EXECUTION VERSION
WARRANT
NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT IS CONVERTIBLE HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER
ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT HAS BEEN ACQUIRED FOR
INVESTMENT AND NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT IS
CONVERTIBLE MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OF THEM UNDER THE ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE ACT. NEITHER THIS WARRANT NOR ANY SECURITY INTO WHICH IT IS
CONVERTIBLE MAY BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS
WARRANT AND THE SECURITIES PURCHASE AGREEMENT, DATED AS OF EVEN DATE HEREWITH,
AND NO TRANSFER OF THIS WARRANT OR ANY SECURITY INTO WHICH IT IS CONVERTIBLE
SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN
COMPLIED WITH. THE TRANSFERABILITY OF THIS WARRANT AND ANY SECURITY INTO WHICH
IT IS CONVERTIBLE IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND
IN THE PURCHASE AGREEMENT.
WARRANT
TO PURCHASE COMMON STOCK OF
IT & E INTERNATIONAL GROUP
THIS WARRANT IS MADE AND DELIVERED PURSUANT TO A CERTAIN SECURITIES PURCHASE
AGREEMENT, DATED AS OF EVEN DATE HEREWITH, AND SUBJECT TO THE TERMS AND
CONDITIONS THEREOF.
Certificate No. ____ Date of Issuance: November __, 2005
Expiration Date: November __, 2009
This Warrant is issued to COMVEST INVESTMENT PARTNERS II LLC (the
"Holder") by IT & E INTERNATIONAL GROUP, a Nevada corporation (the "Company") ,
pursuant to the terms of that certain Securities Purchase Agreement (the
"Purchase Agreement") of even date herewith, in connection with the Company's
issuance to the Holder of this Warrant, a Senior Secured Note or the Preferred
Shares, as the case may be, for an aggregate purchase price of Seven Million
Dollars ($7,000,000), in reliance upon an exemption from registration pursuant
to Section 4(2) of the Securities Act;
THIS CERTIFIES THAT, for value received, the receipt and sufficiency of
which is hereby acknowledged:
Subject to the conditions set forth herein and in the Purchase
Agreement, the Holder, with an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, is entitled, upon surrender of this Warrant at
the principal office of the Company, to subscribe for and
purchase from the Company, for a period of four (4) years after the date hereof
and ending at 5:00 p.m. Eastern Standard Time on November __, 2009 (the
"Exercise Period"), up to 49,999,958 shares of Common Stock at the Per Share
Exercise Price (the "Warrant Shares"). All capitalized terms used but not
defined herein shall have the meaning set forth in the Purchase Agreement.
This Warrant is subject to the following provisions, terms and
conditions:
1. Definitions.
1.1 "Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in The
City of New York.
1.2 "Common Stock" shall mean the shares of common stock, par value
$0.001, of the Company.
1.3 "Commission" shall mean the U.S. Securities and Exchange
Commission or any other governmental authority at the time administering the
Securities Act.
1.4 "Company" shall have the meaning specified in the introduction to
this Warrant, and shall include any corporation or business entity resulting
from the merger, consolidation or conversion of the Company.
1.5 "Current Price per Share" shall mean the average of the closing
sales prices, if available, or the average of the bid and asked prices for the
Warrant Shares, Common Stock or Marketable Securities, as the case may be (or
their successors) on the principal market therefor for the five (5) full Trading
Days preceding the day which is two (2) Business Days prior to the day of
exercise, or if no such price is available, then a price that is mutually agreed
upon by the Holder and the Company. If the Holder and the Company cannot agree
upon a mutually acceptable price, then such price shall be determined by a
written appraisal of a recognized firm of investment bankers who shall be
selected by the Company and shall be reasonably acceptable to the holders of a
majority of the Warrants. The determination of such independent appraiser shall
be conclusive and binding on the Holder and the Company.
1.6 "Exempt Issuance" means the issuance of (a) shares of Common
Stock options or shares of Common Stock issued upon the exercise of any such
options to employees, officers or directors of the Company pursuant to any stock
or option plan duly adopted by a majority of the non-employee members of the
Board of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise of or conversion of any convertible securities, options or warrants
issued and outstanding as of the date hereof, provided that such securities have
not been amended since the date hereof, (c) the securities issued or issuable
hereunder, or pursuant to the Securities Purchase Agreement between the Company
and the Holder, dated as of the date hereof, (d) issuances in connection with
mergers, acquisitions, joint ventures or other transactions with an unrelated
third party in a bona fide transaction the purpose of which is not fundraising,
or (e) issuances at fair market value to the Company's suppliers, consultants
and other providers of services and goods not to exceed $100,000 to any one
Person, and not to
exceed an aggregate of $250,000 in any fiscal year without the prior written
consent of the Holder.
