EXHIBIT 10.41
NO SALE OR TRANSFER OF THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT
MAY BE MADE UNTIL THE EFFECTIVENESS OF A REGISTRATION STATEMENT OR OF A
POST-EFFECTIVE AMENDMENT THERETO UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), COVERING THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT, OR
UNTIL THE COMPANY IS IN RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT.
WARRANT AGREEMENT
Warrant Agreement (the "AGREEMENT") dated March 1, 2002 between Junum
Incorporated, a Delaware corporation (the "COMPANY"), and KNG Consulting, LLC
("Consultant"), and his permitted assigns (the "HOLDERS").
BACKGROUND INFORMATION
----------------------
WHEREAS, the Company agreed to grant warrants (the "Warrants") to the
Consultant under the terms of that certain Consulting Agreement, with an
Effective Date of March 1, 2002, by and between Consultant and the Company (the
"Consulting Agreement"). Under the terms of the Consulting Agreement, the
Warrants shall entitle the Holders to purchase up to 1,800,000 shares of the
Company's common stock, $0.01 par value ("COMMON STOCK") at any time prior to
the fifth anniversary of the issuance of such Warrants, subject to the vesting
schedule set forth herein. Each Warrant entitles the Holder to purchase one duly
authorized, fully paid and nonassessable share of Common Stock upon exercise
thereof.
WHEREAS, each Holder will be entitled to receive a certificate
representing the Warrant (each a "CERTIFICATE") and shall be dated effective as
of the date of issuance. The shares of Common Stock reserved for issuance under
this Agreement are sometimes hereinafter referred to as the "WARRANT SHARES."
The Warrant Shares shall not be issued under the Company's Consultant
Compensation Plan.
WHEREAS, the Company desires to fix the form and provisions of each
Certificate that will represent one or more issued Warrants, as well as the
terms of the Warrants themselves with respect to issuance, exercise, and
expiration, and the respective rights, limitations, obligations and duties of
the Company and each Holder which will be established upon any such issuance;
and to make each Warrant when represented by a Certificate that has been duly
executed by the Company (or by any substitute or replacement Certificate issued
under the terms set forth below), the valid, binding and legally enforceable
obligation of the Company.
Accordingly, the Company and the Holders hereby agree as follows:
OPERATIVE PROVISIONS
--------------------
1. ISSUANCE. Pursuant to the Consulting Agreement, which is incorporated
herein and made a part hereof by this reference, the Company shall
issue Warrant Certificates to purchase 1,800,000 shares of Common Stock
on the date hereof.
2. WARRANT CERTIFICATES. Each Certificate to be delivered pursuant to this
Agreement shall be in the form set forth in Exhibit A (the "WARRANT
CERTIFICATE") which is attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement.
1
3. WARRANTS GOVERNED BY AGREEMENT. This Warrant Agreement governs an issue
of up to an aggregate of 1,800,000 Warrants, each of which will entitle
its Holder to purchase one Warrant Share on the terms and subject to
the conditions and possible adjustments set forth herein. The Warrants
shall vest as to 50,000 shares on the date hereof, and as to the
remaining 1,750,000 shares, in equal monthly installments of 50,000
shares on the first day of each calendar month commencing on April 1,
2002 through and including February 1, 2005, and may be exercised after
such vesting dates, in whole or in part, from time to time, in
accordance with the terms of this Agreement and the Warrants.
4. EXECUTION AND DATE OF WARRANT CERTIFICATES.
(a) GENERAL. Each Certificate shall be executed on behalf
of the Company by its chief executive officer, its president
or any vice president, under its corporate seal which will be
reproduced thereon, and attested by its corporate secretary or
one of its assistant secretaries.
(b) DATE OF CERTIFICATE. Each Certificate shall be dated
as of the date of execution by the Company officers described
above.
5. OWNERSHIP. The Company shall acknowledge each registered Holder of a
Warrant Certificate as the absolute owner thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), in
connection with its sale, transfer or exercise, any distribution to the
holder thereof and for all other purposes, and, subject to the
provisions of Section 9 below, the Company shall not be affected by any
notice to the contrary.
