WARRANT NO. ____
WARRANT FOR PURCHASE OF COMMON STOCK
THIS WARRANT AND THE COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR
ANY STATE OR OTHER JURISDICTIONS SECURITIES LAW. NEITHER THIS
WARRANT NOR THE COMMON STOCK PURCHASABLE HEREUNDER MAY BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES
UNDER SUCH ACT AND ANY APPLICABLE STATE OR OTHER JURISDICTION
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
xxxxxxxx.xxx, Inc.
Purchase Warrant for
Common Stock
THIS INSTRUMENT certifies that, FOR VALUE RECEIVED, E&C Capital Partners,
LLLP, a Florida limited liability limited partnership, with a business address
of ___________________________ Florida (the "Holder"), or its registered
assigns, is entitled, subject to the terms and conditions set forth in this
Warrant for Purchase of Common Stock (this "Warrant"), to purchase from
xxxxxxxx.xxx, Inc., a Delaware corporation (the "Company" or the "Corporation"),
Three Million Three Hundred Thirty Three Thousand Three Hundred and Thirty Three
(3,333,333) shares of Common Stock, $.001 par value, of the Company (the
"Shares"), commencing immediately, and ending at 5:00 p.m., New York time, March
___, 2013, for a purchase price of twelve and one-half cents ($.125) per Share
(the "Exercise Price"), such number of Shares and Exercise Price being subject
to adjustment from time to time as set forth in Sections 3 and 4 below.
This Warrant is subject to the following provisions, terms and conditions:
SECTION 1. Warrant Exercise. This Warrant may be exercised by the holder
hereof, in whole or in part, by the presentation and surrender of this Warrant
with the form of the Purchase Form attached hereto as SCHEDULE A duly executed,
at the principal office of the Company, and upon payment to the Company of the
applicable Warrant Exercise Price in cash or by cashier's check. The Shares so
purchased shall be deemed to be issued to the holder hereof as the record owner
of such Shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such Shares. Upon the exercise
of this Warrant, the issuance of certificates for Shares shall be made forthwith
without charge to the holder hereof including, without limitation, any tax which
may be payable in respect of the issuance thereof, and such certificates shall
be issued in the name of, or in such names as may be directed by, the
holder hereof; 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
and delivery of any such certificates in a name other than that of the holder
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. Upon any partial
exercise of this Warrant, there shall be countersigned and issued to the holder
hereof a new Warrant in respect of the Shares as to which this Warrant shall not
have been exercised.
SECTION 2. Reservation of Shares. The Company covenants and agrees:
(i) That all Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue thereof;
and
(ii) That during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized, and
reserved for the purpose of issue and delivery upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant.
SECTION 3. Adjustment of the Warrant Exercise Price.
a. Adjustments for Subdivision, Dividends, Combinations or
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Consolidations of Common Stock.
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(i) If the Corporation shall at any time or from
time to time after the date that this Warrant is issued (the "Original
Issue Date") effect a combination or consolidation of the outstanding
Common Stock, by reclassification or otherwise, into a lesser number
of shares of Common Stock, the Exercise Price in effect immediately
prior to such combination or consolidation shall, concurrently with
the effectiveness of such combination or consolidation, be
proportionately increased.
(ii) In the event the Corporation shall declare or
pay any dividend on the Common Stock payable in Common Stock or in the
event the outstanding shares of Common Stock shall be subdivided, by
reclassification or otherwise than by payment of a dividend in Common
Stock, into a greater number of shares of Common Stock, the Exercise
Price in effect immediately prior to such dividend or subdivision
shall be proportionately decreased.
a. in the case of any such dividend, immediately
after the close of business on the record date for the determination of
holders of any class of securities entitled to receive such dividend, or
b. in the case of any such subdivision, at the
close of business on the date immediately prior to the date upon which such
corporate action becomes effective.