1.7 "Fair Market Price per Share" shall mean the fair value, as
determined by a majority of the full Board of Directors of the Company in good
faith, which determination shall be described in a duly adopted board resolution
certified by the Company's Secretary or Assistant Secretary, of any potential
dilutive issuance described in Section 5(c).
1.8 "Marketable Securities" shall mean securities of a corporation
subject to the informational and reporting requirements of the Securities
Exchange Act of 1934, as amended, that are listed and actively traded on a
nationally-recognized stock exchange or inter-dealer quotation system in the
United States.
1.9 "Per Share Exercise Price" shall be $0.10, as may be adjusted in
accordance with Section 5 hereof.
1.10 "Registration Statement" shall be (i) any registration statement
that the Company shall file with the Commission in accordance with Section 2(a)
of the Registration Rights Agreement, covering all or part of the Shares and
Warrant Shares, or (ii) the registration statement that the Company may file (or
has filed) with the Commission in accordance with Section 2(b) of the
Registration Rights Agreement, covering all or a part of the Shares and the
Warrant Shares so long as such registration statement is declared effective
prior to the time the registration statement contemplated by Section 2(a) of the
Registration Rights Agreement is declared effective; provided, however, that if
any registration statement filed under Section 2(b) of the Registration Rights
Agreement covers only a portion of the Shares and the Warrant Shares, then
"Registration Statement" shall mean both registration statements described in
subparagraphs (i) and (ii) above.
1.11 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time. Reference to a particular section of the Securities Act shall include
a reference to the comparable section, if any, of any such similar or successor
federal statute.
1.12 "Warrant" shall mean and include this Warrant and any Warrant or
Warrants hereafter issued as a consequence of the exercise or transfer of this
Warrant in whole or in part.
1.13 "Trading Days" shall mean any days during the course of which the
Company's Common Stock is listed and traded with the OTC Electronic Bulletin
Board or such similar organization if the OTC Electronic Bulletin Board is no
longer reporting such information.
2. Payment upon Exercise; Issuance of Certificates; No Fractional
Shares.
(a) This Warrant may be exercised during the Exercise Period,
in whole or in part, by the surrender of this Warrant with the election at the
end hereof (the "Election") duly executed to the Company, during normal business
hours on any Business Day, at the address and
in the manner set forth in Section 11 hereof, or at such other place as is
designated in writing by the Company. Such executed Election must be accompanied
by payment in an amount equal to the applicable Per Share Exercise Price
multiplied by the number of Warrant Shares for which this Warrant is being
exercised. Such payment may be made by check payable to the order of the
Company. The Company agrees that the Warrant Shares so purchased shall be and
are deemed to be issued to the Holder or its designee (subject to the transfer
restrictions applicable to this Warrant) as the record owner of such Warrant
Shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment shall have been made as aforesaid.
(b) Certificates for the Warrant Shares so purchased,
representing the aggregate number of securities specified in the Election, shall
be delivered to the Holder or its designee within a reasonable time, not
exceeding ten (10) Business Days after this Warrant shall have been duly
exercised. The stock certificate or certificates so delivered shall be in such
denominations as may be requested by the Holder and shall be registered in the
name of the Holder or such other name as shall be designated by the Holder
(subject to the transfer restrictions applicable to this Warrant). The Company
shall pay all expenses and charges payable in connection with the preparation,
execution and delivery of stock certificates pursuant to this Section 2, except
that, in case such stock certificates shall be registered in a name or names
other than the Holder or the Holder's designee, funds sufficient to pay all
stock transfer taxes which shall be payable in connection with the execution and
delivery of such stock certificates shall be paid by the Holder to the Company
at the time of delivery of such stock certificates by the Company.
(c) This Warrant shall be exercisable only for a whole number
of Warrant Shares. No fractions of such securities, or scrip for any such
fraction of securities, shall be issued upon the exercise of this Warrant. The
Company shall pay a cash adjustment in respect of such fractional interest in an
amount equal to the Current Price per Share of one share of Warrant Shares at
the time of such exercise multiplied by such fraction computed to the nearest
whole cent.