6. RIGHT TO EXERCISE WARRANTS.
(a) EXPIRATION DATE. Each Warrant shall expire at 5:00
p.m., Pacific Standard Time, on the earlier of (i) Xxxxx 0,
0000, (xx) the date which is two years from the date of
termination without cause of the Consulting Agreement, or
(iii) the date which is two months from the date of
termination of the Consulting Agreement for Cause (as defined
therein) (the "Expiration Date"), and, prior thereto, may be
exercised at any time after the date hereof, subject to the
vesting schedule set forth above.
(b) EXERCISE PRICE AND PAYMENT. Subject to the provisions
of this Agreement, the Holder shall have the right to purchase
from the Company (and the Company shall issue and sell to such
Holder) that number of fully paid and non-assessable Warrant
Shares, at the price of $0.17 per share (the "EXERCISE
PRICE"), as shall be designated in a completed and executed
Election to Purchase form appearing on the reverse side of
each Certificate, and upon surrender to the Company of the
Certificate evidencing each such Warrant being exercised, and
payment of a monetary amount equal to the product of the
Exercise Price and the number of Warrant Shares being
purchased (the "Exercise Price Multiple"). The Exercise Price
Multiple may be paid in cash, check, or by certified or
official bank check payable to the order of the Company, or by
"cashless" exercise, as set forth below.
(c) In the event an "easy exercise" as described in
Section 6(d) below is not lawfully available, in lieu of
exercising the Warrants or any portion thereof, the Holder or
Holders, if applicable, shall have the right to convert the
Warrants, or any portion thereof, into Warrant Shares by
executing and delivering to the Company, at its principal
executive office, a duly executed Election to Purchase Form,
specifying the number of Warrants to be exercised and
converted, and accompanied by the surrender of the Warrant.
The person or persons in whose name or names the certificates
for the Warrant Shares shall be issuable upon such conversion
shall be deemed the holder or holders of record of such
Warrant Shares at that time and date. The number of Warrant
Shares to be issued upon such conversion shall be computed
using the following formula:
X = (P)(Y)((A-B)/A)
X = the number of Warrant Shares to be issued to such Holder for the
percentage of Warrants being converted
P = the percentage of the Warrants being converted
Y = the total number of Warrant Shares then issuable upon exercise of
the Warrants
A = the Fair Value (as defined below) of one Warrant Share
B = the Exercise Price on the date of conversion
2
(d) EASY EXERCISE. In the event the Warrant Shares have
been registered on a then effective registration statement, or
if the Warrant Shares are otherwise not "restricted
securities" under the Securities Act of 1933, as amended, or
are otherwise lawfully permitted to be sold in an open market
transaction, and if permitted by law and applicable
regulations, the Holder may pay the exercise price through a
commitment from the Holder and a broker-dealer that is a
member of the National Association of Securities Dealers (a
"NASD Dealer"), whereby the Holder irrevocably elects to
exercise all or a portion of the Warrant and to sell in an
orderly manner as soon as possible the Warrant Shares issuable
pursuant to such exercise and to pay the Exercise Price
Multiple. The Holder and the NASD Dealer shall irrevocably
commit upon sale of such Warrant Shares to forward the
Exercise Price Multiple directly to the Company. All proceeds
of sales of the Warrant Shares shall be assigned to the
Company to secure the obligation to pay the Exercise Price
Multiple, and all such proceeds shall be remitted directly to
the Company until such Exercise Price Multiple has been paid
in full.
(e) Within three (3) business days following such
surrender of a Certificate and payment of the Exercise Price
Multiple (except in the case of an "easy exercise" as
described in subsection 6(d) above), the Company shall cause
to be issued and delivered promptly to the Holder, or, upon
the written order of the Holder, in such other name as the
Holder may designate, a certificate for the Warrant Shares
being purchased, as evidenced by the Election to Purchase.
