EXHIBIT 10.15
WARRANT AGREEMENT
FOR COMMON STOCK OF
Sonicport, Inc.
THIS CERTIFIES that, for value received, Red Rock Bridge Fund, L.L.C.
or its permitted assigns (collectively, the "Holder"), is entitled to purchase
from Sonicport, Inc., a Nevada corporation (the "Company"), at any time, and
from time to time, during the exercise period referred to in Section 1 hereof
462,000 fully paid, validly issued and nonassessable shares (the "Warrant
Shares") of common stock of the Company, par value $0.001 (the "Common Stock")
at the exercise price of $0.24 per share, subject to anti-dilution adjustments
as provided herein (the 'Warrant Share Price"). Securities issuable upon
exercise of this Warrant and the exercise price payable therefor are subject to
adjustment from time to time as hereinafter set forth. As used herein, the term
"Warrant" shall include any warrant or warrants hereafter issued in consequence
of the exercise of this Warrant in part or transfer of this Warrant in whole or
in part.
1. EXERCISE: PAYMENT FOR OWNERSHIP INTEREST.
(a) Upon the terms and subject to the conditions set forth herein, this
Warrant may be exercised in whole or in part by the Holder hereof at any time,
or from time to time, on or after the date hereof and prior to 5 p.m. Utah time
on January 21, 2007, by presentation and surrender of this Warrant to the
principal offices of the Company, or at the office of its Transfer Agent (as
hereinafter defined), if any, together with the Purchase Form annexed hereto,
duly executed, and accompanied by payment to the Company of an amount equal to
the Warrant . Share Price multiplied by the number of Warrant Shares as to which
this Warrant is then being exercised; provided, however, that in each case, the
minimum number of Warrant Shares as to which this Warrant is being exercised
shall not be less than 1,000 Warrant Shares; provided, further, that in the
event of any merger, consolidation or sale of all or substantially all the
assets of the Company resulting in any distribution to the Company's
stockholders, prior to January 21 2007, the Holder shall have the right to
exercise this Warrant commencing at such time through January 21, 2007 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. Any transfer
of Warrant Shares obtained by the Holder in exercise of this Warrant is subject
to the requirement that such securities be registered under the Securities Act
of 1933, as amended (the "1933 Act"), and applicable state securities laws or
exempt from registration under such laws. The Holder of this Warrant shall be
deemed to be a shareholder of the Warrant Shares as to which this Warrant is
exercised in accordance herewith effective immediately after the close of
business on the date on which the Holder shall have delivered to the Company
this Warrant in proper form for exercise and payment by certified or official
bank check or wire transfer of the cash purchase price for the number of Warrant
Shares as to which the exercise is being made,
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notwithstanding that the stock transfer books of the Company shall be then
closed or that certificates representing such Warrant Shares shall not then be
physically delivered to the Holder.
(b) All or any portion of the Warrant Share Price may be paid by
surrendering Warrants effected by presentation and surrender of this Warrant to
the Company, or at the office of its Transfer Agent, if any, with a Cashless
Exercise Form annexed hereto duly executed (a "Cashless Exercise"). Such
presentation and surrender shall be deemed a waiver by the Company of the
Holder's obligation to pay all or any portion of the aggregate Warrant Share
Price. Except as provided in Section 3 below, in the event of a Cashless
Exercise, the Holder shall exchange its Warrant for that number of shares of
Common Stock determined by multiplying the number of Warrant Shares for which
the Holder desires to exercise this Warrant by a fraction, the numerator of
which shall be the difference between the then current market price per share of
the Common Stock and the Warrant Share Price, and the denominator of which shall
be the then current market price per share of Common Stock. For purposes of any
computation under this Section 1(b), the then current market price per share of
Common Stock at any date shall be deemed to be the average for the ten
consecutive business days immediately prior to the Cashless Exercise of the
daily closing prices of the Common Stock on the principal national securities
exchange on which the Common Stock is admitted to trading or listed, or if not
listed or admitted to trading on any such exchange, the closing prices as
reported by the Nasdaq National Market or, if applicable, the Nasdaq SmallCap
Market, or if not then included for quotation on the Nasdaq National Market or
the Nasdaq SmaIICap Market, the average of the highest reported bid and lowest
reported asked prices as reported by the OTC Bulletin Board or the National
Quotations Bureau, as the case may be, or if not then publicly traded, the fair
market price, not less than book value thereof, of the Common Stock as
determined in good faith by the independent members of the Board of Directors of
the Company.
