***Exhibit 4.4***

* *

*This Warrant and theSecurities issuable upon exercise of this Warrant have not been registeredunder the Securities Act of 1933 (the “Securities Act”) or under any statesecurities or “Blue Sky” laws (“Blue Sky Laws”). No transfer, sale, assign­ment,pledge, hypothecation or other disposition of this Warrant or the Securitiesissuable upon exercise of this Warrant or any interest therein may be madeexcept (a) pursuant to an effective registration statement under theSecurities Act and any applicable Blue Sky Laws or (b) if the Company has beenfurnished with an opinion of counsel for the holder, which opinion and counselshall be reasonably satisfactory to the Company, to the effect that noregistration is required because of the availability of an exemption fromregistration under the Securities Act and applicable Blue Sky laws.*

 

 

**WARRANT**

** **

**To Purchase                  Shares of Common Stock**

**of**

**BALLISTIC RECOVERY SYSTEMS, INC.**

 

EXERCISABLEON OR BEFORE, AND VOID AFTER

5:00P.M. MINNEAPOLIS TIME ON                    ,200   

 

THISCERTIFIES THAT, for good and valuable consideration,                       (the “Holder”), or registered assigns, is entitled to subscribe for and purchase from Ballistic RecoverySystems, Inc., a Minnesota corporation (the “Company”), at any time after                        ,200   , to and including                          ,20      , [THREE YEARS]                    (             )fully paid and non-assessable shares of the Common Stock of the Company at the priceof $2.00 per share (the “Warrant Exercise Price”), subject to the anti-dilutionprovisions of this Warrant. 

Theshares that may be acquired upon exercise of this Warrant are referred toherein as the “Warrant Shares.”  The term“Common Stock” means the common stock, par value $.01 per share, of theCompany, and shall also include any capital stock of any class of the Companyhereafter authorized which shall not be limited to a fixed sum or percentage inrespect of the rights of the holders thereof to participate in dividends or inthe distribution of assets upon the voluntary or involuntary liquidation,dissolu­tion, or winding up of the Company. The term “Convertible Securities”means any stock or other securities convertible into, or exchangeable for,Common Stock.

ThisWarrant is subject to the following provisions, terms and conditions:

1.             Exercise; Transferability.

(a)           The rights represented by thisWarrant may be exercised by the Holder hereof, in whole or in part (but not asto a fractional share of Common Stock), by written notice of exercise (in theform attached hereto) delivered to the Company at the principal office of theCompany prior to the expiration of this Warrant and accompanied or preceded bythe surrender of this Warrant along with a check in payment of the WarrantExercise Price for such shares.

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(b)           This Warrant may not be sold,assigned, hypothecated, or otherwise transferred, other than by will orpursuant to the operation of law, except in a transaction in compliance withthe provisions of Section 7 hereof.

2.             Exchange and Replacement.Subject to Sections 1 and 7 hereof, this Warrant is exchangeable upon thesurrender hereof by the Holder to the Company at its office for new Warrants oflike tenor and date representing in the aggregate the right to purchase thenumber of Warrant Shares purchasable hereunder, each of such new Warrants torepresent the right to purchase such number of Warrant Shares (not to exceedthe aggregate total number purchasable hereunder) as shall be designated by theHolder at the time of such surrender. Upon receipt by the Company of evidencereasonably satisfactory to it of the loss, theft, destruction, or mutilation ofthis Warrant, and, in case of loss, theft or destruction, of indemnity orsecurity reasonably satisfactory to it, and upon surrender and cancellation ofthis Warrant, if mutilated, the Company will make and deliver a new Warrant oflike tenor, in lieu of this Warrant. This Warrant shall be promptly canceled by the Company upon thesurrender hereof in connection with any exchange or replacement. The Companyshall pay all expenses, taxes (other than stock transfer taxes), and othercharges payable in connection with the preparation, execution, and delivery ofWarrants pursuant to this Section 2.

3.             Issuanceof the Warrant Shares.

(a)           The Company agrees that the shares ofCommon Stock purchased upon exercise of this Warrant shall be and are deemed tobe issued to the Holder as of the close of business on the date on which thisWarrant shall have been surrendered and the payment made for such WarrantShares as aforesaid. Subject to the provisions of paragraph (b) of thisSection 3, certificates for the Warrant Shares so purchased shall bedelivered to the Holder within a reasonable time, not exceeding fifteen (15)days after the rights represented by this Warrant shall have been so exercised,and, unless this Warrant has expired, a new Warrant representing the right topurchase the number of Warrant Shares, if any, with respect to which this Warrantshall not then have been exercised shall also be delivered to the Holder withinsuch time.