Such Warrant Share certificate shall be deemed to have been
issued and any person so designated to be named therein shall
be deemed to have become the Holder of such Shares as of the
date of the surrender of the applicable Certificate and
payment of the Exercise Price Multiple. The Warrants evidenced
by a Certificate shall be exercisable, at the election of the
Holder, either as an entirety or from time to time for only
part of the number of Warrants specified in the Certificate.
In the event that less than all of the Warrants evidenced by a
Certificate surrendered upon the exercise of Warrants are
exercised at any time prior to the date of expiration of the
Warrants, a new Certificate shall be issued for the remaining
number of Warrants evidenced by the Certificate so
surrendered. All Certificates surrendered upon exercise of
Warrants shall be canceled by the Company.
(f) NO FRACTIONAL SHARES TO BE ISSUED. No fraction of a
Share shall be issued upon any exercise of Warrants, but, in
lieu thereof, the number of shares issuable upon exercise of
the Warrants shall be rounded up to the nearest full share of
Common Stock. No fractional Warrants shall be issued.
7. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes
attributable to the initial issuance of Shares upon the exercise of
Warrants; provided that the Company shall not be required to pay any
such taxes which may be payable in respect of any transfer involved in
the issue of any Certificates or any certificates for Shares in a name
other than that of the Holder of a Certificate surrendered upon the
exercise of a Warrant.
8. RESERVATION AND ISSUANCE OF SHARES. The Company will at all times
reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock or its
authorized and issued shares of Common Stock held in its treasury, for
the purpose of enabling it to satisfy any OBLIGATION to issue Warrant
Shares upon exercise of Warrants, the full number of Warrant Shares
deliverable upon the exercise of all outstanding Warrants. Before
taking any action which would cause an adjustment pursuant to Section
10 reducing the Exercise Price below the then par value (if any) of the
Warrant Shares issuable upon exercise of the Warrants, the Company will
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
paid and non-assessable Warrant Shares at the Exercise Price as so
adjusted. The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will be validly issued, fully paid and
non-assessable outstanding Warrant Shares of the Company or any
successor.
9. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any Certificate
shall be mutilated, lost, stolen or destroyed, the COMPANY shall issue
in exchange and substitution for and upon cancellation of the mutilated
Certificate, or in lieu of and substitution for the Certificate lost,
stolen or destroyed, a new Certificate, of the same series and
representing an equivalent right or interest, but only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction
of such Certificate and indemnity, if requested, also satisfactory to
it. Applicants for such substitute Certificates shall also comply with
such other reasonable terms and pay such other reasonable charges as
the Company may prescribe.
3
10. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE. The
Exercise Price and the number of Warrant Shares purchasable upon the
exercise of each Warrant are subject to adjustment from time to time as
set forth in this Section 10.
(a) DECREASE OR INCREASE IN EXERCISE PRICE UPON
SUBDIVISION OR COMBINATION. If the Company shall at any time
subdivide or combine the outstanding shares of its Common
Stock, the Exercise Price in effect immediately prior to such
subdivision or combination shall be proportionately increased
in the case of a combination or decreased in the case of a
subdivision, effective at the close of business on the date of
such subdivision or combination, as the case may be.
(b) ADJUSTMENT IN NUMBER OF SHARES UPON CHANGE OF
EXERCISE PRICE. Upon each adjustment of the Exercise Price
pursuant to Section 10.a hereof, each Holder shall thereafter
(until another such adjustment) be entitled to purchase, at
the adjusted Exercise Price, the number of shares of Common
Stock, calculated to the nearest full share, obtained by
multiplying the number of shares of Common Stock purchasable
hereunder immediately prior to such adjustment by the Exercise
Price in effect immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise
Price.
(c) MERGER. If the Company, at any time while any
Warrants remain outstanding and unexpired, consolidates with
or merges into or with any other corporation, the Warrants
shall thereafter evidence the right of the Holder to purchase
the number and kind of securities in respect of the surviving
corporation as would have been issuable or distributable to
the Holder had he, she or it exercised the unexercised portion
of the Warrants immediately prior to such consolidation or
merger.
