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Exhibit 4.21
ANNEX I
TO
SUBSCRIPTION
AGREEMENT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE RESOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.
Right to Purchase 91,393 Shares of Common
Stock of XXX.XXX, Inc.
XXX.XXX, INC.
COMMON STOCK PURCHASE WARRANT, CLASS A
No. A-___
XXX.XXX, INC., a Delaware corporation (the "Company"), hereby certifies
that, for value received,____________________ or registered assigns (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company at any time or from time to time after the date hereof, and before
5:00 p.m., New York City time, on the Expiration Date (such capitalized term and
all other capitalized terms used herein having the respective meanings provided
herein), 91,393 fully paid and nonassessable shares of Common Stock at a
purchase price per share equal to the Purchase Price. The number of such shares
of Common Stock and the Purchase Price are subject to adjustment as provided in
this Warrant.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
"Class A Warrants" means this Warrant and the other Common Stock
Purchase Warrants, Class A issued or issuable by the Company pursuant to
the Subscription Agreement and the Other Subscription Agreement.
"Class B Warrants" means the Common Stock Purchase Warrants, Class B
issued or issuable by the Company pursuant to the Subscription Agreement
and the Other Subscription Agreement.
"Common Stock" means the Company's Common Stock, $.001 par value per
share, as authorized on the date hereof, and any other securities into
which or for which the Common Stock may be converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
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"Company" shall include XXX.XXX, Inc., a Delaware corporation, and any
corporation that shall succeed to or assume the obligation of XXX.XXX, Inc.
hereunder in accordance with the terms hereof.
"Company Put Closing Date" shall have the meaning provided in Section
1.4(a).
"Company Put Notice" means a Company Put Notice, in the form of Exhibit
2 to this Warrant.
"Company Put Requirements" means
(1) The Registration Statement shall be effective and available for use
for the resale of the shares of Common Stock issuable upon exercise of this
Warrant and the Other Warrants and shall be expected to remain effective
and available for use for at least 30 days after the issuance of the Common
Stock that is issuable pursuant to this Warrant by reason of the Company
Put Notice; and
(2) The Company shall, simultaneously with the giving of the Company
Put Notice, have exercised its rights under Section 1.3 of each of the
Other Class A Warrants to require the holders of such Other Class A
Warrants to exercise such Other Class A Warrants in to the same proportion
as this Warrant is being required to be exercised.
"Company Put Threshold Event" means the occurrence of a period of 20
consecutive Trading Days during which period the closing bid price of the
Common Stock on Nasdaq as reported by Bloomberg, L.P. is greater than 150%
of the Purchase Price on each of such Trading Days.
"Expiration Date" means December 7, 2004.
"Issuance Date" means the first date of original issuance of this
Warrant.
"Nasdaq" means the Nasdaq National Market.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"1933 Act" means the Securities Act of 1933, as amended.
"Other Class A Warrants" means the Class A Warrants issued pursuant to
the Other Subscription Agreement.
"Other Securities" refers to any stock (other than Common Stock) and
other securities of the Company or any other person (corporate or
otherwise) which the Holder at any time shall be entitled to receive, or
shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4.
"Other Subscription Agreement" means the subscription agreement, dated
as of the date of the Subscription Agreement, between the Company and the
buyer named therein, as amended from time to time in accordance with its
terms.
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"Other Warrants" means the Class A Warrants (other than this Warrant)
and the Class B Warrants.
"Purchase Price" shall mean $9.8476 per share, subject to adjustment as
provided in this Warrant.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 7, 1999, by and between the Company and the
original Holder of this Warrant, as amended from time to time in accordance
with its terms.
"Registration Statement" shall have the meaning provided in the
Registration Rights Agreement.
"Subscription Agreement" means the Subscription Agreement, dated as of
December 7, 1999, by and between the Company and the original Holder of
this Warrant, as amended from time to time in accordance with its terms.
"Trading Day" means a day on which the principal securities market for
the Common Stock is open for general trading of securities.
"Transaction Documents" means this Warrant, the Class B Warrants issued
to the original Holder of this Warrant on the Issuance Date, the
Subscription Agreement and the Registration Rights Agreement.