(b)           Notwithstanding the foregoing,however, the Company shall not be required to deliver any certificate forWarrant Shares upon exercise of this Warrant except in accordance withexemptions from the applicable securities registration requirements orregistrations under applicable securities laws. Nothing herein, however, shallobligate the Company to effect registrations under federal or state securitieslaws, except as provided in Section 9. If registrations are not in effectand if exemptions are not available when the Holder seeks to exercise theWarrant, the Warrant exercise period will be extended, if need be, to preventthe Warrant from expiring, until such time as either registrations becomeeffective or exemptions are availa­ble, and the Warrant shall then remainexercisable for a period of at least 30 calendar days from the date the Companydelivers to the Holder written notice of the availability of such registrationsor exemptions. The Holder agrees to execute such documents and make suchrepresentations, warranties, and agreements as may be required solely to complywith the exemptions relied upon by the Company, or the registrations made, forthe issuance of the Warrant Shares.

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4.             Covenants of the Company.The Company covenants and agrees that all Warrant Shares will, upon issuance,be duly authorized and issued, fully paid, non-assessable and free from alltaxes, liens and charges with respect to the issue thereof. The Company furthercovenants and agrees that during the period within which the rights representedby this Warrant may be exercised, the Company will at all times have authorizedand reserved for the purpose of issue or transfer upon exercise of thesubscription rights evidenced by this Warrant a sufficient number of shares ofCommon Stock to provide for the exercise of the rights represented by thisWarrant.

5.             Anti-Dilution Adjustments.The provisions of this Warrant are subject to adjustment as provided in thisSection 5.

(a)           The Warrant Exercise Price shall beadjusted from time to time such that in case the Company shall hereafter:

(i)            pay any dividends on any class ofstock of the Company payable in Common Stock or securities convertible intoCommon Stock;

(ii)           subdivide its then outstanding sharesof Common Stock into a greater number of shares; or

(iii)          combine outstanding shares of CommonStock, by reclassification or otherwise;

then, in any suchevent, the Warrant Exercise Price in effect immediately prior to such eventshall (until adjusted again pursuant hereto) be adjusted immediately after suchevent to a price (calculated to the nearest full cent) determined by dividing(A) the number of shares of Common Stock outstanding immediately prior tosuch event, multiplied by the then existing Warrant Exercise Price, by(B) the total number of shares of Common Stock outstanding immediatelyafter such event (including in each case the maximum number of shares of CommonStock issuable in respect of any securities convertible into Common Stock), andthe resulting quotient shall be the adjusted Warrant Exercise Price per share.An adjustment made pursuant to this Subsection shall become effectiveimmediately after the record date in the case of a dividend or distribution andshall become effective immediately after the effective date in the case of asubdivision, combina­tion or reclassification. If, as a result of an adjustmentmade pursuant to this Subsection, the Holder of any Warrant thereaftersurrendered for exercise shall become entitled to receive shares of two or moreclasses of capital stock or shares of Common Stock and other capital stock ofthe Company, the Board of Directors (whose determination shall be conclusive)shall determine the allocation of the adjusted Warrant Exercise Price betweenor among shares of such classes of capital stock or shares of Common Stock andother capital stock. All calculations under this Subsection shall be made tothe nearest cent or to the nearest 1/100 of a share, as the case may be. In theevent that at any time as a result of an adjustment made pursuant to this Sub­section,the holder of any Warrant thereafter surrendered for exercise shall becomeentitled to receive any shares of the Company other than shares of CommonStock, thereafter the Warrant Exercise Price of such other shares so receivableupon exercise of any Warrant shall be subject to adjustment from time to timein a manner and on terms as nearly equivalent as practicable to the provisionswith respect to Common Stock contained in this Section.

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(b)           Upon each adjustment of the WarrantExercise Price pursuant to Section 5(a) above, the Holder of each Warrantshall thereafter (until another such adjustment) be entitled to purchase at theadjusted Warrant Exercise Price the number of shares, calculated to the nearestfull share, obtained by multiplying the number of shares specified in suchWarrant (as adjusted as a result of all adjustments in the Warrant ExercisePrice in effect prior to such adjustment) by the Warrant Exercise Price ineffect prior to such adjustment and dividing the product so obtained by theadjusted Warrant Exercise Price.