(d) DISTRIBUTION OF COMPANY ASSETS. If the Company shall
make any distribution of its assets to the holders of its
Common Stock as a partial or complete liquidating dividend, a
return of capital or otherwise. each Holder shall be entitled,
after occurrence of the record date for determining
shareholders entitled to such distribution, but before the
date of such distribution, to exercise any Warrants then owned
and purchase any or all of the shares of Common Stock then
subject hereto, and thereupon to receive the amount of such
assets (or at the option of the Company a sum equal to the
value thereof at the time of such distribution to holders of
Common Stock as such value is determined in good faith by the
Company's Board of Directors) which would have been payable to
such Holder had he, she or it been the holder of record of
such shares of Common Stock on the referenced record date.
11. TRANSFER RESTRICTIONS. The Holder acknowledges that neither this
Warrant nor the Warrant Shares may be offered or sold except pursuant
to an effective registration statement under the Securities Act or a
written opinion of counsel satisfactory to the Company that an
exemption from registration under the Securities Act is available. Each
Holder agrees that prior to making any disposition of the Warrant or
Warrant Shares, unless a registration statement under the Securities
Act is in effect with regard thereto, the Holder shall give written
notice to the Company describing briefly the manner in which any such
proposed disposition is to be made, along with an opinion of counsel
satisfactory to the Company which provides that no registration
statement or other notification or post-effective amendment thereto
(hereinafter collectively a "REGISTRATION STATEMENT") under the
Securities Act is required with respect to such disposition.
12. TRANSFER - GENERAL. Subject to the terms hereof, the Warrants shall be
transferable only on the books of the Company MAINTAINED at its
principal office upon delivery thereof duly endorsed by the Holder or
by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In
all cases of transfer by an attorney, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced. and may be
required to be deposited and to remain with the Company in its
discretion. Upon any registration of transfer. the person to whom such
transfer is made shall receive a new Warrant or Warrants as to the
portion of the Warrant transferred, and the Holder of such Warrant
shall be entitled to receive a new Warrant or Warrants from the Company
as to the portion thereof retained. The Company may require the payment
of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any such transfer.
4
13. PIGGYBACK REGISTRATION RIGHTS.
(a) In case the Company shall at any time determine to
register any of its securities under the Securities Act, other
than by way of Securities and Exchange Commission (the
"COMMISSION") Forms S-4 or S-8, or any successor form thereto,
or any other appropriate form, or to qualify such securities
under the securities laws of any state, at its own initiative,
the Company will give prompt notice thereof to the Holder, and
if so requested in writing by any person to which such notice
shall have been properly provided, the Company will include
among the securities which it then endeavors to make the
subject of a registration statement to be filed under the
Securities Act, or to qualify under such state securities
laws, all or any part of such previously issued shares, or of
the shares then eligible for issuance upon exercise of the
Warrants as shall be specified in such request (the
"DESIGNATED SHARES"), and the Company will use its best
efforts to cause all such registrations, qualifications or
compliances to be effected and to be kept effective for not
less than 90 days.
(b) Notwithstanding the foregoing, if at any time after
the date hereof the Company tiles a registration statement
with respect to any of its securities in connection with a
bona fide underwritten public offering of the same, then (a)
any Designated Shares which shall have been made the subject
of a registration statement filed for the purpose of
qualifying shares under the Securities Act for future sale or
which are, in connection with such a registration. being or to
be included pursuant to Section 13, shall, if so requested by
the managing underwriter(s) and consented to by each
applicable holder of Designated Shares, be offered for sale
through the underwriters on the same terms and conditions
under which the Company's securities are to be distributed,
provided that if the managing underwriter(s) elect to
include less than all Designated Shares to be offered by
selling shareholders, those to be included in the underwritten
portion of the offering shall be, as to each holder thereof,
as nearly equal in number as is practicable; and (b) those
Designated Shares which are not being distributed by the
underwriters in such public offering shall be withheld from
the market by the selling shareholders for a period, not to
exceed 180 days, measured from the effective date of the
registration statement by which such public offering is being
effected, which the managing underwriter(s) determine
necessary in order to stabilize the market for the
underwritten shares. Notwithstanding the foregoing. in the
event in the written opinion of such managing underwriter(s),
the Designated Shares may not be included in the registration
statement without having a material adverse effect on the
Company's offering of it securities, the managing
underwriter(s) shall have the right to eliminate or reduce the
number of Designated Shares proportionately among the Holders.
