AGENT UNIT PURCHASE WARRANT AGREEMENT
DATED AS OF FEBRUARY 22, 2001
BY AND BETWEEN
SIDEWARE SYSTEMS, INC.
AND
THE WARRANT HOLDERS DESCRIBED HEREIN
WARRANT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. UNIT PURCHASE WARRANT CERTIFICATES. 1
SECTION 2. EXECUTION OF UNIT PURCHASE WARRANT CERTIFICATES. 1
SECTION 3. NO TRANSFERS. 1
SECTION 4. TERMS OF WARRANTS; EXERCISE OF WARRANTS. 2
SECTION 5. PAYMENT OF TAXES. 3
SECTION 6. MUTILATED OR MISSING UNIT PURCHASE WARRANT CERTIFICATES. 4
SECTION 7. RESERVATION OF WARRANT SHARES. 4
SECTION 8. OBTAINING STOCK EXCHANGE LISTINGS. 5
SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE. 5
SECTION 10. FRACTIONAL INTERESTS. 7
SECTION 11. COMPANY REDEMPTION. 7
SECTION 12. NOTICES TO WARRANT HOLDERS. 7
SECTION 13. NOTICES TO COMPANY. 8
SECTION 14. SUPPLEMENTS AND AMENDMENTS. 9
SECTION 15. SUCCESSORS. 9
SECTION 16. TERMINATION. 9
SECTION 17. GOVERNING LAW. 9
SECTION 18. BENEFITS OF THIS AGREEMENT. 9
SECTION 19. HEADINGS; COUNTERPARTS. 9
This Table of Contents does not constitute a part of this Agreement or have
any bearing upon the interpretation of any of its terms or provisions.
UNIT WARRANT PURCHASE AGREEMENT, dated as of February 22
2001, between Sideware Systems, Inc., a Canadian corporation (the
"Company"), and the holders of Warrants (as defined below) from time
to time.
WHEREAS, the Company shall issue 4.000 Unit Purchase
Warrants (equal to 10% of the Aggregate amount of securities purchased
pursuant to the Subscription Agreement dated February 22, 2001 among
the Company and certain Investors) (the "Unit Purchase Warrants"),
each Unit Purchase Warrant entitling the Holder to purchase a unit
("Unit") each consisting of 131,579 common shares ("Common Shares")
without par value (the "Common Stock") of the Company and 131,579
Common Stock Purchase Warrants (the "Class A Warrants"), (the Common
Stock issuable on exercise of the Class A Warrants being referred to
herein as the "Warrant Shares");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as
follows:
SECTION 1. UNIT PURCHASE WARRANT CERTIFICATES.
The certificates evidencing the Unit Purchase Warrants
(the " Unit Purchase Warrant Certificates") to be delivered pursuant
to this Agreement shall substantially in the form set forth in Exhibit
A attached hereto.
SECTION 2. EXECUTION OF UNIT PURCHASE WARRANT CERTIFICATES.
Unit Purchase Warrant Certificates shall be signed on
behalf of the Company by its Chairman of the Board or its President or
a Vice President and by another Director of the Company or its
Secretary or an Assistant Secretary and shall be dated the date of
signature by the Company.
The Company may deem and treat the registered holder(s) of
the Unit Purchase Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing
thereon made by anyone), for all purposes, and the Company shall not
be affected by any notice to the contrary.
SECTION 3. TRANSFERS.
The Unit Purchase Warrants will be transferable to and
among any designees within ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc. (the "Holders")
at the reasonable discretion of ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
The Unit Purchase Warrant holders agree that each
certificate representing Unit Purchase Warrants and underlying Common
Shares, Class A Warrants and Warrant Shares will bear a legend in
substantially the following form:
"The securities evidenced or constituted hereby have
been acquired for investment and have not been
registered under the Securities Act of 1933, as
amended. Such securities may not be sold,
transferred, pledged or hypothecated unless the
registration provisions of said Act have been
complied with or unless the Company has received an opinion
of counsel reasonably satisfactory to the Company that
such registration is not required."
