Warrant Agreement
THIS WARRANT AGREEMENT, dated as of January 5, 1999 is made and entered
into by and between Colmena Corp., a Delaware corporation (the "Issuer") and The
Yankee Companies, Inc., a Florida corporation (hereinafter referred to variously
as the "Holder" or "Yankee").
Preamble:
WHEREAS, the Issuer and Yankee have entered into a certain strategic
consulting agreement of even date herewith (hereinafter the "Advisory
Agreement"), pursuant to which Yankee is entitled to receive certain
compensation, including among other things, warrants ("Warrants") to purchase
8,066,326 shares of the Issuer's common stock, $0.01 par value per share
("Common Stock"), upon and subject to the terms and conditions of the Advisory
Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the Holder
to or for the benefit of the Issuer of FIVE ($5.00) DOLLARS, the agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agrees as
follows:
Witnesseth:
1. Grant
The Holder is hereby granted the right to purchase, at any time from
January 15, 1999, until 5:00 p. m., New York time, on January 15, 2000, up to an
aggregate of 8,066,326 shares of Common Stock at the initial exercise price per
share (subject to adjustments as provided in Section 8 hereof) as provided in
Section 6 hereof.
2. Warrant Certificates.
The warrant certificates (the"Warrant Certificates") delivered and to be
delivered pursuant to this agreement shall be in the form set forth in Exhibit A
attached hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions, and other variations as required or permitted by this
Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise
The Warrants initially are exercisable at an initial exercise price
(subject to adjustment as provided in Section 8 hereof) per share of
Common Stock set forth in Section 6 hereof payable by certified or
official bank check in New York Clearing House funds, subject to
adjustment as provided in Section 8 hereof. Upon surrender of a Warrant
Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter
defined) for the shares of Common Stock purchased at the Issuer's
principal offices, as reflected in the records of the Securities and
Exchange Commission maintained on its XXXXX Internet site, the
registered holder of a Warrant Certificate ("Holder" or "Holders')
shall be entitled to receive a certificate or certificates for the
shares of Common Stock so purchased. The purchase rights represented by
each Warrant Certificate are exercisable at the option of the Holder
thereof, in whole or in part (but not as to fractional shares of the
Common Stock underlying the Warrants). Warrants may be exercised to
purchase all or part of the shares of Common Stock represented thereby.
In the case of the purchase of less than all the shares of Common Stock
purchasable under any Warrant Certificate, the Issuer shall cancel said
Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the
shares of Common Stock.
Page 142
3.2 Exercise by Surrender of Warrant.
(a) (1) In addition to the method of payment set forth in Section 3.1 and
in lieu of any cash payment required thereunder the Holder(s) of
the Warrants shall have the right at any time to and from time to
time exercise the Warrants in full or in part by surrendering the
Warrant Certificate in the manner specified in Section 3.1 in
exchange for the number of shares of Common Stock equal to the
product of (x) the number of shares to which the Warrants are
being exercised multiplied by (y) a fraction, the numerator of
which is the Market Price (as defined in Section 8.1(vi) hereof)
of the Common Stock less the Exercise Price and the denominator
of which is such Market Price.
(2) The Parties acknowledge that this optional form of exercise is
designed to permit tacking of the Warrant holding period to that
of the common stock received upon exercise thereof, for purposes
of SEC Rule 144, under the concept commonly referred to as
"cashless exercise."
(b) Solely for the purposes of this Section 3.2, Market Price shall be
calculated either (i) on the date on which the form of election
attached hereto is deemed to have been sent to the Issuer pursuant to
Section 13 hereof ("Notice Date") or (ii) as the average of the Market
Price for each of the five trading days preceding the Notice Date,
whichever of (i) or (ii) is greater.
