WARRANT AGREEMENT
THIS AGREEMENT, made as of this 7th day of September 1999, by and
between AmeriNet Xxxxx.xxx Inc., a Delaware corporation having its principal
place of business located at 000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx 00000 (the "Company"), and Xcel Associates, Inc., a New Jersey
corporation having its principal office at 000 Xxxxxx Xxxx, 0xx Xxxxx, Xxxxxx,
Xxx Xxxxxx 00000, a consultant to the Company (the "Warrant Holder").
W I T N E S S E T H:
WHEREAS, the Company has determined to sell to the Warrant Holder for
the sum of $10,000, and the Warrant Holder desires to purchase from the Company,
a warrant (the "Warrant") to purchase up to 1,000,000 shares of the Company's
Common Stock, par value $.01 per share ("Common Stock"), on terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the payment to the Company by the
Warrant Holder of $10,000, the receipt of which is hereby acknowledged, the
parties agree as follows:
1. Grant of Warrant.
Subject to all terms and conditions of this Agreement, the Company hereby
grants to the Warrant Holder a Warrant to purchase all or any part of an
aggregate of one million (1,000,000) shares (the "Shares") of Common Stock
at a purchase price of $0.75 per share.
2. Registration of Shares; Expiration.
(a) The Company shall file with the Securities and Exchange Commission
(the "Commission") within 45 days following the filing of its Annual
Report on Form 10-KSB for the year ended June 30, 1999, and shall use
its best efforts to cause to become effective, a registration
statement on Form SB-2, Form S-3 or other appropriate form (the
"Registration Statement") relating to the Shares.
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(b) Subject to Section 2(c) hereof, the Warrant will expire as to 500,000
of the Shares (the "Initial Shares") at 6:00 p.m., New York City time,
on the 60th day following the effective date of the Registration
Statement (the "Effective Date"), and as to the remaining 500,000
Shares on the 120th day following the Effective Date; provided,
however, that if the Warrant to acquire the Initial Shares is not
exercised by the Warrant Holder in full, the Warrant will expire as to
all Shares at 6:00 p.m., New York City time, on the 60th day following
the Effective Date.
(c) If not already expired pursuant to the provisions of Section 2(b)
hereof, the Warrant shall expire as to all Shares at 6:00 p.m., New
York City time, on December 31, 2000 (the "Expiration Date").
3. Exercise of Warrant.
The Warrant may be exercised, in whole or in part, as to any Shares at
any time prior to the Expiration Date or the earlier termination of the
Warrant with respect to such Shares; provided, however, that the
Warrant must be exercised in each case in increments of not less than
50,000 Shares. If the Warrant is not exercised to the maximum extent
permissible, it shall be exercisable, in whole or in part (in
increments of not less than 50,000 shares), with respect to all Shares
not so purchased at any time prior to the Expiration Date or the
earlier termination of the Warrant.
4. Payment of Purchase Price Upon Exercise.
The Warrant granted under this Agreement may be exercised in whole or
in part by delivering or mailing to the Company at its principal
office, or such other place as the Company may designate in writing to
the Warrant Holder, written notice of exercise duly signed by the
Warrant Holder. Such exercise shall be effective upon (a) receipt by
the Company of such written notice and (b) payment to the Company of
the full purchase price in cash.
5. Issuance and Delivery.
The Warrant Holder's written notice to the Company shall state the
number of Shares with respect to which the Warrant is being exercised
and specify a date, not less than five (5) or more than fifteen (15)
days after the date of the mailing of such notice, on which the Shares
will be taken and payment made therefor. On the date specified in the
notice of exercise, the Company shall deliver, or cause to be
delivered, to the Warrant Holder (or its representative, as the case
may be) stock certificates for the number of Shares with respect to
which the Warrant is being exercised, against receipt of payment
therefor. Certificates evidencing the Shares issued upon exercise of
the Warrant may contain such legends reflecting any restrictions upon
transfer of the Shares evidenced thereby as in the opinion of counsel
to the Company may be necessary for the lawful and proper issuance of
such certificates. Delivery of the Shares may be made at the office of
the Company or at the office of a transfer agent appointed for the
transfer of shares of Common Stock.
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6. Transferability.
The Warrant shall be transferable on the books of the Company only upon
delivery thereof duly endorsed by the Warrant Holder or by its
authorized attorney or legal representative. The Company shall have no
obligation to cause the Warrant to be transferred on its books to any
person if, in the opinion of counsel to the Company, such transfer does
not comply with the applicable provisions of all applicable federal and
state laws, rules and regulations.
