DOMAIN REGISTRAR PROJECT COMPLETION AGREEMENT
This Domain Registrar Project Completion Agreement (the "Agreement") is
made and entered into this 10th day of May, 2000, between FullNet
Communications, Inc., an Oklahoma corporation ("FullNet"), FullWeb, Inc., an
Oklahoma corporation dba FullNic ("FullNic") and Think Capital, Inc., an
Oklahoma corporation ("Think Capital").
RECITALS
WHEREAS, FullNic is in the process of becoming a domain name registrar
and wishes to retain the services of Think Capital; and
WHEREAS, Think Capital wishes to provide certain services to FullNic to
enable it to become a domain registrar;
NOW THEREFORE, in light of the foregoing and the mutual consideration
provided for herein, the parties agree as follows:
1. Term and Termination.
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1.1 This Agreement shall be effective as of the date
first written above and shall continue for a period
of sixty days, subject to the provisions hereinafter.
1.2 Upon written notice by either party of the other
party's failure to abide by its covenants herein or
otherwise default in the performance of any of its
obligations under this Agreement, the party receiving
such notice (the "Defaulting Party") shall have
forty-eight hours to correct or remedy such
deficiency. Any such notice shall describe in detail
the basis upon which the party providing notice (the
"Non-defaulting Party") believes such termination is
justified. Upon receipt of such notice, the
Defaulting Party shall have forty-eight (48) hours
during which to attempt to cure any alleged default
under this Agreement, and upon such cure being
effected, the Non-defaulting Party's rights to
terminate the Agreement by virtue of such default
shall cease and this Agreement will continue in full
force and effect. In the event that any such
deficiency or default is not corrected within such
forty-eight hour period, the Non-defaulting Party may
terminate this Agreement effective immediately;
provided, however, if the Defaulting Party has
diligently attempted to effect such a cure within
such forty-eight hour period but cannot complete such
cure because of the failure of a third-party to act
within such period, as evidenced in writing by such
third party to the Non-defaulting Party, then the
Defaulting Party shall have such additional time
beyond such forty-eight hour period as may be agreed
between the Defaulting Party and the Non-defaulting
Party to cure the deficiency or default; provided,
further, in no event shall such additional time
exceed forty-eight hours.
1.3 Upon termination of this Agreement, Think Capital
shall be entitled to immediately receive payment of
all accrued and unpaid amounts then due Think Capital
pursuant to the terms of this Agreement at the date
of termination, and neither party shall have any
further obligations whatsoever under this Agreement,
except pursuant to the indemnity provisions herein.
If, after prior written demand, either party hereto
brings an action because of the termination of this
Agreement, the non-prevailing party agrees to pay all
costs and reasonable attorneys' fees incurred by the
prevailing party in connection with such action. No
right or remedy herein conferred upon or reserved to
either of the parties hereto is intended to be
exclusive of any other right or remedy, and each and
every right and remedy shall be cumulative and in
addition to any other right or remedy given
hereunder, or now or hereinafter legally existing
upon the termination of this Agreement.
1.4 The term "Preliminary Project Completion" shall
hereinafter be defined as the date at which Think
Capital has performed in good faith all the
requirements of section 6 below. "Project Completion"
shall hereinafter be defined as the date at which
domain names are first registered via the FullNic web
site.
2. Consideration for Services Rendered by Think Capital.
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2.1 Upon execution of this Agreement ("Execution Date"),
FullNic shall pay to Think Capital the sum of
$6,500.00. Sixty days after the Execution Date (the
"Preliminary Project Due Date"), FullNic shall pay to
Think Capital the sum of $6,500.00, subject to the
provisions of Section 4. FullNet hereby guarantees
payment of FullNic's obligations under this
Agreement.
2.2 Subject to the provisions of Sections 4 and 5, in
addition to the consideration payable pursuant to
Section 2.1 above, FullNet agrees to issue to Think
Capital, as additional compensation, warrants to
purchase 25,000 shares ("Original Warrants") of
FullNet's $0.00001 common stock ("Common Stock"), at
an exercise price per share equal to the market price
of the Common Stock on the date of the issuance of
the warrants, and pursuant to the other terms set
forth in the Warrant Agreement, a form of which is
attached hereto as Exhibit "A" (the "Warrant
Agreement"). The Original Warrants will be issued to
Think Capital on the Preliminary Project Due Date,
subject to the provisions of Section 4.