1. EXERCISE OF WARRANT; COMPANY PUT RIGHT.
1.1 EXERCISE. (a) This Warrant may be exercised by the Holder hereof in
full or in part at any time or from time to time during the exercise period
specified in the first paragraph hereof until the Expiration Date by surrender
of this Warrant and the subscription form in the form of EXHIBIT 1 to this
Warrant (duly executed by the Holder) to the Company and by making payment, in
cash or by certified or official bank check payable to the order of the Company,
in the amount obtained by multiplying (a) the number of shares of Common Stock
designated by the Holder in the subscription form by (b) the Purchase Price then
in effect. If at the request of the Company the subscription form is delivered
to the Company's transfer agent for the Common Stock, the Holder shall provide a
copy of the subscription form to the Company at the time of exercise and the
Company will confirm the exercise instructions given therein by notice to the
Company's transfer agent within one Trading Day after receiving subscription
form. On any partial exercise the Company will forthwith issue and deliver to or
upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in
the name of the Holder hereof or as the Holder (upon payment by the Holder of
any applicable transfer taxes) may request, providing in the aggregate on the
face or faces thereof for the purchase of the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
(b) Notwithstanding any other provision of this Warrant, in no event
shall the Holder be entitled at any time to purchase a number of shares of
Common Stock on exercise of this Warrant in excess of that number of shares upon
purchase of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and all persons whose beneficial ownership of
shares of Common Stock would be aggregated with the Holder's beneficial
ownership of shares of Common Stock for purposes of Section 13(d) of the 1934
Act and Regulation 13D-G thereunder (each such person other than the Holder an
"Aggregated
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Person" and all such persons other than the Holder, collectively, the
"Aggregated Persons") (other than shares of Common Stock deemed beneficially
owned through the ownership by the Holder and all Aggregated Persons of the
Holder of the unexercised portion of this Warrant and the unexercised or
unconverted portion of any other security of the Company which contains similar
provisions) (2) the number of shares of Common Stock issuable upon exercise of
the portion of this Warrant with respect to which the determination in this
sentence is being made, would result in beneficial ownership by the Holder and
all Aggregated Persons of the Holder of more than 4.9% of the outstanding shares
of Common Stock. For purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the 1934 Act
and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of
the immediately preceding sentence.
1.2 NET ISSUANCE. Notwithstanding anything to the contrary contained in
Section 1.1, the Holder may elect to exercise this Warrant in whole or in part
by receiving shares of Common Stock equal to the net issuance value (as
determined below) of this Warrant, or any part hereof, upon surrender of this
Warrant to the principal office of the Company together with the subscription
form annexed hereto (duly executed by the Holder), in which event the Company
shall issue to the Holder a number of shares of Common Stock computed using the
following formula:
X = Y(A-B)
------
A
Where: X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock as to which this
Warrant is to be exercised
A = the current fair market value of one share of Common Stock
calculated as of the last Trading Day immediately preceding
the exercise of this Warrant
B = the Purchase Price
As used herein, current fair market value of Common Stock as of
a specified date shall mean with respect to each share of Common Stock the
closing sale price of the Common Stock on the principal securities market on
which the Common Stock may at the time be listed or, if there have been no sales
on any such exchange on such day, the average of the highest bid and lowest
asked prices on the principal securities market at the end of such day, or, if
on such day the Common Stock is not so listed, the average of the representative
bid and asked prices quoted in the Nasdaq System as of 4:00 p.m., New York City
time, or, if on such day the Common Stock is not quoted in the Nasdaq System,
the average of the highest bid and lowest asked price on such day in the
domestic over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of five consecutive Trading Days consisting of the day as of which
the current fair market value of a share of Common Stock is being determined (or
if such day is not a Trading Day, the Trading Day next preceding such day) and
the four consecutive Trading Days prior to such day. If on the date for which
current fair market value is to be determined the Common Stock is not listed on
any securities exchange or quoted in the Nasdaq System or the over-the-counter
market, the current fair market value of Common Stock shall be the highest price
per share which the Company could then obtain from a willing buyer (not a
current
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employee or director) for shares of Common Stock sold by the Company, from
authorized but unissued shares, as determined in good faith by the Board of
Directors of the Company, unless prior to such date the Company has become
subject to a merger, acquisition or other consolidation pursuant to which the
Company is not the surviving party, in which case the current fair market value
of the Common Stock shall be deemed to be the value received by the holders of
the Company's Common Stock for each share thereof pursuant to the Company's
acquisition.
