Exhibit 10.29
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NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
Original Issue Date: March 31, 2005
Original Principal Amount: $166,000.00
SECURED CONVERTIBLE PROMISSORY NOTE
THIS SECURED CONVERTIBLE PROMISSORY NOTE is made by each of SBS
INTERACTIVE, CO., a Florida corporation (the "Company"), and SBS INTERACTIVE,
INC., a Nevada corporation (the "Subsidiary;" each of the Company and the
Subsidiary is referred to herein as a "Borrower," and collectively as the
"Borrowers"), jointly and severally (the "Note").
PRELIMINARY STATEMENT
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WHEREAS, reference is hereby made to (i) that certain Master Loan Agreement
dated as of July 22, 2004 (the "Loan Agreement"), by and among the Borrowers and
Xxxxxx Xxxx ("Xxxx"), and (ii) that certain Pledge and Security Agreement, dated
as of July 22, 2004, by and among the Borrowers and Xxxx (the "Security
Agreement");
WHEREAS, the Company and the Subsidiary have requested that Xxxx provide
financing to the Company and the Subsidiary and Xxxx is willing to provide
financing to the Company and the Subsidiary on the terms and conditions set
forth in this Note, the Loan Agreement and the Security Agreement;
WHEREAS, pursuant to the Loan Agreement, Xxxx has certain consent rights
set forth in negative covenants with respect to certain financing transactions
involving the Company and the Subsidiary;
WHEREAS, Xxxx has provided consent to the Company and the Subsidiary to
enter into financing transactions with one or more third-parties on
substantially the terms and conditions of this Note, the Loan Agreement and the
Security Agreement in lieu of entering into a financing transaction with Xxxx;
WHEREAS, in reliance on such consent, the Company and the Subsidiary have
explored other financing opportunities with third-parties to raise capital; have
determined that no financing is available from any third-party on terms and
conditions substantially equivalent to, or more favorable to the Company and the
Subsidiary than, the terms and conditions of the Note, the Loan Agreement and
the Security Agreement; and have determined that it is in the best interests of
the Company and the Subsidiary to enter into this Note with Xxxx;
WHEREAS, the loan evidenced by this Note is a "Future Loan," and this Note
is a "Future Loan Note" and, therefore, a "Financing Document" as such terms are
defined in the Loan Agreement.
AGREEMENT
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FOR VALUE RECEIVED, the Borrowers, jointly and severally, promise to pay to
the order of Xxxx or his assigns (the "Holder"), the principal sum of One
Hundred Sixty-Six Thousand Dollars ($166,000.00) (the "Principal Amount") on the
"Maturity Date" (as defined herein), and to pay interest to the Holder on the
aggregate outstanding Principal Amount at the rate of six percent 6% per annum,
payable on the Maturity Date, in cash (in lawful currency of the United States
of America), subject to the right of the Holder to convert the Principal Amount
and all accrued but unpaid interest thereon into shares of the Company's "Common
Stock" (as defined herein) in accordance with Section 4 hereof. Interest shall
be calculated on the basis of a 360-day year and shall accrue daily commencing
on the Original Issue Date until payment in full of the Principal Amount,
together with all accrued and unpaid interest and other amounts which may become
due hereunder, has been made. Interest shall cease to accrue on the "Conversion
Date" (as defined herein) with respect to any Principal Amount and accrued but
unpaid interest thereon converted, provided that the Company in fact delivers
the "Underlying Shares" (as defined herein) within the time period required by
Section 4(c)(i). All overdue Principal Xxxxxx and/or accrued and unpaid interest
to be paid hereunder shall entail a late fee at the rate of fifteen percent
(15%) per annum, or such lower maximum amount of interest permitted to be
charged under applicable law (the "Late Fee") which will accrue daily, from the
date such payment is due hereunder through and including the date of payment.
For purposes hereof, the "Maturity Date" shall mean the effective date (in
accordance with Section 5 hereof) of any written demand by the Holder, from time
to time, for payment hereunder.
THE BORROWERS MAY NOT PREPAY ANY PORTION OF THE PRINCIPAL AMOUNT OR ACCRUED
BUT UNPAID INTEREST THEREON WITHOUT THE PRIOR WRITTEN CONSENT OF THE HOLDER.
This Note is subject to the following additional provisions:
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Section 1. Exchange. This Note is exchangeable for an equal aggregate
Principal Amount of Notes of different authorized denominations, as requested by
the Holder surrendering the same and subject to compliance with applicable laws.
No service charge will be made for such registration of transfer or exchange.
Section 2. Transfer. This Note may be transferred or exchanged only in
compliance with applicable federal and state securities laws and regulations.
Prior to due presentment to the Borrowers for transfer of this Note, the
Borrowers and any agent of the Borrowers may treat the Person in whose name this
Note is duly registered on the records of the Borrowers as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note is overdue, and neither the Borrowers nor any such
agent thereof shall be affected by notice to the contrary.
Section 3. Security; Events of Default; Remedies; Waivers.
(a) The Loan Obligations are secured in accordance with the terms and
conditions set forth in the Security Agreement.
(b) Upon the occurrence of any Event of Default, the Holder shall have all
of the rights, powers and remedies set forth in the Loan Agreement and/or
Security Agreement.
(c) Each Borrower waives presentment, demand for payment, protest, notice
of demand, dishonor and nonpayment, notice of protest and all other notices or
demands in connection with the delivery, acceptance, performance, default or
enforcement of this Note.
Section 4. Conversion.
