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EXHIBIT 10.15
WARRANT AGREEMENT
THIS WARRANT AGREEMENT is dated as of March 2, 2000, between x0x0.xxx
Inc., a Delaware corporation (the "Company"), and eVentures Group, Inc., a
Delaware corporation (the "Holder").
Contemporaneously with the execution and delivery of this Agreement,
the Holder has advanced $3.0 million to the Company pursuant to the terms and
provisions of that certain Promissory Note (herein so called). As partial
consideration for the advance evidenced by the Promissory Note, the Company has
agreed to issue and deliver the Warrants (as defined herein) to the Holder.
NOW, THEREFORE, in consideration of the mutual promises,
representations, covenants and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Defined Terms. As used in this Agreement, the following terms shall
have the meanings indicated below, unless the context clearly indicates to the
contrary:
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
Person. For purposes of this definition, a Person shall be deemed to "control"
another Person if such first Person possesses directly or indirectly the power
to (i) vote 10% or more of the securities having ordinary voting power for the
selection of directors of such Person, or (ii) direct, or cause the direction
of, the management and policies of the second Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" means this Warrant Agreement, as amended, supplemented or
modified from time to time.
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day other than Saturday, Sunday or a legal
holiday in the State of Texas.
"Closing Date" means March 2, 2000, the date of the closing of the
advance described in the Promissory Note.
"Commission" means the Securities and Exchange Commission or any entity
succeeding to any or all of its functions under the Securities Act and the
Exchange Act.
"Common Stock" means the common stock, par value $0.00l per share, of
the Company, which has voting rights, and shall include any stock into which
such Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock and all other stock of any class or
classes (however designated) of the Company the registered holders of which have
the right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference.
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"Company" has the meaning given to such term in the first paragraph
hereof.
"Composite Transaction Tape" means a security price reporting service
that includes all transactions in a security on each of the exchanges and in the
over-the-counter market.
"Conversion Right" has the meaning given such term in Section 5(b)
hereof.
"Current Market Price Per Share" means, with respect to any share of
Common Stock, as of any particular date of determination:
(i) If the Common Stock is then reported on a Composite
Transaction Tape, the average of the daily closing prices for the
30 consecutive trading days immediately prior to such date, as
reported on the Composite Transaction Tape (as adjusted for any
stock dividend, split, combination or reclassification that
occurred during such 30-day period); or
(ii) If the Common Stock is not then reported on a Composite
Transaction Tape but is then listed or admitted to trading on a
national securities exchange, the average of the daily last sale
prices regular way of the Common Stock for the 30 consecutive
trading days immediately prior to such date (as adjusted for any
stock dividend, split, combination or reclassification that
occurred during such 30-day period), on the principal national
securities exchange on which the Common Stock is traded or, in
case no such sale takes place on any such day, the average of the
closing bid and asked prices regular way, in either case on such
national securities exchange; or
(iii) If the Common Stock is not then reported on a
Composite Transaction Tape but is then traded in the
over-the-counter market, the average of the daily closing sales
prices, or, if there is no closing sales price, the average of
the closing bid and asked prices, in the over-the-counter market,
for the 30 consecutive trading days immediately prior to such
date (as adjusted for any stock dividend, split, combination or
reclassification that occurred during such 30-day period), as
reported by the National Association of Securities Dealers'
Automated Quotation System, or, if not so reported, as reported
by the National Quotation Bureau, Incorporated or any successor
thereof, or, if not so reported the average of the closing bid
and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to
time by the Board of Directors and agreed to by the holders of a
majority of the Warrants for that purpose; or
(iv) If no such prices are then furnished, the higher of (x)
the Exercise Price and (y) the fair market value of a share of
the Common Stock as determined by agreement between the Holder
and the Company or, in the absence of such an agreement, by an
independent investment banking firm or an independent appraiser
engaged by the Company (in either case, the cost of which
engagement will be borne by the Company) and acceptable to a
majority of the Warrant Holders.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute.
"Exempted Securities" means: (i) Warrant Shares; (ii) shares of the
Company's capital stock issued as a stock dividend described in Section 11(a),
and (iii) shares of the Company's capital stock issued on any conversion of the
Promissory Note.
"Exercise Price" means 110% of the Conversion Price (as defined in the
Promissory Note).
"Expiration Date" means 5:00 p.m., Dallas time on March 1, 2004.
"Non-Public Warrant Shares" means Warrant Shares that have not been
sold to the public and bear the legend set forth in Section 13(b).
"Non-Surviving Combination" means any merger, consolidation or other
business combination by the Company with one or more Persons in which the
Company is not the survivor, or a sale of all or substantially all of the assets
of the Company to one or more such other Persons.
"Person" means any person, firm or entity.
"Promissory Note" has the meaning given to such term in the second
paragraph hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute and the rules and regulations of the Commission
thereunder, all as the same may be in effect from time to time.
"Subsidiary" means, as to any Person, a corporation of which shares of
stock having ordinary voting power (other than stock having such power only by
reason of the occurrence of a contingency) to elect a majority of the board of
directors or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.
"Survivor" has the meaning given such term in Section 9(d).
"Warrant Certificate" means a certificate evidencing one or more
Warrants, substantially in the form of Exhibit A attached hereto, with such
changes therein as may be required to reflect any adjustments made pursuant to
Section 11.
"Warrant Holders" means the Holder or any Affiliate thereof and such
other Persons to whom the Holder or Affiliate thereof transfers Warrants in
compliance with the terms of this Agreement.
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"Warrant Office" means the office or agency of the Company at which the
Warrant Register shall be maintained and where the Warrants may be presented for
exercise, exchange, substitution and transfer, which office or agency will be
the office of the Company located at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx
Xxxx 00000, which office or agency may be changed by the Company pursuant to
notice in writing to the Persons named in the Warrant Register as the holders of
the Warrants.
"Warrant Register" means the register, substantially in the form of
Exhibit B attached hereto, maintained by the Company at the Warrant Office.
"Warrant Shares" means the shares of Common Stock issued or issuable
upon exercise of the Warrants, as the number of such shares may be adjusted from
time to time pursuant to Section 11 and the provisions of the Company's
Certificate of Incorporation.
"Warrants" means, collectively, the stock purchase warrants issued
pursuant to this Agreement entitling the record holders thereof to purchase from
the Company at the Warrant Office an aggregate of 240,000 shares of Common Stock
(subject to adjustment as provided in Section 11) at the Exercise Price at any
time after the Closing Date and before the Expiration Date; and, individually, a
"Warrant."
