WARRANT AND WARRANT AGREEMENT
TO PURCHASE COMMON STOCK
OF OBJECTSOFT CORPORATION
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED UNLESS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, OR UPON DELIVERY
TO THE ISSUER OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT
THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
In accordance with a consulting agreement between The Xxxxxx Group (the
"Holder") and ObjectSoft Corporation (the "Company") dated the date hereof, the
Company has agreed to issue to the Holder this warrant to acquire 300,000 shares
of the Company's common stock, par value $.0001 per share (the "Common Stock"),
exercisable for five years at $1.16 per share, pursuant to the terms provided in
this Warrant and Warrant Agreement. This Warrant and Warrant Agreement is
hereafter referred to as the "Warrant".
Accordingly, the Company and the Holder agree as follows:
1. Issuance. The Company hereby issues to the Holder the right to
purchase, subject to the provisions of this Warrant, 300,000 shares (the
"Shares") of the Company's Common Stock, at an exercise price of $1.16 per
Share. The term of this Warrant shall be five years commencing September 28,
2000 (the "Exercise Period"). This Warrant shall be subject to earlier
termination as provided herein. This Warrant shall expire and become void on the
expiration of the Exercise Period. The number of shares of Common Stock to be
received upon the exercise of this Warrant and the exercise price to be paid for
each may be adjusted from time to time as herein set forth. The securities
deliverable pursuant to this Warrant, as they may be adjusted from time to time,
are herein referred to as "Warrant Securities" and the exercise price for the
underlying securities in effect at any time and as adjusted from time to time is
herein referred to as the "Exercise Price".
2. Exercise of Warrant. At any time, unless otherwise agreed to by the
Company, whether or not the Shares are registered for resale, this Warrant may
be exercised only as to the number of shares of Common Stock that could be sold
by the Holder pursuant to Rule 144(e) of the Securities Act of 1933, as amended
(the "Act"). The right to purchase the Shares under this Warrant shall be
cumulative, so that if the full number of shares purchasable in a period shall
not be purchased, the balance may be purchased at any time or from time to time
thereafter, but not after the expiration of the Warrant. This Warrant may be
exercised as a whole or in part during the Exercise Period, subject to the above
provisions, by presentation and surrender hereof to the Company at its executive
offices with the purchase form (the "Form") annexed hereto duly executed and
accompanied by payment of
the Exercise Price by certified check or wire transfer of immediately available
funds. The Company may, in its sole discretion, permit payment of the Exercise
Price of this Warrant by delivery by the Holder of a properly executed Form,
together with a copy of the Holder's irrevocable instructions to a broker
designated by the Company to deliver promptly to the Company the amount of sale
proceeds sufficient to pay such Exercise Price. In connection therewith, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms. If this Warrant is exercised in part, the Company will issue to
the Holder a new warrant representing the right of the Holder to purchase the
remaining number of Warrant Securities at the identical terms hereto.
3. Reservation of Shares. The Company hereby agrees that at all times
during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant and the exercise of any
convertible securities issuable upon the exercise hereof.
4. Assignment or Loss of Warrant. (a) This Warrant is not assignable or
transferable without the written consent of the Company, except by operation of
law or as provided in (b) below. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.
(b) This Warrant shall not be transferable by Holder other
than to a "Permitted Transferee" (as defined below); provided, that any
Permitted Transferee shall be absolutely prohibited from transferring all or any
portion of this Warrant other than to Holder or another Permitted Transferee of
Holder; and provided further, that if Holder dies or becomes incapacitated, this
Warrant may be exercised by Holder's estate, legal representative or
beneficiary, as the case may be, subject to all other terms and conditions
contained in this Warrant.
(c) For purposes of this Agreement, Permitted Transferees
shall include only the members of the "immediate family" (which shall be limited
to Holder's spouse, children, and parents) of Holder, and to trusts for such
person's own benefit and/or for the benefit of members of Holder's immediate
family; provided, that such Permitted Transferees must agree in writing to be
bound by all of the terms of this Agreement to the same extent as Holder
hereunder, in form acceptable to counsel to the Company, including but not
limited to restrictions on the exercise of this Warrant and on transfers of the
Shares, as the case may be, following exercise of this Warrant, such that any
Shares so acquired shall be held subject to the terms of this Agreement. Shares
held by any Permitted Transferee shall be aggregated with those held by the
Permitted Transferee's transferor in order to determine the number of shares
subject to the provisions of this Agreement.