(a) (i) At any time after the Original Issue Date, the outstanding
Principal Amount and all accrued but unpaid interest thereon shall be
convertible, at the option of the Holder, in whole or in part at any time and
from time to time, into (i) shares of Common Stock and (ii) warrants to purchase
up to One Million Six Hundred Sixty Thousand (1,660,000) shares of Common Stock
(the "Target Warrant Shares"), in the latter case, on the terms and conditions
set forth in the form of Common Stock Purchase Warrant attached hereto as
Exhibit A (collectively, the "Warrants"); provided, that the Target Warrant
Shares shall be (x) subject to adjustment prior to the "Conversion Date" (as
defined herein) to reflect any and all adjustments to the "Set Price" (as
defined herein, and in accordance with Section 4(d) hereof) so that the number
of Target Warrant Shares (subject to clauses (y) and (z) hereof) is equal to the
product of (A) two, multiplied by (B) the number of "Underlying Shares" (as
defined herein), (y) subject to adjustment prior to the Conversion Date in the
same manner as the shares purchasable under the Warrants are subject to
adjustment from and after the Conversion Date, and (z) pro-rated, from time to
time, in the event the Holder converts part but not all of the outstanding
Principal Amount and accrued but unpaid interest thereon; provided, further,
that in the event of any adjustment to the number of Target Warrant Shares
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hereunder, the "Exercise Price" (as defined in the Warrants) with respect to
fifty percent (50%) of such Target Warrant Shares (as so adjusted) shall be the
amount set forth in clause (i) of the definition of Exercise Price in the
Warrants, and the Exercise Price with respect to the remaining fifty percent
(50%) of such Target Warrant Shares (as so adjusted) shall be the amount set
forth in clause (ii) of such definition of Exercise Price.
(ii) The Holder shall effect conversions by delivering to the Company
written notice (a "Notice of Conversion"), specifying therein the Principal
Amount and accrued but unpaid interest thereon to be converted and the date on
which such conversion is to be effected (a "Conversion Date"). If no Conversion
Date is specified in a Notice of Conversion, the Conversion Date shall be the
date that such Notice of Conversion is provided hereunder. To effect conversions
hereunder, the Holder shall not be required to physically surrender the Note to
the Company unless the entire Principal Amount of the Note plus all accrued and
unpaid interest thereon has been so converted. Conversions hereunder shall have
the effect of lowering the outstanding Principal Xxxxxx and accrued but unpaid
interest thereon in an amount equal to the amount so converted. The Holder and
the Company shall maintain records showing the Principal Amount and accrued but
unpaid interest thereon converted and the date of such conversions. The Company
shall deliver any objection to any Notice of Conversion within one Business Day
after receipt of such notice. In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the absence of
manifest error. Each Holder, by acceptance of this Note, acknowledges and agrees
that, by reason of the provisions of this paragraph, following conversion of a
portion of this Note, the unpaid and unconverted Principal Amount of this Note
may be less than the Original Principal Xxxxxx stated on the face hereof.
(b) At any time, the number of shares of Common Stock issuable upon
conversion (the "Underlying Shares") shall be determined by the quotient
obtained by dividing (x) the outstanding Principal Amount and accrued but unpaid
interest thereon to be converted by (y) the "Set Price" (as defined herein).
(c) (i) Not later than three Trading Days after any Conversion Date, the
Company shall deliver to the Holder a certificate or certificates representing
the Underlying Shares (which shall be free of restrictive legends and trading
restrictions) being acquired upon such conversion and the Warrants, duly
executed. The Company shall, if available and if allowed under applicable
securities laws, use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions. If, in the case of any Notice of
Conversion, such certificate or certificates and the Warrants are not delivered
to, or as directed by, the Holder by the third Trading Day after a Conversion
Date, the Holder shall be entitled by written notice to the Company at any time
on or before its receipt of such certificate or certificates thereafter, to
rescind such conversion.
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(ii) If the Company fails for any reason to deliver to the Holder such
certificate or certificates or the Warrants pursuant to Section 4(c)(i) by the
third Trading Day after the Conversion Date, the Company shall pay to such
Holder, in Common Stock at the then Set Price, as liquidated damages and not as
a penalty, for each $1,000 of Principal Amount and accrued but unpaid interest
thereon being converted, $50 per Trading Day (increasing to $100 per Trading Day
after three Trading Days after such damages begin to accrue) for each Trading
Day after such third Trading Day until such certificates are delivered. In the
event a Holder shall elect to convert any or all of the outstanding Principal
Amount and accrued but unpaid interest thereon, the Company may not refuse
conversion based on any claim that the Holder or any one associated or
affiliated with the Holder has been engaged in any violation of law, agreement
or for any other reason, unless, an injunction from a court, on notice,
restraining and or enjoining conversion of all or part of this Note shall have
been sought and obtained and the Company posts a surety bond for the benefit of
the Holder in the amount of 150% of the Principal Amount of the Note
outstanding, which is subject to the injunction, which bond shall remain in
effect until the completion of arbitration/litigation of the dispute and the
proceeds of which shall be payable to such Holder to the extent it obtains
judgment. In the absence of an injunction precluding the same, the Company shall
issue the Underlying Shares and the Warrants upon a properly noticed conversion.
Nothing herein shall limit Xxxxxx's right to pursue actual damages or declare an
Event of Default pursuant to the Loan Agreement for the Company's failure to
deliver the Underlying Shares or the Warrants within the period specified
herein, and such Holder shall have the right to pursue all remedies available to
it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. The exercise of any such rights shall not
prohibit the Holder from seeking to enforce damages pursuant to any other
Section hereof or under applicable law.
