Document:

ex10_1.htm

    
      

    

    Exhibit 10.1

    

    STOCK PURCHASE
AGREEMENT

    

    This
Agreement dated as of December 24, 2009 is entered into by and among Symbollon
Pharmaceuticals, Inc., a Delaware corporation, residing at 99 West Street, Suite
J, Medfield, Massachusetts 02052 (the “Company”), and Ninth Inning Investments,
LLC, a Arizona corporation, Vincent Zaldivar, an individual residing at 2728
Brookstone Ct., Las Vegas, Nevada 89117, and their designees (collectively, the
“Purchasers”).  Certain other terms are defined in Section 8
below.

    

    In
consideration of the mutual promises and covenants contained in the Agreement,
the parties hereto agree as follows:

    

    
      	
               
      

            	
              1.

            	
              Authorization and Sale
      of Securities.

            

    

    

    1.1           Authorization.  The
Company has, or before the Closing (as defined in Section 2) will have, duly
authorized and taken all such corporate and other actions within its control as
is necessary for the issuance, sale and delivery, pursuant to the terms of this
Agreement, of 5,000,000 shares of Common Stock (the “Shares”).  The
Shares shall hereinafter be referred to as the Securities.

    

    1.2           Issuance of
Securities.  Subject to the terms and conditions of this
Agreement, at the Closings (as defined in Section 2) the Company and the
Purchasers agree that the Purchasers will purchase from the Company and the
Company will issue and sell to the Purchasers, in a private placement the Shares
at a purchase price of $0.02 per Share, for an aggregate purchase price of
$100,000 (the “Purchase Price”).

    

    2.            
The
Closings.  The closing of the sale and purchase of the
Securities shall take place at the offices of the Company, or such other
mutually agreeable location as the parties may deem appropriate, on the
following dates unless the parties shall otherwise agree in writing (the
“Closings”).

    

    
      	
              Closing
      Dates

            	 	
              Purchase
      Price

            	 
	
              On
      or before December 24, 2009

            	 	$	25,000	 
	
              On
      or before January 12, 2010

            	 	$	75,000	 
	 
      	 	 	 	 
	
              Total

            	 	$	100,000	 

    

    

    The dates
of the Closings are hereinafter referred to as the “Closing
Dates”.  At the Closings, the Company shall deliver to the Purchasers
certificates for the number of Shares, against payment of the Purchase
Price.

    

    3.            
Representations of the
Company.  The Company hereby represents and warrants to the
Purchasers as follows:

    

    3.1           Organization and
Standing.  The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to conduct its business as presently
conducted and as proposed to be conducted by it and to enter into and perform
this Agreement and to carry out the transactions contemplated
hereby.  The Company is qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the nature of
the business transacted by it or the character or location of its properties
requires such qualification, except where the failure to so qualify would not
have a Material Adverse Effect.

    

    
      
        
           

        

        
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1

          
            

          

        

        
           

        

      

    

     

    3.2           Capitalization.  The
authorized capital stock of the Company consists of (i)  93,750,000 shares
of Class A Common Stock, of which 27,473,340 shares are outstanding on the date
hereof, 1,250,000 shares of Class B Common Stock and 5,000,000 shares of
preferred stock .  The outstanding shares of capital stock of the
Company have been duly and validly issued and are fully paid and nonassessable,
have been issued in material compliance with all federal and state securities
laws, and were not issued in violation of any preemptive or similar rights to
subscribe for or purchase securities.  Except for (i) options to
purchase up to  3,377,500 shares of Common Stock or other equity
awards issued to employees, directors and consultants of the Company and (ii)
warrants to purchase up to 7,293,732 shares of Common Stock, there are no
existing options, warrants, calls, preemptive (or similar) rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell, or cause to be issued,
transferred or sold, any shares of the capital stock of the Company or other
equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity
interests.  There are no voting agreements or other similar
arrangements with respect to the Common Stock to which the Company is a
party.  The Company has not adopted a stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of Common
Stock or a change in control of the Company.

    

    3.3           Issuance of
Securities.  The issuance, sale and delivery of the Securities
have been, or will be on or prior to the Closing Dates, duly authorized by all
necessary corporate action on the part of the Company.  The
Securities, when issued, sold and delivered against payment therefore in
accordance with the provisions of this Agreement, will be duly and validly
issued, fully paid and non-assessable and free and clear of any liens or
preemptive, rights of first refusal, or other similar rights (other than
Applicable Securities Laws and the terms of this Agreement).