SECTION 4. TERMS OF WARRANTS; EXERCISE OF WARRANTS.
The initial exercise price at which Units shall be
purchasable upon the exercise of the Unit Purchase Warrants (the
"Exercise Price") shall be $100,000 per Unit. Each Unit Purchase
Warrant shall be initially exercisable for 131,578 Common Shares and
131,578 Class A Warrants. Except for the "Cashless Exercise" as set
forth in this Section 4, which shall be available to all the holders
of the Class A Warrants, and the Redemption Provision as set forth in
Section 11 of this Agreement, which shall not apply to the Class A
Warrant holders, the Class A Warrants shall be governed by a separate
warrant agreement in the same form as that Warrant Agreement dated
February 22, 2001 between the Company and certain Investors. The term
of the Class A Warrants will expire February 22, 2004.
CASHLESS EXERCISE. This Unit Purchase Warrant may be
exercised by presentation and surrender of this Unit Purchase Warrant
to the Company at its principal executive offices with a written
notice of the Holder's intention to effect a cashless exercise,
including a calculation of the number of Common Shares and the number
of Class A Warrants to be issued upon such exercise in accordance with
the terms hereof (a "Cashless Exercise"). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the Holder
shall surrender this Unit Purchase Warrant for the number of Units
determined by multiplying the number of Units to which it would
otherwise be entitled by a fraction, the numerator of which shall be
the difference between the then current fair value per share of the
Common Stock multiplied by the number of Common Shares included in
each Unit and the then effective Exercise Price, and the denominator
of which shall be such then current fair value per share of the Common
Stock multiplied by the number of Common Shares included in each Unit.
For purposes of this Section 12(c), the "fair value" per share of
Common Stock shall be the average of the closing prices, as reported
by Bloomberg, for the five (5) consecutive trading days immediately
preceding, but not including, the date of determination, or, if such
method of valuation is not acceptable to the Toronto Stock Exchange,
the "fair value" of the Common Stock determined by such other
reasonable method as may be acceptable to the Toronto Stock Exchange.
Notwithstanding any of the foregoing, and for purposes of this
Section, in the event of a stock combination or a stock split, the
number of Units issued under this Agreement and the $100,000 Exercise
Price shall remain the same and the number of Common Shares and Class
A Warrants underlying the Units shall adjust in accordance with any
such stock combination or stock split as set forth in Section 9 of
this Agreement.
Subject to the terms of this Agreement, each Warrant holder
shall have the right, from the date issuance of the Unit Purchase
Warrants until 5:00 p.m., New York City time on February 22, 2004 (the
"Exercise Period"), to receive from the Company the number of fully
paid and nonassessable shares of Common Stock and Class A Warrants
underlying the Units which the holder may at the time be entitled to
receive on exercise of such Unit Purchase Warrants and payment of the
Exercise Price then in effect for such Unit. Each Warrant not
exercised prior to 5:00 p.m., New York City time, on February 22, 2004
shall become void and
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all rights thereunder and all rights in respect
thereof under this agreement shall cease as of such time.
A Unit Purchase Warrant may be exercised upon surrender to
the Company at its principal office, which is currently located at the
address listed in Section 13 hereof, of the certificate or
certificates evidencing the Unit Purhcase Warrants to be exercised
with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by a
participant in a recognized Signature Guarantee Medallion Program and
such other documentation as the Company may reasonably request, and
upon payment to the Company for the account of the Company of the
Exercise Price which is set forth in the form of Unit Purchase Warrant
Certificate attached hereto as Exhibit A as adjusted as herein
provided, for the number of Unit Purchase Warrants in respect of which
such Unit Purchase Warrants are then exercised. Payment of the
aggregate Exercise Price shall be made if not as a "Cashless Exercise"
as set forth above, (i) in cash or (ii) by certified or official bank
check payable to the order of the Company in New York Clearing House
Funds.
