EXHIBIT 4.7
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, NOR
WILL ANY ASSIGNEE OR ENDORSEE HEREOF BE RECOGNIZED AS AN OWNER OR HOLDER
HEREOF BY THE ISSUER FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS
WITH RESPECT TO THIS WARRANT SHALL THEN BE IN EFFECT OR UNLESS THE AVAILABILITY
OF AN EXEMPTION FROM REGISTRATION WITH RESPECT TO ANY PROPOSED TRANSFER OR
DISPOSITION OF THIS WARRANT SHALL BE ESTABLISHED TO THE REASONABLE SATISFACTION
OF COUNSEL FOR THE ISSUER.
WARRANT
to Purchase up to 25,000 Shares of Common Stock of
XXXX.XXX, INC.
December 31, 1999
THIS IS TO CERTIFY THAT, for good and valuable consideration received,
("Warrant Holder" or, with its successors and assigns, "Holder"), is entitled to
purchase from xxxx.xxx, Inc., a Georgia corporation (the "Company"), at any time
or from time to time after the date hereof, through and including December 31,
2004, at 0000 Xxxxx Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, or at such
other place as the Company may request by written notice given at least fifteen
(15) days before the applicable exercise date (the "Warrant Office"), for a
purchase price equal to the "Price Per Share" (as defined below), a total number
of duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock of the Company up to the "Number of Available Shares" (as defined
below). This Warrant may not be exercised after December 31, 2004.
This Warrant is one of a series of warrants being issued pursuant to the
terms of that certain Bridge Note and Warrant Purchase Agreement, dated December
31, 1999, among the Company, the Holder and certain other purchasers of the
notes and warrants of the Company under that agreement, and this Warrant is
subject to the terms and conditions of that Bridge Note and Warrant Purchase
Agreement.
ARTICLE I
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise requires,
the following terms have the following respective meanings:
"Act" means the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission promulgated thereunder,
as then in effect.
"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited)
in any Person that is a partnership, (iii) all membership interests or
limited liability company interests in any limited liability company, and
(iv) all equity or ownership interests in any Person of any other type.
"Commission" means the Securities and Exchange Commission, or any other
federal agency then administering the Act.
"Common Stock" means the Company's common stock, par value $.01 per share,
and any other Capital Stock into which such stock may hereafter be changed.
"Company" means xxxx.xxx, Inc., a Georgia corporation, and any other
corporation assuming or required to assume the Warrant pursuant to this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
promulgated thereunder, as then in effect.
"Note Purchase Agreement" means the Bridge Note and Warrant Purchase
Agreement, dated December 31, 1999, among the Company, the Holder and certain
other purchasers of notes and warrants of the Company under that agreement.
"Number of Available Shares" means the number of shares of Common Stock
that the Holder is entitled to purchase under this Warrant. Initially, the
Number of Available Shares will be equal to 25,000 shares. The Number of
Available Shares will be subject to adjustment as provided in Article IV.
"Options" means any rights to subscribe for or to purchase, or any options
for the purchase of, Common Stock, or any other securities that are convertible
or exchangeable into Common Stock.
"Person" means any individual, corporation, limited liability company,
partnership, trust, unincorporated organization, government, or any political
subdivision, instrumentality or agency of any government.
"Price Per Share" means the Price Per Share determined in accordance with
Section 2.1 of the Note Purchase Agreement. The Price Per Share is subject to
adjustment as provided in Article IV.
"State Securities Laws" means any applicable state securities laws that may
restrict or prohibit the issuance or purchase of shares of Common Stock upon
exercise of the Warrant.
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"Transfer" means distribute, sell, transfer, pledge, hypothecate or
otherwise dispose.
"Warrant" means this Warrant and any warrants issued in substitution,
combination or subdivision therefor.
