EXHIBIT 4.64
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW OR THE
SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON RELIANCE OF EXEMPTIONS
AVAILABLE THEREFOR. THE SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY SURFNET MEDIA GROUP, INC. AS HAVING ANY
INTEREST IN SUCH SECURITIES IN THE ABSENCE OF (i) AN OPINION OF COUNSEL THAT THE
TRANSACTION BY WHICH SUCH SECURITIES WILL BE OFFERED FOR SALE, HYPOTHECATED,
SOLD OR TRANSFERRED IS EXEMPT UNDER THE FEDERAL ACT, AND APPLICABLE STATE
SECURITIES LAWS; OR (ii) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE
SECURITIES UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS.
SURFNET MEDIA GROUP, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. 14
No. of Shares - 50,000
Dated: October 1, 2004
This certifies that, for value received, Xxxxx Xxxxx, hereinafter referred
to as the registered holder or the "Holder," or her successors and assigns, is
entitled, subject to the terms and conditions hereinafter set forth, at or
before 5:00 o'clock P.M., Eastern time, subject to adjustment upon the
occurrence of the contingencies set forth, to purchase fifty thousand (50,000)
shares of $.0001 par value Common Stock (the "Common Stock") of SurfNet Media
Group, Inc., upon the exercise of this Warrant, at one dollar and 50/100 cents
($1.50) per share (the "Warrant Price") and is subject to adjustments upon the
occurrence of the contingencies set forth in this Warrant. The Holder and
SurfNet are hereinafter referred to collectively as the "Parties."
Upon delivery of this Warrant with the subscription form annexed hereto,
duly executed, together with payment of this Warrant Price for the shares of
Common Stock thereby purchased, at the principal office of SurfNet, 0000 Xxxxx
Xxxx Xxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000, or at such other address as SurfNet
may designate by notice in writing to the registered holder hereof, the
registered holder of this Warrant shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased. All shares of Common
Stock which may be issued upon the exercise of this Warrant will, upon issuance,
be fully-paid and non-assessable and free from all taxes, liens and charges with
respect thereto.
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
a. This Warrant may be exercised in whole at any time, or in any
part from time to time, prior to 5:00 o'clock P.M., Eastern
time, on or before January 1, 2010, but not thereafter, as to
all or any part of the number of shares of Common Stock then
subject hereto to the extent such shares have vested. This
Warrant vests sequentially at the rate of sixteen thousand six
hundred sixty-six and 66/100 (16,666.66) shares per month,
with the first increment of this Warrant exercisable on and
after May 1, 2005, the second increment exercisable on or
after June 1, 2005, and the third and final increment of this
Warrant exercisable on or after July 1, 2005. Unvested shares
are subject to substantial risk of forfeiture. If the
Consulting Agreement between Holder and SurfNet is terminated
before this Warrant fully vests, then the Holder is entitled
to exercise this Warrant solely as to the number of vested
shares of Common Stock then subject hereto as of the date of
termination. Any further right to exercise this Warrant as to
unvested shares that, upon the passage of time, would
otherwise be available for exercise under this Warrant shall
thereupon cease and be of no further force or effect.
b. In case of any partial exercise of this Warrant, SurfNet shall
execute and deliver a new Warrant of like tenor and date for
the balance of the shares of Common Stock purchasable
hereunder. This Warrant may not be exercised as to less than
one thousand (1,000) shares at any one time unless the number
of shares purchased is the total number at the time available
for purchase under this Warrant. This Warrant may be exercised
only as to whole shares; fractional share interests will be
disregarded except that they may be accumulated.
c. Upon any exercise of this Warrant, Holder may, in lieu of
payment of the Warrant Price in cash, surrender this Warrant
(or any successor hereto or fraction hereof) (valued for such
purpose at the Fair Market Value of the underlying Common
Stock for which such Warrant is exercisable on the date of
such exercise less the Warrant Price then in effect) and apply
all or a portion of the amount so determined to the payment of
the Warrant Price for the number of shares of Common Stock
being purchased as to all the number of whole shares of Common
Stock then subject hereto.
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2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE
HEREUNDER. In case SurfNet shall at any time subdivide the
outstanding shares of its Common Stock, this Warrant Price in effect
immediately prior to such subdivision shall be proportionately
decreased, and in case SurfNet shall at any time combine the
outstanding shares of its Common Stock, this Warrant Price in effect
shall immediately prior to such combination be proportionately
increased, effective from and after the record date of such
subdivision or combination, as the case may be.
