Warrant Agreement
THIS WARRANT AGREEMENT is made and entered into by and between Equity
Growth Systems, Inc. , a Delaware corporation (the "Issuer") and The Yankee
Companies, Inc., a Florida corporation (hereinafter referred to variously as the
"Holder" or "Yankees").
Preamble:
WHEREAS, the Issuer and Yankees have entered into a certain strategic
consulting agreement of even date herewith (hereinafter the "Advisory
Agreement"), pursuant to which Yankees is entitled to receive certain
compensation, including among other things, warrants ("Warrants") to purchase
shares of the Issuer's common stock, $0.01 par value per share ("Common Stock"),
upon and subject to the terms and conditions of the Advisory Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the Holder
to or for the benefit of the Issuer of FIVE ($5.00) DOLLARS, the agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agrees as
follows:
Witnesseth:
1. Grant
The Holder is hereby granted the right to purchase shares of the Issuer's
Common Stock in an amount equal to 10% of the Issuer's outstanding or
reserved Common Stock immediately following complete exercise of all the
Warrants, at any time from the 60th date following the Advisory Agreement
until the close of business on the 45th business day after this Warrant and
the shares of Common Stock into which it can be exercised are registered
for sale to the public under applicable federal and state securities laws,
provided, however, that the Holder shall have the option of exercising this
Warrants prior to such registration at a 50% discount from the otherwise
applicable exercise price, subject to the resale restrictions imposed by
Securities and Exchange Commission Rule 144, but subject to the piggy back
and registration provisions hereinafter set forth.
2. Warrant Certificates.
The warrant certificates (the"Warrant Certificates") delivered and to be
delivered pursuant to this agreement shall be in the form set forth in
Exhibit A attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions, and other variations as required or
permitted by this Agreement.
3. Exercise of Warrant.
ss.3.1 Method of Exercise
(a) The Warrants initially are exercisable at an initial exercise price
(subject to adjustment as provided in Section 8 hereof) per share of Common
Stock set forth in Section 6 hereof payable by certified or official bank
check in New York Clearing House funds, subject to adjustment as provided
in Section 8 hereof.
(b) Upon surrender of a Warrant Certificate with the annexed Form of Election
to Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the shares of Common Stock purchased at the
Issuer's principal offices, as reflected in the records of the Securities
and Exchange Commission maintained on its XXXXX Internet site, the
registered holder of a Warrant Certificate ("Holder" or "Holders') shall be
entitled to receive a certificate or certificates for the shares of Common
Stock so purchased.
(c) The purchase rights represented by each Warrant Certificate are exercisable
at the option of the Holder thereof, in whole or in part (but not as to
fractional shares of the Common Stock underlying the Warrants).
(d) Warrants may be exercised to purchase all or part of the shares of Common
Stock represented thereby.
(e) In the case of the purchase of less than all the shares of Common Stock
purchasable under any Warrant Certificate, the Issuer shall cancel said
Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the
shares of Common Stock.
ss.3.2 Exercise by Surrender of Warrant.
(a) (1) In addition to the method of payment set forth in Section 3.1 and
in lieu of any cash payment required thereunder the Holder(s) of
the Warrants shall have the right at any time to and from time to
time exercise the Warrants in full or in part by surrendering the
Warrant Certificate in the manner specified in Section 3.1 in
exchange for the number of shares of Common Stock equal to the
product of (x) the number of shares to which the Warrants are
being exercised multiplied by (y) a fraction, the numerator of
which is the Market Price (as defined in Section 8.1 hereof) of
the Common Stock less the Exercise Price and the denominator of
which is such Market Price.
(2) The Parties acknowledge that this optional form of exercise is
designed to permit tacking of the Warrant holding period to that
of the Common Stock received upon exercise thereof, for purposes
of SEC Rule 144, under the concept commonly referred to as
"cashless exercise."
(b) Solely for the purposes of this Section 3.2, Market Price shall be
calculated either (i) on the date on which the form of election attached
hereto is deemed to have been sent to the Issuer pursuant to Section 13
hereof ("Notice Date") or (ii) as the average of the Market Price for each
of the five trading days preceding the Notice Date, whichever of (i) or
(ii) is greater.