(c) All expenses incurred in connection with any
registration, qualification or compliance effected by the
Company pursuant to Section 13, including, without limitation,
all registration and filing fees, fees and expenses of
complying with federal and state securities laws, printing
expenses, fees and disbursements of counsel for the Company.
and all expenses of any special audits incidental to or
required by such registration (collectively, the "REGISTRATION
EXPENSES") shall be borne by the Company, provided that each
holder of Designated Shares shall be responsible for that
portion of any underwriting commission incurred in connection
with the underwritten distribution of the securities made the
subject of such registration effort as shall bear the same
ratio to such commission as the value of the Designated Shares
sold by the holder in the offering bears to the value of all
Company securities sold in such offering.
(d) INDEMNIFICATION BY THE COMPANY: In ease of each
registration, qualification or compliance effected by the
Company pursuant to Section 13, the Company will indemnify and
hold harmless each holder of Designated Shares from and
against all claims, losses, damages and liabilities of such
holder arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
prospectus or other document incident to such registration,
qualification or compliance or any omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, or any violation
by the Company of any rule or regulation promulgated under the
Securities Act or the Exchange Act applicable to the Company
and relating to action or inaction required of the Company in
connection with any such registration, qualification or
compliance; provided that the Company will not be liable to
any such person to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue
statement or omission based upon written
5
information furnished to the Company by an instrument duly
executed by such person and stated to be specifically for use
therein.
(e) INDEMNIFICATION BY THE HOLDERS. Each Holder hereby
agrees, and by requesting registration of Designated Shares,
each Holder agrees, that in connection with each registration
statement effected pursuant hereto in which Common Stock
issued upon exercise of all or any portion of the Warrants
(the "Holder Common Stock") is to be disposed of, each of the
participating Holders shall, severally but not jointly,
indemnify and hold harmless, to the fullest extent permitted
by law, the Company, each other selling Holder and their
respective directors, officers, agents and employees and each
person who controls the Company and each other selling Holder
(within the meaning of the Securities Act and the Exchange
Act) and the managing underwriter if any, and its directors,
officers, agents. and employees and each person who controls
such underwriter (within the meaning of the Securities Act and
Exchange Act), in each case against any losses, claims,
damages, liabilities and expenses resulting from any untrue
statement of a material fact or any omission of a material
fact required to be stated in such registration statement or
prospectus or preliminary prospectus or necessary to make the
statements therein not misleading, to the extent that such
untrue statement or omission is contained in any information
furnished by such folder to the Company expressly for
inclusion in such registration statement or prospectus;
provided that each Holder will not be liable to the Company to
the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission
based upon written information furnished to a Holder by an
instrument duly executed by the Company and stated to be
specifically for use therein.
(f) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder shall give prompt notice
to the indemnifying party of any claim with respect to which
it shall seek indemnification and shall permit such
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party;
PROVIDED, however, that any person entitled to indemnification
hereunder shall have the right to employ separate counsel and
to participate in the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such
person unless (i) the indemnifying party shall have agreed to
pay such fees or expenses, or (ii) the indemnifying party
shall have failed to assume the defense of such claim and to
employ counsel reasonably satisfactory to such person or (iii)
such assumption would constitute an actual conflict of
interest (in which case, if the person notifies the
indemnifying party in writing that such person elects to
employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to
assume the defense of such claim on behalf of such person). If
such defense is not assumed by the indemnifying party, the
indemnifying party shall not be subject to any liability for
any settlement made without its consent (but such consent
shall not be unreasonably withheld). No indemnified party
shall be required to consent to entry of any judgment or enter
into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
indemnified party of a written release in form and substance
reasonably satisfactory to such indemnified party from all
liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim shall not be obligated to pay
the fees and expenses of more than one firm of counsel (and,
if necessary, local counsel) for all parties indemnified by
such indemnifying party with respect to such claim, unless a
conflict of interest as to the subject matter exists between
such indemnified party and another indemnified party with
respect to such claim, in which event the indemnifying party
shall be obligated to pay the fees and expenses of additional
counsel for such indemnified party.