Subject to the provisions of Section 5 hereof, upon such
surrender of Unit Purchase Warrants and payment of the Exercise Price,
the Company shall issue and cause to be delivered with all reasonable
dispatch to and in such name or names as the Warrant holder may
designate a certificate or certificates for the number of full Common
Shares and Class A Warrants underlying such Unit Purchase Warrants
together with cash as provided in Section 10; provided, however, that
if any consolidation, merger or lease or sale of assets is proposed to
be effected by the Company as described in subsection (c) of Section 9
hereof, or a tender offer or an exchange offer for shares of Common
Stock of the Company shall be made, upon such surrender of Unit
Purchase Warrants and payment of the Exercise Price as aforesaid, the
Company shall, as soon as possible, but in any event not later than
two business days thereafter, issue and cause to be delivered the full
number of Common Shares and Class A Warrants issuable upon the
exercise of such Unit Purchase Warrants in the manner described in
this sentence together with cash as provided in Section 10. Such
certificate or certificates shall be deemed to have been issued and
any person so designated to be named therein shall be deemed to have
become a holder of record of such Common Shares and Class A Warrants
as of the date of the surrender of such Unit Purchase Warrants and
payment of the Exercise Price.
The Unit Purchase Warrants shall be exercisable, at the
election of the holders thereof, either in full or from time to time
in part and, in the event that a certificate evidencing Unit Purchase
Warrants is exercised in respect of fewer than all of the Common
Shares and Class A Warrants issuable on such exercise at any time
prior to the date of expiration of the Unit Purchase Warrants, a new
certificate evidencing the remaining Unit Purchase Warrants will be
issued. The Company may assume that any Unit Purchase Warrant
presented for exercise is permitted to be so exercised under
applicable law and shall have no liability for acting in reliance on
such assumption.
All Unit Purchase Warrant Certificates surrendered upon
exercise of Unit Purchase Warrants shall be cancelled by the Company.
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The Company shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the
holders with reasonable prior written notice during normal business
hours at its office.
SECTION 5. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes
attributable to the initial issuance of Common Shares upon the
exercise of Unit Purchase Warrants; provided, however, that the
Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue of any Unit
Purchase Warrant Certificates or any certificates for Common Shares in
a name other than that of the registered holder of a Unit Purchase
Warrant Certificate surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Unit
Purchase Warrant Certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 6. MUTILATED OR MISSING UNIT PURCHASE WARRANT
CERTIFICATES.
In case any of the Unit Purchase Warrant Certificates
shall be mutilated, lost, stolen or destroyed, the Company may in its
discretion issue, in exchange and substitution for and upon
cancellation of the mutilated Unit Purchase Warrant Certificate, or in
lieu of and substitution for the Unit Purchase Warrant Certificate
lost, stolen or destroyed, a new Unit Purchase Warrant Certificate of
like tenor and representing an equivalent number of Unit Purchase
Warrants, but only upon receipt of evidence satisfactory to the
Company of such loss, theft or destruction of such Unit Purchase
Warrant Certificate and indemnity, if requested, also satisfactory to
the Company. Applicants for such substitute Unit Purchase Warrant
Certificates shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may prescribe.
SECTION 7. RESERVATION OF COMMON 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, for the purpose of enabling it to satisfy any
obligation to issue Common Shares and Warrant Shares upon exercise of
the Class A Warrants underlying the Units upon exercise of each Unit
Purchase Warrant, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Unit
Purchase Warrants and underlying Class A Warrants.
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 Agreement 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 the Unit Purchase Warrants. The
Company will supply such Transfer Agent with duly executed
certificates for
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such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 10.
The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto, transmitted to each
holder pursuant to Section 12 hereof.
Before taking any action which would cause an adjustment
pursuant to Section 9 hereof to reduce the Exercise Price below the
then par value (if any) of the Common Shares and the Warrant Shares,
the Company will take any corporate action which may, in the opinion
of its counsel (which may be counsel employed by the Company), be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable Common Shares and Warrant Shares at the
Exercise Price as so adjusted.