ARTICLE II
EXERCISE OF WARRANTS
2.1 METHOD OF EXERCISE. To exercise this Warrant in whole or in part, the
Holder will deliver to the Company at the Warrant Office: (a) a written notice,
in substantially the form of the subscription notice attached as EXHIBIT A
(modified, as appropriate, to reflect any conditional exercise or change in the
terms of exercise as described below) of Holder's election to exercise this
Warrant, which notice will specify the number of shares of Common Stock to be
purchased not exceeding, on a cumulative basis, the Number of Available Shares
(the "Notice"), (b) this Warrant, and (c) a check payable to the order of the
Company in an amount equal to the product of the Price Per Share multiplied by
the number of shares of Common Stock being purchased. Upon receipt of the
Notice, the Company will promptly execute and deliver a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in the Notice. The stock certificate or certificates will be in the
denominations as specified in the Notice and will be registered in the name of
Holder or such other name or names as designated in the Notice; PROVIDED,
HOWEVER, the Company has no obligation to issue such shares in any manner which
would result in a violation of the registration requirements of the Act or any
applicable State Securities Laws. Such certificate or certificates will be
deemed to have been issued and the Holder or any other person so designated to
be named therein will be deemed for all purposes to have become a holder of
record of such shares as of the date the Notice and payment is received by the
Company. If this Warrant is exercised only in part, the Company will, at the
time of delivery of the certificate or certificates, deliver to the Holder a new
Warrant evidencing the rights to purchase the remaining shares of Common Stock
called for by this Warrant. The new Warrant will in all other respects be
identical with this Warrant, or, at the request of the Holder, appropriate
notation may be made on this Warrant which will then be returned to the Holder.
The Company will pay all expenses, transfer (but not income) taxes and other
charges payable in connection with the preparation, issuance and delivery of
stock certificates and new Warrants, except that, in case stock certificates or
new Warrants will be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes which are payable upon the
issuance of stock certificates or new Warrants will be paid by the Holder
promptly upon receipt of a written request of the Company for payment.
2.2 CASHLESS EXERCISE. In lieu of exercising the Warrant for cash
pursuant to Section 2.1(a) above, the Holder shall have the right to require
the company to convert the Warrant, in whole or in part and at any time or
times (the "Conversion Right"), into Warrant Shares, by surrender to the
Company of this Warrant and the Notice of Exercise attached hereto, duly
completed and executed by the Holder to evidence the exercise of the
Conversion Right. Upon exercise of the Conversion Right, the Company shall
deliver to the Holder a certificate(s) representing that number of Warrant
Shares which is equal to the quotient obtained by dividing
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(x) the value of the Warrant at the date the Conversion Right is exercised
(determined by subtracting (A) the aggregate Price Per Share for all Warrant
Shares immediately prior to the exercise of the Conversion Right from (B) the
aggregate fair market value of all Warrant Shares purchasable upon exercise
of such Warrant immediately prior to the exercise of the Conversion Right)
(determined on the basis of the fair market value per share of the Warrant
Shares purchasable upon exercise of such Warrants immediately prior to the
exercise of the Conversion Right)), by (y) the fair market value per share of
one share of Common Stock on the date of the exercise of the Conversion
Right. For purpose of this calculation, the fair market value per share of
Common Stock shall be, (i) if a public market for the Company's Common Stock
exists at the time of such exercise, the average of the closing bid and asked
prices of the Common Stock quoted in the Over-The-Counter Market Summary or
the last reported sale price of the Common Stock or closing price quoted on
the Nasdaq National Market or on any exchange on which the Common Stock is
listed, whichever is applicable, as published in the Wall Street Journal for
the five (5) trading days prior to the date of determination of fair market
value; or (ii) if there is no public market for the Company's Common Stock,
determined by the Company's Board of Directors in good faith. Any references
in this Warrant to the "exercise" of any Warrants, and the use of the term
"exercise" herein, shall be deemed to include (without limitation) any
exercise of the Conversion Right. If this Warrant is exercised only in part,
the Company will, at the time of delivery of the certificate or certificates,
deliver to the Holder a new Warrant evidencing the rights to purchase the
remaining shares of Common Stock called for by this Warrant. The new Warrant
will in all other respects be identical with this Warrant, or, at the request
of the Holder, appropriate notation may be made on this Warrant which will
then be returned to the Holder. The Company will pay all expenses, transfer
(but not income) taxes and other charges payable in connection with the
preparation, issuance and delivery of stock certificates and new Warrants,
except that, in case stock certificates or new Warrants will be registered in
a name or names other than the name of the Holder, funds sufficient to pay
all transfer taxes which are payable upon the issuance of stock certificates
or new Warrants will be paid by the Holder promptly upon receipt of a written
request of the Company for payment.
