EXHIBIT 4.1
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND IS SUBJECT TO RESTRICTIONS ON EXERCISE
AND TRANSFER AS SET FORTH HEREIN
WARRANT
To Purchase Common Stock of
xXxxxx.xxx, Inc.
1. Grant and Exercise of Warrant.
1.1. Grant of Warrants. THIS WARRANT (the "Warrant") CERTIFIES
THAT, for value received, Xxxxxxx Xxxxxx (the "Holder"), is entitled to purchase
at a price of $0.75 per share (the "Warrant Price") xXxxxx.xxx, Inc., a Delaware
corporation (the "Company"), shares of common stock of the Company (the "Common
Stock") on the following terms and conditions. This Warrant permits the Holder
to purchase from the Company 400,000 shares of Common Stock at the Warrant Price
at any time during the three year period commencing on the date hereof.
1.2. Exercise of Warrants. To exercise the Warrants in whole
or in part, the Holder shall deliver to the Company at its principal office (a)
a written notice of the Holder's election to exercise this Warrant, which notice
shall specify the number of shares of Common Stock to be purchased, (b) cash or
a certified check payable to the Company in an amount equal to the aggregate
purchase price of the number of shares of Common Stock being purchased, and (c)
this Warrant. The Company shall as promptly as practicable, and in any event
within 20 days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in such
notice. The stock certificate or certificates so delivered shall be in the
denomination of 100 shares each or such lesser or greater denomination as may be
specified in such notice and shall be issued in the name of the Holder or such
other name as shall be designated in such notice. Such certificate or
certificates shall be deemed to have been issued and the Holder or any other
person so designated to be named therein shell be deemed for all purposes to
have become a holder of record of such shares as of the date such notice is
received by the Company as aforesaid. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of said certificate or
certificates, deliver to the Holder a new Warrant evidencing the rights of the
Holder to purchase the remaining shares of Common Stock provided for by this
Warrant, which new Warrant shall in all other respects be identical to this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant and the same returned to the Holder. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issue and delivery of such stock certificates and new Warrants, except that, in
case such stock certificates or new Warrants shall be registered in a name or
names other than the name of the Holder, funds sufficient to pay all stock
transfer taxes that are payable upon the issuance of such stock certificate or
certificates or new Warrants shall be paid by the Holder at the time of
delivering the notice of exercise mentioned above.
Prior to the issuance of any shares of Common Stock upon exercise of this
Warrant, the Company shall secure the listing of such shares of Common Stuck
upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance upon exercise of
this Warrant) and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant.
2. Representations and Warranties. The Company hereby represents
and warrants that:
2.1. Organization, Standing, Capitalization, etc. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation and has all requisite corporate power and
authority to enter into this Warrant. The Company has delivered to the Holder a
complete and correct copy of the Articles of Incorporation of the Company, and
all amendments thereto, as in effect on the date hereof, and a complete and
correct copy of the Bylaws of the Company as in effect on the date hereof. The
Company has an authorized equity capitalization as described in the Articles of
Incorporation. All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable.
2.2. Qualification. The Company is duly qualified and in good
standing as a foreign corporation authorized to transact business in each
jurisdiction where the conduct of the Company's business or the ownership of its
properties requires such qualification, or, if not so qualified, the Company's
failure so to qualify will not have a material adverse effect on the Company,
its financial condition or operations and will not impair the Company's right to
enforce any material agreement to which it is a party.
2.3. Agreement Authorization. This Warrant has been duly
authorized, executed and delivered by or on behalf of the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms.
2.4. Authorization and Legality of the Warrants and the Common
Stock. The Board of Directors of the Company has duly authorized the grant of
the Warrants. There are no preemptive rights or similar rights on the part of
the holders of shares of the Company's capital stock. No approval or
authorization of the shareholders of the Company is required for the issuance
and sale of the Warrants as contemplated herein. The shares of Common Stock
issuable upon exercise of the Warrants have been duly authorized and, when
delivered to the Holder upon such exercise, will be validly issued and
outstanding and fully paid and nonassessable. The issuance of the securities and
the consummation of the other transactions contemplated hereby will not conflict
with, or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, with or without notice or lapse of time or both,
(a) any contract, indenture, mortgage, deed of trust, loan agreement,
understanding or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is or may be bound or to which any of the property or assets of the Company or
any of its subsidiaries is or may be subject, which breach, violation or default
could reasonably be expected to have a material adverse effect on the Company or
its subsidiaries taken as a whole, or (b) the Articles of Incorporation or
Bylaws of the Company or of any order, judgment or decree of any court or
governmental agency, authority or
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instrumentality having jurisdiction over the Company or any of it subsidiaries
or any of their material properties.
2.5. Disclosure. Neither this Warrant nor any certificate or
other document referenced herein or therein and furnished to the Holder by the
Company contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein or
herein, in light of the circumstances under which they were made, not
misleading.