3. Cashless Exercise. At any time during the Exercise Period, the
Company agrees that:
(a) The Holder may exercise this Warrant by surrendering it to
the Company and receiving, in exchange therefor, the number of shares of Common
Stock then purchasable upon exercise of that portion of the Warrant to be
exercised less the number of shares of Common Stock equal to the quotient of the
aggregate Per Share Exercise Price of all such shares underlying that portion of
the Warrant to be exercised divided by the Current Price per Share.
(b) Concurrent with the occurrence of any event described in
Section 5(a) for cash, the Holder may exercise this Warrant by surrendering it
to the Company in exchange for the amount of cash per share the Holder would be
entitled to receive after the happening of such event if this Warrant had been
exercised immediately prior to the close of business on such record date or
effective date, as applicable, less the applicable Per Share Exercise Price.
(c) Concurrent with the occurrence of any event described in
Section 5(a) for Marketable Securities, the Holder may exercise this Warrant by
surrendering it to the Company
in exchange for the applicable amount of such Marketable Securities the Holder
would be entitled to receive after the happening of such event if this Warrant
had been exercised immediately prior to the close of business on such record
date or effective date, as applicable, less the number of such Marketable
Securities equal to the quotient of the aggregate Per Share Exercise Price of
all shares underlying this Warrant divided by the Current Price per Share of
such Marketable Securities.
4. Redemption
(a) The Company shall have the right, upon the affirmative
vote of a majority of the independent non-employee members of the Board of
Directors, as "independent" is defined in Rule 10A-3 of the Exchange Act of
1934, approving the Warrant Redemption subject to the prior satisfaction of the
conditions precedent set forth in Section (b), upon delivery of written notice
to the Holder or its assigns ("Redemption Notice"), to redeem any then
unexercised portion, in whole or in part, of this Warrant (a "Warrant
Redemption). The Warrant Redemption may be exercised by the Company by
delivering the payment of the Warrant Redemption Price (as defined below) for
the number of Warrant Shares issuable upon exercise of the Warrant being
redeemed to the Holder of its assigns at the address of the Holder or its
assigns provided to the Company, together with the Redemption Form attached
hereto, duly completed and signed. The Warrant Shares issuable upon exercise of
the Warrant being redeemed under this Section (a) shall be and are deemed to be
redeemed by the Company as of the close of business on the latest date on which
the Redemption Form is delivered to the Holder or its assigns (which must be at
least five business days after the Redemption Notice is given) and payment made
therefor. Upon receipt of the payment and the duly completed and signed
Redemption Form, the holder shall deliver this Warrant to the Company within
three business days thereafter for cancellation of that number of Warrants being
redeemed. The Warrant Redemption Price shall mean $.001 per Warrant Share
issuable upon exercise of the Warrant being redeemed.
(b) The Company's right to redeem this Warrant as described
above is subject to the satisfaction of the following conditions:
(i) The closing price of the Common Stock is at least
$0.30 for twenty (20) consecutive trading days immediately preceding the date on
which the Redemption Notice is delivered to the Holder or its assigns.
(ii) The Company has achieved pre-tax income per share of
Common Stock (calculated on a fully-diluted basis after giving effect to the
issuance of the Common Stock underlying the Series D Preferred Stock and using
the Treasury Method for options and warrants) of at least $.015 per share for
the prior trailing four quarters (excluding any non-recurring extraordinary
expenses).
(iii) The number of Warrants that may be called by the
Company during any thirty (30) day period shall not be exercisable for a number
of shares of Common Stock that exceeds the average weekly trading volume during
the prior four (4) weeks.
5. Adjustment Provisions. The Per Share Exercise Price and number
and kind of shares or other securities to be issued upon conversion determined
pursuant to this Warrant shall be subject to adjustment from time to time upon
the happening of certain events while this conversion right remains outstanding,
as follows:
(a) Reclassification. If the Company at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Warrant shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock (i) immediately prior to, or
(ii) immediately after, such reclassification or other change at the sole
election of the Holder.
(b) Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock or any
preferred stock issued by the Company in shares of Common Stock, the Per Share
Exercise Price shall be proportionately reduced in case of subdivision of shares
or stock dividend or proportionately increased in the case of combination of
shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.
(c) Anti-Dilution Provisions. The Per Share Exercise Price
shall be subject to adjustment from time to time as provided in this Section 5.
In the event that any adjustment of the Per Share Exercise Price as required
herein results in a fraction of a cent, such Per Share Exercise Price shall be
rounded up or down to the nearest cent.
