COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
March 29, 2001 by and between Pro Net Link Corp., a Nevada corporation (the
"Company"), and Waveland Capital, LLC, a Colorado limited liability company (the
"Purchaser").
RECITALS
A. The parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall sell to Purchaser from time to time as
provided herein, and Purchaser shall purchase, up to $5,000,000 of Common Stock
(as defined below) and the Company shall issue to the Purchaser Initial Warrants
and Performance Warrants (as defined below); and
B. Such investments will be made by the Purchaser as statutory underwriter
of a registered indirect primary offering of such Common Stock by the Company.
NOW, THEREFORE, in consideration of the Recitals and the promises and
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties, intending to be legally bound,
hereby agree as follows:
AGREEMENTS
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN DEFINITIONS.
(a) "Effective Date" shall mean the date the Registration Statement of the
Company covering the Shares being subscribed for hereby is (i)
initially declared effective by the Securities and Exchange Commission
(the "SEC") (which date shall be referred to herein as the "Initial
Effective Date") and (ii) declared effective by the SEC for subsequent
registrations, if any, of the Shares.
(b) "Floor Price" shall mean the price per Share designated by the Company
in a Put Notice below which the Company will not be required to sell
shares of its Common Stock for that particular Put Notice.
(c) "GAAP" shall mean the Generally Accepted Accounting Principles as
those conventions, rules and procedures are determined by the
Financial Accounting Standards Board and its predecessor agencies.
(d) "Initial Warrants" shall mean the non-transferable, divisible warrants
to purchase the Company's Common Stock that are issued at the time of
the execution of this Agreement, as are more fully defined in Section
5.2(f), below.
(e) "Investment Amount" shall mean the amount of a particular purchase of
Common Stock as a result of a Put Notice, determined by multiplying
the number of Put Shares times the Market Price.
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(g) "Market Price" shall mean the average of the three lowest closing bid
prices of the Company's Common Stock for the ten Trading Days
beginning on the Commencement Date.
(h) "Material Adverse Effect" shall mean any adverse effect on the
business, operations, properties, prospects or financial condition of
the Company that is material and adverse to the Company and its
subsidiaries and affiliates, taken as a whole and/or any condition,
circumstance, or situation that would prohibit or otherwise materially
interfere with the ability of the Company to perform any of its
material obligations under this Agreement or the Registration Rights
Agreement or to perform its obligations under any other Material
Agreement (as defined in Section 3.1(u)).
(i) "Performance Warrants" shall mean the non-transferable, divisible
warrants to purchase the Company's Common Stock that are issued at the
time that certain minimum funding levels are achieved, as are more
fully defined in Section 5.3(f), below.
(j) "Principal Market" shall mean initially the OTC Bulletin Board and
shall include the American Stock Exchange, Nasdaq Small-Cap Market,
Nasdaq National Market or the New York Stock Exchange if the Company
becomes listed and trades on such market or exchange after the date
hereof, and so long as Company is listed and traded on such market or
exchange.
(k) "Purchase Price" shall mean 90% of the Market Price.
(l) "Put" shall mean the sale by the Company to Purchaser of shares of its
Common Stock pursuant to the terms and conditions of this Agreement.
(m) "Put Notice" shall mean the written notice from the Company to the
Purchaser pursuant to which the Company exercises a Put for a certain
number of shares of its Common Stock, the form of which shall be as
set forth in Exhibit A attached hereto.
(n) "Put Pricing Period" shall mean a period of ten consecutive Trading
Days beginning on the date specified in the Put Notice; provided,
however, the Put Pricing Period shall not begin before the day on
which such notice is delivered pursuant to Section 9.4 herein.
(o) "Put Shares" shall mean those shares of the Common Stock of the
Company that are Put to the Purchaser pursuant to a Put Notice.
(p) "Registration Statement" shall mean the registration statement under
the Securities Act of 1933, as amended (the "Securities Act"), to be
filed with the SEC for the registration of the Shares pursuant to the
Registration Rights Agreement attached hereto as Exhibit B (the
"Registration Rights Agreement").
(q) "SEC Documents" shall mean the Company's latest Form 10-K or Form
10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K
filed thereafter, and the Proxy Statement for its latest fiscal year
as of the time in question until such time as the Company no longer
has an obligation to maintain the effectiveness of a Registration
Statement as set forth in the Registration Rights Agreement.
(r) "Settlement Date" shall have the meaning assigned to such term in
Section 6.1(b).
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(s) "Shares" shall mean the Put Shares and those shares of Common Stock
issuable to the Purchaser upon exercise of the Initial Warrants and
the Performance Warrants or, if applicable, the Undrawn Minimum
Warrants (as defined in Section 7.3(b) below (the "Warrant Shares")).
(t) "Trading Day" shall mean the hours of 9:30 a.m. until 4:30 p.m. (EST
or EDT, as applicable) on any day on which the Principal Market is
open for business.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
SECTION 2.1. PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of
this Agreement, the Company may sell and issue to the Purchaser and the
Purchaser shall be obligated to purchase from the Company up to an aggregate
purchase price of $5,000,000 of the Company's Common Stock (the "Commitment
Amount"), $.001 par value per share (the "Common Stock") based on the Puts.
SECTION 2.2. THE SHARES. The Company has authorized and reserved free of
preemptive rights and other similar contractual rights of stockholders,
20,000,000 of its authorized but unissued shares of Common Stock to cover the
Shares to be issued in connection with all Puts and Warrants. The Company
covenants to continue to reserve free of such pre-emptive and contractual
rights, a sufficient number of its authorized but unissued shares of Common
Stock to cover the Shares to be issued in connection with the Initial Warrant
and the Performance Warrants or the Undrawn Minimum Warrants.
SECTION 2.3. PURCHASE PRICE AND CLOSING. The Company agrees to issue and sell to
the Purchaser and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase that number of the Shares to be issued in
connection with each Put Notice. The delivery of executed documents under this
Agreement and the other agreements referred to herein and the payment of the
fees set forth in Article II of the Escrow Agreement (the "Closing"), which
Escrow Agreement shall be in substantially the form as attached as Exhibit C
hereto (except for such additional modifications required by either party in
their sole discretion) (the "Escrow Agreement") shall take place at the offices
of the Bank of New York (the "Escrow Agent") (i) within five business days
following the Initial Effective Date, or (ii) such other time and place or on
such date as the Purchaser and the Company may agree upon (the "Closing Date").
Each party shall deliver all documents, instruments and writings required to be
delivered by such party pursuant to this Agreement at or prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATION AND WARRANTIES OF THE COMPANY. The Company hereby
makes the following representations and warranties to the Purchaser:
(a) ORGANIZATION, GOOD STANDING AND POWER. The Company is a corporation
duly incorporated validly existing and in good standing under the laws
of Nevada and has all requisite corporate authority to own, lease and
operate its properties and assets and to carry on its business as now
being conducted. The Company does not have any subsidiaries and does
not own more than 50% of or control any other business entity except
as set forth in the SEC Documents. The Company is duly qualified to do
business and is in good standing as a foreign corporation in every
jurisdiction in which the nature of the business conducted or
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property owned by it makes such qualification necessary, other than
those in which the failure so to qualify would not have a Material
Adverse Effect.
(b) AUTHORIZATION, ENFORCEMENT. (i) The Company has the requisite
corporate power and corporate authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement,
the Escrow Agreement, the Initial Warrants, the Performance Warrants,
the Undrawn Minimum Warrants, and such other documents as are executed
in connection with the Agreement (collectively, the "Transaction
Documents") and to issue the Put Shares pursuant to their respective
terms, (ii) the execution and delivery of the Transaction Documents by
the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action, and (iii) the Transaction Documents have
been duly executed and delivered by the Company and at the Closing
shall constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable
principles of general application. The Company has duly and validly
authorized and reserved for issuance shares of Common Stock pursuant
to Section 2.2.
(c) CAPITALIZATION. Except as set forth on Schedule 3.1(c), the authorized
capital stock of the Company consists of 150,000,000 shares of Common
Stock of which 52,208,070 shares are issued and outstanding and no
shares of preferred stock are issued and outstanding. All of the
outstanding shares of the Company's Common Stock have been duly and
validly authorized and are fully paid and non-assessable, except as
set forth in the SEC Documents. Except as set forth in this Agreement
and the Registration Rights Agreement and as set forth in the SEC
Documents, or on Schedule 3.1(c) hereto, no shares of Common Stock are
entitled to preemptive rights or registration rights and there are no
outstanding options, warrant, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company.
Furthermore, except as set forth in this Agreement and as set forth in
the SEC Documents or on Schedule 3.1(c), there are no contracts,
commitments, understandings, or arrangements by which the Company is
or may become bound to issue a material number of additional shares of
the capital stock of the Company or options, securities or rights
convertible into shares of capital stock of the Company. Except as set
forth on Schedule 3.1(c), the Company is not a party to any agreement
granting registration rights to any person with respect to any of its
equity or debt securities. Except as set forth on Schedule 3.1(c), the
Company is not a party to, and it has no knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock
of the Company. Except as set forth in the SEC Documents or on
Schedule 3.1(c) hereto, the offer and sale by the Company of all
capital stock, convertible securities, rights, warrants, or options of
the Company issued prior to the Closing complied with all applicable
federal and state securities laws, and to the Company's knowledge, no
stockholder has a right of rescission or damages with respect thereto
which would have a Material Adverse Effect on the Company's financial
condition or operating results. The Company has made available to the
Purchaser true and correct copies of the Company's articles or
certificate of incorporation as in effect on the date hereof (the
"Charter"), and the Company's bylaws as in effect on the date hereof
(the "Bylaws"). The Company has not received any notice from the
Principal Market questioning or threatening the continued inclusion of
the Common Stock on such market.
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(d) ISSUANCE OF SHARES. Subject to Section 2.2, the Shares to be issued
under this Agreement have been duly authorized by all necessary
corporate action and, when paid for and issued in accordance with the
terms hereof and the Initial Warrants and the Performance Warrants or
the Undrawn Minimum Warrants, the Shares shall be validly issued and
outstanding, fully paid and non-assessable, and the Purchaser shall be
entitled to all rights accorded to a holder of Common Stock.
(e) NO CONFLICTS. Except as set forth on Schedule 3.1(e), the execution,
delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated herein do
not and will not (i) violate any provision of the Company's Charter or
Bylaws, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture,
note, bond, license, lease agreement, instrument or obligation to
which the Company is a party, (iii) create or impose a lien, charge or
encumbrance on any property of the Company under any agreement or any
commitment to which the Company is a party or by which the Company is
bound or by which any of its properties or assets are bound, or (iv)
result in a violation of any federal, state, local or other foreign
statute, rule, regulation, order, judgment or decree (including any
federal or state securities laws and regulations) applicable to the
Company or any of its subsidiaries or by which any property or asset
of the Company or any of its subsidiaries are bound or affected,
except, in all cases, for such conflicts, defaults, termination,
amendments, accelerations, cancellations, liens and violations as
would not, individually or in the aggregate, have a Material Adverse
Effect. The business of the Company and its subsidiaries is not being
conducted in violation of any laws, ordinances or regulations of any
governmental entity, except for possible violations which singularly
or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under any federal, state or local
law, rule or regulation to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its
obligations under this Agreement, or issue and sell the Shares in
accordance with the terms hereof (other than any filings which may be
required to be made by the Company with the SEC or state securities
administrators subsequent to the Closing and any registration
statement which may be filed pursuant hereto); provided that, for
purpose of the representation made in this sentence, the Company is
assuming and relying upon the accuracy of the relevant representations
and agreements of the Purchaser herein.
(f) SEC DOCUMENTS, FINANCIAL STATEMENTS. The Common Stock of the Company
is registered pursuant to Section 12(g) of the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"), and, except as disclosed
in the SEC Documents or on Schedule 3.1(f) hereto, the Company has
timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act, including material filed
pursuant to Section 13(a) or 15(d) of the Exchange Act. The Company
has delivered or made available to the Purchaser, through the XXXXX
system or otherwise, true and complete copies of the SEC Documents
filed with the SEC since December 31, 1998. Except as set forth on
Schedule 3.1(f), the Company has not provided to the Purchaser any
information which, according to applicable law, rule or regulation,
should have been disclosed publicly by the Company but which has not
been so disclosed, other than with respect to the transactions
contemplated by this Agreement. As of their respective filing dates,
the SEC Documents complied in all material respects with the
requirements of the Exchange Act or the Securities Act, as applicable,
and the rules and regulations of the SEC promulgated thereunder
applicable to such documents, and, as of their
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respective filing dates, none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company
included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements under GAAP and the
published rules and regulations of the SEC or other applicable rules
and regulations with respect thereto. Such financial statements have
been prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly
present in all material respects the financial position of the Company
and its subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
(g) SUBSIDIARIES. The SEC Documents or Schedule 3.1(g) hereto sets forth
each subsidiary of the Company, showing the jurisdiction of its
incorporation or organization and showing the percentage of the
Company's ownership of the outstanding stock or other interests of
such subsidiary. For the purposes of this Agreement, "subsidiary"
shall mean any corporation or other entity of which at least a
majority of the securities or other ownership interests having
ordinary voting power (absolutely or contingently) for the election of
directors or other persons performing similar functions are at the
time owned directly or indirectly by the Company and/or any of its
other subsidiaries. All of the issued and outstanding shares of
capital stock of each subsidiary have been duly authorized and validly
issued, and are fully paid and non-assessable. There are no
outstanding preemptive, conversion or other rights, options, warrants
or agreements granted or issued by or binding upon any subsidiary for
the purchase or acquisition of any shares of capital stock of any
subsidiary or any other securities convertible into, exchangeable for
or evidencing the rights to subscribe for any shares of such capital
stock. Neither the Company nor any subsidiary is subject to any
obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of the capital stock of any subsidiary or
any convertible securities, rights, warrants or options of the type
described in the preceding sentence. Neither the Company nor any
subsidiary is a party to, nor has any knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock
of any subsidiary.
(h) NO MATERIAL ADVERSE EFFECT. Since the date of the financial statement
contained in the most recently filed Form 10-Q (or 10-QSB) or Form
10-K (or 10-KSB), whichever is most current, no Material Adverse
Effect has occurred or exists with respect to the Company, except as
disclosed in the SEC Documents or on Schedule 3.1(h) hereto.
(i) NO UNDISCLOSED LIABILITIES. Except as disclosed in the SEC Documents
or on Schedule 3.1(i) hereto, neither the Company nor any of its
subsidiaries has any liabilities, obligations, claims or losses
(whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) that would be required to be
disclosed on a balance sheet of the Company or any subsidiary
(including the notes thereto) in conformity with GAAP which are not
disclosed in the SEC Documents, other than those incurred in the
ordinary course of the Company's or its subsidiaries' respective
businesses since such date and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect on the
Company or its subsidiaries.
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(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since the date of the
financial statement contained in the most recently filed Form 10-Q
(or 10-QSB) or Form 10-K (or 10-KSB), whichever is most current, no
event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, prospects, operations or
financial condition, that, under applicable law, rule or regulation,
requires public disclosure or announcement prior to the date hereof by
the Company but which has not been so publicly announced or disclosed
in the SEC Documents.
(k) INDEBTEDNESS. The SEC Documents or Schedule 3.1(k) hereto sets forth
as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any subsidiary, or for which the
Company or any subsidiary has commitments. For the purposes of this
Agreement, "Indebtedness" shall mean (A) any liabilities for borrowed
money or amounts owed in excess of $100,000 (other than trade accounts
payable incurred in the ordinary course of business), (B) all
guaranties, endorsements and contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be
reflected in the Company's balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business; and (C) the present value of any lease payments in excess of
$100,000 due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any subsidiary is in default with
respect to any Indebtedness.
(l) TITLE TO ASSETS. Each of the Company and the subsidiaries has good and
marketable title to all of its real and personal property reflected in
the SEC Documents, free of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those indicated
in the SEC Documents or on Schedule 3.1(1) hereto or such that do not
cause a Material Adverse Effect. All such leases of the Company and
each of its subsidiaries are valid and subsisting and in full force
and effect.
(m) ACTIONS PENDING. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of the Company, threatened
against the Company or any subsidiary which questions the validity of
this Agreement or the transactions contemplated hereby or any action
taken or to be taken pursuant hereto or thereto. Except as set forth
in the SEC Documents or on Schedule 3.1(m) hereto, there is no action,
suit, claim, investigation or proceeding pending or, to the knowledge
of the Company, threatened, against or involving the Company, any
subsidiary or any of their respective properties or assets, except for
such actions as would not, individually or in the aggregate, have a
Material Adverse Effect. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or
governmental or regulatory body against the Company or any subsidiary.
