EXHIBIT 10.48
NO SALE OR TRANSFER OF THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT
MAY BE MADE UNTIL THE EFFECTIVENESS OF A REGISTRATION STATEMENT OR OF A
POST-EFFECTIVE AMENDMENT THERETO UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), COVERING THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT, OR
UNTIL THE COMPANY IS IN RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT.
WARRANT AGREEMENT
Warrant Agreement (the "AGREEMENT") dated March 1, 2002 between Junum
Incorporated, a Delaware corporation (the "COMPANY"), and KNG Consulting, LLC
("Consultant"), and his permitted assigns (the "HOLDERS").
BACKGROUND INFORMATION
----------------------
WHEREAS, the Company agreed to grant warrants (the "Warrants") to the
Consultant under the terms of that certain Consulting Agreement, with an
Effective Date of January 1, 2002 by and between Consultant and the Company (the
"Consulting Agreement"). Under the terms of the Consulting Agreement, the
Warrants shall entitle the Holders to purchase up to 1,800,000 shares of the
Company's common stock, $0.01 par value ("COMMON STOCK") at any time prior to
the fifth anniversary of the issuance of such Warrants, subject to the vesting
schedule set forth herein. Each Warrant entitles the Holder to purchase one duly
authorized, fully paid and nonassessable share of Common Stock upon exercise
thereof.
WHEREAS, each Holder will be entitled to receive a certificate
representing the Warrant (each a "CERTIFICATE") and shall be dated effective as
of the date of issuance. The shares of Common Stock reserved for issuance under
this Agreement are sometimes hereinafter referred to as the "WARRANT SHARES."
The Warrant Shares shall not be issued under the Company's Consultant
Compensation Plan.
WHEREAS, the Company desires to fix the form and provisions of each
Certificate that will represent one or more issued Warrants, as well as the
terms of the Warrants themselves with respect to issuance, exercise, and
expiration, and the respective rights, limitations, obligations and duties of
the Company and each Holder which will be established upon any such issuance;
and to make each Warrant when represented by a Certificate that has been duly
executed by the Company (or by any substitute or replacement Certificate issued
under the terms set forth below), the valid, binding and legally enforceable
obligation of the Company.
Accordingly, the Company and the Holders hereby agree as follows:
OPERATIVE PROVISIONS
--------------------
1. ISSUANCE. Pursuant to the Consulting Agreement, which is incorporated
herein and made a part hereof by this reference, the Company shall
issue Warrant Certificates to purchase 1,800,000 shares of Common Stock
at an exercise price of $0.17 per share on the date hereof.
2. WARRANT CERTIFICATES. Each Certificate to be delivered pursuant to this
Agreement shall be in the form set forth in Exhibit A (the "WARRANT
CERTIFICATE") which is attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement.
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3. WARRANTS GOVERNED BY AGREEMENT. This Warrant Agreement governs an issue
of up to an aggregate of 1,800,000 Warrants, EACH of which will entitle
its Holder to purchase one Warrant Share on the terms and subject to
the conditions and possible adjustments set forth herein. The Warrants
shall vest as to 50,000 shares on the date hereof, and as to the
remaining 1,750,000 shares, in equal monthly installments of 50,000
shares commencing on April 1, 2002, and may be exercised after such
vesting dates, in whole or in part, from time to time, in accordance
with the terms of this Agreement and the Warrants.
4. EXECUTION AND DATE OF WARRANT CERTIFICATES.
(a) GENERAL. Each Certificate shall be executed on behalf of
the Company by its chief executive officer, its president or any vice
president, under its corporate seal, which will be reproduced thereon,
and attested by its corporate secretary or one of its assistant
secretaries.
(a) DATE OF CERTIFICATE. Each Certificate shall be dated as of
the date of execution by the Company officers described above.
5. OWNERSHIP. The Company shall acknowledge each registered Holder of a
Warrant Certificate as the absolute owner thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), in
connection with its sale, transfer or exercise, any distribution to the
holder thereof and for all other purposes, and, subject to the
provisions of Section 10 below, the Company shall not be affected by
any notice to the contrary.
6. RIGHT TO EXERCISE WARRANTS.
(a) EXPIRATION DATE. Each Warrant shall expire at 5:00 p.m.,
Pacific Standard Time, on March 1, 2007 (the "Expiration Date"), and,
prior thereto, may be exercised at any time after the date hereof,
subject to the vesting schedule set forth above.
