Exhibit No. 4.5
Form SB-2
Buyers United, Inc.
WARRANT AGREEMENT
BUYERS UNITED, INC.
Warrant for the Purchase of
Shares of Common Stock
Par Value $0.0001
THE HOLDER OF THIS WARRANT, BY ACCEPTANCE HEREOF, BOTH WITH RESPECT TO THE
WARRANT AND COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANT, AGREES AND
ACKNOWLEDGES THAT THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR OTHER COMPLIANCE UNDER THE SECURITIES ACT OR THE LAWS
OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT THE SALE OR
TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE
STATUTES.
This is to certify that, for value received ____________________________,
(the "Holder") is entitled to purchase from BUYERS UNITED, INC. (the "Company"),
on the terms and conditions hereinafter set forth, all or any part of
___________ shares ("Warrant Shares") of the Company's common stock, par value
$0.0001 (the "Common Stock"), at the purchase price of $2.50 per share or the
lowest price provided to any third party individual or entity in the three (3)
months prior to the last "Closing," defined hereinafter (this or the "Warrant").
Upon exercise of this Warrant in whole or in part, a certificate for the Warrant
Shares so purchased shall be issued and delivered to the Holder. If less than
the total warrant is exercised, a new warrant of similar tenor shall be issued
for the unexercised portion of this Warrant. By acceptance hereof, the Holder
agrees to be bound by the terms and conditions of this Warrant.
This Warrant is granted subject to the following further terms and
conditions:
1. This Warrant has vested and is exercisable immediately and through the
period ending 5:00 p.m. Salt Lake City time, two (2) years from the
"Closing," as defined in paragraph 9 of that certain Loan Agreement (the
"Loan Agreement"), executed on even date herewith by the Company and Holder
(the "Exercise Period"). In order to exercise this Warrant with respect to
all or any part of the Warrant Shares for which this Warrant is at the time
exercisable, Holder (or in the case of exercise after Holder's death,
Holder's executor, administrator, heir or legatee, as the case may be) must
take the following actions:
(a) Deliver to the Corporate Secretary of the Corporation an executed
notice of exercise in substantially the form of notice attached to this
Agreement (the "Exercise Notice") in which there is specified the number of
Warrant Shares which are to be purchased under the exercised warrant.
(b) Pay the aggregate Warrant Price for the purchased shares through full
payment in cash or by check made payable to the Corporation's order
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(c) Furnish to the Corporation appropriate documentation that the person or
persons exercising the Warrant (if other than Holder) have the right to
exercise this Warrant.
(d) For purposes of this Agreement, the Exercise Date shall be the date on
which the executed Exercise Notice shall have been delivered to the
Company. Except to the extent the sale and remittance procedure specified
above is utilized in connection with the warrant exercise, payment of the
Warrant Price for the purchased shares must accompany such Exercise Notice.
(e) Upon such exercise, the Company shall issue and cause to be delivered
with all reasonable dispatch (and in any event within three business days
of such exercise) to or upon the written order of the Holder at its
address, and in the name of the Holder, a certificate or certificates for
the number of full Warrant Shares issuable upon the exercise together with
such other property (including cash) and securities as may then be
deliverable upon such exercise. Such certificate or certificates shall be
deemed to have been issued and the Holder shall be deemed to have become a
holder of record of such Warrant Shares as of the Exercise Date.
2. The Warrant Shares have not and may not be registered as of the date of
exercise of this Warrant under the Securities Act or the securities laws of
any state. This Warrant and the Warrant Shares issuable on exercise of the
Warrant, when and if issued, are and may be "restricted securities" as
defined in Rule 144 promulgated by the Securities and Exchange Commission
and must be held indefinitely unless subsequently registered under the
Securities Act and any other applicable state registration requirements, or
an exemption from such registration requirements for resale is available.
The Warrant Shares carry one piggy back registration right. Other than the
foregoing, the Company is under no obligation to register the securities
under the Securities Act or under applicable state statutes. In the absence
of such a registration or an available exemption from registration, sale of
the Warrant Shares will be prohibited for not less than one (1) year
following exercise and until the Holder receives a Letter of Opinion from
the Company stating the Holder's decision to sell said Warrant Shares is in
compliance with the terms of sale under Rule 144. The Holder shall confirm
to the Company the representations set forth above in connection with the
exercise of all or any portion of this Warrant.