3. Bonus Compensation.
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3.1 If the total number of ".com," ".net," and ".org"
domains registered by FullNic on or prior to the
twelve-month anniversary of Project Completion is
equal to or greater than 85,000, FullNet agrees to
issue to Think Capital, as bonus compensation, an
additional 55,000 warrants (the "Bonus Warrants"),
giving Think Capital the right to purchase from
FullNet 55,000 shares of Common Stock at an exercise
price per share equal to the market price of the
Common Stock on the date of the issuance of the
warrants, and pursuant to the other terms as set
forth in the Warrant Agreement; provided, however,
Think Capital may request that the Bonus Warrants be
issued at either (1) the last day of the month in
which the 85,000th domain is registered, or (2) the
last day of the twelfth month following Project
Completion.
3.2 If, subsequent to Preliminary Project Completion,
FullNet (a) liquidates, discontinues, sells, effects
a spinoff of or otherwise disposes of FullNic, (b)
fails to provide adequate funding to allow FullNic to
remain a going concern, (c) fails to pursue Project
Completion in accordance with the reasonable
recommendations provided by Think Capital and agreed
to by both parties pursuant to Think Capital's
provision of services in accordance with Section 6,
or (d) otherwise improperly impedes Think Capital's
provision of services in accordance with Section 6,
FullNet and FullNic shall, notwithstanding the
failure of Project Completion to occur, pay to Think
Capital upon demand the bonus compensation set forth
in Section 3.1 hereof.
4. If, on the Preliminary Project Due Date, Preliminary Project
Completion has not occurred due to the failure of Think Capital to perform in
good faith all services described in Section 6 hereof for the account of and as
agent of FullNic, and FullNic elects to waive its right to terminate the
Agreement pursuant to Section 1.2 hereof with respect to such default, the
following adjustments to compensation will be made:
4.1. The number of Original Warrants to be issued pursuant
to the terms of Section 2.2 will be adjusted downward
by 250 Warrants for each day the date of Preliminary
Project Completion extends beyond the Preliminary
Project Due Date;
4.2. Notwithstanding the provisions of Section 2.1 and
Section 2.2 of this Agreement, the Original Warrants,
as adjusted pursuant to Section 4.1, shall not be
issued, and the second cash payment of $6,500 will
not be paid, until the earlier to occur of (a) the
date of Preliminary Project Completion, or (b) Think
Capital's performance in good faith of the services
described in Section 6 hereof; and
4.3. Think Capital's rights to receive the Bonus Warrants
pursuant to Section 3 shall not be affected by any
adjustment effected to the Original Warrants pursuant
to this Section 4.
5. If, on the Preliminary Project Due Date, Preliminary Project
Completion has not occurred due to the failure of FullNic to perform in good
faith all services required of it pursuant to this Agreement and,
notwithstanding FullNic's default, and Think Capital elects to (i) waive its
right to terminate the Agreement pursuant to Section 1.2 hereof with respect to
such default and (ii) continue to perform in good faith the services described
in Section 6 hereof, the compensation set forth in Section 2 will be paid, with
the following adjustment:
5.1. Additional warrants will accrue at the rate of 250
each day until Preliminary Project Completion. These
additional warrants will be issued as of Preliminary
Project Completion and pursuant to the terms of the
Warrant Agreement.
6. Duties of Think Capital. The services to be provided by Think
Capital with respect to Preliminary Project Completion will consist of the
following:
6.1. A written, detailed marketing outline.
6.2. A written, detailed marketing advertising budget.
6.3. Specifications for back-end and site development
delivered and clearly explained to contract
developers, as well as on-going discussions and
consultation with lead developers.
6.4. Complete of Network Solutions' requirements, or, in
the alternative, prepare comprehensive and detailed
instructions to FullNic on how to complete the
requirements. Network Solution's testing will be
scheduled at the earliest possible date given the
status of the contract developers.
6.5. Think Capital will develop contracts and paperwork
for Value Added Resellers and volume discount
customers. Think Capital will proactively solicit and
attempt to sign such clients.
6.6. Written potential advertising locations and rates.
6.7. Various consultations with FullNet and FullNic
executives regarding the direction, needs and
objectives of FullNic.
6.8. All such further action as may reasonably be required
and agreed to by both parties.
7. Miscellaneous.
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7.1 Authorization. Each party warrants and represents
that it is fully entitled and duly authorized to
enter into this Agreement.
7.2 Entire Agreement. The terms of this Agreement are
intended by the parties to be the final expression of
their agreement with respect to the subject matter
hereof and may not be contradicted by evidence of any
prior or contemporaneous agreement. This Agreement
may not be amended except in a writing signed by both
of the parties.
