Exhibit 10.49
COMMON STOCK WARRANT AGREEMENT
by and among
HOUSTONSTREET EXCHANGE, INC.
and
THE PERSONS LISTED ON ANNEX I HERETO
Dated as of March 30, 2001
COMMON STOCK WARRANT AGREEMENT, dated as of March 30, 2001, among
HOUSTONSTREET EXCHANGE, INC., a Delaware corporation (the "Company") and the
persons and entities listed on Annex I hereto (each a "Holder", and
collectively, the "Holders" ).
WHEREAS, in connection with a private placement of up to (i)
$13,617,015 aggregate principal amount of Senior Secured Notes (each a "Note"
and collectively the "Notes"), (ii) Series C Preferred Stock purchase warrants,
(iii) Common Stock Purchase Warrants (the "Common Warrants"), pursuant to the
terms of Senior Note and Warrant Purchase Agreement of even date herewith (the
"Note Purchase Agreement") the Company will issue to the Holders Common Warrants
to purchase an aggregate of up to 4,539,005 shares of Common Stock, par value
$.01 per share, of the Company (the "Common Stock"), subject to adjustment.
NOW THEREFORE, in consideration of the agreements herein set forth and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Grant and Exercise of Warrants. The Company hereby grants to each
Holder or its successors or registered assigns the right to purchase (each a
"Warrant" and collectively, the "Warrants"), at any time or from time to time
beginning on the date hereof and ending at 5:00 p.m. E.S.T. on March ___, 2006,
up to such number of fully paid and nonassessable shares of Common Stock (as
defined herein) (the "Warrant Shares"), at an exercise price per share of the
par value of $2.50 per share of Common Stock (as such price may be adjusted
pursuant to the terms hereof, the "Exercise Price"), set forth opposite such
Warrant Holder's name on Annex I hereto.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") representing the Warrant Shares delivered and to be delivered to
each Holder 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. Registration of Warrant Certificates. The Warrant Certificates shall
be numbered and shall be registered on the books of the Company when issued.
4. Exercise of the Warrants. The Warrants initially are exercisable at
the Exercise Price set forth in Section 1 hereof, which shall be payable for the
shares of Common Stock to be issued upon such exercise in one of the following
manners at the option of the Holder:
(i) delivery of a certified check, cashier's check, cash,
or wire transfer of the purchase price for such
shares;
(ii) delivery of shares of Common Stock (not including the
shares of Common Stock issuable upon the exercise of
this Warrant) with an aggregate Fair Market Value
equal to the aggregate purchase price;
(iii) through a "cashless" or "net-issue" exercise through
the exchange of this Warrant for that number of
shares of Common Stock determined by multiplying the
number of shares of Common Stock issuable hereunder
by
a fraction, the numerator of which is the difference
between (x) the Fair Market Value per share and (y)
the Exercise Price per share, and the denominator of
which is the Fair Market Value per share;
(iv) delivery to the Company for cancellation (or partial
cancellation, as the case may be) of the Note from
the Company to the Holder as the purchase price for
such shares (in the case of the cancellation of less
than all of the Note, the Company shall cancel said
Note upon the surrender thereof and shall execute and
deliver a new Note of like tenor for the balance of
the principal amount payable thereunder); or
(v) a combination of any of the methods set forth in (i),
(ii), (iii) or (iv) above.
"Fair Market Value" as used in this Section 4, shall be:
(i) the mean of the final bid and asked prices of the
Common Stock on the date of exercise, as reported in
The Wall Street Journal (or, if not so reported, as
otherwise reported by the NASDAQ National Market
System or Nasdaq); or
(ii) in the event the Common Stock is listed on a stock
exchange, the Fair Market Value per share shall be
the closing price of the Common Stock on such
exchange on the date of exercise of the Warrant, as
reported in The Wall Street Journal;
provided, however, that where there is no public market for the Common Stock,
the Fair Market Value per share shall be determined by the Company's Board of
Directors in good faith using a generally accepted valuation method.
Upon surrender of a Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with payment of the Exercise Price
for the Warrant Shares to be purchased, at the Company's principal offices,
currently located at 000 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000,
the registered holder of a Warrant Certificate ("Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the Warrant Shares so
purchased. 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 Common Stock underlying the Warrant). In the case of the
purchase of less than all of the Warrant Shares purchasable under any Warrant
Certificate, the Company 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 Warrant Shares purchasable thereunder.
