EXHIBIT 10.13
NOTE AND WARRANT
PURCHASE AGREEMENT
THIS NOTE PURCHASE AND OPTION AGREEMENT ("Agreement") is made and
entered into as of the 9th day of March, 2000, by and between E COM VENTURES,
INC., a Florida Corporation ("Lender"), and TAKE TO XXXXXXX.XXX, INC., a Florida
corporation (the "Corporation").
RECITALS
A. Lender desires to lend to Corporation, and the Corporation desires
to borrow from Lender an amount equal to One Million Dollars ($1,000,000) (the
"Principal Amount") upon the terms and conditions set forth herein.
B. In connection with the loan, the Corporation shall deliver to Lender
a convertible promissory note in the aggregate principal amount of One Million
Dollars ($1,000,000) (the "Promissory Note").
C. In connection with the loan, the Corporation shall issue a Warrant
for the purchase of shares of the Corporation's Common Stock (the "Common
Shares") following the consummation of the initial public offering of the Common
Shares (the "IPO").
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements set forth in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Loan. At the "Closing" (as defined below), the Corporation
shall deliver to the Lender the Promissory Note, which note shall be in the form
attached hereto as Exhibit A (the "Promissory Note").
Section 2. Warrant. At the Closing, the Corporation shall deliver to
the Lender a warrant in the form attached hereto as Exhibit B (the "Warrant").
Section 3. Closing. The closing of the loan by the Lender to the
Corporation described herein and the sale of the Warrant by the Corporation to
Lender (the "Closing") shall occur at such time and place as the Corporation
shall designate by written notice to the undersigned. At the Closing, the
Corporation shall deliver the Lender the Promissory Note and the Warrant.
Lender, upon proper tender of the Promissory Note and the Warrant from the
Corporation, shall tender payment of the Principal Amount in cash or by official
bank check or money order (or such other form of consideration as may be
mutually agreed upon by the parties) less any portion
previously paid to the Corporation prior to the date of the Closing. Corporation
shall pay all stamp taxes arising in connection with the issuance of the
Promissory Note.
Section 4. Representations, Warranties and Covenants of Lender. Lender
hereby represents and warrants to the Corporation as follows:
(a) State Securities Laws. Lender received this Agreement and
first learned of the offer of the sale of the Promissory Note and the Warrant
(together, the "Offered Securities") in Florida. Lender executed and will
execute all documents contemplated hereby in Florida, and intends that the laws
of Florida govern this offering of Offered Securities.
Lender understands, agrees and acknowledges that the
Offered Securities have not been registered under the Florida Securities Act and
that such securities are being offered in reliance upon exemption provisions
contained therein which the Corporation believes are available. Any sale made
pursuant to such exemption provisions is voidable by Lender within three
business days after the first tender of consideration is made by Lender to the
issuer, an agent of the issuer or an escrow agent. A withdrawal within such
three day period will be without any further liability to any person. To
accomplish this withdrawal, a Lender need only send a letter or telegram to the
Corporation at the address set forth in this Agreement, indicating his or her
intention to withdraw.
Such letter or telegram should be sent and postmarked
prior to the end of the aforementioned third business day. It is advisable to
send such letter by certified mail, return receipt requested, to ensure that it
is received and also to evidence the date it was mailed. If the request is made
orally, in person or by telephone, to a representative of the Corporation, a
written confirmation that the request has been received will be requested.
(b) Authority. Lender has the capacity, power and authority to
execute this Agreement and perform its obligations hereunder. This Agreement has
been duly executed and delivered by Lender and (assuming the due execution and
delivery hereof by the Corporation) constitutes a valid and binding obligation
of Lender enforceable against Lender in accordance with its terms.
(c) Acquisition for Investment. Lender shall acquire the
Offered Securities for investment solely for Lender's account and not for
distribution to others.
(d) Restrictions on Transfer. Lender understands that Lender
must bear the economic risk of the purchase of the Offered Securities for an
indefinite period of time because, except as provided in this Agreement, (i) the
Corporation's sale of the Offered Securities to Lender will not be registered
under the Securities Act of 1933, as amended (the "Act"), and applicable state
securities laws in reliance on Lender's representations; (ii) the Offered
Securities may not be sold, transferred, pledged, or otherwise disposed of
without the consent of the Corporation and an opinion of counsel for or
satisfactory to the Corporation that registration under the Act or any
applicable state securities laws is not required (provided that no opinion shall
be required if the Offered Securities are disposed of in accordance with Rule
144 under the Act); (iii) the Corporation neither has an obligation to register
a sale of the Offered Securities nor
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has it agreed to do so in the future; and (iv) the exemption provided in Rule
144 under the Act is not presently available for the resale of any Offered
Securities.
(e) Certain Risk Factors. Lender understands the speculative
nature of and risks involved in the proposed investment in and loan to the
Corporation, and all matters relating to the structure and the operations of the
Corporation have been discussed and explained to Lender's satisfaction. Lender
specifically acknowledges, understands and agrees that, (i) that no return on
investment (other than payment of interest under the Promissory Note), whether
through distributions, appreciation, transferability or otherwise, and no
above-average or other performance, by, through or of the Corporation, has been
promised, assured, represented or warranted by the Corporation or any director,
officer, employee, agent or representative thereof; (ii) that there is no
present public or other market for the Offered Securities and that there may
never be a public or other market for the Offered Securities; and (iii) that the
purchase of the Offered Securities is a highly speculative investment, involving
a high degree of risk, and is suitable only for persons of adequate financial
means who are able to bear the economic risks inherent in such an investment and
have no need for liquidity in this investment in that, among other things, (a)
such persons may not be able to liquidate their investment in the event of an
emergency or otherwise, (b) transferability is extremely limited, and (c) in the
event of a disposition or otherwise, such persons could sustain a complete loss
of their entire investment.