4. Issuance of Certificates.
(a) Upon the exercise of the Warrant the issuance of certificates for shares of
Common Stock or other securities, properties or rights underlying such
Warrants, shall be made forthwith (and in any event such issuance shall be
made within five [5] business days thereafter) without charge to the Holder
thereof including, without limitations any tax which may be payable in
respect of the issuance thereof and such certificates shall (subject to the
provisions of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that
the Issuer shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the Holder arid the Issuer 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
Issuer the amount of such tax or shall have established to the satisfaction
of the Issuer that such tax has been paid.
(b) The Warrant Certificates and the certificates representing the shares of
Common Stock (and/or other securities, property or rights issuable upon
exercise of the Warrants) shall be executed on behalf of the Issuer by the
manual or facsimile signature of the then present Chairman or Vice Chairman
of the Board of Directors or President or Vice President of the Issuer
under its corporate seal reproduced thereon, attested to by the manual or
facsimile signature of the then present Secretary or Assistant Secretary of
the Issuer.
(c) Warrant Certificates shall be dated the date of execution by the Issuer
upon initial issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants.
The Holder of a Warrant Certificate, by its acceptance thereof, covenants
and agrees that the Warrants are being acquired as an investment and not with a
view to the distribution thereof, unless they are properly registered as
contemplated hereby.
6. Exercise Price.
ss.6.1 Initial and Adjusted Exercise Price.
(a) (1) Except as otherwise provided in Section 8 thereof, the initial
exercise price of each Warrant shall be based on dividing the sum
of $60,000 by the number of the Issuer's authorized and
outstanding shares of Common Stock plus the number of the
Issuer's shares of Common Stock reserved for issuance under
currently determinable circumstances (e.g., outstanding options,
warrants, convertible debentures, commitments under employment,
reorganization or acquisition agreements or shares issuable in
conjunction with pending acquisitions) at the time of exercise,
and dividing the result by 0.10.
(2) For purposes of illustration, if the Issuer had 20,000,000 shares
of Common Stock authorized, of which 1,000,000 were outstanding
and 1,000,000 were reserved for issuance under currently
determinable circumstances, then the Holder would be entitled to
purchase 200,000 shares and the Warrant exercise price per share
would be determined by dividing $60,000 by 2,000,000 shares =
($0.03) and dividing by 0.1= $0.30 per share.
(3) Consequently, any increase in the aggregate of authorized and
reserved shares will result in a decrease in the exercise price
per share and any decrease thereof will result in an increase in
the exercise price per share, the product of the shares of Common
Stock underlying this warrant and the exercise price per share
always equaling $60,000.
(b) The adjusted exercise price shall be the price which shall result from time
to time from any and all adjustments of the initial exercise price in
accordance with the foregoing provisions and the provisions of Section 8
hereof.
ss.6.2 Exercise Price.
The term "Exercise Price" herein shall mean the initial exercise price or
the adjusted exercise price, depending upon the context.
7. Registration Rights.
ss.7.1 Registration Under the Securities Act of 1933.
(a) The Warrants and the shares of Common Stock issuable upon exercise of the
Warrants and any of the other securities issuable upon exercise of the
Warrants have not been registered under the Securities Act of 1933, as
amended (the "Act") for public resale.
(b) Upon exercise, in part or in whole, of the Warrants, certificates
representing the shares of Common Stock and any other securities issuable
upon exercise of the Warrants (collectively, the "Warrant Securities")
shall bear the following legend:
(b) The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act') for public resale, and
may not be offered or sold except pursuant to (i) an effective registration
statement under the Act, (ii) to the extent applicable, Rule 144 under the
Act (or any similar rule under such Act relating to the disposition of
securities), or (iii) an opinion of counsel, if such opinion shall be
reasonably satisfactory to counsel to the issuer, that an exemption from
registration under such Act is available.
ss.7.2 Piggyback Registration.
(b) If, at any time after the date hereof the Issuer proposes to register any
of its securities under the Act (other than in connection with a merger or
pursuant to Form X-0, X-0 or comparable registration statement) it will
give written notice by registered mail, at least thirty (30) days prior to
the filing of each registration statement, to Yankees and to all other
Holders of the Warrants and/or the Warrant Securities of its intention to
do so.
(c) If Yankees or other Holders of the Warrants and/or Warrant Securities
notify the Issuer within twenty (20) days after receipt of any such notice
of its or their desire to include any such securities in such proposed
registration statement, the Issuer shall afford Yankees and such Holders of
the Warrants and/or Warrant Securities the opportunity to have any such
Warrant Securities registered under such registration statement.
ss.7.3 Demand Registration.