The Company covenants that all the Common Shares and the
Warrant Shares underlying the Units which may be issued upon exercise
of Unit Purchase Warrants and the underlying Class A Warrants will,
upon payment of the Exercise Prices therefor and 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.
SECTION 8. OBTAINING STOCK EXCHANGE LISTINGS.
The Company will from time to time take all action which
may be necessary so that the Warrant Shares, immediately upon their
issuance upon the exercise of Unit Purchase Warrants, will be listed
on the principal securities exchanges and markets within the United
States of America, if any, on which other shares of Common Stock are
then listed.
SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
COMMON SHARES ISSUABLE.
The Exercise Price and the number of Common Shares and
Class A Warrants issuable upon the exercise of each Unit Purchase
Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 9. With respect
to any Unit Purchase Warrant, no adjustment to the Exercise Price or
to the number of Common Shares and Class A Warrants issuable upon
exercise shall be made for any event enumerated in this Section 9 if
the date as to which the Company committed to undertake such event was
prior to such Unit Purchase Warrant's issuance. For purposes of this
Section 9, "Common Stock" means shares now or hereafter authorized of
any class of common stock of the Company and any other stock of the
Company, however designated, that has the right (subject to any prior
rights of any class or series of preferred stock) to participate in
any distribution of the assets or earnings of the Company without
limit as to per share amount.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If the Company:
(1) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
5
(2) subdivides its outstanding shares of Common Stock
into a greater number of shares;
(3) combines its outstanding shares of Common Stock
into a smaller number of shares;
(4) makes a distribution on its Common Stock in shares
of its capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any
shares of its capital stock,
then the Unit Purchase Warrant in effect immediately prior to
such action shall be proportionately adjusted so that the holder
of any Unit Purchase Warrant thereafter exercised may receive the
aggregate number and kind of shares of capital stock of the
Company which he would have owned immediately following such
action if such Unit Purchase Warrant had been exercised
immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately
after the effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a holder of a Unit Purchase Warrant
upon exercise of it may receive shares of two or more classes of
capital stock of the Company, the Company shall determine the
allocation of the adjusted Exercise Price between the classes of
capital stock. After such allocation, the exercise privilege and the
Exercise Price of each class of capital stock shall thereafter be
subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 9.
Such adjustment shall be made successively whenever any
event listed above shall occur.
(b) ADJUSTMENT FOR OTHER TRANSACTIONS.
If the Company:
(i) distributes any rights, options or warrants to all holders of
its Common Stock entitling them to purchase shares of Common
Stock at a price per share less than the current market price
per share on the applicable record date, within 60 days of such
record date; or
(ii) distributes to all holders of its Common Stock any of its
assets or debt securities or any rights or warrants to purchase
debt securities, assets or other securities of the Company;
the Company shall make such fair and reasonable adjustments to the
Exercise Price and to the number of Common Shares and Class A
Warrants included within a Unit as may be appropriate in the
circumstances, and as may be permitted under the policies, rules and
6
practices of the Toronto Stock Exchange. To the greatest extent
practicable, and subject to the requirements of the Toronto Stock
Exchange, the adjustments will be analogous to those stipulated in
Section 9 of the Warrant Agreement.
(c) REORGANIZATION OF COMPANY.
If the Company consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any
person, upon consummation of such transaction the Unit Purchase
Warrants shall automatically become exercisable for the kind and
amount of securities, cash or other assets which the holder of a Unit
Purchase Warrant would have owned immediately after the consolidation,
merger, transfer or lease if the holder had exercised the Warrant
immediately before the effective date of the transaction.
Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if
other than the Company, or the person to which such sale or conveyance
shall have been made, shall enter into a supplemental Warrant
Agreement so providing and further providing for adjustments which
shall be as nearly equivalent as may be practical to the adjustments
provided for in this Section. The successor Company shall mail to
Warrant holders a notice describing the supplemental Warrant
Agreement.