5. Issuance of Certificates. Upon the exercise of a Warrant, the
issuance of certificates for Warrant Shares shall be made forthwith (and in any
event within ten (10) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax, other than income taxes which
may be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Sections 6 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 Company shall not be required to pay any transfer tax which may be
payable in respect of any transfer involved in
2
the issuance and delivery of any such certificates in a name other than that of
the Holder 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.
Each Warrant Certificate and any certificate representing Warrant
Shares or other securities, property or rights issued upon exercise of a Warrant
shall be executed on behalf of the Company by the manual or facsimile signature
of the then present President or any Vice President of the Company under its
corporate seal reproduced thereon, attested to by the manual or facsimile
signature of the then Secretary or any Assistant Secretary of the Company. Each
Warrant Certificate shall be dated the date of execution by the Company upon
initial issuance, division, exchange, substitution or transfer.
6. Transfer of a Warrant. A Warrant shall be transferable only on the
books of the Company maintained at its principal office, where its principal
office may then be located, upon delivery thereof duly endorsed by the Holder or
by its duly authorized attorney or representative accompanied by proper evidence
of succession, assignment or authority to transfer. Upon any registration
transfer, the Company shall execute and deliver a new Warrant to the person
entitled thereto.
7. Restrictions on Transfer of the Warrant.
7.1 Any Warrant Shares issued will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), and the
Holder agrees to acquire any Warrant Shares for investment (which is
understood to mean that Holder must intend to retain such Warrant
Shares indefinitely without any intention of reselling or otherwise
disposing of them either presently or at the expiration of any
particular period unless they are subsequently registered under the
Securities Act or an exemption from registration is available). It is
further understood that any sales of Warrant Shares made in reliance
upon Rule 144 under the Securities Act can be made only in limited
amounts in accordance with the terms and conditions of that Rule 144,
and that such Rule 144 is not presently available with respect to the
sale of any Warrant Shares. The Holder agrees to be bound by the
provisions of a legend substantially similar to the following which
will be endorsed upon the stock certificate to be issued for any
Warrant Shares issued:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws, have been
acquired for investment, and may not be sold, pledged,
hypothecated or otherwise transferred unless a registration
statement under the Securities Act and any applicable state
law is in effect with regard thereto or an exemption from such
registration is available."
7.2 It is understood that the Company is not obligated to
register any Warrant Shares (nor has the Company represented to the
Holder that it will register any of the Warrant Shares) or to comply
with the terms of any exemption from registration and that the Company
may place a "Stop Transfer Order" against such shares until one of the
conditions set forth in the foregoing legend shall have been met.
3
8. Exercise Price and Number of Securities. Each Warrant is exercisable
to purchase Warrant Shares at an initial exercise price equal to the Exercise
Price. The Exercise Price and the number of Warrant Shares for which each
Warrant may be exercised shall be the price and the number of Warrant Shares
which shall result from time to time from any and all adjustments in accordance
with the provisions of Section 9 hereof.
9. Adjustments to Exercise Price and Number of Securities. The Exercise
Price in effect at any time and the number and kind of securities purchased upon
the exercise of the Warrant shall be subject to adjustment from time to time
only upon the happening of the following events:
9.1 Stock Dividend, Subdivision and Combination. In case the
Company shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number
of shares, or (iii) combine its outstanding shares of Common Stock into
a smaller number of shares, the Exercise Price in effect at the time of
the record date for such dividend or distribution or of the effective
date of such subdivision, combination or reclassification shall be
adjusted so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to
such action, and the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such action. Such
adjustment shall be made successively whenever any event listed above
shall occur.
9.2 Adjustment in Number of Securities. Upon each adjustment
of the Exercise Price pursuant to the provisions of this Section 9, the
number of Warrant Shares issuable upon the exercise of each Warrant at
the adjusted Exercise Price shall be adjusted to the nearest number of
whole shares of Common Stock obtained by multiplying a number equal to
the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares issuable upon exercise of the Warrant
immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
9.3 Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock
designated as Common Stock in the Amended and Restated Certificate of
Incorporation of the Company, 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.
9.4 Merger or Consolidation. In case of any consolidation of
the Company with, or merger of the Company 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
4
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 for which such Warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which
shall be identical to the adjustments provided in Section 9. The above
provision of this subsection shall similarly apply to successive
consolidations or mergers.
9.5 Exchange and Replacement of the Warrant Certificates. Each
Warrant Certificate is exchangeable, without expense, upon the
surrender thereof by the registered Holder at the principal executive
office of the Company for a new Warrant Certificate of like tenor and
date representing in the aggregate the right to purchase the same
number of Warrant Shares purchasable thereunder in such denominations
as shall be designated by the Holder thereof at the time of such
surrender.