(n) COMPLIANCE WITH LAW. The Company and each of its subsidiaries have all
franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct of
their respective businesses as now being conducted by them unless the
failure to possess such franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
(o) TAXES. The Company and each subsidiary has filed all Tax Returns which
it is required to file under applicable laws; all such Tax Returns are
true and accurate and have been prepared in compliance with all
applicable laws; the Company has paid all Taxes due and owing by it or
any subsidiary (whether or not such Taxes are required to be shown on
a Tax Return) and has withheld and paid over to the appropriate taxing
authorities all Taxes which it is required to
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withhold from amounts paid or owing to any employee, stockholder,
creditor or other third parties; and since December 31, 1999, the
charges, accruals and reserves for Taxes with respect to the Company
(including any provisions for deferred income taxes) reflected on the
books of the Company are adequate to cover any Tax liabilities of the
Company if its current tax year were treated as ending on the date
hereof.
No claim has been made by a taxing authority in a jurisdiction where the
Company does not file tax returns that the Company or any subsidiary is or may
be subject to taxation by that jurisdiction. There are no foreign, federal,
state or local tax audits or administrative or judicial proceedings pending or
being conducted with respect to the Company or any subsidiary; no information
related to Tax matters has been requested by any foreign, federal, state or
local taxing authority; and, except as disclosed above, no written notice
indicating an intent to open an audit or other review has been received by the
Company or any subsidiary from any foreign, federal, state or local taxing
authority. There are no material unresolved questions or claims concerning the
Company's Tax liability.
The Company has not made any payments, is not obligated to make payments
nor is it a party to an agreement that could obligate it to make any payments
that would not be deductible under section 280G of the Internal Revenue Code.
For purposes of this Section 3.1(o):
"IRS" means the United States Internal Revenue Service.
"TAX" OR "TAXES" means federal, state, county, local, foreign, or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.
"TAX RETURN" means any return, information report or filing with respect to
Taxes, including any schedules attached thereto and including any amendment
thereof.
(p) CERTAIN FEES. Except for those fees payable by the Company to
Xxxxxxx.xxx as set forth on Schedule 3.1(p) hereto, no brokers,
finders or financial advisory fees or commissions will be payable by
the Company or any subsidiary with respect to the transactions
contemplated by this Agreement.
(q) DISCLOSURE. Neither this Agreement or the Schedules hereto nor any
other documents, certificates or instruments furnished to the
Purchaser by or on behalf of the Company or any subsidiary in
connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements made herein or
therein, in the light of the circumstances under which they were made
herein or therein, not misleading.
(r) OPERATION OF BUSINESS. The Company and each of the subsidiaries owns
or possesses all patents, trademarks, service marks, trade names,
copyrights, licenses and authorizations as set forth in the SEC
Documents or on Schedule 3.1(r) hereto, and all rights with respect to
the foregoing, which are necessary for the conduct of its business as
now conducted without any conflict with the rights of others.
Page 8
(s) INSURANCE. Except as disclosed in the SEC Documents or on Schedule
3.1(s) hereto, the Company carries or will have the benefit of
insurance in such amounts and covering such risks as is adequate for
the conduct of its business and the value of its properties and as is
customary for companies engaging in similar businesses and similar
industries.
(t) BOOKS AND RECORDS. The records and documents of the Company and its
subsidiaries accurately reflect in all material respects the
information relating to the business of the Company and the
subsidiaries, the location and collection of their assets, and the
nature of all transactions giving rise to the obligations or accounts
receivable of the Company or any subsidiary.
(u) MATERIAL AGREEMENTS. Except as set forth in the SEC Documents, or on
Schedule 3.1(u) hereto, neither the Company nor any subsidiary is a
party to any written or oral contract, instrument, agreement,
commitment, obligation, plan or arrangement, a copy of which would be
required to be filed with the SEC as an exhibit to a registration
statement on Form S-1 or other applicable form (collectively,
"Material Agreements") if the Company or any subsidiary were
registering securities under the Securities Act. Except as set forth
on Schedule 3.1(u), the Company and each of its subsidiaries has in
all material respects performed all the obligations required to be
performed by them to date under the foregoing agreements, have
received no notice of default and, to the best of the Company's
knowledge are not in default under any Material Agreement now in
effect, the result of which could cause a Material Adverse Effect.
Except as set forth in the SEC Documents, no written or oral contract,
instrument, agreement, commitment, obligation, plan or arrangement of
the Company or of any subsidiary limits or shall limit the payment of
dividends on the Company's Common Stock.
(v) TRANSACTIONS WITH AFFILIATES. Except as more fully set forth in the
SEC Documents or on Schedule 3.1(v) hereto, there are no loans,
leases, agreements, contracts, royalty agreements, management
contracts or arrangements or other continuing transactions exceeding
$60,000 between (A) the Company, any subsidiary or any of their
respective customers or suppliers on the one hand, and (B) on the
other hand, any officer, employee, consultant or director of the
Company, or any of its subsidiaries, or any person owning 5% or more
of the capital stock of the Company or any subsidiary or any member of
the immediate family of such officer, employee, consultant, director
or stockholder or any corporation or other entity controlled by such
officer, employee, consultant, director or stockholder, or a member of
the immediate family of such officer, employee, consultant, director
or stockholder.
(w) SECURITIES LAWS. The Company has complied and will comply with all
applicable federal, and state securities laws in connection with the
offer, issuance and sale of the Shares hereunder. Except as (i)
disclosed in the SEC Documents, (ii) contemplated hereby, and (iii)
contemplated by the agreement between the Company and Xxxxxxx.xxx,
neither the Company nor anyone acting on its behalf, directly or
indirectly, has or will sell, offer to sell or solicit offers to buy
the Shares or similar securities to, or solicit offers with respect
thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any person (other than the
Purchaser). Neither the Company nor any of its affiliates, nor any
person acting on its or their behalf, has engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or
sale of the shares of common stock of the Company. The parties
acknowledge that the Company has previously engaged in discussions
with GEM Advisors, Inc. concerning the sale of certain securities,
which discussions did not result in the completion of a financial
transaction. All negotiations with GEM Advisors, Inc. have been
terminated.
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(x) EMPLOYEES. Neither the Company nor any subsidiary has any collective
bargaining arrangements or agreements covering any of its employees.
Except as set forth in the SEC Documents or on Schedule 3.1(x) hereto,
neither the Company nor any subsidiary is in breach of any employment
contract, agreement regarding proprietary information, noncompetition
agreement, nonsolicitation agreement, confidentiality agreement, or
any other similar contract or restrictive covenant, relating to the
right of any officer, employee or consultant to be employed or engaged
by the Company or such subsidiary. Except as disclosed in the SEC
Documents, since the date of the _February 15, 2000, Form 10-Q, no
officer, consultant or key employee of the Company or any subsidiary
whose termination, either individually or in the aggregate, could have
a Material Adverse Effect, has terminated or, to the knowledge of the
Company, has any present intention of terminating his or her
employment or engagement with the Company or any subsidiary.
(y) ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed in SEC Documents
or on Schedule 3.1(y) hereto, and except for those matters which would
not constitute a Material Adverse Effect, since the date of the
financial statement contained in the most recently filed Form 10-Q (or
10-QSB) or Form 10-K (or 10KSB), whichever is most current, neither
the Company nor any subsidiary has:
(i) issued any stock, bonds or other corporate securities or any
rights, options or warrants with respect thereto;
(ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current
liabilities incurred in the ordinary course of business which
are comparable in nature and amount to the current liabilities
incurred in the ordinary course of business during the
comparable portion of its prior fiscal year, as adjusted to
reflect the current nature and volume of the Company's or such
subsidiary's business;
(iii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business;
(iv) declared or made any payment or distribution of cash or other
property to stockholders with respect to its stock, or
purchased or redeemed, or made any agreements so to purchase
or redeem, any shares of its capital stock;
(v) sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of
business;
(vi) sold, assigned or transferred any patent rights, trademarks,
trade names, copyrights, trade secrets or other intangible
assets or intellectual property rights, or disclosed any
proprietary confidential information to any person except to
customers in the ordinary course of business or to the
Purchaser or its representatives;
(vii) suffered any material losses (except for anticipated losses
consistent with prior quarters) or waived any rights of
material value, whether or not in the ordinary course of
business, or suffered the loss of any material amount of
prospective business;
(viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past
practices;
Page 10
(ix) made capital expenditures or commitments therefor that
aggregate in excess of $100,000;
(x) entered into any other material transaction, whether or not in
the ordinary course of business;
(xi) suffered any material damage, destruction or casualty loss,
whether or not covered by insurance;
(xii) experienced any material problems with labor or management in
connection with the terms and conditions of their employment;
or
(xiii) effected any two or more events of the foregoing kind which in
the aggregate would be material to the Company or its
subsidiaries.
(z) GOVERNMENTAL APPROVALS. Except as set forth in the SEC Documents or on
Schedule 3.1(z) hereto, and except for the filing of any filing prior
or subsequent to any Settlement Date that may be required under
applicable federal or state securities laws (which if required, shall
be filed on a timely basis), including the filing of a registration
statement or post-effective amendment pursuant to this Agreement, no
authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary for, or in connection with, the delivery of the
Shares, or for the performance by the Company of its obligations under
this Agreement.
(aa) USE OF PROCEEDS. The proceeds from the sale of the Shares will be used
by the Company and its subsidiaries for general corporate purposes.
(bb) ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF SHARES. The Company
acknowledges and agrees that the Purchaser is acting solely in the
capacity of arm's length purchaser with respect to this Agreement and
the transactions contemplated hereunder. The Company further
acknowledges that the Purchaser is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect
to this Agreement and the transactions contemplated hereunder. The
Company further represents to the Purchaser that the Company's
decision to enter into this Agreement has been based solely on (a) the
Purchaser's representations and warranties in Section 3.2, and (b) the
independent evaluation by the Company and its own representatives and
counsel.
(cc) INTERNAL ACCOUNTING CONTROLS. The Company is aware of no instance in
which its system of internal accounting controls is not sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby makes the following representations and warranties to the Company:
Page 11
(a) ORGANIZATION AND STANDING OF THE PURCHASER. The Purchaser is a limited
liability company duly organized, validly existing and in good
standing under the laws of the Colorado.
(b) AUTHORIZATION AND POWER. The Purchaser has the requisite power and
authority to enter into and perform the Transaction Documents and to
purchase the Shares being sold to it hereunder. The execution,
delivery and performance of the Transaction Documents by Purchaser and
the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action and at the Closing shall
constitute valid and binding obligations of the Purchaser enforceable
against the Purchaser in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership
or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of
general application. The Transaction Documents have been duly executed
and delivered by the Purchaser and at the Closing shall constitute
valid and binding obligations of the Purchaser enforceable against the
Purchaser in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership
or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of
general application.
(c) NO CONFLICTS. The execution, delivery and performance of this
Agreement and the consummation by the Purchaser of the transactions
contemplated hereby or relating hereto do not and will not (i) result
in a violation of the Purchaser's Articles of Organization or
Operating Agreement, or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument to which the Purchaser is a party, or result in a violation
of any law, rule, or regulation, or any order, judgment or decree of
any court or governmental agency applicable to the Purchaser or its
properties (except for such conflicts, defaults and violations as
would not, individually or in the aggregate, have a Material Adverse
Effect on Purchaser). The Purchaser is not required to obtain any
consent, authorization or order of, or make any filing or registration
with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or to
purchase the Shares in accordance with the terms hereof.
(d) FINANCIAL RISKS. The Purchaser acknowledges that it is able to bear
the financial risks associated with an investment in the Shares and
that it has been given full access to such records of the Company and
the subsidiaries and to the officers of the Company and the
subsidiaries as it has deemed necessary or appropriate to conduct its
due diligence investigation. The Purchaser is capable of evaluating
the risks and merits of an investment in the Shares by virtue of its
experience as an investor and its knowledge, experience, and
sophistication in financial and business matters and the Purchaser is
capable of bearing the entire loss of its investment in the Shares.
(e) ACTIONS PENDING. There is no action, suit, claim, investigation or
proceeding pending or, to the knowledge of the Purchaser, threatened
against the Purchaser which questions the validity of this Agreement
or the transactions contemplated hereby or any action taken or to be
taken pursuant hereto or thereto. There is no action, suit, claim,
investigation or proceeding pending or, to the knowledge of the
Purchaser, threatened, against or involving the Purchaser, or any of
its properties or assets, except for such actions as would not,
Page 12
individually or in the aggregate, have a Material Adverse Effect.
There are no outstanding orders, judgments, injunctions, awards or
decrees of any court, arbitrator or governmental or regulatory body
against the Purchaser.
(f) COMPLIANCE WITH LAW. The Purchaser has all franchises, permits,
licenses, consents and other governmental or regulatory authorizations
and approvals necessary for the conduct of its business as now being
conducted by it unless the failure to possess such franchises,
permits, licenses, consents and other governmental or regulatory
authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(g) SECURITIES LAWS. The Purchaser has complied and will comply with all
applicable federal, and state securities laws in connection with the
purchase of the Shares hereunder.
(h) GOVERNMENTAL APPROVALS. Except as set forth for the filing of any
filing prior or subsequent to any Settlement Date that may be required
under applicable federal or state securities laws (which if required,
shall be filed on a timely basis), no authorization, consent,
approval, license, exemption of, filing or registration with any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is or will be necessary for, or
in connection with, the purchase of the Shares, or for the performance
by the Company of its obligations under this Agreement.
(i) ACCREDITED INVESTOR. The Purchaser is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act.
(j) GENERAL. The Purchaser understands that the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein
in order to determine the suitability of the Purchaser to acquire the
Shares.
ARTICLE IV
COVENANTS
The Company covenants with the Purchaser as follows:
SECTION 4.1. SECURITIES COMPLIANCE. The Company shall notify the Principal
Market, if required under its rules and regulations, of the transactions
contemplated by this Agreement, shall file a form 8K with the SEC in connection
with such transactions, and shall take all other reasonably necessary action and
proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Shares and the Warrant to
the Purchaser or subsequent holders.
SECTION 4.2. REGISTRATION AND LISTING. The Company will cause its Common Stock
to continue to be registered under Sections 12(b) or 12(g) of the Exchange Act,
will comply in all respects with its reporting and filing obligations under the
Exchange Act, will comply with all requirements related to any registration
statement filed pursuant to this Agreement, and will not take any action or file
any document (whether or not permitted by the Securities Act or the Exchange Act
or the rules promulgated thereunder) to terminate or suspend such registration
or to terminate or suspend its reporting and filing obligations under the
Exchange Act or Securities Act, except as permitted herein. The Company will
take all action reasonably necessary to continue the listing or trading of its
Common Stock on the Principal Market and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or
Page 13
rules of the Principal Market and shall provide the Purchaser with copies of any
correspondence to or from such Principal Market which questions or threatens
delisting of the Common Stock, within three Trading Days of the Company's
receipt thereof, until the Purchaser has disposed of all of the Shares.
Purchaser affirmatively agrees to notify the Company when it has disposed of all
of the Shares it has previously purchased or received under this Agreement.
SECTION 4.3. ESCROW AGREEMENT. The Company and the Purchaser shall enter into
the Escrow Agreement (in a form acceptable each of the parties in their sole
discretion) with the Escrow Agent hereto respecting payment against delivery of
the Shares.
SECTION 4.4. REGISTRATION RIGHTS AGREEMENT. The Company and the Purchaser shall
enter into the Registration Rights Agreement. Before the Purchaser shall be
obligated to accept a Put request from the Company, the Company shall have
caused a sufficient number of shares of Common Stock to be registered to cover
the Shares to be issued in connection with such Put.
SECTION 4.5. ACCURACY OF REGISTRATION STATEMENT. On each Settlement Date, the
Registration Statement and the prospectus therein shall not contain any untrue
statement of a material fact or omit to state any material fact to be required
to be stated therein or necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made; and on such
Settlement Date or date of filing of the Registration Statement and the
prospectus therein will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
SECTION 4.6. COMPLIANCE WITH LAWS. The Company shall comply, and cause each
subsidiary to comply, with all applicable laws, rules, regulations and orders,
noncompliance with which could have a Material Adverse Effect.
SECTION 4.7. KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall keep and
cause each subsidiary to keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Company and its subsidiaries, and
in which, for each fiscal year, all proper reserves for depreciation, depletion,
obsolescence, amortization, taxes, bad debts and other purposes in connection
with its business shall be made.
SECTION 4.8. OTHER AGREEMENTS. The Company shall not enter into any agreement
the terms of which such agreement would have a Material Adverse Effect on the
ability of the Company to perform its obligations under this Agreement.
SECTION 4.9. NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF
RIGHT TO REQUEST A PUT. The Company will immediately notify the Purchaser in
writing pursuant to Section 9.4 herein, upon the occurrence of any of the
following events in respect of the Registration Statement or related prospectus
in respect of the Shares: (i) receipt of any request for additional information
from the SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement the response to which
would require any amendments or supplements to the Registration Statement or
related prospectus; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making
Page 14
of any changes in the Registration Statement, related prospectus or documents so
that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate. The Company shall not deliver to the Purchaser
any Put Notice during the continuation of any of the foregoing events. In the
event that the Company has already delivered a Put Notice prior to the
occurrence of one of the foregoing events but before the applicable Settlement
Date, Purchaser shall have no obligation to purchase the Put Shares for that
particular Put Notice, and the Company may rescind such Put Notice. The Company
shall promptly make available to the Purchaser any such supplements or
amendments to the related prospectus, at which time, provided that the
registration statement and any supplements and amendments thereto are then
effective, the Company may recommence the delivery of Put Notices.
