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THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
STOCK PURCHASE WARRANT
This Stock Purchase Warrant (this "Warrant"), dated September 29, 1999, is
issued to LEVEL JUMP ASSET MANAGEMENT, INC. (the "Holder"), by
XXXXXXXXXXXX.XXX, INC., a Colorado corporation (the "Company").
1. Purchase of Shares. Subject to the terms and conditions hereinafter
set forth, the Holder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall
notify the holder hereof in writing), to purchase from the Company 150,000
fully paid and non-assessable shares of Common Stock, $.01 par value (the
"Common Stock"), of the Company (as adjusted pursuant to Section 7 hereof, the
"Shares") for the purchase price specified in Section 2 below.
2. Purchase Price. The purchase price for the Shares is $5.00 per
share. Such price shall be subject to adjustment pursuant to Section 7 hereof
(such price, as adjusted from time to time, is herein referred to as the
"Warrant Price").
3. Exercise Period. This Warrant is exercisable in whole or in part at
any time from the date hereof through September 29, 2001.
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by surrender of this Warrant, together with a duly executed copy of
the form of Exercise Notice attached hereto, to the Secretary of the Company at
its principal offices, and the payment to the Company of an amount equal to the
aggregate purchase price for the number of Shares being purchased.
5. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter, and in any event
within thirty (30) days of the delivery of the subscription notice.
6. Reservation of Shares. The Company covenants that it will at all
times keep available such number of authorized shares of its Common Stock, free
from all preemptive rights with respect thereto, which will be sufficient to
permit the exercise of this Warrant for the full number of Shares specified
herein. The Company further covenants that such Shares, when issued pursuant to
the
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exercise of this Warrant, will be duly and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issuance thereof.
7. Adjustment of Warrant Price and Number of Shares. The number and
kind of securities purchasable upon exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time as follows:
(a) Stock Dividends, Subdivisions, Combinations and Other
Issuances. If the Company shall at any time prior to the expiration of this
Warrant subdivide its Common Stock, by stock split or otherwise, combine its
Common Stock or issue additional shares of its Common Stock as a dividend with
respect to any shares of its Common Stock, the number of Shares issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend and proportionately decreased in the
case of a combination. Appropriate adjustments shall also be made to the
purchase price payable per share, but the aggregate purchase price payable for
the total number of Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 7(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective or as of the record date of such dividend, or, in the event that no
record date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization, Merger, Sale or
Consolidation. In the event of any reclassification, capital reorganization or
other change in the Common Stock of the Company (other than as a result of a
subdivision, combination or stock dividend provided for in Section 7(a) above)
or in the event of a consolidation or merger of the Company with or into, or the
sale of all or substantially all of the properties and assets of the Company, to
any person, and in connection therewith consideration is payable to holders of
Common Stock in cash, securities or other property, then as a condition of such
reclassification, reorganization or change, consolidation, merger or sale,
lawful provision shall be made, and duly executed documents evidencing the same
shall be delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant immediately prior to such
event, the kind and amount of cash, securities or other property receivable in
connection with such reclassification, reorganization or change, consolidation,
merger or sale, by a holder of the same number of shares of Common Stock as were
exercisable by the Holder immediately prior to such reclassification,
reorganization or change, consolidation, merger or sale. In any such case,
appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with
respect to any cash, securities or property deliverable upon exercise hereof.
Notwithstanding the foregoing, (i) if the Company merges or consolidates with,
or sells all or substantially all of its property and assets to, any other
person, and consideration is payable to holders of Common Stock in exchange for
their Common Stock in connection with such merger, consolidation or sale which
consists solely of cash, or (ii) in the event of the dissolution, liquidation or
winding up of the Company, then the Holder shall be entitled to receive
distributions on the date of such event on an equal basis with holders of Common
Stock as if this Warrant had been exercised immediately prior to such event,
less the Warrant Price. Upon receipt of such payment, if any, the rights of the
Holder shall terminate and cease, and this Warrant shall expire. In case of any
such merger, consolidation or sale of assets, the surviving or acquiring person
and, in the event of any dissolution, liquidation or winding up of the Company,
the Company shall promptly, after receipt of this surrendered Warrant, make
payment by delivering a
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check in such amount as is appropriate (or, in the case of consideration other
than cash, such other consideration as is appropriate) to such person as it may
be directed in writing by the Holder surrendering this Warrant.
(c) Certain Distributions. In case the Company shall fix a record
date for the making of a dividend or distribution of cash, securities or
property to all holders of Common Stock (excluding any dividends or
distributions referred to in Sections 7(a) or 7(b) above, the number of Shares
purchasable upon an exercise of this Warrant after such record date shall be
adjusted to equal the product obtained by multiplying the number of Shares
purchasable upon an exercise of this Warrant immediately prior to such record
date by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such distribution, and the denominator of which shall be
the Warrant Price immediately prior to such distribution, less the fair market
value per Share, as determined by the Holder, of the cash, securities or
property so distributed. Such adjustment shall be made successively whenever
any such distribution is made and shall become effective on the effective date
of distribution.