(a) At any time during the term of this Warrant, the Holders of the Warrants
and/or Warrant Securities representing a "Majority" (as hereinafter
defined) of such securities (assuming the exercise of all of the Warrants)
shall have the right (which right is in addition to the registration rights
under Section 7.2 hereof), exercisable by written notice to the Issuer, to
have the Issuer prepare and file with the Commission, on one occasion, a
registration statement and such other documents, including a prospectus, as
may be necessary in the opinion of both counsel for the Issuer and counsel
for Yankees and Holders, in order to comply with the provisions of the Act,
so as to permit a public offering and sale of their respective Warrant
Securities for nine (9) consecutive months by such Holders and any other
Holders of the Warrants and/or Warrant Securities who notify the Issuer
within ten (10) days after receiving notice from the Issuer of such
request.
(b) The Issuer covenants and agrees to give written notice of any registration
request under this Section 7.3 by any Holder or Holders to all other
registered Holders of the Warrants and the Warrant Securities within (10)
days from the date of the receipt of any such registration request.
(c) (1) Notwithstanding anything to the contrary contained herein, if the
Issuer shall not have filed a registration statement for the
Warrant Securities within the time period specified in Section
7.4(a) hereof pursuant to the written notice specified in Section
7.3(a) of a Majority of the Holders of the Warrants and/or
Warrant Securities, the Issuer agrees that upon the written
notice of election of a Majority of the Holders of the Warrants
and/or Warrant Securities it shall repurchase (i) any and all
Warrant Securities at higher of the Market Price (as defined in
Section 8. l(vi)) per share of Common Stock on (x) the date of
the notice sent pursuant to Section 7.3(a) or (y) the expiration
of the period in Section 7.4(a) and (ii) any and all Warrants at
such Marker Price less the exercise price of such Warrant.
(2) Such repurchase shall be in immediately available funds and shall
close within two (2) days after the later of (i) the expiration
of the period specified in Section 7.4(a) or (ii) the delivery of
the written notice of election specified in this Section 7.3.
ss.7.4 Covenants of the Issuer, With Respect to Registration.
In connection with any registration under Section 7.2 or 7.3 hereof, the
Issuer covenants and agrees as follows:
(a) The Issuer shall use its best efforts to file a registration statement
within sixty (60) days of receipt of any demand therefor, shall use its
best efforts to have any registration statements declared effective at the
earliest possible time, and shall furnish the Holder desiring to sell
Warrant Securities such number of prospectuses as shall reasonably be
requested.
(b) (1) The Issuer shall pay all costs (excluding any underwriting or
selling commissions or over charges of any broker-dealer acting
on behalf of Holders), fees and expenses in connection with all
registration statements filed pursuant to Sections 7.2 and 7.3(a)
hereof including, without limitation, the Issuer's legal and
accounting fees, printing expenses, blue sky fees and expenses.
(2) If the Issuer shall fail to comply with the provisions of Section
7.4(a), the Issuer shall, in addition to any other equitable or
other relief available to the Holder(s), be liable for any or all
damages due to loss of profit sustained by the Holder(s)
requesting registration of its Warrant Securities.
(c) The Issuer will take all necessary action which may be required in
qualifying or registering the Warrant Securities included in a registration
statement for offering and sale under the securities or blue sky laws of
the state requested by the Holder.
(d) The Issuer shall indemnify the Holder(s) of the Warrant Securities to be
sold pursuant to any registration statement and each person, if any, who
controls such Holder within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under
the Act, The Exchange Act or otherwise, arising from such registration
statement.
(e) Nothing contained in this Agreement shall be construed as requiring the
Holder(s) to exercise their Warrants prior to the initial filing of any
registration statement or the effectiveness thereof.
(f) The Issuer shall not permit the inclusion of any securities other than the
Warrant Securities to be included in any registration statement filed
pursuant to Section 7.3 hereof, or permit any other registration statement
to be or remain effective during the effectiveness of a registration
statement filed pursuant to Section 7.3 hereof, without the prior written
consent of the Holders of the Warrants arid Warrant Securities representing
a Majority of such securities (assuming an exercise of all of the
Warrants).