    

    3.4           Authority for Agreement; No
Conflicts.  The execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by all necessary corporate
action.  This Agreement has been duly executed and delivered by the
Company, and is enforceable against it in accordance with its terms, except that
such enforcement may be subject to applicable bankruptcy, receivership,
fraudulent transfer, moratorium and similar laws affecting creditors’ rights,
and the remedy of specific performance and injunctive relief may be subject to
equitable defenses and to the discretion of the court for which proceeding
therefore may be brought.  The execution and delivery of this
Agreement and performance of the transactions contemplated by this Agreement and
compliance with its provisions by the Company will not conflict with or result
in any breach of any of the terms, conditions or provisions of, or constitute a
default under, or require a consent or waiver under, its Certification of
Incorporation or By-Laws (each as amended to date) or any indenture, lease,
agreement or other instrument to which the Company is party or by which it or
any of its properties is bound,  or violate any decree, judgment,
order, statute, rule, regulation or other provision of law applicable to the
Company, except in each case as would not result in a Material Adverse
Effect.

    

    
      
        
           

        

        
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    3.5           Governmental
Consents.  No consents, approval, order or authorization of, or
regulation, qualification, designation, declaration or filing with, any
governmental authority is required on the part of the Company in connection with
the execution and delivery of this Agreement or the offer, issuance, sale and
delivery of the Shares or the other transactions to be consummated at any
Closing, as contemplated by this Agreement, except for compliance with the
provisions of any laws as to which the failure to be made or obtained would not
result in a Material Adverse Effect and such filings as shall have been made
prior to and shall be effective on and as of the applicable
Closing.

    

    4.          
  Representations of the
Purchasers.  The Purchasers represent and warrant to the
Company as follows:

    

    4.1      
     Investment.  The
Purchasers are acquiring the Shares for their own account for investment and not
with a view to, or for sale in connection with, any distribution thereof, nor
with any present intention of distributing or selling the same.  The
Purchasers are each an “Accredited Investor” within the meaning of Rule
501(a)(3) of Regulation D under the Securities Act.  The Purchasers
understand that the Shares have not been registered under the Securities Act by
reason of a specific exemption from the registration provisions thereof which
depends upon, among other things, the bona fide nature of their investment
intent as expressed herein.  The Purchasers will not transfer the
Shares except in compliance with Applicable Securities Laws and the terms of
this Agreement.

    

    4.2           Power and
Authority.  The Purchasers have the full power and authority to
execute, deliver and perform this Agreement.  This Agreement, when
executed and delivered by the Purchasers, will constitute a valid and legally
binding obligation of the Purchasers, enforceable in accordance with its
terms.

    

    4.3           State of
Jurisdiction.  The Purchasers represent and warrant that all
matters and actions relevant to their considerations, evaluations or executions
of this Agreement or the transactions contemplated hereby by them including,
without limitation, the receipt of any offer to purchase, the receipt and review
of any documents or other materials relevant hereto, the participation in any
communications with the Company or any other party, and the consummation of the
transactions contemplated hereby occurred solely in Arizona.

    

    4.4           Independent
Investigation.  The Purchasers have relied solely upon an
independent investigation made by them and their representatives and have, prior
to the date hereof, been given access to and the opportunity to examine all
material contracts and documents of the Company.  The Purchasers have
requested, received, reviewed and considered all information they deem relevant
in making a decision to execute this Agreement and to purchase the
Shares.  In making their investment decision to purchase the Shares,
the Purchasers are not relying on any oral or written representations or
assurances from the Company or any other person or any representation of the
Company or any other person other than as set forth in this
Agreement.

    

    
      
        
           

        

        
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    4.5           Economic
Risk.  The Purchasers understand and acknowledge that an
investment in the Shares involves a high degree of risk.  The
Purchasers acknowledge that there are limitations on the liquidity of the
Shares.  The Purchasers represent that the Purchasers are able to bear
the economic risk of an investment in the Shares, including a possible total
loss of investment.  The Purchasers have such knowledge and experience
in financial and business matters that the Purchasers are capable of evaluating
the merits and risks of the investment in the Shares to be received by the
Purchasers; and that the Purchasers are sophisticated accredited investors with
experience with development stage issuers engaged in biotech and pharmaceutical
businesses.