(f) Restrictive Legends. Lender understands that the Offered
Securities the Note Shares, and the shares to be issued upon exercise of the
Warrant (the "Warrant Shares", and together, the "Issued Shares") if issued,
will each bear a restrictive legend prohibiting the transfer thereof except in
compliance with applicable state and federal securities laws.
(g) Access to Information. Lender has been offered, and up to
the date of purchase shall be offered, the opportunity to ask questions of, and
receive answers from, the Corporation and to obtain any additional information,
to the extent that the Corporation possesses such information or could have
acquired it without unreasonable effort or expense, necessary to verify the
accuracy of the information contained in the documents delivered to Lender and
has in general had access to all information Lender has deemed material to an
investment decision with respect to the purchase of the Offered Securities.
(h) Investment Experience. Lender acknowledges that it is able
to fend for itself, can bear the economic risk of its investment in the Offered
Securities, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Shares. Lender represents that Lender is an "accredited investor" within
the meaning of such term under paragraph (a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) of Rule 501 under Regulation D under the Securities Act.
Section 5. Representations, Warranties and Covenants of the
Corporation.
In order to induce the Lender into this Agreement, the Corporation
represents and warrants to and agrees with the Lender as follows:
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(a) Existence and Good Standing. The Corporation is duly
organized, validly existing and in good standing, or the equivalent thereof,
under the laws of the State of Florida. The Corporation has the requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted and as proposed to be conducted. The Corporation
is duly qualified or licensed to do business and is in good standing, or the
equivalent thereof, and is authorized to do business, in each jurisdiction in
which the character or location of the properties owned, leased or operated by
the Corporation or the nature of the business conducted by such entity makes
such qualification or license necessary, except where any such failure to be
duly qualified or licensed or in good standing, or the equivalent thereof, would
not have a material adverse effect on the business, operations, financial
condition or results of operations of the Corporation, taken as a whole, or on
the ability of the Corporation to perform its obligations under the Agreement (a
"Material Adverse Effect").
(b) Authority. The Corporation hereby represents and warrants
to Lender that, the Corporation has the power and authority to execute and
deliver this Agreement, the Note and the Warrant and to perform its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement, the Note and the Warrant by the Corporation and the performance of
its obligations hereunder and thereunder have been duly authorized and approved
by all necessary action (including, without limitation, all action of the Board
of Directors, or the equivalent thereof, and shareholders or other required
persons of the Corporation) and no other action on the part of such persons is
necessary to authorize the execution, delivery and performance of this
Agreement, the Note and the Warrant by the Corporation. This Agreement, the Note
and the Warrant have been duly executed and delivered by the Corporation and,
assuming due execution thereof by the other parties thereto, are the valid and
binding obligations of the Corporation enforceable against the Corporation in
accordance with their terms, except to the extent that enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding brought in equity or at law). The Corporation has
reserved a sufficient number of shares of its Common Stock for issuance upon
conversion of the Note and Exercise of the Warrant. Upon the issuance of the
Issued Shares, such shares shall be duly authorized, validly issued, fully paid
and nonassessable.
(c) Rule 144. Following the consummation of the IPO (assuming
such IPO occurs) and during such time as the Corporation is a public company
with its securities registered under the Act, the Corporation will use
commercially reasonable efforts to ensure that it is in compliance with the
requirements of Rule 144 under the Act applicable to the issuer of securities,
so as to facilitate non-registered sales of the Corporation's securities held by
the Lender, consistent with the limitations and requirements of Rule 144 under
the Act. Nothing in this Section 5(c) shall be deemed as either (i) any
representation or warranty that the Corporation will become a public corporation
with securities registered under the Act, or (ii) any covenant or agreement by
the Corporation to register, under federal or state securities laws or
otherwise, any of the Corporation's securities issued to, or held by, the
Lender.
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(d) Financial Statements. Attached hereto as Exhibit C are the
Corporation's audited financial statements (balance sheet and statement of
operations, statement of changes in shareholders' equity and statement of cash
flows, including notes thereto) as at its most recent audit date (the "Audit
Date") (the "Financial Statements"). The Financial Statements have been prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods indicated and with
each other, except that the unaudited Financial Statements may not contain all
footnotes required by GAAP. The Financial Statements fairly present the
financial condition, stockholders' equity and cash flows and operating results
of the Corporation as of the date, and for the periods, indicated therein. Other
than as disclosed in the Financial Statements, the Corporation has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the Audit Date and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and
not required under GAAP to be reflected in the Financial Statements, which, in
both cases, individually or in the aggregate, are not material to the financial
condition or operating results of the Corporation.