1.3 COMPANY PUT RIGHT. (a) If a Company Put Threshold Event occurs,
then at any time within ten Trading Days after such Company Put Threshold Event,
the Company shall have the right to require the Holder to exercise this Warrant
in full or in part in accordance with Sections 1.1 and 1.2 with respect to the
shares of Common Stock that are subject to this Warrant that the Holder has not
previously purchased and to require the holders of the Other Class A Warrants to
exercise such Other Class A Warrants in full or in part (in the same proportion
as this Warrant) with respect to all of the shares of Common Stock that such
holders have not previously purchased. To exercise its right to require the
Holder to purchase Common Stock pursuant to this Warrant, the Company shall give
the Holder a Company Put Notice within five Trading Days after the Company Put
Threshold Event and the Holder shall be obligated to exercise this Warrant as
specified in such Notice if the requirements of this Section and Section 1.4 are
satisfied. The Company may give the Holder a Company Put Notice no more
frequently than once during any period of 90 consecutive days. Notwithstanding
the Company's put rights, nothing in this Section 1.3 or Section 1.4 shall
prevent the Holder from exercising this Warrant in accordance with Sections 1.1
and 1.2 at any time prior to the Company Put Closing Date (as defined herein).
(b) The Company shall be entitled to give the Company Put Notice only
if the Company Put Requirements are met on the date the Company Put Notice is
given. If the Company shall have given the Company Put Notice with respect to a
particular Company Put Threshold Event, the Company shall be entitled to require
the Holder to purchase shares of Common Stock pursuant to this Section 1.3 only
if the Company Put Requirements are met at all times from the time the Company
gives such Company Put Notice to and including the applicable Company Put
Closing Date.
1.4 EXERCISE OF COMPANY PUT RIGHT; CONDITIONS. (a) Notwithstanding
anything to the contrary in this Warrant, the date and time of the issuance and
sale of shares of Common Stock pursuant to the exercise of the Company's rights
under Section 1.3 and this Section 1.4 shall be the date which is not earlier
than ten Trading Days and not later than 30 Trading Days after the Company gives
the Company Put Notice, or such earlier date as specified by the Holder by
notice to the Company (the "Company Put Closing Date"). The closing of such
exercise shall occur at a location and time of day as mutually agreed by the
Holder and the Company.
(b) The obligation of the Holder to exercise this Warrant pursuant to
Section 1.3 on the Company Put Closing Date is subject to the satisfaction of
the following conditions precedent (any or all of which may be waived by the
Holder in its sole discretion):
(1) On the Company Put Closing Date, no legal action, suit or
proceeding shall be pending or threatened which seeks to restrain or prohibit
the transactions contemplated by this Warrant or the other Transaction
Documents;
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(2) The material representations and warranties of the Company
contained in the Transaction Documents shall have been true and correct on the
respective dates of the Transaction Documents and shall be true and correct on
the Company Put Closing Date, as if made on and as of the Company Put Closing
Date (except for representations made as of a specific date, which
representations shall be true and correct as of such date) and on or before the
Company Put Closing Date the Company shall have performed all covenants and
agreements of the Company contained in the Transaction Documents required to be
performed by the Company on or before the Company Put Closing Date;
(3) At all times from the time the Company gives the Company Put Notice
to and including the Company Put Closing Date, the Company Put Requirements
shall have been met;
(4) The Company shall have delivered to the Holder its certificate,
dated the Company Put Closing Date, duly executed by its Chief Executive Officer
to the effect set forth in clauses (1), (2) and (3) of this Section 1.4(b);
(5) On the Put Closing Date, the Holder shall have received an opinion
of counsel selected by the Company and reasonably acceptable to the Holder,
dated the Put Closing Date, addressed to the Holder, in form, scope and
substance reasonably satisfactory to the Holder, substantially in the form of
EXHIBIT 3 to this Warrant; and
(6) On the Company Put Closing Date (i) trading in securities on the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., the Nasdaq or
the Nasdaq SmallCap shall not have been suspended or materially limited and (ii)
a general moratorium on commercial banking activities in the State of Colorado
or the State of New York shall not have been declared by either federal or state
authorities.
2. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as
practicable after the exercise of this Warrant, and in any event within three
Trading Days thereafter, the Company at its expense (including the payment by it
of any applicable issue or stamp taxes) will cause to be issued in the name of
and delivered to the Holder hereof, or as the Holder (upon payment by the Holder
of any applicable transfer taxes) may direct, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which the Holder shall be entitled on such exercise, in such
denominations as may be requested by the Holder, plus, in lieu of any fractional
share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then current fair market value (as determined in
accordance with subsection 1.2) of one full share, together with any other stock
or other securities and property (including cash, where applicable) to which the
Holder is entitled upon such exercise pursuant to Section 1 or otherwise. Upon
exercise of this Warrant as provided herein, the Company's obligation to issue
and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Company to the Holder, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other person
of any obligation to the Company, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in
connection with such exercise. If the Company fails to issue and deliver the
certificates for the Common Stock to the Holder pursuant to the first sentence
of this paragraph as and when required to do so, in addition to any other
liabilities the Company may have hereunder and
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under applicable law, the Company shall pay or reimburse the Holder on demand
for all out-of-pocket expenses including, without limitation, reasonable fees
and expenses of legal counsel incurred by the Holder as a result of such
failure.
3. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.;
RECLASSIFICATION, ETC. In case at any time or from time to time after the
Issuance Date, all the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock-split (adjustments in respect of which are provided
for in Section 5), then and in each such case the Holder, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3) which the Holder would hold on the
date of such exercise if on the date thereof the Holder had been the holder of
record of the number of shares of Common Stock called for on the face of this
Warrant and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and all such other or
additional stock and other securities and property (including cash in the case
referred to in subdivisions (b) and (c) of this Section 3) receivable by the
Holder as aforesaid during such period, giving effect to all adjustments called
for during such period by Section 4. Notwithstanding anything in this Section 3
to the contrary, no adjustments pursuant to this Section 3 shall actually be
made until the cumulative effect of the adjustments called for by this Section 3
since the date of the last adjustment actually made would change the amount of
stock or other securities and property which the Holder would hold by more than
1%.
4. EXERCISE UPON REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at
any time or from time to time after the Issuance Date, the Company shall (a)
effect a reorganization, (b) consolidate with or merge into any other person, or
(c) transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition of such reorganization,
consolidation, merger, sale or conveyance, the Company shall give at least 30
days notice to the Holder of such pending transaction whereby the Holder shall
have the right to exercise this Warrant prior to any such reorganization,
consolidation, merger, sale or conveyance. Any exercise of this Warrant pursuant
to notice under this Section shall be conditioned upon the closing of such
reorganization, consolidation, merger, sale or conveyance which is the subject
of the notice and the exercise of this Warrant shall not be deemed to have occ
until immediately prior to the closing of such transaction.
5. ADJUSTMENT FOR EXTRAORDINARY EVENTS. In the event that after the
Issuance Date the Company shall (i) issue additional shares of Common Stock as a
dividend or
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other distribution on outstanding Common Stock, (ii) subdivide or reclassify
its outstanding share of Common Stock, or (iii) combine its outstanding share of
Common Stock into a smaller number of shares of Common Stock, then, in each
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the Purchase Price in effect immediately prior
to such event by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 5. The Holder shall thereafter, on the
exercise hereof as provided in Section 1, be entitled to receive that number of
shares of Common Stock determined by multiplying the number of shares of Common
Stock which would be issuable on such exercise immediately prior to such
issuance by a fraction of which (i) the numerator is the Purchase Price in
effect immediately prior to such issuance and (ii) the denominator is the
Purchase Price in effect on the date of such exercise.