SECTION 4.10. CONSOLIDATION; MERGER. The Company shall not, without the prior
written consent of the Purchaser, at any time after the date hereof, effect any
merger or consolidation of the Company with or into, or a transfer of all or
substantially all of the assets of the Company to, another entity (a
"Consolidation Event") unless the resulting successor or acquiring entity (if
not the Company) assumes by written instrument or by operation of law the
obligation to deliver to the Purchaser the Shares and the Performance Warrants
or Undrawn Minimum Warrants that the Company would actually be required to
deliver pursuant to this Agreement at the time of such transaction.
SECTION 4.11. LIMITATION ON FUTURE FINANCING. The Company agrees that, except as
set forth below, it will not without the prior written consent of the Purchaser,
enter into any sale of its Common Stock or securities convertible into common
stock or cash until the earlier of (i) six months from the Initial Effective
Date, or (ii) 60 days after the entire Commitment Amount has been purchased by
the Purchaser. The Company may, however, sell unregistered shares of the common
stock of the Company provided that the purchasers do not grant registration
rights allowing such Common Stock to be registered within a period of one year
from the date of such sale.
The Purchaser covenants with the Company as follows:
SECTION 4.12. COMPLIANCE WITH LAW. The Purchaser agrees that its trading
activities with respect to shares of the Company's Common Stock will be in
compliance with all applicable state and federal securities laws, rules and
regulations and rules and regulations of the Principal Market on which the
Company's Common Stock is listed. Without limiting the generality of the
foregoing, the Purchaser agrees that it will, whenever required by federal
securities laws, deliver the prospectus included in the Registration Statement
to any purchaser of Shares from the Purchaser.
SECTION 4.13. SHORT SALES. The Purchaser shall only have the right to sell short
shares of Common Stock pursuant to the terms of this Section. Purchaser shall
have the right to sell short shares of Common Stock during any Put Period.
Purchaser agrees that the maximum number of shares of Common Stock sold pursuant
to any short sales within such Put Period shall not exceed the number of Put
Shares for the applicable Put Period.
Page 15
ARTICLE V
CONDITIONS TO CLOSING AND PUTS
SECTION 5.1. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO SELL THE
PUT SHARES. The obligation hereunder of the Company to proceed to close this
Agreement and to issue and sell the Put Shares to the Purchaser is subject to
the satisfaction or waiver, as of each Settlement Date, of each of the
conditions set forth below. These conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion.
(a) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Purchaser shall be true and
correct in all material respects as of the date when made and as of
the Closing and as of each Settlement Date as though made at that
time, except for representations and warranties that speak as of a
particular date.
(b) PERFORMANCE BY THE PURCHASER. The Purchaser shall have performed,
satisfied and complied in all material respects with all material
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Purchaser at or prior to
the Closing and as of each Settlement Date.
(c) NO INJUNCTION. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(d) NO PROCEEDINGS OR LITIGATION; NO MATERIAL ADVERSE EFFECT. No action,
suit or proceeding before any arbitrator or any governmental authority
shall have been commenced, and no investigation by any governmental
authority shall have been threatened, against the Purchaser or the
Company or any subsidiary, or any of the officers, directors or
affiliates of the Purchaser seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in
connection with such transactions. No event shall have occurred which
will have a Material Adverse Effect on the business or prospects of
the Purchaser.
(e) CLOSING THRESHOLD. For the ten Trading Days immediately preceding both
the date of the Put Notice and the Settlement Date, the weighted
average daily trading volume (volume times closing bid price) of the
Common Stock shall be greater than $30,000 and the weighted average
closing bid price for the Common Stock shall be not less than $0.10
per share. In the event that either of these thresholds is not met,
then, notwithstanding the delivery of a Put Notice, the Company shall
not be obligated to Put the Put Shares to the Purchaser.
SECTION 5.2. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO CLOSE.
The obligation hereunder of the Purchaser to perform its obligations under this
Agreement and to purchase the Shares is subject to the satisfaction or waiver,
at or before the Closing and as of each Settlement Date as though made at that
time, except for representations and warranties that speak as of a particular
date, of each of the conditions set forth below. These conditions are for the
Purchaser's sole benefit and may be waived by the Purchaser at any time in its
sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of
the Closing and as of each Settlement Date as though made at that time
(except for representations and warranties that speak as of a
particular date).
Page 16
(b) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing
and as of each Settlement Date.
(c) NO INJUNCTION. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(d) NO PROCEEDINGS OR LITIGATION; NO MATERIAL ADVERSE EFFECT. No action,
suit or proceeding before any arbitrator or any governmental authority
shall have been commenced, and no investigation by any governmental
authority shall have been threatened, against the Purchaser or the
Company or any subsidiary, or any of the officers, directors or
affiliates of the Company or any subsidiary seeking to restrain,
prevent or change the transactions contemplated by this Agreement, or
seeking damages in connection with such transactions. No event shall
have occurred which will have a Material Adverse Effect on the
business or prospects of the Company.
(e) INITIAL WARRANTS. Simultaneously with the execution of this Agreement,
the Company shall issue to the Purchaser one or more warrant
certificates to purchase certain shares of Common Stock. The number of
shares of Common Stock purchasable pursuant to the Initial Warrants
shall be equal to 250,000 divided by the product of (i) 110% and (ii)
the average of the closing bid prices for the five Trading Days
immediately preceding the execution of this Agreement. For example, by
way of illustration, if the average closing bid price of the Company's
common stock for the five Trading Days immediately preceding the date
of this Agreement is $0.17 per share, the Initial Warrants shall
entitle Purchaser to purchase 1,336,898 shares of Common Stock at
$0.187 per share ($0.17 times 110% = $0.187; $250,000 divided by .187
= 1,336,898 shares). The Initial Warrants shall have a term from their
initial date of issuance of five years. The exercise price of the
Initial Warrants shall be 110% of the average of the closing bid
prices of the Common Stock on the Principal Market during the five
Trading Days immediately prior to the execution of this Agreement. The
Common Stock underlying the Initial Warrants will be registered in the
Registration Statement referred to in Section 4.3 hereof. The Initial
Warrants may not be exercisable by Purchaser for a period of 180 days
following the execution of this Agreement. The Initial Warrants shall
be in the form of Exhibit E hereto.
SECTION 5.3. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO ACCEPT A
PUT AND PURCHASE THE SHARES. The obligation hereunder of the Purchaser to accept
a Put request and to acquire and pay for the Shares is subject to the
satisfaction at or before each Settlement Date, of each of the conditions set
forth below.
(a) SATISFACTION OF CONDITIONS TO CLOSING. The Company shall have
satisfied, or the Purchaser shall have waived the conditions set forth
in Section 5.2(a) - (d) hereof.
(b) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement
registering the Shares covered by the Put shall have been declared
effective by the SEC and shall remain effective on each Settlement
Date. Such Registration Statement shall not have been suspended by the
Securities Exchange Commission for any period exceeding ten
consecutive Trading Days.
Page 17
(c) NO SUSPENSION OF TRADING. Trading in the Company's Common Stock shall
not have been suspended by the SEC or the Principal Market (except for
any suspension of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior to the delivery of
each Put Notice), or trading in securities generally as reported on
the Principal Market shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose
trades are reported on the Principal Market unless the general
suspension or limitation shall have been terminated.
(d) MATERIAL ADVERSE EFFECT. No Material Adverse Effect and no violation
of Section 4.10 shall have occurred.
(e) OPINION OF COUNSEL; ADDITIONAL REQUIREMENTS. The Purchaser shall have
received (i) (A) with respect to the first Settlement Date, the
opinion of special counsel to the Company, Kronish Xxxx Xxxxxx &
Xxxxxxx, LLP, and of Xxxxx Xxxxxxx, Esq., substantially in the form of
Exhibit D hereto, and (B) with respect to each subsequent Settlement
Date a "down-to-date" letter from the Company's counsel, confirming
that there is no change from the counsel's previously delivered
opinion, or else specifying with particularity the reason for any
change and (ii) any other items required to be delivered as set forth
in the Escrow Agreement.
(f) PERFORMANCE WARRANTS. At such time as the Company has received a
cumulative total of $2,500,000 from the Purchaser for the purchase of
the Put Shares, the Company shall issue to the Purchaser the
Performance Warrants to purchase certain shares of Common Stock. The
Performance Warrants shall entitle Purchaser to purchase Common Stock
of the Company in an amount equal to $250,000 divided by the average
of the closing bid prices for the five Trading Days immediately
preceding the Settlement Date for the last payment that brings the
total of the purchases by Purchaser to $2,500,000 (the "Performance
Date"). For example, by way of illustration, if the average closing
bid price of the Company's common stock for the five Trading Days
immediately preceding the Performance Date is $0.17 per share, the
Performance Warrants shall entitle Purchaser to purchase 1,470,588
shares of Common Stock at $0.17 per share ($250,000 divided by $0.17 =
1,470,588 shares). The Performance Warrants shall have a term from
their initial date of issuance of five years. The exercise price of
the Purchase Warrant shall be equal to the average of the closing bid
prices of the Common Stock on the Principal Market during the five
Trading Days immediately prior to the Performance Date. The Common
Stock underlying the Performance Warrants will be registered in the
Registration Statement referred to in Section 4.3 hereof. The
Performance Warrants shall be in the form of Exhibit F hereto.
If the conditions precedent to the closing of any Put shall not be
satisfied or waived within five days of the relevant Settlement Date, the
Company may, within five days thereafter, rescind such Put.
ARTICLE VI
PUT TERMS
SECTION 6.1. PUT TERMS. Subject to the satisfaction of the conditions set forth
in this Agreement, the parties agree as follows:
(a) EXERCISE OF PUT. At any time during the period of 18 months commencing
immediately after the Initial Effective Date (the "Commencement
Period"), the Company, may, in its sole discretion, issue and exercise
a Put, which Put the Purchaser shall be obligated to accept,
Page 18
subject to the terms and conditions set forth in this Agreement. Each
Put shall be exercised by delivery to the Purchaser of a Put Notice.
(b) LIMITATIONS. There shall be at least 15 Trading Days between Puts. The
number of shares of Common Stock purchased by the Purchaser with
respect to each Put shall be determined as set forth in Sections
6.1(c) and 6.1(d) below and settled on the 14th Trading Day after the
date of the Put Notice (the "Settlement Date").
(c) VOLUME RESTRICTIONS. The maximum number of shares that may be put
during any Put Period shall not exceed 15% of the aggregate trading
volume of the Common Stock as traded on the Principal Market during
the 20 consecutive Trading Days immediately preceding the date of the
Put Notice.
(d) MINIMUM. The minimum Investment Amount (based on the Market Price as
of the date of the Put Notice) for any Put shall be $30,000.
(e) PUT NOTICE. The Company shall inform the Purchaser of the number of
Common Shares being Put to the Purchaser (the "Put Shares") by
delivering to the Purchaser with a copy to the Escrow Agent, a Put
Notice via facsimile transmission in accordance with Section 9.4. The
first day of the Put Pricing Period (the "Commencement Date") shall be
deemed to be the next Trading Day following delivery of the Put
Notice; provided that if the Put Notice shall be delivered and receipt
confirmed by the Purchaser by 7:30 a.m. C.S.T. (or C.D.S.T., as
applicable), then the Commencement Date shall be the date of the
delivery of the Put Notice. At no time shall the Purchaser be required
to purchase more than the maximum Put Shares for a given Put Pricing
Period.
(f) DELIVERY OF PUT SHARES. Simultaneous with the delivery of the Put
Notice, and as a condition of the Purchaser's obligation to purchase
the Put Shares, the Company shall deliver to the Escrow Agent
certificates evidencing the Put Shares together with any legal opinion
necessary of their transfer. Such certificates shall bear no legends
and shall be subject to no restrictions on transfer. The delivery of
the Shares into the Purchaser's account in exchange for payment
therefor shall be referred to herein as "Settlement".
(g) PAYMENT. The Purchaser shall purchase and pay for the Put Shares on
the Settlement Date. The amount of the payment for the Put Shares
shall be determined by the product of (i) the number of Put Shares
times (ii) the Purchase Price. Each time the Purchaser shall purchase
Shares pursuant to a Put, the Purchaser shall wire to the Escrow Agent
on the Settlement Date, funds equal to the Purchase Price for the Put
Shares. Each such funding shall be accompanied by a Statement of
Determination of Market Price in the form as attached hereto as
Exhibit G. The Escrow Agent shall, within one Trading Day of the
receipt of the funds representing the Purchase Price, wire funds equal
to the Purchase Price of the Put Shares per the written instructions
of the Company, net of applicable escrow expenses to the Escrow Agent.
(h) PLAN OF DISTRIBUTION OF PUT SHARES. The Put Shares may be disposed of
from time to time in one or more transactions, which may involve:
(i) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; sales on the Nasdaq National Market, or
any other Principal Market on which the shares trade at the time of
sale, including directly with market makers acting as principal;
privately-negotiated transactions, which include direct sales to
purchasers and sales effected through agents; a block trade in which
the broker or dealer so engaged xxxx
Xxxx 19
attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
(ii) purchases by a broker or dealer as principal and resale by
that broker or dealer for its own account;
(iii) an exchange distribution in accordance with the rules of
that exchange or transactions in the over-the-counter market;
(iv) transactions otherwise than in the over-the-counter market;
(v) the writing of put or call options on the securities;
(vi) short sales of the shares and transactions covering short
sales, provided, however, that the maximum number of Shares sold
pursuant to such short sales shall not exceed the number of Put Shares
for the applicable Put Period;
(vii) the pledge of the security for any loan or obligation,
including pledges to brokers or dealers who may, from time to time,
themselves sell or transfer the securities or interest therein;
(viii) the transfer of the securities by the Purchaser to its
partners, members or shareholders; or
(ix) a combination of any of the above.
The sale price for any sales of Put Shares may be:
(i) a fixed price;
(ii) the market price prevailing at the time of sale;
(iii) a price related to such prevailing market price;
(iv) a negotiated price; or
(v) such other price as the Purchaser may determine from time to
time, including sales below the market price. In addition, the shares
may also be sold in private transactions, block transactions to market
makers, or other purchasers at a price per share which may be below
the then current market price.
SECTION 6.2. VOLUME AND PRICE DETERMINATIONS. Whenever in this
Agreement or the Transactional Documents there is a reference to the
trading "volume" of the Company's Common Stock, or a reference to the
"bid" price of the Company's Common Stock, or any other similar term,
then the data as provided by Bloomberg Financial L.P. ("Bloomberg")
relating to any such matter shall be determinative. If for any reason
Bloomberg discontinues the current services relating to these matters,
the parties agree to proceed in good faith to agree upon a substitute
source.
Page 20
ARTICLE VII
TERMINATION
SECTION 7.1. TERM. The term of this Agreement shall begin on the date hereof and
shall end 18 months from the Initial Effective Date or as otherwise set forth in
Section 7.2.
SECTION 7.2. OTHER TERMINATION.
(a) COMPANY EVENT. This Agreement shall terminate upon one Trading Day's
notice if (i) an event resulting in a Material Adverse Effect has
occurred and has not been cured for a period of 60 days, (ii) the
Common Stock is de-listed from the Principal Market unless such
de-listing is in connection with the listing of the Common Stock on
the Nasdaq National Market, Nasdaq SmallCap Market, the American Stock
Exchange or the New York Stock Exchange, (iii) the Company files for
protection from creditors under any applicable law, or (iv) if the
Company elects, in its sole discretion, to terminate this Agreement.
(b) PURCHASER EVENT. The Company may terminate this Agreement upon one
Trading Day's notice if the Purchaser shall fail to fund a properly
noticed Put within three Trading Days of a Settlement Date.
(c) DELAYED EFFECTIVENESS. The Company may terminate this Agreement upon
one Trading Day's notice if the SEC shall fail to declare the
effectiveness of the Registration Statement within 90 days from the
effective date of this Agreement. In such event, the Purchaser shall
be entitled to retain the Initial Warrants and the neither party shall
have any further rights or obligations hereunder.
SECTION 7.3. EFFECT OF TERMINATION.