Each of the balance sheets included in the Financial
Statements (including any related notes and schedules) fairly presents the
financial position of the Corporation as of its date and each of the statements
of operations, shareholders' equity (deficit) and cash flows included in or
incorporated by reference into the Financial Statements (including any related
notes and schedules) fairly presented the results of operations, retained
earnings or cash flows, as the case may be, of the entity or entities to which
it relates for the periods set forth therein, in each case in accordance with
GAAP consistently applied during the periods involved, except as may be noted
therein and except, in the case of the unaudited statements, subject to normal
recurring year-end adjustments.
The capitalization of the Corporation is as set forth in
Exhibit D attached hereto.
(e) Consents and Approvals; no Violations. The execution and
delivery of this Agreement, the Note and the Warrant by the Corporation and
compliance by the Corporation with the terms and provisions hereof and thereof
and the issuance of the Note Shares and Warrant Shares by the Corporation and
the consummation of the transactions contemplated hereby and thereby do not and
will not (a) violate or contravene any provision of the articles of
incorporation or bylaws of the Corporation, (b) violate or contravene any
statute, rule, regulation, licensing requirement, order or decree of any court,
arbitrator or any other public body or authority by which the Corporation is
bound or by which any of its properties or assets are bound, (c) require any
filing with, or permit, consent authorization, qualification or approval of, or
exemption from, or the giving of any notice to, any governmental or regulatory
body, agency or authority, or any other person (other than required filings
under the Act or the Exchange Act of 1934, as amended (the "1934 Act") which
have been or prior to the Closing will be made) or (d) result in a violation or
breach of, conflict with, constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
payment or acceleration) under, or result in the creation of any encumbrance
upon any of the properties or assets of the Corporation under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, agreement, lease, franchise agreement or any
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other instrument or obligation to which the Corporation is bound, or by which it
or any of its properties or assets may be bound.
(f) Compliance with Laws. The Corporation is in compliance in
all material respects with all applicable laws, regulations, licensing
requirements, orders, judgments and decrees and has obtained all required
governmental approvals and permits in each jurisdiction in which they currently
do business, in each case except where the failure to do so would not have a
Material Adverse Effect on the Corporation. Without limiting the generality of
the foregoing, the Corporation is in compliance in all respects with the United
States Foreign Corrupt Practices Act of 1977, as amended.
(g) Employment Relations. The Corporation is in substantial
compliance with all federal, state or other applicable laws, domestic or
foreign, respecting employment and employment practices, terms and conditions of
employment and wages and hours, and has not, and is not, engaged in any unfair
labor practice and there is no labor strike, dispute, slowdown or stoppage
actually pending or threatened against or involving the Corporation.
(h) Securities Law Compliance. Assuming that the
representations set forth in Section 5 are true and correct, the offering,
issuance, sale and delivery of the Promissory Note and Warrant and the Warrant
Shares and the Note Shares to the Lender is exempt from the registration
requirements of the Act. The Corporation has complied with, or is exempt from,
all registration requirements of all applicable state securities laws, or
foreign securities law, in connection with the offering, issue, sale and
delivery of the Shares.
(i) Broker's or Finder's Fees. No agent, broker, person or
firm acting on behalf of the Corporation is, or will be, entitled to any
commission or broker's or finder's fees from the Corporation, or from any person
controlling, controlled by or under common control with the Corporation, in
connection with the transactions contemplated hereby.
(j) Corporation Registration.
(i) Notice; Registration Rights. If (but without any
obligation to do so) the Corporation proposes to register (including, without
limitation, for this purpose a registration effected by the Corporation for
shareholders other than the Lender) any of its stock or other securities under
the Act in connection with the public offering of such securities (other than a
registration relating solely to the sale of securities to participants in a
Corporation stock plan, a registration relating to a corporate reorganization or
other transaction under Rule 145 of the Act, a registration on any form that
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Issued Shares or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities that are also being registered), the
Corporation shall, at such time, promptly give Lender written notice of such
registration. Upon the written request of Lender given within twenty (20) days
after mailing of such notice by the Corporation in accordance with Section 7,
the Corporation shall, subject to the provisions of Section 1.3(c), use all
commercially reasonable efforts to cause to be registered under the Act all of
the Issued Shares that Lender has requested to be registered. Notwithstanding
the foregoing, the rights set
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forth in this Section 5(c) shall not be available (i) after the fifth
anniversary of the IPO and (ii) if Lender is permitted, under applicable
securities laws (including Rule 144 or any successor rule promulgated under the
Act), to sell the Issued Shares for which Holder is seeking registration on an
unrestricted basis as to amount and method of sale in the four week period
immediately prior to the effective date of the Corporation's registration. The
expenses of any such registration hereunder shall be borne by the Corporation.
(ii) Right to Terminate Registration. The Corporation
shall have the right to terminate or withdraw any registration initiated by it
under this Section 5(c) prior to the effectiveness of such registration whether
or not Lender has elected to include securities in such registration.