4. Issuance of Certificates.
(a) Upon the exercise of the Warrant the issuance of certificates for shares of
Common Stock or other securities, properties or rights underlying such
Warrants, shall be made forthwith (and in any event such issuance shall be
made within five (5) business days thereafter) without charge to the Holder
thereof including, without limitations any tax which may be payable in
respect of the issuance thereof and such certificates shall (subject to the
provisions of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that
the Issuer shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the Holder arid the Issuer shall
not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Issuer the amount of such tax or shall have established to the satisfaction
of the Issuer that such tax has been paid.
(b) The Warrant Certificates and the certificates representing the shares of
Common Stock (and/or other securities, property or rights issuable upon
exercise of the Warrants) shall be executed on behalf of the Issuer by the
manual or facsimile signature of the then present Chairman or Vice Chairman
of the Board of Directors or President or Vice President of the Issuer
under its corporate seal reproduced thereon, attested to by the manual or
facsimile signature of the then present Secretary or Assistant Secretary of
the Issuer. Warrant Certificates shall be dated the date of execution by
the Issuer upon initial issuance, division, exchange, substitution or
transfer.
5. Restriction On Transfer of Warrants.
The Holder of a Warrant Certificate, by its acceptance thereof, covenants
and agrees that the Warrants are being acquired as an investment and not with a
view to the distribution thereof.
Page 143
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price.
Except as otherwise provided in Section 8 hereof, the initial exercise
price of each Warrant shall be $0.005 per share of Common Stock. The
adjusted exercise price shall be the price which shall result from time
to time from any and all adjustments of the initial exercise price in
accordance with the provisions of Section 8 hereof.
6.2 Exercise Price.
The term "Exercise Price" herein shall mean the initial exercise price
or the adjusted exercise price, depending upon the context.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933.
(a) The Warrants and the shares of Common Stock issuable upon exercise of
the Warrants and any of the other securities issuable upon exercise of
the Warrants have not been registered under the Securities Act of 1933,
as amended (the "Act") for public resale. Upon exercise, in part or in
whole, of the Warrants, certificates representing the shares of Common
Stock and any other securities issuable upon exercise of the Warrants
(collectively, the "Warrant Securities") shall bear the following
legend:
(b) The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act') for public resale,
and may not be offered or sold except pursuant to (i) an effective
registration statement under the Act, (ii) to the extent applicable,
Rule 144 under the Act (or any similar rule under such Act relating to
the disposition of securities), or (iii) an opinion of counsel, if such
opinion shall be reasonably satisfactory to counsel to the issuer, that
an exemption from registration under such Act is available.
7.2 Piggyback Registration.
If, at any time during the five year period commencing after the date
hereof, the Issuer proposes to register any of its securities under the
Act (other than in connection with a merger or pursuant to Form X-0,
X-0 or comparable registration statement) it will give written notice
by registered mail, at least thirty (30) days prior to the filing of
each registration statement, to Yankee and to all other Holders of the
Warrants and/or the Warrant Securities of its intention to do so. If
Yankee or other Holders of the Warrants and/or Warrant Securities
notify the Issuer within twenty (20) days after receipt of any such
notice of its or their desire to include any such securities in such
proposed registration statement, the Issuer shall afford Yankee and
such Holders of the Warrants and/or Warrant Securities the opportunity
to have any such Warrant Securities registered under such registration
statement.
7.3 Demand Registration.
(a) At any time during the term of this Warrant, the Holders of the
Warrants and/or Warrant Securities representing a "Majority" (as
hereinafter defined) of such securities (assuming the exercise of
all of the Warrants) shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof),
exercisable by written notice to the Issuer, to have the Issuer
prepare and file with the Commission, on one occasion, a
registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel
for the Issuer and counsel for Yankee and Holders, in order to
comply with the provisions of the Act, so as to permit a public
offering and sale of their respective Warrant Securities for nine
(9) consecutive months by such Holders and any other Holders of
the Warrants and/or Warrant Securities who notify the Issuer
within ten (10) days after receiving notice from the Issuer of
such request.
Page 144
(b) The Issuer covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or
Holders to all other registered Holders of the Warrants and the
Warrant Securities within (10) days from the date of the receipt
of any such registration request.