3. The number of Warrant Shares purchasable upon the exercise of this Warrant
and the Warrant Price per share shall be subject to adjustment from time to
time subject to the following terms. If the outstanding shares of Common
Stock of the Company are increased, decreased, changed into or exchanged
for a different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock
split or reverse stock split, the Company or its successors and assigns
shall make an appropriate and proportionate adjustment in the number or
kind of shares, and the per-share Warrant Price thereof, which may be
issued to the Holder under this Agreement upon exercise of the Warrants
granted under this Agreement. If any capital reorganization or
reclassification of Common Stock, or consolidation or merger of the Company
with another corporation or the sale of all or substantially all of its
assets to another corporation shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities, or assets
with respect to or in exchange for Common Stock, then as a condition of
such reorganization, reclassification, consolidation, merger or sale,
lawful adequate provisions shall be made whereby the Holder of this Warrant
shall thereafter have the right to acquire and receive on exercise hereof
such shares of stock, securities, or assets as would have been issuable or
payable (as part of such reorganization, reclassification, consolidation,
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merger or sale) with respect to or in exchange for such number of
outstanding shares of Common Stock as would have been received on exercise
of this Warrant immediately before such reorganization, reclassification,
consolidation, merger or sale. In any such case, appropriate provision
shall be made with respect to the rights and interests of the Holder of
this Warrant to the end that the provisions hereof shall thereafter be
applicable in relation to any shares of stock, securities, or assets
thereafter deliverable on the exercise of this Warrant. The Company will
not effect any such consolidation, merger, or sale unless prior to the
consummation thereof the successor corporation resulting from such
consolidation or merger or the corporation purchasing such assets shall
assume, by written instrument mailed or delivered to the Holder hereof at
its last address appearing on the books of the Company, the obligation to
deliver to such Holder such shares of stock, securities, or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
acquire on exercise of this Warrant. The purchase rights represented by
this Warrant shall not be exercisable with respect to a fraction of a share
of Common Stock. Any fractional shares of Common Stock arising from the
dilution or other adjustment in the number of shares subject to this
Warrant shall be rounded up to the nearest whole share.
4. The Company covenants and agrees that all Warrant Shares which may be
delivered upon the exercise of this Warrant will, upon delivery, be free
from all taxes, liens, and charges with respect to the purchase thereof;
provided, that the Company shall have no obligation with respect to any
income tax liability of the Holder.
5. The Company agrees at all times to reserve or hold available a sufficient
number of shares of Common Stock to cover the number of Warrant Shares
issuable upon the exercise of this and all other warrants of like tenor and
other convertible securities then outstanding.
6. This Warrant shall not entitle the Holder hereof to any voting rights or
other rights as a shareholder of the Company, or to any other rights
whatsoever, except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this Warrant or the interest represented
hereby or the Warrant Shares purchasable hereunder until or unless, and
except to the extent that, this Warrant shall be exercised.
7. The Company may deem and treat the registered owner of this Warrant as the
absolute owner hereof for all purposes and shall not be affected by any
notice to the contrary.
8. In the event that any provision of this Agreement is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
9. This Agreement shall be governed by and construed in accordance with the
internal laws of the state of Utah, without regard to the principles of
conflicts of law thereof.
10. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the
Company may at its discretion issue and deliver in exchange and
substitution for and on cancellation of the mutilated Warrant, or in lieu
of and substitution for the Warrant lost, stolen, or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest; but
only on receipt of evidence satisfactory to the Company of such loss,
theft, or destruction of this Warrant and indemnity satisfactory to the
Company. The Holder shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may
prescribe.
11. This Agreement shall be binding on and inure to the benefit of the Company
and the person to whom a warrant is granted hereunder, and such person's
heirs, executors, administrators, legatees, personal representatives,
assignees, and transferees.
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00. For purposes of the Warrant's Exercise Period, the following definition of
the "Closing" (the "Closing") referenced in paragraph 1 hereof shall
apply: On even date herewith, the Company and the Holder entered into the
Loan Agreement, which Loan Agreement defines a term "Closing" in section 9
thereof. The Closing for purposes of this Warrant Agreement shall have the
same definition as the term "Closing" as defined in section 9 of the Loan
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
the signature of its duly authorized officer on this ___ day of
__________________, 2002.
BUYERS UNITED, INC.
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By: Xxxx Xxxxxx
Its: Chief Operating Officer
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