2. Issuance of Warrants. The Company hereby agrees to issue and deliver
to the Holder, on the Closing Date, the Warrants and one or more Warrant
Certificates evidencing the Warrants. No consideration other than the advance
evidenced by the Promissory Note shall be required from the Holder in
consideration of the receipt of the Warrants.
3. Registration, Transfer and Exchange of Certificates.
(a) The Company shall maintain, at the Warrant Office, the Warrant
Register for registration of the Warrants and Warrant Certificates and transfers
thereof. On the Closing Date, the Company shall register the Warrants and
Warrant Certificates in the Warrant Register in the name of the Holder. The
Company may deem and treat the registered holders of the Warrant Certificates as
the absolute owners thereof and the Warrants represented thereby
(notwithstanding any notation of ownership or other writing on the Warrant
Certificates made by any Person) for the purpose of any exercise thereof or any
distribution to the holders thereof, and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
(b) Subject to Section 13, the Company shall register the transfer of
any outstanding Warrants in the Warrant Register upon surrender of the Warrant
Certificates evidencing such Warrants to the Company at the Warrant Office,
accompanied (if so required by it) by a written instrument or instruments of
transfer in form satisfactory to it, duly executed by the registered holder or
holders thereof or by the duly appointed legal representative thereof. Upon any
such registration of transfer, new Warrant Certificates evidencing such
transferred Warrants shall be issued to the transferee, and the surrendered
Warrant Certificates shall be canceled. If less than all the Warrants evidenced
by Warrant Certificates surrendered for transfer are to be transferred, new
Warrant Certificates shall be issued to the holder surrendering such Warrant
Certificates evidencing such remaining number of Warrants.
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(c) Warrant Certificates may be exchanged at the option of the holders
thereof, when surrendered to the Company at the Warrant Office, for another
Warrant Certificate or other Warrant Certificates of like tenor and
representing, in the aggregate, a like number of Warrants. Warrant Certificates
surrendered for exchange shall be canceled.
(d) No charge shall be made for any such transfer or exchange, except
for any tax or other governmental charge imposed in connection therewith. Except
as provided in Section 13(b), each Warrant Certificate issued upon transfer or
exchange shall bear the legend set forth in Section 13(b) if the Warrant
Certificate presented for transfer or exchange bore such legend.
4. Mutilated or Missing Warrant Certificates. If any Warrant Certificate
shall be mutilated, lost, stolen or destroyed, the Company shall issue, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant Certificate and,
if requested, indemnity satisfactory to it. The Company acknowledges that a
written indemnity by a Holder or, if an Affiliate of a Holder is the holder of
such lost, stolen or destroyed Warrant Certificate, by such Holder or such
Affiliate shall be satisfactory to the Company for such purpose. No service
charge shall be made for any such substitution; however, all expenses and
reasonable charges associated with procuring such indemnity and all stamp, tax
and other governmental duties that may be imposed in relation thereto shall be
borne by the holder of such Warrant Certificate. Each Warrant Certificate issued
in any such substitution shall bear the legend set forth in Section 13(b) if the
Warrant Certificate for which such substitution was made bore such legend.
5. Duration and Exercise of Warrants.
(a) The Warrants evidenced by a Warrant Certificate shall be
exercisable in whole or in part by the registered holder thereof on any Business
Day after the Closing Date and on or before the Expiration Date.
(b) Subject to the provisions of this Agreement, the Warrants evidenced
by a Warrant Certificate may be exercised by the registered holder thereof by
the surrender of the Warrant Certificate evidencing the Warrants to be
exercised, with the form of election to purchase on the reverse thereof or
attached thereto duly completed and signed, to the Company at the Warrant
Office, and upon payment of the aggregate Exercise Price for the number of
Warrant Shares in respect of which such Warrants are being exercised in lawful
money of the United States of America and/or by surrender to the Company of
shares of Common Stock then owned by the Warrant Holder and valued for purposes
hereof at their Current Market Price Per Share at the time of exercise. In lieu
of exercising Warrants pursuant to the immediately preceding sentence, the
Warrant Holder shall have the right to require the Company to convert the
Warrants, in whole or in part and at any time or times (the "Conversion Right"),
into Warrant Shares, by surrendering to the Company the Warrant Certificate
evidencing the Warrants to be converted, accompanied by the form of conversion
notice on the reverse thereof or attached thereto which has been duly completed
and signed. Upon exercise of the Conversion Right, the
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Company shall deliver to the Warrant Holder (without payment by the Warrant
Holder of any Exercise Price) that number of Warrant Shares which is equal to
the quotient obtained by dividing (x) the value of the number of Warrants being
converted at the time the Conversion Right is exercised (determined by
subtracting the aggregate Exercise Price for all such Warrants immediately prior
to the exercise of the Conversion Right from the aggregate current market price
(determined on the basis of the Current Market Price Per Share) of that number
of Warrant Shares purchasable upon exercise of such Warrants immediately prior
to the exercise of the Conversion Right (taking into account all applicable
adjustments pursuant to Section 11, including, without limitation, any
adjustments which would be made pursuant to Section 11(b)(vii) upon exercise of
the Warrants being converted) by (y) the Current Market Price Per Share of one
share of Common Stock immediately prior to the exercise of the Conversion Right.
Any references in this Agreement to the "exercise" of any Warrants, and the use
of the term "exercise" herein, shall be deemed to include, without limitation,
any exercise of the Conversion Right. Any exercise of a Warrant hereunder may be
made subject to the satisfaction of one or more conditions (including, without
limitation, the consummation of a sale of the capital stock of the Company or a
merger or other business combination involving the Company) which are set forth
in a writing which is made a part of or is appended to the aforementioned form
of election to purchase or conversion notice (as the case may be) by the Warrant
Holder.
(c) Upon exercise of any Warrants hereunder, the Company shall issue
and cause to be delivered to or upon the written order of the registered holders
of such Warrants and in such name or names as such registered holders may
designate, a certificate for the Warrant Shares issued upon such exercise of
such Warrants. Any Persons so designated to be named therein shall be deemed to
have become holders of record of such Warrant Shares as of the date of exercise
of such Warrants.
(d) Warrants shall be deemed to have been exercised or converted
immediately prior to the close of business on the date of its surrender for
exercise or conversion as provided herein, and the Person entitled to receive
the Warrant Shares issuable upon such exercise shall be treated for all purposes
as the holder of record of such shares as of the close of business on such date.
(e) If less than all of the Warrants evidenced by a Warrant Certificate
are exercised at any time, a new Warrant Certificate or Certificates shall be
issued for the remaining number of Warrants evidenced by such Warrant
Certificate. Each new Warrant Certificate so issued shall bear the legend set
forth in Section 13(b) if the Warrant Certificate presented in connection with
partial exercise thereof bore such legend, unless the transfer restrictions
referred to in such legend are no longer applicable pursuant to Section 13(d).