6. ADJUSTMENT FOR CERTAIN STOCK ISSUANCES. In case at any time the
Company shall issue shares of its Common Stock or debt or equity securities
convertible into or exercisable or exchangeable for shares of Common Stock
(collectively, the "Newly Issued Shares"), other than (i) an issuance pro rata
to all holders of its outstanding Common Stock, (ii) pursuant to compensation
plans for employees, directors, officers, advisers or consultants of the Company
and in accordance with the terms of such plans as in effect on the Issuance
Date, (iii) upon exercise of conversion, exchange, purchase or similar rights
issued, granted or given by the Company and outstanding on the Issuance Date,
(iv) pursuant to a public offering underwritten on a firm commitment basis
registered under the 1933 Act or (v) as part of a transaction involving a
strategic alliance, acquisition of stock or assets, merger, collaboration, joint
venture, partnership or other similar arrangement of the Company with another
corpo partnership or other business entity which is engaged in a business
similar to or related to the business of the Company, so long as in the case of
this clause (v) the Board of Directors of the Company by resolution duly adopted
(and a copy of which shall be furnished to the Holder promptly after adoption)
determines that such issuance is fair to the holders of each class and series of
capital stock of the Company and to the Holder in respect of its equity interest
in the Company, at a price below the Purchase Price in effect at the time of
such issuance, then following such issuance of Newly Issued Shares the number of
shares of Common Stock which the Holder shall be entitled to receive upon
exercise of this Warrant shall be increased and the Purchase Price shall be
decreased to the respective amounts determined pursuant to this Section 6. The
number of shares of Common Stock purchasable upon the exercise of this Warrant
following any such adjustment shall be determined by multiplying the number of
shares purchasable upon exercise of this Warrant immediately prior to such
adjustment by a fraction, the numerator of which shall be the sum of (a) the
number of shares of Common Stock outstanding immediately prior to the issuance
of the Newly Issued Shares (calculated on a fully-diluted basis assuming the
exercise or conversion of all options, warrants, purchase rights or convertible
securities which are exercisable at the time of the issuance of the Newly Issued
Shares), plus (b) the number of Newly Issued Shares, and the denominator of
which shall be the sum of (a) the number of shares of Common Stock outstanding
immediately prior to the issuance of the Newly Issued Shares (calculated on a
fully-diluted basis assuming the conversion of all options, warrants, purchase
rights or convertible securities which are exercisable at the time of the
issuance of the Newly Issued Shares), plus (b) the number of shares of Common
Stock which the aggregate consideration, if any, received by the Company for the
number of Newly Issued Shares would purchase at a price equal to the Purchase
Price in effect at the time of such issuance. Upon any adjustment under this
Section 6, the number of
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shares of Common Stock purchasable upon exercise of this Warrant in full
immediately after such adjustment shall be rounded to the nearest
one-one-hundredth of a share of Common Stock subject, however, to Section 2 of
this Warrant relating to fractional shares of Common Stock. Such adjustment of
the number of shares purchasable provided for in this Section 6 may be expressed
as the following mathematical formula:
X = W x [O+N]
--------
[O+(C/P)]
where:
C = aggregate consideration received by the Company for the Newly Issued Shares
N = number of Newly Issued Shares
O = number of shares of Common Stock outstanding (on a fully diluted basis, as
described above) prior to the issuance of the Newly Issued Shares
P = Purchase Price in effect at the time of the issuance of the Newly Issued
Shares
W = number of shares issuable upon exercise of this Warrant prior to the
issuance of the Newly Issued Shares
X = number of shares issuable upon exercise of this Warrant after the issuance
of the Newly Issued Shares
Upon the issuance of such Newly Issued Shares, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
Purchase Price in effect immediately prior to such event by a fraction, the
numerator of which shall be the number of shares of Common Stock issuable upon
exercise of this Warrant prior to the issuance of the Newly Issued Shares and
the denominator of which shall be the number of shares of Common Stock issuable
upon the exercise of this Warrant after the issuance of the Newly Issued Shares
as provided in this Section 6, and the product so obtained shall thereafter be
the Purchase Price then in effect. The number of shares issuable upon exercise
of this Warrant and the Purchase Price, as each is so adjusted, shall be
readjusted in the same manner upon the happening of any successive issuances of
Newly Issued Shares described in this Section 6.
7. FURTHER ASSURANCES. The Company will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock, free from all taxes, liens and
charges with respect to the issue thereof, on the exercise of all or any portion
of this Warrant from time to time outstanding.
8. NOTICES OF RECORD DATE, ETC. In the event of
(a) 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 on, 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
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(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all
or substantially all of the assets of the Company to or consolidation or
merger of the Company with or into any other person (other than a
wholly-owned subsidiary of the Company), or
(c) 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, at least ten days prior to such record date, 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, (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
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 Common Stock (or Other
Securities) shall be entitled to exchange their shares of Common Stock (or Other
Securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up, and (iii) the amount and character of
any stock or other securities, or rights or options with respect thereto,
proposed to be issued or granted, the date of such proposed issue or grant and
the persons or class of persons to whom such proposed issue or grant is to be
offered or made. Such notice shall also state that the action in question or the
record date is subject to the effectiveness of a registration statement under
the 1933 Act, or a favorable vote of stockholders, if either is required. Such
notice shall be mailed at least ten days prior to the date specified in such
notice on which any such action is to be taken or the record date, whichever is
earlier.
9. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available out of its authorized but
unissued shares of capital stock, solely for issuance and delivery on the
exercise of this Warrant, a sufficient number of shares of Common Stock (or
Other Securities) to effect the full exercise of this Warrant and the exercise,
conversion or exchange of any other warrant or security of the Company
exercisable for, convertible into, exchangeable for or otherwise entitling the
holder to acquire shares of Common Stock (or Other Securities), and if at any
time the number of authorized but unissued shares of Common Stock (or Other
Securities) shall not be sufficient to effect such exercise, conversion or
exchange, the Company shall take such action as may be necessary to increase its
authorized but unissued shares of Common Stock (or Other Securities) to such
number as shall be sufficient for such purposes.
10. TRANSFER OF WARRANT. This Warrant shall inure to the benefit of the
successors to and assigns of the Holder. This Warrant and all rights hereunder,
in whole or in part, are registrable at the office or agency of the Company
referred to below by the Holder hereof in person or by his duly authorized
attorney, upon surrender of this Warrant properly endorsed.
11. REGISTER OF WARRANTS. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Holder hereof), a register in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as the
name and address of each successor and prior owner of such Warrant. The Company
shall be entitled to treat the person in whose name this Warrant is so
registered as the sole and absolute owner of this Warrant for all purposes.
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12. EXCHANGE OF WARRANT. This Warrant is exchangeable, upon the
surrender hereof by the Holder hereof at the office or agency of the Company
referred to in Section 11, for one or more new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such number of shares as shall be designated by said Holder hereof at the time
of such surrender.
13. 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 any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
14. WARRANT AGENT. The Company may, by written notice to the Holder,
appoint the transfer agent and registrar for the Common Stock as the Company's
agent for purposes of issuing shares of Common Stock (or Other Securities) on
the exercise of this Warrant pursuant to Section 1, and the Company may, by
notice to the Holder, appoint an agent having an office in the United States of
America for the purpose of exchanging this Warrant pursuant to Section 12 and
replacing this Warrant pursuant to Section 13, or either of the foregoing, and
thereafter any such exchange or replacement, as the case may be, shall be made
at such office by such agent.
15. REMEDIES. The Company stipulates that the remedies at law of the
Holder 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 Warrant are not and
will not be adequate, and that such terms 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.
16. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the Holder hereof to purchase Common Stock, and no mere enumeration
herein of the rights or privileges of the Holder hereof, shall give rise to any
liability of the Holder for the Purchase Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
17. NOTICES, ETC. All notices and other communications from the Company
to the registered Holder or from the registered Holder to the Company shall be
delivered personally (which shall include telephone line facsimile transmission
with answer back confirmation) or by courier and shall be effective upon
receipt, addressed to each party at the address or telephone line facsimile
transmission number for each party set forth in the Subscription Agreement or at
such other address or telephone line facsimile transmission number as a party
shall have provided to the other party in accordance with this provision.
18. TRANSFER RESTRICTIONS. By acceptance of this Warrant, the Holder
represents to the Company that this Warrant is being acquired for the Holder's
own account and for the purpose of investment and not with a view to, or for
sale in connection with, the distribution thereof, nor with any present
intention of distributing or selling this Warrant or the Common Stock issuable
upon exercise of this Warrant. The Holder acknowledges and agrees
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that this Warrant and, except as otherwise provided in the Registration Rights
Agreement, the shares of Common Stock issuable upon exercise of this Warrant (if
any) have not been (and at the time of acquisition by the Holder, will not have
been or will not be), registered under the 1933 Act or under the securities laws
of any state, in reliance upon certain exemptive provisions of such statutes.
The Holder further recognizes and acknowledges that (a) because this Warrant
and, except as provided in the Registration Rights Agreement, the Common Stock
issuable upon exercise of this Warrant (if any) are unregistered, they may not
be eligible for resale, and may only be resold in the future pursuant to an
effective registration statement under the 1933 Act and any applicable state
securities laws, or pursuant to a valid exemption from such registration
requirements and (b) the transfer of this Warrant and the Common Stock issuable
upon the exercise hereof are subject to the restrictions on transfer set forth
in the Registration Rights Agreement and in Section 4 of the Subscription
Agreement. Unless the shares of Common Stock issuable upon exercise of this
Warrant have theretofore been registered for resale under the 1933 Act, the
Company may require, as a condition to the issuance of Common Stock upon the
exercise of this Warrant (i) in the case of an exercise in accordance with
Section 1.1 hereof, a confirmation as of the date of exercise of the Holder's
representations pursuant to this Section 18, or (ii) in the case of an exercise
in accordance with Section 1.2 hereof, an opinion of counsel reasonably
satisfactory to the Company that the shares of Common Stock to be issued upon
such exercise may be issued without registration under the 1933 Act.
