THIS WARRANT AND THE SUBORDINATE VOTING SHARES TO BE SOLD UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN EXEMPTION THEREFROM.
Warrant to Purchase Up To
______________ Subordinate Voting Shares Of
Xxx-Xxxxxxx Technologies Inc.
THIS CERTIFIES that, for value received, ________________ ("Investor") or
any transferee of Investor (Investor or such transferee being hereinafter
referred to as the "Holder"), is entitled, upon the terms and subject to the
conditions hereinafter set forth, to purchase from Xxx-Xxxxxxx Technologies
Inc., a Wyoming corporation (the "Company"), that number of fully paid and
nonassessable subordinate voting shares (the "Subordinate Shares") of the
Company at the purchase price per share as set forth in Section 1 below (the
"Exercise Price"). The number of Subordinate Shares purchasable and Exercise
Price are subject to adjustment as provided in Section 10 hereof.
1. NUMBER OF WARRANT SHARES; EXERCISE PRICE; TERM.
(a) Subject to adjustments as provided herein, the Holder of this
Warrant may, at his option, exercise this Warrant in whole at any time or
in part from time to time for _____________________________ (__________)
Subordinate Shares (the "Warrant Shares") at an Exercise Price of Thirty
Cents ($0.30) per Warrant Share.
(b) Subject to the terms and conditions set forth herein, this
Warrant and all rights and options hereunder shall expire at 5:00 p.m.
central standard time on May 6, 2004. This Warrant and all options and
rights hereunder shall be wholly void to the extent this Warrant is not
exercised before it expires.
2. TITLE TO WARRANT. The Warrant and all rights hereunder are
transferable, in whole or in part. Transfers shall occur at the office or
agency of the Company by the Holder of the Warrant in person or by duly
authorized attorney, upon surrender of the Warrant together with the Assignment
Form annexed hereto properly endorsed.
3. EXERCISE OF WARRANT. The Warrant is exercisable by the Holder, in
whole or in part, at any time, or from time to time, during the term hereof as
described in Section l above, by the surrender of the Warrant and the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder
hereof, at the office of the Company in Lincolnshire, Illinois (or such other
office or agency of the Company as it may designate by notice in writing to the
Holder hereof at the address of the Holder appearing on the books of the
Company), and subject to Section 4 hereof, upon payment of the Exercise Price in
cash or check, whereupon the Holder of the Warrant shall be entitled to receive
a Warrant for the number of Warrant Shares so purchased
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and, if the Warrant is exercised for fewer than all of the Warrant Shares, a
new Warrant representing the right to acquire the number of Warrant Shares in
respect of which this Warrant shall not have been exercised. Notwithstanding
the foregoing, payment of the Exercise Price may also be made by (a)
delivering Subordinate Shares already owned by the Holder having a total Fair
market Value (as defined in Section 4) on the date of delivery equal to the
aggregate Exercise Price; (b) authorizing the Company to return Subordinate
Shares which would otherwise be issuable upon exercise of this Warrant having
a total Fair Market Value on the date of exercise equal to the aggregate
Exercise Price; or (c) any combination of the foregoing. The Company agrees
that, upon exercise of the Warrant in accordance with the terms hereof, the
Warrant Shares so purchased shall be deemed to be issued to the Holder as the
record owner of such Warrant Shares as of the close of business on the date
on which the Warrant shall have been exercised.
Certificates for Warrant Xxxxxx purchased hereunder and, on exercise of
fewer than all of the Warrant Shares purchasable hereunder, a new Warrant
representing the right to acquire Warrant Shares not so purchased shall be
delivered to the Holder hereof as promptly as practicable after the date on
which the Warrant shall have been exercised.
The Company covenants that all Warrant Shares which may be issued upon the
exercise of the Warrant shall, upon exercise of the Warrant and payment of the
Exercise Price, be fully paid and nonassessable and free from all taxes, liens
and charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously or otherwise specified herein).