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If such record date shall have been fixed and such dividend
shall not have been fully paid on the date fixed therefor, the adjustment
previously made in the applicable Exercise Price that became effective on
such record date shall be canceled as of the close of business on such
record date, and thereafter the applicable Exercise Price shall be adjusted
as of the time of actual payment of such dividend.
b. Adjustment for Other Dividends and Distributions. If the
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Corporation at any time or from time to time after the Original Issue Date
makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, in each
such event provision shall be made so that the holder of the Warrant shall
receive upon Exercise thereof, in addition to the number of shares of
Common Stock receivable thereupon, the amount of other securities of the
Corporation that it would have received had its Warrant been exercised for
Common Stock on the date of such event and had it thereafter, during the
period from the date of such event to and including the exercise date,
retained such securities receivable by them as aforesaid during such
period, subject to all other adjustments called for during such period
under this Section 3 with respect to the rights of the holder of the
Warrant or with respect to such other securities by their terms.
c. Adjustment for Reclassification, Exchange and Substitution. If
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at any time or from time to time after the Original Issue Date, the Common
Stock issuable upon the exercise of the Warrant is changed into the same or
a different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision
or combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 3),
in any such event the holder of this Warrant shall have the right
thereafter to exercise this Warrant for the kind and amount of stock and
other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number of shares
of Common Stock into which this Warrant could have been exercised
immediately prior to such recapitalization, reclassification or change, all
subject to further adjustment as provided herein or with respect to such
other securities or property by the terms thereof.
d. Sale of Shares Below Exercise Price.
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(i) If at any time or from time to time the Corporation
issues or sells, or is deemed by the express provisions of this subsection
(i) to have issued or sold, Additional Shares of Common Stock (as defined
herein), other than as provided in Sections 3.a through 3.c above, for an
Effective Price (as defined herein) less than the then effective Exercise
Price, then and in each such case the then existing Exercise Price shall be
reduced as of the opening of business on the date of such issue or sale, to
a price determined by multiplying the Exercise Price by a fraction (i) the
numerator of which shall be (A) the number of
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shares of Common Stock Deemed Outstanding (as defined herein) immediately
prior to such issue or sale, plus (B) the number of shares of Common Stock
that the Aggregate Consideration Received (as defined herein) by the
Corporation for the total number of Additional Shares of Common Stock so
issued could purchase at such Exercise Price, and (ii) the denominator of
which shall be the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale plus the total number of Additional
Shares of Common Stock so issued. For the purposes of this paragraph, the
number of shares of Common Stock Deemed Outstanding as of a given date
shall be the sum of (A) the number of shares of Common Stock actually
"Outstanding," (B) the number of shares of Common Stock into which then
outstanding Warrants could be exercised if fully exercised on the day
immediately preceding the given date, and (C) the number of shares of
Common Stock which could be obtained through the exercise or conversion of
all other rights, options and convertible securities on the day immediately
preceding the given date.
(ii) For the purpose of making any adjustment required under
this Section 3.d, the consideration received by the Corporation from any
issue or sale of securities shall (A) to the extent it consists of cash, be
computed at the net amount of cash received by the Corporation after
deduction of any underwriting or similar commissions, compensation or
concessions paid or allowed by the Corporation in connection with such
issue or sale but without deduction of any expenses payable by the
Corporation, (B) to the extent it consists of property other than cash, be
computed at the fair value of that property as determined in good faith by
the Board, and (C) if Additional Shares of Common Stock, Convertible
Securities (as defined herein) or rights or options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued or
sold together with other stock or securities or other assets of the
Corporation for a consideration that covers both, be computed as the
portion of the consideration so received that may be reasonably determined
in good faith by the Board to be allocable to such Additional Shares of
Common Stock, Convertible Securities or rights or options.