3. NOTICE OF ADJUSTMENTS. Upon any adjustment of this Warrant Price and
any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, then and in each such
case, SurfNet, within thirty (30) days thereafter, shall give
written notice thereof to the registered holder of this Warrant at
the address of such holder as shown on the books of SurfNet, which
notice shall state this Warrant Price as adjusted and the increased
or decreased number of shares purchasable upon the exercise of this
Warrant, setting forth in reasonable detail the method of
calculation of each. The holder of this Warrant shall have ten (10)
days in which to review the proposed adjustment and to object to the
proposed adjustment by notifying SurfNet in writing of such
objection, setting forth in reasonable detail the reasons for such
objection. If the holder fails to object to the proposed adjustment
during such ten (10) day period the proposed adjustment shall become
final. If the holder objects to the proposed adjustment then SurfNet
and the holder shall attempt to reconcile their differences and if
unable to do so such adjustment shall be determined by SurfNet's
independent accountants whose determination shall be final.
4. NOTICE OF EXERCISE OF WARRANT. This Warrant may be exercised by this
Holder by a written notice signed by this Holder, and delivered or
mailed to SurfNet to the attention of the President. The notice
shall specify the number of shares of Stock which this Holder elects
to purchase hereunder, and be accompanied by (i) a certified or
cashier's check payable to SurfNet in payment of the total Exercise
Price applicable to such shares as provided herein. Upon receipt of
an such notice and accompanying payment, SurfNet agrees to issue to
this Holder stock certificates for the number of shares specified in
such notice registered in the name of this Holder.
5. CHARGES, TAXES AND EXPENSES. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made
without charge to the holder hereof for any tax or other expense in
respect to the issuance of such certificates, all of which taxes and
expenses shall be paid by SurfNet, and such certificates shall be
issued in the name of, or in such name or names as may be directed
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by, the holder of this Warrant; provided, however, that in the event
that certificates for shares of Common Stock are to be issued in a
name other than the name of the holder of this Warrant, this Warrant
when surrendered for exercise shall be accompanied by an instrument
of transfer in form satisfactory to SurfNet, duly executed by the
holder hereof in person or by an attorney duly authorized in
writing.
6. CERTAIN OBLIGATIONS OF SURFNET. SurfNet will not, by amendment of
its Certificate of Incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any
other voluntary act or deed, avoid or seek to avoid the performance
or observance of any of the covenants, stipulations or conditions to
be performed or observed by SurfNet, but will at all times in good
faith assist, insofar as it is able, in the carrying out of all
provisions of this Warrant and in the taking of all other action
which may be necessary in order to protect the rights of the holder
of this Warrant against dilution. Without limiting the generality of
the foregoing, SurfNet agrees that it will not establish or increase
the par value of the shares of any Common Stock which are at the
time issuable upon exercise of this Warrant above the then
prevailing Warrant Price hereunder and that, before taking any
action which would cause an adjustment reducing this Warrant Price
hereunder below the then par value, if any, of the shares of any
Common Stock issuable upon exercise hereof, SurfNet will take any
corporate action which may, in the opinion of its counsel, be
necessary in order that SurfNet may validly and legally issue
fully-paid and non-assessable shares of such Common Stock at this
Warrant Price as so adjusted.
7. CONTINUANCE OF ENGAGEMENT. Nothing contained in this Warrant shall
confer upon this Holder any right to continue in the engagement of
SurfNet or constitute any contract or agreement of engagement.
Nothing contained in this Warrant shall interfere in any way with
the right of SurfNet to (i) terminate the engagement of this Holder,
or (ii) reduce the compensation received by this Holder from time to
time, provided that nothing herein shall modify any written
engagement or consulting agreement as may now exist or hereinafter
be entered into between Holder and SurfNet.
8. EFFECT OF TERMINATION OF RELATIONSHIP. If this Holder ceases to be
engaged by SurfNet for any reason, this Warrant shall terminate to
the extent not vested. Upon termination of Holder's engagement by
reason of retirement, disability or death, this Warrant, to the
extent vested, may be exercised by this Holder or her executor or
administrator, as the case may be, at any time prior to January 1,
2010.