(g) The Issuer shall furnish to each Holder participating in the offering, and
to each underwriter, if any, a signed counterpart, addressed to such Holder
or underwriter, of (i) an opinion of counsel to the Issuer, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering; a letter
dated the date of the closing under the underwriting agreement) signed by
the independent public accountants who have issued a report on the Issuer's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to agents subsequent to the date of such
financial statements, are as customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to underwriters in
underwritten public offering of securities.
(h) The Issuer shall as soon as practicable after the effective date of the
registration statement, and in any event within 15 months thereafter, make
"generally available to its security holders" (within the meaning of Rule
158 under the Act) an earnings statement (which need not be audited)
complying with Section 11(a) of the Act and covering a period of at least
12 consecutive months beginning after the effective date of the
registration agreement.
(i) (1) The Issuer shall deliver promptly to each Holder participating in the
offering requesting the correspondence and memoranda described below
and the managing underwriter copies of all correspondence between the
Commission and the Issuer, its counsel or auditors and all memoranda
relating to discussions with the Commission or its staff with respect
to the registration statement and permit the Holder and underwriter to
do such investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the registration statement as
it deems reasonably necessary to comply with applicable securities
laws or rules of the National Association of Securities Dealers, Inc.
("NASD").
(2) Such investigation shall include access to books, records and
properties and opportunities to discuss the business of the Issuer
with its officers and independent auditors, all to such reasonable
extent and at such reasonable times and as often as any such Holder
shall reasonably request as it deems necessary to comply with
applicable securities laws or NASD rules.
(j) In addition to the Warrant Securities, upon the written request therefor by
any Holder(s), the Issuer shall include in the registration statement any
other securities of the Issuer held by such Holder(s) as of the date of
filing of such registration statement, including without limitation,
restricted shares of Common Stock, options, warrants or any other
securities convertible into shares of Common Stock.
(k) For purposes of this Agreement, the term "Majority" in reference to the
Holders of Warrants or Warrant Securities shall mean in excess of fifty
percent (50%) or the then outstanding Warrants or Warrant Securities that
(i) are not held by the Issuer, an affiliate, officer, creditor, employee
or agent thereof or any of their respective affiliates, members of their
family, persons acting as nominees or in conjunction therewith or (ii) have
not been resold to the public pursuant to a registration statement filed
with the Commission under the Act.
8. Adjustments to Exercise and Number of Securities.
ss.8.1 Computation of Adjusted Exercise Price.
(a) Except as hereafter provided, in case the Issuer shall at any time after
the date hereto or sell any shares of Common Stock ( other than the
issuances or sales referred to in Section 8.7 hereof), including shares
held in the Issuer's treasury and shares of Common Stock issued upon the
exercise of any options, rights or warrants, to subscribe for shares of
Common Stock and shares issued upon the direct or indirect conversion or
exchange of securities for shares of Common Stock, for a consideration per
share less than the Exercise Price in effect immediately prior to the
issuance or sale of such shares or the "Market Price" ( as defined in
Section 8.1(vi) hereof) per share of Common Stock on the date immediately
prior to the issuance or sale of such shares, or without consideration,
then forthwith upon such issuance or sale, the Exercise Price shall (until
another such issuance or sale) be reduced to the price ( calculated to the
nearest full cent) equal to the quotient derived by dividing (A) an Amount
to the sum of (X) the product of (a) the lower of (i) the Exercise Price in
effect immediately prior to such issuance or sale and (ii) the Market Price
per share of Common Stock on the date immediately prior to the issuance or
sale of such shares, in either event, reduced, but not to a number which is
below .001 by the positive difference, if any, between the (u) Market Price
per share of Common Stock on the date immediately prior to the issuance or
sale and (v) the amount per share received in connection with such issuance
or sale, multiplied by (b) the total number of shares of Common Stock
outstanding immediately prior to such issuance or sale, plus (Y) the
aggregate of the amount of all consideration, if any, received by the
Issuer upon such issuance or sale by (B) the total number of shares of
Common Stock outstanding immediately after such issuance or sale, provided,
however, that in no event shall the Exercise Price be adjusted pursuant to
this computation to an amount i excess of the Exercise Price in effect
immediately prior to such computation, except in the case of a combination
of outstanding shares of Common Stock, as provided by Section 8.3 thereof.
(b) For the purposes of this Section 8 the term Exercise Price shall mean the
Exercise Price per share of Common Stock set forth in Section 6 hereof, as
adjusted from time to time pursuant to the provisions of this Section 8.
