AMENDED AND RESTATED WARRANT ANTIDILUTION AGREEMENT
THIS AMENDED AND RESTATED WARRANT ANTIDILUTION AGREEMENT (the
"Agreement" or the "Warrant Antidilution Agreement") is entered into as of April
10, 2001, by and among XXXXXXXX.XXX ENTERPRISES INC, a corporation duly
organized and existing under the laws of the Territory of Yukon, Province of
Canada (the "Company") and Xxxxxx Private Equity, LLC (hereinafter referred to
as "Xxxxxx" or the "Investor"), and amends and restates the Warrant Antidilution
Agreement between the parties dated on or about November 16, 2000.
RECITALS:
WHEREAS, pursuant to the Company's offering ("Equity Line") of up to
Twenty Five Million Dollars ($25,000,000), excluding any funds paid upon
exercise of the Warrants, of Common Stock of the Company pursuant to that
certain Amended and Restated Investment Agreement (the "Investment Agreement")
between the Company and Xxxxxx dated on or about April 10, 2001, the Company has
agreed to sell and Xxxxxx has agreed to purchase, from time to time as provided
in the Investment Agreement, shares of the Company's Common Stock for a maximum
aggregate offering amount of Twenty Five Million Dollars ($25,000,000); and
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed, among other things, to issue to Xxxxxx Commitment Warrants, as
defined in the Investment Agreement, to purchase a number of shares of Common
Stock, exercisable for five (5) years from their respective dates of issuance.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. ISSUANCE OF COMMITMENT WARRANTS. As partial consideration for entering into
the Equity Line, the Company issued and delivered to Investor a warrant to
purchase 760,000 shares of common stock of the Company in the form attached to
the Investment Agreement as EXHIBIT U1, or such other form as agreed upon by the
parties, a warrant to purchase an additional 144,000 shares of common stock of
the Company in the form attached to the Investment Agreement as EXHIBIT U2, or
such other form as agreed upon by the parties, and on or about the date of
execution of this Amended and Restated Investment Agreement, the Company issued
and delivered to Investor warrants in the form attached to the Investment
Agreement as EXHIBIT U3, or such other form as agreed upon by the parties, to
purchase AN ADDITIONAL 90,400 shares of Common Stock (collectively, the warrants
described in this sentence are referred to as the "Commitment Warrants").
2. ISSUANCE OF ADDITIONAL WARRANTS. On each six month anniversary of the date
of execution by the Company and the Investor of the initial Commitment Warrants
(each, a "Six Month Anniversary Date") continuing throughout the term of the
Commitment Warrant, the Company shall issue to the Investor additional warrants
(the "Additional Warrants"), to purchase a number of shares of Common Stock, if
necessary, such that the sum of the number of Commitment Warrants and the number
of Additional Warrants issued to Investor shall equal at least "Y%" of the
number of fully diluted shares of Common Stock of the Company on such Six Month
Anniversary Date (not including any shares issued or issuable to Xxxxxx), where
"Y" shall equal 4.0% for the first Six Month Anniversary Date, and shall be
reduced by 0.5% for each Six Month
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Anniversary Date beginning on and following the second Six Month Anniversary
Date. The Additional Warrants shall be in the form of EXHIBIT A hereto, and
shall initially be exerciseable at the same price as the Commitment Warrants (as
most recently reset), shall have the same reset provisions as the Commitment
Warrants (which resets shall occur on each six month anniversary of the date of
issuance of the applicable Additional Warrant throughout the term of the
applicable Additional Warrant), shall have registration rights as set forth in
the Amended and Restated Registration Rights Agreement dated April 4, 2001
between the Company and the Investor, and shall have a 5-year term.
3. OPINION OF COUNSEL. Concurrently with the issuance and delivery of the
Commitment Opinion (as defined in the Investment Agreement) to the Investor, or
on the date that is six (6) months after the date of this Agreement, whichever
is sooner, the Company shall deliver to the Investor an Opinion of Counsel
(signed by the Company's independent counsel) covering the issuance of the
Commitment Warrants and the Additional Warrants, and the issuance and resale of
the Common Stock issuable upon exercise of the Warrants and the Additional
Warrants.
4. CHANGE IN CORPORATE ENTITY. Except in connection with the Change of Domocile
(as that term is defined in the Investment Agreement), the Company shall not, at
any time after the date hereof, enter into any merger, consolidation or
corporate reorganization of the Company with or into, or transfer all or
substantially all of the assets of the Company to, another entity unless the
resulting successor or acquiring entity in such transaction, if not the Company
(the "Surviving Entity"), (i) has Common Stock listed for trading on Nasdaq, on
another national stock exchange or on the O.T.C. Bulletin Board, and is a
Reporting Issuer, (ii) assumes by written instrument the Company's obligations
with respect to this Warrant Antidilution Agreement and the Additional Warrants,
including but not limited to the obligations to deliver to the Investor shares
of Common Stock and/or securities that Investor is entitled to receive pursuant
to this Warrant Antidilution Agreement and upon exercise of the Additional
Warrants and agrees by written instrument to reissue, in the name of the
Surviving Entity, any Additional Warrants (each in the same terms, including but
not limited to the same reset provisions, as the Commitment Warrants originally
issued or required to be issued by the Company) that are outstanding immediately
prior to such transaction, making appropriate proportional adjustments to the
number of shares represented by such Additional Warrants and the exercise prices
of such Additional Warrants to accurately reflect the exchange represented by
the transaction.
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5. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the Securities Exchange Act of 1934, which matters shall be
construed and interpreted in accordance with such laws.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 10th day of APRIL, 2001.
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SUBSCRIBER:
XXXXXXXX.XXX ENTERPRISES INC. XXXXXX PRIVATE EQUITY, LLC.
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxx
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Xxxxxx X. Xxxx, Chairman Xxxx X. Xxxxxx, Manager
Xxxxxxxx.xxx Enterprises Inc. 000 Xxxxxxxx Xxxxxx Xxxxxxx
000 Xxxxxx Xxx Xxxxx 000
Xxxxxx, XX 00000 Xxxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
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