(a) FAILURE TO PERFORM. In the event of termination by the Company or the
Purchaser, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement shall be terminated without
further action by either party. If this Agreement is terminated as provided in
Section 7.1 or 7.2 herein, this Agreement and other Transaction Documents (other
than any previously issued Warrants (including any Performance Warrants or
Undrawn Minimum Warrants that may have been earned under Section 5.3(f) or
Section 7.3(b), if applicable, and as the case may be)) shall become void and of
no further force and effect, except for Sections 9.1 and 9.2, and Article VIII
herein. Nothing in this Section 7.3 shall be deemed to release the Company or
the Purchaser from any liability for any breach under this Agreement, or to
impair the rights of the Company or the Purchaser to compel specific performance
by the other party of its obligations under this Agreement. If the Company is in
violation of Section 5.3(c) above, then the Company shall be required to pay to
the Purchaser an amount equal to 2% of the cost of any Common Stock then held by
the Purchaser at the time of the violation for each 20-day period (or portion
thereof) during which the Registration Statement is suspended. If the
Registration Statement is suspended for more than 60 consecutive days, then at
Purchaser's option, the Purchaser may terminate this Agreement and the
Transaction Documents. Such termination shall cause the Company to issue the
Undrawn Minimum Warrants as set forth in Section 7.3(b) below, unless the
Purchaser shall have already been issued the Performance Warrants.
(b) FAILURE TO DRAW MINIMUM. If the Company for any reason whatsoever
(other than the termination by the Company under Section 7.2(c)) does not put to
the Purchaser a sufficient number of shares of Common Stock to result in
purchases of at least $2,500,000 during the term hereof, then the Company shall
issue to the Purchaser additional warrants to purchase the Company's Common
Stock in
Page 21
the form of Exhibit H attached hereto (the "Undrawn Minimum Warrants"). The
Undrawn Minimum Warrants shall entitle the Purchaser to purchase Common Stock in
an amount equal to $250,000 divided by the lowest closing bid price of the
Company's Common Stock during the three-month period immediately preceding the
termination date (the "Minimum Warrant Purchase Price"). The Undrawn Minimum
Warrants shall entitle the Purchaser to purchase the shares of Common Stock for
a period of five years from the date of such termination at a purchase price
equal to the Minimum Warrant Purchase Price. For example, by way of
illustration, if at the end of the Term of this Agreement, the Purchaser has
purchased Put Shares totaling less than $2,500,000, and if the lowest closing
bid price during the three-month period prior to such termination was $0.20 per
share, then the Company shall issue to the Purchaser warrants to purchase
1,250,000 shares of the Company's Common Stock at a purchase price of $0.20 per
share ($250,000 divided by $0.20 = 1,250,000 shares). The Common Stock
underlying the Undrawn Minimum Warrants will be registered in accordance with
the terms of the Registration Rights Agreement.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. GENERAL INDEMNITY.
(a) COMPANY INDEMNITY. The Company agrees to indemnify and hold harmless
the Purchaser (and its managers, members, agents, successors and assigns) from
and against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys' fees, charges and
disbursements) incurred by the Purchaser as a result of any inaccuracy in or
breach of the representations, warranties or covenants made by the Company
herein.
(b) PURCHASER INDEMNITY. The Purchaser agrees to indemnify and hold
harmless the Company and its directors, officers, affiliates, agents, successors
and assigns from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation, reasonable
attorneys' fees, charges and disbursements) incurred by the Company as result of
any material inaccuracy in or breach of the representations, warranties or
covenants made by the Purchaser herein. Notwithstanding anything to the contrary
herein, the Purchaser shall be liable under this Section 8.1 for only that
amount as does not exceed the net proceeds to the Purchaser as a result of the
sale of the Shares.
SECTION 8.2. INDEMNIFICATION PROCEDURE. Any party entitled to indemnification
under this Article VIII (an "Indemnified Party") will give written notice to the
indemnifying party of any matters giving rise to a claim for indemnification;
provided, that the failure of any party entitled to indemnification hereunder to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under this Article VIII except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is brought against an Indemnified Party in respect of which
indemnification is sought hereunder, the indemnifying party shall be entitled to
participate in and, unless in the reasonable judgment of counsel to the
Indemnified Party a conflict of interest between it and the indemnifying party
may exist with respect of such action, proceeding or claim, to assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Party.
In the event that the indemnifying party advises an Indemnified Party that it
will contest such a claim for indemnification hereunder, or fails, within 30
days of receipt of any indemnification notice to notify, in writing, such person
of its election to defend, settle or compromise, at its sole cost and expense,
any action, proceeding or claim (or discontinues its defense at any time after
it commences such defense), then the Indemnified Party may, at its option,
defend, settle or otherwise compromise or pay such action or claim. In any
event, unless and until the indemnifying party elects in writing to assume and
does so assume the defense of any such claim, proceeding or action, the
Indemnified Party's costs (including reasonable attorneys' fees, charges
Page 22
and disbursements) and expenses arising out of the defense, settlement or
compromise of any such action, claim or proceeding shall be losses subject to
indemnification hereunder. The Indemnified Party shall cooperate fully with the
indemnifying party in connection with any settlement negotiations or defense of
any such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified
Party, which relates to such action or claim. The indemnifying party shall keep
the Indemnified Party fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. If the indemnifying
party elects to defend any such action or claim, then the Indemnified Party
shall be entitled to participate in such defense with counsel of its choice at
its sole cost and expense. The indemnifying party shall not be liable for any
settlement of any action, claim or proceeding effected without its prior written
consent. Notwithstanding anything in this Article VIII to the contrary, the
indemnifying party shall not, without the Indemnified Party's prior written
consent, settle or compromise any claim or consent to entry of any judgment in
respect thereof which imposes any future obligation on the Indemnified Party or
which does not include, as an unconditional term thereof, the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such claim. The indemnification required by this Article
VIII shall be made by periodic payments of the amount thereof during the course
of investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred, within ten Trading Days of written notice
thereof to the indemnifying party so long as the Indemnified Party irrevocably
agrees to refund such moneys, with interest, if it is ultimately determined by a
court of competent jurisdiction that such party was not entitled to
indemnification. The indemnity agreements contained herein shall be in addition
to (a) any cause of action or similar rights of the Indemnified Party against
the indemnifying party or others, and (b) any liabilities to which the
indemnifying party may be subject.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. FEES AND EXPENSES. Each of the parties to this Agreement shall pay
its own fees and expenses related to the transactions contemplated by this
Agreement, except that the parties recognize that the Company has previously
paid $7,500 in partial payment of the Purchaser's legal fees in the preparation,
negotiation, execution, and delivery of this Agreement and the Transaction
Documents. Upon execution of this Agreement, the Company shall pay to the
Purchaser the balance of the Purchaser's legal fees and expenses in an amount
not to exceed $7,500. In addition, the Company shall pay all reasonable fees and
expenses incurred by the Purchaser in connection with any subsequent amendments,
modifications or waivers of this Agreement, the Escrow Agreement or the
Registration Rights Agreement or incurred in connection with the enforcement of
this Agreement, the Escrow Agreement and the Registration Rights Agreement,
including, without limitation, all reasonable attorneys' fees and expenses if
such subsequent amendment, modification or waiver is at the request of the
Company. The Company shall pay all taxes and duties levied in connection with
issuance of the Shares pursuant hereto.
SECTION 9.2. SPECIFIC ENFORCEMENT. The Company and the Purchaser acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity.
SECTION 9.3. ENTIRE AGREEMENT; AMENDMENT. The Transaction Documents contain the
entire understanding of the parties with respect to the matters covered in the
Transaction Documents, and neither the Company nor the Purchaser makes any
representations, warranty, covenant or undertaking with respect to such matters
other than those in such Transaction Documents. No provision of this
Page 23
Agreement may be waived or amended other than by a written instrument signed by
the party against whom enforcement of any such amendment or waiver is sought.
Only the Purchaser may waive any condition to the closing of any Put.
SECTION 9.4. NOTICES. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery or facsimile at the address or number
designated below (if delivered on a business day during normal business hours or
prior thereto where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours or prior thereto where such notice is to be received) or (b) on
the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such communications
shall be:
If to the Company: Pro Net Link Corp.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxx.xxx
Attention: Xxxxx Xxxxxx
With copies to: Kronish Xxxx Xxxxxx & Xxxxxxx LLC
(which shall not constitute 1114 Avenue of the Americas
notice) Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxx.xxx
Attention: Xxxxxx Xxxxxxx
If to Purchaser: Waveland Capital, LLC
00000 X. Xxxx Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
E-mail: xxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Attention: D. Xxxx Xxxxx
with copies to: Xxxxxxxx Xxxx Killin Brittan & Ray, LLC
(which shall not constitute 000 Xx. Xxxx Xxxxxx, Xxxxx 000
xxxxxx) Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxxxxxxx.xxx
Attn: Xxxxxxx X. Xxxxxxxx
If to Escrow Agent: The Bank of New York
Suite 520
000 Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx 00000
Any party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto in
accordance herewith.
Page 24
SECTION 9.5. WAIVERS. No waiver by either party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
SECTION 9.6. HEADINGS. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
SECTION 9.7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. The
parties hereto may not amend this Agreement or any rights or obligations
hereunder without the prior written consent of the Company and the Purchaser
SECTION 9.8. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
SECTION 9.9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Colorado, without giving
effect to the choice of law provisions. The Company and the Purchaser agree to
submit itself to the in personam jurisdiction of the state and federal courts
situated in Denver, Colorado with regard to any controversy arising out of or
relating to this Agreement. The prevailing party shall be awarded its costs,
including attorneys' fees, from the non-prevailing party as part of any judgment
awarded in any controversy arising out of this Agreement or the other
Transaction Documents. Any party shall have the right to seek injunctive relief
from any court of competent jurisdiction in any case where such relief is
available. The prevailing party in such injunctive action shall be awarded its
costs, including attorney's fees, from the non-prevailing party.
SECTION 9.10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. Execution may be made by delivery by
facsimile.
SECTION 9.11. PUBLICITY. Except as otherwise set forth in this paragraph,
neither the Company nor the Purchaser shall issue any press release or otherwise
make any public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement. After the
Closing, the Company may issue a press release or otherwise make a public
statement or announcement with respect to this Agreement or the transactions
contemplated hereby or the existence of this Agreement; provided, however, that
prior to issuing any such press release, making any such public statement or
announcement, the Company obtains the prior consent of the Purchaser, which
consent shall not be unreasonably withheld or delayed.
SECTION 9.12. SEVERABILITY. The provisions of this Agreement are severable and,
in the event that any court or officials of any regulatory agency of competent
jurisdiction shall determine that any one or more of the provisions or part of
the provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum
Page 25
extent possible, so long as such construction does not materially adversely
effect the economic rights of either party hereto.
SECTION 9.13. FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Purchaser or the Company, each of the Company and the
Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
SECTION 9.14. EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective
only upon satisfaction of the conditions precedent to the Closing set forth in
Article I of the Escrow Agreement.
Executed this 29th day of March, 2001.
PRO NET LINK CORP.
By /s/ Xxxx Xxxxxx Collardeau
---------------------------------------
Xxxx Xxxxxx Collardeau, Its President
WAVELAND CAPITAL, LLC
By /s/ D. Xxxx Xxxxx
---------------------------------------
D. Xxxx Xxxxx, Its Manager
Page 26
EXHIBIT A
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
PUT NOTICE/COMPLIANCE CERTIFICATE
PRO NET LINK CORP.
The undersigned hereby certifies, with respect to shares of Common Stock of
Pro Net Link Corp. (the "Company") issuable in connection with this Put Notice
and Compliance Certificate dated _____________ (the "Notice"), delivered
pursuant to the Common Stock Purchase Agreement dated as of March 29, 2001 (the
"Agreement"), as follows:
1. The undersigned is the duly appointed ___________ Officer of the
Company.
2. Except as set forth on the schedules attached hereto, the
representations and warranties of the Company set forth in the Agreement are
true and correct in all material respects as though made on and as of the date
hereof and all SEC Documents are as represented in Article III of the Agreement.
3. The Company has performed in all material respects all covenants and
agreements to be performed by the Company under the Agreement on or prior to the
date of this Put Notice and has complied in all material respects with all of
the Company's obligations and conditions contained in the Agreement.
4. The number of Put Shares is _____________.
5. The Floor Price, if any, is $__________.
6. The Put Pricing Period shall commence on ____________.
The undersigned has executed this Certificate this ___ day of_______, 200_.
PRO NET LINK, CORP.
By ______________________
Its ________________
Page 27
EXHIBIT B
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is dated as of March 29, 2001, between
Waveland Capital, LLC, a Colorado limited liability company ("Purchaser") and
Pro Net Link Corp., a Nevada corporation (the "Company").
A. Simultaneous with the execution and delivery of this Agreement, pursuant
to a Common Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement") by and between the Purchaser and the Company, the Purchaser has
committed to purchase up to $5,000,000 of the Company's Common Stock and the
Company has agreed to issue to the Purchaser Initial Warrants, and, under
certain circumstances, Performance Warrants, or Undrawn Minimum Warrants. Terms
not defined herein shall have the meanings ascribed to them in the Purchase
Agreement.
B. The Company desires to grant to the Purchaser the registration rights
set forth herein with respect to the Shares.
NOW, THEREFORE, the parties hereto mutually agree as follows:
AGREEMENTS
SECTION 1. REGISTRABLE SECURITIES. "Registrable Security" or "Registrable
Securities" means all shares of the Common Stock of the Company registered
pursuant to the Registration Statement pursuant to the terms and conditions set
forth below. Such shares of the Common Stock and shall be in a sufficient number
for the Company to cover the conversion of the Initial Warrants and, under
certain circumstances, the Performance Warrants or the Undrawn Minimum Warrants
(all as defined in the Purchase Agreement) based on the closing bid price of the
Common Stock as of the date of the filing of the Registration Statement but not
more than 20,000,000 shares. The shares of the Common Stock of the Company to be
registered hereunder, including without limitation, those necessary to be issued
as a result of the Put Notices and those necessary to be issued upon conversion
of all Warrants, shall be referred to as the "Shares." The Registration
Statement shall state that, in accordance with the Securities Act, it also
covers such indeterminate number of additional shares of Common Stock as may
become issuable to prevent dilution resulting from stock splits, or stock
dividends. If at any time the total number of Shares issuable upon (i) exercise
of the Initial Warrants plus (ii) either the Performance Warrants or the Undrawn
Minimum Warrants, exceeds the aggregate number of shares of Common Stock then
registered, the Company shall, within ten business days after receipt of written
notice from the Purchaser, file with the SEC an additional Registration
Statement on Form SB-2 or any other applicable registration statement, to
register such additional shares of Common Stock issuable as provided above that
exceed the aggregate number of shares of Common Stock already registered. For
purposes of determining when Purchaser may require the Company to register
additional Shares as provided above, Purchaser shall only be eligible to request
such registration during the first 10 Trading Days of a calendar month if the
Purchaser shall calculate the average closing bid price of the Shares for the
previous calendar month and, based upon that average bid price, determine the
total number of Shares that would be issuable upon exercise of the total of the
Initial Warrants and either the Performance Warrants or the Undrawn Minimum
Warrants would exceed the Shares previously registered as aforesaid.
Page 28
SECTION 2. RESTRICTIONS ON TRANSFER. The Purchaser acknowledges and
understands that in the absence of an effective Registration Statement
authorizing the resale of the Shares as provided herein, the Shares are
"restricted securities" as defined in Rule 144. The Purchaser understands that
no disposition or transfer of the Shares may be made by Purchaser in the absence
of (i) an opinion of counsel to the Purchaser, in form and substance reasonably
satisfactory to the Company, that such transfer may be made without registration
under the Securities Act or (ii) such registration.
With a view to making available to the Purchaser the benefits of Rule 144,
the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144; and
(b) file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of the Purchaser, make available other information as required
by, and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144.
SECTION 3. REGISTRATION RIGHTS WITH RESPECT TO THE SHARES.
(a) The Company agrees that it will prepare and file with the Securities
and Exchange Commission ("Commission"), within 30 days after the date hereof, a
registration statement (on Form SB-2, or other appropriate form of registration
statement) under the Securities Act (the "Registration Statement"), at the sole
expense of the Company (except as provided in Section 3(d) hereof), in respect
of Purchaser, so as to permit a public offering and resale of the Shares under
the Securities Act by the Purchaser. The Company agrees to register such shares
of the Company's Common Stock so as to have a total of 20,000,000 shares
available for issuance to the Purchaser pursuant to the Purchase Agreement for
resale by the Purchaser.
(b) The Company shall use its best efforts to cause the Registration
Statement to become effective within the earlier of (i) 75 days of the date
hereof, or (ii) five days after receiving written notice of SEC clearance and
will within such five days request acceleration of effectiveness. The Company
will notify the Purchaser of the effectiveness of the Registration Statement
within one Trading Day of such event.
(c) The Company will maintain the Registration Statement or post-effective
amendment filed under this Section 3 hereof effective under the Securities Act
until the date that all the Shares have been disposed of pursuant to the
Registration Statement or until such earlier time as the Shares then held by
Purchaser may be sold under Rule 144 under the Securities Act (the
"Effectiveness Period").
(d) All fees, disbursements and out-of-pocket expenses and costs incurred
by the Company in connection with the preparation and filing of the Registration
Statement under subparagraph 3(a) and in complying with applicable securities
and a reasonable number of Blue Sky laws (including, without limitation, all
attorneys' fees of the Company) shall be borne by the Company. The Purchaser
shall bear the cost of underwriting and/or brokerage discounts, fees and
commissions, if any, applicable to the Shares being registered.