4. NO FRACTIONAL WARRANT SHARES OR SCRIP. No fractional Warrant Shares
or scrip representing fractional shares shall be issued upon the exercise of the
Warrant. In lieu of any fractional Warrant Share to which the Holder would
otherwise be entitled, such Holder shall be entitled, at its option, to receive
either (a) a cash payment equal to the excess of Fair Market Value (as defined
herein) for such fractional Warrant Share above the Exercise Price for such
fractional share or (b) a whole share if the Holder tenders the Exercise Price
for one whole Warrant Share. For purposes hereof, the term "Fair Market Value"
shall mean an amount determined as follows: (A) if the Subordinated Shares is
listed on a national or regional securities exchange or admitted to unlisted
trading privileges on such exchange or listed for trading on the NASDAQ National
Market System or the NASDAQ Small Cap Market (collectively, "NASDAQ"), the Fair
Market Value on a particular day shall be the last reported sale price of the
Subordinated Shares on such exchange or on NASDAQ, on the last business day
prior to such day or, if no such sale is made on such business day, the average
closing bid and asked prices for such day on such exchange or on NASDAQ, or (B)
if the Subordinated Shares are not listed or admitted to unlisted trading
privileges on an exchange or on NASDAQ, the fair market value on a particular
day shall be the mean of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc., or the National Association of Securities
Dealers, Inc. OTC Bulletin Board on the last business day prior to such day, or
(C) if the Subordinated Shares are not so listed or admitted to unlisted trading
privileges on an exchange or on NASDAQ and bid and asked prices are not so
reported, the Fair Market Value on a particular day shall be an
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amount determined in such reasonable manner as may be prescribed by the board
of directors of the Company.
5. CHARGES, TAXES AND EXPENSES. Issuance of certificates for Warrant
Shares upon the exercise of the Warrant shall be made without charge to the
Holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder of the Warrant or in such name or names as may be directed by the
Holder of the Warrant; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder of
the Warrant, the Warrant when surrendered for exercise shall be accompanied by
the Assignment Form attached hereto duly executed by the Holder and the Notice
of Exercise duly completed and executed and stating in whose name the
certificates are to be issued; and provided further, that such assignment shall
be subject to applicable laws and regulations.
6. NO RIGHTS AS WARRANT SHAREHOLDERS. The Warrant does not entitle the
Holder hereof to any voting rights, dividend rights or other rights as a
shareholder of the Company prior to the exercise thereof.
7. EXCHANGE AND REGISTRY OF WARRANT. The Company shall maintain a
registry showing the name and address of the Holder of the Warrant. The Warrant
may be surrendered for exchange, transfer or exercise, in accordance with the
terms hereof, at the office of the Company, and the Company shall be entitled to
rely in all respects, prior to written notice to the contrary, upon such
registry.
8. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of the Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
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 of like tenor and dated as of such cancellation,
in lieu of the Warrant.
9. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a Saturday or a Sunday or a legal holiday.
10. ADJUSTMENTS.
(a) Subject to the exceptions referred to in Section 10(f) below,
in the event the Company shall, at any time or from time to time after the
date hereof, (i) sell any Subordinate Shares for a consideration per share
less than U.S. $0.20, (ii) issue any Subordinate Shares as a stock dividend
to the holders of Subordinate Shares, or (iii) subdivide or combine the
outstanding Subordinate Shares into a greater or lesser number of shares
(any such sale, issuance, subdivision or combination being herein called a
-3-
"Change of Shares"), then, and thereafter upon each further Change of
Shares, the Exercise Price in effect immediately prior to such Change of
Shares shall be changed to a price (including any applicable fraction of a
cent) (A) in the case of clause (i), equal to the lesser of (A) the
consideration per share paid in such sale or (B) the then current Exercise
Price and (ii) in the case of clause (ii) or (iii), determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the number of Subordinate Shares
outstanding immediately prior to the issuance of such additional shares,
and the denominator of which shall be the number of Subordinate Shares
outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made.
Upon each adjustment of the Exercise Price pursuant to this Section
10, except pursuant to Section 10(a)(i) or 10(e)(iv), the total number of
Subordinate Shares purchasable upon the exercise of each Warrant shall be
such number of shares (calculated to the nearest tenth) purchasable at the
Exercise Price immediately prior to such adjustment multiplied by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which shall be
the Exercise Price in effect immediately after such adjustment.