(c)           In case of any consolidation ormerger to which the Company is a party other than a merger or consolidation inwhich the Company is the continuing corporation, or in case of any sale orconveyance to another corporation of the property of the Company as an entiretyor substantially as an entirety, or in the case of any statutory exchange ofsecurities with another corporation (including any exchange effected inconnection with a merger of a third corporation into the Company), there shallbe no adjustment under Section 5(a) above but the Holder of each Warrantthen outstanding shall have the right thereafter to convert such Warrant intothe kind and amount of shares of stock and other securities and property whichhe would have owned or have been entitled to receive immediately after suchconsolidation, merger, statutory exchange, sale, or conveyance had such Warrantbeen converted immediately prior to the effective date of such consolidation,merger, statutory exchange, sale, or conveyance and in any such case, ifnecessary, appropriate adjustment shall be made in the application of theprovisions set forth in this Section with respect to the rights and intereststhereafter of any Holders of the Warrant, to the end that the provisions setforth in this Section shall thereafter correspondingly be made applicable, asnearly as may reasonably be, in relation to any shares of stock and othersecurities and property thereafter deliverable on the exercise of the Warrant.The provisions of this Subsection shall similarly apply to successiveconsolidations, mergers, statutory exchanges, sales or conveyances.

(d)           Upon any adjustment of the WarrantExercise Price, then and in each such case, the Company shall give writtennotice thereof, by First-class mail, postage prepaid, addressed to the Holderas shown on the books of the Company, which notice shall state the WarrantExercise Price resulting from such adjustment and the increase or decrease, ifany, in the number of shares of Common Stock purchasable at such price upon theexercise of this Warrant, setting forth in reasonable detail the method ofcalculation and the facts upon which such calculation is based.

6.             No Voting Rights. ThisWarrant shall not entitle the Holder to any voting rights or other rights as ashareholder of the Company.

7.             Noticeof Transfer of Warrant or Resale of the Warrant Shares.

(a)           Subject to the sale, assignment,hypothecation, or other transfer restrictions set forth in Section 1hereof, the Holder, by acceptance hereof, agrees to give written notice to theCompany before transferring this Warrant or transferring any Warrant Shares of suchHolder’s intention to do so, describing briefly the manner of any proposedtransfer. Promptly upon receiving such written notice, the Company shallpresent copies thereof to the Company’s counsel and to counsel to the originalpurchaser of this Warrant. If in the opinion of each such counsel the proposedtransfer may be effected without registra­tion or qualification 

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(under any federalor state securities laws), the Company, as promptly as practicable, shallnotify the Holder of such opinion, whereupon the Holder shall be entitled totransfer this Warrant or to dispose of Warrant Shares received upon theprevious exercise of this Warrant, all in accordance with the terms of thenotice delivered by the Holder to the Company; provided that an appropriatelegend may be endorsed on this Warrant or the certificates for such WarrantShares respecting restrictions upon transfer thereof necessary or advisable inthe opinion of counsel and satisfactory to the Company to prevent furthertransfers which would be in violation of Section 5 of the Securities Actof 1933, as amended (the “1933 Act”) and applicable state securities laws; andprovided further that the prospective transferee or purchaser shall executesuch documents and make such representations, warranties, and agree­ments asmay be required solely to comply with the exemptions relied upon by the Companyfor the transfer or disposition of the Warrant or Warrant Shares.

(b)           If in the opinion of either of thecounsel referred to in this Section 7, the proposed transfer ordisposition of this Warrant or such Warrant Shares described in the writtennotice given pursuant to this Section 7 may not be effected withoutregistration or qualification of this Warrant or such Warrant Shares theCompany shall promptly give written notice thereof to the Holder, and theHolder will limit its activities in respect to such transfer or disposition as,in the opinion of both such counsel, are permitted by law.

8.             FractionalShares.

(a)           Fractional shares shall not be issuedupon the exercise of this Warrant, but in any case where the holder would,except for the provisions of this Section, be entitled under the terms hereofto receive a fractional share, the Company shall, upon the exercise of thisWarrant for the largest number of whole shares then called for, pay a sum incash equal to the sum of (a) the excess, if any, of the Fair Market Valueof such fractional share over the proportional part of the Warrant ExercisePrice represented by such fractional share, plus (b) the proportional partof the Warrant Exercise Price represented by such fractional share.