(c) For the purpose of any computation to be made in accordance with this
Section 8.1, the following provisio9ns shall be applicable:
(i) In case of the issuance or sale or shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the
cash consideration therefor shall be deemed to be the amount of cash
received by the Issuer for such shares (or, if shares of Common Stock
are offered by the Issuer for subscription, the subscription price,
or, if either of such securities shall be sold to underwriters or
dealers for public offering without a subscription offering the
initial pubic offering price) before deducting therefrom any
compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing
similar services, or any expenses incurred in connectio9n therewith
and less any amounts payable to security holders or any affiliate
thereof, including without limitation, any employment agreement,
royalty, consulting agreement, covenant not to compete, earned or
contingent payment right or similar arrangement, agreement or
understanding, whether oral or written; all such amounts shall be
valued at the aggregate mount payable thereunder whether such payments
are absolute or contingent and irrespective of the period or
uncertainly of payment, the rate of interest, if any, or the
contingent nature thereof.
(ii) In case of the issuance or sale ( otherwise than as a dividend or over
distributio9n on any stock of the Issuer) of shares of Common Stock
for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash shall be deemed
to be the value of such consideration as determined in good faith by
the Board of Directors of the Issuer.
(iii) Shares of Common Stock issuable by way of Dividend or other
distributio9n on any stock of the Issuer shall be deemed to have been
issued immediately after the opening of business on the day following
the record date for the determination of stockholders entitled to
receive such dividend or other distribution and shall be deemed to
have been issued without consideration.
(iv) The reclassification of securities of the Issuer other than shares of
Common Stock shall be deemed to involve the issuance of such shares of
Common Stock for a consideratio9n other than cash immediately prior to
the close of business on the date fixed for the determination of the
security holders entitled to receive such shares, and the value of the
consideration allocable to such shares of Common Stock shall be
determined as provided in subsection (ii) of this Section 8.1.
(v) The number of shares of Common Stock at any one time outstanding shall
include the aggregate number of shares issued or issuable ( subject to
readjustment upon the actual issuance thereof) upon the exercise of
options, rights, warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(vi) As used herein, the phrase "Market Price" at any date shall be deemed
to be the last reported sale price, or, in case no such reported sale
takes place on such day, the average of the last reported sale prices
for the last three (3) trading days, in either case as officially
reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the
average closing bid price as furnished by the NASD through NASDAQ or
similar organization if NASDAQ is no longer reporting such
information, or if the Common Stock is nor quoted an NASDAQ, as
determined in good faith by resolution of the Board of Directors of
the Issuer, based on the best information available to it.
ss.8.2 Options, Rights, Warrants and Convertible and Exchangeable Securities
In case the Issuer shall at any time after the date hereof issue options,
rights or warrants to subscribe for shares of Common Stock, or issue any
securities convertible into exchangeable for shares of Common Stock, for a
consideration per share less than the Exercise Price in effect or the
Market Price immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, or without
consideration, the Exercise Price in effect immediately prior to the
issuance of such options, rights or warrant, or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of
Section 8.1 hereof, provided that:
(1) The aggregate maximum number of shares of Common Stock, as the case
may be, issuable under such options, right or warrants shall be deemed
to be issued and outstanding at the time such options, rights or
warrants were issued, and for in such options, right or warrants at
the time of issuance, plus the consideration (determined in the same
manner as consideration received on the issue or sale of shares in
accordance with the terms of the Warrants), if any, received by the
Issuer for such options, right or warrants.
(2) The aggregate maximum number of shares of Common Stock issuable upon
conversion or exchange or any convertible or exchangeable securities
shall be deemed to be issued and outstanding at the time of issuance
of such securities, and for a consideration equal to the minimum
purchase price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration ( determined
in the same manner as consideration received on the issue or sale of
shares in accordance with the terms of the Warrants), received by the
Issuer for such securities, plus the minimum consideration, if any,
receivable by the Issuer upon the conversion or exchange thereof.
(3) If any change shall occur in the price per share provided for in any
of the op0tional rights or warrants referred to in subsection (a) of
this Section 8.2, or in the price per share at which the securities
referred to in subsection (b) of this Section 8.2 are convertible or
exchangeable, such options, rights or warrants or conversion or
exchange rights, as the case may be, shall be deemed to have expired
or terminated on the case when such price change became effective in
respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Issuer shall be deemed to have
issued upon such date new options, right or warrants, or convertible
or exchangeable securities at the new price in respect of the number
shares issuable upon the exercise of such options, right or warrants
or the conversion or exchange of such convertible or exchangeable
securities.
ss.8.3 Subdivision and Combination.