(c) Notwithstanding anything to the contrary contained herein, if the
Issuer shall not have filed a registration statement for the
Warrant Securities within the time period specified in Section
7.4(a) hereof pursuant to the written notice specified in Section
7.3(a) of a Majority of the Holders of the Warrants and/or
Warrant Securities, the Issuer agrees that upon the written
notice of election of a Majority of the Holders of the Warrants
and/or Warrant Securities it shall repurchase (i) any and all
Warrant Securities at higher of the Market Price (as defined in
Section 8. l(vi)) per share of Common Stock on (x) the date of
the notice sent pursuant to Section 7.3(a) or (y) the expiration
of the period in Section 7.4(a) and (ii) any and all Warrants at
such Marker Price less the exercise price of such Warrant. Such
repurchase shall be in immediately available funds and shall
close within two (2) days after the later of (i) the expiration
of the period specified in Section 7.4(a) or (ii) the delivery of
the written notice of election specified in this Section 7.3(d).
7.4 Covenants of the Issuer, With Respect to Registration.
In connection with any registration under Section 7.2 or 7.3 hereof, the
Issuer covenants and agrees as follows:
(a) The Issuer shall use its best efforts to file a registration
statement within sixty (60) days of receipt of any demand
therefor, shall use its best efforts to have any registration
statements declared effective at the earliest possible time, and
shall furnish the Holder desiring to sell Warrant Securities such
number of prospectuses as shall reasonably be requested.
(b) The Issuer shall pay all costs (excluding any underwriting or
selling commissions or over charges of any broker-dealer acting
on behalf of Holders), fees and expenses in connection with all
registration statements filed pursuant to Sections 7.2 and 7.3(a)
hereof including, without limitation, the Issuer's legal and
accounting fees, printing expenses, blue sky fees and expenses.
If the Issuer shall fail to comply with the provisions of Section
7.4(a), the Issuer shall, in addition to any other equitable or
other relief available to the Holder(s), be liable for any or all
damages due to loss of profit sustained by the Holder(s)
requesting registration of its Warrant Securities.
(c) The Issuer will take all necessary action which may be required
in qualifying or registering the Warrant Securities included in a
registration statement for offering and sale under the securities
or blue sky laws of the state requested by the Holder.
(d) The Issuer shall indemnify the Holder(s) of the Warrant
Securities to be sold pursuant to any registration statement and
each person, if any, who controls such Holder within the meaning
of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), against all
loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become
subject under the Act, The Exchange Act or otherwise, arising
from such registration statement.
Page 145
(e) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Warrants prior to the
initial filing of any registration statement or the effectiveness
thereof.
(f) The Issuer shall not permit the inclusion of any securities other
than the Warrant Securities to be included in any registration
statement filed pursuant to Section 7.3 hereof, or permit any
other registration statement to be or remain effective during the
effectiveness of a registration statement filed pursuant to
Section 7.3 hereof, without the prior written consent of the
Holders of the Warrants arid Warrant Securities representing a
Majority of such securities (assuming an exercise of all of the
Warrants).
(g) The Issuer shall furnish to each Holder participating in the
offering, and to each underwriter, if any, a signed counterpart,
addressed to such Holder or underwriter, of (i) an opinion of
counsel to the Issuer, dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), and (ii) a "cold
comfort" letter dated the effective date of such registration
statement (and, if such registration includes an underwritten
public offering; a letter dated the date of the closing under the
underwriting agreement) signed by the independent public
accountants who have issued a report on the Issuer's financial
statements included in such registration statement, in each case
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of such accountants' letter, with respect to agents
subsequent to the date of such financial statements, are as
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten
public offering of securities.
(h) The Issuer shall as soon as practicable after the effective date
of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders"
(within the meaning of Rule 158 under the Act) an earnings
statement (which need not be audited) complying with Section
11(a) of the Act and covering a period of at least 12 consecutive
months beginning after the effective date of the registration
agreement.