(b) EXERCISE PRICE AND PAYMENT. Subject to the provisions of
this Agreement, the Holder shall have the right to purchase from the
Company (and the Company shall issue and sell to such Holder) that
number of fully paid and non-assessable Warrant Shares, at the price of
$0.17 per share (the "EXERCISE PRICE"), as shall be designated in a
completed and executed Election to Purchase form appearing on the
reverse side of each Certificate, and upon surrender to the Company of
the Certificate evidencing each such Warrant being exercised, and
payment of a monetary amount equal to the product of the Exercise Price
and the number of Warrant Shares being purchased (the "Exercise Price
Multiple"). The Exercise Price Multiple may be paid in cash, check, or
by certified or official bank check payable to the order of the
Company, or by "cashless" exercise, as set forth below.
(c) In lieu of exercising the Warrants or any portion thereof,
the Holder or Holders, if applicable, shall have the right to convert
the Warrants, or any portion thereof, into Warrant Shares by executing
and delivering to the Company, at its principal executive office, a
duly executed Election to Purchase Form, specifying the number of
Warrants to be exercised and converted, and accompanied by the
surrender of the Warrant. The person or persons in whose name or names
the certificates for the Warrant Shares shall be issuable upon such
conversion shall be deemed the holder or holders of record of such
Warrant Shares at that time and date. The number of Warrant Shares to
be issued upon such conversion shall be computed using the following
formula:
X = (P)(Y)((A-B)/A)
X = the number of Warrant Shares to be issued to such Holder for the
percentage of Warrants being converted
P = the percentage of the Warrants being converted
Y = the total number of Warrant Shares then issuable upon exercise of
the Warrants
A = the Fair Value (as defined below) of one Warrant Share
B = the Exercise Price on the date of conversion
(d) EASY EXERCISE. In the event the Warrant Shares have been
registered on a then effective registration statement, or if the
Warrant Shares are otherwise not "restricted securities" under the
Securities Act of 1933, as amended, and if permitted by law and
applicable regulations (including Nasdaq and NASD rules), the Holder
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may pay the exercise price through a commitment from the Holder and a
broker-dealer that is a member of the National Association of
Securities Dealers (a "NASD Dealer"), whereby the Holder irrevocably
elects to exercise all or a portion of the Warrant and to sell in an
orderly manner as soon as possible the Warrant Shares issuable pursuant
to such exercise and to pay the Exercise Price Multiple. The Holder and
the NASD Dealer shall irrevocably commit upon sale of such Warrant
Shares to forward the Exercise Price Multiple directly to the Company.
All proceeds of sales of the Warrant Shares shall be assigned to the
Company to secure the obligation to pay the Exercise Price Multiple,
and all such proceeds shall be remitted directly to the Company until
such Exercise Price Multiple has been paid in full.
(e) Within three (3) business days following such surrender of
a Certificate and payment of the Exercise Price Multiple (except in the
case of an "easy exercise" as described in subsection 6(d) above), the
Company shall cause to be issued and delivered promptly to the Holder,
or, upon the written order of the Holder, in such other name as the
Holder may designate, a certificate for the Warrant Shares being
purchased, as evidenced by the Election to Purchase. Such Warrant Share
certificate shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become the
Holder of such Shares as of the date of the surrender of the applicable
Certificate and payment of the Exercise Price Multiple. The Warrants
evidenced by a Certificate shall be exercisable, at the election of the
Holder, either as an entirety or from time to time for only part of the
number of Warrants specified in the Certificate. In the event that less
than all of the Warrants evidenced by a Certificate surrendered upon
the exercise of Warrants are exercised at any time prior to the date of
expiration of the Warrants, a new Certificate shall be issued for the
remaining number of Warrants evidenced by the Certificate so
surrendered. All Certificates surrendered upon exercise of Warrants
shall be canceled by the Company.
(f) NO FRACTIONAL SHARES TO BE ISSUED. No fraction of a Share
shall be issued upon any exercise of Warrants, but, in lieu thereof,
the number of shares issuable upon exercise of the Warrants shall be
rounded up to the nearest full share of Common Stock. No fractional
Warrants shall be issued.
7. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes
attributable to the initial issuance of SHARES upon the exercise of
Warrants; provided that the Company shall not be required to pay any
such taxes which may be payable in respect of any transfer involved in
the issue of any Certificates or any certificates for Shares in a name
other than that of the Holder of a Certificate surrendered upon the
exercise of a Warrant.
