EXHIBIT 99.3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
NO. G-1
WARRANT TO PURCHASE COMMON STOCK
OF
XXXXXXXXXXX.XXX, INC.
In consideration of the sum of ten dollars ($10.00) previously paid to
XXXXXXXXXXX.XXX, INC., a Nevada corporation (the "Company"), receipt and
sufficiency of which are hereby acknowledged, this certifies that, for value
received, Gateway Companies, Inc. or its registered assigns ("Holder") is
entitled, subject to the terms and conditions set forth below, to purchase from
the Company, in whole or in part that number of fully paid and non-assessable
shares of the common stock, par value $0.01 per share, of the Company (the
"Warrant Shares") as set forth in Section 2 below and at a purchase price per
share (the "Exercise Price") as set forth in Section 2 below. The term "Warrant"
as used herein shall mean this Warrant, and any warrants delivered in
substitution or exchange therefor as provided herein.
1. Term of Warrant; Purpose; Vesting.
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(a) Subject to the terms and conditions set forth herein, this Warrant
shall be exercisable in accordance with the provisions contained in
Section 3 hereof until 5:00 p.m., Pacific time, September 30, 2001
(the "Exercise Period"), and shall be void thereafter.
(b) This Warrant is issued as payment for the performance by the
initial Holder under a Training and Marketing Services Agreement
between the Company and initial Holder, dated September 29, 2000
("Agreement") pursuant to which the initial Holder has agreed to
perform certain Phase I Training Services and Phase I Marketing
Services for the Company, as such terms are defined in the
Agreement. This Warrant is referred to in the Agreement as the
Phase I Warrant.
(c) The right to purchase Warrant Shares pursuant to this Warrant is
vested and exercisable at any time during the Exercise Period.
2. Number of Shares, Exercise Price.
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(a) This Warrant shall be exercisable for up to four hundred twenty-
five thousand three hundred fourteen (425,314) shares of common
stock of the Company vested in accordance with Section 1 (c).
(b) Warrant Shares vested pursuant to Section 1(c) shall be exercisable
at any exercise price equal to $59.50 per share (the "Exercise
Price"), as adjusted to reflect any stock dividend, stock split or
other conversion of the number of shares of the Company into a
different number of shares, however denominated.
3. Exercise of Warrant.
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(a) This Warrant may be exercised by the Holder by the surrender of
this Warrant to the Company, with the Notice of Exercise annexed
hereto duly completed and executed on behalf of the Holder, at the
office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company)
during the Exercise Period and: (x) the delivery of payment to the
Company, for the account of the Company, by cash, wire transfer of
immediately available funds to a bank account specified by the
Company, or by certified or bank cashier's check, of the Exercise
Price for the number of Warrant Shares specified in the Exercise
Form in lawful money of the United States of America or (y)
pursuant to a net issuance election in accordance with Section 3(b)
hereof. The number of Warrant Shares shall be adjusted to reflect
any cash or stock dividend, stock split or other conversion of the
number of shares of the Company into a different number of shares,
however denominated as provided in Section 4.
(b) In lieu of exercising this Warrant pursuant to Section 3(a), the
Holder may elect to receive, without the payment by the Holder of
any additional consideration, shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant or
such portion to the Company, with the Net Issue Election Notice
annexed hereto duly executed, at the office of the Company.
Thereupon, the Company shall issue to the Holder such number of
fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
X=Y (A-B)
-------
A
where
X = the number of shares to be issued to the Holder pursuant to
this Section 3(b).
Y = the number of shares of Common Stock otherwise issuable
under this Warrant (as adjusted to the date of such calculation).
A = the closing stock price of one share of the Company's common
stock as reported by the Nasdaq National Market the business day
immediately prior to the Exercise Date (as defined below).
B = the Exercise Price in effect under this Warrant at the time
the net issue election is made pursuant to this Section 3(b).
This Warrant shall automatically by deemed to be
exercised in full pursuant to the provisions of this Section
3, without any further action on behalf of the Holder,
immediately prior to the time this Warrant would otherwise
expire pursuant to the terms of this Warrant.
(c) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for
exercise as provided above (the "Exercise Date"), and the person
entitled to receive the shares of common stock issuable upon such
exercise shall be treated for all purposes as the holder of record
of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event
within three (3) business days thereafter, the Company at its
expense shall issue and deliver to the person or persons entitled
to receive the same a certificate or certificates for the number of
shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of
shares for which this Warrant may then be exercised
4. No Impairment. The Company will not, by amendment of its Certificate of
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Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase
the par value of any shares of stock receivable on the exercise of this
Warrant above the amount payable therefor on such exercise, and (b) will
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares
of stock on the exercise of this Warrant. Upon the request of a Holder at
any time during the period that this Warrant is outstanding, the Company
will acknowledge in writing, in form reasonably satisfactory to such
Holder, the continued validity of this Warrant and the Company's
obligations hereunder.
5. Payment Of Taxes. The issuance of certificates for Warrant Shares shall be
----------------
made without charge to the Holder for any stock transfer or other issuance
tax in respect thereto; provided, however, that the Holder shall be
responsible for the payment of any and all taxes which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificates for Warrant Shares in a name other than that of the then
Holder as reflected upon the books of the Company.
6. Divisibility Of Warrant. This Warrant may be divided into warrants
-----------------------
representing one Warrant Share or multiples thereof, upon surrender at the
principal office of the Company on any business day, without charge to any
Holder, except as provided below. Upon any such division, and if permitted
by Section 10, the Warrants may be transferred of record to a name other
than that of the Holder of record; provided, however, that the Holder shall
be responsible for payment of any and all transfer taxes with respect
thereto.
7. No Fractional Shares or Scrip. No fractional shares or scrip representing
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fractional shares shall be issued upon the exercise of this Warrant. In
lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to
----------------------
the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and substance to the Company or,
in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor and amount.
9. Rights of Stockholders. The Holder of this Warrant shall not be entitled to
----------------------
vote or receive dividends or be deemed the holder of common stock nor shall
anything contained herein be construed to confer upon the Holder, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, or change of stock to no par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until
the Warrant shall have been exercised as provided herein.
10. Transfer of Warrant.
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(a) Warrant Register. The Company will maintain a register (the "Warrant
----------------
Register") containing the names and addresses of the Holders or
Holders. Any Holder of this Warrant or any portion thereof may
change his address as shown on the Warrant Register by written
notice to the Company requesting such change. Any notice or written
communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant
Register and at the address shown on the Warrant Register. Until
this Warrant is transferred on the Warrant Register of the Company,
the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding
any notice to the contrary.
(b) Warrant Agent. The Company may, by written notice to the Holder,
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appoint an agent for the purpose of maintaining the Warrant Register
referred to in Section 10(a) above, issuing the common stock,
exchanging this Warrant, replacing this Warrant, or any or all of
the foregoing. Thereafter, any such registration, issuance,
exchange, or replacement, as the case may be, shall be made at the
office of such agent.
(c) Transferability and Non-negotiability of Warrant. This Warrant may
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not be transferred or assigned in whole or in part, without
compliance with all applicable federal and state securities laws by
the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably
satisfactory to the Company, if such are requested by the Company).
Notwithstanding the foregoing, no investment representation letter
or opinion of counsel shall be required for any transfer of this
Warrant (or any portion thereof) or any shares of common stock
issued upon exercise hereof (i) in compliance with Rule 144 or Rule
144A of the Act, or (ii) by gift, will or intestate succession by
the Holder to his or her spouse or lineal descendants or ancestors
or any trust for any of the foregoing, provided that in each of the
foregoing cases the transferee agrees in writing to be subject to
the terms of this Section 10(c). In addition, if the holder of the
Warrant (or any portion thereof) or any common stock issued upon
exercise hereof delivers to the Company an unqualified opinion of
counsel that no subsequent transfer of such Warrant or common stock
shall require registration under the Act, the Company shall, upon
such contemplated transfer, promptly deliver new
documents/certificates for such Warrant or common stock that do not
bear the legend set forth in Section 10(e)(ii) below. Subject to the
provisions of this Warrant with respect to compliance with the
Securities Act of 1933, as amended (the "Act"), title to this
Warrant may be transferred by endorsement (by the Holder executing
the Assignment Form annexed hereto) and delivery in the same manner
as a negotiable instrument transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant
-----------------------------------
for exchange, properly endorsed on the Assignment Form and subject
to the provisions of this Warrant with respect to compliance with
the Act and with the limitations on assignments and transfers and
contained in this Section 10, the Company at its expense shall issue
to or on the order of the Holder a new warrant or warrants of like
tenor, in the name of the Holder
or as the Holder (on payment by the Holder of any applicable
transfer taxes) may direct, for the number of shares issuable upon
exercise hereof.
(e) Compliance with Securities Laws.
-------------------------------
(i) The initial Holder of this Warrant represents and warrants
to the Company that it is an accredited investor under the
Act. The initial Holder represents and warrants to the
Company that it has all of the information necessary for it
to evaluate an investment in the Company's securities.
(ii) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of common
stock to be issued upon exercise hereof are being acquired
solely for the Holder's own account and not as a nominee for
any other party, and for investment, and that the Holder
will not offer, sell or otherwise dispose of this Warrant or
any shares of common stock to be issued upon exercise hereof
except under circumstances that will not result in a
violation of the Act or any applicable state securities
laws.
(iii) This Warrant and all shares of common stock issued upon
exercise hereof shall be stamped or imprinted with a legend
in substantially the following form (in addition to any
legend required by state securities laws):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES AND ANY
SECURITIES OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT,
COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY
OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES."
(iv) The Company agrees to remove promptly, upon the request of
the holder of this Warrant and Securities issuable upon
exercise of the Warrant, the legend set forth in Section
10(e)(iii) above from the documents/certificates for such
securities upon full compliance with this Agreement Rules
144 and 145 or upon resale in accordance with an effective
registration statement.
11. Reservation and Listing of Shares. All Warrant Shares which are issued upon
---------------------------------
the exercise of the rights represented by this Warrant shall, upon issuance
and payment of the Exercise Price, be validly issued, fully paid and
nonassessable and free from all taxes, liens, security interests, charges
and other encumbrances with respect to the issue thereof other than taxes
in respect of any transfer occurring contemporaneously with such issuance.
During the period within which this Warrant may be exercised, the Company
shall at all times have authorized and reserved, and keep available free
from preemptive rights, a sufficient number of shares of Warrant Shares to
provide for the exercise of this Warrant, and shall at its expense procure
such listing thereof (subject to official notice of issuance) as then may
be required on all stock exchanges on which the Common Stock is then
listed, if any. The Company from time to time shall take all such action as
may be required to assure that the par value per share of the Warrant
Shares is equal to or less than the Exercise Price. The Company agrees that
its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of common stock
upon the exercise of this Warrant.
12. Registration Rights; Company Registration.
-----------------------------------------
(a) If the Company shall determine to register any of its securities for
its own account, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule
145 transaction, or a registration on any registration form that
does not permit secondary sales, the Company will:
(i) promptly give to Holder written notice thereof; and
(ii) use its best efforts to include in such registration (and any
related qualification under blue sky laws or other
compliance), except as set forth in Section 12(b) below, and
in any underwriting involved therein, all or any part (in
minimum increments of 100,000 Shares) of the Warrant Shares
specified in a written request or requests, made by Holder
and received by the Company within twenty (20) days after the
written notice from the Company described in clause (i) above
is mailed or delivered by the Company. Such written request
may specify all or a part of Holder's Warrant Shares.
(b) Underwriting. If the registration of which the Company gives notice
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is for a registered public offering involving an underwriting, the
Company shall so advise Holder as a part of the written notice given
pursuant to Section 12(a)(i). In such event, the right of Holder to
registration pursuant to this Section 12 shall be conditioned upon
Holder's participation in such underwriting and the inclusion of
Holder's Warrant Shares in the underwriting to the extent provided
herein. A Holder proposing to distribute its securities through such
underwriting shall (together with the Company and the other holders
of securities of the Company with registration rights to participate
therein distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the
Company. If any person does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice from
the Company or the underwriter. Any Warrant Shares or other
securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
Notwithstanding any other provision of this Section 12, if the
representative of the underwriters advises the Company, in good faith, in
writing, that marketing factors require a limitation on the number of shares to
be underwritten, (i) the representative may (subject to the limitations set
forth below) exclude all Warrant Shares from, or limit the number of Warrant
Shares to be included in the registration and underwriting, or (ii) the Company
may limit, to the extent so advised by the underwriters, the amount of
securities to be included in the registration by the Company's stockholders
(including the Holder), to be apportioned pro rata among the holders of
registrable securities, including Warrant Shares, according to the total amount
of securities entitled to be included therein owned by each holder of
registrable securities, including Warrant Shares, and subject in all respects to
the rights of holders of registrable securities other than Holder affecting the
ability of such representative or the Company, as applicable, to limit the
number of registrable securities of such holder or holders to be included in
such registration and underwriting. Notwithstanding the foregoing, the Company
shall use best efforts to cause the number of Warrant Shares included in such
registration to be at least 250,000 Warrant Shares (as adjusted for stock
splits, stock dividends, recapitalizations and the like, and inclusive of any
other Warrant Shares beneficially held by the Holder or its permitted assignees
that are acquired or acquirable upon exercise of a warrant issued by the
Company).
If registrable securities are withdrawn from the registration as a
result of the holder failing to agree to the terms of any such underwriting and
the number of registrable securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include registrable
securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn,
apportioned pro rata among the holders of registrable securities, including
Warrant Shares, according to the total amount of securities entitled to be
included therein owned by each holder of registrable securities, including
Warrant Shares, and subject in all respects to the rights of holders of
registrable securities other than Holder affecting the ability of such
representative or the Company, as applicable, to limit the number of registrable
securities of such holder or holders to be included in such registration and
underwriting.
13. Registration on Form S-3.
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(a) Provided the Company is qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of
Section 12, Holder shall have the right to request one or more
registrations on Form S-3 (such requests shall be in writing and
shall state the number of shares of Warrant Shares to be disposed of
and the intended methods of disposition of such shares by Holder),
provided, however, that the Company shall not be obligated to effect
any such registration if (i) Holder proposes to sell Warrant Shares
on Form S-3 at an aggregate price to the public of less than
$500,000, or (ii) in the event the Company shall furnish the
certification described in paragraph 13(d)(ii) (but subject to the
limitations set forth therein), or (iii) the Company has, within the
six (6) month period preceding the date of such request already
effected on registration on Form S-3 for Holder pursuant to this
Section 13.
(b) If a request complying with the requirements of Section 13(a) hereof
is delivered to the Company, the provisions of Section 12(a)(i) and
(ii) and Section 13(c) hereof shall apply to such registration. If
the registration is for an underwritten offering, the provisions of
Sections 12(b) hereof shall apply to such registration.
(c) The Company shall not be obligated to effect, or to take any action
to effect, any such registration pursuant to this Section 13:
(i) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process
in effecting such registration, qualification, or
compliance, unless the Company is already subject to service
in such jurisdiction and except as may be required by the
Act;
(ii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180)
days after the effective date of, a Company-initiated
registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such
registration statement to become effective.
(d) Subject to the limitations set forth in this Section 13, the Company
shall file a registration statement covering the Warrant Shares so
requested to be registered as soon as practicable after receipt of
the request of Holder; provided, however, that if (i) in the good
faith judgment of the Board of Directors of the Company, such
registration would be seriously detrimental to the Company and the
Board of Directors of the Company concludes, as a result, that it is
essential to defer the filing of such registration statement at such
time, and (ii) the Company shall furnish to Holder a certificate
signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company for such registration statement
to be filed in the near future and that it is, therefore, essential
to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for the period during
which such disclosure would be seriously detrimental, provided that
(except as provided in clause (c) above) the Company may not defer
the filing for a period of more than one hundred eighty (180) days
after receipt of the request of Holder, and, provided further, that
the Company shall not defer its obligation in this manner more than
once in any twelve (12) month period.
14. Expenses of Registration. All Registration Expenses (as defined herein)
------------------------
incurred in connection with any registration, qualification or compliance
pursuant to Sections 12 and 13 hereof and
reasonable fees of one counsel for Holder shall be borne by the Company.
All Selling Expenses (as defined herein) relating to securities so
registered shall be borne by the holders of such securities pro rata on the
basis of the number of shares of securities so registered on their behalf.
"Registration Expenses" shall mean all expenses incurred in effecting any
registration pursuant to this Warrant, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, fees and
disbursements of one special counsel for the selling stockholders, blue sky
fees and expenses, accounting fees and expenses of any regular or special
audits incident to or required by any such registration, but shall not
include Selling Expenses and fees and disbursements of additional counsel
for the stockholders. Registration Expenses do not include the compensation
of regular employees of the Company, which shall be paid in any event by
the Company. "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Warrant Shares and fees and
disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).
15. Amendments. This Warrant and any term hereof may be changed, waived,
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discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought.
16. Miscellaneous.
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(a) This Warrant shall be governed by the laws of the State of Nevada as
applied to agreements entered into in the State of Nevada by and
among residents of the State of Nevada.
(b) In the event of a dispute with regard to the interpretation of this
Warrant, the prevailing party may collect the cost of attorney's
fees, litigation expenses or such other expenses as may be incurred
in the enforcement of the prevailing party's rights hereunder.
(c) The rights to cause the Company to register securities granted to a
Holder by the Company under Sections 13 and 14 may be transferred or
assigned by Holder only to a transferee or assignee of not less than
100,000 Warrant Shares, provided that the Company is given written
notice at the time of or within a reasonable time after such
transfer or assignment, stating the name and address of the
transferee or assignee and identifying the securities with respect
to which such registration rights are being transferred or assigned,
and, provided further, that the transferee or assignee of such
rights assumes the obligations of such Holder under this Warrant.
(d) This Warrant shall be exercisable as provided for herein, except
that in the event that the expiration date of this Warrant shall
fall on a Saturday, Sunday or United States federally recognized
holiday, this expiration date for this Warrant shall be extended to
5:00 p.m. Pacific standard time on the business day following such
Saturday, Sunday or recognized holiday.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officers thereunto duly authorized.
Dated: September 29, 2000.
COMPANY:
XXXXXXXXXXX.XXX, INC., a Nevada
corporation
By: ___________________________________
Xxxxxxxxxxx X. Carton
President
INITIAL HOLDER:
GATEWAY COMPANIES, INC., a
Delaware corporation
By: ____________________________________
Name: ____________________________________
Title:____________________________________
EXHIBIT A
ADJUSTMENTS
The Exercise Price at which Warrant Shares may be purchased and the number of
Warrant Shares to be purchased upon exercise of this Warrant are subject to
change or adjustment as follows:
(a) General. If the Company (i) pays a dividend in shares of Common
Stock or makes a distribution in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a greater
number of shares of Common Stock, (iii) combines its outstanding
shares of Common Stock into a smaller number of shares of Common
Stock or (iv) issues by reclassification of its shares of Common
Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in
which the Company is the surviving corporation), the number of
Warrant Shares purchasable upon exercise of this Warrant shall be
adjusted so that the Holder shall be entitled to receive the kind
and number of Warrant Shares or other securities of the Company that
the Holder would have owned or have been entitled to receive after
the happening of any of the events described above, had this Warrant
been exercised immediately prior to the happening of such event or
any record date with respect thereto. An adjustment made pursuant to
this Exhibit A shall become effective immediately after the
effective date of such event retroactive to the record date, if any,
for such event.
(b) Adjustment For Capital Reorganization. If at any time there shall be
a capital reorganization of the Company or a merger or consolidation
of the Company with or into another corporation, or the sale of all
or substantially all of the Company's properties and assets, then,
as part of such reorganization, merger, consolidation, or sale,
lawful provision shall be made so that the Holder of this Warrant
shall thereafter be entitled to receive on exercise of this Warrant
during the period specified in this Warrant and on payment of the
Exercise Price then in effect, the number of shares of stock or
other securities or property of the Company, or of the successor
corporation resulting from such merger or consolidation, to which a
holder of the Common Stock deliverable on exercise of this Warrant
would have been entitled on such capital reorganization, merger,
consolidation, or sale if this Warrant had been exercised
immediately before that capital reorganization, merger,
consolidation, or sale. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder of this
Warrant after the reorganization, merger, consolidation, or sale to
the end that the provisions of this Warrant (including adjustment of
the number of shares purchasable on exercise of this Warrant) shall
be applicable after that event, as near as reasonably may be, in
relation to any shares or other securities or property deliverable
after that event on exercise of this Warrant. Upon any
reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this paragraph
(b), this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other
securities property receivable on the exercise of this Warrant after
the consummation of such reorganization, consolidation or merger or
the effective date of dissolution following any such transfer, as
the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such
transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person
shall have expressly assumed the terms of this Warrant as provided
in Section 7.
(c) Certificate Of Adjustments. Upon the occurrence of each adjustment
or readjustment pursuant to this Exhibit A, the Company at its
expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each Holder a
certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written request,
at any time, of any Holder, furnish or cause to be furnished to such
Holder, a like certificate setting forth: (i) such adjustments and
readjustments; (ii) the Exercise Price at the time in effect; and
(iii) the number of shares of Common Stock and the amount, if any,
of other property that at the time would be received upon the
exercise of the Warrant.
(d) Notices Of Record Date. In the event of any taking by the Company of
a record of the holders of any class of securities for the purpose
of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend that is the same as cash
dividends paid in previous quarters) or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to
receive any other right, or any capital reorganization of the
Company, any reclassification or recapitalization of the capital
stock of the Company, or any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then and in each such
event the Company will mail or cause to be mailed to the holder of
this Warrant a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution
or right, and stating the amount and character of such dividend,
distribution or right, and stating the amount and character of such
dividend, distribution or right, and (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer,
consolidation, dissolution, liquidation or winding-up is to take
place, and the time, if any is to be fixed, as of which the holders
of record of any class of securities shall be entitled to exchange
their shares of securities for securities or other property
deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, dissolution, liquidation
or winding-up. Such notice shall be mailed to the Holder at the same
time it is sent to stockholders.
(e) Announced Stock Split. The Warrant will be deemed to be issued prior
to the 2-for-1 stock split announced by the Company prior to the
date hereof. As a result, after taking into account such stock
split, an aggregate of 850,628 Warrant Shares shall be exerciseable
pursuant to this Warrant and the Exercise Price shall be 50% of the
amount set forth in Section 2(b).