(e) The Purchaser and its counsel shall have a reasonable period, not to
exceed five Trading Days, to review the proposed Registration Statement or any
amendment thereto, prior to filing with the Commission, and the Company shall
provide the Purchaser with copies of any comment letters received from the
Commission with respect thereto within two Trading Days of receipt thereof.
Page 29
(f) Upon reasonable request of Purchaser, the Company shall make reasonably
available for inspection by the Purchaser, any underwriter participating in any
disposition pursuant to the Registration Statement, and any attorney, accountant
or other agent retained by the Purchaser or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the Company's officers, directors and
employees to supply all information reasonably requested by the Purchaser or any
such underwriter, attorney, accountant or agent in connection with the
Registration Statement, in each case, as is customary for similar due diligence
examinations; provided, however, all records, information and documents that are
designated in writing by the Company, in good faith, as confidential,
proprietary or containing any material non-public information shall be kept
confidential by the Purchaser and any such underwriter, attorney, accountant or
agent, unless such disclosure is made pursuant to judicial process in a court
proceeding (after first giving the Company an opportunity promptly to seek a
protective order or otherwise limit the scope of the information sought to be
disclosed) or is required by law, or such records, information or documents
become available to the public generally or through a third party not in
violation of an accompanying obligation of confidentiality. If the foregoing
inspection and information gathering would otherwise disrupt the Company's
conduct of its business, such inspection and information gathering shall, to the
maximum extent possible, be coordinated on behalf of the Purchaser and the other
parties entitled thereto by one firm of counsel designed by and on behalf of the
Purchaser and other parties.
(g) The Company shall qualify the Shares for sale in New York, Colorado,
and such other states reasonably designated by the Purchaser (not to exceed a
total of eight states with total filing fees and related expenses (including
without limitation, reasonable attorneys fees) not to exceed $10,000) that allow
for registration by coordination with SEC cleared registration statements, and
shall furnish indemnification in the manner provided in Section 6 hereof.
However, the Company shall not be required to qualify in any state which will
require an escrow or other restriction relating to the Company and/or the
sellers, or which will require the Company to qualify to do business or become a
taxpayer in such state or require the Company to file therein any general
consent to service of process.
(h) The Company at its expense will supply the Purchaser with copies of the
Registration Statement and other related documents in such quantities as may be
reasonably requested by the Purchaser.
(i) The Company shall not be required by this Section 3 to include the
Purchaser's Shares in any Registration Statement which is to be filed if, in the
opinion of counsel for both the Purchaser and the Company (or, should they not
agree, in the opinion of another counsel experienced in securities law matters
acceptable to counsel for the Purchaser and the Company) the proposed offering
or other transfer as to which such registration is requested would result in all
purchasers or transferees obtaining securities which are not "restricted
securities", as defined in Rule 144 under the Securities Act.
(j) If at any time or from time to time after the effective date of the
Registration Statement, the Company notifies the Purchaser in writing of the
existence of a Potential Material Event (as defined in Section 3(k) below), the
Purchaser shall not offer or sell any Shares or engage in any other transaction
involving or relating to Shares, from the time of the giving of notice with
respect to a Potential Material Event until the Purchaser receives written
notice from the Company that such Potential Material Event either has been
disclosed to the public or no longer constitutes a Potential Material Event (the
"Suspension Period"). Notwithstanding anything herein to the contrary, if a
Suspension Period occurs between the Commencement Date and the Settlement Date
relating to any Put, then the related Put Notice shall be deemed cancelled at
the option of the Purchaser exercised in writing no later than (x) two Trading
Days prior to the applicable Settlement Date and (y) one Trading Day following
the end of the
Page 30
Suspension Period, but in no event later than the scheduled Settlement Date
related to such Put. If a Potential Material Event occurs prior to the date the
Registration Statement is filed, then the Company's obligation to file the
Registration Statement shall be delayed without penalty for not more than 30
calendar days. The Company must give the Purchaser notice of the existence of a
Potential Material Event in writing at least two Trading Days prior to the first
day of any Suspension Period, if lawful and/or possible to do so.
(k) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information that is not ripe for
disclosure in a registration statement, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company or that disclosure of
such information in the Registration Statement would be detrimental to the
business and affairs of the Company; or (ii) any material engagement or activity
by the Company which would, in the good faith determination of the Chief
Executive Officer or the Board of Directors of the Company, be adversely
affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Chief
Executive Officer or the Board of Directors of the Company that the Registration
Statement would be materially misleading absent the inclusion of such
information.
SECTION 4. COOPERATION WITH COMPANY. The Purchaser will cooperate with the
Company in all respects in connection with this Agreement, including timely
supplying all information reasonably requested by the Company (which shall
include all information regarding the Purchaser and proposed manner of sale of
the Registrable Securities required to be disclosed in the Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Registrable Securities and
entering into and performing its obligations under any underwriting agreement,
if the offering is an underwritten offering, in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering. The
Purchaser shall consent to be named as an underwriter in the Registration
Statement. Purchaser acknowledges that in accordance with current Commission
policy, the Purchaser will be named as the underwriter of the Shares in the
Registration Statement.
SECTION 5. REGISTRATION PROCEDURES. If and whenever the Company is required
by any of the provisions of this Agreement to effect the registration of any of
the Registrable Securities under the Securities Act, the Company shall (except
as otherwise provided in this Agreement), exercise reasonable efforts to,
subject to the Purchaser's assistance and cooperation as reasonably required:
(a) (i) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration statement
whenever the Purchaser of such Registrable Securities shall desire to sell or
otherwise dispose of the same (including prospectus supplements with respect to
the sales of securities from time to time in connection with a registration
statement pursuant to Rule 415 promulgated under the Securities Act) and (ii)
take all lawful reasonable efforts such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
and (B) the prospectus forming part of the Registration Statement, and any
amendment or supplement thereto, does not at any time during the Effectiveness
Period (except as otherwise provided in this Agreement) include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
Page 31
(b) list such Registrable Securities on the Principal Market, and any other
exchange on which the Common Stock of the Company is then listed, if the listing
of such Registrable Securities is then permitted under the rules of such
exchange;
(c) subject to Section 3, notify the Purchaser at any time when a
prospectus relating thereto covered by the Registration Statement is required to
be delivered under the Securities Act, of the happening of any event of which it
has knowledge as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, and the Company shall prepare and file a curative amendment under
Section 5(a);
(d) as promptly as practicable after becoming aware of such event, notify
the Purchaser who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the
Commission or any state authority of any stop order or other suspension of the
effectiveness of the Registration Statement at the earliest possible time and
take such lawful reasonable efforts to effect the withdrawal, recission or
removal of such stop order or other suspension;
(e) cooperate with the Purchaser to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be offered pursuant
to the Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts, as the case may be, as the
Purchaser reasonably may request and registered in such names as the Purchaser
may request, pursuant to the Purchase Agreement;
(f) take such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Purchaser of its Registrable Securities in
accordance with the intended methods therefor provided in the prospectus which
are customary for issuers to perform under the circumstances; and
(g) maintain a transfer agent for its Common Stock.
SECTION 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Purchaser and
each person, if any, who controls the Purchaser within the meaning of the
Securities Act ("Distributing Purchaser") against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), to which the Distributing
Purchaser may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, or any related
preliminary prospectus, final prospectus or amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to the
Company by the Distributing Purchaser specifically for use in the preparation
thereof. This Section 6(a) shall not inure to the benefit of any Distributing
Purchaser with respect to any person asserting such loss, claim, damage or
liability who purchased the Registrable Securities which are the subject thereof
if any Distributing Purchaser failed to send or give (in violation of the
Securities Act
Page 32
or the rules and regulations promulgated thereunder) a copy of the prospectus
contained in such Registration Statement, or any amendment or supplement
thereto, to such person at or prior to the written confirmation to such person
of the sale of such Registrable Securities, where any Distributing Purchaser has
any prospectus delivery requirements under the Securities Act or the rules and
regulations promulgated thereunder. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Purchaser agrees that it will indemnify and hold harmless the Company,
and each officer, director of the Company or person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages or liabilities (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) to which the Company or any
such officer, director or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, or any related preliminary prospectus, final
prospectus or amendment or supplement thereto, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, preliminary prospectus, final prospectus or amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by such Distributing Purchaser specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Purchaser may otherwise have. Notwithstanding anything to
the contrary herein, the Purchaser shall not be liable under this Section 6(b)
for any amount in excess of the net proceeds to any Purchaser as a result of the
sale of Registrable Securities pursuant to the Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve the indemnifying
party from any liability which it may have to any indemnified party except to
the extent of actual prejudice demonstrated by the indemnifying party. In case
any such action is brought against any indemnified party, the indemnifying party
will be entitled to participate in and assume the defense thereof, subject to
the provisions herein stated and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action to its final conclusion. The indemnified party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof. The fees and expenses of such counsel, however, shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the indemnified
party. The fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party, or (ii) the named parties to
any such action (including any impleaded parties) include both the Purchaser and
the indemnifying party and the Purchaser shall have been advised by such counsel
that there may be one or more legal defenses available to the indemnifying party
in conflict with any legal defenses which may be available to the Purchaser. In
such event, the indemnifying party shall not have the right to assume the
defense of such action on behalf of the Purchaser, it being understood, however,
that the indemnifying party shall, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable only for
the reasonable fees and expenses of one separate firm of attorneys for the
Purchaser, which firm shall be
Page 33
designated in writing by the Purchaser and be approved by the indemnifying
party). No settlement of any action against an indemnified party shall be made
without the prior written consent of the indemnified party, which consent shall
not be unreasonably withheld. All fees and expenses of the indemnified party
(including reasonable costs of defense and investigation in a manner not
inconsistent with this Section and all reasonable attorneys' fees and expenses)
shall be paid to the indemnified party, as incurred, within 20 Trading Days of
written notice thereof to the indemnifying party; provided, that the
indemnifying party may require such indemnified party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such indemnified party is not entitled to indemnification hereunder.
SECTION 7. CONTRIBUTION. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
Purchaser shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the applicable
Purchaser on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding any other provision of this Section 7, in no
event shall Purchaser be required to undertake liability to any person under
this Section 7 for any amounts in excess of the dollar amount of the net
proceeds to be received by the Purchaser from the sale of the Purchaser's
Registrable Securities pursuant to any Registration Statement under which such
Registrable Securities are to be registered under the Securities Act.
SECTION 8. NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be delivered as set forth in the
Purchase Agreement.
SECTION 9. ASSIGNMENT. Neither this Agreement nor any rights of the
Purchaser or the Company hereunder may be assigned by either party to any other
person. Notwithstanding the foregoing, (a) the provisions of this Agreement
shall inure to the benefit of, and be enforceable by, any transferee of any of
the Common Stock purchased by the Purchaser pursuant to the Purchase Agreement
other than through open-market sales, and (b) upon the prior written consent of
the Company, which consent shall not be unreasonably withheld or delayed in the
case of an assignment to an affiliate of the Purchaser, the Purchaser's interest
in this Agreement may be assigned at any time, in whole or in part, to any other
person or entity (including any affiliate of the Purchaser) who agrees to be
bound hereby.
Page 34
SECTION 10. COUNTERPARTS/FACSIMILE. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when together shall constitute but one and the same instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party. In lieu of the original, a facsimile
transmission or copy of the original shall be as effective and enforceable as
the original.
SECTION 11. REMEDIES AND SEVERABILITY. The remedies provided in this
Agreement are cumulative and not exclusive of any remedies provided by law. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of those that may be hereafter declared
invalid, illegal, void or unenforceable.
SECTION 12. CONFLICTING AGREEMENTS. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the purchasers of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.
SECTION 13. HEADINGS. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
SECTION 14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of Colorado applicable to contracts made
in Colorado by persons domiciled in Denver, Colorado and without regard to its
principles of conflicts of laws. Any action may be brought as set forth in the
Purchase Agreement. Any party shall have the right to seek injunctive relief
from any court of competent jurisdiction in any case where such relief is
available. The prevailing party shall be awarded its costs, including attorneys'
fees, from the non-prevailing party as part of any judgment rendered hereunder.
Any party shall have the right to seek injunctive relief from any court of
competent jurisdiction in any case where such relief is available. The
prevailing party in such injunctive action shall be awarded its costs, including
attorney's fees, from the non-prevailing party.
Executed this 29th day of March, 2001.
PRO NET LINK CORP.
By
---------------------------------------
Xxxx Xxxxxx Collardeau, Its President
WAVELAND CAPITAL, LLC
By
---------------------------------------
D. Xxxx Xxxxx, Manager
Page 35
EXHIBIT C
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link Corp. and Waveland Capital, LLC)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made effective as of March 29,
2001, by and among Pro Net Link Corp., a corporation incorporated under the laws
of Nevada (the "Company"), Waveland Capital, LLC, a Colorado limited liability
company (the "Purchaser"), Xxxxxxx.xxx, (the "Placement Agent") and The Bank of
New York, having an address at Xxxxx 000, 000 Xxxxxxx Xxxxxx, Xxxxx, Xxxxxxx,
Xxxxxxx 00000 (the "Escrow Agent"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Common Stock Purchase Agreement
referred to in the first recital.
RECITALS
A. The Purchaser will from time to time over an 18-month period, as
requested by the Company, purchase shares of the Company's Common Stock from the
Company as set forth in that certain Common Stock Purchase Agreement (the
"Purchase Agreement") dated March 29, 2001, between the Purchaser and the
Company. Under the terms of the Purchase Agreement, the Company will from time
to time (but with a minimum of 15 days between Puts) put shares of its
registered common stock to the Purchaser. The maximum number of Shares that may
be put during any Put Period is equal to 15% of the aggregate trading volume of
the Company's common stock as traded on the Principal Market during the 20
consecutive Trading Days immediately preceding the date of the Put Notice. The
Purchaser will pay for the Put Shares on the 14th Trading Day following the date
of the Put Notice. The Purchaser will deliver by wire transfer to the Escrow
Agent the total purchase price for the Shares and will also deliver a
calculation of the purchase price. The Escrow Agent will disburse the funds to
the Company and the Purchaser as set forth below.
B. The Company and the Purchaser have requested that the Escrow Agent, upon
each exercise of a Put, hold the relevant documents including the certificates
representing the securities issuable upon such Put and disburse the funds to the
Company payable by the Purchaser for the Put Shares.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
AGREEMENTS
ARTICLE I
GENERAL TERMS OF THE ESCROW
SECTION 1.1. The parties hereby agree to establish an escrow account with
the Escrow Agent. The Escrow Agent shall hold the funds and documents as set
forth below.
SECTION 1.2. Within 20 Trading Days following execution of the Purchase
Agreement, the parties shall deliver to the Escrow Agent:
Page 36
(i) the original executed Registration Rights Agreement;
(ii) the original executed Escrow Agreement executed in by Purchaser and
the Company;
(iii) the original executed Purchase Agreement;
(iv) the original executed Performance Warrant, and Undrawn Minimum
Warrant; and
(v) current financial statements of the Company
SECTION 1.3. Wire transfers to the Escrow Agent (not address for notice or
delivery of documents) shall be made as follows:
Bank: The Bank of New York
ABA #
GLA #
Reference TAS # _________________, XYZ Investment Company
Attn:
Only wire transfers shall be accepted.
ARTICLE II
TERMS OF THE ESCROW FOR EACH PUT AND
FOR EXERCISE OF WARRANTS
SECTION 2.1. Each time the Company sends a Put Notice to the Purchaser as
provided in the Purchase Agreement, it shall also send a copy of such Put
Notice, by facsimile, to the Escrow Agent and shall further deliver to the
Escrow Agent within one Trading Day of the Put Notice one or more stock
certificates of the Company (free and clear of all legends or other restrictions
of any kind whatsoever) for the number of Shares equal to the Put Shares (the
"Put Certificates"). The Company shall also deliver to the Escrow Agent the
original executed attorney's opinion in the form of Exhibit D to the Purchase
Agreement (the "Opinion") to the Purchaser. Escrow Agent shall give notice to
Purchaser by facsimile within one Trading Day following receipt of the Put
Certificates and the Opinion that Escrow Agent has received the Put Certificates
and the Opinion.
SECTION 2.2. Each time the Purchaser shall purchase Shares pursuant to a
Put, the Purchaser shall wire to the Escrow Agent funds equal to the Purchase
Price (as defined in the Purchase Agreement) for the Put Shares in the amount
and pursuant to the schedule set forth in the Purchase Agreement. Each such
funding shall be accompanied by a Statement of Determination of Market Price in
the form as attached hereto as Exhibit A (the "Statement"), which Statement
shall further set forth the Purchase Price. Purchaser shall send to the Company
a copy of the Statement at least two Trading Days prior to any Settlement Date.
Upon receipt of such funds and the Statement, the Escrow Agent shall send the
Company by facsimile a copy of the Statement and shall provide notice that it
has received the funds for such Put Shares.