8. RESERVATION AND ISSUANCE OF SHARES. The Company will at all times
reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock or its
authorized and issued shares of Common Stock held in its treasury, for
the purpose of enabling it to satisfy any OBLIGATION to issue Warrant
Shares upon exercise of Warrants, the full number of Warrant Shares
deliverable upon the exercise of all outstanding Warrants. Before
taking any action which would cause an adjustment pursuant to Section
10 reducing the Exercise Price below the then par value (if any) of the
Warrant Shares issuable upon exercise of the Warrants, the Company will
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
paid and non-assessable Warrant Shares at the Exercise Price as so
adjusted. The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will be validly issued, fully paid and
non-assessable outstanding Warrant Shares of the Company or any
successor.
9. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any Certificate
shall be mutilated, lost, stolen or destroyed, the COMPANY shall issue
in exchange and substitution for and upon cancellation of the mutilated
Certificate, or in lieu of and substitution for the Certificate lost,
stolen or destroyed, a new Certificate, of the same series and
representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction
of such Certificate and indemnity, if requested, also satisfactory to
it. Applicants for such substitute Certificates shall also comply with
such other reasonable regulations and pay such other reasonable charges
as the Company may prescribe.
10. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE. The
Exercise Price and the number of Warrant SHARES purchasable upon the
exercise of each Warrant are subject to adjustment from time to time as
set forth in this Section 10.
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(a) DECREASE OR INCREASE IN EXERCISE PRICE UPON SUBDIVISION OR
COMBINATION. If the Company shall at any time subdivide or combine the
outstanding shares of its Common Stock, the Exercise Price in effect
immediately prior to such subdivision or combination shall be
proportionately increased in the case of a combination or decreased in
the case of a subdivision, effective at the close of business on the
date of such subdivision or combination, as the case may be.
(b) ADJUSTMENT IN NUMBER OF SHARES UPON CHANGE OF EXERCISE
PRICE. Upon each adjustment of the Exercise Price pursuant to Section
10.a hereof, each Holder shall thereafter (until another such
adjustment) be entitled to purchase, at the adjusted Exercise Price,
the number of shares of Common Stock, calculated to the nearest full
share, obtained by multiplying the number of shares of Common Stock
purchasable hereunder immediately prior to such adjustment by the
Exercise Price in effect immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
(c) MERGER. If the Company, at any time while any Warrants
remain outstanding and unexpired, consolidates with or merges into or
with any other corporation, the Warrants shall thereafter evidence the
right of the Holder to purchase the number and kind of securities in
respect of the surviving corporation as would have been issuable or
distributable to the Holder had he, she or it exercised the unexercised
portion of the Warrants immediately prior to such consolidation or
merger.
(d) DISTRIBUTION OF COMPANY ASSETS. If the Company shall make
any distribution of its assets to the holders of its Common Stock as a
partial or complete liquidating dividend, a return of capital or
otherwise, each Holder shall be entitled, after occurrence of the
record date for determining shareholders entitled to such distribution,
but before the date of such distribution, to exercise any Warrants then
owned and purchase any or all of the shares of Common Stock then
subject hereto, and thereupon to receive the amount of such assets (or
at the option of the Company a sum equal to the value thereof at the
time of such distribution to holders of Common Stock as such value is
determined in good faith by the Company's Board of Directors) which
would have been payable to such Holder had he, she or it been the
holder of record of such shares of Common Stock on the referenced
record date.
11. TRANSFER RESTRICTIONS. The Holder acknowledges that neither this
Warrant nor the Warrant Shares may be offered or sold except pursuant
to an effective registration statement under the Securities Act or a
written opinion of counsel satisfactory to the Company that an
exemption from registration under the Securities Act is available. Each
Holder agrees that prior to making any disposition of the Warrant or
Warrant Shares, unless a registration statement under the Securities
Act is in effect with regard thereto, the Holder shall give written
notice to the Company describing briefly the manner in which any such
proposed disposition is to be made, along with an opinion of counsel
satisfactory to the Company which provides that no registration
statement or other notification or post-effective amendment thereto
(hereinafter collectively a "REGISTRATION STATEMENT") under the
Securities Act is required with respect to such disposition.