(b) In case of any reclassification, capital reorganization or
other change of outstanding Subordinate Shares, or in case of any
consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any, reclassification,
capital reorganization or other change of outstanding Subordinate Shares),
or in case of any sale or conveyance to another corporation of the property
of the Company as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction), the Company shall
cause effective provision to be made so that the Holder of the Warrant
shall have the right thereafter, by exercising such Warrant, to purchase
the kind and highest number of shares of stock or other securities or
property (including cash) receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance
by a holder of the number of Subordinate Shares that might have been
purchased upon exercise of the Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 10. The Company shall not effect
any such consolidation, merger or sale unless prior to or simultaneously
with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger or the corporation
purchasing such assets or other appropriate corporation or entity shall
assume in writing the obligation to deliver to the Holder such shares of
stock, securities or assets as, in accordance with the foregoing provision,
the Holder may be entitled to purchase and the other obligations under this
Warrant. The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganzations and other changes of outstanding
Subordinate Shares and to successive consolidations, mergers, sales or
conveyances.
-4-
(c) Irrespective of any adjustments or changes in the Exercise
Price or the number of Subordinate Shares purchasable upon exercise of the
Warrant, this Warrant shall continue to express the Exercise Price per
share, the number of shares purchasable thereunder as if the changed
Exercise Price per share, and the changed number of shares purchasable were
expressed in the Warrant when the same was originally issued.
(d) After each adjustment of the Exercise Price pursuant to this
Section 10, the Company will promptly deliver to the Holder a certificate
signed by the Chief Executive Officer of the Company setting forth: (i) the
Exercise Price as so adjusted, (ii) the number of Subordinate Shares
purchasable upon exercise of the Warrant after such adjustment, and (iii) a
brief statement of the facts accounting for such adjustment. No failure to
deliver such notice nor any defect therein or in the delivery thereof shall
affect the validity thereof.
(e) For purposes of Section 10(a) hereof, the following provisions
(i) through (v) shall also be applicable:
(i) The number of Subordinate Shares outstanding at any
given time shall include Subordinate Shares owned or held by or for
the account of the Company and the sale or issuance of such
treasury shares or the distribution of any such treasury shares
shall not be considered a Change of Shares for purposes of said
sections.
(ii) In case of (A) the sale by the Company of any
options, rights or warrants to subscribe for or purchase
Subordinate Shares or any securities convertible into or
exchangeable for Subordinate Shares without the payment of any
further consideration other than cash, if any (such convertible or
exchangeable securities being herein called "Convertible
Securities"), or (B) the issuance by the Company, without the
receipt by the Company of any consideration therefor, of any
options, rights or warrants to subscribe for or purchase
Subordinate Shares or Convertible Securities, in each case, if (and
only if) the consideration payable to the Company upon the exercise
of such rights, warrants or options shall consist of cash, whether
or not such rights, warrants or options, or the right to convert or
exchange such Convertible Securities, are immediately exercisable,
and the price per share for which Subordinate Shares are issuable
upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities (determined
by dividing (x) the minimum aggregate consideration payable to the
Company upon the exercise of such rights, warrants or options, plus
the consideration received by the Company for the issuance or sale
of such rights, warrants or options, plus, in the case of such
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, other than such Convertible Securities,
payable upon the conversion or exchange thereof, by (y) the total
maximum number of Subordinate Shares issuable upon the exercise of
such rights, warrants or options or upon the conversion or
-5-
exchange of such Convertible Securities issuable upon the exercise
of such rights, warrants or options) is less than U.S. $0.20, then
the total maximum number of Subordinate Shares issuable upon the
exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities (as of the date of the
issuance or sale of such rights, warrants or options) shall be
demed to have been sold for cash in an amount equal to such price
per share.