7.3 Successors and Assigns This Agreement is binding upon
and shall inure to the benefit of each party to this
Agreement and to any successors in interest or
assigns of any party to this Agreement.
7.4 Governing Law. This Agreement shall be interpreted in
accordance with the laws of the State of Oklahoma
without reference to conflicts of laws principles
thereof.
7.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an
original, but such counterparts together shall
constitute one and the same instrument.
7.6 Expenses. FullNet shall be responsible for all
reasonable out-of-pocket expenses incurred by Think
Capital in connection with the performance of its
obligations under this Agreement, including, but not
limited to, contract programming and development,
marketing and advertising expenses; provided,
however, FullNet will be notified in advance of the
incurrence of expenses and shall have consented to
their incurrence, such consent not to be unreasonably
withheld. Any reasonable out-of-pocket expenses that
are incurred by ThinkCapital pursuant to the
provisions of this Section 7.6 will be reimbursed
within 30 days by FullNet.
7.7 Partnership. Think Capital, FullNet and FullNic
affirmatively state that they do not have the
intention to form a joint venture or partnership for
tax or any other purpose, nor have they done so.
7.8 Indemnification. In accordance with customary
practices associated with the retention of an
adviser, FullNet will indemnify and hold harmless
Think Capital and its personnel from any claims,
liabilities, cost and expenses, including without
limitation reasonable attorneys' fees and related
expenses relating to Think Capital's services under
this Agreement, except to the extent determined to
have resulted from the intentional misconduct or
gross negligence of Think Capital personnel. Under
all circumstances, Think Capital's maximum liability
to FullNet arising for any reason relating to
services rendered under this letter shall be limited
to the amount of the fees paid for these services.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed all as of the date first above written.
FULLWEB, INC. FULLNET COMMUNICATIONS, INC.
dba FullNic
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxx Xxxxx, President Xxxxxxx X. Xxxxxxxx, President
THINK CAPITAL, INC.
By____________________________
Name:______________________
Title:_____________________
EXHIBIT A
FULLNET COMMUNICATIONS, INC.
(an Oklahoma corporation)
WARRANT AGREEMENT
______, 2000
[Name of Warrant Holder]
[Address]
Mr. __________:
FullNet Communications, Inc., an Oklahoma corporation (the "Company"),
agrees to issue to you warrants (the "Warrants") to purchase the number of
shares of common stock, par value $0.00001 per share (the "Common Stock"), of
the Company set forth herein, subject to the terms and conditions contained
herein.
1. Issuance of Warrants; Exercise Price. The Warrants, which shall be
certificated in the form attached hereto as EXHIBIT "B" (each, a "Warrant
Certificate"), shall be issued to you concurrently with the execution hereof in
consideration of the Domain Registrar Project Completion Agreement dated
_________________ (the "Registrar Agreement"). The Warrants shall provide that
you, or such other holder or holders of the Warrants to whom transfer is
authorized in accordance with the terms of this Agreement, shall have the right
to purchase an aggregate of ________ shares of Common Stock for an exercise
price equal to the average of the daily closing prices of the Common Stock as
listed on the OTC Bulletin Board for the ten (10) consecutive trading days
immediately preceding the date of this Warrant Agreement for which there were
shares of the Company's Common Stock traded on the OTC Bulletin Board (the
"Exercise Price").
2. Exercise of Warrants. At any time and from time to time after the
date hereof and expiring on the third anniversary of the effective date of this
Warrant Agreement at 5:00 p.m., Central Standard Time, Warrants may be exercised
as to all or any portion of the whole number of shares of Common Stock covered
by the Warrants by the holder thereof by surrender of the Warrants, accompanied
by a subscription for shares to be purchased in the form attached to each
Warrant Certificate and by payment to the Company as set forth in the Warrant
Certificate in the amount required for purchase of the shares as to which the
Warrant is being exercised, delivered to the Company at its principal office at
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx Xxxx, Xxxxxxxx 00000, Attention:
President. Upon the exercise of a Warrant, in whole or in part, the Company
will, within ten (10) days thereafter, at its expense (including the payment by
the Company of any applicable issue or transfer taxes), cause to be issued in
the name of and delivered to the holder a certificate or certificates for the
number of fully paid and non-assessable shares of Common Stock to which such
holder is entitled upon exercise of the Warrant. In the event such holder is
entitled to a fractional share, in lieu thereof, such holder shall be paid a
cash amount equal to such fraction, multiplied by the Current Value (as
hereafter defined) of one full share of Common Stock on the date of exercise.