7. No Rights as a Shareholder.
Neither the Warrant Holder nor its legal representative shall be, nor
have any of the rights or privileges of, a shareholder of the Company
in respect of any of the Shares, unless and until certificates
representing such Shares shall have been issued and delivered to the
Warrant Holder (or its representative).
8. Adjustment.
(a) In case, prior to the expiration of the Warrant by exercise or by its
terms, the Company shall issue any shares of its Common Stock as a
stock dividend or subdivide the number of outstanding shares of Common
Stock into a greater number of shares, then, in either of such cases,
the purchase price per share of the Shares issuable upon exercise of
the Warrant in effect at the time of such action shall be
proportionately reduced and the number of Shares at that time
purchasable pursuant to the Warrant shall be proportionately
increased; and conversely, in the event the Company shall contract the
number of outstanding shares of Common Stock by combining such shares
into a smaller number of shares, then, in such case, the purchase
price per share of the Shares issuable upon exercise of the Warrant in
effect at the time of such action shall be proportionately increased
and the number of Shares at that time purchasable pursuant to Warrant
shall be proportionately decreased. Any dividend paid or distributed
upon the Common Stock in stock of any other class of securities
convertible into shares of Common Stock shall be treated as a dividend
paid in Common Stock to the extent that shares of Common Stock are
issuable upon the conversion thereof.
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(b) In case, prior to the expiration of the Warrant by exercise or by its
terms, there shall be a recapitalization, whether by reorganization,
reclassification or otherwise, of the capital of the Company, or the
Company or a successor corporation shall be consolidated or merge with
or convey all or substantially all of its or of any successor
corporation's property and assets to any other corporation or
corporations (any such corporation being included within the meaning
of the term "successor corporation" in the event of any consolidation
or merger of any such corporation with, or the sale of all or
substantially all of the property of any such corporation to, another
corporation or corporations), in exchange for stock or securities of a
successor corporation, the Warrant Holder shall thereafter have the
right to purchase upon the terms and conditions and during the time
specified in this Agreement, in lieu of the Shares theretofore
purchasable upon the exercise of the Warrant, the kind and amount of
shares of stock and other securities receivable upon such
recapitalization or consolidation, merger or conveyance by a holder of
the number of shares of Common Stock which the Warrant Holder might
have purchased immediately prior to such recapitalization or
consolidation, merger or conveyance.
9. Compliance with Law and Regulations.
The Warrant and the obligation of the Company to sell and deliver
Shares hereunder shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for Shares prior to (i)
the listing of such Shares on any stock exchange on which the Common
Stock may then be listed and (ii) the completion of any registration or
qualification of such Shares under any federal or state law, or any
rule or regulation of any government body which the Board of Directors
of the Company shall, in its sole discretion, determine to be necessary
or advisable. Moreover, the Warrant may not be exercised if its
exercise or the receipt of Shares pursuant thereto, would be contrary
to applicable law.
10. Investment Representation.
The Board of Directors of the Company may require the Warrant Holder to
furnish to the Company, prior to the issuance of any Shares upon the
exercise of the Warrant, an agreement (in such form as the Board of
Directors may specify) in which the Warrant Holder represents that the
Shares acquired by the Warrant Holder upon exercise are being acquired
for investment and not with a view to the sale or distribution thereof.
12. Notices.
Any notice hereunder to the Company shall be addressed to it at
AmeriNet Xxxxx.xxx Inc., 000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx, 00000, Attention: Xxxxxxx Xxxxxx Xxxxxx, President; and any
notice hereunder to the Warrant Holder shall be addressed to it at
Xcel Associates, Inc., 000 Xxxxxx Xxxx, 0xx Xxxxx, Xxxxxx, Xxx Xxxxxx
00000, Attention: Xxxxxx X. Xxxxxx, President; subject to the right of
either party to designate at any time hereafter in writing some other
address.
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13. Governing Law.
This Agreement shall be interpreted, and the rights and liabilities of
the parties hereto determined, in accordance with the internal laws of
the State of Delaware, without regard to the conflicts of law
principles thereof.
14. Counterparts.
This Agreement may be executed in two counterparts each of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have signed this Agreement as of
the date and year first above written.
AmeriNet Xxxxx.xxx Inc.
By: /s/ Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxx Xxxxxx Jordan, President
Xcel Associates, Inc.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
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