SECTION 10. FRACTIONAL INTERESTS.
(a) The Company shall not be required to issue fractional
Common Shares or Class A Warrants on the exercise of Unit Purchase
Warrants. If more than one Unit Purhcase Warrant shall be presented
for exercise in full at the same time by the same holder, the number
of full Common Shares and Class A Warrants which shall be issuable
upon the exercise thereof shall be computed on the basis of the
aggregate number of Common Shares and Class A Warrants purchasable on
exercise of the Unit Purchase Warrants so presented. If any fraction
of a Common Share and corresponding Class A Warrant would, except for
the provisions of this Section 10, be issuable on the exercise of any
Unit Purchase Warrants (or specified portion thereof), the Company
shall pay an amount in cash equal to the fair market value on the day
immediately preceding the date the Unit Purchase Warrant is presented
for exercise, multiplied by such fraction.
(b) Unit Purchase Warrants may be issued in fractional
interests. Holders of fractional interests in Unit Purchase Warrants
will be entitled to purchase a number of Common Shares and Class A
Warrants equal to the product obtained by multiplying the number of
Common Shares and corresponding Class A Warrants issuable with respect
to a full Unit Purchase Warrant multiplied by the fractional interest
owned by such holder in the Unit Purchase Warrant.
SECTION 11. COMPANY REDEMPTION.
Intentionally left blank.
SECTION 12. NOTICES TO WARRANT HOLDERS.
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Upon any adjustment of the Exercise Price pursuant to
Section 9, the Company shall promptly thereafter, or within five days,
cause to be given to each of the registered holders of the Unit
Purchase Warrant Certificates at his address appearing on the Warrant
register written notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such notice may be given in
advance and included as a part of the notice required to be mailed
under the other provisions of this Section 12.
In case:
(a) the Company shall authorize the issuance to all holders
of shares of Common Stock of rights, options or warrants to subscribe
for or purchase shares of Common Stock or of any other subscription
rights or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in shares
of Common Stock or distributions referred to in subsection (a) of
Section 9 hereof); or
(c) of any consolidation or merger to which the Company is
a party and for which approval of any shareholders of the Company is
required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of
the Unit Purchase Warrants (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or a tender offer or exchange
offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any action (other than
actions of the character described in Section 9(a)) which would
require an adjustment of the Exercise Price pursuant to Section 9;
then the Company shall cause to be given to each of the registered
holders of the Unit Purchase Warrant Certificates at his address
appearing on the Warrant register, at least 15 calendar days (or 10
calendar days in any case specified in clauses (a) or (b) above) prior
to the applicable record date hereinafter specified, or promptly in
the case of events for which there is no record date, by first-class
mail, postage prepaid, a written notice stating (i) the date as of
which the holders of record of shares of Common Stock to be entitled
to receive any such rights, options, warrants or distribution are to
be determined, or (ii) the initial expiration date set forth in any
tender offer or exchange offer for shares of Common Stock, or (iii)
the date on which any such consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up is expected to become
effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to
exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up. The
failure to give the notice required by this Section 12 or any defect
therein shall not affect the legality or validity of any distribution,
right, option, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or the vote upon any action.
8
Nothing contained in this Agreement or in any of the Unit
Purchase Warrant Certificates shall be construed as conferring upon
the holders thereof the right to vote or to consent or to receive
notice as shareholders in respect of the meetings of shareholders or
the election of Directors of the Company or any other matter, or any
rights whatsoever as shareholders of the Company.
SECTION 13. NOTICES TO COMPANY.
Any notice or demand authorized by this Agreement to be
given or made by the registered holder of any Unit Purchase Warrant
Certificate to or on the Company shall be sufficiently given or made
when and if deposited in the mail, first class or registered, postage
prepaid, addressed (until another address is provided in writing by
the Company), as follows:
Sideware Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President & CEO
with a copy to:
Sideware Systems Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Facsimile No.: 604-688-0094
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Chairman
SECTION 14. SUPPLEMENTS AND AMENDMENTS.