Certificates for shares of Common Stock issuable by reason of the exercise of
the Warrant or Warrants shall be dated and shall be effective as the date of the
surrendering of the certificates for the shares so purchased. In the event a
Warrant is exercised, as to less than the aggregate amount of all shares of
Common Stock issuable upon exercise of all Warrants held by such person, the
Company shall issue a new Warrant to the holder of the Warrant so exercised
covering the aggregate number of shares of Common Stock as to which Warrants
remain unexercised.
For purposes of this section, Current Value is defined (i) in
the case for which a public market exists for the Common Stock at the time of
such exercise, the average of the daily closing prices of the Common Stock for
twenty (20) consecutive business days commencing thirty (30) business days
before the date of exercise, and (ii) in the case no public market exists at the
time of such exercise, at the Appraised Value. For the purposes of this
Agreement, "Appraised Value" is the value determined in accordance with the
following procedures. For a period of five (5) days after the date of an event
(a "Valuation Event") requiring determination of Current Value at a time when no
public market exists for the Common Stock (the "Negotiation Period"), each party
to this Agreement agrees to negotiate in good faith to reach agreement upon the
Appraised Value of the securities or property at issue, as of the date of the
Valuation Event, which will be the fair market value of such securities or
property, without premium for control or discount for minority interests,
illiquidity or restrictions on transfer. In the event that the parties are
unable to agree upon the Appraised Value of such securities or other property by
the end of the Negotiation Period, then the Appraised Value of such securities
or property will be determined for purposes of this Agreement by a recognized
appraisal or investment banking firm mutually agreeable to the holders of the
Warrants and the Company (the "Appraiser"). If the holders of the Warrants and
the Company cannot agree on an Appraiser within two (2) business days after the
end of the Negotiation Period, the Company, on the one hand, and the holders of
the Warrants, on the other hand, will each select an Appraiser within ten (10)
business days after the end of the Negotiation Period and those two (2)
Appraisers will select ten (10) days after the end of the Negotiation Period an
independent Appraiser to determine the fair market value of such securities or
property, without premium for control or discount for minority interests,
illiquidity or restrictions on transfer. Such independent Appraiser will be
directed to determine fair market value of such securities as soon as
practicable, but in no event later than thirty (30) days from the date of its
selection. The determination by an Appraiser of the fair market value will be
conclusive and binding on all parities to this Agreement. Appraised Value of
each share of Common stock at a time when (i) the Company is not a reporting
company under the Exchange Act and (ii) the Common Stock is not traded in the
organized securities markets, will, in all cases, be calculated by determining
the Appraised Value of the entire Company taken as a whole and dividing that
value by the number of shares of Common Stock then outstanding, without premium
for control or discount for minority interests, illiquidity or restrictions on
transfer. The costs of the Appraiser will be borne by the Company. In no event
will the Appraised Value of the Common Stock be less than the per share
consideration received or receivable with respect to the Common Stock or
securities or property of the same class in connection with a pending
transaction involving a sale, merger, recapitalization, reorganization,
consolidation, or share exchange, dissolution of the Company, sale or transfer
of all or a majority of its assets or revenue or income generating capacity, or
similar transaction.
3. Protection Against Dilution. The Exercise Price for the shares of
Common Stock and number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment from time to time as follows:
(a) Stock Dividends, Subdivisions, Reclassifications, Etc.. In
case at any time or from time to time after the date of execution of
this Agreement, the Company shall (i) take a record of the holders of
Common Stock for the purpose of entitling them to receive a dividend or
a distribution on shares of Common Stock payable in shares of Common
Stock or other class of securities, (ii) subdivide or reclassify its
outstanding shares of Common Stock into a greater number of shares, or
(iii) combine or reclassify its outstanding Common Stock into a smaller
number of shares, then, and in each such case, the Exercise Price in
effect at the time of the record date for such dividend or distribution
or the effective date of such subdivision, combination or
reclassification shall be adjusted in such a manner that the Exercise
Price for the shares issuable upon exercise of the Warrants immediately
after such event shall bear the same ratio to the Exercise Price in
effect immediately prior to any such event as the total number of
shares of Common Stock outstanding immediately prior to such event
shall bear to the total number of shares of Common Stock outstanding
immediately after such event.