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5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. Protection Against Dilution. (a) If at any time and from time to
time the Company shall (i) declare a dividend in shares of Common Stock to
holder of Common Stock or make a distribution in shares of Common Stock to
holders of Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock or (iv) otherwise effect a
recapitalization of such character that the shares of Common Stock shall be
changed into or become exchangeable for a greater or lesser number of shares of
Common Stock, then the Exercise Price in effect on the record date of such
dividend or distribution or the effective date of such subdivision, combination
or reclassification (individually an "Event" and collectively the "Events")
shall be adjusted, or further adjusted, to a price (to the nearest cent)
determined by multiplying (i) the Exercise Price in effect immediately prior to
such Event by (ii) a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such Event, and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such Event. Upon each adjustment in the Exercise Price
resulting from an Event, the number of Warrant Securities shall be adjusted (to
the nearest one-thousandth share) by multiplying (i) the number of Warrant
Securities for which the Warrant was exercisable immediately prior to such Event
by (ii) a fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to such Event, and the denominator of which shall be the
Exercise Price in effect immediately after such Event. Notice of each such
adjustment and each such readjustment shall be forthwith mailed to the Holder
setting forth such adjustments or readjustments and the facts and calculations
thereof in reasonable detail. Any dividend paid or distributed upon the Common
Stock in stock of any other class of securities convertible into shares of
Common Stock shall be treated as a dividend paid in Common Stock to the extent
that shares of Common Stock are issuable upon the conversion thereof.
(b) In case: (i) a distribution in the form of stock or other
securities of any other corporation or other entity shall be made or paid by the
Company on, or with respect to, the then outstanding shares of Common Stock,
(ii) the Company shall effect a recapitalization of such character that the
shares of Common Stock will be changed into or become exchangeable for shares of
Common Stock with a different par value or no par value, or (iii) the Company
(or a successor corporation) shall be consolidated or merged with or into
another corporation or entity or shall sell, lease or convey all or
substantially all of its assets in exchange for stock or property (including
cash) with the view of distributing such stock or property to its shareholders,
each Share issuable upon exercise of this Warrant shall be replaced by, and/or
shall include, as the case may be, for the purposes hereof, the stock or
property issued or distributed in respect of each share of Common Stock upon
such recapitalization, reclassification, merger, sale, lease or conveyance as
the Holder would have been entitled to had the Holder exercised this Warrant and
any underlying convertible
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security immediately prior to any such occurrence, and adequate provision to
that effect shall be made at the time thereof.
(c) In case: (i) of any classification, reclassification or
other reorganization of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, or the sale, lease or
conveyance of all or substantially all of the assets of the Company; or (ii ) of
the voluntary or involuntary dissolution, liquidation or winding up of the
Company; then, and in any such case, the Company shall mail to the Holder, at
least 15 days prior thereto, a notice stating the date or expected date on which
a record is to be taken. Such notice shall also specify the date or expected
date, if any is to be fixed, as of which holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such classification, reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation, winding up or any
other appropriate action, as the case may be.
7. Transfer to Comply with the Securities Act. This Warrant has not
been registered under the Act and has been issued to the Holder for investment
and not with a view to the distribution of either the Warrant or the Warrant
Securities. Neither this Warrant nor any of the Warrant Securities or any other
security issued or issuable upon exercise of this Warrant may be sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement under the Act relating to such security or an opinion of counsel
satisfactory to the Company that registration is not required under the Act.
Each certificate for the Warrant, the Warrant Securities and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
8. Registration Rights. (a) The Company will use reasonable efforts to
register the Shares for resale in a registration statement which may otherwise
be filed by the Company on or before October 30, 2000. If the Company does not
file a registration statement that includes the Shares on or before October 30,
2000, the Holder of this Warrant and all transferees of all or any portion
hereof, acting jointly, shall have the right on one occasion to demand that the
Company file, at the Company's expense, an S-3 registration for the resale of
the Shares. The foregoing demand right is applicable only in the event that the
closing price of the Company's stock for five (5) days prior to the demand is
greater than $1.16.
(b) If at any time or from time to time following the date
hereof, the Company shall determine to register any distribution of its
securities with the Securities and Exchange Commission, either for its own
account or the account of a security holder or holders, in a registration
statement covering the sale of shares of Common Stock or other securities to the
general public pursuant to a public offering in compliance with the Act (except
with respect to any registration filed on Form S-4 or such other form which does
not include substantially the same information as would be included in a
registration statement covering the sale of shares of Common Stock to the
general public) , the Company will: (i) give to Holder written notice thereof at
least 30 days before the initial filing of such registration statement (which
shall include a list of the jurisdictions in which the Company
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intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and (ii) include in such registration (and any
related qualification under blue sky laws) and in any underwriting involved
therein, all the Shares of the Holder, specified in a written request, made
within 30 days after receipt of such written notice from the Company, by Holder,
except as set forth in subparagraphs (b) or (c) below.