(i) The Issuer shall deliver promptly to each Holder participating in
the offering requesting the correspondence and memoranda
described below and the managing underwriter copies of all
correspondence between the Commission and the Issuer, its counsel
or auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the registration
statement and permit the Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the registration
statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association
of Securities Dealers, Inc. ("NASD"). Such investigation shall
include access to books, records and properties and opportunities
to discuss the business of the Issuer with its officers and
independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such Holder shall reasonably
request as it deems necessary to comply with applicable
securities laws or NASD rules.
Page 146
(j) In addition to the Warrant Securities, upon the written request
therefor by any Holder(s), the Issuer shall include in the
registration statement any other securities of the Issuer held by
such Holder(s) as of the date of filing of such registration
statement, including without limitation, restricted shares of
Common Stock, options, warrants or any other securities
convertible into shares of Common Stock.
(k) For purposes of this Agreement, the term "Majority" in reference
to the Holders of Warrants or Warrant Securities shall mean in
excess of fifty percent (50%) or the then outstanding Warrants or
Warrant Securities that (i) are not held by the Issuer, an
affiliate, officer, creditor, employee or agent thereof or any of
their respective affiliates, members of their family, persons
acting as nominees or in conjunction therewith or (ii) have not
been resold to the public pursuant to a registration statement
filed with the Commission under the Act.
8. Adjustments to Exercise and Number of Securities.
8.1 Computation of Adjusted Exercise Price.
(a) Except as hereinafter provided, in case the Issuer shall at any
time after the date hereof issue or sell any shares of Common
Stock (other than the issuances or sales referred to in Section
8.7 hereof), including shares held in the Issuer's treasury and
shares of Common Stock issued upon the exercise of any options,
rights or warrants, to subscribe for shares of Common Stock and
shares of Common Stock issued upon the direct or indirect
conversion or exchange of securities for shares of Common Stock,
for a consideration per share less than the Exercise Price in
effect immediately prior to the issuance or sale of such shares
or the "Market Price" (as defined in Section 8.1(vi) hereof) per
share of Common Stock on the date immediately prior to the
issuance or sale of such shares, or without consideration, then
forthwith upon such issuance or sale, the Exercise Price shall
(until another such issuance or sale) be reduced to the price
(calculated to the nearest full cent) equal to the quotient
derived by dividing (A) an amount equal to the sum of (X) the
product of (a) the lower of (i) the Exercise Price in effect
immediately prior to such issuance or sale and (ii) the Market
Price per share of Common Stock on the date immediately prior to
the issuance or sale of such shares, in either event, reduced,
but not to a number which is below .001 by the positive
difference, if any, between the (u) Market Price per share of
Common Stock on the date immediately prior to the issuance or
sale and (v) the amount per share received in connection with
such issuance or sale, multiplied by (b) the total number of
shares of Common Stock outstanding immediately prior to such
issuance or sale, plus (Y) the aggregate of the amount of all
consideration, if any, received by the Issuer upon such issuance
or sale by (B) the total number of shares of Common Stock
outstanding immediately after such issuance or sale; provided,
however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the
Exercise Price in effect immediately prior to such computation,
except in the case of a combination of outstanding shares of
Common Stock, as provided by Section 8.3 thereof.
(b) For the purposes of this Section 8 the term Exercise Price shall
mean the Exercise Price per share of Common Stock set forth in
Section 6 hereof, as adjusted from time to time pursuant to the
provisions of this Section 8.
Page 147
(c) For the purposes of any computation to be made in accordance with
this Section 8.1, the following provisions shall be applicable:
(i) In case of the issuance or sale or shares of Common Stock
for a consideration part or all of which shall be cash. the
amount of the cash consideration therefor shall be deemed to
be the amount of cash received by the Issuer for such shares
(or, if shares of Common Stock are offered by the Issuer for
subscription, the subscription price, or, if either of such
securities shall be sold to underwriters or dealers for
public offering without a subscription offering the initial
public offering price) before deducting therefrom any
compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers
or others performing similar services, or any expenses
incurred in connection therewith and less any amounts
payable to security holders or any affiliate thereof,
including without limitation, any employment agreement,
royalty, consulting agreement, covenant not to compete,
earned or contingent payment right or similar arrangement,
agreement or understanding, whether oral or written; all
such amounts shall be valued at the aggregate amount payable
thereunder whether such payments are absolute or contingent
and irrespective of the period or uncertainty of payment,
the rate of interest, if any, or the contingent nature
thereof.