(iii) Underwriting Requirements. In connection with
any offering involving an underwriting of shares of the Corporation's capital
stock, the Corporation shall not be required under this Section 5(c) to include
any of the Lender's securities in such underwriting unless it accepts the terms
of the underwriting as agreed upon between the Corporation and the underwriters
selected by it (or by other persons entitled to select the underwriters) and
enter into an underwriting agreement in customary form with an underwriter or
underwriters selected by the Corporation, and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering by the Corporation. If the total amount of securities, including
the Issued Shares together with shares held by other persons (such persons,
together with the Lender, the "Holders") with rights similar to those granted to
Lender hereunder (collectively, the "Registrable Securities") requested by
Lender to be included in such offering exceeds the amount of securities sold
other than by the Corporation that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Corporation
shall be required to include in the offering only that number of such
securities, including Registrable Securities, that the underwriters determine in
their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned as follows: first, to the Corporation;
second, to the selling Holders, on a pro rata basis based on the total number of
Registrable Securities held by such selling Holders or in such other proportions
as shall mutually be agreed to by such selling Holders; third, to any other
shareholder of the Corporation (other than a Holder on a pro rata basis). For
purposes of the preceding parenthetical concerning apportionment, for any
selling shareholder that is a Holder of Registrable Securities and that is a
partnership or corporation, the partners, retired partners and shareholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling Holder," and any pro rata reduction with respect
to such "selling Holder" shall be based upon the aggregate amount of Registrable
Securities owned by all such related entities and individuals.
(k) S-3 Registration Rights. If Lender makes a written request
that the Corporation effect a registration on Form S-3 with respect to Issued
Shares that have been held by Lender for one year or more and which cannot be
sold without restrictions as to amount or method of sale pursuant to Rule 144 of
the Securities Act or if the Corporation is otherwise required to effect a
registration on Form S-3 the Corporation shall:
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(i) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(ii) use commercially reasonable best efforts to
effect, as soon as practicable, such registration and all such qualifications
and compliances as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Holders' Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holders joining in such request as
are specified in a written request given within fifteen (15) days after receipt
of such written notice from the Corporation, provided, however, that the
Corporation shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 5(k).
(A) if Form S-3 is not available under
applicable rules and regulations of the SEC for such offering by the
Holders;
(B) if the Holders, together with the
holders of any other securities of the Corporation entitled to
inclusion in such registration, propose to sell Registrable Securities
and such other securities (if any) at an aggregate price to the public
(net before deduction of underwriters' discounts or commissions) of
less than $500,000;
(C) if the Corporation shall furnish to the
Holders a certificate signed by the Chief Executive Officer or Chairman
of the Board of the Corporation stating that in the good faith judgment
of a majority of the Board of Directors of the Corporation, it would be
detrimental to the Corporation and its shareholders for such Form S-3
Registration to be effected at such time, in which event the
Corporation shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than one hundred twenty
(120) days after receipt of the request of the Holder or Holders under
this Section 5(d); provided, however, that the Corporation shall not
utilize this right more than once in any twelve month period;
(D) if the Corporation has, within the six
(6) month period preceding the date of such request, already effected
one registration on Form S-3 for the Holders; or
(E) if the Corporation would be required to
qualify to execute a general consent to service of process, unless the
Corporation is already subject to service of process in such
jurisdiction and except as may be required under the Act.
(iii) Subject to the foregoing, the Corporation shall
file a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders.
(iv) Notwithstanding anything herein to the contrary,
(i) the Corporation shall have the right from time to time to require any Holder
of Registrable Securities not to sell Registrable Securities pursuant to any
Form S-3 or to suspend the effectiveness
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thereof during the period starting with the date 30 days prior to the
Corporation's good faith estimate, as certified in writing by an executive
officer of the Corporation to the Holders of Registrable Securities, of the
proposed date of filing of a registration statement or a preliminary prospectus
supplement relating to an underwritten public offering of equity securities of
the Corporation for the account of the Corporation, and ending on the date 120
days following the delivery of such estimate and (ii) the Corporation shall be
entitled to require the Holders of Registrable Securities not to sell
Registrable Securities pursuant to any Form S-3 or to suspend the effectiveness
thereof (but not for a period exceeding 90 days) if the Corporation determines,
based on the opinion of legal counsel, that such offering or continued
effectiveness would interfere with any material financing, acquisition,
disposition, corporate reorganization or other material transaction involving
the Corporation or any of its subsidiaries because public disclosure thereof
would be required prior to the time such disclosure might otherwise be required.
In any event, the Corporation shall not be entitled to exercise the rights
granted to the Corporation pursuant to this Section 5(d)(iv) more than two times
in any one year period.
Upon the request of the Lender, the Corporation shall
cause to be delivered to the Lender a customary opinion of counsel and auditors
"cold comfort" letter in connection with the effectiveness of each registration
statement pursuant to which Lender sells securities.
(1) At the date of the final Prospectus relating to the
initial public offering of the Corporation's common stock, $.001 par value (the
"Prospectus"), the Prospectus will not contain a false or misleading statement
of a material fact or omit to state any material fact necessary in order to make
the statements made in such Prospectus, in light of the circumstances under
which they were made, not misleading, provided, however, that no forecast shall
be deemed to be misleading unless any such forecast was not based on reasonable
assumptions when made or was not prepared in good faith. Notwithstanding any
other provision herein, the Lender hereby expressly agrees that the Lender has
not relied on any registration statement or other document filed in connection
with the initial public offering of the Corporation's common shares in
connection with its decision to enter into this agreement.
Section 6. Indemnification for Third Party claims.