12. TRANSFER - GENERAL. Subject to the terms hereof, the Warrants shall be
transferable only on the books of the Company MAINTAINED at its
principal office upon delivery thereof duly endorsed by the Holder or
by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In
all cases of transfer by an attorney, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and may be
required to be deposited and to remain with the Company in its
discretion. Upon any registration of transfer, the person to whom such
transfer is made shall receive a new Warrant or Warrants as to the
portion of the Warrant transferred, and the Holder of such Warrant
shall be entitled to receive a new Warrant or Warrants from the Company
as to the portion thereof retained. The Company may require the payment
of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any such transfer.
13. PIGGYBACK REGISTRATION RIGHTS.
(a) In case the Company shall at any time determine to
register any of its securities under the Securities Act, other than by
way of Securities and Exchange Commission (the "COMMISSION") Forms S-4
or S-8, or any successor form thereto, or to qualify such securities
under the securities laws of any state, at its own initiative, the
Company will give prompt notice thereof to the Holder, and if so
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requested in writing by any person to which such notice shall have been
properly provided, the Company will include among the securities which
it then endeavors to make the subject of a registration statement to be
filed under the Securities Act, or to qualify under such state
securities laws, all or any part of such previously issued shares, or
of the shares then eligible for issuance upon exercise of the Warrants
as shall be specified in such request (the "DESIGNATED SHARES"), and
the Company will use its best efforts to cause all such registrations,
qualifications or compliances to be effected and to be kept effective
for not less than 90 days.
(b) Notwithstanding the foregoing, if at any time after the
date hereof the Company files a registration statement with respect to
any of its securities in connection with a bona fide underwritten
public offering of the same, then (a) any Designated Shares which shall
have been made the subject of a registration statement filed for the
purpose of qualifying shares under the Securities Act for future sale
or which are, in connection with such a registration, being or to be
included pursuant to Section 13, shall, if so requested by the managing
underwriter(s) and consented to by each applicable holder of Designated
Shares, be offered for sale through the underwriters on the same terms
and conditions under which the Company's securities are to be
distributed, PROVIDED that if the managing underwriter(s) elect to
include less than all Designated Shares to be offered by selling
shareholders, those to be included in the underwritten portion of the
offering shall be, as to each holder thereof, as nearly equal in number
as is practicable; and (b) those Designated Shares which are not being
distributed by the underwriters in such public offering shall be
withheld from the market by the selling shareholders for a period, not
to exceed 180 days, measured from the effective date of the
registration statement by which such public offering is being effected,
which the managing underwriter(s) determine necessary in order to
stabilize the market for the underwritten shares. Notwithstanding the
foregoing, in the event in the written opinion of such managing
underwriter(s), the Designated Shares may not be included in the
registration statement without having a material adverse effect on the
Company's offering of it securities, the managing underwriter(s) shall
have the right to eliminate or reduce the number of Designated Shares
proportionately among the Holders.
(c) All expenses incurred in connection with any registration,
qualification or compliance effected by the Company pursuant to Section
13, including, without limitation, all registration and filing fees,
fees and expenses of complying with federal and state securities laws,
printing expenses, fees and disbursements of counsel for the Company,
and all expenses of any special audits incidental to or required by
such registration (collectively, the "REGISTRATION EXPENSES") shall be
borne by the Company, provided that each holder of Designated Shares
shall be responsible for that portion of any underwriting commission
incurred in connection with the underwritten distribution of the
securities made the subject of such registration effort as shall bear
the same ratio to such commission as the value of the Designated Shares
sold by the holder in the offering bears to the value of all Company
securities sold in such offering.
(d) INDEMNIFICATION BY THE COMPANY: In case of each
registration, qualification or compliance effected by the Company
pursuant to Section 13, the Company will indemnify and hold harmless
each holder of Designated Shares from and against all claims, losses,
damages and liabilities of such holder arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus or other document incident to such
registration, qualification or compliance or any omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or the Exchange Act
applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification
or compliance; provided that the Company will not be liable to any such
person to the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by an instrument duly
executed by such person and stated to be specifically for use therein.
