THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS
AND HAS BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT. THIS WARRANT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A
SOLICITATION OF AN OFFER TO BUY THE WARRANT IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (i) REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR (ii) IJOIN SYSTEMS,
INC., A DELAWARE CORPORATION (THE "COMPANY"), SHALL HAVE RECEIVED AN OPINION, IN
FORM, SCOPE AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, FROM COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.
WARRANT
IJOIN SYSTEMS, INC.
No. ____ Number of Shares: _____
Date of Issuance: May 8, 2001 Exercise Price: $_____
THIS CERTIFIES that, for value received, _______________ (the
"Holder"), is entitled, upon the terms and subject to the conditions hereinafter
set forth, at any time on or after May 8, 2001, and on or prior to May 8, 2004
(the "Termination Date"), but not thereafter, to subscribe for and purchase from
IJOIN SYSTEMS, INC., a Delaware corporation (the "Company"), up to
____________________ (______) shares (the "Warrant Shares") of Common Stock, par
value US $0.0001 per share of the Company (the "Common Stock"), subject to
adjustment as hereinafter provided, at a purchase price per share equal to
$_____ (the "Exercise Price"). This Warrant is being issued in connection with
the conversion of that Convertible Note dated April 1, 2001 between the Holder
and xXxxx.xxx, Inc.
1. Title of Warrant. Prior to the expiration hereof and subject to
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and other applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.
2. Warrant Shares.
--------------
(a) The Company covenants that all shares of Common Stock which may be
issued upon the exercise of rights represented by this Warrant will, upon
exercise of the rights represented by this Warrant, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
in respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
(b) The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock,
solely for the purpose of effecting the exercise of the Warrant a number of
shares of Common Stock equal to the aggregate number of Warrant Shares issuable
upon exercise of the Warrant on the date of this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.
3. Exercise of Warrant. Except as provided in Section 4 below, exercise of
the purchase rights represented by this Warrant may be made at any time or times
before the close of business on the Termination Date, by the surrender of this
Warrant and the delivery of that Notice of Exercise form annexed hereto, duly
executed, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder appearing on the books of the Company) and upon
payment of the Exercise Price of the shares thereby purchased. Upon the actual
receipt by the Company of the surrendered Warrant, the Notice of Exercise form
and the payment in full of the Exercise Price of the shares thereby purchased,
the holder of this Warrant shall be entitled to receive a certificate for the
number of shares of Common Stock so purchased. Certificates for shares purchased
hereunder shall be delivered to the holder hereof within ten (10) business days
after the date on which the Company actually received the surrendered Warrant,
the Notice of Exercise form and the Exercise Price of the shares thereby
purchased. Payment of the Exercise Price of the shares may be by certified check
or cashier's check or by wire transfer to an account designated by the Company
in an amount equal to the Exercise Price multiplied by the number of Warrant
Shares.
4. Adjustments of Exercise Price and Number of Warrant Shares. The number
and kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following.
-2-
(a) In case the Company shall (i) declare or pay a dividend in shares
of Common Stock or make a distribution in shares of Common Stock to holders of
its outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) issue any shares of its capital stock
in a reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the holder of this Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder, the holder of this Warrant shall thereafter be entitled to purchase
the number of Warrant Shares or other securities resulting from such adjustment
at an Exercise Price per such Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made pursuant to
this paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event. (b) If after
the date on which the Warrants are first issued to the Holder, any capital
reorganization or reclassification of the shares of the Common Stock, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the Holder shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified in this
Warrant such shares of stock, securities, or assets as may be issued or payable
with respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented by this
Warrant had such reorganization, reclassification, consolidation, merger or sale
not taken place, and in such event appropriate provisions shall be made with
respect to the rights and interests of the Holder to the end that the provisions
hereof shall thereafter be applicable, as nearly as may be in relation to any
shares of stock, securities, or assets thereafter deliverable upon the exercise
hereof. Upon the occurrence of any event specified in this paragraph, the
Company shall give written notice of the effective date of such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, winding
up or issuance. Such notice shall also specify the date as of which the holders
of Common Stock of record shall be entitled to exchange their Common Stock for
stock, securities, or other assets deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, winding
up or issuance. Failure to give such notice, or any defect therein shall not
affect the legality or validity of such material.
5. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period
-3-
of time deemed appropriate by the Board of Directors of the Company.
6. Notice of Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
holder of this Warrant notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
7. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon any exercise
hereof, the Company, at its sole option, shall either issue a whole share in
lieu of such fractional share or pay to the Holder an amount in cash equal to
such fraction multiplied by the current market value of such fractional share,
determined as follows:
(a) If the Common Stock is listed on the New York or American Stock
Exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on the Nasdaq Stock Market, the current value shall be the reported
last sale price of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant, or if no such sale
is made on such day, the average closing bid and asked prices for such day on
such exchange or system; or
(b) If the Common Stock is not listed or admitted to unlisted trading
privileges, the current value shall be the last reported bid price reported by
the National Quotation Bureau, Inc. on the last business day prior to the date
of the exercise of this Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid prices are not so reported, the current value shall
be an amount determined in such reasonable manner as may be prescribed by the
board of directors of the Company.
8. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached
-4-
hereto duly executed by the holder hereof; and provided further, that upon any
transfer involved in the issuance or delivery of any certificates for shares of
Common Stock, the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.
9. No Rights as Stockholder until Exercise. This Warrant does not entitle
the holder hereof to any voting rights or other rights as a stockholder of the
Company prior to the actual receipt by the Company of the surrendered Warrant,
the Notice of Exercise form and the payment of the aggregate Exercise Price.
Upon the actual receipt by the Company of the surrendered Warrant, the Notice of
Exercise form and the payment of the aggregate Exercise Price, the Warrant
Shares so purchased shall be, and be deemed to be, issued to such holder as the
record owner of such shares as of the close of business on the later of the date
of actual receipt of such surrendered Warrant and Notice of Exercise form or the
date on which payment of the aggregate Exercise Price has been received by the
Company.
10. Loss, Theft, Destruction or Mutilation of Warrant. The Company
represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
certificate or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to it, and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.
11. Unregistered Securities/Exemption/Legend.
----------------------------------------
(a) The Holder understands that the Warrant and the underlying Warrant
Shares (collectively, the "Company Securities") have not been, and will not be,
registered under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
Holder's representations made herein. The Holder understands that the Company
Securities are "restricted securities" under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the Holder must hold the
Company Securities indefinitely unless they are registered with the Securities
and Exchange Commission and qualified by state authorities, or an exemption from
such registration and qualification requirements is available. The Holder
acknowledges that the Company has no obligation to register or qualify the
Company Securities for resale. The Holder further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Company Securities, and on requirements
relating to the Company which are outside of the Holder's control, and which the
Company is under no obligation and may not be able to satisfy.
(b) The Holder is aware of what constitutes, and fully understands the
definition of, an "Accredited Investor," as that term is defined in Regulation D
promulgated
-5-
under the Act and under the laws of each state of which the Holder is a
resident, and is an "Accredited Investor" for purpose of said Regulation D and
the laws of each state in which the Holder is a resident;
(c) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant and the Warrant Shares to be issued upon exercise hereof are
being acquired solely for the Holder's own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Shares to be issued
upon exercise hereof except pursuant to an effective registration statement, or
an exemption from registration, under the Securities Act and any applicable
state securities laws.
(d) Except as provided in Section 11(e) hereof, this Warrant and all
certificates representing shares of Warrant Shares issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form:
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
UNLESS (i) REGISTERED UNDER THE SECURITIES ACT AND
UNDER APPLICABLE STATE SECURITIES LAWS OR (ii) IJOIN
SYSTEMS, INC., A DELAWARE CORPORATION (THE "COMPANY"),
SHALL HAVE RECEIVED AN OPINION, IN FORM, SCOPE AND
SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, FROM
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
(e) The restrictions imposed by this Section 11(e) upon the transfer
of this Warrant or the Warrant Shares to be purchased upon exercise hereof shall
terminate (i) when such securities shall have been resold pursuant to being
effectively registered under the Securities Act, (ii) upon the Company's receipt
of an opinion of counsel, in form and substance reasonably satisfactory to the
Company, addressed to the Company to the effect that such restrictions are no
longer required to ensure compliance with the Securities Act and state
securities laws or (iii) upon the Company's receipt of other evidence reasonably
satisfactory to the Company that such registration and qualification under state
securities laws is not required. Whenever such restrictions shall cease and
terminate as to any such securities, the Holder thereof shall be entitled to
receive from the Company (or its transfer agent and registrar), without any
-6-
cost or expense (other than applicable transfer taxes, if any), new warrants
(or, in the case of Warrant Shares, new stock certificates) of like tenor not
bearing the applicable legend required by Section 11(d) hereof relating to the
Securities Act and applicable state securities laws.
12. Miscellaneous.
-------------
(a) Issue Date. The provisions of this Warrant shall be construed and
shall be given effect in all respects as if it had been issued and delivered by
the Company on the date first set forth hereon.
(b) Waivers. Any waiver by the Company, on the one hand, and the
Holder, on the other hand, of any breach of or failure to comply with any
provision or condition of this Warrant by the other party shall not be construed
as, or constitute, a continuing waiver of such provision or condition, or a
waiver of any other breach of, or failure to comply with, any other provision or
condition of this Warrant, any such waiver to be limited to the specific matter
and instance for which it is given. No waiver of any such breach or failure or
of any provision or condition of this Warrant shall be effective unless in a
written instrument signed by the party granting the waiver and delivered to the
other party hereto in the manner provided for hereunder in Section 12(c). No
failure or delay by either party to enforce or exercise its rights hereunder
shall be deemed a waiver hereof, nor shall any single or partial exercise of any
such right or any abandonment or discontinuance of steps to enforce such rights,
preclude any other or further exercise thereof or the exercise of any other
right.
(c) Notices. Except as provided in Section 3 and Section 9 hereof, all
notices, demands, consents, requests, instructions and other communications to
be given or delivered or permitted under or by reason of the provisions of this
Warrant or in connection with the transactions contemplated hereby shall be in
writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of such
delivery (as evidenced by the receipt of the personal delivery service), (ii) if
mailed certified or registered mail return receipt requested, four (4) business
days after being mailed, (iii) if delivered by overnight courier (with all
charges having been prepaid), on the business day of such delivery (as evidenced
by the receipt of the overnight courier service of recognized standing), or (iv)
if delivered by facsimile transmission, on the business day of such delivery if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time,
on the next succeeding business day (as evidenced by the printed confirmation of
delivery generated by the sending party's telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 12(c)), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers as
applicable:
-7-
If to the Company: IJoin Systems, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000 Xxxxxxx, XX 00000
Attn: President
Telephone: 000-000-0000
Facsimile: 000-000-0000
With copies to: Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Holder: ________________________
========================
Attn:
Telephone:
Facsimile:
or to such other address as any party may specify by notice given to the other
party in accordance with this Section 12(c).
(d) Governing Law. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to its conflict of law provisions.
(e) Interpretation. The article and section headings contained in this
Warrant are solely for the purpose of reference, are not part of this Warrant of
the parties and shall not in any way affect the meaning or interpretation of
this Warrant.
(f) Entire Agreement. This Warrant contains the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Warrant. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. This Warrant supersedes all prior and/or contemporaneous
agreements and understandings between the parties with respect to such
transactions.
(g) Severability. The parties agree that should any provision of this
Warrant be held to be invalid, illegal or unenforceable in any jurisdiction,
that holding shall be effective
-8-
only to the extent of such invalidity, illegally or unenforceability without
invalidating or rendering illegal or unenforceable the remaining provisions
hereof, and any such invalidity, illegally or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is the intent of the parties that the Warrant be fully
enforced to the fullest extent permitted by applicable law. (h) Amendment and
Waiver. This Warrant and any provisions hereof may be amended, modified or
supplemented, changed, waived, discharged or terminated only by an instrument in
writing signed by the Company and the Holder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
DATED: _________ ____, 2001 IJOIN SYSTEMS, INC.
By: _______________________________
Name: _____________________________
Title: ___________________________
The representations and warranties contained in Section 11 hereof are
hereby acknowledged and agreed to by the undersigned Holder, as of the date
first above written.
NAME OF HOLDER
By: ___________________________
Name: ___________________________
Title: ___________________________
-9-
NOTICE OF EXERCISE
To: IJOIN SYSTEMS, INC.
(1) The undersigned hereby elects to purchase ________ shares of
Common Stock, par value $0.0001 per share (the "Common Stock") of IJOIN SYSTEMS,
INC. pursuant to the terms of the attached Warrant, and tenders herewith payment
of the exercise price in full, together with all applicable transfer taxes, if
any.
(2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
(3) The shares of Common Stock being issued in connection with the
exercise of the attached Warrant are [not] being issued in connection with the
sale of the Common Stock.
Dated:
------------------------------
Signature
-1-
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
______________________________________________________________________.
______________________________________________________________________
Dated: ______________, 20___
Holder's Signature: _____________________________
Holder's Address: _____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
-2-