2.3 SHARES TO BE FULLY PAID AND NONASSESSABLE. All shares of Common Stock
issued upon the exercise of this Warrant will be duly authorized, validly
issued, fully paid and nonassessable.
2.4 LEGEND ON WARRANT AND STOCK CERTIFICATES. This Warrant and any
certificates or other instruments which evidence the shares issued upon exercise
of the Warrant will bear a legend substantially to the following effect
(together with any other legends required under applicable state laws):
THIS WARRANT [OR, AS APPLICABLE, THE STOCK EVIDENCED BY THIS
CERTIFICATE] HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE TRANSFERRED, NOR WILL ANY ASSIGNEE OR ENDORSEE
HEREOF BE RECOGNIZED AS AN OWNER OR HOLDER HEREOF BY THE
COMPANY FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT
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UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE
STATE SECURITIES LAWS WITH RESPECT TO THIS WARRANT [OR, AS
APPLICABLE, THE STOCK EVIDENCED BY THIS CERTIFICATE] SHALL
THEN BE IN EFFECT OR UNLESS THE AVAILABILITY OF AN EXEMPTION
FROM REGISTRATION WITH RESPECT TO ANY PROPOSED TRANSFER OR
DISPOSITION OF THIS WARRANT [OR, AS APPLICABLE, THE STOCK
EVIDENCED BY THIS CERTIFICATE] SHALL BE ESTABLISHED TO THE
REASONABLE SATISFACTION OF COUNSEL FOR THE COMPANY.
ARTICLE III
TRANSFER OF WARRANT
This Warrant may be transferred, in whole or in part, to any Person by
presentation to the Company of the Warrant and an assignment, in form reasonably
acceptable to the Company and its counsel, duly executed by the Holder or its
duly authorized agent or attorney along with written instructions for such
Transfer; PROVIDED, HOWEVER, the Holder agrees not to transfer the Warrant, any
Common Stock issued upon exercise of the Warrant, except pursuant to (i) an
effective registration statement under the Act and any applicable State
Securities Laws or (ii) an opinion, of counsel satisfactory to the Company and
its counsel, that such Transfer is exempt from registration under the Act and
any applicable State Securities laws. The Company will not be required to take
any action which would result in a violation of such provisions. Upon
presentation for Transfer in compliance with the terms of this Warrant, the
Company will promptly execute and deliver a new Warrant or Warrants identical to
this Warrant in the name or names of the transferee or transferees and in the
denominations specified in such instructions. The Company will pay all expenses,
taxes (other than income taxes) and other charges payable in connection with the
preparation, issuance and delivery of Warrants under this Article III, except
that funds sufficient to pay all transfer taxes pertaining to the Transfer which
are payable upon the issuance of such new Warrants will be paid by the Holder
promplty upon receipt of written request of the Company for payment.
ARTICLE IV
ADJUSTMENTS
4.1 ADJUSTMENTS OF PRICE PER SHARE. In order to prevent dilution of the
rights granted to Holder, the Price Per Share will be subject to adjustment from
time to time in accordance with this Article IV.