(a) To the extent permitted by law, the Corporation
will indemnify and hold harmless each Holder, any underwriter (as defined in the
Act) for such Holder and each person, if any, who controls such Holder or such
Holder's securities or such underwriter within the meaning of the Act or the
1934 Act, and each officer, director, agent, employee and partner of the
foregoing against any losses, claims, damages or liabilities (joint or several)
to which they may become subject insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto or any other document prepared by the Corporation incident
to such registration, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Corporation of the Act,
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the 1934 Act, any state securities law or any rule or regulation promulgated
under the Act, or the 1934 Act or any state securities law, and the Corporation
will pay to each such indemnified person any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 6 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Corporation (which consent
shall not be unreasonably withheld), nor shall the Corporation be liable in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with information furnished by such Holder, underwriter or
controlling person in writing expressly for use in such registration or for use
in direct connection with such registration.
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Corporation, each of its directors,
each of its officers each person, if any, who controls the Corporation within
the meaning of the Act, any underwriter and any controlling person of any such
underwriter, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject insofar as
such losses, claims, damages or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and
only to the extent) that such Violation occurs in reliance upon and in
conformity with information furnished in writing by such Holder expressly for
use in connection with such registration, and each such Holder will pay to each
such indemnified party any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 6 shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party
under this Subsection (l) of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 6
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of receipt of notice of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6 (to the extent of such prejudice), but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 6. No
indemnifying party, in the defense of any claim or litigation, shall, except
with the consent of each indemnified party,
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consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation. Each indemnified party shall furnish such information
regarding itself or the claim in question as an indemnifying party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this
Section 6 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
Section 7. Legend. The Promissory Note and the Warrant shall bear the
legend substantially in the form described below.
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR SALE OR
TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH
SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL,
SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER
APPLICABLE SECURITIES LAWS IS NOT REQUIRED."
The Corporation may also cause to be imposed upon such certificates such other
legends as counsel to the Corporation shall determine to be required under the
provisions of any federal securities act or any state law.
Section 8. Notice. Any notice or demand required to be given hereunder
shall be in writing and shall be deemed to have been duly given and received, if
given by hand, when a writing containing such notice is received by the person
to whom addressed or, is given by mail,
11
two (2) business days after a certified or registered letter containing such
notice, with postage prepaid, is deposited in the United States mails, addressed
to:
To the Corporation: Take to Xxxxxxx.xxx, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to: Xxxxx & XxXxxxxx,
0000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxxx, Esq.
To Lender: E Com Ventures, Inc.
00000 X.X. 000xx Xxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxx, CFO
Telecopier: (000) 000-0000
Any party may change its address for the purposes of this Agreement by giving
notice of such change of address to the other parties in the manner herein
provided for giving notice. Time shall be of the essence with respect to all
time periods specified for the giving of notices to the Corporation hereunder.
Section 9. Miscellaneous.
(a) Modification. This Agreement may only be amended,
terminated or modified by the written consent of all parties.
(b) Successors. This Agreement cannot be assigned, transferred
or otherwise conveyed by either party without the consent of the other party
which consent shall not be unreasonably withheld. This Agreement shall be
binding upon the parties hereto, their heirs, administrators, successors,
executors and assigns, and the parties hereto do covenant and agree that they
themselves and their respective heirs, executors, successors, administrators and
assigns will execute any and all instruments, releases, assignments and consents
that may be reasonably required of them to more fully execute the provisions of
this Agreement.
(c) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall serve as an original for all purposes,
but all copies of which shall constitute but one and the same Agreement.
12
(d) Headings. All headings set forth in this Agreement are
intended for convenience only and shall not control or affect the meaning,
construction or effect of this Agreement or of any of the provisions thereof.
(e) Governing Law. This Agreement shall be governed by and
shall be construed and enforced in accordance with the laws of the State of
Florida. To the fullest extent permitted by law, the subscriber and the
Corporation hereby (a) submit to the jurisdiction of the Florida and United
States courts for the Florida judicial circuit and the federal district,
respectively, wherein lies Miami-Dade County, Florida for purposes of any legal
action or proceeding brought under this Agreement and (b) agree that exclusive
venue of any such action or proceeding may be laid in Miami-Dade County, Florida
and waive any claim that the same is an inconvenient forum.
(f) Entire Agreement. This Agreement, the Note and the Warrant
constitute the entire Agreement of the parties hereto with respect to the
subject matter hereof, and it is hereby agreed that any prior oral or written
agreements concerning the sale or disposition of the Stock shall be null and
void.
(g) Specific Performance; Fees. Consequently, the parties
hereto agree that an action for specific performance of the purchase and sale
obligations created by this Agreement is a proper remedy for the breach of its
provisions. If the parties to this Agreement are forced to institute legal
proceedings to enforce their rights in accordance with the provisions of this
Agreement, the prevailing party shall be entitled to recover their reasonable
attorneys' fees and court costs incurred in enforcing such rights.
(h) Indemnification. Each party shall indemnify and hold each
other and their respective affiliated companies, officers, directors, employees,
stockholders and agents harmless from all liabilities, claims, costs, damages
and expenses, including reasonable attorney's fees and costs, at both the trial
and appellate levels, arising out of any breach on the part of the either party
with respect to any of their respective representations or obligations under
this Agreement.
13
IN WITNESS WHEREOF, the parties to this Agreement have hereunto set
their names as of the date first above written.