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9. CHANGE OF CONTROL. This Warrant shall accelerate to the extent not
vested in the event of a Change of Control, provided Holder remained
engaged by SurfNet under that certain Consulting Agreement between
SurfNet and SurfNet of event date herewith not less than six months
prior to the Change of Control. For purposes hereof, "Change Of
Control" means a change in control of SurfNet of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not SurfNet is subject to
the Exchange Act at such time, including any of the following
events:
(a) Any Person becomes the Beneficial Owner, directly or
indirectly, of securities of SurfNet representing a majority
of the combined voting power of or equity interest in SurfNet
in connection with a merger or otherwise. In applying the
preceding sentence, securities acquired directly from SurfNet,
its subsidiaries, or affiliates by or for the Person shall not
be taken into account.
(b) A merger or consolidation of SurfNet is consummated with any
other corporation or entity or any other form of business
combination pursuant to which the outstanding stock of SurfNet
is exchanged for cash, securities or other property paid,
issued or caused to be issued by the surviving or acquiring
corporation or entity unless the stockholders immediately
before the merger or consolidation would continue to own
equity securities that represent (either by remaining
outstanding or by being converted into equity securities of
the surviving entity) at least a controlling interest in
SurfNet or such surviving or acquiring entity corporation
immediately after such merger or consolidation.
(c) A sale, transfer or lease by SurfNet of all, or substantially
all, of SurfNet's assets is consummated.
"Beneficial Owner" has the meaning set forth in Rule 13d-3 under the
Securities Act of 1993, as amended. "Person" has the meaning given
in Section 3(a)(9) of the Securities Act of 1933, amended, as
modified and used in Section 13(d) of the Securities Act of 1933,
amended, and will include a "group," as defined in Rule 13d-5
promulgated thereunder. However, a person will not include SurfNet
or any of its affiliates.
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10. Notices. All notices and other communications required or permitted
under this Warrant will be delivered to the parties at the address
set forth below their respective signature blocks, or at such other
address that they hereafter designate by notice to all other parties
in accordance with this Section. All notices and communications will
be deemed to be received in accordance with the following: (i) in
the case of personal delivery, on the date of such delivery; (ii) in
the case of facsimile transmission, on the date on which the sender
receives confirmation by facsimile transmission that such notice was
received by the addressee, provided that a copy of such transmission
is additionally sent by mail as set forth in (iv) below; (iii) in
the case of overnight air courier, on the second business day
following the day sent, with receipt confirmed by the courier; and
(iv) in the case of mailing by first class certified mail, postage
prepaid, return receipt requested, on the fifth business day
following such mailing.
11. COMPULSORY ARBITRATION. Any controversy, claim and/or dispute
arising out of or relating to this Warrant or the breach hereof or
subject matter hereof (including any action in tort) will be finally
and fully settled by arbitration in Maricopa County, Arizona in
accordance with the then-existing Commercial Arbitration Rules of
the American Arbitration Association (the "AAA"), and judgment upon
the award rendered by the arbitrators may be entered in any court
having applicable jurisdiction. Written notice of demand for
arbitration will be given to the other parties and to the AAA within
six (6) months after the controversy, claim or dispute has arisen or
be barred, and in no event after the date when the institution of
court proceedings based on such dispute would be barred by the
applicable statute of limitations. Controversies, claims and/or
disputes will be resolved by one arbitrator selected by the mutual
agreement of the parties or, failing that agreement within
forty-five (45) days after written notice demanding arbitration, by
the AAA. There will be limited discovery prior to the arbitration
hearing as follows: (i) exchange of witness lists and copies of
documentary evidence and documents related to or arising out of the
issues to be arbitrated, and (ii) depositions of all Party
witnesses. Depositions will be conducted in accordance with the
rules or code of Civil Procedure of the jurisdiction in which the
arbitration is conducted, and a court reporter will record all
hearings, with such record constituting the official transcript of
such proceedings. All decisions of the arbitrator will be in
writing, and the arbitrator will provide reasons for the decision.
Each of the Parties will bear its own respective attorney's fees and
costs in accordance with any dispute or arbitration.
12. GOVERNING LAW. This Warrant will be deemed to have been executed in
the State of Delaware and will be governed and construed as to both
substantive and procedural matters in accordance with the laws of
the State of Delaware, but excepting (i) any State of Delaware rule
which would result in judicial failure to enforce the arbitration
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provisions of Section 11 hereof or any portion thereof and (ii) any
State of Delaware rule which would result in the application of the
law of a jurisdiction other than the State of Delaware. Any dispute
arising from this Warrant must be filed in the county in which the
principal office of SurfNet is located.