(c) If this Warrant shall 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 hereunder as to which the Warrant has not been
exercised. If this Warrant is exercised in part, such exercise shall be for a
whole number of Warrant Shares. Upon any exercise and surrender of this Warrant,
the Company (i) will issue and deliver to the Holder a certificate or
certificates in the name of the Holder for the largest whole number of Warrant
Shares to which the Holder shall be entitled and, if this Warrant is exercised
in whole, in lieu of any fractional Warrant Share to which the Holder otherwise
might be entitled, cash in an amount equal to the fair value of such fractional
Warrant Share (determined in such reasonable and equitable manner as the Board
of Directors of the Company shall in good faith determine), and (ii) will
deliver to the Holder such other securities, properties and cash which the
Holder may be entitled to receive upon
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such exercise, or the proportionate part thereof if this Warrant is exercised in
part, pursuant to the provisions of this Warrant.
2. ANTI-DILUTION PROVISIONS. The Warrant Share Price in effect at any time and
the number and kind of securities issuable upon exercise of this Warrant and the
Warrant Share Price shall be subject to adjustment from time to time upon
happening of certain events as follows:
2.1 Reorganization, Reclassification, Consolidation, Merger or Sale. If
any capital reorganization, reclassification or any other change of capital
stock of the Company, or any consolidation or merger of the Company with another
person, or the sale or transfer of all or substantially all of its assets to
another person shall be effected in such a way that holders of shares of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for their shares of Common Stock, then provision shall be made by
the Company, in accordance with this Section 2.1, whereby the Holder hereof
shall thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in this Warrant Agreement and in addition to
or in exchange for, as applicable, the Warrant Shares subject to this Warrant
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such securities or assets as would have been issued
or payable with respect to or in exchange for the aggregate Warrant Shares
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby if exercise of the Warrant had occurred immediately
prior to such reorganization, reclassification, consolidation, merger or sale.
The Company will not effect any such consolidation, merger, sale, transfer or
lease unless prior to the consummation thereof the successor entity (if other
than the Company) resulting from such consolidation or merger or the entity
purchasing such assets shall assume by written instrument (i) the obligation to
deliver to the Holder such securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to purchase, and (ii) all other
obligations of the Company under this Warrant; provided, however, that the
failure to comply with the foregoing shall not affect the validity or legality
of such consolidation, merger, sale, transfer or lease. The provisions of this
Section 2.1 shall similarly apply to successive consolidations, mergers,
exchanges, sales, transfers or leases. In the event that in connection with any
such capital reorganization or reclassification, consolidation, merger, sale or
transfer, 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 Section 2.2 hereof.
2.2 Stock Dividends and Securities Distributions. If, at any time or
from time to time after the date of this Warrant, the Company shall distribute
to the holders of shares of Common Stock (i) securities (including rights,
warrants, options or another form of convertible securities), (ii) property,
other than cash, or (iii) cash,
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without fair payment therefor, then, and in each such case, the Holder, upon the
exercise of this Warrant, shall be entitled to receive such securities, property
and cash which the Holder would hold on the date of such exercise if, on the
date of the distribution, the Holder had been the holder of record of the shares
of Common Stock issued upon such exercise and, during the period from the date
of this Warrant to and including the date of such exercise, had retained such
shares of Common Stock and the securities, property and cash receivable by the
Holder during such period, subject, however, to the Holder agreeing to any
conditions to such distribution as were required of all other holders of shares
of Common Stock in connection with such distribution.
2.3 Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Warrant Share Price pursuant to this Section 2, the Company
at its expense will promptly compute such adjustment or readjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment or readjustment, including a statement of the adjusted
Warrant Share Price or adjusted number of shares of Common Stock, if any,
issuable upon exercise of each Warrant, describing the transaction giving rise
to such adjustments and showing in detail the facts upon which such adjustment
or readjustment is based. The Company will forthwith mail, by first class mail,
postage prepaid, a copy of each such certificate to the Holder of this Warrant
at the address of such Holder as shown on the books of the Company, and to its
Transfer Agent.
2.4 No adjustment in the Warrant Share Price shall be required unless
such adjustment would require an increase or decrease of at least one cent
($0.01) in such price; provided, however, that any adjustments which by reason
of this Section 2.4 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made hereunder.
All calculations under this Section 2 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
3. RE-SET OF WARRANT SHARE PRICE. In the event that the average closing bid
price for the Company's Common Stock for the 10 trading days preceding the
one-year anniversary of the date hereof ("Adjustment Price") is less than the
Warrant Share Price, then the Warrant Share Price shall be automatically reset
to such lower price equal to $0.10 (ten cents) less than the Adjustment Price.
However, in no case shall the Warrant Share Price fall below $0.01 (one cent)
per share.
4. NO VOTING RIGHTS. This Warrant shall not be deemed to confer upon the Holder
any right to vote or to consent to or receive notice as a stockholder of the
Company, as such, in respect of any matters whatsoever, or any other rights or
liabilities as a stockholder, prior to the exercise hereof.