(i) Adjustment of the Per Share Exercise Price. If and
whenever the Company issues or sells, or in accordance with Section 5(c) hereof
is deemed to have issued or sold, any shares of Common Stock for an effective
consideration per share of less than the then Per Share Exercise Price or for no
consideration (such lower price, the "Base Share Price" and such issuances
collectively, a "Dilutive Issuance"), then, the Per Share Exercise Price shall
be reduced to equal such Base Share Price. Such adjustment shall be made
whenever shares of Common Stock or an instrument convertible into Common Stock
("Common Stock Equivalents") are issued.
(ii) Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section 5(c) hereof,
the following will be applicable:
(A) Issuance of Rights or Options. If the Company
in any manner issues or grants any warrants, rights or options,
whether or not immediately exercisable, to subscribe for or to
purchase Common Stock or (such warrants, rights and options to
purchase Common Stock or Common Stock Equivalents are hereinafter
referred to as "Options") and the effective price per share for which
Common Stock is issuable upon the exercise of such Options is less
than the Per Share Exercise Price ("Below Base Price Options"), then
the maximum total number of shares of Common Stock issuable upon the
exercise of all such Below Base Price
Options (assuming full exercise, conversion or exchange of Common
Stock Equivalents, if applicable) will, as of the date of the issuance
or grant of such Below Base Price Options, be deemed to be outstanding
and to have been issued and sold by the Company for such price per
share and the maximum consideration payable to the Company upon such
exercise (assuming full exercise, conversion or exchange of Common
Stock Equivalents, if applicable) will be deemed to have been received
by the Company. For purposes of the preceding sentence, the "effective
price per share for which Common Stock is issuable upon the exercise
of such Below Base Price Options" is determined by dividing (i) the
total amount, if any, received or receivable by the Company as
consideration for the issuance or granting of all such Below Base
Price Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all
such Below Base Price Options, plus, in the case of Common Stock
Equivalents issuable upon the exercise of such Below Base Price
Options, the minimum aggregate amount of additional consideration
payable upon the exercise, conversion or exchange thereof at the time
such Common Stock Equivalents first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the exercise of all such Below Base Price Options
(assuming full conversion of Common Stock Equivalents, if applicable).
No further adjustment to the Exercise Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Below
Base Price Options or upon the exercise, conversion or exchange of
Common Stock Equivalents issuable upon exercise of such Below Base
Price Options.
(B) Issuance of Common Stock Equivalents. If the
Company in any manner issues or sells any Common Stock Equivalents,
whether or not immediately convertible (other than where the same are
issuable upon the exercise of Options) and the effective price per
share for which Common Stock is issuable upon such exercise,
conversion or exchange is less than the Exercise Price, then the
maximum total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of all such Common Stock Equivalents
will, as of the date of the issuance of such Common Stock Equivalents,
be deemed to be outstanding and to have been issued and sold by the
Company for such price per share and the maximum consideration payable
to the Company upon such exercise (assuming full exercise, conversion
or exchange of Common Stock Equivalents, if applicable) will be deemed
to have been received by the Company. For the purposes of the
preceding sentence, the "effective price per share for which Common
Stock is issuable upon such exercise, conversion or exchange" is
determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or sale of
all such Common Stock Equivalents, plus the minimum aggregate amount
of additional consideration, if any, payable to the
Company upon the exercise, conversion or exchange thereof at the time
such Common Stock Equivalents first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the exercise, conversion or exchange of all such
Common Stock Equivalents. No further adjustment to the Exercise Price
will be made upon the actual issuance of such Common Stock upon
exercise, conversion or exchange of such Common Stock Equivalents.
(C) If, at any time after any adjustment of the
Exercise Price shall have been made pursuant to Section 5(c)(ii)(A) or
5(c)(ii)(B) as the result of any issuance of warrants, rights or
convertible securities, and either (1) such warrants or rights, or the
rights of conversion or exchange in such other convertible securities,
shall expire, and all or a portion of such warrants or rights, or the
right of conversion or exchange with respect to all or a portion of
such other convertible securities, as the case may be, shall not have
been exercised, or (2) the consideration per share for which shares of
Common Stock are issuable pursuant to such warrants or rights, or such
other convertible securities, shall be increased or decreased by
virtue of provisions therein contained, then such previous adjustments
shall be rescinded and annulled and the additional shares of Common
Stock which were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and
annulled shall no longer be deemed to have been issued by virtue of
such computation. Thereupon, a recomputation shall be made of the
effect of such rights or options or other convertible securities on
the then outstanding Warrants, but not on any then outstanding Warrant
Shares, on the basis of (x) treating the number of additional shares
of Common Stock or other property, if any, theretofore actually issued
or issuable pursuant to the previous exercise of any such warrants or
rights or any such right of conversion or exchange, as having been
issued on the date or dates of any such exercise and for the
consideration actually received and receivable therefor, and (y)
treating any such warrants or rights or any such other convertible
securities which then remain outstanding as having been granted or
issued immediately after the time of such increase or decrease of the
consideration per share for which shares of Common Stock or other
property are issuable under such warrants or rights or other
convertible securities.