(b) Adjustment of Number of Shares Purchasable. When any
adjustment is required to be made in the Exercise Price under this
Section 3, (i) the number of shares of Common Stock issuable upon
exercise of the Warrants shall be changed (upward to the nearest full
share) to the number of shares determined by dividing (x) an amount
equal to the number of shares issuable pursuant to the exercise of the
Warrants immediately prior to the adjustment, multiplied by the
Exercise Price in effect immediately prior to the adjustment, by (y)
the Exercise Price in effect immediately after such adjustment, and
(ii) upon exercise of the Warrant, the holder will be entitled to
receive the number of shares of other securities referred to in Section
3(a) that such holder would have received had the Warrant been
exercised prior to the events referred to in Section 3(a).
(c) Adjustment for Reorganization, Consolidation, Merger,
Etc.. In case of any reorganization or consolidation of the Company
with, or any merger of the Company with or into, another entity (other
than a consolidation or merger in which the Company is the surviving
corporation) or in case of any sale or transfer to another entity of
the majority of assets of the Company, the entity resulting from such
reorganization or consolidation or surviving such merger or to which
such sale or transfer shall be made, as the case may be, shall make
suitable provision (which shall be fair and equitable to the holders of
Warrants) and shall assume the obligations of the Company hereunder (by
written instrument executed and mailed to each holder of the Warrants
then outstanding) pursuant to which, upon exercise of the Warrants, at
any time after the consummation of such reorganization, consolidation,
merger or conveyance, the holder shall be entitled to receive the stock
or other securities or property that such holder would have been
entitled to upon consummation if such holder had exercised the Warrants
immediately prior thereto, all subject to further adjustment as
provided in this Section 6.
(d) Certificate as to Adjustments. In the event of adjustment
as herein provided in paragraphs of this Section 3, the Company shall
promptly mail to each Warrant holder a certificate setting forth the
Exercise Price and number of shares of Common Stock issuable upon
exercise after such adjustment and setting forth a brief statement of
facts requiring such adjustment. Such certificate shall also set forth
a brief statement of facts requiring such adjustment. Such certificate
shall also set forth the kind and amount of stock or other securities
or property into which the Warrants shall be exercisable after any
adjustment of the Exercise Price as provided in this Agreement.
(e) Minimum Adjustment. Notwithstanding the foregoing, no
certificate as to adjustment of the Exercise Price hereunder shall be
made if such adjustment results in a change in the Exercise Price then
in effect of less than five cents ($0.05) and any adjustment of less
than five cents ($0.05) of any Exercise Price shall be carried forward
and shall be made at the time of and together with any subsequent
adjustment that, together with the adjustment or adjustments so carried
forward, amounts to five cents ($0.05) or more; provided however, that
upon the exercise of a Warrant, the Company shall have made all
necessary adjustments (to the nearest cent) not theretofore made to the
Exercise Price up to and including the date upon which such Warrant is
exercised.
4. Registration Rights.
(a) S-3 Registration Rights. The Company will register the
shares of Common Stock underlying the Warrants (the "Warrant Shares")
within thirty (30) days following the date upon which the Company shall
become eligible to register its securities on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act") or any
successor to such form in a manner that will, upon being declared
effective, constitute a "shelf" registration for purposes of Rule 415
under the Securities Act, pursuant to which the Warrant Shares may be
sold from time to time and in such amounts as the holder(s) thereof may
hereafter determine, all in a manner consistent with all applicable
provisions of the Securities Act; provided, however, if at the time of
such S-3 eligibility, the Company has formulated plans to file within
60 days thereof a registration statement covering the sale of any of
its securities in a public offering under the Securities Act, no
registration of the Warrant Shares shall be initiated under this
Section 4(a) until 90 days after the effective date of such
registration statement unless the Company is no longer proceeding
diligently to secure the effectiveness of such registration statement;
provided that the Company shall provide the Warrant holder(s) the right
to participate in such public offering pursuant to, and subject to,
Section 4(b). The Company will use its best efforts to have the Form
S-3 declared effective. At its expense, the Company will keep such
registration effective for a period of one hundred eighty (180) days or
until the holder or holders have completed the distribution described
in the registration statement relating thereto, whichever first occurs;
and furnish such number of prospectuses and other documents incident
thereto as a holder from time to time may reasonably request.