The Company may from time to time supplement or amend
this Agreement (a) without the approval of any holders of Unit
Purchase Warrant Certificates in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make
any other provisions in regard to matters or questions arising
hereunder which the Company may deem necessary or desirable and which
shall not in any way adversely affect the interests of the holders of
Unit Purchase Warrant Certificates, or (b) with the approval of the
holders of a majority of the Unit Purchase Warrants outstanding.
SECTION 15. SUCCESSORS.
All the covenants and provisions of this Agreement by or
for the benefit of the Company shall be binding and inure to the
benefit of its respective successors and assigns hereunder.
SECTION 16. TERMINATION.
This Agreement will terminate on any earlier date if all
Unit Purchase Warrants have been exercised or expired without
exercise.
9
SECTION 17. GOVERNING LAW.
This Agreement and each Unit Purchase Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws
of the State of New York and for all purposes shall be construed in
accordance with the internal laws of said State.
SECTION 18. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company and the registered
holders of the Unit Purchase Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company
and the registered holders of the Unit Purchase Warrant Certificates.
SECTION 19. HEADINGS; COUNTERPARTS.
The headings and captions contained herein are for
convenience of reference only and shall not control or affect the
meaning or construction of any provision hereof. 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
all such counterparts shall together constitute but one and the same
instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above
written.
SIDEWARE SYSTEMS, INC.
By "▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇"
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chairman
EXHIBIT A
[Form of Unit Purchase Warrant Certificate]
[Face]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
EXERCISABLE ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME ON FEBRUARY _,
2004.
No. _____ _____ Warrants
Unit Purchase Warrant Certificate
SIDEWARE SYSTEMS, INC.
This Unit Purchase Warrant Certificate certifies that
______________________ is the registered holder of ________Warrants
expiring February 22, 2004 (the "Unit Purchase Warrants") to purchase
one Unit, each consisting of 131,578 common shares without par value (
"Common Shares"), of Sideware Systems, Inc., a Canadian corporation
(the "Company") and 131,578 Class A Warrants (the "Class A Warrants")
each entitling the holder thereof to purchase an additional share of
Common Stock (the "Warrant Shares"). Each Unit Purchase Warrant
entitles the holder upon exercise to receive from the Company on or
before 5:00 p.m. New York City Time on February 22, 2004 that number
of fully paid and nonassessable Common Shares and an equal number of
Class A Warrants as set forth below at the exercise price (the
"Exercise Price") as determined pursuant to the Warrant Agreement
referenced below payable in lawful money of the United States of
America upon surrender of this Unit Purchase Warrant Certificate and
payment of the Exercise Price at the office of the Company, but only
subject to the conditions set forth herein and in the Unit Purchase
Warrant Agreement referred to on the reverse hereof. The Exercise
Price and number of Common Shares and Class A Warrants issuable upon
exercise of the Unit Purchase Warrants are subject to adjustment upon
the occurrence of certain events set forth in the Warrant Agreement.
Except for the "Cashless Exercise" as set forth in Section 4 of the
Unit Purchase Warrant Agreement and the Redemption Provision as set
forth in Section 11 of the Unit Purchase Warrant Agreement which shall
carry over for all the holders of the Class A Warrants, the Class A
Warrants shall be governed by a separate Warrant Agreement in the same
form as that of the Investors dated February 22, 2001.
Each Unit Purchase Warrant is initially exercisable for
131,579 shares of Common Stock and 131,579 Class A Warrants to
purchase an equal number of Warrant Shares. The initial Exercise
Price for each Unit shall be $100,000. No Unit Purchase Warrant may
be exercised after 5:00 p.m. New York City Time on February 22, 2004
and to the extent not exercised by such time such Unit Purchase
Warrants shall become void.
Reference is hereby made to the further provisions of this
Unit Purchase Warrant Certificate set forth on the reverse hereof and
such further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Unit Purchase Warrant Certificate shall be governed
and construed in accordance with the internal laws of the State of New
York.