19. LEGEND. Unless theretofore registered for resale under the 1933
Act, each certificate for shares issued upon exercise of this Warrant shall bear
the following legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be resold, transferred or assigned in
the absence of an effective registration statement for the securities under
the Securities Act of 1933, as amended, or an opinion of counsel that
registration is not required under said Act.
20. LIMITATION OF HOLDER'S LIABILITY. In connection with any exercise
by the Company of its rights under Section 1.3, the Holder (a) shall be liable
for damages from breach of the Holder's obligations relating to such exercise
only if and to the extent such breach shall have been determined by final
judgment, not subject to further appeal, of a court of competent jurisdiction to
have resulted from conduct of the Holder which constitutes gross negligence or
willful misconduct, (b) shall have no liability in connection with any dispute
or legal action relating to such exercise if at any time prior to a final
judgment referred to in the immediately preceding clause (a) the Holder shall
have tendered the Purchase Price of, or surrendered this Warrant in accordance
with Section 1.2 in respect of, all shares of Common Stock the purchase of which
is in dispute (in which case the Company shall issue such shares to the Holder
in accordance with this Warrant) and (c) if the immediately preceding clause (b)
is inapplicable, shall not in any event be liable for damages or liability
arising from or in any way relating to any breach or alleged breach by the
Holder of its obligations under this Warrant or otherwise in connection with
this Warrant in an amount in excess of the aggregate Purchase Price payable upon
exercise of the unexercised portion of this Warrant. This Warrant and the terms
and provisions hereof are for the sole and exclusive benefit of the Holder, the
Company and the Holder's permitted assigns and in no event shall the Holder have
any liability to any stockholder or creditor of the Company or any other Person
(other than the Company, subject to the limitations on liability to the Company
contained herein) in any way relating to or arising from this Warrant or the
transactions contemplated hereby.
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21. ATTORNEYS' FEES. In any litigation, arbitration or court proceeding
between the Company and Holder relating hereto, the prevailing party shall be
entitled to attorneys' fees and expenses and all costs of proceedings incurred
in enforcing this Warrant.
22. AMENDMENT; WAIVER. This Warrant and any terms hereof may be
changed, waived, 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. Notwithstanding any other provision of this Warrant or
the Subscription Agreement, in addition to the requirements of the immediately
preceding sentence, any amendment of (x) Section 1.1(b), (y) the definition of
the term Aggregated Person or (z) this sentence shall require approval by the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock, present in person or represented by proxy at a duly convened
meeting of stockholders of the Company, and entitled to vote, or the consent
thereto in writing by holders of a majority of the outstanding shares of Common
Stock, and the stockholders of the Company are hereby expressly made third party
beneficiaries of this sentence.
23. MISCELLANEOUS. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws of the State of Colorado. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
on its behalf by one of its officers thereunto duly authorized.
Dated: December ___, 1999 XXX.XXX, INC.
By:
-------------------------
Title:
----------------------
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EXHIBIT 1
FORM OF SUBSCRIPTION
XXX.XXX, INC.
(To be signed only on exercise of Warrant)
TO: XXX.XXX, Inc.
000 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
1. The undersigned Holder of the attached original, executed
Warrant hereby elects to exercise its purchase right under such Warrant
with respect to ______________ shares of Common Stock, as defined in the
Warrant, of XXX.XXX, Inc., a Delaware corporation (the "Company").
2. The undersigned Holder (check one):
p (a) elects to pay the aggregate purchase price for such shares of
Common Stock (the "Exercise Shares") (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 Form of Subscription
pursuant to the instructions of the Company;
or
p (b) elects to receive shares of Common Stock having a value equal to
the value of the Warrant calculated in accordance with Section
1.2 of the Warrant.
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 as is specified below:
Name:
--------------------------
Address:
-----------------------
------------------------------
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4. The undersigned Holder hereby represents to the Company that the
exercise of the Warrant elected hereby does not violate Section 1.1(b) of
the Warrant.