(b) Piggyback Registration Rights. At any time following the
date hereof, whenever the Company proposes to register any Common Stock
for its own or the account of others under the Securities Act for a
public offering, other than (i) any shelf registration of shares to be
used solely as consideration for acquisitions of additional businesses
by the Company and (ii) registrations relating solely to employee
benefit plans, the Company shall give each Warrant holder prompt
written notice of its intent to do so. Upon the written request of any
Warrant holder given within 15 business days after receipt of such
notice, the Company shall cause to be included in such registration all
Warrant Securities (including any shares of Common Stock issued as a
dividend or other distribution with respect to, or in exchange for, or
in replacement of such Warrant Securities) which any Warrant holder
requests; provided, however, if the Company is advised in writing in
good faith by any managing underwriter of an underwritten offering of
the securities being offered pursuant to any registration statement
under this Section 4(b) that the number of shares to be sold by persons
other than the Company is greater than the number of such shares which
can be offered without adversely affecting the offering, the Company
may reduce pro rata the number of shares offered for the accounts of
such persons (based upon the number of shares held by such person) to a
number deemed satisfactory by such managing underwriter.
(c) Lock-up Agreement. In consideration for the Company's
agreeing to its obligations under this Section 4, each Warrant holder
agrees that, effective upon the request of the underwriters managing
the Company's initial public offering, such holder shall be obligated,
so long as all executive officers and directors of the Company are
bound by a comparable obligation, not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
shares of Common Stock underlying the Warrants (other than those
included in the registration) without the prior written consent of such
underwriters, for such period of time (not to exceed one hundred eighty
(180) days) from the effective date of such initial public offering as
the underwriters may specify.
(d) Indemnification; Contribution.
(i) The Company will indemnify and hold harmless each
holder and each affiliate thereof of Common Stock registered
pursuant to this Agreement with the Commission, or under any
Blue Sky Law or regulation against any losses, claims,
damages, or liabilities, joint or several, to which such
holder may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus,
registration statement, prospectus, or any amendment or
supplement thereto, or arise out of or are based upon 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, and will reimburse each
such holder and affiliate for any legal or other expenses
reasonably incurred by such holder in connection with
investigating or defending any such action or claim regardless
of the negligence of any such holder or affiliate; provided,
however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, or liability
arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any
preliminary prospectus, registration statement or prospectus,
or any such amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to the
Company by any such holder expressly for use therein.
(ii) Each holder of Common Stock registered pursuant
to this Agreement will indemnify and hold harmless the Company
against any losses, claims, damages, or liabilities to which
the Company may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus,
registration statement or prospectus, or any amendment or
supplement thereto, or arise out of or are based upon 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, in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in
any preliminary prospectus, registration statement or
prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with written information
furnished to the Company by such holder expressly for use
therein.
(iii) Promptly after receipt by an indemnified party
under Sections 4(d)(i) or (ii) above of the commencement of
any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under either such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to
notify the indemnifying party shall not relieve it from any
liability that it may otherwise have to any indemnified party.
In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party
of the commencement thereof the indemnifying party shall be
entitled to assume the defense thereof by notice in writing to
the indemnified party. After notice from the indemnifying
party to such indemnified party of its election to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under either of such subsections for
any legal expenses of other counsel or any other expense, in
each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable
costs of investigation incurred prior to the assumption by the
indemnifying party, unless such expenses have been
specifically authorized in writing by the indemnifying party,
the indemnifying party has failed to assume the defense and
employ counsel, or the named parties to any such action
include both the indemnified party and the indemnifying party,
as appropriate, and such indemnified party has been advised by
counsel that the representation of such indemnified party has
been advised by counsel that the representation of such
indemnified party and the indemnifying party by the same
counsel would be inappropriate due to actual or potential
differing interests between them, in each of which cases the
fees of counsel for the indemnified party will be paid by the
indemnifying party.
(iv) If the indemnification provided for in this
Section 4(d) is unavailable or insufficient to hold harmless
an indemnified party under Section 4(d)(i) or (ii) in respect
of any losses, claims, damages, or liabilities (or action in
respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and the holder or holders from this
Agreement and from the offering of the shares of Common Stock.
If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the holders in
connection with the statement or omissions that resulted in
such losses, claims, damages, or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
information supplied by the Company or the holder and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the holders agree that it would not be just
and equitable if contribution pursuant to this Section
4(d)(iv) were determined by pro rata allocation (even if the
holders were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the
equitable considerations referred to above in this subsection
4(d)(iv). Except as provided in Section 4(d)(iii), the amount
paid or payable by an indemnified party as a result of the
losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above in this Section 4(d)(iv) shall be
deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigation or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding any provision in
this Section 4(d)(iv) to the contrary, no holder shall be
liable for any amount, in the aggregate, in excess of the net
proceeds to such holder from the sale of such holder's shares
(obtained upon exercise of Warrants) giving rise to such
losses, claims, damages, or liabilities.