(g) CONTRIBUTION. If for any reason the indemnification
provided for herein is unavailable to an indemnified party or
is insufficient to hold it harmless as contemplated hereby,
then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such
loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received
by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable
considerations, provided that in no event shall the liability
of any Holder for such contribution and indemnification
exceed, in the aggregate, the dollar amount of the proceeds
received or to be received by such Holder upon the sale of
securities giving rise to such indemnification and
contribution obligation.
6
(h) The Company may require each selling Holder to
furnish to the Company such information and documents
regarding such selling Holder and the distribution of such
securities as the Company may from time to time reasonably
request in writing in order to comply with the Securities Act.
(i) Each of the selling Holders agrees that. upon receipt
of any notice from the Company of the happening of any event
which would cause any then effective registration statement to
be inaccurate, no longer effective, subject to a stop order
issued by the Securities and Exchange Commission, or which
would otherwise require by law or regulation that such selling
Holders to discontinue sales of securities under such
registration statement, it will forthwith discontinue
disposition pursuant to such registration statement of any
shares of Common Stock covered by such registration statement
or prospectus until its receipt of the copies of a
supplemented or amended prospectus relating to such
registration statement or prospectus or until it is advised in
writing by the Company that the use of the applicable
prospectus may be resumed and, if so directed by the Company,
will deliver to the Company all copies, other than permanent
file copies then in their possession, of the prospectus
covering such securities in effect at the time of receipt of
such notice.
(j) The obligations of the Company to use its reasonable
efforts to cause the Holder Common Stock to be registered
under the Securities Act are subject to each of the following
limitations, conditions and qualifications:
(i) The Company shall be entitled to abandon,
discontinue, withdraw or postpone for any period of
time the filing or effectiveness of, or suspend the
rights of selling Holders to make sales pursuant to,
any registration statement otherwise required to be
prepared, filed and made and kept effective by it
hereunder if the Board of Directors of the Company
reasonably determines in good faith that (i) there is
a material undisclosed development in the business or
affairs of the Company (including any pending or
proposed financing, recapitalization, acquisition or
disposition), the disclosure of which at such time
would be adverse to the Company's interests or (ii)
such filing or effectiveness would be disadvantageous
to the Company or its shareholders.
(ii) The Company's obligations shall be subject
to the obligations of the selling Holders, which each
of the Holders hereby acknowledges. to furnish all
information and materials and to take any and all
actions as may be required under applicable federal
and state securities laws and regulations to permit
the Company to comply with all applicable
requirements of the SEC and state securities
regulations and to obtain any acceleration of the
effective date of such registration statement or
maintain the effectiveness or currency thereof.
(iii) If requested by an underwriter in an
underwritten offering, each Holder agrees not to
effect any public sale or distribution, including any
sale pursuant to Rule 144 under the Securities Act,
of any Common Stock within 30 days before or 60 days
after the effective date of a registration statement
filed pursuant to Section 13.
14. MISCELLANEOUS PROVISIONS.
(a) LIMITATION OF RIGHTS CONFERRED. This Warrant
Agreement does not confer upon any Holder of a Warrant
Certificate any right as a shareholder of the Company, nor
shall anything contained herein be deemed to affect the right
or power of the Company to make adjustments,
reclassifications, reorganizations other changes in and to its
capital stock or business organization or to limit its right
to merge or consolidate or to sell, transfer or liquidate all
or any part of its business or assets.