(ii) In case of the issuance or sale (otherwise than as a
dividend or over distribution on any stock of the Issuer) of
shares of Common Stock for a consideration part or all of
which shall be other than cash, the amount of the
consideration therefor other than cash shall be deemed to be
the value of such consideration as determined in good faith
by the Board of Directors of the Issuer.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Issuer shall be deemed to
have been issued immediately after the opening of business
on the day following the record date for the determination
of stockholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without
consideration.
(iv) The reclassification of securities of the Issuer other than
shares of Common Stock shall be deemed to involve the
issuance of such shares of Common Stock for a consideration
other than cash immediately prior to the close of business
on the date fixed for the determination of security holders
entitled to receive such shares, and the value of the
consideration allocable to such shares of Common Stock shall
be determined as provided in subsection (ii) of this Section
8.1.
(v) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares
issued or issuable (subject to readjustment upon the actual
issuance thereof) upon the exercise of options, rights,
warrants and upon the conversion or exchange of convertible
or exchangeable securities.
Page 148
(vi) As used herein, the phase "Market Price" at any date shall
be deemed to be the last reported sale price, or, in case no
such reported sale takes place on such day, the average of
the last reported sale prices for the last three (3) trading
days, in either case as officially reported by the principal
securities exchange on which the Common Stock is listed or
admitted to trading, or, if the Common Stock is not listed
or admitted to trading on any national securities exchange,
the average closing bid price as furnished by the NASD
through NASDAQ or similar organization if NASDAQ is no
longer reporting such information, or if the Common stock is
not quoted an NASDAQ, as determined in good faith by
resolution of the Board of Directors of the Issuer, based on
the best information available to it.
8.2 Options, Rights, Warrants and Convertible and Exchangeable
Securities.
In case the Issuer shall at any time after the date hereof issue options,
rights or warrants to subscribe for shares of Common Stock, or issue any
securities convertible into or exchangeable for shares of Common Stock, for a
consideration per share less than the Exercise Price in effect or the Market
Price immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, or without consideration, the
Exercise Price in effect immediately prior to the issuance of such options,
rights or warrant, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 8.1 hereof, provided that:
(l) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable under such options, rights or warrants
shall be deemed to be issued and outstanding at the time such
options, rights or warrants were issued, and for a consideration
equal to the minimum purchase price per share provided for in
such options, rights or warrants at the time of issuance, plus
the consideration (determined in the same manner as consideration
received on the issue or sale of shares in accordance with the
terms of the Warrants), if any, received by the Issuer for such
options, rights or warrants.
(2) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange or any convertible or exchangeable
securities shall be deemed to be issued and outstanding at the
time of issuance of such securities, and for a consideration
equal to the consideration (determined in the same manner as
consideration received on the issue or sale of shares of Common
Stock in accordance with the terms of the Warrants) received by
the Issuer for such securities, plus the minimum consideration,
if any, receivable by the Issuer upon the conversion or exchange
thereof.
(3) If any change shall occur in the price per share provided for in
any of the optional rights or warrants referred to in subsection
(a) of this Section 8.2, or in the price per share at which the
securities referred to in subsection (b) of this Section 8.2 are
convertible or exchangeable, such options, rights or warrants or
conversion or exchange rights, as the case may be, shall be
deemed to have expired or terminated on the case when such price
change became effective in respect of shares not theretofore
issued pursuant to the exercise or conversion or exchange
thereof, and the Issuer shall be deemed to have issued upon such
date new options, rights or warrants, or convertible or
exchangeable securities at the new price in respect of the number
shares issuable upon the exercise of such options, rights or
warrants or the conversion or exchange of such convertible or
exchangeable securities.