SECTION 2.3. Upon receipt of written confirmation from the transfer agent
or from the Purchaser that such Put Shares have been transferred to the
Purchaser and the Opinion and the supplemental prospectus have been delivered to
the Purchaser, the Escrow Agent shall, within one Trading Day of the
Page 37
receipt of such notice, wire funds equal to the Purchase Price (as defined in
the Purchase Agreement) of the Put Shares per the written instructions of the
Company, net of $__ as escrow expenses to the Escrow Agent.
SECTION 2.4. In the event that the Put Shares are not transferred to the
Purchaser's account and the Opinion and supplemental prospectus are not
delivered to the Escrow Agent as provided above, then Purchaser shall have the
right to declare, by written notice, the Put Notice cancelled.
SECTION 2.5. Within three Trading Days following the Settlement Date on
which the Company has received a cumulative total of $2,500,000 from the
Purchaser for the purchase of the Put Shares, the Escrow Agent shall deliver to
the Purchaser the original Performance Warrant. The Escrow Agent shall fill in
the number of Warrant Shares and amount of the Exercise Price in the first
paragraph of the Performance Warrant pursuant to the Statement of Determination
of Performance Warrant Exercise Price in the form as attached hereto as Exhibit
B (the "Performance Warrant Statement"). The Performance Warrant Statement shall
be delivered to the Company not more than two Trading Days following the
Settlement Date on which the Company received funds that brought the cumulative
total of funds received from the Purchaser to $2,500,000. The Performance
Warrant Statement shall be delivered to the Escrow Agent by the Purchaser
pursuant to the notice provisions of Section 3.10 below. The notice shall affirm
that the Company has received a cumulative total of $2,500,000 from the
Purchaser from the sale of Put Shares. The Escrow Agent shall deliver to the
Purchaser the Performance Warrant within two Trading Days following its receipt
of the Performance Warrant Statement.
SECTION 2.6. Provided that the Performance Warrants have not been delivered
to Purchaser as provided herein, on the earlier of (i) September 29, 2002, or
(ii) the termination of the Purchase Agreement for any reason (except for
termination by the Company pursuant to Section 7.2(c) of the Purchase
Agreement), the Escrow Agent shall deliver to the Purchaser the original Undrawn
Minimum Warrant. The Escrow Agent shall fill in the number of Warrant Shares and
amount of the Exercise Price in the first paragraph of the Undrawn Minimum
Warrant pursuant to the Statement of Determination of Undrawn Mimimum Warrant
Exercise Price in the form as attached hereto as Exhibit C (the "Undrawn Minimum
Warrant Statement"). The Undrawn Minimum Warrant Statement shall be delivered to
the Company and to the Escrow Agent by the Purchaser pursuant to the notice
provisions of Section 3.10 below. The Escrow Agent shall deliver the Undrawn
Minimum Warrant within two Trading Days following its receipt of the Undrawn
Mimimum Warrant Statement. If Purchaser delivers the Undrawn Mimimum Warrant
Statement prior to September 29, 2001, Purchaser shall affirm that the Purchase
Agreement is terminated for reasons other than as set forth in Section 7.2 of
the Purchase Agreement.
SECTION 2.7. If the Company objects to the calculation set forth in either
the Performance Warrant Statement or the Undrawn Minimum Warrant Statement, as
the case may be, then the Company shall give notice to Purchaser within one
Trading Day following delivery of such Statement. The parties shall make a good
faith attempt to resolve any discrepancy in such Statement. If they are unable
to resolve such discrepancy, the determination of the disputed issues shall be
made by a representative of Bloomberg Financial L.P., and the cost of such
determination shall be divided evenly between Purchaser and the Company.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 Escrow Agent shall not be liable to anyone for any damages,
losses, or expense which they may incur as a result of any act or omission of
Escrow Agent, unless such damages, losses, or expenses are caused by Escrow
Agent's willful misconduct or gross negligence. Accordingly, Escrow
Page 38
Agent shall not incur any such liability with respect to (i) any action taken or
omitted in good faith upon the advice of Escrow Agent's counsel or counsel for
any other party hereto, given with respect to any question relating to the
duties and responsibilities of Escrow Agent under this Agreement or (ii) any
action taken or omitted in reliance upon any instrument, including execution, or
the identity or authority of any person executing such instrument, its validity
and effectiveness, but also as to the truth and accuracy of any information
contained therein which Escrow Agent shall, in good faith, believe to be
genuine, to have been signed by a proper person or persons and to conform to the
provisions of this Escrow Agreement.
SECTION 3.2 Escrow Agent shall not be bound in any way by any contract or
agreement between other parties hereto, whether or not it has knowledge of any
such contract or agreement or of its terms or conditions.
SECTION 3.3 The parties hereto, jointly and severally, hereby agree to
indemnify and, hold harmless Escrow Agent against any and all costs, losses,
claims, damages, liabilities, expenses, including reasonable costs of
investigation, court costs, and attorney's fees, and disbursements, which may be
imposed upon Escrow Agent in connection with its acceptance of appointment as
Escrow Agent hereunder, including any litigation arising from this Escrow
Agreement or involving the subject matter hereof, and all such costs, expenses
and disbursements shall be deducted from the income (if sufficient) or paid by
the parties hereto, except for matters arising from the gross negligence or
willful misconduct of Escrow Agent.
SECTION 3.4 As security for such fees and expenses of Escrow Agent and any
and all losses, claims, damages, liabilities and expenses incurred by Escrow
Agent in connection with its acceptance of appointment hereunder, and with
performance of the agreements herein contained, the Escrow Agent is hereby given
a lien upon all assets held by Escrow Agent hereunder, which lien shall be prior
to all other liens upon or claims against such assets.
SECTION 3.5 In the event of any disagreement among any of the parties to
this Agreement, or among them or any other person resulting in adverse claims
and demands being made in connection with or from any property involved herein
or affected hereby, Escrow Agent shall be entitled to refuse to comply with any
such claims or demands as long as such disagreement may continue, and in so
refusing, shall make no delivery or other disposition of any property then held
by it under this Escrow Agreement, and in so doing the Escrow Agent shall be
entitled to continue to refrain from acting until (a) the right of adverse
claimants shall have been finally settled by binding arbitration or finally
adjudicated in a court assuming and having jurisdiction of the property involved
herein or affected hereby or (b) all differences shall have been adjusted by
agreement and Escrow Agent shall have been notified in writing of such agreement
signed by the parties hereto.
SECTION 3.6 In the event of such disagreement (or resignation under the
terms of this Agreement), Escrow Agent may, but need not, tender into the
registry or custody of any court of competent jurisdiction all, money or
property in its hands under the terms of this Agreement, together with such
legal proceedings as it deems appropriate and thereupon to be discharged from
all further duties under this Escrow Agreement. The filing of any such legal
proceeding shall not deprive Escrow Agent of its compensation earned prior to
such filing.
SECTION 3.7 Escrow Agent shall have no obligation to take any legal, action
in connection with this Escrow Agreement or towards its enforcement, or to
appear in, prosecute or defend any action or legal proceeding which would or
might involve it in any cost, expense, loss or liability unless security and
indemnity shall be furnished.
Page 39
SECTION 3.8 This Agreement contains the entire understanding between and
among the parties hereto, and shall be binding upon and inure to the benefit of
such parties, and subject to its terms, their respective successors, heirs,
assigns and legal representatives. Any corporation into which Escrow Agent may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which Escrow Agent
shall be a party, or any corporation to which substantially all the corporate
trust business of Escrow Agent may be transferred, shall, subject to the terms
of the Escrow Agreement, be Escrow Agent under this Escrow Agreement without
further act.
SECTION 3.9 This Escrow Agreement is being delivered in and shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware without giving effect to the principles or rules governing conflicts
of laws.
SECTION 3.10 Notices, requests, demands or other communications required or
permitted under this Escrow Agreement will be in writing and will be deemed
given when actually delivered, received via facsimile notice for which a
confirmation is received, or the third business day after said notice has been
sent by certified mail, postage prepaid, return receipt requested to:
If to Escrow Agent: The Bank of New York
Suite 520
000 Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx 00000
Tel: _______________
Fax: _______________
E-mail: _______________
Attention: ________________
If to Company: Pro Net Link Corp.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxx.xxx
Attention: Xxxxx Xxxxxx
With copies to: Kronish Xxxx Xxxxxx & Xxxxxxx LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxx.xxx
Attention: Xxxxxx Xxxxxxx
If to Purchaser: Waveland Capital, LLC
00000 X. Xxxx Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Attention: D. Xxxx Xxxxx
With copies to: Xxxxxxxx Xxxx Killin Brittan & Ray, LLC
Page 40
000 Xx. Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxxxxxxx.xxx
Attn: Xxxxxxx X. Xxxxxxxx
If to Placement Agent: Xxxxxxx.xxx
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxx@xxxxxxx.xxx
Attn: Xxxxxx Xxxxxx
or such other address as a party may specify in writing to other
parties pursuant hereto.
SECTION 3.11 This Escrow Agreement shall not be modified, revoked, released
or terminated except in writing and signed by the parties hereto.
SECTION 3.12 Should, at any time, any attempt be made to modify this Escrow
Agreement in a manner that would increase the duties and responsibilities of
Escrow Agent, or to modify this Escrow Agreement in any matter which Escrow
Agent shall deem undesirable, or at any other time, Escrow Agent may resign by
notifying the parties in writing, by certified mail to their respective
addresses here and above set forth. Until (i) the acceptance by such successor
Escrow Agent as shall be appointed by such parties; or (ii) 60 days following
the date upon which notice was mailed, whichever occurs sooner, Escrow Agent's
only remaining obligation shall be to perform its duties hereunder in accordance
with the terms of this Escrow Agreement. If said 60 days have passed without the
acceptance by such successor Escrow Agent as shall have been appointed by such
parties, then the Escrow Agent may exercise its rights under item 8(b) (ii) of
this Agreement.
SECTION 3.13 The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no additional duties or obligations shall be
implied hereunder. The parties hereby acknowledge that the Escrow Agent is
serving as the Escrow Agent of the Offering for the limited purposes set forth
herein, and hereby agree that they will not represent or imply that the Escrow
Agent, by serving as the escrow agent hereunder or otherwise, has investigated
the desirability or advisability of this investment, or has approved, endorsed
or passed upon the merits of this Offering or any related, offering. It is
further agreed that no party shall in any way use the name "The Bank of New
York" in any sales presentation or literature except in, the context of the
duties of the Escrow Agent as escrow agent of the Offering in the strictest
sense. Any breach or violation of this paragraph (h) shall be grounds for the
immediate resignation by the Escrow Agent. This Escrow Agreement may be executed
in two (2) or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
Executed as of this 29th day of March, 2001.
PRO NET LINK CORP.
By:
---------------------------------------
Xxxx Xxxxxx Collardeau, President and CEO
Page 41
WAVELAND CAPITAL, LLC
By:
---------------------------------------
D. Xxxx Xxxxx, Manager
ESCROW AGENT:
THE BANK OF NEW YORK
By: ___________________________
Its ___________________
PLACEMENT AGENT:
XXXXXXX.XXX
By: __________________________
Its __________________
Page 42
EXHIBIT D
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
Waveland Capital, LLC
00000 X. Xxxx Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: D. Xxxx Xxxxx
Re: Common Stock Purchase Agreement Between Waveland Capital, LLC and
ProNetLink Corp.
Ladies and Gentlemen:
We have acted as special counsel for ProNetLink Corp., a Nevada corporation
(the "Company"), in connection with the Common Stock Purchase Agreement by and
between the Company and Waveland Capital, LLC a Colorado limited liability
company (the "Purchaser"), dated as of March 29, 2001 (the "Purchase
Agreement"), which provides for the issuance and sale by the Company of up to
$5,000,000 of Common Stock (the "Shares") of the Company and the issuance of the
Initial Warrants, and, under certain circumstances set forth therein, the
Performance Warrants or the Undrawn Minimum Warrants (collectively, the
"Warrants"). Capitalized terms used herein which are not otherwise defined
herein have the meanings assigned to them in the Purchase Agreement.
In rendering the opinions set forth herein, we have examined originals or
copies of the Purchase Agreement, forms of the Warrants to be issued by the
Company, the Registration Rights Agreement between the Purchaser and the Company
dated as of March 29, 2001 (the "Registration Rights Agreement"), and the Escrow
Agreement between the Purchaser, the Company and The Bank of New York, dated as
of March 29, 2001 (the "Escrow Agreement", and together with the Purchase
Agreement, the Warrants and the Registration Rights Agreement, the
"Agreements").
As special counsel, we have made such legal and factual examinations and
inquiries as we have deemed advisable or necessary for the purpose of rendering
this opinion. In addition, we have examined, among other things, originals or
copies of such corporate records of the Company, certificates of public
officials and such other documents and questions of law that we consider
necessary or advisable for the purpose of rendering this opinion. In such
examination we have assumed the genuineness of all signatures on original
documents, the authenticity and completeness of all documents submitted to us as
originals, the conformity to original documents of all copies submitted to us as
certified, facsimile or photostatic copies thereof, the authenticity of such
latter documents and the accuracy of the statements contained in such documents,
the legal capacity of natural persons, and the due execution and delivery of all
documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
As used in this opinion, the expression "to our knowledge" refers to the
current actual knowledge of the attorneys of this firm who have worked on
matters for the Company solely in connection with the Agreements and the
transactions contemplated thereby without independent investigation or inquiry.
Page 43
As to all questions of fact material to the opinions expressed herein, we
have relied, without independent verification or investigation, upon
certificates and/or representations of the parties to the Agreements and public
officials (where applicable), and upon the representations and warranties of the
parties contained in the Agreements, and to the extent any such factual matters
are stated herein, such statements are not our professional opinions, but merely
a recitation of such factual matters from sources described herein.
For purposes of this opinion, we have assumed (i) the due execution and
delivery, pursuant to due authorization and legal capacity, of the Agreements by
all parties thereto other than the Company, (ii) that the Agreements constitute
the legal, valid and binding obligations of each party thereto other than the
Company, enforceable against each party thereto other than the Company in
accordance with their respective terms, and (iii) that the representations and
warranties made by each party to the Agreements other than the Company in the
Agreements and pursuant thereto are true and correct.
Based on the foregoing, and subject to the limitations and assumptions set
forth herein, and having due regard for such legal considerations as we deem
relevant, we are of the opinion that:
1. Each of the Agreements constitutes valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms.
2. To our knowledge, the execution, delivery and performance of the
Agreements by the Company and the consummation by the Company of the
transactions contemplated thereby, including, without limitation, the issuance
of the Shares, the Warrants and the Warrant Shares, do not and will not result
in a violation of any federal or state law, rule or regulation applicable to the
Company or by which any property or asset of the Company is bound or affected,
except for such violations as would not, individually or in the aggregate, have
a Material Adverse Effect.
3. When issued in accordance with the terms of the Purchase Agreement and,
if applicable, the Warrants, and when duly paid for, the Shares will be duly and
validly issued, fully paid and nonassessable.
4. The Registration Statement has been declared effective by the SEC and no
stop order is in effect with respect to the Registration Statement.
Our opinion set forth in Paragraph 1 as to enforceability is qualified to
the extent that the enforceability of the Agreements may be limited by (i)
general equitable principles and the exercise of judicial discretion (including,
without limitation, the unavailability of specific performance as a remedy),
(ii) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance and
other similar laws affecting generally the enforcement of creditors' rights and
(iii) considerations of public policy which may limit the enforceability of
provisions for indemnification or contribution. We express no opinion as to the
enforceability of any provision of the Agreements (a) purporting to specify a
manner of service of process which is an shall be acceptable in any proceeding,
(b) relating to jurisdiction, choice of law or selection of forum or venue, (c)
under which the provisions of the Agreements are severable in the event a
provision that is determined by a court to be an essential part of the agreed
exchange is determined to be invalid or unenforceable, (d) under which any party
waives any rights afforded to it under applicable law or public, including
without limitation, any waiver of the right to a trial by jury, (e) under which
a party is required to pay the legal fees of another party or (f) under which a
party agrees to indemnify (or contribute to the indemnification of) another
party (including, without limitation, Section 8 of the Purchase Agreement and
Section 6 of the Registration Rights Agreement).
Page 44
Our opinion set forth in Paragraph 4 as to the effectiveness of the
Registration Statement is based entirely on our conversations with the
Securities and Exchange Commission on ________, 2001.
We are admitted to practice law in the State of New York and do not purport
to be expert with respect to the laws of the State of Colorado or the laws of
the State of Nevada. Except as expressly stated in this paragraph, we do not
purport to render any opinion with respect to matters not governed by the laws
of the State of New York or the federal laws of the United States. To the extent
the matters as to which we express an opinion herein are or purport to be
governed by the substantive laws of the State of Colorado or the State of
Nevada, we have assumed that such laws are identical to the substantive laws of
the State of New York. We express no opinion as to the applicability to the
subject transactions of the federal securities laws or of the state "Blue Sky"
laws.