(b)           For purposes of this Section, theterm “Fair Market Value” with respect to shares of Common Stock as of aparticular date (the “Determination Date”) shall mean:

(i)            If the Company’s Common Stock istraded on an exchange or is quoted on The Nasdaq National Market, then theaverage closing or last sale prices, respectively, reported for the ten (10)business days immediately preceding the Determination Date; 

(ii)           If the Company’s Common Stock is nottraded on an exchange or on The Nasdaq National Market but is traded on TheNasdaq Small-Cap Market or the local over-the-counter market, then the averageclosing bid and asked prices reported for the ten (10) business days immediatelypreceding the Determination Date; and

(iii)          If the Company’s Common Stock is nottraded on an exchange, on The Nasdaq National Market, The Nasdaq Small-CapMarket or on the local over-the-counter market, then the fair market value ofCommon Stock as determined in good faith by the Board of Directors of theCompany.

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9.             RegistrationRights.

(a)           Required Registration.  Pursuant to a Registration Rights Agreementof even date herewith, the Company shall include the Warrant Shares in theRegistration Statement that it is required to file within forty-five (45) daysof the final closing of the private offering, pursuant to which this Warrantwas issued.   

(a)           Piggyback Registration. If theCompany at any time within two (2) years after complete exercise of thisWarrant, but no more than seven (7) years from the date of this Warrant,proposes to register under the 1933 Act (except by a Form S-4 orForm S-8 Registration Statement or any successor forms thereto) or qualifyfor a public distribution under Section 3(b) of the 1933 Act, any of itssecurities, it will give written notice to all Holders of this Warrant, anyWarrants issued pursuant to Section 2 and/or Section 3(a) hereof, andany Warrant Shares of its intention to do so and, on the written request of anysuch Holder given within twenty (20) days after receipt of any such notice(which request shall specify the Warrant Shares intended to be sold or disposedof by such Holder and describe the nature of any proposed sale or otherdisposition thereof), the Company will use its best efforts to cause all suchWarrant Shares, the Holders of which shall have requested the registration orqualification thereof, to be included in such registration statement proposedto be filed by the Company; provided, however, that if a greater number ofWarrant Shares is offered for participation in the proposed offering than inthe reasonable opinion of the managing underwriter of the proposed offering(which opinion shall be in writing and delivered to the Holders) can beaccommodated without adversely affecting the proposed offering, then the amountof Warrant Shares proposed to be offered by such Holders for registration, aswell as the number of securities of any other selling shareholdersparticipating in the registration, shall not be included or shall beproportionately reduced to a number deemed satisfactory by the managingunderwriter. With respect to each inclusion of securities in a registrationstatement pursuant to this Section 9(a), the selling Holders shall pay thefees and disbursements of special counsel and accountants for the sellingHolders, and underwriting discounts or commissions and transfer taxesapplicable to the selling Holders’ shares, and the Company shall pay all othercosts and expenses of the registration, including but not limited to allregistration, filing and NASD fees, printing expenses, fees and disbursementsof counsel and accountants for the Company, all internal expenses, and legalfees and disbursements and other expenses of complying with state securitieslaws of any jurisdictions in which the securities to be offered are to beregistered or qualified. The Company need not maintain the effectiveness of anysuch registration, qualification, notification or approval, whether or not at therequest of the Holders, more than six (6) months following the effective datethereof.

(b)           Indemnification. The Companyhereby indemnifies each of the Holders of this Warrant and of any WarrantShares, and the officers and directors, if any, who control such Holders,within the meaning of Section 15 of the 1933 Act, against all losses,claims, damages, and liabilities caused by (1) any untrue statement oralleged untrue statement of a material fact contained in any RegistrationStatement or Prospectus (and as amended or supplemented if the Company shallhave furnished any amendments thereof or supplements thereto), any PreliminaryProspectus (not corrected in the final, amended or supplemented prospectusfurnished to such Holders for distribution) or any state securities lawfilings; (2) any omission or alleged omission to state therein a materialfact required to be stated therein or necessary to make the statements thereinnot misleading except insofar as such losses, claims, damages, or liabilitiesare caused by 

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any untruestatement or omission contained in information furnished in writing to theCompany by such Holder expressly for use therein; and each such Holder by itsacceptance hereof severally agrees that it will indemnify and hold harmless theCompany, each of its officers who signs such Registration Statement, and eachperson, if any, who controls the Company, within the meaning of Section 15of the 1933 Act, with respect to losses, claims, damages, or liabilities whichare caused by any untrue statement or omission contained in informationfurnished in writing to the Company by such Holder expressly for use therein.