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled.
6. No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock upon exercise of any Warrants, but shall pay
for any such fraction of a share an amount in cash equal to the then Current
Market Price Per Share of one such share of Common Stock multiplied by such
fraction.
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7. Payment of Taxes. The Company shall pay all taxes (other than income
taxes) attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
of any Warrant Certificate or any certificate for Warrant Shares in a name other
than that of the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such certificate 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.
8. Stockholder Rights. Nothing contained in this Agreement or in any of
the Warrant Certificates shall be construed as conferring upon the holders
thereof the right to vote or to consent or to receive notice as a stockholder in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter, or any rights whatsoever as a stockholder of the
Company. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as imposing any obligation on the registered
holders thereof to purchase any securities or as imposing any liabilities on
such holders as stockholders of the Company, whether such obligation or
liabilities are asserted by the Company or by creditors of the Company.
9. Reservation and Issuance of Warrant Shares; Certain Corporate
Actions.
(a) The Company will at all times have authorized, and reserve and
keep available, free from statutory preemptive rights, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon the exercise
of the Warrants, the number of shares of Common Stock deliverable upon exercise
of all outstanding Warrants.
(b) The Company covenants that all Warrant Shares will, upon
issuance in accordance with the terms of this Agreement and the Company's
Certificate of Incorporation, be fully paid and nonassessable and free from all
liens, charges and security interests (other than any created by or on behalf of
any Warrant Holder).
(c) The Company will not, by amendment of its Certificate of
Incorporation or through any merger, consolidation, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Agreement or the Warrant Certificates. Without limiting the generality of the
foregoing, the Company (i) will not permit the par value or the determined or
stated value of any shares of Common Stock receivable upon the exercise of the
Warrants to exceed the amount payable therefor upon such exercise, (ii) will
take all such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of the Warrants from time to time outstanding,
including, without limitation, amending its Certificate of Incorporation to
reduce or eliminate the par value of the Common Stock, (iii) will not take any
action which results in an adjustment in the number of Warrant Shares obtainable
upon the exercise of any Warrants if the total number of shares of Common Stock
issuable after such action upon the exercise of all of the then-outstanding
Warrants would exceed the total number of shares of Common Stock then authorized
by the Company's Certificate of Incorporation and available for
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purpose of issuance upon such exercise, (iv) will not have any class of
authorized common stock other than its existing authorized Common Stock, and (v)
will not amend its Certificate of Incorporation to change any terms of its
existing Common Stock (other than to increase the authorized number of shares of
Common Stock, upon such approval as may be required by the Delaware General
Corporation Law, as amended from time to time).
(d) If the Company proposes, prior to the Expiration Date, to enter
into a transaction that would constitute a Non-Surviving Combination, if
consummated, the Company shall give written notice thereof to each of the
Warrant Holders promptly after an agreement is reached with respect to the
Non-Surviving Combination, but in any event no less than ten days prior to the
consummation thereof. Such notice shall describe the proposed transaction in
reasonable detail and specify the consideration to be received by the Warrant
Holders in respect thereto and/or any adjustment to be made to the number of
Warrant Shares obtainable upon the exercise of the Warrants as a result of such
Non-Surviving Combination. The Company shall also furnish to each Warrant Holder
all notices and materials furnished to its stockholders in connection with such
transaction as and when such notices and materials are furnished to its
stockholders. The Company agrees that it will not enter into an agreement
providing for a Non-Surviving Combination or effect any such Non-Surviving
Combination unless the party to such transaction that is the surviving entity
thereof or the purchaser or purchasers of substantially all of the assets of the
Company (the "Survivor") (i) shall be obligated to distribute or pay to each
Warrant Holder, upon payment of the Exercise Price prior to the Expiration Date,
the number of shares of stock or other securities or other property (including
any cash) of the Survivor that would have been distributable or payable on
account of the Warrant Shares if such Warrant Holder's Warrants had been
exercised immediately prior to such Non-Surviving Combination (or, if
applicable, the record date therefor), as such number of shares or other
securities or other property may thereafter be adjusted pursuant to Section 11
and (ii) shall assume by written instrument all of the obligations of the
Company under this Agreement and the Warrants.
10. Obtaining of Governmental Approvals and Stock Exchange
Listings/Registration Rights.
(a) Subject, in the case of any registration under the Securities
Act, to the limitations set forth in any registration rights or similar
agreements, the Company will, at its own expense, from time to time take all
action which may be necessary to obtain and keep effective any and all
exemptions, permits, consents and approvals of governmental agencies and
authorities which are or become requisite in connection with the issuance, sale,
transfer and delivery of the Warrant Certificates, the exercise of the Warrants,
the issuance, sale, transfer and delivery of the Warrant Shares, and all action
which may be necessary so that such Warrant Shares, immediately upon their
issuance upon the exercise of Warrants, will be listed on each securities
exchange, if any, on which the Common Stock is then listed.
(b) The Warrant Shares shall be subject to the following
registration rights: (i) the Warrant Shares will be included in the registration
rights granted in connection with the first private placement of equity
securities of the Company that closes prior to the maturity date of the
Promissory Note (an "Equity Financing"), if more favorable than those granted
under the Registration Rights Agreement (herein so called) dated as of June 25,
1999, between the Company and IEO Holdings Limited; or (ii) the Warrant Shares
shall be entitled to the same
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registration rights as "Registrable Securities," as defined and described in the
Registration Rights Agreement. Upon request by Maker within 90 days after the
Equity Financing (except with respect to the first Equity Financing occurring
subsequent to the date hereof), which request shall provide a summary in
reasonable detail of such Equity Financing, Payee will advise Maker as to
whether the Warrant Shares will be subject to the registration rights granted in
clause (i) or clause (ii) above.
11. Adjustment of Number of Warrant Shares Purchasable. The number of
shares of Common Stock purchasable upon the exercise of each Warrant is subject
to adjustment from time to time upon the occurrence of any of the events
enumerated in this Section 11 at any time or from time to time after the date
hereof and prior to the Expiration Date.
