EXHIBIT 10.8
WARRANT SIDE AGREEMENT
BETWEEN
XXXXXXXXXXXXXXXX.XXX, INC.
AND
XXXXXX EQUITY PARTNERS, LLC
AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of August 15, 2000,
by and among XXXXXXXXXXXXXXXX.XXX, a corporation duly organized and existing
under the laws of the State of Delaware (the "Company") and Xxxxxx Private
Equity, LLC (hereinafter referred to as "Investor").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Equity Line") of up to
Thirty Million Dollars ($30,000,000), excluding any funds paid upon exercise of
the Warrants, of Common Stock of the Company pursuant to that certain Investment
Agreement (the "Investment Agreement") between the Company and Investor dated on
or about August 15, 2000, the Company has agreed to sell and Investor has agreed
to purchase, from time to time as provided in the Investment Agreement, shares
of the Company's Common Stock for a maximum aggregate offering amount of Thirty
Million Dollars ($30,000,000); and
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed, among other things, to issue to the Investor Commitment Warrants, as
defined in the Investment Agreement, to purchase a number of shares of Common
Stock, exercisable for five (5) years from their respective dates of issuance.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. ISSUANCE OF COMMITMENT WARRANTS. As compensation for entering into the Equity
Line, Investor received a warrant convertible into 3,450,000 shares of the
Company's Common Stock, in the form attached hereto as EXHIBIT A (the
"Commitment Warrants").
2. ISSUANCE OF ADDITIONAL WARRANTS. At the earlier of (i) June 19, 2001 or (ii)
the date of the first Put Notice delivered to Investor pursuant to the
Investment Agreement, Investor shall receive additional warrants (the
"Additional Warrants"), to purchase a number of shares of Common Stock, if
necessary, such that the sum of the number of Commitment Warrants and the number
of Additional Warrants issued to Investor shall equal at least 4.5% of the
number of fully diluted shares of Common Stock of the Company that are then
outstanding. If the Company shall at any time effect a recapitalization,
reclassification or other similar transaction of such character that the shares
of Common Stock shall be changed into or become exchangeable for a SMALLER
number of shares (a "Reverse Stock Split"), then on the date of such Reverse
Stock Split, and on each one year anniversary (each, an "Anniversary Date") of
the Reverse Stock Split thereafter throughout the term of the Commitment
Warrants, the Company shall issue to Investor additional warrants (the
"Additional Warrants"), in the form of EXHIBIT A, to purchase a number of shares
of Common Stock, if necessary, such that the sum of the number of Warrants and
the number of Additional Warrants issued to Investor shall equal at least 4.5%
of the number of fully diluted shares of Common Stock of the Company that are
outstanding immediately following the
Reverse Stock Split or Anniversary Date, as applicable. The Additional
Warrants shall be exerciseable at the same price as the Commitment Warrants,
shall have the same reset provisions as the Commitment Warrants, shall have
piggyback registration rights and shall have a 5-year term.
3. OPINION OF COUNSEL. Concurrently with the issuance and delivery of the
Commitment Opinion (as defined in the Investment Agreement) to the Investor, or
on the date that is six (6) months after the date of this Agreement, whichever
is sooner, the Company shall deliver to the Investor an Opinion of Counsel
(signed by the Company's independent counsel) covering the issuance of the
Commitment Warrants and the Additional Warrants, and the issuance and resale of
the Common Stock issuable upon exercise of the Warrants and the Additional
Warrants.
4. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the Securities Exchange Act of 1934, which matters shall be
construed and interpreted in accordance with such laws.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 15th day of August, 2000.
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XXXXXXXXXXXXXXXX.XXX INVESTOR:
XXXXXX PRIVATE EQUITY, LLC.
By: /s/ Xxxxxx Xxxx By: /s/ Xxxx X. Xxxxxx
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Xxxxxx Xxxx, CEO Xxxx X. Xxxxxx, Manager
xxxxxxxxxxxxxxxx.xxx
000 Xxxxxxx Xxxxxx Xxxxx 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxx 000 Bldg. 200, Suite 285
Newport Beach, CA 92660 Xxxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
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