate the concerns raised.




          (d) The Company will furnish to the Warrantholder the number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the Act, and such other
documents as it may reasonably request in order to facilitate the disposition of Securities owned
by it.




          (e) The Company will, at the request of the Warrantholder, (i) furnish an opinion of the
counsel representing the Company for the purposes of the registration pursuant to this Section 6,
addressed to the Warrantholder and any Participating Underwriter; (ii) furnish an appropriate
letter from the independent public accountants of the Company, addressed to the Warrantholder and
any Participating Underwriter; and (iii) make such representations and warranties to the
Warrantholder and any Participating Underwriter as are customarily given to underwriters of public
offerings of equity securities in connection with such offerings. A request pursuant to this
subsection (e) may be made on three occasions. The documents required to be delivered pursuant to
this subsection (e) will be dated within ten days of the request and will be, in form and
substance, equivalent to similar documents furnished to the underwriters in connection with the
Offering, with such changes as may be appropriate in light of changed circumstances.




7. INDEMNIFICATION IN CONNECTION WITH REGISTRATION.




          (a) If any of the Securities are registered, the Company will indemnify and hold harmless each
selling Warrantholder, any person who controls any selling Warrantholder within the meaning of the
Act, and any Participating Underwriter against any losses, claims, damages, or liabilities, joint
or several, to which any Warrantholder, controlling person, or Participating Underwriter may be
subject under the Act or otherwise; and it will reimburse each Warrantholder, each controlling
person, and each Participating Underwriter for any legal or other




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expenses reasonably incurred by the Warrantholder, controlling person, or Participating
Underwriter in connection with investigating or defending any such loss, claim, damage, liability,
or action, insofar as such losses, claims, damages, or liabilities, joint or several (or actions in
respect thereof), arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained, on the effective date thereof, in any such registration statement
or any preliminary prospectus or final prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading; provided, however,
that the Company will not be liable in any case to the extent that any loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in any registration statement, preliminary prospectus, final
prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with written
information furnished by a Warrantholder for use in the preparation thereof. The indemnity
agreement contained in this subparagraph (a) will not apply to amounts paid to any claimant in
settlement of any suit or claim unless such payment is first approved by the Company, such approval
not to be unreasonably withheld.




          (b) Each selling Warrantholder, as a condition of the Company’s registration obligation, will
indemnify and hold harmless the Company, each of its directors, each of its officers who have
signed any registration statement or other filing or any amendment or supplement thereto, and any
person who controls the Company within the meaning of the Act, against any losses, claims, damages,
or liabilities to which the Company or any such director, officer, or controlling person may become
subject under the Act or otherwise, and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or action, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in said registration
statement, any preliminary or final prospectus, or other filing, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in said registration statement, preliminary or final
prospectus, or other filing, or amendment or supplement, in reliance upon and in conformity with
written information furnished by such Warrantholder for use in the preparation thereof; provided,
however, that the indemnity agreement contained in this subparagraph (b) will not apply to amounts
paid to any claimant in settlement of any suit or claim unless such payment is first approved by
the Warrantholder, such approval not to be unreasonably withheld.




          (c) Promptly after receipt by an indemnified party under subparagraphs (a) or (b) above of
notice of the commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, notify the indemnifying party of the
commencement thereof, but the omission to notify the indemnifying party will not relieve it from
any liability that it may have to any indemnified party otherwise than under subparagraphs (a) and
(b), except to the extent it was prejudiced by such failure to notify.




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          (d) If any such action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified
party; and after notice from the indemnifying party to such indemnified party of its election to
assume the defense thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.




     8. RESTRICTIONS ON TRANSFER. The Warrant and the Securities may not be sold, transferred,
assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put
or call transaction that would result in the effective economic disposition of the Securities by
any person for a period of one year following the Final Prospectus Date, except as otherwise
permitted by Rule 2710(g)(2) of the rules of the Financial Industry Regulatory Authority, Inc. The
Warrant may be divided or combined, upon request to the Company by the Warrantholder, into a
certificate or certificates evidencing the same aggregate number of Warrants.



     9. NO RIGHTS AS A STOCKHOLDER. Except as otherwise provided herein, the Warrantholder will
not, by virtue of ownership of the Warrant, be entitled to any rights of a stockholder of the
Company but will, upon written request to the Company, be entitled to receive such quarterly or
annual reports as the Company distributes to its stockholders.



     10. NOTICE. Any notices required or permitted to be given hereunder will be in writing and may
be served personally or by mail; and if served will be addressed as follows:



     If to the Company:




NitroSecurity, Inc.

230 Commerce Way, Suite 325

Portsmouth, New Hampshire 03801

Attention: Chief Executive Officer



     If to the Warrantholder:



                                                            

                                                            

                                                            




     Any notice so given by mail will be deemed effectively given 48 hours after mailing when
deposited in the United States mail, registered or certified mail, return receipt requested,
postage prepaid and addressed as specified above. Any party may by written notice to the other
specify a different address for notice purposes.



     11. APPLICABLE LAW. This Warrant Certificate will be governed by and construed in accordance
with the laws of the State of Oregon, without reference to conflict of laws principles thereunder.
All disputes relating to this Warrant Certificate shall be tried before the



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courts of Oregon located in Multhomah, Oregon to the exclusion of all other courts that might
have jurisdiction.





Dated as of                                         , 2007



	 	 	 	 	 	 	 
	 	 	NITROSECURITY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







Agreed and Accepted as of                                         , 2007



	 	 	 	 	 	 	 
	 	 	[WARRANTHOLDER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







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