(a) If the Company (i) declares a dividend or makes a distribution
on its Common Stock in shares of its Common Stock, (ii) splits or subdivides its
outstanding shares of Common Stock into a greater number of shares, (iii)
combines its outstanding shares of Common Stock into a smaller number of shares,
(iv) makes a distribution on its Common Stock in shares of its capital stock
other than Common Stock, or (v) issues by reclassification of its Common Stock
any shares of its Common Stock (including any such reclassification in
connection with a merger or consolidation in which the Company is the surviving
entity), then each Warrant outstanding at the time of the record date for such
dividend or distribution or of the effective date of such split, subdivision,
merger or combination shall thereafter entitle the holder of such Warrant to
receive the aggregate number and kind of shares which, if such Warrant had been
exercised immediately prior to such time, such holder would have owned or have
become entitled to receive by virtue of such dividend, subdivision or
combination. Such adjustment shall be made successively whenever any event
listed above shall occur and, if a dividend which is declared is not paid, each
Warrant outstanding shall again entitle the holder thereof to receive the number
of shares of Common Stock as would have been the case had such dividend not been
declared. If at any time, as a result of an adjustment made pursuant to this
Section 11(a), the holder of any Warrant thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than shares
of Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Warrant shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in this Section 11, and the provisions
of this Agreement with respect to the Warrant Shares shall apply on like terms
to such other shares.
(b) If the Company shall issue any shares of Common Stock without
consideration or at a price per share less than the greater of the Exercise
Price or the Current Market Price Per Share of the Common Stock as at the date
of such issuance, including any shares of Common Stock deemed to have been
issued pursuant to this Section 11(b), but excluding any Exempted Securities (as
defined herein), each Warrant outstanding on the date of such issuance shall
thereafter entitle the holder of such Warrant to receive a number of shares of
Common Stock equal to the product of (x) the number of shares of Common Stock to
which the holder of such Warrant was entitled immediately prior to such issuance
and (y) the quotient that is obtained by dividing:
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the total number of shares of Common Stock outstanding
immediately after such issuance (including any shares of Common
Stock deemed to have been issued pursuant to this Section 11(b))
by
the sum of
(1) the number of shares of Common Stock outstanding immediately
prior to such issuance, plus
(2) the number of shares of Common Stock which the aggregate
consideration received (or deemed to be received) by the
Company upon such issuance would purchase at such Current
Market Price Per Share.
For purposes of any adjustment of the number of shares of Common Stock
obtainable upon the exercise of any Warrants pursuant to this Section 11(b), the
following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash, the
consideration therefor shall be deemed to be the amount of cash paid
therefor, without deducting therefrom any discounts, commissions or
other expenses allowed, paid or incurred by the Company in connection
with the issuance or sale thereof.
(ii) In the case of the issuance of Common Stock for a
consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined by agreement
between the holders of a majority of the Warrants outstanding and the
Company or, in the absence of such an agreement, by an independent
investment banking firm or an independent appraiser engaged by the
Company and reasonably acceptable to the holders of a majority of the
Warrants outstanding (in either case, the cost of which engagement
will be borne by the Company). In the case of any issuance of Common
Stock upon the exercise of any warrants, options or other rights or
the conversion or exchange of any convertible or exchangeable
securities, the aggregate consideration received by the Company upon
such issuance shall be deemed to include the consideration, if any,
received by the Company as consideration for the issuance of such
warrants, options or rights or such convertible or exchangeable
securities (excluding any cash received on account of accrued interest
or accrued dividends) and, in the case of any conversion or exchange
of securities, shall not include any amount attributable to the
converted or exchanged securities. If any warrant, option or right to
purchase or subscribe for any Common Stock or convertible securities
is issued in connection with the issuance or sale of other securities
by the Company, together comprising one integrated transaction in
which no specific consideration is allocated to such warrant, option,
right or security, such warrant, option, right or security shall be
deemed to have been issued for no consideration.
(iii) If (A) the Company shall issue warrants or options to
purchase or rights to subscribe for Common Stock (other than Exempted
Securities), and (B) the
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consideration, if any, received by the Company as consideration for
the issuance of such warrants, options or rights plus the minimum
aggregate consideration required to be paid upon exercise of such
warrants, options or rights (the aggregate amount of such
consideration (the "Aggregate Consideration") to be determined in each
case as set forth above) shall be less than the product of the greater
of the then Exercise Price or the Current Market Price Per Share on
the date of such issuance multiplied by the maximum number of shares
of Common Stock deliverable upon such exercise, then such aggregate
maximum number of shares shall be deemed to have been issued at the
time such warrants, options or rights were issued and for a
consideration equal to the Aggregate Consideration.
(iv) If (A) the Company shall issue (1) securities (other than
Exempted Securities) which are by their terms convertible into or
exchangeable for Common Stock or (2) warrants or options to purchase
or rights to subscribe for any such convertible or exchangeable
securities, and (B) the consideration received by the Company for any
such securities or any such warrants, options or rights (excluding any
cash received on account of accrued interest or accrued dividends)
plus the minimum aggregate consideration (not including any amount
attributed to the converted or exchanged securities), if any, to be
received by the Company upon the conversion or exchange of such
securities or upon the exercise of such warrants, options or rights
and the conversion or exchange of the securities received upon such
exercise, as the case may be (the total amount of such consideration
(the "Total Consideration") to be determined in each case as set forth
above), shall be less than the product of the greater of the then
Exercise Price or the Current Market Price Per Share on the date of
such issuance multiplied by the maximum number of shares deliverable
upon conversion of or in exchange for such convertible or exchangeable
securities or upon the exercise of any such warrants, options or
rights and subsequent conversion or exchange thereof, then such
securities, warrants, options or rights shall be deemed to have been
exercised and/or converted or exchanged, and the aggregate maximum
number of shares of Common Stock shall be deemed to have been issued
at the time such securities, warrants, options or rights were issued
for a consideration equal to the Total Consideration.
(v) Upon any reduction in the exercise price of Common Stock
deliverable upon exercise of any of such warrants, options or rights
as are referred to in this Section 11(b) (for avoidance of doubt,
excluding Exempted Securities) any reduction in the amount of
consideration required to be paid or the conversion or exchange price
or ratio payable upon conversion or exchange of any of such
convertible or exchangeable securities, in each case other than a
change resulting from any antidilution provisions thereof which are no
more favorable in such instance to the holder thereof than the
provisions of this Section 11 are to the Warrant Holders, (A) if an
adjustment shall previously have been made pursuant to this Section
11(b) in respect of such warrants, options or rights or such
securities, the number of shares of Common Stock obtainable upon the
exercise of the Warrants shall forthwith be readjusted to such number
of shares as would have obtained had the adjustment made upon the
issuance of such warrants, options, rights or securities as have not
been exercised, converted or exchanged prior to such change (or any
prior adjustment made pursuant to this Section 11(b)(v)) been made
upon the basis of such change, and (B) if an adjustment has not
previously been made
-11-
12
pursuant to this Section 11(b) in respect of such options or rights or
such securities, then such warrants, options or rights or such
securities shall be deemed to have been granted or issued (as the case
may be) for purposes of this Section 11(b) as of the date of such
reduction, and any adjustments required to be made pursuant to this
Section 11(b) as a result of such deemed grant or issuance shall
forthwith be made effective as of such date.