(v) The obligations of the Company under this Section
4(d) shall be in addition to any liability that the Company
may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any holder of
Warrants within the meaning of the Securities Act. The
obligations of the holders of Common Stock under this Section
4(d) shall be in addition to any liability that such holders
may otherwise have and shall extend, upon the same terms and
conditions to each person, if any, who controls the Company
within the meaning of the Securities Act.
5. Stock Exchange Listing. In the event the Company lists its Common
Stock on any national securities exchange, the Company will, at its expense,
also list on such exchange, upon exercise of a Warrant, all shares of Common
Stock issuable pursuant to such Warrant.
6. Specific Performance. The Company stipulates that remedies at law,
in money damages, available to the holder of a Warrant, or of a holder of Common
Stock issued pursuant to exercise of a Warrant, in the event of any default or
threatened default by the Company in the performance of or compliance with any
of the terms of this Agreement are not and will not be adequate. Therefore, the
Company agrees that the terms of this Agreement may be specifically enforced by
a decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
7. Successors and Assigns; Binding Effect. This Agreement shall be
binding upon and insure to the benefit of you and the Company and their
respective successors and permitted assigns.
8. Notices. Any notice hereunder shall be given by registered or
certified mail, if to the Company, at its principal office, and, if to the
holders, to the respective addresses shown in the Warrant ledger of the Company,
provided that any holder may at any time on three (3) days' written notice to
the Company designate or substitute another address where notice is to be given.
Notice shall be deemed given and received after a certified or registered
letter, properly addressed with postage prepaid, is deposited in the U.S. mail.
9. Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Agreement.
10. Assignment; Replacement of Warrants. If the Warrant or Warrants are
assigned, in whole or in part, the Warrants shall be surrendered at the
principal office of the Company, and thereupon, in the case of a partial
assignment, a new Warrant shall be issued to the holder thereof covering the
number of shares not assigned, and the assignee shall be entitled to receive a
new Warrant covering the number of shares so assigned. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of any Warrant and appropriate bond or indemnification protection,
the Company shall issue a new Warrant of like tenor. The Warrants will not be
transferred, sold, or otherwise hypothecated by you or any other person and the
Warrants will be nontransferable, except to (i) one or more persons, each of
which on the date of transfer is an officer, shareholder, or employee of you;
(ii) a partnership or partnerships, the partners of which are you and one or
more persons, each of whom on the date of transfer is an officer of you; (iii) a
successor to you in merger or consolidation; (iv) a purchaser of all or
substantially all of your assets; (v) a person that receives a Warrant upon
death of a holder pursuant to will, trust, or the laws of intestate succession;
or (vi) otherwise in compliance with the requirements of Section 4(1) or Section
5 of the Securities Act.
10. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Oklahoma without giving effect to the
principles of choice of laws thereof.
11. Definition. All references to the word "you" in this Agreement
shall be deemed to apply with equal effect to any persons or entities to whom
Warrants have been transferred in accordance with the terms hereof, and, where
appropriate, to any persons or entities holding shares of Common Stock issuable
upon exercise of Warrants.
12. Headings. The headings herein are for purposes of reference only
and shall not limit or otherwise affect the meaning of any of the provisions
hereof.
13. Counterparts. This Agreement may be executed in two or more
counterparts, and it will not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof. Each counterpart will be
deemed an original, but all counterparts together will constitute one and the
same instrument. The parties agree that a facsimile of this Agreement signed by
the parties will constitute an agreement in accordance with the terms hereof as
if all of the parties had executed an original of this Agreement.
Very truly yours,
FULLNET COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxxx, President and CEO
ACCEPTED AS OF THE __ DAY OF ________:
[NAME OF WARRANT HOLDER]
---------------------------------------
EXHIBIT B
WARRANT CERTIFICATE
-------------------
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO THE ISSUER, THAT AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
FULLNET COMMUNICATIONS, INC.
No.: W-00-15 __________Warrants
Date: ____________
THIS IS TO CERTIFY that ____________ or its assigns, as permitted in
that certain Warrant Agreement (the "Warrant agreement"), dated of even date
herewith, by and among FullNet Communications, Inc. (the "Company") and
___________ is entitled to purchase at any time or from time to time on or after
________, 200_, until 5:00 p.m., Central Standard Time on _________, 200_, an
aggregate of __________________________________________________ (___________)
shares of common stock, par value $0.00001 per share, of the Company, for an
exercise price per share as set forth in the Warrant Agreement referred to
herein. This Warrant is issued pursuant to the Warrant Agreement, and all rights
of the holder of this Warrant are further governed by, and subject to the terms
and provisions of such Warrant Agreement, copies of which are available upon
request to the Company. The holder of this Warrant and the shares issuable upon
the exercise hereof shall be entitled to the benefits, rights and privileges and
subject to the obligations, duties and liabilities provided for in the Warrant
Agreement.