    

    4.6           No
Conflicts.  The execution of and performance of the
transactions contemplated by this Agreement and compliance with its provisions
by the Purchasers will not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, or require a
consent or waiver under any indenture, lease, agreement or other instrument to
which the Purchasers are a party or by which them or any of their properties are
bound, or violate any decree, judgment, order, statute, rule, regulation or
other provision of law applicable to the Purchasers, which violation would
prevent, impair, hinder or delay the consummation of the transactions
contemplated by this Agreement.

    

    4.7           Governmental
Consents.  No consents, approval, order or authorization of, or
regulation, qualification, designation, declaration or filing with, any
governmental authority is required on the part of the Purchasers in connection
with the execution and delivery of this Agreement or the purchase of the Shares
or the other transactions to be consummated at any Closing, as contemplated by
this Agreement.

    

    4.8           Brokers,
Etc.  The Purchasers have dealt with no broker, finder,
commission agent or person in connection with the offer or sale of the Shares
and the transactions contemplated by this Agreement and neither the Purchasers
nor the Company is under any obligation to pay any broker’s fees, finder’s fees,
or other fees or commissions in connection with such transactions as a result of
any action by the Purchasers.

    

    5.           Conditions to the
Obligations of the Purchasers at the Closings.  Notwithstanding
anything to the contrary contained herein, the obligation of the Purchasers to
purchase Securities at the Closings is subject to the fulfillment, or the waiver
by the Purchasers, of each of the following conditions on or before the
Closings:

    

    5.1           Accuracy of Representations
and Warranties.  Each representation and warranty of the
Company contained in Section 3 hereof shall be true on and as of Closing Dates
in all material respects with the same effect as though such representation and
warranty had been made on and as of those dates.

    

    
      
        
           

        

        
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    5.2           Performance.  The
Company shall have performed and complied in all material respects with all
agreements and conditions contained in this Agreement required to be performed
or complied with by the Company prior to or at the Closings.

    

    5.3           Qualifications.  There
shall not be in effect any law, rule or regulation prohibiting or restricting
the sale and issuance of the Securities or requiring any consent or approval of
any person or governmental entity which shall not have been obtained prior to
the issuance of the Securities in the Closings.

    

    5.4           Proceedings and
Documents.  All corporate or other proceedings in connection
with the transactions contemplated at the Closings and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Purchasers
and their counsel and the Purchasers shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request.

    

    5.5           Issuance of
Shares.  The Company shall have taken all steps necessary to
instruct its transfer agent to issue a share certificate or certificates
representing the Shares issued in the Closings.

    

    6.            
Conditions to the
Obligations of the Company. Notwithstanding anything to the contrary
contained herein, the obligations of the Company to issue, sell and deliver at
the Closings the Securities are subject to fulfillment, on or before the Closing
Dates, of each of the following conditions:

    

    6.1           Accuracy of Representations
and Warranties.  Each representation and warranty of the
Purchasers contained in Section 4 hereof shall be true on and as of the Closing
Dates in all material respects with the same effect as though such
representation and warranty had been made on and as of those dates.

    

    6.2           Performance.  The
Purchasers shall have performed and complied in all material respects with all
agreements and conditions contained in this Agreement required to be performed
or complied with by the Purchasers prior to or at the Closings.

    

    6.3           Qualifications.  There
shall not be in effect any law, rule or regulation prohibiting or restricting
the sale and issuance of the Securities or requiring any consent or approval of
any person or governmental entity which shall not have been obtained prior to
the issuance of the Securities in the Closings.

    

    6.4           Required
Consideration.  The Purchasers shall have paid in accordance
with this Agreement the Purchase Price.

    

    
      	
               
      

            	
              7.

            	
              Transfer Restrictions
      and Registration.

            

    

    

    7.1           Legend.  Unless
and until otherwise permitted, each certificate representing the Shares shall be
stamped or otherwise imprinted with a legend in substantially the following
form:

    

    
      
        
           

        

        
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    “THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW.  NO
TRANSFER, SALE OR OTHER DISPOSITION OF THESE SHARES MAY BE MADE UNLESS A
REGISTRATION STATEMENT WITH RESPECT TO THESE SHARES HAS BECOME EFFECTIVE UNDER
SAID ACT, OR SYMBOLLON PHARMACEUTICALS, INC. IS FURNISHED WITH AN OPINION OF
COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT SUCH REGISTRATION IS NOT
REQUIRED.”