(vi) All grants or issuances of options or other rights to
acquire shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) issued to any officer,
director or employee of the Company or of any Subsidiary of the
Company or to members of the immediate family of any of them
("Management Options"), and all issuances of shares of Common Stock
(or securities convertible into or exchangeable for shares of Common
Stock) under or pursuant to such Management Options shall, for
purposes of Section 11(b), be deemed to be granted and issued for no
consideration except to the extent cash or notes are paid or payable
therefor whether upon issuance or exercise. The foregoing shall not be
applicable to the grant or issuance of Exempted Securities.
(vii) If and when any Warrants shall be exercised as set forth
herein, (A) if there shall be any outstanding warrants or options to
purchase or rights to subscribe for shares of Common Stock or any
outstanding warrants or options to purchase or rights to subscribe for
or securities which are by their terms convertible into or
exchangeable for Common Stock (in each case, other than Exempted
Securities) which in each case would, if issued on the date of such
Warrant exercise, result in an adjustment pursuant to either of
Sections 11(b)(iii) or 11(b)(iv), then such warrants or options
shall be deemed to have been exercised in full immediately prior to
the exercise of such Warrants for a consideration equal to the
aggregate consideration, if any, received by the Company upon the
issuance of such warrants, options or rights plus the minimum
aggregate consideration required to be paid upon exercise of such
warrants, options or rights (the amount of such consideration to be
determined in each case as set forth above), and (B) if there shall be
any outstanding securities (other than Exempted Securities) which are
by their terms convertible into or exchangeable for Common Stock at
the time of such Warrant exercise or at any time thereafter which in
each case would, if issued on the date of such Warrant exercise,
result in an adjustment pursuant to Section 11(b)(iv), then such
securities shall be deemed to have been converted or exchanged in full
immediately prior to the exercise of such Warrants for a consideration
equal to the aggregate consideration received by the Company for any
such securities plus the minimum aggregate consideration (not
including any amount attributed to the converted or exchanged
securities), if any, required to be paid upon the conversion or
exchange of such securities (the amount of such consideration to be
determined in each case as set forth above); provided, however, that
any adjustment made pursuant to this Section 11(b)(vii) shall only be
made with respect to such Warrants as are then being exercised.
(viii) Shares of Common Stock owned by or held for the account of
the Company or any majority-owned Subsidiary shall not be deemed
outstanding for the purpose of any computation made pursuant to this
Section 11(b). Any adjustment required to be made pursuant to this
Section 11(b) shall be made successively whenever the date of issuance
or deemed issuance of any such Common Stock or any such options,
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13
rights or convertible or exchangeable securities is fixed (which date
of issuance shall be the record date for such issuance if a record
date therefor is fixed) and, in the event that (A) such shares or
options, rights, warrants or convertible or exchangeable securities
are not so issued, or (B) any such option, right, warrant or
convertible or exchangeable security (or the conversion or exchange
right thereunder) expires according to its terms without having been
exercised, converted or exchanged, each Warrant outstanding shall, as
of the date of cancellation of such issuance in the case of clause (A)
above and the date of such expiration in the case of clause (B) above,
entitle the holder thereof to receive the number of shares of Common
Stock as would have been the case had the date of such issuance of
such unissued options, rights, warrants or convertible or exchangeable
securities not been fixed or such expired options, rights, warrants or
convertible or exchangeable securities not been issued, as the case
may be. If any adjustment is made pursuant to either of Section
11(b)(iii) or Section 11(b)(iv) upon the granting or issuance of any
warrants, options or other rights or any convertible or exchangeable
securities or any adjustment or readjustment is made pursuant to
Section 11(b)(v), then any adjustment required to be made hereunder
upon the exercise of any such warrants, options or other rights or
upon the exchange or conversion of any such convertible or
exchangeable securities (including any deemed exercise, conversion or
exchange pursuant to Section 11(b)(vii)) shall be made only to the
extent that the number of shares of Common Stock purchasable upon the
exercise of a Warrant shall not previously have been increased
pursuant to this Section 11(b) upon such grant or issuance (or upon
such adjustment or readjustment made pursuant to Section 11(b)(v), if
applicable).
(ix) Upon the expiration of the right to convert or exchange any
convertible securities, or upon the expiration of any rights, options
or warrants, if such convertible securities shall have not been
converted or exchanged, or if any such rights, options or warrants
shall not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding by reason of the fact that they
were issuable upon conversion or exchange of such convertible
securities or upon exercise of any such rights, options or warrants
shall no longer be computed as set forth above, and the number of
Warrant Shares purchasable upon conversion of a Warrant shall be
forthwith be readjusted, and thereafter the number of Warrant Shares
which are purchasable on the exercise of a Warrant shall be that
number which it would have been (but reflecting any other adjustments
made pursuant to the provisions of this Section 11 after the issuance
of such convertible securities, rights, options or warrants) had the
adjustment of the number of Warrant Shares upon the issuance of such
convertible securities, rights, warrants or options been made on the
basis of the issuance only of the number of shares of Common Stock
actually issued upon conversion or exchange of such convertible
securities or upon the exercise of such rights, options or warrants,
and thereupon only the number of additional shares of Common Stock
actually so issued shall be deemed to have been issued and only the
consideration actually received shall be deemed to have been received
by the Company.
(x) The term "Exempted Securities" shall mean (i) shares of
Common Stock issuable upon exercise of warrants and options to acquire
Common Stock and which are outstanding as of the date hereof, (ii)
shares of Common Stock issuable upon the exercise or conversion of
Warrants or the conversion of the Note, (iii) shares of Common Stock
or
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14
securities convertible into Common Stock, options, warrants or other
rights to acquire Common Stock granted to employees, consultants or
directors of the Company, and any issuances related to the exercise or
conversion thereof, in each case as approved by the Board of Directors
or a duly constituted committee thereof, (iv) shares of Common Stock
or securities convertible into Common Stock issued to, options,
warrants or other rights to acquire Common Stock granted to, and any
issuances related to the exercise or conversion thereof by, vendors in
connection with commercial arrangements, in each case where the
issuance or grant of which is approved by the Board of Directors or a
duly constituted committee thereof, and (v) shares of Common Stock or
securities convertible into Common Stock issued, options, warrants or
rights to acquire Common Stock granted, and any issuances related to
the exercise or conversion thereof, in connection with establishing
strategic partnerships and alliances, in each case where the issuance
or grant of which is approved by the Board of Directors or a duly
constituted committee thereof.