In case the Issuer shall at any time subdivide or combine the
outstanding shares of Common Stock, the Exercise Price shall forthwith
be proportionately decreased in the case of subdivision or increased
in the case of combination.
ss.8.4 Adjustment in Number of Securities.
Upon each adjustment of the Exercise Price pursuant to the provisions
of this Section 8, the number of Securities issuable upon the exercise
of each Warrant shall be adjusted to the nearest full amount by
multiplying, a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant
Securities issuable upon exercise of the Warrants immediately prior to
such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
ss.8.5 Definition of Common Stock.
(a) For the purpose of this Agreement, the term "Common Stock" shall mean (i)
the class of stock designated as Common Stock in the Certificate of
Incorporation of the Issuer as may be amended as of the date hereof, or
(ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par
value.
(b) In the event that the Issuer shall after the date hereof issue securities
with greater or superior voting rights than the shares of Common Stock
outstanding as of the date hereof, the Holder, at its option, may receive
upon exercise of any Warrant either shares of Common Stock or a like number
of such securities with greater or superior voting rights.
ss.8.6 Merger or Consolidation.
(a) In care of any consolidation of the Issuer with, or merger of the Issuer
with, or merger of the Issuer into, another corporation (other than a
consolidation or merger which does not result in any reclassification or
change of the outstanding Common Stock), the corporation formed by such
consolidation or merger shall execute and deliver to the Holder a
supplemental warrant agreement providing that the holder of each Warrant
then outstanding or to be outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive upon exercise of such
warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the
number of shares of Common Stock of the Issuer for which such warrant might
have been exercised immediately prior to such consolidation, merger, sale
or transfer.
(b) (1) Such supplemental warrant agreement shall provide for adjustments
which shall be identical to the adjustments provided in Section 8. The
above provision of this Subsection shall similarly apply to successive
consolidations or mergers.
ss.8.7 No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the shares of Common Stock
issuable upon the exercise of the Warrants; or
(b) If the amount of said adjustment shall be less than 1 cent ($.01) per
Security, provided, however, that in such case any adjustment that would
otherwise be required then to be made shall be carried forward and shall be
made at the time of and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall amount to at least 1
cent ($.01) per Security.
ss.8.8 Dividend and Other Distributions.
(a) In the event that the Issuer shall at any time prior to the exercise of all
Warrants declare a dividend (other then a dividend consisting solely of
shares of Common Stock) or otherwise distribute to its stockholders any
assets, property, rights, evidences of indebtedness, securities (over than
shares of Common Stock), whether issued by the Issuer or by another, or any
other thing of value, the Holders of the unexercised Warrants shall
thereafter be entitled, in addition to the shares of Common Stock or other
securities and property receivable upon the exercise thereof, to receive,
upon the exercise of such Warrants, the same property, assets, rights,
evidences of indebtedness, securities or any other thing of value that they
would have been entitled to receive at the time of such dividend or
distribution as if the Warrants had been exercised immediately prior to
such dividend or distribution.
(b) At the time of any such dividend or distribution, the Issuer shall make
appropriate reserves to ensure the timely performance of the provisions of
this Subsection 8.2.
9. Exchange and Replacement of Warrant Certificates
(a) Each Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive
office of the Issuer, for a new Warrant Certificate of like tenor and date
representing in the aggregate the right to purchase the same number of
Securities in such denominations as shall be designated by the Holder
thereof at the time of such surrender.
(b) Upon by the Issuer of evidence reasonably satisfactory to it of loss,
theft, destruction or mutilation of any Warrant Certificate, and, in case
of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Issuer of all reasonable
expenses incidental thereto, and upon surrender and cancellation of the
Warrants if mutilated, the Issuer will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests.
The Issuer shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the Warrants, nor
shall it be required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional interests
shall be eliminated by rounding any fraction up to the nearest whole number
of shares of Common Stock or other securities, properties or rights.
11. Reservation and Listing of Securities.
(a) The Issuer shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon
the exercise of the Warrants, such number of shares of Common Stock or
other securities properties or rights as shall be issuable upon the
exercise thereof.