(c) If the distribution is to be underwritten, the right of
Holder to registration pursuant to this Section 8 shall be conditioned upon
Holder's participation in the underwriting and the inclusion of the Shares and
securities underlying the Shares, as the case may be, in the underwriting to the
extent provided herein. Holder shall (together with the Company) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Holder shall furnish to the
Company such written information concerning Holder and the distribution proposed
by Holder as the Company may reasonably request.
(d) Notwithstanding any other provision of this Section 8, if
the underwriter determines that marketing factors require a limitation of the
number of shares to be underwritten, and such determination is made by such
underwriter in writing and in good faith, then the underwriter may limit the
number of Holder's Shares to be included in the registration and underwriting,
or may exclude the Shares from such underwriting, provided that the underwriter
limits all proposed selling shareholders on a pro-rata basis. In addition, this
Section 8 shall not be applicable at any time that all the Shares owned by the
Holder have been effectively registered for resale under the Act.
(e) All expenses incurred in connection with any registration
or qualification pursuant to this Warrant, including, without limitation, all
registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Company, and expenses and fees of any special
audits incidental to or required by. such registration, shall be borne by the
Company; provided, however, that the Company in any event shall not be required
to pay the fees of Holder's legal counsel, brokerage fees, or underwriters'
discounts or commissions relating to the Shares (such legal fees, brokerage
fees, and underwriters, discounts or commissions to be borne by Holder).
(f) In the case of each registration effected by the Company
pursuant to this Warrant, the Company will: (i) keep such registration or
qualification pursuant to this Section 8 effective until Holder has completed
the distribution described in the registration statement relating thereto, and
(ii) furnish such number of prospectuses and other documents incident thereto as
Holder from time to time may reasonably request.
(g) The registration rights granted to Holder pursuant to this
Section 8 are assignable solely to its Permitted Transferees in connection with
a transfer of any of the Shares to such persons.
9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile
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transmission or sent by certified, registered or express mail, postage pre-paid.
Any such notice shall be deemed given when so delivered personally, telegraphed,
telexed or sent by facsimile transmission, or, if mailed, two days after the
date of deposit in the United States mails, as follows:
(a) if to the Company, to:
OBJECTSOFT CORPORATION
Continental Plaza III
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. X. Xxxxx, Chairman
(b) if to the Holder, to:
THE XXXXXX GROUP
0000 Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxx, President
Any party may be notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
10. Supplements and Amendments; Whole Agreement. This Warrant may be
amended or supplemented or any provision hereof waived only by an instrument in
writing signed by the Company and the Holder. This Warrant contains the full
understanding of the parties hereto with respect to the subject matter hereof
and thereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein and therein.
11. Governing Law. This Warrant shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
12. Counterparts. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
13. Descriptive Headings. Descriptive headings of the several Sections
of this Warrant are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the 28th day of September, 2000.
OBJECTSOFT CORPORATION
By:/s/ Xxxxx X. X. Xxxxx
-------------------------------------
Xxxxx X. X. Xxxxx, Chairman
THE XXXXXX GROUP
By:/s/ Xxxxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxx, President
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PURCHASE FORM
(To be signed only upon exercise of Warrant)
To ObjectSoft Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, __________________________________________________
(__________) of the number of shares (the "Shares") of common stock (the "Common
Stock"), par value $.0001 per share, of ObjectSoft Corporation purchasable under
such Warrant and requests that a certificate(s) for such shares be issued in the
name of, and delivered to, _____________________ whose address
is_________________________________________________________________. If said
number of shares is less than all of the shares of Common Stock purchasable
under the within Warrant, the undersigned requests that a new Warrant
representing the remaining balance of such shares be registered in the name of
_______________, whose address is
_____________________________________________________, and that such Warrant be
delivered to _______________________, whose address is _____________________
The exercise price for the Shares is $1.16 per Share, for an aggregate
exercise price of $________ for all of the Shares. Together with the delivery of
this Purchase Form, the undersigned is:
Please check one:
|_| Tendering to the Company cash or a certified check in
the amount of $_______________, as payment of the
exercise price of the Shares.
|_| Requesting permission from the Company to permit
payment of the exercise price through a sale of
Shares by a broker designated by the Company in
accordance with the terms of the Warrant.
(i)
The undersigned understands that the Shares shall be delivered
to the undersigned promptly after the Company instructs the transfer agent for
its Common Stock to deliver a certificate for the Shares to the undersigned.
The undersigned represents that it is acquiring such shares of
Common Stock for its own account for investment purposes only and not with a
view to or for sale in connection with any distribution thereof.
Dated: ______________ Signature: ___________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
Address:
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(ii)