Dated: HOLDER:
------- ---, ---
-----------------------------------
By:
-------------------------------
(Signature must conform to name
of Holder as specified on the
face of the Warrant)
Name:
Title:
Address:
------------------------
--------------------------------
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EXHIBIT 2
COMPANY PUT NOTICE
XXX.XXX, INC.
TO:
--------------------
Name of Holder
1. XXX.XXX, Inc., a Delaware corporation (the "Company"), hereby elects to
exercise its right under the Company's Common Stock Purchase Warrant, Class A,
No. ___ (the "Warrant") to require the Holder to exercise the Warrant for
______________ shares of Common Stock of the Company.
2. The Company Put Closing Date will be ______________, unless another date
is specified by the Holder pursuant to Section 1.4(a) of the Warrant.
3. The Company hereby represents and warrants that the Company Put
Requirements are satisfied on the date this Notice is given.
4. Capitalized terms used in this Notice and not otherwise defined herein
shall have the respective meanings provided in the Warrant.
Dated: XXX.XXX, INC.
------- ---, ----
By:
------------------------
Name:
Title:
18
EXHIBIT 3
[Letterhead of Company Counsel]
[Company Put Closing Date]
To the Holders Listed on Schedule A hereto
RE: XXX.XXX, INC.
Ladies and Gentlemen:
We have acted as counsel to XXX.XXX, Inc., a Delaware corporation (the
"Company"), in connection with issuance by the Company of Common Stock Purchase
Warrants, Class A (the "Warrants") to purchase shares (the "Warrant Shares") of
Common Stock, $.001 par value, of the Company, pursuant to the several
Subscription Agreements, dated as of December 70+*-, 1999 (the "Agreements"),
between the Company and the several Buyers named therein (the "Buyers"). This
opinion is rendered pursuant to Section 1.4(b)(5) of the Warrants in connection
with the exercise by the Company of its put rights pursuant of Section 1.3 of
the Warrants. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings assigned to such terms in the Agreements and
the Warrants.
[OTHER INTRODUCTORY STATEMENTS ACCEPTABLE TO THE BUYERS MAY BE
INCLUDED PRIOR TO EXECUTION OF THE SUBSCRIPTION AGREEMENTS.]
Based upon the foregoing, we are of the opinion that:
(1) The Warrant Shares have been duly authorized and, when issued upon
exercise of the Warrants in accordance with the terms of Sections 1.3, 1.4 and
the other applicable provisions of the Warrants will be validly issued, fully
paid and non-assessable and will not subject the holder thereof to personal
liability by reason of being such holder;
(2) The issuance by the Company of the Warrant Shares do not, with or
without the giving of notice or the lapse of time, or both, (i) result in any
violation of any term of the certificate of incorporation or by-laws of the
Company, (ii) conflict with or result in a breach by the Company of any of the
terms or provisions of, or constitute a default under, or result in the
modification of, or result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company pursuant to, any indenture, mortgage, deed of trust or other agreement
or instrument to which the Company is a party or by which the Company or any of
its properties or assets are bound or affected or (iii) violate or contravene
any applicable law, rule or regulation or any applicable decree, judgment or
order of any court, federal or state regulatory body, administrative agency or
other governmental body having jurisdiction over the Company or any of its
properties or assets or (iv) have any material adverse effect on any permit,
certification, registration, approval, consent, license or franchise necessary
for the Company to own or lease and operate any of its properties and to conduct
any of its business or the ability of the Company to make use thereof;
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(3) There is no legal action, suit, or proceeding pending or, to the
best of our knowledge, threatened against or affecting the Company which seeks
to restrain or prohibit the transactions contemplated by the Warrants, the Class
B Warrants or the Agreements;
(4) Assuming the representations and warranties of the Buyers in
Section 2 of the Agreements are true and correct, the Warrant Shares may be
issued to the Holders upon exercise of the Warrants without registration under
the 1933 Act; and
(5) The Registration Statement is effective under the 1933 Act, to the
best of our knowledge, no stop order proceedings with respect thereto have been
instituted or threatened by the SEC, and the prospectus contained therein may be
used by the Holders and the other selling stockholders named therein for resale
of the Warrant Shares in accordance with the 1933 Act and the "Plan of
Distribution" contained in such prospectus.
These opinions are limited to the matters expressly stated herein and
are rendered solely for your benefit and may not be quoted or relied upon for
any other purpose or by an other person.
Very truly yours,