10. Theft or Destruction of Certificates. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Warrant Certificate, and, in the case of loss, theft or
destruction, an indemnity or security reasonably satisfactory to it and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Warrant, if mutilated, the Company will
make and deliver a new Warrant Certificate of like tenor, in lieu thereof.
11. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Warrant, 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 down to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
12. Reservation of Securities. The Company 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 Warrant, such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise thereof. Every transfer agent ("Transfer Agent") for the Common
Stock and other securities of the Company issuable upon the exercise of the
Warrant will be irrevocably authorized and directed at all times to reserve such
number of authorized shares of Common Stock and other securities as shall be
requisite for such purpose. The Company will keep a copy of this Agreement on
file with every Transfer Agent for the Common Stock and other securities of the
Company issuable upon the exercise of the Warrant. The Company will supply every
such Transfer Agent with duly executed stock and other certificates, as
appropriate, for such purpose. Initially, the Transfer Agent shall be the
Company. The Company covenants and agrees that, (a) upon exercise of the Warrant
and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid, non-assessable, free from all taxes, liens and charges with respect to the
issue thereof and not subject to the preemptive rights of any stockholder, (b)
it will from time to time take all such actions as may be required to assure
that the stated or par value per share of Common Stock is at all times equal to
or less than the then effective Exercise Price per Warrant Share issuable upon
exercise of the Warrant and (c) if and so long as the Warrant Shares issuable
upon the exercise of the Warrant are listed on any
5
national securities exchange, the Company will list and keep listed on such
exchange, upon official notice of issuance, any Warrant Shares.
13. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed 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 matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
after the Exercise Date and prior to the Holder's exercise of the Warrant, any
of the following events shall occur:
13.1 the Company 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 Company; or
13.2 the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock
of the Company, or any option, right or warrant to subscribe therefor;
or
13.3 a dissolution, liquidation or winding up of the Company
(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 Company shall give written notice of
such event to the holder of the Warrant at least fifteen (15) days prior to the
date fixed as a record date or the date of 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. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to give such notice or any defect therein shall not affect
the validity of any action taken in connection with 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.
14. Counterpart Execution. This Agreement may be executed in any number
of counterparts with the same effect as if all of the parties hereto had signed
the same documents. All counterparts shall be construed together and shall
constitute one agreement.
15. Subsequent Holder. Any future purchaser of Warrants in accordance
with the terms of the Note Purchase Agreement may become a party to this
Agreement after the date hereof without the consent of the other parties hereto
by executing a counterpart signature page to this Agreement. Each such party
shall be deemed a Holder hereunder. Annex I hereto shall be amended from time to
time to reflect the addition of any Holder pursuant to this Section 15.
6
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
7
IN WITNESS OF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
HOUSTONSTREET EXCHANGE, INC. HOLDER
BAYCORP HOLDINGS, LTD.
By: /s/ Xxxxx X. Xxxxxx Xx. By: /s/ Xxxxx X. Xxxxxx Xx.
------------------------------ -------------------------------
Name: Xxxxx X. Xxxxxx Xx. Name: Xxxxx X. Xxxxxx Xx.
Title: President and Chief Title: President and Chief
Executive Officer Executive Officer
8
ANNEX I --- LIST OF HOLDERS
Name and Address of Holder No. of Common
-------------------------- -------------
Stock Warrants
--------------
BayCorp Holdings, Ltd. 2,806,614
Attn: Xxxxx X. Xxxxxx, Xx.
000 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
TSG Equity Fund, L.P. 5,921
Attn: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx, XX 00000
TSG Equity Partners LLC 60
Attn: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx, XX 00000
Xxxxxx X. Xxxxxxxx 501
c/o TSG Equity Partners LLC
000 Xxxxx Xxxx
Xxxx, XX 00000
T. Xxxxxxxxx Xxxxxxxx 185
c/o TSG Equity Partners LLC
000 Xxxxx Xxxx
Xxxx, XX 00000
Xxxxx X. Xxxxxx 62,500
00 Xx. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxxxx Xxxxxx 41,667
0 Xxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
KRoad Ventures 53,334
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Equiva Trading Company 464,785
Attention: Xxxxxxx X. Xxxxxxxx
One Xxxxx Center
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Omega Advisors, Inc. 30,000
Attention: Xx Xxxx
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxx 27,778
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx XxXxxxxx 27,778
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxx 27,778
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Conoco, Inc. 145,940
000 X. Xxxxx Xxxxxxx
XX 0000
Xxxxxxx, XX 00000-0000
Xxxxxx X. Xxx Investors Limited 25,000
Partnership
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
2