(iii) In addition to any other rights available to the Holder, if the
Company fails for any reason to deliver to the Holder such certificate or
certificates pursuant to Section 4(c)(i) by the third Trading Day after the
Conversion Date, and if after such third Trading Day the Holder is required by
its brokerage firm to purchase (in an open market transaction or otherwise)
Common Stock to deliver in satisfaction of a sale by such Holder of the
Underlying Shares which the Holder anticipated receiving upon such conversion (a
"Buy-In"), then the Company shall (A) pay in cash to the Holder (in addition to
any remedies available to or elected by the Holder) the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
Common Stock so purchased exceeds (y) the product of (1) the aggregate number of
shares of Common Stock that such Holder anticipated receiving from the
conversion at issue multiplied by (2) the actual sale price of the Common Stock
at the time of the sale (including brokerage commissions, if any) giving rise to
such purchase obligation and (B) at the option of the Holder, either reissue a
Note in Principal Amount equal to the Principal Amount of the attempted
conversion or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its delivery
requirements under Section 4(c)(i). For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted conversion of the Note with respect to which the actual sale price
of the Underlying Shares at the time of the sale (including brokerage
commissions, if any) giving rise to such purchase obligation was a total of
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$10,000, under clause (A) of the immediately preceding sentence, the Company
shall be required to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In. Notwithstanding anything contained herein to the contrary, if a Holder
requires the Company to make payment in respect of a Buy-In for the failure to
timely deliver certificates hereunder and the Company timely pays in full such
payment, the Company shall not be required to pay such Holder liquidated damages
under Section 4(c)(ii) in respect of the certificates resulting in such Buy-In.
(d) (i) The conversion price in effect on any Conversion Date shall be
equal to Twenty Cents ($0.20) per share of Common Stock, subject to adjustment
herein (the "Set Price").
(ii) If the Company, at any time while the Note is outstanding: (A)
shall pay a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company pursuant to this Note,
including interest thereon), (B) subdivide outstanding shares of Common Stock
into a larger number of shares, (C) combine (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or
(D) issue by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then the Set Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification.
(iii) If the Company, at any time while the Note is outstanding, shall
offer, sell, grant any option to purchase or offer, sell or grant any right to
reprice its securities, or otherwise dispose of or issue (or announce any offer,
sale, grant or any option to purchase or other disposition) any Common Stock or
securities exercisable, convertible into or exchangeable for Common Stock (the
"Common Stock Equivalents"), at an effective price per share less than the then
Set Price ("Dilutive Issuance") (if the holder of the Common Stock or Common
Stock Equivalent so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which is
issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share which is less than the Set Price, such
issuance shall be deemed to have occurred for less than the Set Price), then the
Set Price shall be reduced to equal the effective conversion, exchange or
purchase price for such Common Stock or Common Stock Equivalents. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents
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are issued. The Company shall notify the Holder in writing, no later than the
third Business Day following the issuance of any Common Stock or Common Stock
Equivalent subject to this section, indicating therein the applicable issuance
price, or the applicable reset price, exchange price, conversion price and other
pricing terms.
(iv) All calculations under this Section 4 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 4, the number of shares of Common Stock deemed to be outstanding
as of a given date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) outstanding on a fully diluted basis.
(v) Whenever the Set Price is adjusted hereunder, the Company shall
promptly mail to each Holder a notice setting forth the Set Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
(vi) If (A) the Company shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock the
rights or warrants to subscribe for or purchase any shares of capital stock of
any class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of the Notes, and shall cause
to be mailed to the Holder at its last addresses as it shall appear upon the
stock books of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange.
(vii) If, at any time while this Note is outstanding, (A) the Company
effects any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
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holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a "Fundamental Transaction"),
then upon any subsequent conversion of this Note, the Holder shall have the
right to receive, for each Underlying Share that would have been issuable upon
such conversion absent such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of one share of Common Stock (the
"Alternate Consideration"). For purposes of any such conversion, the
determination of the Set Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Set Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any conversion of this Note following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new Note consistent with the foregoing provisions
and evidencing the Holder's right to convert such Note into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (d) and
insuring that this Note (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
(e) Upon a conversion hereunder, the Company shall not be required to issue
stock certificates representing fractions of shares of the Common Stock, but may
if otherwise permitted, make a cash payment in respect of any final fraction of
a share based on the fair market value at such time. If the Company elects not,
or is unable, to make such a cash payment, the Holder shall be entitled to
receive, in lieu of the final fraction of a share, one whole share of Common
Stock.
(f) The issuance of certificates for shares of the Common Stock on
conversion of the Note shall be made without charge to the Holder for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate upon conversion in a name other
than that of the Holder of such Note so converted, and the Company shall not be
required to issue or deliver such certificates unless or until the Person or
Persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
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Section 5. Notices. Any and all notices or other communications or
deliveries to be provided hereunder shall be given in the manner set forth in,
and shall be effective as provided in, the Loan Agreement.
Section 6. Definitions. For purposes hereof, in addition to the terms
defined elsewhere in this Note: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Loan Agreement, and (b) the
following terms shall have the following meanings:
"Common Stock" means the common stock, $0.001 par value per share, of the
Company and stock of any other class into which such shares may hereafter have
been reclassified or changed.
"Original Issue Date" shall mean the date of the first issuance of the Note
set forth herein regardless of the number of transfers of the Note and
regardless of the number of instruments which may be issued to evidence such
Note.
"Person" means a corporation, an association, a partnership, organization,
a business, an individual, a government or political subdivision thereof or a
governmental agency.
"Trading Day" means a day on which the shares of Common Stock are quoted in
the over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices); provided, that in the event that the shares of Common Stock
are not so quoted, then Trading Day shall mean a Business Day.
Section 7. No Alteration. No provision of this Note shall alter or impair
the obligation of the Borrowers, which is absolute and unconditional, to pay the
principal of, interest and liquidated damages (if any) on, this Note at the
time, place, and rate, and in the coin or currency, herein prescribed. This Note
is a direct debt obligation of the Borrowers.
Section 8. Replacement. If this Note shall be mutilated, lost, stolen or
destroyed, the Borrowers shall execute and deliver, in exchange and substitution
for and upon cancellation of a mutilated Note, or in lieu of or in substitution
for a lost, stolen or destroyed Note, a new Note for the Principal Amount of
this Note so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Note, and of the ownership
hereof, and indemnity, if requested, all reasonably satisfactory to the
Borrowers.
