THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
("SHARES OR WARRANT SHARES") HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY
STATE SECURITIES LAW. THEY ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM
REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.
THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S)
UNLESS THESE SECURITIES ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION REQUIREMENTS OF THOSE LAWS.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ETS INTERNATIONAL, INC.
COMMON STOCK PURCHASE WARRANT
Dated: February 28, 1997
WARRANT
to purchase 100,000 Shares of ETS International, Inc.
common stock, no par value (the "Common Stock")
at an exercise price per Share equal to 100% of the average Closing Bid Price
(payable in U.S. Dollars) of the Company's Shares for the five (5) days
immediately preceding the closing date, February 28, 1997 (the "Closing
Date").
THIS IS TO CERTIFY THAT, for value received, the undersigned or registered
assigns (the "Holder"), is entitled to purchase from ETS International, Inc.
(the "Company"), at any time or from time to time forty-five (45) days after
9.00 a.m., New York time, on February 28, 1997 and prior to 6.00 p.m., New
York time, on February 27, 2002, at the Company's principal executive office,
at a price per Share equal to 100% of the average Closing Bid Price of the
Company's Shares for the five (5) days immediately preceding the Closing
Date, up to the number of Shares of the Company's Common Stock shown above,
all subject to adjustment and upon the terms and conditions as herein
provided, and is entitled also to exercise the other appurtenant rights,
powers and privileges hereinafter described. No fractional Shares will be
issued upon the exercise of this Warrant. This Warrant is being issued in
connection with the Company's 7% Convertible Debenture Due February 27, 2002,
between the Company and the Holder.
The holder of Warrants evidenced by this "Warrant Certificate" may exercise
them by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with
payment of the Exercise Price in cash at the office of the Company designated
for such purpose. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number
of Warrants evidenced hereby, there shall be issued to the holder hereof or
his assignee a new Warrant Certificate evidencing the number of Warrants not
exercised. No adjustment shall be made for any dividends on any Common Stock
issuable upon exercise of this Warrant.
This Warrant, and the rights and privileges conferred hereby, shall be
exercisable only by the Holder and shall not be assignable or transferable
except pursuant to the provisions of the Securities Act of 1933, as amended,
and the Rules and Regulations promulgated thereunder and applicable state
securities laws. This Warrant shall be binding upon and shall inure to the
benefit of the Company and any successor to the Company and to the Holder's
successors and assigns.
The Holder, by acceptance hereof, acknowledges and agrees that:
(a) The Warrant represented by this certificate has not been
registered under the Securities Act of 1933, as amended or any state
securities laws, and the Warrants are restricted Securities within the
meaning of the rules promulgated under the Securities Act of 1933, as amended
(the "Act"). This Warrant has been issued to Holder for investment purposes
only and not with a view to distribution or sale, and may not be made subject
to a security interest or be pledged, hypothecated or otherwise transferred
without an effective Registration Statement for such Warrant under the Act,
and all applicable state securities laws or an opinion of counsel for the
Company that such Shares may be lawfully offered, sold or otherwise
transferred without such registration in reliance on applicable exemptions
from such registration. Any Shares issued upon the exercise of this Warrant
shall be issued under the provisions of Regulation S ("Regulation S") under
the Act without restrictive legend. Any offer to sell, pledge, hypothecate
or transfer these securities, or any interest therein effected in violation
of any of the foregoing restrictions and conditions is unlawful and shall not
be consummated on the books and records of the Company or otherwise be
recognized as valid by the Company, and the Company shall not have any
liability therefor.