    

    and any
legend required by any applicable state securities laws.

    

    7.2           Required
Registration.  The Company hereby agrees to use its
commercially reasonable efforts to file within thirty (30) days following the
final closing of the purchase of the Shares a registra­tion statement under
the Act covering the resale of the Shares and to use its commercially reasonable
efforts to have such registration statement declared effective within ninety
(90) days of the final closing of the purchase of the Shares.  The
Company shall use its commercially reasonable efforts to maintain the
effectiveness of the registration statement until the first to occur of (i) the
completion of the distribution of the Shares covered thereby, or (ii) such time
as the Shares covered thereby may be sold without restrictive legend under Rule
144 or other exemption from the registration requirements of the Securities
Act.  The Company agrees to keep the registration statement current
during such period.  The Company’s obligation shall be limited to one
registration covering the Shares.

    

    7.3           Non-public
Information.  Notwithstanding anything to the contrary in this
Section 7, the Company shall have the right (i) to defer the initial filing or
request for acceleration of effectiveness of any registration or (ii) after
effectiveness, to suspend effectiveness of any such registration statement, if,
in the good faith judgment of the board of directors of the Company, such delay
in filing or requesting acceleration of effectiveness or such suspension of
effectiveness is necessary in light of the existence of material non-public
information (financial or otherwise) concerning the Company disclosure of which
at the time is not, in the opinion of the board of directors of the Company, (A)
otherwise required and (B) in the best interests of the Company; provided
however that the Company will use its commercially reasonable efforts to
terminate such delay or suspension as soon as practicable.

    

    7.4           Payment of
Expenses.  The Company shall bear the expense (excluding
underwriting commissions, dealers’ fees, brokers’ fees, concessions applicable
to the Shares, legal fees and expenses of the Purchasers and any out-of-pocket
expenses of the Purchasers) of all registrations pursuant to this Section
7.

    

    7.5           Indemnification.  The
Company hereby agrees to indemnify and hold harmless the Purchasers and any
underwriter against all losses, claims, damages, liabilities and expenses (under
the Applicable Securities Laws, or common law or otherwise) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus or any other document prepared and/or furnished to the
Purchasers incident to such registration statements or prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein complete or not
misleading except insofar as such losses, claims, damages, liabilities or
expenses are caused by any untrue statement or omission contained in information
furnished in writing to the Company by the Purchasers expressly for use
therein.  In connection with any registration statement in which the
Purchasers are participating, and as a condition to the obligation of the
Company to cause any Shares of the Purchasers to be included in a registration
statement pursuant to this Section 7, the Purchasers will furnish to the Company
in writing such information as shall reasonably be requested by the Company for
use in any such registration statement or prospectus and will indemnify,
severally and not jointly, the Company, its directors and officers, each person,
if any, who controls the Company within the meaning of the Applicable Securities
Laws, such underwriters and each person who controls such underwriters within
the meaning of the Applicable Securities Laws, against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact required to be stated in the registration statement or prospectus
and necessary to make the statements therein complete or not misleading, but
only to the extent that such untrue statement or omission is contained in
information so furnished in writing by the Purchasers expressly for use
therein.

    

    
      
        
           

        

        
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    Promptly
after receipt by any person entitled to indemnity hereunder (the “Indemnified
Party”) of notice of the commencement of any action in respect of which
indemnity may be sought against another party hereunder (the “Indemnifying
Party”) such Indemnified Party will notify the Indemnifying Party in writing of
the commencement thereof, and, subject to the provisions hereinafter stated, the
Indemnifying Party shall assume the defense of such action (including the
employment of counsel, who shall be counsel reasonably satisfactory to such
Indemnified Party), and the payment of expenses as incurred insofar as such
action shall relate to any alleged liability in respect of which indemnity may
be sought against the Indemnifying Party.  Such Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall not be at the expense of the Indemnifying Party unless (i) the employment
of such counsel has been specifically authorized by the Indemnifying Party or
(ii) the Indemnifying Party shall have failed to assume the defense of such
action or proceeding.  The Indemnifying Party shall not be liable to
indemnify any person for any settlement of any such action effected without the
Indemnifying Party’s consent, which consent shall not be unreasonably withheld
or delayed.