Section 9. Waiver. Any waiver by the Borrowers or the Holder of a breach of
any provision of this Note shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Note. The failure of the Borrowers or the Holder to insist upon strict
adherence to any term of this Note on one or more occasions shall not be
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considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Note. Any waiver must be
in writing.
Section 10. Miscellaneous. If a court of competent jurisdiction shall find
that any interest or other amount deemed interest due hereunder violates
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
Each Borrower covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Borrowers from paying all or any portion of the
Principal Amount or interest on the Note as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the other
covenants or the performance of the Financing Documents, and each Borrower (to
the extent it may lawfully do so) hereby expressly waives all benefits or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Holder, but will suffer and permit the execution of ever such power as though no
such law has been enacted.
Section 11. Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.
Section 12. Preliminary Statement. The Preliminary Statement of this Note
is hereby incorporated by reference into the body of this Note and hereby
becomes an integral part of this Note.
Section 13. Registration Rights.
(a) Upon receipt of a written request from the Holder, the Company shall
prepare and file with the Securities and Exchange Commission (the "Commission")
a "shelf" registration statement covering the resale of shares of Common Stock
purchased, or to be purchased, upon conversion of this Note (collectively, the
"Registrable Securities") for an offering to be made on a continuous basis
pursuant to Rule 415. Subject to the terms of this Agreement, the Company shall
use its best efforts to cause the registration statement to be declared
effective under the Securities Act of 1933, as amended (the "Securities Act") as
promptly as possible after the filing thereof, but in any event prior to that
date which is four months following the date of the written request of the
Holder, and shall use its best efforts to keep such registration statement
continuously effective under the Securities Act until the date which is two
years after the date that such registration statement is declared effective by
the Commission or such earlier date when the Registrable Securities covered by
such registration statement have been sold or may be sold without volume
restrictions pursuant to Rule 144(k) as determined by counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Company's transfer agent and the Holder (the "Effectiveness Period").
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(b) If the Company proposes to register (including for this purpose a
registration effected by the Company for shares held by holders of shares of
Common Stock other than the Holder) securities under the Securities Act on Form
S-1, S-2, S-3 or SB-2 (or any replacement or successor forms), the Company shall
cause to be included in such registration statement and use reasonable efforts
to be registered under the Securities Act all the Registrable Securities that
the Holder shall request to be registered; provided, however, that such right of
inclusion shall not apply to any registration statement covering an underwritten
offering unless the underwriter or its agent agrees in writing to the inclusion
of the Registrable Securities. The Company shall have the absolute right to
withdraw or cease to prepare or file any registration statement for any offering
referred to in this Section 13(b) without any obligation or liability to the
Holder.
(c) All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the registration statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the OTCBB
(or any securities exchange or market upon which the Common Stock is then
listed), and (B) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment under the laws of
such jurisdiction as requested by the Holder), (ii) printing expenses
(including, without limitation, expenses of printing certificates for the
Registrable Securities and of printing prospectuses requested by the Holder),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company and up to $5,000 in fees of counsel for the Holder for
review of the registration statement, including the prospectus, and any
pre-effective amendments thereto and for the preparation and filing of required
forms under Sections 13 and 16 of the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and (v) fees and expenses of all other persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with its obligations
under this Section 13 (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on the OTCBB (or any securities
exchange or market upon which the Common Stock is then listed). In no event
shall the Company be responsible for any broker or similar commissions or any
legal fees (other than those set forth in subparagraph (iv) above) or other
costs of the Holder.
(d) In connection with the Company's registration obligations hereunder,
the Company shall:
11
(i) (A) Prepare and file with the Commission such amendments,
including post-effective amendments, to the registration statement and the
prospectus used in connection therewith as may be necessary to keep the
registration statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file
with the Commission such additional registration statements in order to
register for resale under the Securities Act all of the Registrable
Securities; (B) cause any related prospectus to be amended or supplemented
by any required prospectus supplement and as so supplemented or amended to
be filed pursuant to Rule 424; (C) respond as promptly as reasonably
possible, and in any event within 20 trading days, to any comments received
from the Commission with respect to a registration statement or any
amendment thereto; and (D) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the registration
statement during the applicable period in accordance with the intended
methods of disposition by the Holder set forth in such registration
statement as so amended or in such prospectus as so supplemented.
(ii) Notify the Holder (which notice shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made) as promptly as reasonably possible: (A)(1) when a
prospectus or any prospectus supplement or post-effective amendment to a
registration statement is proposed to be filed; (2) when the Commission
notifies the Company whether there will be a "review" of such registration
statement and whenever the Commission comments in writing on such
registration statement (the Company shall provide true and complete copies
thereof and all written responses thereto to the Holder); and (3) with
respect to the registration statement or any post-effective amendment, when
the same has become effective; (B) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements
to the registration statement or prospectus or for additional information;
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement covering any or all of the
Registrable Securities or the initiation of any proceedings for that
purpose; (D) of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose; (E) of the
occurrence of any event or passage of time that makes the financial
statements included in a registration statement ineligible for inclusion
therein or any statement made in a registration statement or prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to a
registration statement, prospectus or other document so that, in the case
of a registration statement or the prospectus, as the case may be, 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 light of the circumstances under which they were
made, not misleading; and (F) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes
13
may be material and that, in the determination of the Company, makes it not
in the best interests of the Company to allow continued availability of the
registration statement or prospectus; provided, however, that any and all
of such information shall remain confidential to the Holder until such
information otherwise becomes public, unless disclosure by the Holder is
required by law.
(iii) Promptly deliver to the Holder, without charge, as many copies
of the prospectus or prospectuses (including each form of prospectus) and
each amendment or supplement thereto as the Holder may reasonably request.
