EXHIBIT 4.7
WARRANTS
Critical Path hereby agrees to grant Worldsport within 10 business days of the
execution of the Critical Path Master Service Agreement (the "Agreement"),
warrants entitling Worldsport to purchase up to a 1.25% equity interest in CP on
a fully diluted basis as of the date of the Agreement.
The warrants will become exercisable in five equal installments of .25%, upon
registration of each group of Worldsport service email boxes, provided that all
such Worldsport service email boxes shall be CP sub-branded (as defined below).
The initial warrant installment shall vest upon the registration by Worldsport
of two million (2,000,000) sub-branded email boxes; the second warrant
installment shall vest upon the registration of 4 million (4,000,000) mailboxes
that are CP sub-branded; the third warrant installment shall vest upon the
registration of 8 million (8,000,000) mailboxes that are CP sub-branded; the
fourth warrant installment shall vest upon the registration of 12 million
(12,000,000) mailboxes that are CP sub-branded; and the fifth warrant
installment shall vest upon registration of 20 million (20,000,000) mailboxes
that are CP sub-branded.
The warrant installments which have become exercisable pursuant to the terms set
forth above shall be exercisable for a period of five (5) years after each first
became exercisable.
Any of the warrants which shall not have become exercisable (in accordance with
the formula set forth above) within five years from the date of the Agreement
shall be cancelled.
The Initial Exercise Price for the first warrant installment (representing .25%
of the fully diluted equity of CP) shall be the average of the closing price of
CP's Common Stock as quoted on the NASDAQ National Market System for the fifteen
(15) trading days prior to the day in question. The pricing of the additional
warrant installments shall be (i) for the second warrant installment, the
Initial Exercise Price plus $5.00, (ii) for the third warrant installment shall
be the Initial Exercise Price plus $10.00, (iii) for the fourth warrant
installment shall be the Initial Exercise Price plus $15.00, and (iiii) for the
fifth warrant installment shall be the Initial Exercise Price plus $20.00.
A mailbox shall be deemed to be sub-branded, provided that one of the following
occurs: Worldsport shall cause the CP emblem or logo, or a variation thereof
approved by CP in its reasonable discretion, to appear (i) on the initial login
screen and main screens of a web-based mailbox, (ii) on the welcome message of a
POP or IMAP session or (iii) in the initial email message received at the
mailbox.