(b) NOTICES: All notices or other communications required
or permitted to be given pursuant to this Agreement shall be
in writing and shall be considered as properly given or made
if hand delivered, mailed from within the United States by
certified or registered mail, or sent by prepaid telegram:
if to the Company:
7
Junum Incorporated
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Tel:(000) 000-0000
Fax:(000) 000-0000
if to a Holder, in care of the address set
forth in the Company's records established
at the time of the Holder's receipt of a
Certificate,
or to such other address as any such party may
have designated by like notice forwarded to
the other party hereto. Notwithstanding the
foregoing, notices of change of address shall
he furnished only when received.
(c) GOVERNING LAW. This Agreement and the rights and
obligations of the parties under this Agreement shall be
governed by and construed and interpreted in accordance with
the laws of the State of California, without regard to the
principles of conflicts of laws thereof. In the event of
litigation, the prevailing party shall be entitled to
reasonable attorneys fees and costs.
WAIVER OF JURY TRIAL. THE COMPANY ANT) THE HOLDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR FOR
ANY COUNTERCLAIM THEREIN.
(d) SUPPLEMENTS AND AMENDMENTS. The Company may from time
to time supplement or amend this Agreement in order to cure
any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the
Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which
shall not adversely affect the interests of the Holders.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Company and the
Holders and their respective successors and assigns.
(f) MERGER OR CONSOLIDATION OF THE COMPANY. So long as
the Warrant remains outstanding, the Company will not merge or
consolidate with or into, or sell, transfer or lease all or
substantially all of its property to, any other corporation
unless the successor or purchasing corporation, as the case
may be (if not the Company), shall expressly assume, by
supplemental agreement, the due and punctual performance and
observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
(g) BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to confer upon any person other than the
Company and the Holders any legal or equitable right, remedy
or claim under this Agreement and this Agreement shall be for
the sole and exclusive benefit of the Company and the Holders.
(h) CAPTIONS. The captions of the Sections of this
Agreement have been inserted for convenience only and shall
have no substantive effect.
(i) COUNTERPARTS. This Agreement may be executed in any
number of counterparts (including by telecopy) each of which
when so executed shall be deemed to be an original; and all of
which counterparts together shall constitute one and the same
instrument.
(j) LIMITATION OF LIABILITY. No provision hereof, in the
absence of affirmative action by any Holder to purchase shares
of Common Stock, and no enumeration herein of the rights or
privileges of any Holder of a Warrant, shall give rise to any
liability of such Holder for the purchase price of any Common
Stock or as a shareholder of the Company, whether such
liability is asserted by the Company or by the creditors of
the Company.
(k) NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of any Holder
or the Company, any right, remedy, power or privilege
hereunder shall
8
operate as a waiver thereof, nor shall any single or partial
exercise or any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and
privileges provided by law.
(l) COMPLIANCE WITH GOVERNMENTAL REGULATIONS. The Holder
acknowledges that none of the Warrants or Warrant Shares have
been registered under the Securities Act, and therefore may be
sold or disposed of only pursuant to an effective registration
statement under the Securities Act, or an exemption from such
registration, and in accordance with this Agreement. The
Warrant Shares will bear a legend to the following effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR WITH
THE SECURITIES COMMISSION OF ANY STATE UNDER ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THOSE SECURITIES LAWS
AND UPON PROVISION OF AN OPINION OF COUNSEL IN FORM
SATISFACTORY TO THE COMPANY."
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written
JUNUM INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, CEO
KNG CONSULTING, LLC
/s/ Xxxxxxxxx Xxxxxxxxx
---------------------------------
Xxxxxxxxx Xxxxxxxxx
9
EXHIBIT A
FORM OF WARRANT CERTIFICATE
---------------------------
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR WITH
THE SECURITIES COMMISSION OF ANY STATE UNDER ANY APPLICABLE STATE SECURITIES OR
BLUE SKY LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THOSE SECURITIES LAWS
AND UPON PRO VISION OF AN OPINION OF COUNSEL IN FORM SATISFACTORY TO THE
COMPANY.