TAKE TO XXXXXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: CEO/President
----------------------------
E COM VENTURES, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
-----------------------------
Title: CEO
----------------------------
14
EXHIBIT A
FORM OF PROMISSORY NOTE
Please See Attached
EXHIBIT B
FORM OF WARRANT
Please See Attached
EXHIBIT C
FINANCIAL STATEMENTS
Please See Attached
EXHIBIT D
CAPITALIZATION OF THE CORPORATION
Please See Attached
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED OR DEFERRED FOR SALE OR TRANSFER IN VIOLATION OF ANY FEDERAL OR
STATE SECURITIES LAWS.
TAKE TO XXXXXXX.XXX, INC.
CONVERTIBLE
PROMISSORY NOTE
$1,000,000 March 9, 2000
TAKE TO XXXXXXX.XXX INC., a Florida corporation (hereinafter
called the "Obligor"), for value received, hereby promises to pay to E Com
Ventures, Inc. (the "Holder") the principal sum of ONE MILLION DOLLARS
($1,000,000) (the "Principal Balance"). The Principal Balance shall be payable
on March 8, 2002. Interest on the Principal Balance shall accrue from the date
hereof at a rate of six percent (6% per annum) and shall be payable
semi-annually on the (9th) day of each September and March, commencing September
9, 2000 and continuing up to and including the Payment Date ("Payment Date").
All payments of principal and interest shall be in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts, and shall be made at the
address of the Holder in accordance with Section 7 below.
1. Note. This Note is the "Promissory Note" issued pursuant to
a Note and Warrant Purchase Agreement dated as of March 9, 2000 (the "Note
Purchase Agreement"), by and between the Obligor and the Holder, and is subject
to the terms and conditions of the Note Purchase Agreement.
2. Conversion. During the Subscription Period (as defined
below), the Holder shall have the right to convert all, but not less than all,
of the Principal Amount hereof into shares of the Obligor's common stock, $.001
par value (the "Common Stock") at the conversion price per share equal to the
price to public specified on the cover page of the final prospectus of the
Company's Registration Statement (No. 333-91177) (the "Registration Statement")
relating to the initial public offering of the Common Stock, less the
underwriters' gross commissions (the "IPO Price") for one share of Common Stock,
upon surrender of this Note, at the principal office of the Company, accompanied
by written notice of conversion in the form attached hereto as Schedule I, duly
executed by the Holder or its duly authorized attorney-in-fact (the process by
which the Holder may exercise its right to convert this Note into shares of
Common Stock is defined as a "Conversion Election"). The shares of Common Stock
into which this Note converts shall be delivered to Holder or its order not more
than seven (7) days after the date the Conversion Election is complete. No
adjustments in respect of dividends or any other event will be made upon any
conversion. Accrued and unpaid interest hereon shall not be convertible into
Common Stock of the Company; however, the Holder shall be entitled to receive
any accrued and unpaid interest to the date of conversion and the conversion of
this Note will not extinguish that contractual right, which interest shall be
paid on the date that the shares of Common Stock into which this Note is
converted are delivered. For purposes of this Agreement, the Subscription Period
shall be the 14 days immediately following the effective date of the
Registration Statement. Obligor shall give Holder notice of such effective date
not more than 1 day after the declaration thereof. The Subscription Period shall
be extended one day for each day that such notice is not timely given by
Obligor.
3. Default. If any of the following events shall occur and be
continuing (each such event, an "Event of Default"):
(a) the Obligor fails to repay any installment of the
Principal Balance when due hereunder.
(b) the Obligor fails to make any installment of interest
within ten (10) days after the due date thereof.
(c) the Obligor violates any other covenant, agreement or
condition contained in this Note or the Note Purchase Agreement and such
violation remains uncured for ten (10) Business Days after receipt of written
notice from the Holder, which notice shall specify the conduct required to cure
such violation; or
(d) the Obligor shall be adjudicated insolvent, or fails to
pay or admits in writing its inability to pay its debts as they mature (whether
at stated maturity; upon acceleration or otherwise), makes a general assignment
for the benefit of creditors; or the Obligor shall apply for or consent to the
appointment of any receiver, custodian, trustee or similar officer for it or for
all or any substantial part of its property, or such receiver, custodian,
trustee or similar officer shall be appointed without the application or consent
of the Obligor; or the Obligor shall institute (by petition, application,
answer, consent or otherwise), or take any action to authorize the institution
of, any bankruptcy, insolvency, reorganization, arrangement, readjustment of
debt, dissolution, liquidation or similar proceeding relating to the Obligor
under the laws of any jurisdiction; or any such proceeding shall be instituted
(by petition, application or otherwise) against the Obligor and such proceeding
shall not be dismissed within sixty (60) days after being instituted;
then, (i) upon the occurrence of any Event of Default described in clause (c) of
this Section, the unpaid Principal Balance and accrued and unpaid interest shall
automatically become immediately due and payable, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or further
notice of any kind, all of which are hereby expressly waived by the Obligor, and
(ii) upon the occurrence of any other Event of Default, the Holder may, at its
option, by written notice to the Obligor
2
declare the entire unpaid Principal Balance, together with accrued and unpaid
interest, to be forthwith due and payable, whereupon all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or further notice of any
kind, all of which are hereby expressly waived by the Obligor. During the period
that an Event of Default shall exist, the Principal balance shall bear interest
at a rate of 12% per annum.
4. Prepayment; Redemption. At any time after the Subscription
Period, this Note may, at the option of the Obligor, be redeemed prior to
maturity as a whole or in part at the principal office of the Obligor, upon the
notice provided herein.