Subject to the terms of this Agreement, the Company hereby consents to the
use of such prospectus and each amendment or supplement thereto by the
Holder in connection with the offering and sale of the Registrable
Securities covered by such prospectus and any amendment or supplement
thereto.
(iv) Use commercially reasonable efforts to register or qualify the
resale of such Registrable Securities as required under applicable
securities or Blue Sky laws of each State within the United States as the
Holder requests in writing, to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period;
provided, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or subject
the Company to any material tax in any such jurisdiction where it is not
then so subject.
(v) Cooperate with the Holder to facilitate the timely preparation and
delivery of certificates representing the Registrable Securities to be
delivered to a transferee pursuant to a registration statement, which
certificates shall be free of all restrictive legends (to the extent
allowed by law), and to enable such Registrable Securities to be in such
denominations and registered in such names as the Holder may request.
(vi) Upon the occurrence of any event contemplated by Section
13(d)(ii)(B)-(F), as promptly as reasonably possible, prepare a supplement
or amendment, including a post-effective amendment, to a registration
statement or a supplement to the related prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file
any other required document so that, as thereafter delivered, neither a
registration statement nor such prospectus will 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, in light of the
circumstances under which they were made, not misleading. If the Company
notifies the Holder in accordance with Section 13(d)(ii)(B)-(F) above to
suspend the use of any prospectus until the requisite changes to such
prospectus have been made, or the Company otherwise notifies the Holder of
its election to suspend the availability of a registration statement and
prospectus pursuant to clause (F) of Section 13(d)(ii), then the Holder
shall suspend use of such prospectus. The Company will use its best efforts
14
to ensure that the use of the prospectus may be resumed as promptly as is
practicable, except that in the case of suspension of the availability of a
registration statement and prospectus pursuant to clause (F) of Section
13(d)(ii), the Company shall not be required to take such action until such
time as it shall determine that the continued availability of the
registration statement and prospectus is no longer not in the best
interests of the Company.
(vii) Comply with all applicable rules and regulations of the
Commission.
(viii) Use its reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (A) any order suspending the effectiveness
of a registration statement, or (B) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(ix) if requested by the Commission, require the Holder to furnish to
the Company a statement as to the number of shares of Common Stock
beneficially owned by the Holder and the controlling person thereof.
Section 14. Indemnifications Relating to Registration.
(a) The Company shall, notwithstanding any termination of this Agreement,
indemnify and hold harmless the Holder, the officers, directors, agents and
employees of the Holder, each person who controls the Holder (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses"), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in a registration statement, any
prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions or alleged untrue statements or
omissions are based upon information regarding the Holder furnished in writing
to the Company by the Holder expressly for use therein, or to the extent that
such information relates to the Holder or the Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by the Holder expressly for use in a registration statement, such
prospectus or such form of prospectus or in any amendment or supplement thereto
or (2) in the case of an occurrence of an event of the type specified in Section
13(d)(ii)(B)-(D), the use by the Holder of an outdated or defective prospectus
after the Company has notified the Holder in writing that the prospectus is
14
outdated or defective and prior to the receipt by the Holder of a writing by the
Company that the use of the applicable prospectus may be resumed. The Company
shall notify the Holder promptly of the institution, threat or assertion of any
proceeding arising from or in connection with the transactions contemplated by
this Agreement of which the Company is aware.
(b) The Holder shall indemnify and hold harmless the Company, its
directors, officers, agents and employees, each person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling persons, to the fullest extent permitted by applicable law, from and
against all Losses (as determined by a court of competent jurisdiction in a
final judgment not subject to appeal or review) arising out of or based upon any
untrue statement of a material fact contained in any registration statement, any
prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon: (i) the Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or
(ii) any untrue statement or omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, such untrue statement or omission is contained
in any information so furnished in writing by the Holder to the Company
specifically for inclusion in such registration statement or such prospectus or
to the extent that (1) such information relates to the Holder or the Holder's
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by the Holder expressly for use in the
registration statement, such prospectus or such form of prospectus or in any
amendment or supplement thereto or (2) in the case of an occurrence of an event
of the type specified in Section 13(d)(ii)(B)-(D), the use by the Holder of an
outdated or defective prospectus after the Company has notified the Holder in
writing that the prospectus is outdated or defective and prior to the receipt by
the Holder of a writing by the Company that the use of the applicable prospectus
may be resumed.
(c) If any proceeding shall be brought or asserted against any person
entitled to indemnity hereunder (an "Indemnified Party"), the Indemnified Party
shall promptly notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, however, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party
of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that such failure shall have prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any
such proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such proceeding and to employ counsel reasonably satisfactory to the
15
Indemnified Party in any such proceeding; or (3) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified Party
and the Indemnifying Party, and the Indemnified Party shall have been advised by
counsel that a material conflict of interest is likely to exist if the same
counsel were to represent the Indemnified Party and the Indemnifying Party (in
which case, if the Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the expense of one such counsel for the Indemnified Party shall be
at the expense of the Indemnifying Party). The Indemnifying Party shall not be
liable for any settlement of any such proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of the
Indemnified Party from all liability on claims that are the subject matter of
such proceeding.
Subject to the terms of this Agreement, all fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section 14) shall be paid to the Indemnified
Party, as incurred, within ten trading days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided,
however, that the Indemnifying Party may require the Indemnified Party to
undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that the Indemnified Party is not entitled to
indemnification hereunder).
(d) If a claim for indemnification under Section 14(a) or 14(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying the Indemnified Party,
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
the Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 14(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 14 was available to such party in
accordance with its terms.
[THIS SPACE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, each Borrower has caused this Secured Convertible
Promissory Note to be executed by its duly authorized officer, as of the
Original Issue Date.
WITNESS BORROWERS:
---------
SBS INTERACTIVE CO.