8. Pre-Exercise Rights. Prior to exercise of this Warrant, the Holder
shall not be entitled to any rights of a shareholder with respect to the
Shares, including without limitation, the right to vote such Shares, receive
preemptive rights or be notified of shareholder meetings, and the Holder shall
not be entitled to any notice or other communication concerning the business or
affairs of the Company.
9. "Piggy-Back" Registration.
(a) If the Company proposes to register any of its capital stock
under the 1933 Act in connection with the public offering of such securities
for its own account or for the account of its security holders, other than
Holders of Registrable Shares pursuant hereto (a "Piggy-Back Registration
Statement"), except for (i) a registration relating solely to the sale of
securities to participants in the Company's stock plans or employee benefit
plans or (ii) a registration relating solely to a transaction for which Form
S-4 may be used, then the Company shall give written notice of such
determination to each Holder of Registrable Shares, and each such Holder shall
have the right to request, by written notice given to the Company within
fifteen (15) days of the date that such written notice was mailed by the
Company to such Holder, that a specific number of Registrable Shares held by
such Holder be included in the Piggy-Back Registration Statement (and related
underwritten offering, if any);
(b) If the Piggy-Back Registration Statement relates to an
underwritten offering, the notice given to each Holder shall specify the name
or names of the managing underwriter or underwriters for such offering. In
addition, such notice shall also specify the number of securities to be
registered for the account of the Company and for the account of its
shareholders (other than the Holders of Registrable Shares), if any;
(c) If the Piggy-Back Registration Statement relates to an
underwritten offering, each Holder of Registrable Shares to be included therein
must agree (i) to sell such Holder's Registrable Shares on the same basis as
provided in the underwriting arrangement approved by the Company, and (ii) to
timely complete and execute all questionnaires, powers of attorney,
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indemnities, hold-back agreements, underwriting agreements and other documents
required under the terms of such underwriting arrangements or by the SEC, NASD
or by any state securities regulatory body;
(d) If the Piggy-Back Registration Statement relates to an
underwritten offering, the managing underwriter may limit or exclude the
Registrable Shares from the Piggy-Back Registration Statement if it deems it
desirable and in the best interests of the offering. If the number of
securities proposed to be sold in such underwritten offering exceeds the number
of securities that may be sold in such offering, there shall be included in the
offering, first, up to the maximum number of securities to be sold by the
Company for its own account, and second, as to the balance, if any, pro rata as
between Holders, based upon the number of Registrable Shares proposed to be
registered by each Holder, and any other shareholders having piggy-back
registration rights, based upon the number of shares proposed to be registered
by each of them.
(e) Holders of Registrable Shares shall have the right to withdraw
their Registrable Shares from the Piggy-Back Registration Statement, but if the
same relates to an underwritten offering, they may only do so during the time
period and on the terms agreed upon among the underwriters for such underwritten
offering and the Holders of Registrable Shares;
(f) The Holders will advise the Company at the time a registration
becomes effective whether the Registrable Shares included in the registration
will be underwritten or sold directly by the Holders;
(g) All demand and piggy-back registration rights of the Holders
shall terminate when all of the Registrable Shares then outstanding may be sold
pursuant to Rule 144(k) or when all of the Registrable Shares have been sold in
registered public offerings. These registration rights are transferable to any
Holder of the Registrable Shares.
(h) All expenses incurred in connection with the registration of
the Registrable Shares shall be borne by the Company, other than underwriting
discounts and commissions, registration, filing and qualification fees, and
printing expenses applicable to the Registrable Shares, and legal counsel to the
selling Holders, which shall be borne by the selling Holders.
11. Restricted Securities. The Holder understands that this Warrant
and the Shares purchasable hereunder constitute "restricted securities" under
the federal securities laws and are being, or will be, acquired from the Company
in transactions not involving a public offering and accordingly may not, under
such laws and applicable regulations, be resold or transferred without
registration under the Securities Act of 1933, as amended, or an applicable
exemption from registration. In this connection, the Holder acknowledges that
Rule 144 of the Securities and Exchange Commission is not now, and may not in
the future be, available for resales of the Shares purchased hereunder. The
Holder further acknowledges that the Shares and any other securities issued
upon exercise of this Warrant shall bear a legend substantially in the form of
the legend appearing of the face hereof.
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12. Investment Purpose. The Holder represents and warrants to the
Company that the Warrants and Shares are acquired for investments purposes only
and are not acquired with a view to, or for sale in connection with, any
distribution.
13. Successors and Assigns. This Warrant may not be assigned without
the prior written consent of the Company.
14. Governing Law. This Warrant shall be governed by the laws of the
State of Colorado, excluding the conflicts of laws provisions thereof.
XXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Chief Financial Officer
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EXERCISE NOTICE
Dated ,
The undersigned hereby irrevocably elects to exercise the Stock Purchase
Warrant, dated September 29, 1999, issued by XxxxxXxxxxxx.xxx, a Colorado
corporation (the "Company") to the undersigned to the extent of purchasing
shares of Common Stock and hereby makes payment of $ in payment
of the aggregate Warrant Price of such Shares.
LEVEL JUMP ASSET MANAGEMENT,
INC.
By:
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