(c) In the event of any capital reorganization of the Company, or of
any reclassification of the Common Stock (other than a subdivision or
combination of outstanding shares of Common Stock), or in case of the merger of
the Company with or the consolidation of the Company with or into any other
entity or of the sale of the properties and assets of the Company as, or
substantially as, an entirety to any other entity, each Warrant shall after such
capital reorganization, reclassification of Common Stock, merger, consolidation
or sale be exercisable upon the terms and conditions specified in this Warrant,
for the number of shares of stock or other securities or assets to which a
holder of the number of Warrant Shares purchasable (at the time of such capital
reorganization, reclassification of Common Stock, merger, consolidation or sale)
upon exercise of such Warrant would have been entitled upon such capital
reorganization, reclassification of Common Stock, merger, consolidation or sale;
and in any such case, if necessary, the provisions set forth in this Section 11
with respect to the rights thereafter of the holders of the Warrants shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any shares of stock or other securities or assets thereafter deliverable on
the exercise of the Warrants.
(d) No adjustment in the number of Warrant Shares purchasable shall be
required unless such adjustment would require an increase or decrease in the
aggregate number of Warrant Shares purchasable of at least 1%; provided,
however, that any adjustments which by reason of this Section 11(d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest whole cent or to the nearest hundredth of a share, as the case may
be.
(e) Irrespective of any adjustments in the number or kind of shares
purchasable upon the exercise of the Warrant, Warrant Certificates theretofore
or thereafter issued may continue to express the same number and kind of shares
as are stated on the Warrant Certificates initially issuable pursuant to this
Agreement.
(f) If any question shall at any time arise with respect to the number
of Warrant Shares purchasable following any adjustment pursuant to this Section
11, such question shall be determined by agreement between the holders of a
majority of the Warrants and the Company or, in the absence of such an
agreement, by an independent investment banking firm or
-14-
15
an independent appraiser engaged by the Company (in either case, the cost of
which engagement will be borne by the Company) and acceptable to the Company and
the holders of a majority of Warrants, and such determination shall be binding
upon the Company and all holders of Warrants.
(g) Anything in this Section 11 to the contrary notwithstanding:
(i) The Company shall be entitled to make such increases in the number
of Warrant Shares purchasable upon the exercise of each Warrant, in
addition to those adjustments required by this Section 11, as it in its
sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Common Stock, or any issuance wholly
for cash or any shares of Common Stock at less than the greater of the
Exercise Price or the Current Market Price Per Share, or any issuance
wholly for cash or shares of Common Stock or securities which by their
terms are convertible into or exchangeable for shares of Common Stock or
any stock dividend, or any issuance of rights, options or warrants referred
to hereinabove in this Section 11, hereinafter made by the Company to the
holders of its Common Stock shall not be taxable to them; and
(ii) No adjustment in the number of Warrant Shares purchasable shall
be required in the event the Company pays a cash dividend to holders of
Common Stock.
(h) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company but will at all times in good
faith assist in the carrying out of all the provisions of this Section 11 and in
the taking of all such action as may be necessary or appropriate in order to
protect against impairment of the rights set forth in Section 11 of the holder
of any Warrants.
12. Notices to Warrant Holders; Notices of Issuances and Dividends.
(a) Whenever there is an adjustment in the number of Warrant Shares or
other securities or assets to which each Warrant Holder is entitled, the Company
shall promptly mail to all Warrant Holders a notice of adjustment. Such notice
shall be accompanied by (i) a certificate briefly stating the facts requiring
the adjustment and the manner of computing it and (ii) an Officer's Certificate
which shall certify that the adjustment is correct.
(b) If the Company takes any action that would require an adjustment in
the number of Warrant Shares or other securities or assets to which each Warrant
Holder is entitled pursuant to Section 11 or there is a liquidation or
dissolution of the Company, the Company shall mail to all Warrant Holders a
notice stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, issuance,
reclassification, merger, consolidation, transfer, voluntary or involuntary
liquidation, or dissolution or the date on which such other action is to be
effective, and the date as of which it is expected that holders of record of
Common Stock shall be entitled to exchange their shares for securities or other
property, if any, deliverable upon such subdivision, combination, issuance,
reclassification, merger, consolidation, transfer, liquidation, dissolution,
winding up or other
-15-
16
action. The Company shall mail such notice at least ten Business Days before the
applicable record date or effective date, if any, or, if no such record date or
effective date is specified, ten Business Days prior to taking such action.
Failure to give the notice or any defect in it shall not affect the legality or
validity or the transaction.
13. Restrictions on Transfer.
(a) The Holder (i) represents that it is an "accredited investor"
within the meaning of the Securities Act and the rules and regulations
promulgated thereunder, (ii) represents that it has received adequate
information about the Company to determine the advisability of a purchase of the
Company's securities, (iii) represents that it is acquiring the Warrants and
will acquire any Warrant Shares for its own account for investment and not with
a view to any distribution or public offering within the meaning of the
Securities Act, except with respect to Warrant Shares, pursuant to the
registration of the offer and sale thereof under the Securities Act, (iv)
acknowledges that the Warrants and any Warrant Shares issuable upon exercise
thereof have not been registered under the Securities Act and (v) agrees that it
will not sell or otherwise transfer any of its Warrants or Warrant Shares except
pursuant to the terms and conditions specified herein and that it will cause any
permitted transferee thereof to agree to take and hold the same subject to the
terms and conditions specified herein (including, without limitation, Section
13(c)).
(b) Except as provided in Section 13(d), each Warrant Certificate and
each certificate for the Warrant Shares issued to the Holder or to a subsequent
transferee thereof pursuant to Section 13(c) shall include a legend in
substantially the following form (with such changes therein as may be
appropriate to reflect whether such legend refers to Warrants or Warrant
Shares); provided, however, that such legend shall not be required if such
transfer is being made in connection with a sale which is exempt from
registration pursuant to Rule 144 under the Securities Act or if the opinion of
counsel referred to in Section 13(c) is to the further effect that neither such
legend nor the restrictions on transfer in this Section 13 are required in order
to ensure compliance with the Securities Act:
THE WARRANTS AND SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAW. SUCH
WARRANTS AND SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED IN AND ARE SUBJECT TO OTHER PROVISIONS OF THE WARRANT
AGREEMENT, DATED AS OF MARCH 2, 2000, BETWEEN THE COMPANY AND CERTAIN
HOLDERS (AS SUCH AGREEMENT MAY BE SUPPLEMENTED, MODIFIED, AMENDED OR
RESTATED FROM TIME TO TIME), A COMPLETE AND CORRECT COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
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17
(c) Prior to (or promptly after, in the case of a transfer to an
Affiliate) any assignment, transfer or sale of any Warrant or any Warrant Shares
(other than a transfer among the Holder and/or its Affiliates), the holder
thereof shall give written notice to the Company of such holder's intention to
effect such assignment, transfer or sale, which notice shall set forth the date
of such proposed assignment, transfer or sale and the identity of the proposed
transferee. Each holder wishing to effect such a transfer of any Warrant or
Warrant Shares shall also furnish to the Company an agreement by the transferee
thereof that it is taking and holding the same subject to the terms and
conditions specified herein and, unless the transferee is an affiliate (as
defined in the Securities Exchange Act of 1934, as amended) of such holder, a
written opinion of such holder's counsel, in form reasonably satisfactory to the
Company, to the effect that the proposed transfer may be effected without
registration under the Securities Act.