Our opinion in Paragraph 2 as to violations of laws, rules and regulations
("Laws") is limited to cover only laws that, given the nature of the transaction
and the parties to it, a lawyer in the relevant jurisdiction exercising
customary diligence would reasonably recognize as being applicable.
Our opinions expressed herein are based on the law in effect and the facts
in existence on the date hereof, and we assume no obligation to revise or
supplement our opinions should the law be changed by legislative action,
judicial decision or otherwise or should any facts change after the date hereof.
This letter is solely for your benefit in connection with the Agreements, and it
may not be delivered to or relied upon by any other person or for any other
purpose without our prior written consent.
Page 45
Waveland Capital, LLC
00000 X. Xxxx Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: D. Xxxx Xxxxx
Re: Common Stock Purchase Agreement Between Waveland Capital, LLC and
ProNetLink Corp.
Ladies and Gentlemen:
I have acted as special counsel for ProNetLink Corp., a Nevada corporation
(the "Company"), in connection with the Common Stock Purchase Agreement by and
between the Company and Waveland Capital, LLC a Colorado limited liability
company (the "Purchaser"), dated as of March 29, 2001 (the "Purchase
Agreement"), which provides for the issuance and sale by the Company of up to
$5,000,000 of Common Stock (the "Shares") of the Company and the issuance of the
Initial Warrants, and, under certain circumstances set forth therein, the
Performance Warrants or the Undrawn Minimum Warrants (collectively, the
"Warrants"). Capitalized terms used herein which are not otherwise defined
herein have the meanings assigned to them in the Purchase Agreement.
In rendering the opinions set forth herein, I have examined originals or
copies of the Purchase Agreement, forms of the Warrants to be issued by the
Company, the Registration Rights Agreement between the Purchaser and the Company
dated as of March 29, 2001 (the "Registration Rights Agreement"), and the Escrow
Agreement between the Purchaser, the Company and The Bank of New York, dated as
of March 29, 2001 (the "Escrow Agreement", and together with the Purchase
Agreement, the Warrants and the Registration Rights Agreement, the
"Agreements").
As special counsel, I have made such legal and factual examinations and
inquiries as I have deemed advisable or necessary for the purpose of rendering
this opinion. In addition, I have examined, among other things, originals or
copies of such corporate records of the Company, certificates of public
officials and such other documents and questions of law that I consider
necessary or advisable for the purpose of rendering this opinion. In such
examination I have assumed the genuineness of all signatures on original
documents, the authenticity and completeness of all documents submitted to me as
originals, the conformity to original documents of all copies submitted to us as
certified, facsimile or photostatic copies thereof, the authenticity of such
latter documents and the accuracy of the statements contained in such documents,
the legal capacity of natural persons, and the due execution and delivery of all
documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
As used in this opinion, the expression "to my knowledge" refers to my
current actual knowledge, without independent investigation or inquiry.
As to all questions of fact material to the opinions expressed herein, I
have relied, without independent verification or investigation, upon
certificates and/or representations of the parties to the Agreements and public
officials (where applicable), and upon the representations and warranties of the
parties contained in the Agreements, and to the extent any such factual matters
are stated herein, such statements are not my professional opinions, but merely
a recitation of such factual matters from sources described herein.
Page 46
For purposes of this opinion, I have assumed (i) the due execution and
delivery, pursuant to due authorization and legal capacity, of the Agreements by
all parties thereto other than the Company, (ii) that the Agreements constitute
the legal, valid and binding obligations of each party thereto other than the
Company, enforceable against each party thereto other than the Company in
accordance with their respective terms, and (iii) that the representations and
warranties made by each party to the Agreements other than the Company in the
Agreements and pursuant thereto are true and correct.
Based on the foregoing, and subject to the limitations and assumptions set
forth herein, and having due regard for such legal considerations as I deem
relevant, I am of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of Nevada and has all requisite power and authority
(corporate and other) to carry on its business and to own, lease and operate its
properties and assets as described in the Company's SEC Documents. The Company
is duly qualified as a foreign corporation to do business and is in good
standing in the State of New York.
2. The Company has the requisite corporate power and authority to enter
into and perform its obligations under the Agreements and to issue the Shares
and the Warrant Shares. The execution and delivery of the Agreements by the
Company and the consummation by it of the transactions contemplated thereby have
been duly authorized by all necessary corporate action. Each of the Agreements
has been duly executed and delivered by the Company.
3. The execution, delivery and performance of the Agreements by the Company
and the consummation by the Company of the transactions contemplated thereby,
including, without limitation, the issuance of the Shares, the Warrants and the
Warrant Shares, do not and will not (i) result in a violation of the Company's
Charter (the "Charter") or By-Laws; or (ii) to my knowledge, except as set forth
on Schedule 3 hereto, materially conflict with, or constitute a material default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture, instrument or any "lock-up"
or similar provision of any underwriting or similar agreement to which the
Company is a party.
4. To my knowledge, the Company is not in violation of any terms of its
Charter or Bylaws.
5. When issued in accordance with the terms of the Purchase Agreement and,
if applicable, the Warrants, and when duly paid for, the Shares will be free of
any liens, encumbrances and preemptive or similar rights contained in the
Company's Charter or Bylaws or, to my knowledge, in any agreement to which the
Company is party, except as set forth in Schedule 2 hereto.
6. To my knowledge, except as disclosed in the SEC Documents and in
Schedule 6 hereto, there are no claims, actions, suits, proceedings or
investigations that are pending against the Company or its properties, or
against any officer or director of the Company in his or her capacity as such,
nor has the Company received any written threat of any such claims, actions,
suits, proceedings, or investigations except for such as would not, individually
or in the aggregate, have a Material Adverse Effect. To my knowledge, the
Company is not a party to or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality, except as described in the SEC Documents or the Agreements or
as set forth in Schedule 6 hereto.
7. To my knowledge, there are no outstanding options, warrants, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for,
Page 47
or giving any right to subscribe for or acquire any shares of Common Stock or
contracts, commitments, understanding, or arrangements by which the Company is
or may become bound to issue additional shares of Common Stock, or securities or
rights convertible or exchangeable into shares of Common Stock, except as
described in the SEC Documents or the Agreements or as set forth in Schedule 7
hereto.
My opinion set forth in Paragraph 1 as to the good standing of the Company
(i) in Nevada is based solely on my review of a certificate of good standing
from the Secretary of State of Nevada dated _____ __, 2001 and (ii) in New York
is based solely on my review of a certificate of good standing from the
Secretary of State of the State of New York dated ______ __, 2001.
I am admitted to practice law in the State of New York and do not purport
to be expert with respect to the laws of the State of Colorado or the laws of
the State of Nevada. Except as expressly stated in this paragraph, I do not
purport to render any opinion with respect to matters not governed by the laws
of the State of New York or the federal laws of the United States. To the extent
the matters as to which we express an opinion herein are or purport to be
governed by the substantive laws of the State of Colorado or the State of
Nevada, I have assumed that such laws are identical to the substantive laws of
the State of New York. I express no opinion as to the applicability to the
subject transactions of the registration requirements of state "Blue Sky" laws.
My opinions expressed herein are based on the law in effect and the facts
in existence on the date hereof, and I assume no obligation to revise or
supplement our opinions should the law be changed by legislative action,
judicial decision or otherwise or should any facts change after the date hereof.
This letter is solely for your benefit in connection with the Agreements, and it
may not be delivered to or relied upon by any other person or for any other
purpose without our prior written consent.
Page 48
EXHIBIT E
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
STOCK PURCHASE WARRANT
To Purchase1,465,416 shares of Common Stock of
PRO NET LINK CORP.
THIS CERTIFIES that, for value received, Waveland Capital, LLC, a Colorado
limited liability company (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after September 29, 2001 (the "Initial Exercise Date") and on
or prior to the close of business on March 28, 2006 (the "Termination Date") but
not thereafter, to subscribe for and purchase from Pro Net Link Corp., a
corporation incorporated in Nevada (the "Company"), up to 1,465,416 shares (the
"Warrant Shares") of Common Stock, $0.001 par value per share, of the Company
(the "Common Stock"). The purchase price of one share of Common Stock (the
"Exercise Price") under this Warrant shall be $0.1706. The Exercise Price and
the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. In the event of any conflict between
the terms of this Warrant and the Common Stock Purchase Agreement dated as of
March 29, 2001 pursuant to which this Warrant has been issued (the "Purchase
Agreement"), the Purchase Agreement shall control. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth for such terms in
the Purchase Agreement.
1. TITLE TO WARRANT. This Warrant and all rights hereunder are
non-transferable except as otherwise set forth herein, in whole or in part.
Notwithstanding the above, the Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant shall be fully
transferable.
2. AUTHORIZATION OF SHARES. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase 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).
3. EXERCISE OF WARRANT.
(a) Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times on or
after the Initial Exercise Date, and on or before the close of business on
the Termination Date by the surrender of this Warrant and the 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 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 by wire transfer or cashier's check
drawn on a United States bank, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares so purchased. Certificates for
shares purchased hereunder shall be delivered to the Holder within three
Trading Days after the date on which this Warrant shall have been exercised
as aforesaid. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and Holder
or any other person so designated to be named therein shall be
Page 49
deemed to have become a holder of record of such shares for all purposes,
as of the date the Warrant has been exercised by payment to the Company of
the Exercise Price and all taxes required to be paid by the Holder, if any,
pursuant to Section 5 prior to the issuance of such shares, have been paid.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates
representing Warrant Shares or within five Trading Days thereafter, deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant.
(c) This Warrant shall also be exercisable by means of a "cashless
exercise" in which the Holder shall be entitled to receive a certificate
for the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
(A) = the average of the closing bid prices per share of Common
Stock for the five Trading Day-period preceding the date of such
election on the OTC Bulletin Board, ("Market Price") or if the Common
Stock is not traded on the OTC Bulletin Board, then the Principal
Market in terms of volume, and converted into US Dollars;
(B) = the Exercise Price of the Warrants; and
(X) = the number of Warrant Shares for which the Holder intends
to exercise of the Warrants in accordance with the terms of this
Warrant.
For example, by way of illustration, if the average of the
closing bid prices of the Common Stock on the five Trading-Day
preceding the date of exercise of the option is $0.50, and the
Exercise Price of the Warrants is $0.20, and the number of Warrant
Shares being exercised is 1.0 million shares, then the Holder would be
entitled to receive a certificate for 600,000 shares of Common Stock
pursuant to the cashless exercise [.50 - .20 = .30. .30 times
1,000,000 = 300,000. 300,000 divided by .50 = 600,000].
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. CHARGES, TAXES AND EXPENSES; ISSUANCE OF CERTIFICATES FOR WARRANT.
Shares issuable hereunder shall be issued without charge to the Holder 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 or in such name
or names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
6. CLOSING OF BOOKS. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant.
Page 50
7. TRANSFER, DIVISION AND COMBINATION.
(a) Subject to compliance with any applicable securities laws, and
upon obtaining the prior written consent of the Company (which it may grant
in its sole discretion), transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. In the event that the
Holder wishes to transfer a portion of this Warrant, the Holder shall
transfer at least 50,000 shares underlying this Warrant to any such
transferee. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may
be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in
such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section
7.
(d) The Company agrees to maintain books for the registration and the
registration of transfer of the Warrants.
8. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price and any applicable taxes as set forth in Section
3(a) above, 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 such surrender or payment.
9. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant 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 (which shall
not include the posting of any bond), 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.
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.
Page 51
11. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
(a) Stock Splits, etc. 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.
In case the Company shall (i) 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 into a
greater number of shares of Common Stock, or (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive the kind and number of shares of Common Stock or other
securities of the Company which it 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 shall
thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per 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 set by the Company for any such
transaction, if any, for such event.
12. MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. In case the Company
shall consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed to the holders of Common Stock of the Company, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
number of Warrant Shares of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
Page 52
any Other Property. The foregoing provisions of this Section 12 shall similarly
apply to successive mergers, consolidations or disposition of assets.
13. 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 of time deemed appropriate by the Board of Directors of the
Company.
14. 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 notice of such adjustment or adjustments setting forth the number of
Warrant Shares (and Other Property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (and Other 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 the absence of manifest error, shall be conclusive evidence of
the correctness of such adjustment.
15. NOTICE OF CORPORATE ACTION. If at any time:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right; or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or
other disposition of all or substantially all the property, assets or
business of the Company to, another corporation;
then, in any one or more of such cases, the Company shall give to
Holder (i) at least 20 days' prior written notice of the date on which a
record date shall be selected for such dividend, distribution or right or
for determining rights to vote in respect of any such, reclassification,
merger, consolidation, sale, transfer or disposition, and (ii) in the case
of any such merger, consolidation, sale, transfer or disposition, at least
20 days' prior written notice of the date when the same shall take place.
Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).
16. AUTHORIZED SHARES. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the
Principal Market upon which the Common Stock may be listed.
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any transfer of assets,
consolidation, merger, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of
Page 53
all such actions as may be necessary or appropriate to protect the rights of
Holder against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefore upon such exercise immediately prior to such increase
in par value, (b) take all such reasonable action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Company to perform its obligations under this
Warrant.
Before taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
17. MISCELLANEOUS.
(a) Jurisdiction. This Warrant shall constitute a contract under the
laws of Colorado, without regard to its conflict of law, principles or
rules, and be subject to arbitration pursuant to the terms set forth in the
Purchase Agreement.
(b) Restrictions. The parties acknowledge that the Warrant Shares
acquired upon the exercise of this Warrant, at all times will be registered
in accordance with the provisions of, and subject to all of the provisions
of, the Registration Rights Agreement.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of any party shall
operate as a waiver of such right or otherwise prejudice such party's
rights, powers or remedies. If the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
Page 54
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant
are intended to be for the benefit of all Holders from time to time of this
Warrant and shall be enforceable by any such Holder, provided the Holder is
the initial holder or a permitted assign.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
(i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: As of March 29, 2001
PRO NET LINK CORP.
By
----------------------
Xxxx Xxxxxx Collardeau
Its President
The foregoing terms and conditions are acknowledged this 29th day of
March, 2001.
WAVELAND CAPITAL, LLC
By
----------------------
D. Xxxx Xxxxx
Its Manager
Page 55
FORM TO BE USED TO EXERCISE WARRANT:
Pro Net Link Corp.
-----------------
New York, NY
Date: _____________________, 20___
The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ________ shares of Common Stock of Pro Net Link Corp. 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.
OR
The undersigned hereby elects irrevocably to convert its right to purchase
____________ shares of Common Stock purchasable under the within Warrant into
__________ shares of Common Stock of __________________________________________
(based on a "Market Price" of $________ per share of Common Stock). Please issue
the Common Stock 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:_______________________________________________________
Form to be used to assign Warrant:
Page 56
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
_________________________________ (the "Company") evidenced by the within
Warrant and does hereby authorize the Company to transfer such right on the
books of the Company.
Dated: ____________________, 20____
--------------------------------------------
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.
Page 57
EXHIBIT F
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
STOCK PURCHASE WARRANT
To Purchase _____________ shares of Common Stock of
PRO NET LINK CORP.
THIS CERTIFIES that, for value received, Waveland Capital, LLC, a Colorado
limited liability company (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time after the date hereof (the "Initial Exercise Date") and on or prior
to the close of business on ________, 200_ [A DATE FIVE YEARS AFTER THE DATE
HEREOF] (the "Termination Date") but not thereafter, to subscribe for and
purchase from Pro Net Link Corp., a corporation incorporated in Nevada (the
"Company"), up to ___________ shares (the "Warrant Shares") of Common Stock,
$0.001 par value per share, of the Company (the "Common Stock"). The purchase
price of one share of Common Stock (the "Exercise Price") under this Warrant
shall be $___. The Exercise Price and the number of Warrant Shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein. In the
event of any conflict between the terms of this Warrant and the Common Stock
Purchase Agreement dated as of March 29, 2001 pursuant to which this Warrant has
been issued (the "Purchase Agreement"), the Purchase Agreement shall control.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth for such terms in the Purchase Agreement.
1. TITLE TO WARRANT. This Warrant and all rights hereunder are
non-transferable except as otherwise set forth herein, in whole or in part.
Notwithstanding the above, the Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant shall be fully
transferable.
2. AUTHORIZATION OF SHARES. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase 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).
3. EXERCISE OF WARRANT.
(a) Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times on
or after the Initial Exercise Date, and on or before the close of
business on the Termination Date by the surrender of this Warrant and
the 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 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 by
wire transfer or cashier's check drawn on a United States bank, the
Holder shall be entitled to receive a certificate for the number of
Warrant Shares so purchased. Certificates for shares purchased
hereunder shall be delivered to the Holder within three Trading Days
after the date on which this Warrant shall have been exercised as
aforesaid. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall
be
Page 58
deemed to have become a holder of record of such shares for all
purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price and all taxes required to be paid by
the Holder, if any, pursuant to Section 5 prior to the issuance of
such shares, have been paid.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates
representing Warrant Shares or within five Trading Days thereafter, deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant.