(iii) For the purpose of the adjustment required under this
Section 3.d, if the Corporation issues or sells any rights or options for
the purchase of, stock or other securities convertible into, Additional
Shares of Common Stock (such convertible stock or securities being herein
referred to as "Convertible Securities") and if the Effective Price of such
Additional Shares of Common Stock is less than the Exercise Price, in each
case the Corporation shall be deemed to have issued at the time of the
issuance of such rights or options or Convertible Securities the maximum
number of Additional Shares of Common Stock issuable upon exercise or
conversion thereof and to have received as consideration for the issuance
of such shares an amount equal to the total amount of the consideration, if
any, received by the Corporation for the issuance of such rights or options
or Convertible Securities, plus, in the case of such rights or options, the
minimum amounts of consideration, if any, payable to the Corporation upon
the exercise of such rights or options, plus, in the case of
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Convertible Securities, the minimum amounts of consideration, if any,
payable to the Corporation (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion
thereof, provided that, if in the case of Convertible Securities the
minimum amounts of such consideration cannot be ascertained but are a
function of antidilution or similar protective clauses, the Corporation
shall be deemed to have received the minimum amounts of consideration
without reference to such clauses; provided further, that, if the minimum
amount of consideration payable to the Corporation upon the exercise or
conversion of rights, options or Convertible Securities is reduced over
time or on the occurrence or non-occurrence of specified events other than
by reason of antidilution adjustments, the Effective Price shall be
recalculated using the figure to which such minimum amount of consideration
is reduced; provided further, that, if the minimum amount of consideration
payable to the Corporation upon the exercise or conversion of such rights,
options or Convertible Securities is subsequently increased, the Effective
Price shall be again recalculated using the increased minimum amount of
consideration payable to the Corporation upon the exercise or conversion of
such rights, options or Convertible Securities. No further adjustment of
the Exercise Price, as adjusted upon the issuance of such rights, options
or Convertible Securities, shall be made as a result of the actual issuance
of Additional Shares of Common Stock on the exercise of any such rights or
options or the conversion of any such Convertible Securities. If any such
rights or options or the conversion privilege represented by any such
Convertible Securities shall expire without having been exercised, the
Exercise Price as adjusted upon the issuance of such rights, options or
Convertible Securities shall be readjusted to the Exercise Price which
would have been in effect had an adjustment been made on the basis that the
only Additional Shares of Common Stock so issued were the Additional Shares
of Common Stock, if any, actually issued or sold on the exercise of such
rights or options or rights of conversion of such Convertible Securities,
and such Additional Shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Corporation upon such exercise,
plus the consideration, if any, actually received by the Corporation for
the granting of all such rights or options, whether or not exercised, plus
the consideration received for issuing or selling the Convertible
Securities actually converted, plus the consideration, if any, actually
received by the Corporation (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion of
such Convertible Securities, provide Securities, provided that such
readjustment shall not apply to prior exercises of the Warrant.
(iv) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Corporation or deemed to be issued
pursuant to this Section 3.d, whether or not subsequently reacquired or
retired by the Corporation, other than (A) shares of Common Stock issued
upon exercise of the Warrant; (B) shares of Common Stock and/or options,
warrants or other Common Stock purchase rights, and the Common Stock issued
pursuant to such options, warrants or other rights (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like)
issued or to be issued to
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employees, officers or directors of, or consultants or advisors to, the
Corporation or any subsidiary pursuant to stock purchase or stock option
plans or other arrangements that are approved by the Board; (C) shares of
Common Stock issued pursuant to the exercise or conversion, as applicable,
of options, warrants or convertible securities outstanding as of the
Original Issue Date and (D) shares of Common Stock issued in a Qualified
Offering. The "Effective Price" of Additional Shares of Common Stock shall
mean the quotient determined by dividing the total number of Additional
Shares of Common Stock issued or sold, or deemed to have been issued or
sold by the Corporation under this Section 3.d, into the aggregate
consideration received, or deemed to have been received by the Corporation
for such issue under this Section 3.d, for such Additional Shares of Common
Stock. The term "Qualified Offering" shall mean the closing of a firm
commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of Common Stock (whether for the account of the
Corporation or for the account of one or more stockholders of the
Corporation) to the public at an aggregate offering price of not less than
fifteen million dollars ($15,000,000).
e. Certificate as to Adjustments. Upon the occurrence of
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each adjustment or readjustment of the Exercise Prices pursuant to this
Section 3, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish
to each holder of a Warrant, a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at
any time of any holder of a Warrant, furnish or cause to be furnished to
such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Exercise Prices at the time in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the exercise of the
Warrant.
SECTION 4. Adjustments of Number of Shares Issuable Upon Exercise. Upon
each adjustment of the Exercise Price pursuant to Section 3 hereof, the holder
of this Warrant shall thereafter (until another such adjustment) be entitled to
purchase, at the adjusted Exercise Price in effect on the date purchase rights
under this Warrant are exercised, the number of Shares of Common Stock,
calculated to the nearest number of shares, determined by (a) multiplying the
number of Shares of Common Stock purchasable hereunder immediately prior to the
adjustment of the Exercise Price by the Exercise Price in effect immediately
prior to such adjustment, and (b) dividing the product so obtained by the
adjusted Exercise Price in effect on the date of such exercise.