(d) The restrictions set forth in this Section 13 shall terminate and
cease to be effective with respect to any Warrants or Warrant Shares the offer
and sale of which are registered under the Securities Act or upon receipt by the
Company of an opinion of counsel knowledgeable as to securities matters, in form
reasonably satisfactory to the Company, to the effect that compliance with such
restrictions is not necessary in order to comply with the Securities Act with
respect to the transfer of the Warrants and the Warrant Shares; provided,
however, that after two years from the date of issuance of any Warrants (or such
shorter period as may be provided by Rule 144(k) promulgated under the
Securities Act), such restrictions shall automatically terminate with respect to
the Holder if not an Affiliate of the Company (without the necessity of any
opinion of counsel) as to such Warrants and as to any Warrant Shares issued in
respect of such Warrants upon exercise of the Conversion Right set forth in
Section 6(b). Whenever such restrictions shall so terminate the holder of such
Warrants and/or Warrant Shares shall be entitled to receive from the Company,
without expense (other than transfer taxes, if any), Warrant Certificates or
certificates for such Warrant Shares not bearing the legend set forth in Section
13(b), at which time the Company will rescind any transfer restrictions relating
thereto.
14. Amendments and Waivers. Any provision of this Agreement may be
amended, supplemented, waived, discharged or terminated by a written instrument
signed by the Company and the holders of not less than a majority of the
outstanding Warrants (or in the case of Section 13, the holders of a majority of
the aggregate outstanding Warrants and Non-Public Warrant Shares, voting as a
single group); provided, however, that (i) this Agreement may not be amended,
supplemented or waived so as to increase the Exercise Price, reduce the number
of Warrant Shares issuable upon exercise of any Warrants, or alter the period
during which any Warrants may be exercised (except to provide for a later
Expiration Date), in each case without the consent of the holders of all
outstanding Warrants, and (ii) this Section 14 may not be amended or
supplemented without the consent of the holders of all outstanding Warrants and
Non-Public Warrant Shares, voting as a single group, and no waiver of the
requirements of this Section 14 shall be binding upon any such holder without
its consent.
15. Specific Performance. The parties agree that irreparable damage
will result in the event that the obligations of each party under this Agreement
are not specifically enforced, and that any damages available at law for a
breach of any such obligations would be inadequate. Therefore, the holders of
the Warrants and/or Non-Public Warrant Shares and the Company shall have the
right to seek specific performance by the Company and the holders of the
Warrants and/or Non-Public Warrant Shares, respectively, of the provisions of
this Agreement, and
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appropriate injunctive relief may be applied for and granted in connection
therewith. The Company and the holders of the Warrants and/or Non-Public
Warrant Shares hereby irrevocably waive, to the extent that each of them
may do so under applicable law, any defense based on the adequacy of a
remedy at law which may be asserted as a bar to the remedy of specific
performance in any action brought against such party for specific
performance of this Agreement. Such remedies and all other remedies
provided for in this Agreement shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which may be
available under this Agreement.
16. Notices. Any notice, request, instruction or other document to be
given under this Agreement after the date hereof by any party hereto to any
other party shall be in writing and shall be deemed to have been duly given on
the date of service if delivered personally or by telecopier with confirmed
receipt, or on the third day after mailing if sent by certified mail, postage
prepaid, at the addresses set forth below:
If to or on the Company, addressed to the Company at the Warrant
Office.
If to or on a Warrant Holder or holder of Warrant Shares, addressed to
such holder as such holder's name and address shall appear on the Warrant
Register or the Common Stock registry of the Company, as the case may be.
17. Binding Effect. This Agreement shall be binding upon and inure to
the sole and exclusive benefit of the Company, its successors and assigns, the
Holders, Affiliates of the Holders and the registered holders from time to time
of the Warrants and the Warrant Shares.
18. Continued Validity. A holder of Warrant Shares shall continue to be
entitled with respect to such Warrant Shares to all rights and subject to all
obligations to which it would have been entitled or subject as a Warrant Holder
under Sections 13 through 20 of this Agreement. Such rights and obligations
shall terminate as to any such holder upon the sale of the Warrant Shares held
by such holder. The Company will, at the time of each exercise of any Warrant,
in whole or in part, upon the request of the holder of the Warrant Shares issued
upon such exercise thereof, acknowledge in writing, in form reasonably
satisfactory to such holder, its continuing obligation to afford to such holder
all such rights; provided, however, that if such holder shall fail to make any
such request, such failure shall not affect the continuing obligation of the
Company to afford to such holder all such rights.
19. Governing Law. This Agreement and each Warrant Certificate shall be
governed by and construed in accordance with the laws, other than choice of law
rules, of the State of New York. The federal and state courts of competent
jurisdiction located in New York County, New York, shall have personal
jurisdiction over the parties to this Agreement, and no action to interpret or
enforce this Agreement shall be instituted in any other jurisdiction. Each party
hereby irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to any suit, action or proceeding arising out
of or relating to this Agreement being brought in the federal or state courts of
competent jurisdiction located in New York County, New York, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
-18-
19
20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company and the registered
holders of the Warrants and the Warrant Shares any legal or equitable right,
remedy or claim under this Agreement.
21. Voting and Consents to be on an As-Converted Basis. Wherever this
Agreement calls for the written consent or vote of any combinations of the
holders of the Warrants or any of the Warrant Shares, voting as a single group,
the Warrants shall be counted as if they had been exercised for Common Stock.
22. Multiple Counterparts. This Agreement may be executed in one or
more counterparts for the convenience of the parties hereto, all of which
together shall constitute one and the same instrument.
23. Entire Agreement. This Agreement contains the entire understanding
of the parties relating to the subject matter contained herein and supersedes
all prior agreements and understandings, written or oral, relating to the
subject matter hereof.