(c) This Warrant shall also be exercisable by means of a "cashless
exercise" in which the Holder shall be entitled to receive a certificate
for the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
(A) = the average of the closing bid prices per share of Common
Stock for the five Trading Day-period preceding the date of such
election on the OTC Bulletin Board, ("Market Price") or if the Common
Stock is not traded on the OTC Bulletin Board, then the Principal
Market in terms of volume, and converted into US Dollars;
(B) = the Exercise Price of the Warrants; and
(X) = the number of Warrant Shares for which the Holder intends
to exercise the Warrants in accordance with the terms of this
Warrant.
For example, by way of illustration, if the average of the
closing bid prices of the Common Stock on the five Trading-Day
preceding the date of exercise of the option is $0.50, and the
Exercise Price of the Warrants is $0.20, and the number of Warrant
Shares being exercised is 1.0 million shares, then the Holder would be
entitled to receive a certificate for 600,000 shares of Common Stock
pursuant to the cashless exercise [.50 - .20 = .30. .30 times
1,000,000 = 300,000. 300,000 divided by .50 = 600,000].
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. CHARGES, TAXES AND EXPENSES; ISSUANCE OF CERTIFICATES FOR WARRANT.
Shares issuable hereunder shall be issued without charge to the Holder 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 or in such name
or names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
6. CLOSING OF BOOKS. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant.
7. TRANSFER, DIVISION AND COMBINATION.
Page 59
(a) Subject to compliance with any applicable securities laws, and
upon obtaining the prior written consent of the Company (which it may grant
in its sole discretion), transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. In the event that the
Holder wishes to transfer a portion of this Warrant, the Holder shall
transfer at least 50,000 shares underlying this Warrant to any such
transferee. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly transferred,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in
such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section
7.
(d) The Company agrees to maintain books for the registration and the
registration of transfer of the Warrants.
8. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price and any applicable taxes as set forth in Section
3(a) above, 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 such surrender or payment.
9. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant 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 (which shall
not include the posting of any bond), 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.
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.
Page 60
11. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. Stock
Splits, etc. 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. In case the Company shall (i)
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 into a greater number of shares of Common
Stock, or (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then the number of Warrant Shares purchasable
upon exercise of this Warrant immediately prior thereto shall be adjusted so
that the Holder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which it 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
shall thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per 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 set by the Company for any such transaction, if any, for such event.
12. MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. In case the Company
shall consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed to the holders of Common Stock of the Company, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
number of Warrant Shares of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any Other Property. The foregoing provisions of this Section 12 shall similarly
apply to successive mergers, consolidations or disposition of assets.
Page 61
13. 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 of time deemed appropriate by the Board of Directors of the
Company.
14. 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 notice of such adjustment or adjustments setting forth the number of
Warrant Shares (and Other Property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (and Other 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 the absence of manifest error, shall be conclusive evidence of
the correctness of such adjustment.
15. NOTICE OF CORPORATE ACTION. If at any time:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right; or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or
other disposition of all or substantially all the property, assets or
business of the Company to, another corporation;
then, in any one or more of such cases, the Company shall give to
Holder (i) at least 20 days' prior written notice of the date on which a
record date shall be selected for such dividend, distribution or right or
for determining rights to vote in respect of any such, reclassification,
merger, consolidation, sale, transfer or disposition, and (ii) in the case
of any such merger, consolidation, sale, transfer or disposition, at least
20 days' prior written notice of the date when the same shall take place.
Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).
16. AUTHORIZED SHARES. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any transfer of assets,
consolidation, merger, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder against impairment. Without limiting
the generality of the foregoing, the Company will (a) not increase the par value
of any Warrant Shares above the amount payable therefore upon such exercise
immediately prior to such
Page 62
increase in par value, (b) take all such reasonable action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c)
use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Company to perform its
obligations under this Warrant.
Before taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
17. MISCELLANEOUS.
(a) Jurisdiction. This Warrant shall constitute a contract under the
laws of Colorado, without regard to its conflict of law, principles or
rules, and be subject to arbitration pursuant to the terms set forth in the
Purchase Agreement.
(b) Restrictions. The parties acknowledge that the Warrant Shares
acquired upon the exercise of this Warrant, at all times will be registered
in accordance with the provisions of the Registration Rights Agreement.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of any party shall
operate as a waiver of such right or otherwise prejudice such party's
rights, powers or remedies. If the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant
are intended to be for the benefit of all Holders from time to time of this
Warrant
Page 63
and shall be enforceable by any such Holder, provided the Holder is the
initial holder or a permitted assign.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
(i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: ____________, 200_
PRO NET LINK CORP.
By
----------------------
Xxxx Xxxxxx Collardeau
Its President
The foregoing terms and conditions are acknowledged this ___ day of
_______, 2001.
WAVELAND CAPITAL, LLC
By
----------------------
D. Xxxx Xxxxx
Its Manager
Page 64
FORM TO BE USED TO EXERCISE WARRANT:
Pro Net Link Corp.
-----------------
New York, NY
Date: _____________________, 20___
The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ________ shares of Common Stock of Pro Net Link Corp. 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.
OR
The undersigned hereby elects irrevocably to convert its right to purchase
____________ shares of Common Stock purchasable under the within Warrant into
__________ shares of Common Stock of __________________________________________
(based on a "Market Price" of $________ per share of Common Stock). Please issue
the Common Stock 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:_______________________________________________________
Form to be used to assign Warrant:
Page 65
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
_________________________________ (the "Company") evidenced by the within
Warrant and does hereby authorize the Company to transfer such right on the
books of the Company.
Dated: ____________________, 20____
--------------------------------------------
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.
Page 66
EXHIBIT G
(Attached to and made a part of the Common Stock Purchase Agreement
By and Among
Pro Net Link, Corp., Waveland Capital, LLC, and The Bank of New York)
STATEMENT OF DETERMINATION OF MARKET PRICE
This Statement of Determination of Market Price is dated this __ day of
________, 200_, and is delivered pursuant to Section 6.1(g) of the Common Stock
Purchase Agreement (the "Purchase Agreement") entered into on March 29, 2001,
between Pro Net Link, Corp. (the "Company") and Waveland Capital, LLC (the
"Purchaser"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Purchase Agreement.
1. DATE OF PUT NOTICE. The date of the Put Notice is ____________, 200_.
2. LOWEST CLOSING BID PRICES. The three lowest closing bid prices for the
Shares from the period beginning on __________, 200_ [THE COMMENCEMENT
DATE] and ending on ________________, 200_ [TEN TRADING DAYS AFTER THE
COMMENCEMENT DATE], are $__, on ________, 200_, $__, on ________, 200_, and
$__, on ________, 200_.
3. AVERAGE OF LOWEST CLOSING BID PRICES. The average of the three lowest
closing bid prices set forth in paragraph 2 above is $__.
4. NUMBER OF PUT SHARES. The number of Put Shares for this Put is
___________ shares.
5. MARKET PRICE. The Market Price for the Put Shares is $______________
[THE PRODUCT OF THE NUMBER OF PUT SHARES SET FORTH IN PARAGRAPH 4 ABOVE
TIMES THE AVERAGE LOWEST CLOSING BID PRICE SET FORTH IN PARAGRAPH 3 ABOVE].
6. PURCHASE PRICE. The Purchase Price for the Put Shares is $____________
[90% OF THE MARKET PRICE SET FORTH IN PARAGRAPH 5 ABOVE].
The undersigned affirms that the matters set forth in this Statement of
Determination of Market Price are true and correct based upon the published
reports of Bloomberg Financial, L.P.
WAVELAND CAPITAL, LLC
By
----------------------
D. Xxxx Xxxxx, Manager
Page 67
EXHIBIT H
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
STOCK PURCHASE WARRANT
To Purchase _____________ shares of Common Stock of
PRO NET LINK CORP.
THIS CERTIFIES that, for value received, Waveland Capital, LLC, a Colorado
limited liability company (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time after the date hereof (the "Initial Exercise Date") and on or prior
to the close of business on ________, 200_ [A DATE FIVE YEARS AFTER THE DATE
HEREOF] (the "Termination Date") but not thereafter, to subscribe for and
purchase from Pro Net Link Corp., a corporation incorporated in Nevada (the
"Company"), up to ___________ shares (the "Warrant Shares") of Common Stock,
$0.001 par value per share, of the Company (the "Common Stock"). The purchase
price of one share of Common Stock (the "Exercise Price") under this Warrant
shall be $___. The Exercise Price and the number of Warrant Shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein. In the
event of any conflict between the terms of this Warrant and the Common Stock
Purchase Agreement dated as of March __, 2001 pursuant to which this Warrant has
been issued (the "Purchase Agreement"), the Purchase Agreement shall control.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth for such terms in the Purchase Agreement.
1. TITLE TO WARRANT. This Warrant and all rights hereunder are
non-transferable except as otherwise set forth herein, in whole or in part.
Notwithstanding the above, the Warrant Shares which may be issued upon the
exercise of the purchase rights represented by this Warrant shall be fully
transferable.
2. AUTHORIZATION OF SHARES. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase 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).
3. EXERCISE OF WARRANT.
(a) Except as provided in Section 4 herein, exercise of the purchase
rights represented by this Warrant may be made at any time or times on or
after the Initial Exercise Date, and on or before the close of business on
the Termination Date by the surrender of this Warrant and the 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 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 by wire transfer or cashier's check
drawn on a United States bank, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares so purchased. Certificates for
shares purchased hereunder shall be delivered to the Holder within three
Trading Days after the date on which this Warrant shall have been exercised
as aforesaid. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have
Page 68
been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment
to the Company of the Exercise Price and all taxes required to be paid by
the Holder, if any, pursuant to Section 5 prior to the issuance of such
shares, have been paid.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates
representing Warrant Shares or within five Trading Days thereafter, deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant.
(c) This Warrant shall also be exercisable by means of a "cashless
exercise" in which the Holder shall be entitled to receive a certificate
for the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:
(A) = the lowest closing bid price per share of Common Stock for
the three month-period preceding the date of such election on the OTC
Bulletin Board, ("Market Price") or if the Common Stock is not traded
on the OTC Bulletin Board, then the Principal Market in terms of
volume, and converted into US Dollars;
(B) = the Exercise Price of the Warrants; and
(X) = the number of Warrant Shares for which the Holder intends
to exercise the Warrants in accordance with the terms of this Warrant.
For example, by way of illustration, if the lowest closing bid
price of the Common Stock on the three month-period preceding the date
of exercise of the option is $0.50, and the Exercise Price of the
Warrants is $0.20, and the number of Warrant Shares being exercised is
1.0 million shares, then the Holder would be entitled to receive a
certificate for 600,000 shares of Common Stock pursuant to the
cashless exercise [$0.50 - $0.20 = $0.30. $0.30 times 1,000,000 =
300,000. 300,000 divided by .50 = 600,000].
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. CHARGES, TAXES AND EXPENSES; ISSUANCE OF CERTIFICATES FOR WARRANT.
Shares issuable hereunder shall be issued without charge to the Holder 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 or in such name
or names as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
6. CLOSING OF BOOKS. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant.
Page 69
7. TRANSFER, DIVISION AND COMBINATION.
(a) Subject to compliance with any applicable securities laws, and
upon obtaining the prior written consent of the Company (which it may grant
in its sole discretion), transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. In the event that the
Holder wishes to transfer a portion of this Warrant, the Holder shall
transfer at least 50,000 shares underlying this Warrant to any such
transferee. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in
such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly transferred,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in
such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section
7.
(d) The Company agrees to maintain books for the registration and the
registration of transfer of the Warrants.
8. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price and any applicable taxes as set forth in Section
3(a) above, 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 such surrender or payment.
9. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant 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 (which shall
not include the posting of any bond), 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.
10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday, Sunday or a legal holiday, then such action may be taken or
such right may be exercised on the next succeeding day not a Saturday, Sunday or
legal holiday.
Page 70
11. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. Stock
Splits, etc. 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. In case the Company shall (i)
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 into a greater number of shares of Common
Stock, or (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then the number of Warrant Shares purchasable
upon exercise of this Warrant immediately prior thereto shall be adjusted so
that the Holder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which it 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
shall thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per 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 set by the Company for any such transaction, if any, for such event.
12. MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. In case the Company
shall consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed to the holders of Common Stock of the Company, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
number of Warrant Shares of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of Warrant Shares for which
this Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any Other Property. The foregoing provisions of this Section 12 shall similarly
apply to successive mergers, consolidations or disposition of assets.
Page 71
13. 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 of time deemed appropriate by the Board of Directors of the
Company.
14. 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 notice of such adjustment or adjustments setting forth the number of
Warrant Shares (and Other Property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (and Other 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 the absence of manifest error, shall be conclusive evidence of
the correctness of such adjustment.
15. NOTICE OF CORPORATE ACTION. If at any time:
(a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right; or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or
other disposition of all or substantially all the property, assets or
business of the Company to, another corporation;
then, in any one or more of such cases, the Company shall give to
Holder (i) at least 20 days' prior written notice of the date on which a
record date shall be selected for such dividend, distribution or right or
for determining rights to vote in respect of any such, reclassification,
merger, consolidation, sale, transfer or disposition, and (ii) in the case
of any such merger, consolidation, sale, transfer or disposition, at least
20 days' prior written notice of the date when the same shall take place.
Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).
16. AUTHORIZED SHARES. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any transfer of assets,
consolidation, merger, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder against impairment. Without limiting
the generality of the foregoing, the Company will (a) not increase the par value
of any Warrant Shares above the amount payable therefore upon such exercise
immediately prior to such
Page 72
increase in par value, (b) take all such reasonable action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c)
use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Company to perform its
obligations under this Warrant.
Before taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
17. MISCELLANEOUS.
(a) Jurisdiction. This Warrant shall constitute a contract under the
laws of Colorado, without regard to its conflict of law, principles or
rules, and be subject to arbitration pursuant to the terms set forth in the
Purchase Agreement.
(b) Restrictions. The parties acknowledge that the Warrant Shares
acquired upon the exercise of this Warrant, at all times will be registered
in accordance with the provisions of the Registration Rights Agreement.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of any party shall
operate as a waiver of such right or otherwise prejudice such party's
rights, powers or remedies. If the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant
are intended to be for the benefit of all Holders from time to time of this
Warrant
Page 73
and shall be enforceable by any such Holder, provided the Holder is the
initial holder or a permitted assign.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
(i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: ____________, 200_
PRO NET LINK CORP.
By
----------------------
Xxxx Xxxxxx Collardeau
Its President
The foregoing terms and conditions are acknowledged this __ day of _______,
200_.
WAVELAND CAPITAL, LLC
By
----------------------
D. Xxxx Xxxxx
Its Manager
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FORM TO BE USED TO EXERCISE WARRANT:
Pro Net Link Corp.
-----------------
New York, NY
Date: _____________________, 20___
The undersigned hereby elects irrevocably to exercise the within Warrant
and to purchase ________ shares of Common Stock of Pro Net Link Corp. 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.
OR
The undersigned hereby elects irrevocably to convert its right to purchase
____________ shares of Common Stock purchasable under the within Warrant into
__________ shares of Common Stock of __________________________________________
(based on a "Market Price" of $________ per share of Common Stock). Please issue
the Common Stock 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:_______________________________________________________
Form to be used to assign Warrant:
Page 75
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
_________________________________ (the "Company") evidenced by the within
Warrant and does hereby authorize the Company to transfer such right on the
books of the Company.
Dated: ____________________, 20____
--------------------------------------------
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.
Page 76
SCHEDULES, PART 3
(Attached to and made a part of the Common Stock Purchase Agreement
By and Between
Pro Net Link, Corp. and Waveland Capital, LLC)
SCHEDULE 3.1 (C) CAPITALIZATION
None.
SCHEDULE 3.1 (E) NO CONFLICTS
None.
SCHEDULE 3.1 (F) SEC DOCUMENTS, FINANCIAL STATEMENTS
None.
SCHEDULE 3.1 (G) SUBSIDIARIES
None.
SCHEDULE 3.1 (H) NO MATERIAL ADVERSE EFFECT
None.
SCHEDULE 3.1 (I) NO UNDISCLOSED LIABILITIES
None.
SCHEDULE 3.1 (K) INDEBTEDNESS
None.
SCHEDULE 3.1 (L) TITLE TO ASSETS
None.
SCHEDULE 3.1 (M) ACTIONS PENDING
None.
SCHEDULE 3.1 (P) CERTAIN FEES
None.
SCHEDULE 3.1 (R) OPERATION OF BUSINESS
None.
SCHEDULE 3.1 (S) INSURANCE
None.
SCHEDULE 3.1 (U) MATERIAL AGREEMENTS
None.
Page 77
SCHEDULE 3.1 (V) TRANSACTIONS WITH AFFILIATES
None.
SCHEDULE 3.1 (X) EMPLOYEES
None.
SCHEDULE 3.1 (Y) ABSENSE OF CERTAIN DEVELOPMENTS
None.
SCHEDULE 3.1 (Z) GOVERNMENTAL APPROVALS
None.
Page 78