(e) INDEMNIFICATION BY THE HOLDERS. Each Holder hereby agrees,
and by requesting registration of Designated Shares, each Holder
agrees, that in connection with each registration statement effected
pursuant hereto in which Common Stock issued upon exercise of all or
any portion of the Warrants (the "Holder Common Stock") is to be
disposed of, each of the participating Holders shall, severally but not
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jointly, indemnify and hold harmless, to the fullest extent permitted
by law, the Company, each other selling Holder and their respective
directors, officers, agents and employees and each person who controls
the Company and each other selling Holder (within the meaning of the
Securities Act and the Exchange Act) and the managing underwriter if
any, and its directors, officers, agents, and employees and each person
who controls such underwriter (within the meaning of the Securities Act
and Exchange Act), in each case against any losses, claims, damages,
liabilities and expenses resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated
in such registration statement or prospectus or preliminary prospectus
or necessary to make the statements therein not misleading, to the
extent that such untrue statement or omission is contained in any
information furnished by such Holder to the Company expressly for
inclusion in such registration statement or prospectus; provided that
each Holder will not be liable to the Company to the extent that any
such claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information furnished
to a Holder by an instrument duly executed by the Company and stated to
be specifically for use therein.
(f) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder shall give prompt notice to the
indemnifying party of any claim with respect to which it shall seek
indemnification and shall permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the
indemnified party; PROVIDED, however, that any person entitled to
indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person
unless (i) the indemnifying party shall have agreed to pay such fees or
expenses, or (ii) the indemnifying party shall have failed to assume
the defense of such claim and to employ counsel reasonably satisfactory
to such person or (iii) such assumption would constitute an actual
conflict of interest (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ
separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person). If such defense is not assumed by
the indemnifying party, the indemnifying party shall not be subject to
any liability for any settlement made without its consent (but such
consent shall not be unreasonably withheld). No indemnified party shall
be required to consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a
written release in form and substance reasonably satisfactory to such
indemnified party from all liability in respect of such claim or
litigation. An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one firm of counsel (and, if necessary,
local counsel) for all parties indemnified by such indemnifying party
with respect to such claim, unless a conflict of interest as to the
subject matter exists between such indemnified party and another
indemnified party with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of
additional counsel for such indemnified party.
(g) CONTRIBUTION. If for any reason the indemnification
provided for herein is unavailable to an indemnified party or is
insufficient to hold it harmless as contemplated hereby, then the
indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant
equitable considerations, provided that in no event shall the liability
of any Holder for such contribution and indemnification exceed, in the
aggregate, the dollar amount of the proceeds received or to be received
by such Holder upon the sale of securities giving rise to such
indemnification and contribution obligation.
(h) The Company may require each selling Holder to furnish to
the Company such information and documents regarding such selling
Holder and the distribution of such securities as the Company may from
time to time reasonably request in writing in order to comply with the
Securities Act.
(i) Each of the selling Holders agrees that, upon receipt of
any notice from the Company of the happening of any event which would
cause any then effective registration statement to be inaccurate, no
longer effective, subject to a stop order issued by the Securities and
Exchange Commission, or which would otherwise require by law or
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regulation that such selling Holders to discontinue sales of securities
under such registration statement, it will forthwith discontinue
disposition pursuant to such registration statement of any shares of
Common Stock covered by such registration statement or prospectus until
its receipt of the copies of a supplemented or amended prospectus
relating to such registration statement or prospectus or until it is
advised in writing by the Company that the use of the applicable
prospectus may be resumed and, if so directed by the Company, will
deliver to the Company all copies, other than permanent file copies
then in their possession, of the prospectus covering such securities in
effect at the time of receipt of such notice.
(j) The obligations of the Company to use its reasonable
efforts to cause the Holder Common Stock to be registered under the
Securities Act are subject to each of the following limitations,
conditions and qualifications:
(i) The Company shall be entitled to abandon,
discontinue, withdraw or postpone for any period of time the
filing or effectiveness of, or suspend the rights of selling
Holders to make sales pursuant to, any registration statement
otherwise required to be prepared, filed and made and kept
effective by it hereunder if the Board of Directors of the
Company reasonably determines in good faith that (i) there is
a material undisclosed development in the business or affairs
of the Company (including any pending or proposed financing,
recapitalization, acquisition or disposition), the disclosure
of which at such time would be adverse to the Company's
interests or (ii) such filing or effectiveness would be
disadvantageous to the Company or its shareholders.
(ii) The Company's obligations shall be subject to
the obligations of the selling Holders, which each of the
Holders hereby acknowledges, to furnish all information and
materials and to take any and all actions as may be required
under applicable federal and state securities laws and
regulations to permit the Company to comply with all
applicable requirements of the SEC and state securities
regulations and to obtain any acceleration of the effective
date of such registration statement or maintain the
effectiveness or currency thereof.