24. Headings; Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the entities or persons referred may require. The headings of
the sections of this Agreement are inserted for convenience only and shall not
constitute a part hereof nor affect in any way the meaning or interpretation of
this Agreement. "Herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section or
other subdivision. All references herein to any action(s) which are to be taken
(or which are prohibited from being taken) by any Person, the Company or any
Subsidiary shall apply to such Person, the Company or such Subsidiary, as the
case may be, whether such action is taken directly or indirectly. All references
herein to actions by the Company or any Subsidiary (including, without
limitation, actions denoted by terms such as "create," "sell," "transfer" or
"dispose of") mean such action whether voluntary or involuntary, by operation of
law or otherwise.
25. Exhibits and Schedules. All exhibits and schedules attached hereto
are incorporated herein by reference.
26. Severability. In the event that any provision contained herein
shall be held to be invalid, illegal or unenforceable for any reason, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
[the next page is the execution page]
-19-
20
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers, as of
the date and year first above written.
COMPANY:
x0x0.XXX INC.
By:
---------------------------------------
Its:
----------------------------------
HOLDER:
eVENTURES GROUP, INC.
By: /s/ XXXXXX XXXXXXXXX
---------------------------------------
Its: Vice President - Business Development
----------------------------------
-20-
21
EXHIBIT A
TO
WARRANT AGREEMENT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SUCH ACT OR LAW. SUCH WARRANTS MAY BE TRANSFERRED ONLY
IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN AND ARE SUBJECT TO OTHER
PROVISIONS OF THE WARRANT AGREEMENT, DATED AS OF MARCH 2, 2000, BETWEEN THE
COMPANY AND CERTAIN HOLDERS (AS SUCH AGREEMENT MAY BE SUPPLEMENTED, MODIFIED,
AMENDED OR RESTATED FROM TIME TO TIME), A COMPLETE AND CORRECT COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
WARRANT CERTIFICATE
March 2, 2000 Certificate No.: W-1
This Warrant Certificate certifies that _____________________ (the
"Holder"), or registered assigns, is the registered holder of ________________
Warrants (the "Warrants") to purchase shares of common stock, par value $0.001
per share ("Common Stock"), of x0x0.xxx Inc., a Delaware corporation (the
"Company"). Each Warrant entitles the holder, but only subject to the conditions
set forth herein and in the Warrant Agreement referred to below, to purchase
from the Company before 5:00 p.m., Dallas time, on the "Expiration Date" as
defined in the Warrant Agreement, one fully paid and nonassessable share of
Common Stock (the "Warrant Shares") to the extent set forth in the Warrant
Agreement, at a price equal to the Exercise Price (as defined in the Warrant
Agreement), payable in lawful money of the United States of America, upon
surrender of this Warrant Certificate, execution of the annexed Form of Election
to Purchase and payment of the Exercise Price at the office of the Company at
000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, or such other address as
the Company may specify in writing to the registered holder of the Warrants
evidenced hereby (the "Warrant Office"). In lieu of exercising Warrants pursuant
to the immediately preceding sentence, the Warrant holder shall have the right
to require the Company to convert the Warrants, in whole or in part and at any
time or times, into Warrant Shares, by surrendering to the Company the Warrant
Certificate evidencing the Warrants to be converted, accompanied by the annexed
Form of Notice of Conversion which has been duly completed and signed. The
Exercise Price and number of Warrant Shares purchasable upon exercise of the
Warrants are subject to adjustment prior to the Expiration Date as set forth in
the Warrant Agreement.
X-0
00
Xx Xxxxxxx may be exercised after the Expiration Date and (except as
otherwise provided in the Warrant Agreement) all rights of the registered
holders of the Warrants shall cease after the Expiration Date.
The Company may deem and treat the registered holder of the Warrants
evidenced hereby as the absolute owner thereof (notwithstanding any notation of
ownership or other writing hereon made by any person), for the purpose of any
exercise hereof and of any distribution to the holder hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Warrant Certificates, when surrendered at the office of the Company at
the above-mentioned address by the registered holder hereof in person or by a
legal representative 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 Warrant Certificate or Warrant
Certificates of like tenor evidencing, in the aggregate, a like number of
Warrants.
Upon due presentment for registration of transfer of this Warrant
Certificate at the office of the Company at the above-mentioned address, a new
Warrant Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued in exchange for this Warrant
Certificate to the transferee(s) and, if less than all the Warrants evidenced
hereby are to be transferred, to the registered holder hereof, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
This Warrant Certificate is one of the Warrant Certificates referred to
in the Warrant Agreement, dated as of March 2, 2000, between the Company and the
Holder (as such Warrant Agreement may be supplemented, modified, amended or
restated from time to time, the "Warrant Agreement"). The 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.
IN WITNESS WHEREOF the Company has caused this Warrant Certificate to
be signed by its duly authorized officer.
x0x0.xxx Inc.
By:
---------------------------------------
Its:
----------------------------------
A-2
23
FORM OF ELECTION TO PURCHASE
(To be executed upon exercise of Warrants)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______________ Warrant
Shares and herewith tenders payment for such Warrant Shares to the order of the
Company in the amount of $ _______________ in accordance with the terms hereof.
The undersigned requests that a certificate for such Warrant Shares be
registered in the name of____________________ whose address is _______________
and that such certificate be delivered to __________________________________
whose address is ___________________________________. If such number of Warrant
Shares is less than all of the Warrant Shares purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of the Warrant Shares be registered in the name of ____________________
whose address is _________________________________ and that such Warrant
Certificate be delivered to ____________________ whose address is ____________.
Signature:
-----------------------------------------------
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant Certificate)
-----------------------------------------------
(Printed Name)
Date:
-----------------------------------------
A-3
24
FORM OF NOTICE OF CONVERSION
(To be executed upon conversion of Warrants)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to convert Warrants represented hereby
into _________ Warrant Shares in accordance with the terms hereof. The
undersigned requests that a certificate for such Warrant Shares be registered in
the name of__________________________________ whose address is
______________________________________ and that such certificate be delivered to
___________________________ whose address is ___________________________________
_________________________________________. If such number of Warrant Shares is
less than all of the Warrant Shares obtainable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
the Warrant Shares be registered in the name of ______________________________
whose address is ___________________________________ and that such Warrant
Certificate be delivered to __________________________________ whose address is
_________________________________ .
Signature:
-----------------------------------------------
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant Certificate)
-----------------------------------------------
(Printed Name)
Date:
-----------------------------------------
A-4
25
EXHIBIT B
TO
WARRANT AGREEMENT
WARRANT REGISTER
Warrant Original Number Number of Names and
Certificate of Warrants and Warrants Addresses of
Number Warrant Shares Expired Warrant Holders
----------- --------------- --------- ---------------
X-x