(b) The Issuer covenants and agrees that, upon exercise of the Warrants and
payment of the Exercise Price therefor, all shares of Common Stock and over
securities issuable upon such exercise shall be duly and validly issued,
fully paid, non-assessable and not subject to the preemptive rights of any
stockholder.
(c) As long as the Warrants shall be outstanding, the Issuer shall use its best
efforts to cause all shares of Common Stock issuable upon the exercise of
the Warrants to be listed (subject to official notice of issuance) on all
securities exchanges on which the Common Stock issued to the public in
connection herewith may then be listed and/or quoted NASDAQ.
12. Notice to Warrant Holders.
(a) Nothing contained in this Agreement shall be consented as conferring upon
the Holders the right to vote or to consent or to receive notice as a
stockholder in respect of any meetings of stockholders for the election of
directors or any other manner, or as having any rights whatsoever as a
stockholder of the Issuer.
(b) If, however, at any time prior to the expiration of the Warrants and their
exercise, any of the following events shall occur:
(1) the Issuer shall take a record of the holders of its shares of Common
Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained
earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Issuer; or
(2) the Issuer shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Issuer or securities
convertible into or exchange for shares of capital stock of the
Issuer, or any option, right or warrant to subscribe therefor: or
(3) a dissolution, liquidation or winding up of the Issuer other than in
connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety
shall be proposed;
then, in any one or more of said events the Issuer shall give notice
of such event at last fifteen (15) days prior to the date fixed as a
record date or the date of the closing the transfer books for the
determination of the stockholders entitled to such dividend,
distribution, convertible or exchangeable securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation,
winding up or sale.
(c) Such notice shall specify such record date or the date of closing the
transfer books, as the case may be.
(d) Failure to give such notice or any defect herein shall not affect the
validity of any action taken in connection win the declaration or payment
of any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation winding up or sale.
13. Notices.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been duly made when delivered, or
mailed registered or certified mail, return receipt requested:
(a) If the Holders, The Yankee Companies, Inc., to 902 Xxxxx Xxxxx Road, 136;
Xxxx Xxxxx, Xxxxxxx 00000, with a copy to 0000 Xxxxxxxxx 00xx Xxxxxxx,
Xxxxx, Xxxxxxx 00000, and as otherwise listed on the books of the Issuer,
or
(b) If to the Issuer, to the address set forth in Section 3 hereof or to such
other address as the Issuer may designate by notice to the Holders.
14. Supplements and Amendments.
(a) Except as otherwise expressly provided herein, the provisions of this
Agreement may be amended or waived at any time only by the written
agreement of the parties hereto.
(b) Any waiver, permit, consent or approval of kind or character on the part of
each Company or the Holder of any provisions or conditions of this
Agreement must be made in writing and shall be effective only in the extent
specifically set forth in such writing.
15. Successors.
All the covenants and provisions of this Agreement shall be binding upon
and inure to the benefit of the Issuer, the Holder and their respective
successors and assigns hereunder.
16. Governing Law; Submission to Jurisdiction.
(a) This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and
for all the purposes shall be construed in accordance with the laws of said
State without giving effect to the rules of said State governing the
conflicts of laws.
(b) (1) The Issuer and the Holder hereby agree that any action,
proceeding or claim against it arising out of, or relating in any
way to, this Agreement shall be brought and enforced in the
courts of the State of Florida or of the United Slates of America
for the Southern District of Florida, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive.
(2) The Issuer, and the Holder hereby irrevocably waive any objection
to such exclusive jurisdiction or inconvenient forum.
(3) Any such process or summons to be served upon any of the Issuer
and the Holder (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy
thereof, by registered or certified mail, return receipt
requested, postage prepaid, address it at the address as set
forth in Section 13 hereof.
(4) Such mailing shall deemed personal service and shall be legal and
binding upon the party so served in any action, proceeding or
claim.
(5) The Issuer and the Holder agree that the prevailing party(ies) in
any such action or proceeding shall be entitled to recover from
the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
17. Entire Agreement Modification.
This Agreement and the Purchase Agreement (to the extent portions thereof
are referred to herein) contain the entire understanding between the
parties hereto with respect to the subject matter hereof and may not be
modified or amended except by a writing duly signed by the party against
whom enforcement of the modification or amendment is sought.