(iii) In case of the sale by the Company for cash of any
Convertible Securities, whether or not the right of conversion or
exchange thereunder is immediately exercisable, and the price per
share for which Subordinate Shares are issuable upon the conversion
or exchange of such Convertible Securities (determined by dividing
(A) the total amount of consideration received by the Company for
the sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, other than such
Convertible Securities, payable upon the conversion or exchange
thereof, by (B) the total maximum number of Subordinate Shares
issuable upon the conversion or exchange of such Convertible
Securities) is less than U.S. $0.20, then the total maximum number
of Subordinate Shares issuable upon the conversion or exchange of
such Convertible Securities (as of the date of the sale of such
Convertible Securities) shall be deemed to have been sold for cash
in an amount equal to such price per share.
(iv) In case the Company shall modify the rights of
conversion, exchange or exercise of any of the securities referred
to in clause (iii) above or any other securities of the Company
convertible, exchangeable or exercisable for Subordinate Shares,
for any reason other than an event that would require adjustment to
prevent dilution, such that the consideration per share received by
the Company after such modification is less than U.S. $0.20, the
Exercise Price to be in effect after such modification shall be the
lesser of (A) the consideration per share paid after such
modification or (B) the then current Exercise Price. Such
adjustment shall become effective as of the date upon which
modification shall take effect. On the expiration of any such
right, warrant or option or the termination of any such right to
convert or exchange any such Convertible Securities, the Exercise
Price then in effect hereunder shall forthwith be readjusted to
such Exercise Price had no adjustment been made with respect to
such right, warrant or option.
(v) In case of the sale for cash of any Subordinate
Shares, any Convertible Securities, any rights or warrants to
subscribe for or purchase, or any options for the purchase of,
Subordinate Shares or Convertible Securities, the consideration
received by the Company therefor shall be deemed to be the gross
sales price therefor without deducting therefrom any expense paid
or incurred by the Company or any underwriting discounts or
commissions or concessions paid or allowed by the Company in
connection therewith.
-6-
(f) No adjustment to the Exercise Price of the Warrant or to the
number of Warrant Shares shall be made, however:
(i) upon the grant or exercise of any other options which
may hereafter be granted or exercised under any stock option plan
or other employee benefit plan of the Company; or
(ii) upon the issuance or sale of Subordinate Shares or
Convertible Securities upon the exercise of any rights or warrants
or options to subscribe for or purchase Subordinate Shares or
Convertible Securities, whether or not such rights, warrants or
options were outstanding on the date of the original sale of the
Warrant or were thereafter issued or sold; or
(iii) upon the issuance or sale of Subordinate Shares upon
conversion or exchange of any Convertible Securities, whether or
not any adjustment in the Exercise Price was made or required to be
made upon the issuance or sale of such Convertible Securities and
whether or not such Convertible Securities were outstanding on the
date of the original sale of the Warrant or were thereafter issued
or sold.
(g) As used in this Section 10, the term "Subordinate Shares"
shall mean and include the Company's Subordinate Shares authorized on the
date of the original issue of the Warrant and shall also include any
capital stock of any class of the Company thereafter authorized which shall
not be limited to a fixed sum or percentage in respect of the rights of the
Holders thereof to participate in dividends and in the distribution of
assets upon the voluntary liquidation, dissolution or winding up of the
Company; provided, however, that the shares issuable upon exercise of the
Warrants shall include only shares of such class designated in the
Company's Articles of Incorporation as Subordinate Shares on the date of
the original issue of the Warrant or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of the
character referred to in Section 10(b) hereof, the stock, securities or
property provided for in such section or (ii), in the case of any
reclassification or change in the outstanding Subordinate Shares issuable
upon exercise of the Warrant as a result of a subdivision or combination or
consisting of a change in par value, or from par value to no par value, or
from no par value to par value, such Subordinate Shares as so reclassified
or changed.
(h) Any determination as to whether an adjustment in the Exercise
Price in effect hereunder is required pursuant to Section 10, or as to the
amount of any such adjustment, if required, shall be binding upon the
Holder of the Warrant and the Company if made in good faith by the board of
directors of the Company.