4.2 PRICE REDUCTION FORMULA. Except as provided in Sections 4.3, 4.4 or 4.5
below, if the Company (i) issues or sells any shares of its Common Stock for
consideration per share that is less than the Price Per Share in effect
immediately prior to the time of such issue or sale, or (ii) issues or sells any
Options with an exercise price per share of Common Stock less than the Price
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Per Share in effect immediately prior to the time of such issue or sale, then
upon such issue or sale (the "Triggering Transaction"), the Price Per Share
will, subject to this Article IV, be reduced to Price Per Share equal to the
consideration per share received by the Company in such issue or sale of Common
Stock. If any shares of Common Stock are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will be deemed to
be the amount received by the Company therefor. If any shares of Common Stock
are issued or sold for a consideration other than cash, the amount of
consideration other than cash received by the Company will be the fair value of
such consideration, as reasonably determined by the Company's Board of
Directors. If any shares of Common Stock are issued in connection with any
merger in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving corporation attributable to
such Common Stock, as the case may be, as reasonably determined by the Board of
Directors of the Company.
4.3 STOCK DIVIDENDS, SPLITS, ETC. To the extent not theretofore exercised,
the Price Per Share and the Number of Available Shares will be subject to
appropriate decrease or increase, as the case may be, if the Company at any time
after the date hereof either (i) declares any dividend or distribution payable
in shares of Common Stock or in securities directly or indirectly convertible
into or exchangeable for shares of Common Stock, or (ii) subdivides or combines
outstanding shares of Common Stock.
4.4 EXCEPTIONS. The provisions of this Article IV will not apply to any
Common Stock (or rights with respect thereto) issued or issuable to any person
pursuant to (1) any stock option, stock purchase or similar plan or arrangement
for the benefit of the officers, directors and employees of or consultants to
the Company or its subsidiaries adopted by the Board of Directors of the
Company, or (2) stock (or rights with respect thereto) issued or issuable to
Fusion Capital Fund LLC ("Fusion") pursuant to the Securities Purchase Agreement
dated November 15, 1999 between the Company and Fusion.
4.5 RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any
reclassification, change or exchange of the Common Stock (other than a change in
par value, or as a result of a subdivision or combination of such shares), or in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with another corporation in which the Company
is a continuing corporation and that does not result in any reclassification,
change or exchange of outstanding securities issuable upon exercise of this
Warrant), or in case of any sale of all of substantially all of the assets of
the Company, or if the Company shall declare a dividend or distribution (except
in shares of Common Stock or in securities directly or indirectly convertible
into or exchangeable for shares of Common Stock) upon the shares of Common Stock
payable otherwise than in cash out of earned surplus, the Company, or such
successor or purchasing corporation as the case may be, will execute a new
Warrant, providing that Holder will have the right to exercise such new Warrant,
and procure upon such exercise and payment of the same aggregate exercise price,
in lieu of the shares of Common Stock previously issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, change, consolidation, dividend
or distribution, sale of all or substantially all of the Company's assets or
merger by a holder of an
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equivalent number of shares of Common Stock. Such new Warrant will provide for
adjustments that will be as nearly equivalent as practicable to the adjustments
provided for in this Article IV.
ARTICLE V
MISCELLANEOUS
5.1 NOTICE OF CERTAIN EVENTS. In case:
(a) the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive any dividend or other distribution, or
any right to subscribe for or purchase any shares of Capital Stock of any class,
or to receive any other rights; or
(b) of any capital reorganization, any reclassification of shares of
Capital Stock of the Company, or any consolidation or merger of the Company or
the sale or transfer of all or substantially all of the assets of the Company;
or
(c) of any voluntary dissolution, liquidation, or winding up of the
Company; then the Company shall mail (at least twenty (20) days prior to the
applicable date referred to in subclause (x) or in subclause (y) below, as the
case may be), to the Holder at the address set forth in the Company's stock
records, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution, or rights are to be determined, or (y) the date
on which such reclassification, capital reorganization, consolidation, merger,
sale, transfer, dissolution, liquidation, or winding up is expected to become
effective, and, if applicable, the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
capital reorganization, consolidation, merger, sale, transfer, dissolution,
liquidation, or winding up.