(c)           Cooperation. Upon the exerciseof registration rights pursuant hereto, each holder agrees to supply theCompany with such information as may be required by the Company to register orqualify the shares to be registered.

10.           AdditionalRight to Convert Warrant.

(a)           The holder of this Warrant shall havethe right to require the Company to convert this Warrant (the “Conversion Right”)at any time after it is exercisable, but prior to its expiration into shares ofCommon Stock as provided for in this Section 10. Upon exercise of theConversion Right, the Company shall deliver to the holder (without payment bythe holder of any Warrant Exercise Price) that number of shares of CompanyCommon Stock equal to the quotient obtained by dividing (i) the value ofthe Warrant at the time the Conversion Right is exercised (determined bysubtracting the aggregate Warrant Exercise Price for the Warrant Shares ineffect immediately prior to the exercise of the Conversion Right from theaggregate Fair Market Value for the Warrant Shares immediately prior to theexercise of the Conversion Right) by (ii) the Fair Market Value of oneshare of Common Stock immediately prior to the exercise of the ConversionRight.

(b)           The Conversion Right may be exercisedby the holder, at any time or from time to time, prior to its expiration, onany business day by delivering a written notice in the form attached hereto (the“Conversion Notice”) to the Company at the offices of the Company exercisingthe Conversion Right and specifying (i) the total number of shares ofCommon Stock the Holder will purchase pursuant to such conversion and(ii) a place and date not less than one or more than 20 business days fromthe date of the Conversion Notice for the closing of such purchase.

(c)           At any closing underSection 10(b) hereof, (i) the Holder will surrender the Warrant, (ii)the Company will deliver to the Holder a certificate or certificates for thenumber of shares of Common Stock issuable upon such conversion, together withcash, in lieu of any fraction of a share, and (iii) the Company willdeliver to the Holder a new warrant representing the number of shares, if any,with respect to which the Warrant shall not have been exercised.

(d)           For purposes of this section, “FairMarket Value” of a share of Common Stock as of a particular date shall bedetermined as provided in Section 8(b) above.

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IN WITNESS WHEREOF, <ISSUER> has caused thisWarrant to be signed by its duly authorized officer and this Warrant to bedated                    ,200   .
|        |   | BALLISTIC RECOVERY SYSTEMS, INC. |
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**SUBSCRIPTION FORM**

**(To be signed upon exercise ofWarrant)**

 

 

Theundersigned, the holder of the within Warrant, hereby irrevocably elects toexercise the purchase right represented by such Warrant for, and to purchasethereunder,                                                    of the shares of Common Stock of BALLISTIC RECOVERY SYSTEMS, INC to which suchWarrant relates and herewith makes payment of $                               therefor in cash or by certified check and requests that the certificate forsuch shares be issued in the name of, and be delivered to,                                      ,the address for which is set forth below the signature of the undersigned.
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|   |   | Social Security or Tax Ident. No. |

 

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**CONVERSION NOTICE**

**(To be signed upon exercise ofWarrant pursuant to Section 10)**

 

 

Theundersigned hereby irrevocably elects to exercise the conversion right providedin Section 10 of the within Warrant for, and to acquire thereunder,                                          shares of Common Stock. If said number of shares shall not be all the sharespurchasable under the within Warrant, a new Warrant is to be issued in the nameof said undersigned for the balance remaining of the shares purchasablethereunder rounded up to the next higher number of shares.

Pleaseissue a certificate or certificates for such Common Stock in the name of:                                                                  .
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|   |   | Social Security or Tax Ident. No. |

 

 

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**ASSIGNMENT FORM**

**(To be signed upon authorizedtransfer of Warrant)**

 

 

FORVALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto                                           the right to purchase                     shares of Common Stock of <ISSUER> to which the within Warrant relates andappoints                         attorney, to transfer said right on the books of                                      with full power of substitution in the premises.
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|   |   | Social Security or Tax Ident. No. |

 

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