/s/ X. XXXXXXXXX By: /s/ XXXX X. XXXXXXX
-------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
SBS INTERACTIVE, INC.
/s/ X. XXXXXXXXX By: /s/ XXXX X. XXXXXXX
-------------------- -------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
[Signature Page to Secured Convertible Promissory Note]
EXHIBIT A
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO SBS INTERACTIVE, CO. THAT SUCH REGISTRATION
IS NOT REQUIRED.
Right to Purchase [1,660,000] Shares of Common Stock of SBS
Interactive, Co. (subject to adjustment as provided herein)
COMMON STOCK PURCHASE WARRANT
No. ________ Issue Date: ______________
SBS INTERACTIVE, CO., a corporation organized under the laws of the State
of Florida, hereby certifies that, for value received, Xxxxxx Xxxx, or assigns
(the "Holder"), is entitled, subject to the terms set forth below, to purchase
from the Company from and after the Issue Date of this Warrant and at any time
or from time to time before 5:00 p.m., New York time, through three (3) years
after such date (the "Expiration Date"), up to One Million Six Hundred Sixty
Thousand [1,660,000] fully paid and nonassessable shares of Common Stock, $0.001
par value, of the Company, at the Exercise Price (as defined below). The number
and character of such shares of Common Stock and the Exercise Price are subject
to adjustment as provided herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include SBS Interactive, Co. and any
corporation which shall succeed or assume the obligations of SBS Interactive,
Co. hereunder.
(b) The term "Common Stock" includes (x) the Company's Common Stock, $0.001
par value per share, and (y) any other securities into which or for which any of
the securities described in (x) may be converted or exchanged pursuant to a plan
of recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 3 or otherwise.
(d) The term "Exercise Price" shall be as follows, subject to adjustment
pursuant to Section 4:
(i) [830,000] shares at $1.00; and
(ii) [830,000] shares at $1.25
1. Exercise of Warrant.
1.1. Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, shares of Common
Stock of the Company, subject to adjustment pursuant to Section 4, by delivery
of an original or fax copy of the exercise notice attached hereto as Exhibit A
(the "Exercise Notice") along with payment to the Company of the Exercise Price.
2. Procedure for Exercise.
2.1 Delivery of Stock Certificates, etc. on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which both the Exercise Notice and
payment have been made for such shares. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within 3 business
days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities laws, a
certificate or certificates for the number of duly and validly issued, fully
paid and nonassessable shares of Common Stock (or Other Securities) to which
such Holder shall be entitled on such exercise.
2.2. Exercise.
Payment may be made either in cash or by certified or official bank
check payable to the order of the Company equal to the applicable aggregate
Exercise Price for the number of Common Shares specified in such form (as such
exercise number shall be adjusted to reflect any adjustment in the total number
of shares of Common Stock issuable to the Holder per the terms of this Warrant)
and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common Stock
(or Other Securities) determined as provided herein.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or entity, or (c) transfer all
or substantially all of its properties or assets to any other person or entity
under any plan or arrangement contemplating the dissolution of the Company,
then, in each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the Company whereby
the Holder of this Warrant, on the exercise hereof as provided in Section 1 at
any time after the consummation of such reorganization, consolidation or merger
or the effective date of such dissolution, as the case may be, shall receive, in
lieu of the Common Stock (or Other Securities) issuable on such exercise prior
to such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.
3.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrant after the effective date of
such dissolution pursuant to Section 3.1 to a bank or trust company having its
principal office in New York, New York, as trustee for the Holder of the
Warrant.
3.3. Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 3. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then only in such
event will the Company's securities and property (including cash, where
applicable) receivable by the holders of the Warrant be delivered to the Trustee
as contemplated by Section 3.2.
4. Adjustments for Stock Splits, Combinations, etc. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
2
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Exercise Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Exercise Price then in effect. The
Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4.
The number of shares of Common Stock that the holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be increased to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Exercise Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).
6. Reservation of Stock Issuable on Exercise of Warrant. The Company will
at all times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrant, shares of Common Stock (or Other Securities) from time
to time issuable on the exercise of the Warrant.
7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") with respect to any
or all of the shares underlying this Warrant. On the surrender for exchange of
this Warrant, with the Transferor's endorsement in the form of Exhibit B
attached hereto (the "Transferor Endorsement Form") and together with evidence
reasonably satisfactory to the Company demonstrating compliance with applicable
securities laws, which shall include, without limitation, a legal opinion from
the Transferor's counsel that such transfer is exempt from the registration
requirements of applicable securities laws, the Company at its expense (but with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
3
9. Registration Rights.
9.1 Demand Registration. Upon receipt of a written request from the
Holder, the Company shall prepare and file with the Securities and Exchange
Commission (the "Commission") a "shelf" registration statement covering the
resale of shares of Common Stock purchased, or to be purchased, upon exercise of
this Warrant (collectively, the "Registrable Securities") for an offering to be
made on a continuous basis pursuant to Rule 415. Subject to the terms of this
Agreement, the Company shall use its best efforts to cause the registration
statement to be declared effective under the Securities Act of 1933, as amended
(the "Securities Act") as promptly as possible after the filing thereof, but in
any event prior to that date which is four months following the date of the
written request of the Holder, and shall use its best efforts to keep such
registration statement continuously effective under the Securities Act until the
date which is two years after the date that such registration statement is
declared effective by the Commission or such earlier date when the Registrable
Securities covered by such registration statement have been sold or may be sold
without volume restrictions pursuant to Rule 144(k) as determined by counsel to
the Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the Holder (the "Effectiveness
Period").