5.2 SUCCESSORS. This Warrant will be binding upon any corporation
succeeding to the Company by merger, consolidation or sale or transfer of all or
substantially all of the Company's assets.
5.3 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Deleware without regard to its conflict
of laws provisions.
5.4 Waiver and Amendment. Any term or provision of this Warrant may be
waived at any time by the party that is entitled to the benefits thereof and any
term or provision of this Warrant may be amended or supplemented at any time by
agreement of the Holder and the Company, except that any waiver of any term or
condition, or any amendment or supplementation, of this Warrant must be in
writing. A writer of any breach or failure to enforce any of the terms or
conditions of this Warrant will not in any way affect, limit or waive a party's
rights under this Warrant at any time to enforce strict compliance thereafter
with any term or condition of this Warrant.
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5.5 SEVERABILITY. If any one or more of the provisions contained in this
Warrant is determined to be invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
any other respect and the remaining provisions of this Warrant will not, at the
election of the party for whom the benfit of the provision exists, be in any way
impaired.
5.6 FILING OF WARRANT. A copy of this Warrant will be filed in the records
of the Company.
5.7 NOTICE. Any notice or other document required or permitted to be given
or delivered to the Holder will be delivered personally, or sent by certified or
registered mail, to the Holder at the last address shown on the books of the
Company maintained at the Warrant Office for the registration of, and the
registration of transfer of, the Warrant or at any more recent address of which
the holder will have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to the Company, other
than such notice or documents required to be delivered to the Warrant Office,
will be delivered at, or sent by certified or registered mail to, the office of
the Company described above or such other address within the United States of
America as will have been furnished by the Company to the Holder.
5.8 LOSS, DESTRUCTION, ETC. OF WARRANT. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of the
Warrant, and in the case of any such loss, theft or destruction, upon delivery
of a bond of indemnity in such form and the amount as is reasonably satisfactory
to the Company, or in the event of such mutilation, upon surrender and
cancellation of the Warrant, the Company will make and deliver a new Warrant, in
lieu of such lost, stolen, destroyed or mutilated Warrant. Any Warrant issued
under the provisions of this Section 5.7 in lieu of any Warrant alleged to be
lost, destroyed or stolen, or in lieu if any mutilated Warrant, will constitute
an original contractual obligation on the part of the Company.
5.9 LIMITATION OF LIABILITY; NOT STOCKHOLDERS. No provision of this
Warrant will be construed as conferring upon the Holder the right to vote,
consent, receive dividends or receive notice, other than as expressly provided
in this Warrant, in respect of meetings of stockholders for the election of
directors of the Company or any other matter whatsoever as a stockholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the Holder to purchase shares of Common Stock, and no mere enumeration in this
Warrant of the rights or privileges of the Holder hereof, will give rise to any
liability of such Holder for the purchase price of any Common Stock issuable
upon exercise of the Warrant or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer on the date specified below.
Dated: December 31, 1999
XXXX.XXX, INC.
By: ________________________________
________________________________
Its: ________________________________
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EXHIBIT A
FORM OF SUBSCRIPTION NOTICE
xxxx.xxx, Inc.
1. The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by said Warrant for, and to purchase
thereunder, ________________ shares of the Common Stock covered by said Warrant
and herewith makes payment in full therefor of $ _________ by check payable to
the order of the Company, and requests (a) that certificates for such shares
(and any securities or other property issuable upon such exercise) be issued in
the name of and delivered to _________________________________ whose address is
____________________________________________________________________ and whose
federal taxpayer identification number is _____________________; and (b) if such
shares do not include all of the shares issuable as provided in said Warrant,
that a new Warrant of like tenor and date for the balance of the shares of
Common Stock issuable thereunder be delivered to the undersigned.
Warrant Holder
By: _______________________
Dated: ________________