(i) If and whenever the Company shall grant to the holders of
Subordinate Shares, as such, rights or warrants to subscribe for or to
purchase, or any options for the purchase of, Subordinate Shares or
securities convertible into or exchangeable for or carrying a right,
warrant or option to purchase Subordinate Shares, the Company shall
-7-
concurrently therewith grant to the Holder of the Warrant all of such
rights, warrants or options to which the Holder would have been entitled
if, on the date of determination of stockholders entitled to the rights,
warrants or options being granted by the Company, the Holder were the
holder of record of the number of whole Subordinate Shares then issuable
upon exercise of its Warrant. Such grant by the Company to the Holder of
the Warrants shall be in lieu of any adjustment which otherwise might be
called for pursuant to this Section 10.
11. MISCELLANEOUS.
(a) GOVERNING LAW. The Warrant shall be binding upon any
successors or assigns of the Company. The Warrant shall constitute a
contract under the laws of Illinois and for all purposes shall be construed
in accordance with and governed by the laws of said state, without giving
effect to the conflict of laws principles.
(b) RESTRICTIONS. THIS WARRANT AND THE SUBORDINATE VOTING SHARES
TO BE SOLD UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
EXEMPTION THEREFROM.
(c) ATTORNEY'S FEES. In any litigation, arbitration or court
proceeding between the Company and the Holder relating hereto, the
prevailing party shall be entitled to reasonable attorneys' fees and
expenses incurred in enforcing the Warrant.
(d) AMENDMENTS. The Warrant may be amended and the observance of
any term of the Warrant may be waived with the written consent of the
Company and the Holder.
(e) SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect construction of or be taken into consideration in interpreting this
Warrant.
(f) NOTICES. Any notice required or permitted hereunder shall be
deemed effectively given upon personal delivery to the party to be notified
upon deposit with the United States Post Office, by certified mail, postage
prepaid and addressed to the party to be notified at the address: with
respect to the Company, at its principal address in Lincolnshire, Illinois
(or such other office or agency of the Company as it may designate by
notice in writing to the Holder); and with respect to the Holder, at the
address of the Holder appearing on the books of the Company.
* * * *
-8-
IN WITNESS WHEREOF, Xxx-Xxxxxxx Technologies Inc. has caused this Warrant
to be executed by its officer thereunto duly authorized.
Dated: May 6, 1999
XXX-XXXXXXX TECHNOLOGIES INC.
By:
----------------------------
Title:
----------------------------
WARRANT HOLDER:
----------------------------
-9-
NOTICE OF EXERCISE
To: Xxx-Xxxxxxx Technologies Inc.
1. The undersigned hereby elects to exercise the right to purchase
represented by the attached Warrant for, and to purchase thereunder, _______
subordinate voting shares (the "Warrant Shares") of Xxx-Xxxxxxx Technologies
Inc. (the "Company") and tenders herewith payment of the purchase price and any
transfer taxes payable pursuant to the terms of the Warrant.
2. The Warrant Shares to be received by the undersigned upon exercise of
the Warrant are being acquired for its own account, not as a nominee or agent,
and not with a view to resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the same. The undersigned further represents that it
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third
person, with respect to the Warrant Shares. The undersigned believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Warrant Shares.
3. Please issue a certificate or certificates representing said Warrant
Shares in the name set forth below:
------------------------------------
[Name]
6. If said number of Warrant Shares are not all the Warrant Shares
purchasable under the Warrant, please issue a new Warrant for the balance of
such Warrant Shares in the name set forth below:
------------------------------------
[Name]
Executed on (date).
--------------------------
----------------------------------------------
[NAME OF XXXXXX]
By:
-------------------------------------------
Printed Name:
---------------------------------
Title (if applicable):
------------------------
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to
purchase shares.)
FOR VALUE RECEIVED, the ____________ of foregoing Warrant and all rights
evidenced thereby are hereby assigned to
-------------------------------------------------------------------------------
(Please Print)
whose address is .
--------------------------------------------------------------
(Please Print)
Please issue a new Warrant certificate for the unassigned Warrant (if any)
in the name set forth below:
--------------------------------------------
[Name]
Dated: , 19 .
----------------------- ----
Holder's Signature:
------------------------------------
Holder's Address:
------------------------------------
------------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the Warrant registry maintained by the Company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