(D) Change in Option Price or Conversion Rate. If
there is a change at any time in (i) the amount of additional
consideration payable to the Company upon the exercise of any Options;
(ii) the amount of additional consideration, if any, payable to the
Company upon the exercise, conversion or exchange of any Common Stock
Equivalents; or (iii) the rate at which any Common Stock Equivalents
are convertible into or exchangeable for Common Stock (in each such
case, other than under or by reason of provisions designed to protect
against dilution), the
Exercise Price in effect at the time of such change will be readjusted
to the Exercise Price which would have been in effect at such time had
such Options or Common Stock Equivalents still outstanding provided
for such changed additional consideration or changed conversion rate,
as the case may be, at the time initially granted, issued or sold.
(E) Calculation of Consideration Received. If any
Common Stock, Options or Common Stock Equivalents are issued, granted
or sold for cash, the consideration received therefor for purposes of
this Warrant will be the amount received by the Company therefor,
before deduction of reasonable commissions, underwriting discounts or
allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale. In case any
Common Stock, Options or Common Stock Equivalents are issued or sold
for a consideration part or all of which shall be other than cash, the
amount of the consideration other than cash received by the Company
will be the fair market value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company will be the fair market value
(closing bid price, if traded on any market) thereof as of the date of
receipt. In case any Common Stock, Options or Common Stock Equivalents
are issued in connection with any merger or consolidation in which the
Company is the surviving corporation, the amount of consideration
therefor will be deemed to be the fair market value of such portion of
the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Common Stock
Equivalents, as the case may be. The fair market value of any
consideration other than cash or securities will be determined in good
faith by an investment banker or other appropriate expert of national
reputation selected by the Company and reasonably acceptable to the
holder hereof, with the costs of such appraisal to be borne by the
Company.
(iii) Exceptions to Adjustment of Exercise Price.
Notwithstanding the foregoing, no adjustment will be made under this Section 5
in respect of an Exempt Issuance.
(d) Written Notice. The Company shall give written notice to
the Holder within ten (10) days following the consummation of any transaction
within the scope of this Section 5 and provide in such written notice a brief
description of the terms and conditions of such transaction.
(e) Minimal Adjustments. No adjustment in a Per Share
Exercise Price need be made if such adjustment would result in a change in such
Per Share Exercise Price of less than one cent ($0.01). Any adjustment of less
than one cent ($0.01) which is not made shall be carried forward and shall be
made at the time of and together with any subsequent adjustment which, on a
cumulative basis, amounts to an adjustment of one cent ($0.01) or more in a Per
Share Exercise Price.
6. Issue Tax. The issuance of certificates for the Warrant Shares
upon the exercise of this Warrant shall be made without charge to the Holder for
any issuance tax in respect thereof, provided that the Company 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 certificate in a name other than that of the
Holder .
7. Transferability and Assignment. Except as set forth in this
Section 6 hereof and subject to compliance with applicable federal and state
securities laws, and to the extent applicable, the parties may not assign their
rights and obligations under this Warrant except in accordance with Section 5.8
of the Purchase Agreement. In the event the Holder proposes to effect an
assignment, the Holder must present this Warrant to the Company for transfer,
accompanied by a duly completed and executed Form of Assignment (as provided at
the end hereof), the transferee must agree to be bound by the terms of this
Warrant as if such transferee were an original holder of this Warrant, and the
Holder must deliver to the Company an opinion of counsel of the Holder in form
reasonably satisfactory to the Company that the transfer may be properly made
under an exemption from registration under the Securities Act and applicable
state securities laws. Upon any registration of transfer, the Company shall
execute and deliver a new Warrant certificate to the person entitled thereto. In
the event the Warrant is transferred, the subsequent holder shall have no
greater rights than those afforded the Holder hereunder. Any transfer made in
violation of this Section 6 shall be void.
8. Reservation of Warrant Shares. The Company shall, at all times
when this Warrant shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the exercise of this
Warrant, such number of its duly authorized shares of capital stock as shall
from time to time be sufficient to effect the exercise of this Warrant.