Page 149
8.3 Subdivision and Combination.
In case the Issuer shall at any time subdivide or combine the outstanding
shares of Common Stock, the Exercise Price shall forthwith be proportionately
decreased in the case of subdivision or increased in the case of combination.
8.4 Adjustment in Number of Securities.
Upon each adjustment of the Exercise Price pursuant to the provisions of
this Section 8, the number of Securities issuable upon the exercise of each
Warrant shall be adjusted to the nearest full amount by multiplying, a number
equal to the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Securities issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
8.5 Definition of Common Stock.
For the purpose of this Agreement, the term "Common Stock" shall mean (i)
the class of stock designated as Common Stock in the Certificate of
Incorporation of the Issuer as may be amended as of the date hereof, or (ii) any
other class of stock resulting from successive changes or reclassifications of
such Common Stock consisting solely of changes in par value, or from par value
to no par value, or from no par value to par value. In the event that the Issuer
shall after the date hereof issue securities with greater or superior voting
rights than the shares of Common Stock outstanding as of the date hereof, the
Holder, at its option, may receive upon exercise of any Warrant either shares of
Common Stock or a like number of such securities with greater or superior voting
rights.
8.6 Merger or Consolidation.
In care of any consolidation of the Issuer with, or merger of the Issuer
with, or merger of the Issuer into, another corporation (other than a
consolidation or merger which does not result in any reclassification or change
of the outstanding Common Stock), the corporation formed by such consolidation
or merger shall execute and deliver to the Holder a supplemental warrant
agreement providing that the holder of each Warrant then outstanding or to be
outstanding shall have the right thereafter (until the expiration of such
Warrant) to receive upon exercise of such warrant, the kind and amount of shares
of stock and other securities and property receivable upon such consolidation or
merger, by a holder of the number of shares of Common Stock of the Issuer for
which such warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be identical to the adjustments
provided in Section 8. The above provision of this Subsection shall similarly
apply to successive consolidations or mergers.
8.7 No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the shares of Common
Stock issuable upon the exercise of the Warrants; or
(b) If the amount of said adjustment shall be less than 2 cents
($.02) per Security, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall
be carried forward and shall be made at the time of and together
with the next subsequent adjustment which, together with any
adjustment so carried forward, shall amount to at least 2 cents
($.02) per Security.
Page 150
8.8 Dividends and Other Distributions.
In the event that the Issuer shall at any time prior to the exercise of all
Warrants declare a dividend (other then a dividend consisting solely of shares
of Common Stock) or otherwise distribute to its stockholders any assets,
property, rights, evidences of indebtedness, securities (over than shares of
Common Stock), whether issued by the Issuer or by another, or any other thing of
value, the Holders of the unexercised Warrants shall thereafter be entitled, in
addition to the shares of Common Stock or other securities and property
receivable upon the exercise thereof, to receive, upon the exercise of such
Warrants, the same property, assets, rights, evidences of indebtedness,
securities or any other thing of value that they would have been entitled to
receive at the time of such dividend or distribution as if the Warrants had been
exercised immediately prior to such dividend or distribution. At the time of any
such dividend or distribution, the Issuer shall make appropriate reserves to
ensure the timely performance of the provisions of this Subsection 8.8.
9. Exchange and Replacement of Warrant Certificates
(a) Each Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive
office of the Issuer, for a new Warrant Certificate of like tenor and date
representing in the aggregate the right to purchase the same number of
Securities in such denominations as shall be designated by the Holder
thereof at the time of such surrender.
(b) Upon by the Issuer of evidence reasonably satisfactory to it of loss,
theft, destruction or mutilation of any Warrant Certificate, and, in case
of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Issuer of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the
Warrants if mutilated, the Issuer will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests.