(b) In the event that the Company shall, at any time prior to the
expiration date of this Warrant and prior to the exercise thereof: (i)
declare or pay to the holders of the Shares of the Company a dividend payable
in Shares of the Company; or (ii) change, divide or otherwise reclassify its
Shares into the same or a different number of Shares: or (iii) consolidate or
merge with, or transfer its property as an entirety or substantially as an
entirety to any other corporation: or (iv) make any distribution of its
assets to holders of its Shares as a liquidation or partial liquidation
dividend or by way of return of capital; then, upon the subsequent exercise
of this Warrant, the Holder hereof shall receive for the exercise price, in
addition to or in substitution for the Shares to which the Holder would
otherwise be entitled upon such exercise, such additional Shares of the
Company, or such Shares of the securities or property of the Company
resulting from such consolidation, merger or transfer, or such assets of the
Company which Holder would have been entitled to receive had the Holder
exercised the Warrant prior to the happening of any of the foregoing events;
(c) Except with respect to any pending registration statements on the
Closing Date, if the Company shall at any time or from time to time determine
to register any of its securities with the Securities and Exchange Commission
the Company shall:
(i) promptly (but not less than thirty (30) days prior to the
filing of any registration statement) give written notice
thereof (which shall include a list of the jurisdictions,
if any, in which the Company intends to register or qualify
such securities under the applicable blue sky or other
state securities laws) to each Holder or holder of Warrant
Shares;
(ii) use its reasonable best efforts to effect such registration
and any qualification and compliance relating thereto,
including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state
securities laws and appropriate compliance with the
Securities Act and any other government requirements or
regulations as would permit or facilitate:
(1) the sale and distribution of the Warrant to the
extent outstanding;
(2) the sale and distribution of all Warrant Shares; and
(3) the exercise of the Warrant to the extent outstanding
and the sale and distribution of all Warrant Shares.
All notices, requests and other communications provided for herein shall be
in writing, and shall be deemed to have been made or given when delivered or
mailed or sent by facsimile. Such notices and communications shall be
addressed:
(a) if to the Company, to: ETS International, Inc., 0000 Xxxxxxxxx
Xxxx, X.X., Xxxxxxx, XX 00000-0000, Attn.: Xxxx XxXxxxx.
(b) if to the Holder, to its address as shown on the registry books
maintained by the Company.
No failure or delay of the Holder in exercising any right, power or
privilege, hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof, or any abandonment or discontinuance of steps to
enforce such a right, power or privilege, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies of the Holder are cumulative and not exclusive of any
rights or remedies which it would otherwise have. The provisions of this
Warrant may be amended, modified or waived if, but only if, such amendment,
modification or waiver is in writing and is signed by a majority of the
holders of the Warrants; provided that no amendment, modification or waiver
may change the exercise price of (including without limitation any
adjustments or any provisions with respect to adjustments, the expiration of
or the manner of exercising the Warrants) without the consent in writing of
all of the holders of the Warrants outstanding.
This Warrant shall be construed in accordance with and be governed by the
laws of the Commonwealth of Virginia.
All warranties, representations and covenants made by the Company herein or
in any certificate or other instrument delivered by or on behalf of it in
connection herewith or the Company's 7% Convertible Debenture due February
27, 2002, as applicable, shall be considered to have been relied upon by the
Holder and shall survive the issuance and delivery of the Warrants and the
Shares issuable upon exercise of this Warrant, and shall continue in full
force and effect as long as this Warrant is outstanding. All statements in
any such certificate or other instrument shall constitute representations and
warranties hereunder.
All the covenants, stipulations, promises and agreements in this Warrant
contained by or on behalf of the Company shall bind its successors and
assigns, whether or not so expressed.
In case any one or more of the provisions contained in this Warrant shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired in such jurisdiction and shall
not invalidate or render illegal or unenforceable such provision in any other
jurisdiction.
This Warrant shall not entitle the Holder to any rights as a stockholder of
the Company.
At the time of the Holder's election to purchase Shares, the representations
and warranties set forth in Section 8 of the Warrants Purchase Agreement,
dated as of the date hereof, shall be true and correct in all material
respects. Said representations and warranties are incorporated herein by
reference.
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Signature Page to Follow]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its corporate name by one of its officers thereunto duly authorized, and
its corporate seal to be hereunto affixed, attested by its Secretary or an
assistant Secretary, all as of the day and year first above written.
ETS INTERNATIONAL, INC.
By:
--------------------------- [corporate seal]
Title:
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