5. WARRANTS TRANSFERABLE. This Warrant and all rights hereunder are
transferable, in whole or in part, at the principal offices of the Company by
the Holder hereof,
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upon surrender of this Warrant properly endorsed; provided, however, that in
each case the minimum number of Warrant Shares being transferred by the Holder
shall not be less than 1,000 Warrant Shares; provided, further, that without the
prior written consent of the Company, this Warrant and all rights hereunder may
be transferred only (i) to an affiliate of the initial Holder hereof or
successor in interest to any such person in a transaction exempt from
registration under the 1933 Act; or (ii) pursuant to the registration of this
Warrant or the Warrant Shares under the 1933 Act or subsequent to one year from
the date hereof pursuant to an available exemption from such registration. It
shall be a condition to transfer of this Warrant that the transferee agrees to
be bound by the restrictions on transfer contained in Section 3(b)(ix) of the
Agency Agreement.
6. WARRANTS EXCHANGEABLE: ASSIGNMENT; LOSS, THEFT. DESTRUCTION. ETC. This
Warrant is exchangeable, without expense, upon surrender hereof by the Holder
hereof at the principal offices of the Company, or at the office of its Transfer
Agent, if any, for new Warrants of like tenor representing in the aggregate the
right to subscribe for and purchase the Warrant Shares which may be subscribed
for and purchased hereunder, each such new Warrant to represent the right to
subscribe for and purchase such Warrant Shares as shall be designated by such
Holder hereof at the time of such surrender. Upon surrender of this Warrant to
the Company at its principal office, or at the office of its Transfer Agent, if
any, with an instrument of assignment 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 cancelled. 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 Transfer
Agent, if any, 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 may be divided or exchanged. Upon receipt of evidence satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction, upon delivery of a bond or
indemnity satisfactory to the Company, or, in the case of any such mutilation,
upon surrender or cancellation of this Warrant, the Company will issue to the
Holder hereof a new Warrant of like tenor, in lieu of this Warrant, representing
the right to subscribe for and purchase the Warrant Shares which may be
subscribed for and purchased hereunder. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
7. LEGENDS; INVESTMENT REPRESENTATIONS.
(a) Any certificate evidencing the securities issued upon exercise of
this Warrant shall bear a legend in substantially the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND SUCH SECURITIES MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED UNLESS SO REGISTERED OR AN EXEMPTION FROM
REGISTRATION UNDER SAID ACT IS AVAILABLE.
(b) The Holder hereby represents that it is purchasing this Warrant for
its own account for investment and not with the view to or for sale in
connection with the distribution of this Warrant, nor with any present intention
of selling or otherwise disposing of all or any part of this Warrant. The Holder
hereby represents that it understands that there may not be any market for this
Warrant or the Warrant Shares. The Holder hereby agrees that (1) the purchase of
this Warrant is a long-term investment, (2) the Holder may have to bear the
economic risk of investment for an indefinite period of time because neither
this Warrant nor the Warrant Shares has been registered under the Securities Act
and, cannot be resold, pledged, assigned or otherwise disposed of unless they
are subsequently registered under said Securities Act and under applicable
securities laws of certain states or an exemption of such registration is
available and (3) the Holder is an accredited investor as defined in Rule 501
promulgated under the 1933 Act. The Holder hereby represents that it understands
that the Company is under no obligation to register this Warrant and, except as
set forth in a Registration Rights Agreement dated the date hereof, the Company
is under no obligation to register the Warrant Shares. The Holder shall be
deemed to reaffirm the foregoing investment representations at such time the
Holder exercises this Warrant.
8. MODIFICATIONS AND WAIVERS. The terms of the Warrants may be amended, modified
or waived only by the written agreement of the Company and the Holder.
9. MISCELLANEOUS. The Company shall pay all expenses and other charges payable
in connection with the preparation, issuance and delivery of this Warrant and
all substitute Warrants. The Holder shall pay all taxes (other than any issuance
taxes, including, without limitation, documentary stamp taxes, transfer taxes
and other governmental charges, which shall be paid by the Company) in
connection with such issuance and delivery of this Warrant and the Warrant
Shares.
The Company shall maintain, at the office or agency of the Company
maintained by the Company, books for the registration and transfer of the
Warrant.
10. RESERVATION OF WARRANT SHARES. The Company will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in its treasury, solely for the purpose of enabling it to satisfy any
obligation to issue
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Warrant Shares upon exercise of this Warrant, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise of this Warrant
The Company or, if appointed, the Transfer Agent for the Common Stock
(the "Transfer Agent") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Warrant on file with the Transfer Agent and
with every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by this
Warrant. The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to the Holder.
The Company covenants that all Warrant Shares which may be issued upon
exercise of this Warrant will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
with respect to the issue thereof.
11. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The descriptive headings of the
several paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. This Warrant shall be construed and enforced
in accordance with the laws of the State of Utah, and the rights of the parties
shall be governed by, the law of such State.
IN WITNESS WHEREOF, this Warrant Agreement has been executed as of the
21 day of January, 2002.
SONICPORT, INC.
By: /S/ XXXXXXX XXXXXXX
----------------------
Name: Xxxxxxx Xxxxxxx
Title: CFO
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