9.2 Piggyback Registration. If the Company proposes to register
(including for this purpose a registration effected by the Company for shares
held by holders of shares of Common Stock other than the Holder) securities
under the Securities Act on Form S-1, S-2, S-3 or SB-2 (or any replacement or
successor forms), the Company shall cause to be included in such registration
statement and use reasonable efforts to be registered under the Securities Act
all the Registrable Securities that the Holder shall request to be registered;
provided, however, that such right of inclusion shall not apply to any
registration statement covering an underwritten offering unless the underwriter
or its agent agrees in writing to the inclusion of the Registrable Securities.
The Company shall have the absolute right to withdraw or cease to prepare or
file any registration statement for any offering referred to in this Section 9.2
without any obligation or liability to the Holder.
9.3 Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the registration statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the OTCBB (or any securities exchange or market upon
which the Common Stock is then listed), and (B) in compliance with applicable
state securities or Blue Sky laws reasonably agreed to by the Company in writing
(including, without limitation, fees and disbursements of counsel for the
Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdiction as requested by
the Holder), (ii) printing expenses (including, without limitation, expenses of
printing certificates for the Registrable Securities and of printing
prospectuses requested by the Holder), (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company and up to
$5,000 in fees of counsel for the Holder for review of the registration
statement, including the prospectus, and any pre-effective amendments thereto
and for the preparation and filing of required forms under Sections 13 and 16 of
the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and (v)
fees and expenses of all other persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with its obligations under this Section 9 (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on the OTCBB (or any securities exchange or market upon which the
Common Stock is then listed). In no event shall the Company be responsible for
any broker or similar commissions or any legal fees (other than those set forth
in subparagraph (iv) above) or other costs of the Holder.
9.4 Company's Obligation. In connection with the Company's registration
obligations hereunder, the Company shall:
(i)(A) Prepare and file with the Commission such amendments,
including post-effective amendments, to the registration statement and
the prospectus used in connection therewith as may be necessary to
keep the registration statement continuously effective as to the
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applicable Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional registration
statements in order to register for resale under the Securities Act
all of the Registrable Securities; (B) cause any related prospectus to
be amended or supplemented by any required prospectus supplement and
as so supplemented or amended to be filed pursuant to Rule 424; (C)
respond as promptly as reasonably possible, and in any event within 20
trading days, to any comments received from the Commission with
respect to a registration statement or any amendment thereto; and (D)
comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the registration statement during
the applicable period in accordance with the intended methods of
disposition by the Holder set forth in such registration statement as
so amended or in such prospectus as so supplemented.
(ii) Notify the Holder (which notice shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made) as promptly as reasonably possible: (A)(1)
when a prospectus or any prospectus supplement or post-effective
amendment to a registration statement is proposed to be filed; (2)
when the Commission notifies the Company whether there will be a
"review" of such registration statement and whenever the Commission
comments in writing on such registration statement (the Company shall
provide true and complete copies thereof and all written responses
thereto to the Holder); and (3) with respect to the registration
statement or any post-effective amendment, when the same has become
effective; (B) of any request by the Commission or any other Federal
or state governmental authority for amendments or supplements to the
registration statement or prospectus or for additional information;
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement covering any or all of the
Registrable Securities or the initiation of any proceedings for that
purpose; (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for
such purpose; (E) of the occurrence of any event or passage of time
that makes the financial statements included in a registration
statement ineligible for inclusion therein or any statement made in a
registration statement or prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to a registration statement,
prospectus or other document so that, in the case of a registration
statement or the prospectus, as the case may be, 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 light of the circumstances under which they were made, not
misleading; and (F) the occurrence or existence of any pending
corporate development with respect to the Company that the Company
believes may be material and that, in the determination of the
Company, makes it not in the best interests of the Company to allow
continued availability of the registration statement or prospectus;
provided, however, that any and all of such information shall remain
confidential to the Holder until such information otherwise becomes
public, unless disclosure by the Holder is required by law.
(iii) Promptly deliver to the Holder, without charge, as many
copies of the prospectus or prospectuses (including each form of
prospectus) and each amendment or supplement thereto as the Holder may
reasonably request. Subject to the terms of this Agreement, the
Company hereby consents to the use of such prospectus and each
amendment or supplement thereto by the Holder in connection with the
offering and sale of the Registrable Securities covered by such
prospectus and any amendment or supplement thereto.
(iv) Use commercially reasonable efforts to register or qualify
the resale of such Registrable Securities as required under applicable
securities or Blue Sky laws of each State within the United States as
the Holder requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the
Effectiveness Period; provided, that the Company shall not be required
to qualify generally to do business in any jurisdiction where it is
not then so qualified or subject the Company to any material tax in
any such jurisdiction where it is not then so subject.
(v) Cooperate with the Holder to facilitate the timely
preparation and delivery of certificates representing the Registrable
Securities to be delivered to a transferee pursuant to a registration
5
statement, which certificates shall be free of all restrictive legends
(to the extent allowed by law), and to enable such Registrable
Securities to be in such denominations and registered in such names as
the Holder may request.
(vi) Upon the occurrence of any event contemplated by Section
9.4(ii)(B)-(F), as promptly as reasonably possible, prepare a
supplement or amendment, including a post-effective amendment, to a
registration statement or a supplement to the related prospectus or
any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither a registration statement nor such prospectus will
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, in light of the circumstances under which they
were made, not misleading. If the Company notifies the Holder in
accordance with Section 9.4(ii)(B)-(F) above to suspend the use of any
prospectus until the requisite changes to such prospectus have been
made, or the Company otherwise notifies the Holder of its election to
suspend the availability of a registration statement and prospectus
pursuant to clause (F) of Section 9.4(ii), then the Holder shall
suspend use of such prospectus. The Company will use its best efforts
to ensure that the use of the prospectus may be resumed as promptly as
is practicable, except that in the case of suspension of the
availability of a registration statement and prospectus pursuant to
clause (F) of Section 9.4(ii), the Company shall not be required to
take such action until such time as it shall determine that the
continued availability of the registration statement and prospectus is
no longer not in the best interests of the Company.