The issuance of this Warrant and the shares issuable upon the due and
timely exercise hereof have not been registered under the Securities Act of
1933, as amended (the "Act"), or any similar state securities law or act, and,
as such, no public offering of either this Warrant or any of the shares of
common stock issuable upon exercise of this Warrant may be made other than under
an exemption under the Act or until the effectiveness of a registration
statement under such Act covering such offering. Transfer of this Warrant is
restricted pursuant to the terms of Section 8 of the Warrant Agreement.
Subject to the provisions of the Act, of the Warrant Agreement and of
this Warrant, this Warrant and all rights hereunder are transferable, in whole
or in part, only to the extent expressly permitted in such documents and then
only at the office of the Company at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx Xxxx, Xxxxxxxx 00000, Attention President, by the holder hereof or by a
duly authorized attorney-in-fact, upon surrender of this Warrant duly endorsed,
together with the Assignment hereof duly endorsed. Until transfer hereof on the
books of the Company, the Company may treat the registered holder hereof as the
owner hereof for all purposes.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF OKLAHOMA, WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES OF OKLAHOMA LAW.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
and its corporate seal to be hereunto affixed by its proper corporate officers
thereunto duly authorized.
FULLNET COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxxx, President and CEO
(SEAL)
Attest:
/s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxxx, Secretary
FULLNET COMMUNICATIONS, INC.
SUBSCRIPTION
------------
To Be Signed Only Upon Exercise (in whole or in part) of the Warrants
TO: FULLNET COMMUNICATIONS, INC.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
1. The undersigned, _________________________________, pursuant to the
provisions of the Warrant Agreement dated as of ___________ and the attached
Warrant Certificate, hereby agrees to subscribe for the purchase of _______
shares of the common stock of FullNet Communications, Inc. covered by the
attached Warrant Certificate, and makes payment therefor in full at the price
per share provided by the Warrant Agreement.
2. The undersigned Holder elects to pay the aggregate purchase price
for such shares of common stock (i) by lawful money of the United States or the
enclosed certified or official bank check payable in United States dollars to
the order of the Company in the amount of $______________, or (ii) by wire
transfer of United States funds to the account of the Company in the amount of
$___________, which transfer has been made before or simultaneously with the
delivery of this Subscription pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of shares of common stock in the name of the undersigned or
in such other name(s) as is specified below:
-------------------------------------- --------------------------------------
(Name) (Social Security or Fed ID #)
-------------------------------------- --------------------------------------
(Signature) (Address)
-------------------------------------- --------------------------------------
(Date) (Address)
ASSIGNMENT
----------
FOR VALUE RECEIVED ____________________________ hereby sells, assigns
and transfer unto ______________________ the foregoing Warrant and all rights
evidenced thereby, and does irrevocably constitute and appoint
________________________, attorney, to transfer said Warrant on the books of
FullNet Communications, Inc.
-------------------------------------- -----------------------------------------
(Name) (Name of Assignee)
-------------------------------------- -----------------------------------------
(Signature) (Signature of Assignee)
-------------------------------------- -----------------------------------------
(Social Security or Fed ID #) (Social Security or Fed ID # of Assignee)
-------------------------------------- -----------------------------------------
-------------------------------------- -----------------------------------------
(Address) (Address of Assignee)
--------------------------------------
(Date)
PARTIAL ASSIGNMENT
------------------
FOR VALUE RECEIVED ____________________________ hereby sells, assigns
and transfer unto ______________________ the right to purchase _____ shares of
the common stock of FullNet Communications, Inc. by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced thereby, and does
irrevocably constitute and appoint ________________________, attorney, to
transfer that part of said Warrant on the books of FullNet Communications, Inc.
------------------------------------- -----------------------------------------
(Name) (Name of Assignee)
------------------------------------- -----------------------------------------
(Signature) (Signature of Assignee)
------------------------------------- -----------------------------------------
(Social Security or Fed ID #) (Social Security or Fed ID # of Assignee)
------------------------------------- -----------------------------------------
------------------------------------- -----------------------------------------
(Address) (Address of Assignee)
-------------------------------------
(Date)