(iii) If requested by an underwriter in an
underwritten offering, each Holder agrees not to effect any
public sale or distribution, including any sale pursuant to
Rule 144 under the Securities Act, of any Common Stock within
30 days before or 60 days after the effective date of a
registration statement filed pursuant to Section 13.
14. MISCELLANEOUS PROVISIONS.
(a) LIMITATION OF RIGHTS CONFERRED. This Warrant Agreement
does not confer upon any Holder of a Warrant Certificate any right as a
shareholder of the Company, nor shall anything contained herein be
deemed to affect the right or power of the Company to make adjustments,
reclassifications, reorganizations other changes in and to its capital
stock or business organization or to limit its right to merge or
consolidate or to sell, transfer or liquidate all or any part of its
business or assets.
(b) NOTICES: All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as properly given or made if hand delivered,
mailed from within the United States by certified or registered mail,
or sent by prepaid telegram:
If to the Company:
Junum Incorporated
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Tel: (000) 000-0000
Fax: (000) 000-0000
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If to a Holder, in care of the address set forth in
the Company's records established at the time of the
Holder's receipt of a Certificate, or to such other
address as any such party may have designated by like
notice forwarded to the other party hereto.
Notwithstanding the foregoing, notices of change of
address shall be furnished only when received.
(c) GOVERNING LAW. This Agreement and the rights and
obligations of the parties under this Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State
of California, without regard to the principles of conflicts of laws
thereof. In the event of litigation, the prevailing party shall be
entitled to reasonable attorneys fees and costs.
WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR FOR
ANY COUNTERCLAIM THEREIN.
(d) SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Agreement in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make
any other provisions in regard to matters or questions arising
hereunder which the Company may deem necessary or desirable and which
shall not be inconsistent with the provisions of the Warrants and which
shall not adversely affect the interests of the Holders.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Company and the Holders and their
respective successors and assigns.
(f) MERGER OR CONSOLIDATION OF THE COMPANY. So long as the
Warrant remains outstanding, the Company will not merge or consolidate
with or into, or sell, transfer or lease all or substantially all of
its property to, any other corporation unless the successor or
purchasing corporation, as the case may be (if not the Company), shall
expressly assume, by supplemental agreement, the due and punctual
performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Company.
(g) BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to confer upon any person other than the Company and
the Holders any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive
benefit of the Company and the Holders.
(h) CAPTIONS. The captions of the Sections of this Agreement
have been inserted for convenience only and shall have no substantive
effect.
(i) COUNTERPARTS. This Agreement may be executed in any number
of counterparts (including by telecopy) each of which when so executed
shall be deemed to be an original; and all of which counterparts
together shall constitute one and the same instrument.
(j) LIMITATION OF LIABILITY. No provision hereof, in the
absence of affirmative action by any Holder to purchase shares of
Common Stock, and no enumeration herein of the rights or privileges of
any Holder of a Warrant, shall give rise to any liability of such
Holder for the purchase price of any Common Stock or as a shareholder
of the Company, whether such liability is asserted by the Company or by
the creditors of the Company.
(k) NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of any Holder or the Company, any
right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise or any right, remedy,
power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
(l) COMPLIANCE WITH GOVERNMENTAL REGULATIONS. The Holder
acknowledges that none of the Warrants or Warrant Shares have been
registered under the Securities Act, and therefore may be sold or
disposed of only pursuant to an effective registration statement under
the Securities Act, or an exemption from such registration, and in
accordance with this Agreement. The Warrant Shares will bear a legend
to the following effect:
8
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR WITH THE SECURITIES
COMMISSION OF ANY STATE UNDER ANY APPLICABLE STATE SECURITIES
OR BLUE SKY LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THOSE SECURITIES LAWS AND UPON
PROVISION OF AN OPINION OF COUNSEL IN FORM SATISFACTORY TO THE
COMPANY."
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
JUNUM INCORPORATED
By: /S/ Xxxxx X. Xxxxxxx
---------------------
Xxxxx X. Xxxxxxx, CEO
XXXX XXXXXXXXX
/S/ Xxxx Xxxxxxxxx
------------------
Xxxx Xxxxxxxxx
9
EXHIBIT A
FORM OF WARRANT CERTIFICATE
---------------------------
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR WITH
THE SECURITIES COMMISSION OF ANY STATE UNDER ANY APPLICABLE STATE SECURITIES OR
BLUE SKY LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THOSE SECURITIES LAWS
AND UPON PROVISION OF AN OPINION OF COUNSEL IN FORM SATISFACTORY TO THE COMPANY.