    

    If the
indemnification provided for in this Section is held by a court of competent
jurisdiction to be unavailable to the Indemnified Party with respect to any
loss, liability, claim, damage or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and of the Indemnified Party on the other hand in connection with the
statements or omissions which resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations.  The
relevant fault of the Indemnifying Party and the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

    

    
      
        
           

        

        
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    7.6           Notice.  The
Company shall provide notice to the Purchasers of any “stop order” or other
notice affecting the Purchasers’ right to sell the Shares under any effective
registration statement.

    

    8.          
  Definitions.  When
used in this Agreement, the following terms shall have the meanings
indicated.

    

    “Applicable
Securities Laws” means the applicable Federal and state securities
laws.

    

    “Common
Stock” means the Company’s Class A Common Stock, $.001 par value per
share.

    

    “Closing
Dates” shall have the meaning specified in Section 2.

    

    “Closings”
shall have the meaning specified in Section 2.

    

    “Commission”
means the Securities and Exchange Commission.

    

    “Company”
means Symbollon Pharmaceuticals, Inc., a Delaware corporation.

    

    “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

    

    “Indemnified
Party” shall have the meaning specified in Section 7.5.

    

    “Indemnifying
Party” shall have the meaning specified in Section 7.5.

    

    “Material
Adverse Effect” means a material adverse effect on the business, prospects,
condition (financial or otherwise), assets or results of operations of the
Company taken as a whole.

    

    “Purchasers”
means Ninth Inning Investments, LLC and Vincent Zaldivar, and any subsequent
valid designee or transferee.

    

    “Purchase
Price” shall have the meaning specified in Section 1.2.

    

    “Securities”
shall have the meaning specified in Section 1.1.

    

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

    

    “Shares”
shall have the meaning specified in Section 1.1.

    

    
      
        
           

        

        
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    9.            
Notices.  All
notices, requests, consents, and other communications under this Agreement shall
be in writing and shall be delivered in person with receipt acknowledged or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid, by reputable overnight mail or courier, with receipt confirmed,
or by telecopy and confirmed by telecopy answerback, addressed as
follows:

    

    If to the
Company:

    

    Symbollon
Pharmaceuticals, Inc.

    99 West
Street, Suite J

    Medfield,
Massachusetts 02052

    Telephone:
(508) 242-7500

    Attn:
President

    

    To the
Purchasers:

    

    Ninth
Inning Investments, LLC

    9778 N.
131st
St.

    Scottsdale,
AZ 85259

    Telephone:  (480)
314-9840

    Fax:  (480)
314-9843

    

    Vincent
Zaldivar

    2728
Brookstone Ct.

    Las
Vegas, NV 89117

    Telephone:  (702)
400-6609

    Fax:  (702)
243-4367

    

    or at
such other address or addresses as may have been furnished in writing by any
party to the other in accordance with the provisions of this Section
9.  Notices and other communications provided in accordance with this
Section 9 shall be deemed delivered upon receipt.

    

    10.           Entire
Agreement.  This Agreement, together with the Exhibits and
documents incorporated by reference herein, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.

    

    11.           Amendments and
Waivers.  Except as otherwise expressly set forth in this
Agreement, any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Purchasers.  Any amendment or waiver
effected in accordance with this Section 11 shall be binding upon each
party.  No waivers of or exceptions to any terms, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.

    

    
      
        
           

        

        
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    12.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall be one and the same
document.

    

    13.           Section
Headings.  The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.

    

    14.           Severability.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.

    

    15.           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the law of The Commonwealth of Massachusetts.

    

    16.           Successors and
Assigns.  This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto, provided that the Purchasers may not assign their
rights hereunder without the prior written consent of the Company.

    

    IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

    

    

    SYMBOLLON
PHARMACEUTICALS, INC.

    

    

    

    By: /s/ Paul C.
Desjourdy                         

          Paul
C. Desjourdy, President

    

    

    NINTH
INNING INVESTMENT, LLC

    

    

    

    

    By: /s/ George & Paula
Mahfouz             

          Trustees
of the Mahfouz Revocable Trust

    

    

    

    

      /s/ Vincent
Zaldivar                                 

    Vincent
Zaldivar

     

     

    Page
10Exhibit
4.3.2

    

    WARRANT
TO PURCHASE COMMON STOCK

    

    OF

    

    STEELCLOUD,
INC.