18. Severability.
If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any
other provision of this Agreement.
19. Captions.
The caption headings of the Sections of this Agreement are for convenience
of reference only and are not intended, nor should they be construed as, a
part of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation over than the Issuer and the Holder any legal or equitable
right, remedy or claim under this Agreement; and this Agreement shall be
for the sole and exclusive 'benefit of the Issuer and the Holder.
21. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and,
such counterparts shall together constitute but one and the same
instrument.
* * *
In Witness Whereof, the Parties have executed this Agreement, effective as
of the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
AmeriNet Xxxxx.xxx, Inc.
----------------------------
____________________________ By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
[CORPORATE SEAL]
Dated: November 25, 1998
The Yankee Companies, Inc.
----------------------------
____________________________ By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxx Xxxxxx
President
[CORPORATE SEAL]
Dated: November 25, 1998
EXHIBIT A-1
FORM OF WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFERS OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, ___________ ___, ______
No. SB-1
_________ Warrants
Warrant Certificate
This Warrant Certificate certifies that The Yankee Companies, Inc., a
Florida corporation, or registered assigns, is the registered holder of Warrants
to purchase initially, at any time from June 30, 2000, until 5:30 p.m. New York
time on ___________ ___, ______ ("Expiration Date") up to _________ fully-paid
and non-assessable shares of common stock, $0,01 par value per share ("Common
Stock") of AmeriNet Xxxxx.xxx, Inc., a Delaware corporation (the "Issuer"), at
an initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $_____ per share of Common Stock, upon surrender of this
Warrant Certificate and payment of the Exercise Price at an office or agency of
the Issuer or by surrender of this Warrant Certificate in lieu of cash payment,
but subject to the conditions set forth herein and in the Warrant Agreement
dated as of November 25, 1998 between the Issuer and The Yankee Companies, Inc.,
(the "Warrant Agreement").
Unless the cashless exercise rights set forth in the Warrant Agreement are
exercised, payment of the Exercise Price shall be made by certified or official
bank check in New York Clearing House funds payable to the order of the Issuer.
No Warrant may be exercised after 5:30 p.m. New York time, on the
Expiration Date, at which time all Warrants evidenced hereby unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
obligations, duties and immunities thereunder of the Issuer and the holders (the
words "holders" or "holder" meaning the registered holders or registered holder)
of the Warrants.
In Witness Whereof, this instrument has been executed by the Issuer,
effective as of the * last date set forth below.
Signed, Sealed & Delivered
In Our Presence
AmeriNet Xxxxx.xxx, Inc.
----------------------------
____________________________ By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
[CORPORATE SEAL]
Attest: /s/ G. Xxxxxxx Xxxxxxxxxx
G. Xxxxxxx Xxxxxxxxxx, Secretary
Dated: November 25, 1998
Equity Growth Systems, Inc.
Warrant
Exercise Form
Date: _________ ___, ____
The Undersigned hereby irrevocably elects to exercise the subject
Warrant to the extent of purchasing ___ Shares and:
(A) [__] Hereby makes payment of $______, the actual exercise price
thereof; or
(B) [__] Avails itself of the cashless exercise rights granted herein.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Please type or print in block letters
---------------------
(Name)
--------------------------------
--------------------------------
(Address)
* * *
Signature: _______________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, The Yankee Companies, Inc., a Florida corporation,
hereby sells, assigns and transfer unto:
(Please type or print in block letters)
-------------------------------
(Name)
-------------------------------
-------------------------------
(Address)
the right to purchase Shares represented by this Warrant to the extent of ______
Shares to which the within Warrant relates, and does hereby irrevocably
constitute and appoint ________________ attorney, to transfer the same on the
books of the Issuer with full power of substitution in the premises.
Dated: ____ ___, 199_
Signature: _______________________
Xxxxxxx Xxxxx Xxxxxx, President
of The Yankee Companies, Inc.,
a Florida corporation
NOTICE: The signatures to this partial
assignment of Warrant must
correspond with the name as written
upon the face of the Warrant in
every particular, without alteration
or en largement or any change
whatever.
Signature Guaranteed:
IMPORTANT: SIGNATURE MUST BE GUARANTEED BY A FIRM WHICH
IS A MEMBER OF A REGISTERED NATIONAL EXCHANGE
OR BY A COMMERCIAL BANK OR A TRUST COMPANY!