SECTION 5. Fractional Interests. If any fraction of a Share is issuable on
the exercise of this Warrant, the Company shall be required to and shall issue
such fractional Share on the exercise of this Warrant.
SECTION 6. No Rights as Shareholder. Nothing contained in this Warrant
shall be construed as conferring upon the Holder or his transferees any rights
as a shareholder of the Company.
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SECTION 7. Successors. All the covenants and provisions of this Warrant by
or for the benefit of the Company or the Holder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 8. Applicable Law. This Warrant shall be deemed to be a contract
made under and construed in accordance with the laws of the State of Delaware.
SECTION 9. Benefits. This Warrant shall not be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or claim under this Warrant, and this Warrant shall be
for the sole and exclusive benefit of the Company and the Holder.
SECTION 10. Transferability. No transfer of this Warrant shall be effective
unless and until registered on the books of the Company maintained for such
purpose, and the Company may treat the registered holder as the absolute owner
of this Warrant for all purposes and the person entitled to exercise the rights
represented hereby. No such transfer of this Warrant shall be effective unless
prior to any transfer or attempted transfer of Warrant, or any interest herein,
the Holder shall give the Company written notice of his or its intention to make
such transfer, describing the manner of the intended transfer and the proposed
transferee. Promptly after receiving such written notice, the Company shall
present copies thereof to counsel for the Company and to any special counsel
designated by the Holder. If in the opinion of each of such counsel the
proposed transfer may be effected without registration of either the Warrant or
the Common Stock purchasable hereunder under applicable federal or state
securities laws (or other applicable jurisdiction's law), the Company, as
promptly as practicable, shall notify the Holder of such opinions, whereupon
this Warrant (or the interests therein) proposed to be transferred shall be
transferred in accordance with the terms of said notice. The Company shall not
be required to effect any such transfer prior to the receipt of such favorable
opinion(s); provided, however, the Company may waive the requirement that Xxxxxx
obtain an opinion of counsel, in its sole and absolute discretion. As a
condition to such favorable opinion, counsel for the Company may require an
investment letter to be executed by the proposed transferee. Any transferee of
this Warrant, by acceptance hereof, agrees to be bound by all of the terms and
conditions of this Warrant.
SECTION 11. Investment Representation and Legend. Each Holder by acceptance
of this Warrant represents and warrants to the Company that the Holder is
acquiring this Warrant, and unless at the time of exercise a registration
statement under the Securities Act of 1933, as amended, is effective with
respect to the Shares, that upon the exercise hereof the Holder will acquire the
Shares issuable upon such exercise, for investment purposes only and not with a
view towards the resale or other distribution thereof.
The Holder by acceptance of this Warrant agrees that the Company may affix,
unless the Shares issuable upon exercise of this Warrant are registered at the
time of exercise, the following legend to certificates for Shares upon the
exercise of this Warrant:
The securities represented by this certificate have not been registered
under the Securities Act of 1933 (the "Securities Act"), and have not been
registered under any state or other
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jurisdiction's securities law, and may not be offered, sold, transferred,
encumbered or otherwise disposed of unless there is an effective registration
statement under the Securities Act and any applicable state securities laws, or
other jurisdiction, relating thereto or unless, in the opinion of counsel
acceptable to the Company, such registration is not required.
IN WITNESS WHEREOF, the Company has duly authorized the issuance of this
Warrant as of _____________, 2002.
xxxxxxxx.xxx, Inc.
By:__________________________________________
Name:________________________________________
Title:_______________________________________
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SCHEDULE A
XXXXXXXX.XXX, INC.
PURCHASE FORM
xxxxxxxx.xxx, Inc.
000 Xxxx Xxxxxxx Xxxx.
Suite 1400
Ft. Lauderdale, FL 33301
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the attached Warrant for, and to purchase thereunder, ____ of the
Shares provided for therein (originally, _____ of the ___________ Shares, and as
presently adjusted pursuant to Section 3 thereof, ______ of the _____Shares),
and requests that certificates for such Shares be issued in the name of the
undersigned and addressed as follows:
__________________________________________
__________________________________________
__________________________________________
__________________________________________
(Please Print Name, Address, and
Social Security or Tax Identification Number)
Dated: ______________________, 200__.
Name of Warrantholder:__________________________________________________________
(Must be the same as that on the books and records of the
Company)
Signature: __________________________________________________________