13. COMPLETE AGREEMENT. This Warrant, along with the Consulting
Agreement, contains the entire agreement of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings, whether written or oral, with respect to such
subject matter, and the Parties have made no agreements,
representations or warranties relating to the subject matter of this
Warrant which are not set forth herein. If a conflict is determined
to exist among any of the aforementioned agreements, the terms of
this Warrant will control.
14. AMENDMENT. This Warrant may not be amended, modified, superseded,
canceled or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be waived,
except by written instrument executed by the Parties or, in the case
of a waiver, by such of the Parties to be charged with such waiver.
15. WAIVER. The failure of either of the Parties to insist upon strict
adherence to any term, condition or other provision of this Warrant
will not be considered a waiver or deprive that Party of the right
thereafter to insist upon strict adherence to that term or any other
term, condition or other provision of this Warrant.
16. HEADINGS. The headings of this Warrant are solely for convenience of
reference and will not affect its interpretation.
17. SEVERABILITY. If any one clause or part of this Warrant is deemed
invalid, unenforceable or illegal by the arbitrators or court of
competent jurisdiction, then it is severed from this Warrant and the
rest of this Warrant remains in full force and effect. Holder
acknowledges the uncertainty of the law in this respect and
expressly stipulates that this Warrant be given the construction
which renders its
18. FURTHER ASSURANCES. The Parties will sign such other instruments,
cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause
to be done and performed such further and other acts.
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19. LEGAL COUNSEL. Holder hereby acknowledges that she has been advised
that the party who drafted this Warrant on behalf of SurfNet is a
licensed attorney, that such party is representing SurfNet's
interests only and that Holder been urged to retain legal counsel to
advise her.
20. MISCELLANEOUS.
(a) SurfNet covenants that it will at all times reserve and keep
available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to
permit the exercise hereof in full and a sufficient number of
shares of Common Stock to permit the conversion of all such
shares of Common Stock.
(b) The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of SurfNet
and of the holder or holders hereof and of the Common Stock
issued or issuable on the exercise hereof.
(c) No holder of this Warrant, as such, shall be entitled under
this Warrant to vote or receive dividends (except as provided
in paragraph 2 hereof) or be deemed to be a stockholder of
SurfNet for any purpose.
(d) Except as otherwise provided herein, this Warrant and all
rights hereunder are transferable by the registered holder
hereof in person or by duly authorized attorney on the books
of SurfNet upon surrender of this Warrant, properly endorsed,
to SurfNet. SurfNet may deem and treat the registered holder
of this Warrant at any time as the absolute owner hereof for
all purposes and shall not be affected by any notice to the
contrary.
(e) By acceptance of this Warrant the registered holder represents
and warrants to SurfNet that such holder is acquiring this
Warrant and will acquire any shares of Common Stock issued
upon the exercise of this Warrant for the holder's own account
with the intent of holding such warrant or shares for
investment and without the intent of participating directly or
indirectly in a distribution of the same. Any certificates for
Common Stock issued upon the exercise of this Warrant shall
bear a legend similar to the legend appearing on the first
page of this Warrant.
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IN WITNESS WHEREOF, SurfNet has caused this Warrant to be signed by its
duly authorized officers and its corporation seal to be affixed hereto as of the
date first written on.
SURFNET MEDIA GROUP, INC.
BY: /S/ XXXXXX XXXXX
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Xxxxxx Xxxxx
Chairman
Accepted:
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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ASSIGNMENT
(To be Executed by the Registered Holder to effect a Transfer
of the foregoing Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and
transfers unto the foregoing Warrant and the rights represented thereto to
purchase shares of Common Stock of SURFNET MEDIA GROUP, INC., in accordance with
the terms and conditions thereof, and does hereby irrevocably constitute and
appoint
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Attorney to transfer the said Warrant on the books of SurfNet, with full power
of substitution.
By
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Signature
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Address
Dated:
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In the presence of:
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SUBSCRIPTION FORM
(To be Executed by the Registered Holder to
Exercise the Rights to Purchase Stock
evidenced by the foregoing Warrant)
TO: SURFNET MEDIA GROUP, INC.
The undersigned hereby exercises the right to purchase _______ shares of
Common Stock covered by the attached Warrant in accordance with the terms and
conditions thereof, and herewith makes payment of this Warrant Price of such
shares in full.
The undersigned represents and warrants to you that the undersigned is
acquiring such shares for the undersigned's own account with the intent of
holding such shares for investment and without the intent of participating
directly or indirectly in a distribution of such shares.
By
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Signature
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Address
Dated: .
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