(vii) Comply with all applicable rules and regulations of the
Commission.
(viii) Use its reasonable efforts to avoid the issuance of, or,
if issued, obtain the withdrawal of (A) any order suspending the
effectiveness of a registration statement, or (B) any suspension of
the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(ix) If requested by the Commission, require the Holder to
furnish to the Company a statement as to the number of shares of
Common Stock beneficially owned by the Holder and the controlling
person thereof.
10. Indemnifications Relating to Registration.
10.1 Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless the Holder, the
officers, directors, agents and employees of the Holder, each person who
controls the Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained in a registration statement, any prospectus or any form
of prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions or alleged untrue statements or omissions are
based upon information regarding the Holder furnished in writing to the Company
by the Holder expressly for use therein, or to the extent that such information
relates to the Holder or the Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by the
Holder expressly for use in a registration statement, such prospectus or such
form of prospectus or in any amendment or supplement thereto or (2) in the case
of an occurrence of an event of the type specified in Section 9.4(A)-(D), the
use by the Holder of an outdated or defective prospectus after the Company has
notified the Holder in writing that the prospectus is outdated or defective and
prior to the receipt by the Holder of a writing by the Company that the use of
the applicable prospectus may be resumed. The Company shall notify the Holder
promptly of the institution, threat or assertion of any proceeding arising from
or in connection with the transactions contemplated by this Agreement of which
the Company is aware.
6
10.2 Indemnification by Xxxxxx. The Holder shall indemnify and hold
harmless the Company, its directors, officers, agents and employees, each person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling persons, to the fullest extent permitted by
applicable law, from and against all Losses (as determined by a court of
competent jurisdiction in a final judgment not subject to appeal or review)
arising out of or based upon any untrue statement of a material fact contained
in any registration statement, any prospectus, or any form of prospectus, or in
any amendment or supplement thereto, or arising solely out of or based solely
upon: (i) the Holder's failure to comply with the prospectus delivery
requirements of the Securities Act or (ii) any untrue statement or omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent, such untrue
statement or omission is contained in any information so furnished in writing by
the Holder to the Company specifically for inclusion in such registration
statement or such prospectus or to the extent that (1) such information relates
to the Holder or the Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by the Holder
expressly for use in the registration statement, such prospectus or such form of
prospectus or in any amendment or supplement thereto or (2) in the case of an
occurrence of an event of the type specified in Section 9.4(A)-(D), the use by
the Holder of an outdated or defective prospectus after the Company has notified
the Holder in writing that the prospectus is outdated or defective and prior to
the receipt by the Holder of a writing by the Company that the use of the
applicable prospectus may be resumed.
10.3 Conduct of Indemnification Proceedings. If any proceeding shall be
brought or asserted against any person entitled to indemnity hereunder (an
"Indemnified Party"), the Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided,
however, that the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that such failure shall have
prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in
any such proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such proceeding and to employ counsel reasonably satisfactory to the
Indemnified Party in any such proceeding; or (3) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified Party
and the Indemnifying Party, and the Indemnified Party shall have been advised by
counsel that a material conflict of interest is likely to exist if the same
counsel were to represent the Indemnified Party and the Indemnifying Party (in
which case, if the Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and the expense of one such counsel for the Indemnified Party shall be
at the expense of the Indemnifying Party). The Indemnifying Party shall not be
liable for any settlement of any such proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of the
Indemnified Party from all liability on claims that are the subject matter of
such proceeding.
Subject to the terms of this Agreement, all fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten trading days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided,
however, that the Indemnifying Party may require the Indemnified Party to
undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that the Indemnified Party is not entitled to
indemnification hereunder).
10.4 Contribution. If a claim for indemnification under Section 10.1 or
10.2 is unavailable to an Indemnified Party (by reason of public policy or
7
otherwise), then each Indemnifying Party, in lieu of indemnifying the
Indemnified Party, shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, the Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 10.3, any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
11. Warrant Agent. The Company may, by written notice to each holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
12. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
13. Notices, etc. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
14. 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.
15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of State of New York without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall be
brought only in the United States District Court for the Northern District of
Maryland or any state court located in Baltimore, Maryland. The individuals
executing this Warrant on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury. In the event that any
provision of this Warrant is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of this Warrant. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision. The
Company and Holder each acknowledges that legal counsel participated or had an
opportunity to participate in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.
8
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.
SBS INTERACTIVE, CO.
By:
----------------------------------
Xxxx X. Xxxxxxx, President
HOLDER
--------------------------------------
Xxxxxx Xxxx
9
Exhibit A
EXERCISE NOTICE
(To be signed only on exercise of Warrant)
TO: SBS Interactive, Co.
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase:
________ shares of the Common Stock covered by such Warrant.
The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is an
aggregate of $___________.
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to _________________________________ whose address is
________________________________.
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.
Dated:___________________ _______________________________________
(Signature must conform to name of
holder as specified on the face of the
Warrant)
_______________________________________
(Address)
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the Warrant to purchase the number of shares of Common Stock of
SBS Interactive, Co. to which such Warrant relates specified under the heading
"Number of Shares Transferred," respectively, opposite the name(s) of such
person(s) and appoints each such person Attorney to transfer its respective
right on the books of SBS Interactive, Co. with full power of substitution in
the premises.
Number of Shares
Transferees Transferred
----------- -----------
__________________________________ ________________________
__________________________________ ________________________
__________________________________ ________________________
Dated:__________________, _______ _______________________________________
(Signature must conform to name of
holder as specified on the face of the
warrant)
Signed in the presence of:
_________________________________ _______________________________________
(Name) (address)
_______________________________________
ACCEPTED AND AGREED: (address)
[TRANSFEREE]
_________________________________
(Name)