IN WITNESS WHEREOF, the Company has caused this Unit Purchase Warrant
Certificate to be signed by its President and by its Secretary.
SIDEWARE SYSTEMS, INC.
By
Name:
Title:
By
Name:
Title:
[Form of Unit Purchase Warrant Certificate]
[Reverse]
The Warrants evidenced by this Unit Purchase Warrant
Certificate are part of a duly authorized issue of Warrants expiring
February 22, 2004 entitling the holder on exercise to receive common
shares without par value, of the Company (the "Common Shares") and
Class A Warrants to purchase shares of Common Stock of the Company
(the "Warrant Shares") and are issued or to be issued pursuant to a
Warrant Agreement, dated as of February 22, 2001 (the "Warrant
Agreement"), duly executed and delivered by the Company, 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, limitation of rights, obligations, duties and immunities
thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the
Warrants. A copy of the Warrant Agreement may be obtained by the
holder hereof upon written request to the Company.
Warrants may be exercised at any time on or before 5:00
p.m. New York City time on February 22, 2004. The holder of Warrants
evidenced by this Unit Purchase Warrant Certificate may exercise them
by surrendering this Unit Purchase Warrant Certificate, with the form
of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price as specified in
the Warrant Agreement at the office of the Company. In the event that
upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof a new Unit Purchase
Warrant Certificate evidencing the number of Warrants not exercised.
No adjustment shall be made for any dividends on any Common Shares
issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may,
subject to certain conditions, be adjusted. If the Exercise Price is
adjusted, the Warrant Agreement provides that the number of shares of
Common Shares issuable upon the exercise of each Warrant shall be
adjusted. No fractions of a share of Common Shares will be issued
upon the exercise of any Warrant, but the Company will pay the cash
value thereof determined as provided in the Warrant Agreement.
The holders of the Warrants are entitled to certain
registration rights with respect to the Common Shares purchasable upon
exercise thereof. Said registration rights are set forth in full in a
Registration Rights Agreement dated as of February 22, 2004, among the
Company and the Purchasers named therein. A copy of the Registration
Rights Agreement may be obtained by the holder hereof upon written
request to the Company.
Unit Purchase Warrant Certificates, when surrendered at the
office of the Company by the registered holder thereof in person or by
legal representative or attorney duly authorized in writing, may be
exchanged, in the manner and subject to the limitations provided in
the Warrant Agreement, but without payment of any service charge, for
another Unit Purchase Warrant Certificate or Unit Purchase Warrant
Certificates of like tenor evidencing in the aggregate a like number
of Warrants.
The Company may deem and treat the registered holder(s)
thereof as the absolute owner(s) of this Unit Purchase Warrant
Certificate (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any exercise
hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the
contrary. Neither the Warrants nor this Unit Purchase Warrant
Certificate entitles any holder hereof to any rights of a stockholder
of the Company.
Election to Purchase
(to be executed upon exercise of warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Unit Purchase Warrant Certificate, to
receive __________ Common Shares without par value and _________ Class
A Warrants and herewith tenders payment for such shares to the order
of Sideware Systems, Inc. in the amount of $____________ in accordance
with the terms hereof, or tenders the Unit Purchase Warrant
Certificate for cashless exercise in accordance with the terms hereof
to receive _______________ Common Shares without par value and
________________ Class A Warrants. The undersigned requests that a
certificate for such shares be registered in the name of
________________, whose address is __________________________ and that
such shares be delivered to ________________ whose address is
___________ ______________________. If said number of shares is less
than all of the shares of Common Shares purchasable hereunder, the
undersigned requests that a new Unit Purchase Warrant Certificate
representing the remaining balance of such shares be registered in the
name of ______________, whose address is _________________________,
and that such Unit Purchase Warrant Certificate be delivered to
_________________, whose address is __________________.
Signature:
Date:
Signature Guaranteed:
