THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("ACT"), OR APPLICABLE STATE LAW. THIS WARRANT AND THE SHARES UNDERLYING
IT MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAW, OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M. EASTERN TIME, ______________, 2004
WARRANT
For the Purchase of
__________ Shares of Common Stock
of
XXXXXX.XXX, INC.
1. Warrant.
THIS CERTIFIES THAT, in consideration of $10.00 and other good and
valuable consideration, duly paid by or on behalf of _______________ ("Holder"),
as registered owner of this Warrant, to Xxxxxx.xxx, Inc. ("Company"), Xxxxxx is
entitled, at any time or from time to time at or after __________, 2001 [six
months after Initial Closing] ("Commencement Date"), and at or before 5:00 p.m.,
Eastern Time ___________, 2004 [three years six months after Initial Closing]
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to _____________________________ (_________) shares of
Common Stock of the Company ("Common Stock"). If the Expiration Date is a day on
which banking institutions are authorized by law to close, then this Warrant may
be exercised on the next succeeding day which is not such a day in accordance
with the terms herein. During the period ending on the Expiration Date, the
Company agrees not to take any action that would terminate the Warrant. This
Warrant is initially exercisable at $______ per share of Common Stock purchased;
provided, however, that upon the occurrence of any of the events specified in
Section 6 hereof, the rights granted by this Warrant, including the exercise
price and the number of shares of Common Stock to be received upon such
exercise, shall be adjusted as therein specified. The term "Exercise Price"
shall mean the initial exercise price or the adjusted exercise price, depending
on the context, of a share of Common Stock. This Warrant is being issued
together with warrants of like tenor and promissory notes in an offering of
Units by the Company ("Offering").
2. Exercise.
2.1 Exercise Form. In order to exercise this Warrant, the exercise form
attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
shares being purchased. If the subscription rights represented hereby shall not
be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this
Warrant shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire.
2.2 Legend. Each certificate for shares of Common Stock purchased
under this Warrant shall bear a legend as follows, unless the issuance of such
shares of Common Stock have been registered under the Securities Act of 1933, as
amended ("Act"):
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act") or applicable
state law. The shares may not be pledged, sold, assigned or
transferred in the absence of an effective registration statement with
respect thereto under the Act and any applicable state securities law,
or unless the Company receives an opinion of counsel, satisfactory to
the Company, that such registration is not required."
3. Transfer.
3.1 General Restrictions. The registered Holder of this Warrant, by
its acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
promptly transfer this Warrant on the books of the Company and shall execute and
deliver a new Warrant or Warrants of like tenor to the appropriate assignee(s)
expressly evidencing the right to purchase the aggregate number of shares of
Common Stock purchasable hereunder or such portion of such number as shall be
contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Warrant and the
shares of Common Stock underlying this Warrant shall not be transferred unless
and until (i) the Company has received the opinion of counsel for the Holder
that such securities may be sold pursuant to an exemption from registration
under the Act, and applicable state law, the availability of which is
established to the reasonable satisfaction of the Company, or (ii) a
registration statement relating to such securities has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission")
and compliance with applicable state law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in
Section 3 hereof, this Warrant may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Warrant for cancellation, together with the duly executed exercise or
assignment form and funds (or conversion equivalent) sufficient to pay any
Exercise Price and/or transfer tax, the Company shall cause to be delivered to
the Holder without charge a new Warrant of like tenor to this Warrant in the
name of the Holder evidencing the right of the Holder to purchase the aggregate
number of shares of Common Stock as to which this Warrant has not then been
exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of reasonably satisfactory indemnification, the Company shall execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered as a result of such loss, theft, mutilation or destruction shall
constitute a substitute contractual obligation on the part of the Company.
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5. Registration Rights. The Company has agreed to file a registration
statement with the Commission or include the shares of Common Stock purchasable
under this Warrant on a registration statement already filed with the
Commission, but not declared effective, as set forth in full on Schedule 1 of
the Subscription Agreement signed by the original Holder of this Warrant. These
registration rights shall inure to the benefit of the transferees of this
Warrant and the shares underlying it.
6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Shares. The Exercise
Price and the number of shares of Common Stock underlying this Warrant shall be
subject to adjustment from time to time as hereinafter set forth:
6.1.1 Stock Dividends - Recapitalization, Reclassification,
Split-Ups. If, after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend on the Common Stock payable in shares of Common Stock or by a
split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 6.3, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock issuable on exercise of this
Warrant shall be decreased in proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Warrant is
adjusted, as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying such Exercise Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
6.1.4 Replacement of Shares upon Reorganization, etc. In case of
any reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or which solely affects the
par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Warrant shall have the right thereafter (until the expiration
of the right of exercise of this Warrant) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such reclassification, reorganization,
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merger or consolidation, or upon a dissolution following any such sale or other
transfer, by a Holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Warrant immediately prior to such event; and if
any reclassification also results in a change in shares of Common Stock covered
by Sections 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to
Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this
Section 6.1.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
6.1.5 Changes in Form of Warrant. This form of Warrant need not
be changed because of any change pursuant to this Section, and Warrants issued
after such change may state the same Exercise Price and the same number of
shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by the Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
6.2 Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock upon the
exercise of this Warrant, nor shall it be required to issue scrip or pay cash in
lieu of any fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Common Stock or other securities, properties
or rights.
7. Redemption.
7.1 Redemption Rights. The Company may redeem all (but not less than all)
of the Warrants at any time when the registration statement ("Registration
Statement") is effective, at the price of $.01 per Warrant, upon notice referred
to in Section 7.2, provided that (i) the shares underlying the Warrant have been
registered for resale by means of the Registration Statement or any other
registration statement; (ii) the Registration Statement is current and effective
at the time the aforementioned notice is sent and through the redemption period;
and (iii) the closing sales price of a share of Common Stock exceeds $2.00 for a
period of not less than ten consecutive trading days ("Redemption Pricing
Period").
7.2 Date Fixed for Redemption; Notice of Redemption. In the event the
Company shall elect to redeem all of the Warrants, the Company must mail a
notice of redemption by first class mail, postage prepaid, within 5 days of any
Redemption Pricing Period to the Holders of the Warrants at their last address
as they shall appear on the registration books. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given whether
or not the registered Holder received such notice. Such notice shall set forth a
date for redemption no less than 20 days from the mailing of the notice.
7.3 Exercise After Notice of Redemption. The Warrants may be exercised in
accordance with Section 2 of this Agreement within 20 days after notice of
redemption shall have been mailed by the Company pursuant to Section 7.2 hereof
and prior to the time and date fixed for redemption. On and after the redemption
date, the Holder of the Warrants shall have no further rights except to receive,
upon surrender of the Warrants, the redemption price.
8. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Warrant, such number of shares of Common Stock
or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
4
and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
9. Certain Notice Requirements.
9.1 Holder's Right to Receive Notice. Nothing herein shall be construed as
conferring upon the Holder the right to vote or consent or to receive notice as
a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the events
described in Section 9.2 shall occur, then, in one or more of said events, the
Company shall use its best efforts to give written notice of such event at least
fifteen days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, rights offering, merger or reorganization, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of the closing of the transfer books, as the case
may be.
9.2 Events Requiring Notice. The Company shall be required to give the
notice described in this Section 9 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution, (ii)
the Company shall offer to all the holders of its Common Stock any additional
shares of capital stock of the Company or securities convertible into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, (iii) a merger or reorganization in which the
Company is not the surviving party or (iv) a dissolution, liquidation or winding
up of the Company (other than in connection with a consolidation or merger) or a
sale of all or substantially all of its property, assets and business shall be
proposed.
9.3 Notice of Change in Exercise Price. The Company shall, promptly after
an event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holder of such event and change ("Price Notice"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Financial Officer.
9.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant must be in writing and is sufficiently given
if delivered to the addressees in person, by overnight courier service, or, if
mailed, postage prepaid, by certified mail (return receipt requested), and will
be effective three days after being placed in the mail if mailed, or upon
receipt or refusal of receipt, if delivered personally or by courier or
confirmed telecopy, in each case addressed as follows: (i) if to the registered
Holder of this Warrant, to the address of such Holder as shown on the books of
the Company, or (ii) if to the Company, to its principal executive office.
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10. Miscellaneous.
10.1 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
10.2 Entire Agreement. This Warrant (together with the other agreements and
documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
10.3 Binding Effect. This Warrant shall inure solely to the benefit of and
shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
10.4 Governing Law; Submission to Jurisdiction. This Warrant will be deemed
to have been made and delivered in New York City and will be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal laws of the State of New York. Each of the Company and the Holder
hereby (i) agrees that any legal suit, action or proceeding arising out of or
relating to this Warrant will be instituted exclusively in New York State
Supreme Court, County of New York, or in the United States District Court for
the Southern District of New York, (ii) waives any objection to the venue of any
such suit, action or proceeding and the right to assert that such forum is not a
convenient forum for such suit, action or proceeding, (iii) irrevocably consents
to the jurisdiction of the New York State Supreme Court, County of New York, and
the United States District Court for the Southern District of New York in any
such suit, action or proceeding, (iv) agrees to accept and acknowledge service
of any and all process that may be served in any such suit, action or proceeding
in New York State Supreme Court, County of New York or in the United States
District Court for the Southern District of New York and (v) agrees that service
of process upon it mailed by certified mail to its address set forth on my
signature page will be deemed in every respect effective service of process upon
it in any suit, action or proceeding.
10.5 Waiver, Etc. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Warrant shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Warrant or any provision hereof or the right of the Company or any Holder
to thereafter enforce each and every provision of this Warrant. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Warrant shall be effective unless set forth in a written instrument executed by
the party or parties against whom or which enforcement of such waiver is sought;
and no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer as of the _____ day of _______________, 2001.
XXXXXX.XXX, INC.
By:__________________________________
Name:
Title:
Form to be used to exercise Warrant:
____________________________________
____________________________________
____________________________________
Date: _____________________, 200___
The undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase ________ shares of Common Stock of Xxxxxx.xxx,
Inc. and hereby makes payment of $____________ (at the rate of $_________ per
share of Common Stock) in payment of the Exercise Price pursuant thereto. Please
issue the Common Stock as to which this Warrant is exercised in accordance with
the instructions given below.
--------------------------------------
Signature
---------------------------
Signature Guaranteed
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ________________________________________________________
(Print in Block Letters)
Address ________________________________________________________
7
Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer
of the within Warrant):
FOR VALUE RECEIVED, ________________________________ does
hereby sell, assign and transfer unto _________________________________ the
right to purchase _____________________ shares of Common Stock of Xxxxxx.xxx,
Inc. ("Company") evidenced by the within Warrant and does hereby authorize the
Company to transfer such right on the books of the Company.
Dated:____________________, 200___
--------------------------------------
Signature
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
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