CERTIFICATE REPRESENTING
COMMON STOCK PURCHASE WARRANTS
For the purchase of Common Stock, Par Value $.01 per share, of
JUNUM INCORPORATED
1,800,000 WARRANTS
----------
THIS CERTIFIES THAT, for value received, KNG Consulting, LLC, the
registered holder of this Common Stock Purchase Warrant (the "Warrant") or
permitted assigns (the "Holder"), is entitled to purchase from Junum
Incorporated, a Delaware corporation (the "Company"), at any time and from time
to time (but subject to the vesting schedule set forth in the Warrant Agreement,
as defined below) until 5:00 p.m. Pacific Time on March 1, 2007, (the
"Expiration Date"), up to 1.800,000 fully paid and nonassessable shares of the
common stock of the Company, $0.01 par value per share (the "Shares") at a price
per share of $0.17 (the "Exercise Price"). The number of shares purchasable upon
exercise of this Warrant and the Purchase Price per share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement referred to
below.
This Warrant is issued under arid in accordance with a Warrant Agreement, dated
as of March 1, 2002, between the Company and KNG Consulting, LLC (the "Warrant
Agreement") and is subject to the terms and provisions contained in the Warrant
Agreement, all of which are incorporated herein by reference. A copy of the
Warrant Agreement may be obtained for inspection by the Holder hereof upon
written request to the Company.
The Warrants represented by this Certificate may be exercised by the
Holder as to all or any lesser number of Shares upon surrender of this
Certificate, together with a completed and executed Election to Purchase in the
form attaching to this Certificate, on or before the date above designated, at
the principal office of the Company (or at such other address as is designated
in writing by the Company); and upon payment, by cashless exercise, or by cash,
check or cashier's check, payable to the Company, of a sum equal to the product
of the Exercise Price multiplied by the number of Shares being purchased;
provided, that no fractional share shall be issuable upon any such exercise and
the Company shall issue one full share in lieu of any fractional share. If this
Certificate shall be exercised with respect to less than all of the Shares, the
Holder shall be entitled to receive a new Certificate covering the number of
Shares with respect to which this Certificate shall not have been exercised (if
such shares are then purchasable hereunder).
10
This Certificate is issued subject to the condition, and the Holder, by
accepting the same, agrees with every subsequent holder and with the Company
that tide hereto and all rights hereunder shall be transferable (subject to the
provisions of the Warrant Agreement) only by delivery of this Certificate to the
Company. together with the assignment form attached hereto completed and duly
executed by the Holder; and that the Company and all persons dealing with this
Certificate may treat the registered owner hereof as its absolute owner for all
purposes, until notified in writing by such owner of a transfer.
JUNUM INCORPORATED
By: ___________________________
Xxxxx X. Xxxxxxx, CEO
DATED: As of March 1, 2002
11
ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase __________________ Shares and herewith
tenders in payment for such Shares cash, check or a certified or official bank
check, payable to the order of Junum Incorporated, in the amount of $___________
all in accordance with the terms hereof. The undersigned requests that a
certificate of such Shares be registered in the name of _____________________
whose address is ________________ and that such certificate be delivered to
________________ whose address is ___________________. If the number of Shares
being acquired is less than all purchasable hereunder, the undersigned requests
that a new Certificate representing the remaining balance of the Warrants be
registered in the name of and delivered to ____________________ whose address is
_________________________________________.
Dated: _________________________ Signature: _______________________________
(Insert Social Security or Other (Signature must conform in all respects to
Identifying Number of Holder) name of holder as specified on the face of
the Warrant Certificate)
________________________________________
(Printed Name)
ASSIGNMENT
(To be executed if Holder desires to
transfer the Warrant Certificate)
For Value Received, the undersigned hereby sells, assigns and transfers to
(please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and hereby irrevocably constitutes and appoints ______________________________
____________________ as attorney-in-fact to transfer the same on the books of
the Company, with full power of substitution.
Dated: _________________________ Signature: _______________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
________________________________ ___________________________________
(Insert Social Security or Other (Printed Name)
Identifying Number of Holder)
12