5. Waiver of Trial by Jury. THE HOLDER HEREBY AND THE OBLIGOR
BY ACCEPTANCE OF THIS NOTE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREOF, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
6. No Oral Modification; Assignment. This Note cannot be
changed or modified other than pursuant to a written instrument signed by the
parties hereto. This Note cannot be assigned by the Obligor, in whole or in
part, unless the Holder shall consent in writing prior to such assignment.
7. Successors and Assigns. This Note shall be binding upon and
inure to the benefit of the Obligor, the Holder and their respective successors
and assigns.
8. Notice. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or by Federal Express, Express Mail or
similar overnight delivery or courier service or delivered (in person or by
telecopy, telex or similar communications equipment) against receipt to the
party to whom it is to be given, (i) if to the Holder, at 00000 X.X. 000xx Xxxx,
Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx Xxxx, CFO, telecopy (000) 000-0000 and
(ii) if to the Obligor, at 0000 Xxxxxxx Xxxxxx, Xxxxx 00, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxx Xxxxxxxx, President, telecopy (000) 000-0000
and (iii) in either case, to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section. Any
notice or other communication given by certified mail shall be deemed given at
the time of certification thereof, except for a notice changing a party's
address, which shall be deemed given at the time of receipt thereof. Any notice
given by other means permitted by this Section shall be deemed given at the time
of receipt thereof.
9. Applicable Law. This Agreement shall for all purposes be
construed and interpreted in accordance with the laws of the State of Florida,
without regard to any conflict of law rule or principle that would give effect
to the laws of another jurisdiction.
3
IN WITNESS WHEREOF, TAKE TO XXXXXXX.XXX, INC. has caused this
Note to be signed in its corporate name by one of its officers thereunto duly
authorized and to be dated as of the date first above written.
TAKE TO XXXXXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: CEO/President
4
SCHEDULE I
CONVERSION NOTICE FORM
The undersigned hereby irrevocably elects to convert all of the Principal Amount
into shares of the Obligor's Common Stock at the IPO Price. This conversion form
shall not be effective unless delivered to Obligor in conformance with the terms
of the Note, including, without limitation, the surrender of the Note to
Obligor. Terms not defined herein shall have the meaning set forth in that
certain Convertible Promissory Note between Take to Xxxxxxx.xxx. Inc. and E Com
Ventures, Inc., dated March 9, 2000.
-----------------------------------
Signature
-----------------------------------
Date
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT
OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
March 9, 2000
TAKE TO AUCTION. COM, INC.
Warrant for the Purchase of Shares of Common Stock
No. 1
FOR VALUE RECEIVED, TAKE TO XXXXXXX.XXX, INC., INC., a Florida
corporation (the "Company"), hereby certifies that E Com Ventures, Inc. (the
"Holder") is entitled, subject to the provisions of this Warrant, to purchase
from the Company, up to Three Hundred Thousand (300,000), as adjusted pursuant
to Section 6, fully paid and non-assessable shares of Common Stock at a price
per share equal to the price to public specified on the cover page of the final
prospectus of the Company's Registration Statement (the "Registration
Statement") relating to the initial public offering of the Common Shares less
the underwriters' gross commissions (the "IPO Price"), as adjusted pursuant to
Section 6.
The term "Common Stock" means the Company's Common Stock, par value
$0.001 per share. The shares of Common Stock deliverable upon such exercise are
hereinafter referred to as the "Warrant Shares." The term "Other Securities"
means any other equity or debt securities that may be issued by the Company in
addition thereto or in substitution for the Warrant Shares. The term "Company"
means and includes the corporation named above as well as (i) any immediate or
more remote successor corporation resulting from the merger or consolidation of
such corporation (or any immediate or more remote successor corporation of such
corporation) with another corporation, or (ii) any corporation to which such
corporation (or any immediate or more remote successor corporation of such
corporation) has transferred its property or assets as an entirety or
substantially as an entirety.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.
The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.
1. Exercise of Warrant. This Warrant may be exercised in whole or in
part at any time, or from time to time during the period (the "Subscription
Period") commencing on the business day immediately following the effective date
of the Registration Statement and expiring 5:00 p.m. Eastern Standard Time on
the first anniversary of the effective date of the Registration Statement by
presentation and surrender of this Warrant to the Company at its principal
office, or at the office of its stock transfer agent, if any, with the Warrant
Exercise Form attached hereto duly executed and accompanied by payment (either
in cash or by certified or official bank check, payable to the order of the
Company) of the exercise price for the number of shares specified in such form
and instruments of transfer, if appropriate, duly executed by the Holder or his
or her duly authorized attorney. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant for cancellation,
execute and deliver a new Warrant evidencing the rights of the Holder thereof to
purchase the balance of the shares purchasable hereunder. In no event shall
fractional shares or scrip representing fractional shares be issued upon
exercise of this Warrant. Upon receipt by the Company of this Warrant, together
with the Exercise Price, at its office, or by the stock transfer agent of the
Company at its office, in proper form for exercise, (a "Conforming Exercise")
the Holder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the Holder which
certificates shall be delivered to Holder or its order not more than three (3)
business days after a Conforming Exercise. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this Warrant.