The Issuer shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the Warrants, nor shall
it be required to issue scrip or pay cash in lieu of fractional interests, it
being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of shares of
Common Stock or other securities, properties or rights.
11. Reservation and Listing of Securities.
The Issuer shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants, such number of shares of Common Stock or other
securities properties or rights as shall be issuable upon the exercise thereof.
The Issuer covenants and agrees that, upon exercise of the Warrants and payment
of the Exercise Price therefor, all shares of Common Stock and over securities
issuable upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any stockholder. As
long as the Warrants shall be outstanding, the Issuer shall use its best efforts
to cause all shares of Common Stock issuable upon the exercise of the Warrants
to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection herewith
may then be listed and/or quoted NASDAQ.
Page 151
12. Notice to Warrant Holders.
Nothing contained in this Agreement shall be consented as conferring upon
the Holders the right to vote or to consent or to receive notice as a
stockholder in respect of any meetings of stockholders for the election of
directors or any other manner, or as having any rights whatsoever as a
stockholder of the Issuer. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Issuer shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution
payable otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Issuer; or
(b) the Issuer shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Issuer or securities convertible
into or exchange for shares of capital stock of the Issuer, or any option,
right or warrant to subscribe therefor: or
(c) a dissolution, liquidation or winding up of the Issuer other than in
connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall
be proposed; then, in any one or more of said events the Issuer shall give
notice of such event at last fifteen (15) days prior to the date fixed as a
record date or the date of the closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer
books, as the case may be.
(d) Failure to give such notice or any defect herein shall not affect the
validity of any action taken in connection win the declaration or payment
of any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation winding up or sale.
13. Notices.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly made when delivered, or mailed
registered or certified mail, return receipt requested:
(a) If the Holders, The Yankee Companies, Inc., to 902 Xxxxx Xxxxx Road, 136;
Xxxx Xxxxx, Xxxxxxx 00000, with a copy to 0000 Xxxxxxxxx 00xx Xxxxxxx,
Xxxxx, Xxxxxxx 00000, and as otherwise listed on the books of the Issuer,
or
(b) If to the Issuer, to the address set forth in Section 3 hereof or to such
other address as the Issuer may designate by notice to the Holders.
14. Supplements and Amendments.
Except as otherwise expressly provided herein, the provisions of this
Agreement may be amended or waived at any time only by the written agreement of
the parties hereto. Any waiver, permit, consent or approval of kind or character
on the part of each Company or the Holder of any provisions or conditions of
this Agreement must be made in writing and shall be effective only in the extent
specifically set forth in such writing.
15. Successors.
All the covenants and provisions of this Agreement shall be binding upon
and inure to the benefit of the Issuer, the Holder and their respective
successors and assigns hereunder.
Page 152
16. Governing Law; Submission to Jurisdiction.
(a) This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and
for all the purposes shall be construed in accordance with the laws of said
State without giving effect to the rules of said State governing the
conflicts of laws.
(b) The Issuer and the Holder hereby agree that any action, proceeding or claim
against it arising out of, or relating in any way to, this Agreement shall
be brought and enforced in the courts of the State of Florida or of the
United Slates of America for the Southern District of Florida, and
irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Issuer, and the Holder hereby irrevocably waive any
objection to such exclusive jurisdiction or inconvenient forum. Any such
process or summons to be served upon any of the Issuer and the Holder (at
the option of the party bringing such action, proceeding or claim) may be
served by transmitting a copy thereof, by registered or certified mail,
return receipt requested, postage prepaid, address it at the address as set
forth in Section 13 hereof. Such mailing shall deemed personal service and
shall be legal and binding upon the party so served in any action,
proceeding or claim. The Issuer and the Holder agree that the prevailing
party(ies) in any such action or proceeding shall be entitled to recover
from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
17. Entire Agreement Modification.
This Agreement and the Purchase Agreement (to the extent portions thereof
are referred to herein) contain the entire understanding between the parties
hereto with respect to the subject matter hereof and may not be modified or
amended except by a writing duly signed by the party against whom enforcement of
the modification or amendment is sought.