Alternatively, the Company shall take all action necessary to cause it to be
authorized to issue all necessary shares issuable upon exercise of this Warrant.
All shares of capital stock which may be issued in connection with the exercise
of this Warrant will, upon issuance by the Company, be validly issued, fully
paid and non-assessable.
9. Mutilated or Missing Warrant Certificate. In case the certificate
evidencing this Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall, at the request of the Holder, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated certificate, or in lieu
of and in substitution for the certificate lost, stolen or destroyed, a new
Warrant certificate of like tenor and representing the equivalent rights and
interests, but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of such Warrant. Applicants for such substitute
Warrant certificate shall also comply with such other reasonable requirements
and pay such other reasonable charges as the Company may prescribe. The Holder
shall pay all taxes and all other expenses and charges payable in connection
with the preparation, execution and delivery of Warrants pursuant to this
Section 8.
10. No Rights as a Shareholder. Nothing contained herein shall be
construed as conferring upon the Holder or its transferees any rights as a
shareholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or any other matter.
11. Legend. The Warrant Shares issued upon exercise of this Warrant
shall be subject to a stop transfer order and the certificate or certificates
evidencing such Warrant Shares shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES ARE SUBJECT TO THE TERMS
AND CONDITIONS OF A CERTAIN SECURITIES PURCHASE AGREEMENT, A CERTAIN
LOCK-UP AGREEMENT AND A CERTAIN REGISTRATION RIGHTS AGREEMENT, ALL OF
WHICH ARE DATED NOVEMBER __, 2005 AND ARE AVAILABLE FOR INSPECTION AT
THE OFFICES OF THE COMPANY."
12. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or by Federal Express, Express Mail or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex or similar telecommunications equipment) against receipt to the party to
whom it is to be given, (i) if to the Company, addressed to IT & E International
Group, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Chief Financial Officer, Facsmile No. (▇▇▇) ▇▇▇-▇▇▇▇, with
copies to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ (ii) if to
the Holder, at the address set forth above, or (iii) in either case, to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 11. Notice to the estate of any party shall be
sufficient if addressed to the party as provided in this Section 11. Any notice
or other communication given by certified mail shall be deemed given at the time
of certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof. Any notice given by other
means permitted by this Section 11 shall be deemed given at the time of receipt
thereof.
13. Governing Law. This Warrant shall be construed in accordance with
the laws of the State of New York, without regard to principles governing
conflicts of law. Any action or proceeding arising out of or relating to this
Warrant shall be commenced in a federal or state court having competent
jurisdiction in the State of New York, and for the purpose of any such action or
proceeding, each of the Company and the Holder and any assignee of the Holder
submits to the personal jurisdiction of the State of New York The parties hereby
irrevocably
consent to the exclusive jurisdiction of any state or federal court for New York
County in the State of New York or the Southern District of New York. The
parties hereby waive any objection to venue and any objection based on a more
convenient forum in any action instituted under this Warrant.
14. Remedies. The Company stipulates that the remedies at law of the
Holder in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
15. Amendments; Waivers. The terms and provisions of this Warrant may
be amended, modified, waived or altered only in writing signed by the Company
and the Holder, and any such amendment effected pursuant to this Section 15
shall be binding upon the successors and assigns of the parties.
16. Headings. The descriptive headings of the several sections of
this Warrant are inserted for purposes of reference only, and shall not affect
the meaning or construction of any of the provisions hereof.
[Signature Page to Warrant]
Dated: November __, 2005
IT & E INTERNATIONAL GROUP
By:
-------------------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED:
By:
-----------------------------------
Name:
Title:
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Warrant.)
FOR VALUE RECEIVED, ___________________ hereby sells, assigns, and
transfers unto _____________________________ Warrants to purchase _____________
shares of _______________ of IT & E International Group (the "Company"),
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint _____________________________ attorney to
transfer such Warrant on the books of the Company, with full power of
substitution.
Dated:
Signature:
------------------------------------
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
To: IT & E International Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to purchase ______
Warrant Shares covered by the within Warrant certificate and tenders payment
herewith in the amount of $_____________ in accordance with the terms thereof,
and requests that certificates for such securities be issued in the name of, and
delivered to:
----------------------
----------------------
--------------------------------------------------------------------------------
(Print Name, Address and Social Security or Tax Identification Number)
The undersigned also hereby represents that the representations and
warranties provided by the undersigned in Section 3.2 of the Purchase Agreement
are true and correct in all material respects as if made on and as of the date
hereof.
Signature:
----------------------------