     

    This is
to certify that, FOR VALUE RECEIVED, Westminster Securities, a Division of
Hudson Securities Inc. (OTCBB: HDHL), or assigns thereof (“Holder”), is entitled
to purchase, subject to the provisions of this Warrant, from SteelCloud, Inc., a
Virginia corporation (“Company”), ________ fully paid, validly issued and
non-assessable shares of Common Stock of the Company (“Common Stock ”) at a
price equal to $_____________ per share (125% of the final offering price of
the shares of common stock offered pursuant to the Company’s Registration
Statement on Form S-1 (Registration No. 333-158703 ) (the “Offering ”) )
(“Exercise Price ”) at any time or from time to time from _________ until _________ (five years from the
effective date of the Company’s Registration Statement on Form S-1 (Registration
No. 333-158703) ) (the “ Exercise Period ”), subject to adjustment as set
forth herein.  The number of shares of Common Stock to be received
upon the exercise of this Warrant and the price to be paid for each share of
Common Stock may be adjusted from time to time as hereinafter set
forth.  The shares of Common Stock deliverable upon such exercise, and
as adjusted from time to time, are hereinafter sometimes referred to as “
Warrant Shares ”.

     

    (a)           EXERCISE
OF WARRANT; CANCELLATION OF WARRANT.  This Warrant may be exercised in
whole and in part at any time or from time to time during the Exercise Period,
provided, however, that (i) if such day is a day on which banking institutions
in the State of Virginia are authorized by law to close, then on the next
succeeding day which shall not be such a day, and (ii) in the event of any
merger, consolidation or sale of substantially all the assets of the Company as
an entirety, resulting in any distribution to the Company’s stockholders, prior
to the last day of the Exercise Period, the Holder shall have the right to
exercise this Warrant commencing at such time through the last day of the
Exercise Period into the kind and amount of shares of stock and other securities
and property (including cash) receivable by a holder of the number of shares of
Common Stock into which this Warrant might have been exercisable immediately
prior thereto.  This Warrant may be exercised by presentation and
surrender hereof to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form.  As soon as practicable after
each such exercise of the Warrants, but not later than seven (7) days from the
date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificates for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee.  If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable thereunder.  Upon receipt by the Company of this Warrant
at its office, or by the stock transfer agent of the Company at its office, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such shares of Common Stock shall not then be
physically delivered to the Holder.

     

     (b)           RESERVATION
OF SHARES.  The Company shall at all times reserve for issuance and/or
delivery upon exercise of this Warrant such number of shares of its Common Stock
as shall be required for issuance and delivery upon exercise of the
Warrants.

    

     (c)           FRACTIONAL
SHARES.  No fractional shares or script representing fractional shares
shall be issued upon the exercise of this Warrant.  With respect to
any fraction of a share called for upon any exercise hereof, the Company shall
pay the Holder an amount in cash equal to such fraction multiplied by the
current market value of one share.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     (d)           EXCHANGE
OR LOSS OF WARRANT.  This Warrant is exchangeable, without expense, at
the option of the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other Warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable
hereunder.  Upon surrender of this Warrant to the Company at its
principal office or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled.  This Warrant may be divided
or combined with other warrants which carry the same rights upon presentation
hereof at the principal office of the Company or at the office of its stock
transfer agent, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof.  The term “ Warrant ” as used
herein includes any Warrants into which this Warrant might be divided or
exchanged.  Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date.  Any such
new Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by
anyone.

    

    (e)             TRANSFERABILITY.  For
a period of six months after the issuance date of this Warrant (which shall not
be earlier than the closing date of the offering pursuant to which this Warrant
is being issued), neither this Warrant nor any Common Stock issued upon exercise
of this Warrant shall 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 180 days immediately following the date
of effectiveness or commencement of sales of the offering pursuant to which this
Warrant is being issued, except the transfer of any security:

     

    (1) by
operation of law or by reason of reorganization of the Company;

     

    (2) to
any FINRA member firm participating in the offering and the officers or partners
thereof, if all securities so transferred remain subject to the lock-up
restriction in this Section  for the remainder of the time
period;

     

    (3) if
the aggregate amount of securities of the Company held by the Holder or related
person do not exceed 1% of the securities being offered;

     

    (4) that
is beneficially owned on a pro-rata basis by all equity owners of an investment
fund, provided that no participating member manages or otherwise directs
investments by the fund, and participating members in the aggregate do not own
more than 10% of the equity in the fund;  or

     

    (5) the
exercise or conversion of any security, if all securities received remain
subject to the lock-up restriction in this Section (e) for the remainder of the
time period.

     

     (f)           RIGHTS
OF THE HOLDER.  The Holder shall not, by virtue hereof, be entitled to
any rights of a shareholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in the Warrant and are not
enforceable against the Company except to the extent set forth
herein.

     

     (g)           ANTI-DILUTION
PROVISIONS.   There Holder shall not be entitled to any anti-dilution
protections.

    

     (h)           OFFICER’S
CERTIFICATE.  Whenever the Exercise Price shall be adjusted as
required by the provisions of the foregoing Section, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office and with its stock transfer agent, if any, an officer’s certificate
showing the adjusted Exercise Price determined as herein provided, setting forth
in reasonable detail the facts requiring such adjustment, including a statement
of the number of additional shares of Common Stock, if any, and such other facts
as shall be necessary to show the reason for and the manner of computing such
adjustment.  Each such officer’s certificate shall be made available
at all reasonable times for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to Section (a) and the Company shall, forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Holder or any such holder.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     (i)           NOTICES
TO WARRANT HOLDERS.  So long as this Warrant shall be outstanding, (i)
if the Company shall pay any dividend or make any distributions upon the Common
Stock or (ii) if the Company shall offer to the holders of Common Stock for
subscription or purchase by them any share of any class or any other rights or
(iii) if any capital reorganization of the Company, reclassification of the
capital stock of the Company, consolidation or merger of the Company with or
into another corporation, sale, lease or transfer of all or substantially all of
the property and assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall cause to
be mailed by certified mail to the Holder, at least fifteen (15) days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of  Common Stock or other
securities shall receive cash or other property deliverable upon
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.

    

     (j)           RECLASSIFICATION,
REORGANIZATION OR MERGER.  In case of any reclassification, capital
reorganization or other change of outstanding shares of Common Stock of the
Company, or in case of any consolidation or merger of the Company with or into
another corporation (other than a merger with a subsidiary in which merger the
Company is the continuing corporation and which does not result in any
reclassification, capital organization or other change of outstanding shares of
Common Stock of the class issuable upon exercise of this Warrant) or in case of
any sale, lease or conveyance to another corporation at the property of the
Company as an entirety, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that the Holder shall have
the right thereafter by exercising this Warrant at any time prior to the
expiration of the Warrant, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such reclassification, capital
reorganization and other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock which might have been purchased
upon exercise of this Warrant immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance.  Any such provision
shall include a provision for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this
Warrant.  The foregoing provisions of this Section (i) shall similarly
apply to successive reclassifications, capital reorganizations and changes or
shares of Common Stock and to successive consolidations, mergers, sales or
conveyances.  In the event that in connection with any such capital
reorganization or reclassification, consolidation, merger, sale or conveyance,
additional shares of Common Stock shall be issued in exchange, conversion,
substitution or payment, in whole or in part, for a security of the Company
other than Common Stock, any such issue shall be treated as an issue of Common
Stock covered by the provisions of Subsection (1) of Section (f)
hereof.

    

    (k)           REGISTRATION
UNDER THE SECURITIES ACT OF 1933.  The Warrant Shares have been
registered under the Securities Act of 1933, as amended, on a Registration
Statement on Form S-1 and exercise of this Warrant into Warrant Shares shall be
subject to such Registration Statement being effective at the time of
exercise.

    

    
      
        
          	
                  Dated:

                	
                  STEELCLOUD,
      INC.

                
	 
      	 
      	 
      
	 
      	
                  By:

                	  
      
	 
      	
                  Name:

                
	 
      	
                  Title

                

        

      

    

      

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    PURCHASE
FORM

     

    Dated
___________

    

     The
undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing ______________ shares of Common Stock and hereby makes
payment of ___________________ in payment of the actual exercise price
thereof.

    

    ASSIGNMENT
FORM

    

    FOR VALUE
RECEIVED, ___________________hereby sells, assigns and transfers
unto

    

    Name________________________________

    (Please
typewrite or print in block letters)

    

    Address______________________________

    

    the right
to purchase Common Stock represented by this Warrant to the extent of ______
________shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________ Attorney, to transfer the same on the
books of the Company with full power of substitution in the
premises.

    

    Date_____________________

    

    Signature_____________________________

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