18. Severability.
If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
19. Captions.
The caption headings of the Sections of this Agreement are for convenience
of reference only and are not intended, nor should they be construed as, a part
of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation over than the Issuer and the Holder any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the sole
and exclusive 'benefit of the Issuer and the Holder.
21. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and, such
counterparts shall together constitute but one and the same instrument.
In Witness Whereof, the Parties have executed this Agreement, effective as
of the last date set forth below. Signed, Sealed & Delivered In Our Presence
Colmena Corp.
----------------------------
____________________________ By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx., President
Dated: February 2, 1999
The Yankee Companies, Inc.
----------------------------
____________________________ By: Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx Miles Xxxxxx, President
Dated: February 5, 1999
Page 153
EXHIBIT A-1
FORM OF WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933. (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFERS OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE5:30 P.M., NEW YORK TIME, JANUARY 15, 2000
No.SB-1 8,066,326 Warrants
Warrant Certificate
This Warrant Certificate certifies that The Yankee Companies, Inc., a
Florida corporation, or registered assigns, is the registered holder of
8,066,326 Warrants to purchase initially, at any time from June 30, 1999, until
5:30 p.m. New York time on January 15, 2000 ("Expiration Date") up to 8,066,326
fully-paid and non-assessable shares of common stock, $0,01 par value per share
("Common Stock") of Colmena Corp., a Delaware corporation (the "Issuer"), at an
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), of $0.005 per share of Common Stock, upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Issuer or by surrender of this Warrant Certificate in lieu of cash payment, but
subject to the conditions set forth herein and in the Warrant Agreement dated as
of April 4, 1995 between the Issuer and The Yankee Companies, Inc., (the
"Warrant Agreement"). Payment of the Exercise Price shall be made by certified
or official bank check in New York Clearing House funds payable to the order of
the Issuer.
No Warrant may be exercised after 5:30 p.m. New York time, on the
Expiration Date, at which time all Warrants evidenced hereby unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
obligations, duties and immunities thereunder of the Issuer and the holders (the
words "holders" or "holder" meaning the registered holders or registered holder)
of the Warrants.
In Witness Whereof, this instrument has been executed by the Issuer,
effective as of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
Colmena Corp.
----------------------------
____________________________ By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx., President
[CORPORATE SEAL]
Attest: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Secretary
Dated: February 3, 1999
Page 154
Colmena Corp.
Warrant
Exercise Form
Date: _________ ___, ____
The Undersigned hereby irrevocably elects to exercise the subject Warrant
to the extent of purchasing ___ Shares and:
(A) [__] Hereby makes payment of $______, the actual exercise price thereof; or
(B) [__] Avails itself of the cashless exercise rights granted herein.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Please type or print in block letters
---------------------
(Name)
--------------------------------
--------------------------------
(Address)
Signature: _______________________
Page 155
ASSIGNMENT FORM
FOR VALUE RECEIVED, The Yankee Companies, Inc., a Florida corporation,
hereby sells, assigns and transfer unto:
(Please type or print in block letters)
-------------------------------
(Name)
-------------------------------
-------------------------------
(Address)
the right to purchase Shares represented by this Warrant to the extent of ______
Shares to which the within Warrant relates, and does hereby irrevocably
constitute and appoint ________________ attorney, to transfer the same on the
books of the Issuer with full power of substitution in the premises.
Dated: ____ ___, 199_
Signature: _______________________
Xxxxxxx Xxxxx Xxxxxx, President
of The Yankee Companies, Inc.,
a Florida corporation
NOTICE: The signatures to this partial assignment of Warrant must correspond
with the name as written upon the face of the Warrant in every
particular, without alteration or enlargement or any change whatever.
Signature Guaranteed:
IMPORTANT: SIGNATURE MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF A
REGISTERED NATIONAL EXCHANGE OR BY A COMMERCIAL BANK OR A TRUST
COMPANY!
Page 156