CERTIFICATE REPRESENTING
COMMON STOCK PURCHASE WARRANTS
For the purchase of Common Stock, Par Value $.01 per share, of
JUNUM INCORPORATED
1,800,000 WARRANTS
------------------------------
THIS CERTIFIES THAT, for value received, KNG Consulting, LLC, the
registered holder of this Common Stock Purchase Warrant (the "Warrant") or
permitted assigns (the "Holder"), is entitled to purchase from Junum
Incorporated, a Delaware corporation (the "Company"), at any time and from time
to time (but subject to the vesting schedule set forth in the Warrant Agreement,
as defined below) until 5:00 p.m. Pacific Time on March 1, 2007, (the
"Expiration Date"), up to 1,800,000 fully paid and nonassessable shares of the
common stock of the Company, $0.01 par value per share (the "Shares") at a price
per share of $0.17 (the "Exercise Price"). The number of shares purchasable upon
exercise of this Warrant and the Purchase Price per share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement referred to
below.
This Warrant is issued under and in accordance with a Warrant
Agreement, dated as of March 1, 2002, between the Company and the Holder (the
"Warrant Agreement") and is subject to the terms and provisions contained in the
Warrant Agreement, all of which are incorporated herein by reference. A copy of
the Warrant Agreement may be obtained for inspection by the Holder hereof upon
written request to the Company.
The Warrants represented by this Certificate may be exercised by the
Holder as to all or any lesser number of Shares upon surrender of this
Certificate, together with a completed and executed Election to Purchase in the
form attaching to this Certificate, on or before the date above designated, at
the principal office of the Company (or at such other address as is designated
in writing by the Company); and upon payment, by cashless exercise, or by cash,
check or cashier's check, payable to the Company, of a sum equal to the product
of the Exercise Price multiplied by the number of Shares being purchased;
provided, that no fractional share shall be issuable upon any such exercise and
the Company shall issue one full share in lieu of any fractional share. If this
Certificate shall be exercised with respect to less than all of the Shares, the
Holder shall be entitled to receive a new Certificate covering the number of
Shares with respect to which this Certificate shall not have been exercised (if
such shares are then purchasable hereunder).
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This Certificate is issued subject to the condition, and the Holder, by
accepting the same, agrees with every subsequent holder and with the Company
that title hereto and all rights hereunder shall be transferable (subject to the
provisions of the Warrant Agreement) only by delivery of this Certificate to the
Company, together with the assignment form attached hereto completed and duly
executed by the Holder; and that the Company and all persons dealing with this
Certificate may treat the registered owner hereof as its absolute owner for all
purposes, until notified in writing by such owner of a transfer.
JUNUM INCORPORATED
By:
-------------------------------
Xxxxx X. Xxxxxxx, CEO
DATED: As of March 1, 2002
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ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase ________________ Shares and herewith
tenders in payment for such Shares cash, check or a certified or official bank
check, payable to the order of Junum Incorporated, in the amount of
$____________________, all in accordance with the terms hereof. The undersigned
requests that a certificate of such Shares be registered in the name of
_____________________whose address is
________________________________________and that such certificate be delivered
to _________________ whose address is
___________________________________________________________. If the number of
Shares being acquired is less than all purchasable hereunder, the undersigned
requests that a new Certificate representing the remaining balance of the
Warrants be registered in the name of and delivered to __________
___________whose address is
____________________________________________________.
Dated: Signature:
------------------------------ --------------------------
(Insert Social Security or Other (Signature must conform in all
Identifying Number of Holder) respects to name of holder as
specified on the face of the Warrant
Certificate)
--------------------------------- ------------------------------------
(Printed Name)
ASSIGNMENT
(To be executed if Holder desires to
transfer the Warrant Certificate)
For Value Received, the undersigned hereby sells, assigns and transfers to
(please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and hereby irrevocably constitutes and appoints
_________________________________________________________ as attorney-in-fact to
transfer the same on the books of the Company, with full power of substitution.
Dated: Signature:
----------------------------- --------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate)
--------------------------------- ------------------------------------
(Insert Social Security or Other (Printed Name)
Identifying Number of Holder)
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