2. Reservation of Shares. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
or other shares of capital stock of the Company (and Other Securities) from time
to time receivable upon exercise of this Warrant. All such shares (and Other
Securities) shall be duly authorized and, when issued upon such exercise, shall
be validly issued, fully paid and non-assessable and free of all preemptive
rights.
2
3. 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 in
equity, and the rights of the Holder are limited to those expressed in this
Warrant. The Company shall not be obligated to register the shares of the
Warrant Stock or Other Securities, except as set forth in that certain Note and
Warrant Purchase Agreement, dated as of the date hereof between the Company and
the Holder.
4. Transfer to Comply with the Securities Act. This Warrant and any
Warrant Stock or Other Securities may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (a) to a person who, in
the opinion of counsel to the Company, is a person to whom this Warrant or the
Warrant Shares or Other Securities may legally be transferred without
registration and without the delivery of a current prospectus under the
Securities Act with respect thereto and then only against receipt of an
agreement of such person to comply with the provisions of this Section 4 with
respect to any resale or other disposition of such securities; or (b) to any
person upon delivery of a prospectus then meeting the requirements of the
Securities Act relating to such securities and the offering thereof for such
sale or disposition, and thereafter to all successive assignees.
5. Legend. Upon exercise of any of the Warrants and the issuance of any
of the shares of Warrant Shares or Other Securities, all certificates
representing such securities shall bear on the face thereof substantially the
following legend to the extent applicable:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR
OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THAT ACT OR DISPOSED OF PURSUANT TO RULE 144
UNDER THAT ACT OR UNLESS AN OPINION OF COUNSEL TO THE
CORPORATION IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
6. Anti-Dilution Provisions.
(a) Adjustment for Recapitalization. If the Company shall at
any time, after the date hereof, subdivide its outstanding shares of Common
Stock by recapitalization, reclassification or split-up thereof, or if the
Company shall declare a stock dividend or distribute shares of Common Stock to
its stockholders, the number of Warrant Shares then subject to this Warrant
immediately prior to such subdivision shall be proportionately increased and the
exercise price shall be proportionately decreased, and if the Company shall at
any time combine, after the date hereof, the outstanding shares of Common Stock
by recapitalization, reclassification or combination thereof, the number of
Warrant shares then subject to this Warrant immediately prior to such
combination shall be proportionately decreased and the exercise price shall be
proportionately increased. Any such adjustments pursuant to this Section 4(a)
3
shall be effective at the close of business on the effective date of such
subdivision or combination or if any adjustment is the result of a stock
dividend or distribution then the effective date for such adjustment based
thereon shall be the record date therefor.
(b) Adjustment for Reorganization, Consolidation, Merger, Etc.
In case of any reorganization of the Company or in case the Company shall
consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in each such
case, the Holder upon the exercise of this Warrant at any time after the
consummation of such reorganization, consolidation, merger or conveyance, shall
be entitled to receive, in lieu of the Warrant Shares issuable upon the exercise
of this Warrant prior to such consummation, the securities or property to which
the Holder would have been entitled upon such consummation if the Holder had
exercised this Warrant immediately prior thereto; in each such case, the terms
of this Warrant shall be applicable to the securities or property receivable
upon the exercise of this Warrant after such consummation.
(c) No Adjustment for Stock Issuances. Except as otherwise
expressly provided herein, the issuance by the Company of shares of its capital
stock of any class, or securities convertible into shares of capital stock of
any class, either in connection with the direct sale (including in connection
with the Company's initial public offering) or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect
this Warrant, and no adjustment by reason thereof shall be made with respect to
the number of or exercise price of Warrant Shares then subject to this Warrant.
(d) No Effect on Corporate Actions. Without limiting the
generality of the foregoing, the existence of this Warrant shall not affect in
any manner the right or power of the Company to approve or the Company to make,
authorize or consummate (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business; (ii) any merger or consolidation of the Company; (iii) any issuance by
the Company of debt securities, or preferred or preference stock that would rank
above the Warrant Shares subject to outstanding Warrants; (iv) the dissolution
or liquidation of the Company; (v) any sale, transfer or assignment of all or
any part of the assets or business of the Company or (vi) any other corporate
act or proceeding, whether of a similar character or otherwise.
(e) The Company shall give Holder notice of any adjustment
pursuant to this Section 6, not more than ten (10) days thereafter.
7. Notices. All notices required hereunder shall be in writing and
shall be deemed given when telegraphed, delivered personally or within two days
after mailing when mailed by certified or registered mail, return receipt
requested, to the Company at its principal office, or to the Holder at the
address set forth on the record books of the Company, or at such other address
of which the Company or the Holder has been advised by notice hereunder.
8. Applicable Law. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Florida, without giving effect to the choice of law rules thereof.
4
IN WITNESS HEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.
TAKE TO XXXXXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------
Title: CEO/President
----------------------------
5
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing ____________ shares of Common Stock of Take to Xxxxxxx.xxx,
Inc., a Florida corporation, and hereby makes payment of $____________ in
payment therefor.
-----------------------------------
Signature
-----------------------------------
Signature, if jointly held
-----------------------------------
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Warrant and permitted by
Take to Xxxxxxx.Xxx, Inc.)
Name
---------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address
-----------------------------------------------------------------------
--------------------------------------------------------------------------------
Social Security or
Taxpayer Identification Number
-------------------------------------------------
6