3. Covenants of the Company.
3.1. Registration Obligations. The Company covenants and
agrees:
(a) If, at any time after May 12, 2001 Holder
requests that the Company file a registration statement under the Securities Act
of 1933 (the "Securities Act"), as soon as practicable thereafter the Company
shall use its best efforts to file a registration statement with respect to any
or all Warrants, or any or all of the Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares"), (whether for primary offering and sale by the
Company to the Holder, or for a subsequent secondary offering and sale by the
Holder), that the Company has been so requested to include and obtain the
effectiveness thereof, and to take all other action necessary under any Federal
or state law or regulation to permit the Warrants or the Warrant Shares
specified in the notice of the Holder to be sold or otherwise disposed of, and
the Company shall maintain such compliance with each such Federal and state law
and regulation for the period necessary for Holder to effect the proposed sale
or other disposition; provided, however, the Company shall be entitled to defer
such registration for a period of up to 60 days if and to the extent that its
Board of Directors shall determine that such registration would interfere with a
pending corporate transaction. The Holder shall be entitled to register,
re-register or qualify, all or any portion of the Warrant Shares, and the
Company shall be required to effect a registration, re-registration or
qualification as requested by the Holder pursuant to this subsection 3.1(a) on
three occasions.
(b) If at any me or from time to time prior to the
date on which this Warrant expires pursuant to section 1.1 (Expiration Date),
the Company proposes to register any of its securities under the Securities Act
on any form for the registration of securities under such Act, whether or not
for its own account (other than by a registration statement on Form S-8 or Form
S-4 or other form which does not include substantially the same information as
would be required in a form for the general registration of securities or would
not be available for the Common Stock) (a "Piggyback Registration"), it shall as
expeditiously as possible give written notice to the Holders of this intention
to do so and of such Holder's rights under this Section 3.1(b). Such rights are
referred to hereinafter as "Piggyback Registration Rights". Upon the written
request of the Holder made within 20 days after receipt of any such notice
(which request shall specify the registrable securities intended to be disposed
of by such Holder), the Company shall include in the Registration Statement the
registrable securities which the Company has been so requested to register by
the Holder thereof and the Company shall keep such registration statement in
effect and maintain compliance with each Federal and state law or regulation for
the period necessary for such Holder to effect the proposed sale or other
disposition.
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If a Piggyback Registration involves an
offering by or through underwriters, the Company, except as otherwise provided
herein, shall not be required to include registrable shares therein if and to
the extent the underwriter managing the offering reasonably believes in good
faith and advises in writing each Holder requesting to have registrable
securities included in the Company's Registration Statement that marketing
factors require a limitation on the number of shares to be underwritten;
provided that any such reduction or elimination shall be pro rata to all other
holders of the securities of the Company exercising "Piggyback Registration
Rights" similar to those set forth herein in proportion to the respective number
of shares they have requested to be registered.
(c) The Company shall pay all Registration Expense in
connection with the registrations provided for in Section 3.1 (a) and (b).
(d) To update the Holder regarding any material
developments related to the registrations referred to above, including any stop
orders issued by the Securities and Exchange Commission or any other
circumstances that make such registration unavailable for any reason.
3.2. Financial Statements. So long as any of the Warrants are
outstanding, the Company shall deliver to the Holder:
(a) Within 45 days after the end of each of the first
three quarterly fiscal periods in each fiscal year of the Company, a
consolidated balance sheet of the Company and its subsidiaries as at the end of
such period and consolidated statements of income and of cash flow of the
Company and its subsidiaries for each period and, in the case of the second and
third quarterly periods, for the period from the beginning of the then currant
fiscal year to the end of such quarterly period, setting forth in each case in
comparative form the figures for the corresponding period of the previous fiscal
year, all in reasonable detail and certified, subject to changes resulting from
normal year-end audit adjustments, certified by the President and Chief
Financial Officer of the Company; and
(b) Within 90 days after the end of each fiscal year
of the Company, a consolidated balance sheet of the Company and its subsidiaries
as at the end of such year and statements of income and of cash flow of the
Company and its subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and accompanied by the opinion thereon of independent public accountants
of recognized standing, which opinion shall state that such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding fiscal year; and that
the audit by such accountants in connection with such financial statements has
been made in accordance with generally accepted auditing standards.
3.3. Notices. In case the Company proposes:
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(a) to pay any dividend payable in stock (of any
class or classes) or in convertible securities upon its Common Stock or make any
distribution (other than ordinary cash dividend) to the holders of its Common
Stock, or
(b) to grant to the holders of its Common Stock
generally any rights or options, or
(c) to effect any capital reorganization or
reclassification of capital stock of the Company, or
(d) to consolidate with, or merge into, any other
corporation or to transfer its property as an entirety or substantially as an
entirety, or
(e) to effect the liquidation, dissolution or winding
up of the Company, then the Company shall cause notice of any such intended
action to be given to the Holder not less than 30 days before the date on which
the transfer books of the Company shall close or a record be taken for such
stock dividend, distribution or granting of rights or options, or the date when
such capital reorganization, reclassification, consolidation, merger, transfer,
liquidation, dissolution or winding up shall be effective, as the case may be.
3.4. Reservation of Shares. The Company covenants and agrees
that it will at all times reserve and set apart and have free from preemptive
rights, a sufficient number of shares of authorized but unissued Common Stock,
sufficient to permit the exercise in full of the Warrants.
4. No Inconsistent Agreements. The Company will not on or after the
date of this Warrant enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holder in this warrant or
otherwise conflicts with the provisions hereof. The rights granted to the Holder
hereunder do not in any way, conflict with and are not inconsistent with the
rights granted to holders of the Company's securities under any other
agreements.
5. Expenses. The Company will pay (a) all costs and expenses of the
Company's performance of and compliance with all agreements and conditions
contained herein on its part to be performed or complied with, including
registration filing and qualification fees, blue sky fees, printing expenses and
accounting fees; and (b) the cost of complying with the securities or blue sky
laws of any jurisdiction with respect to the offering or sale of the Common
Stock issued upon exercise of the Warrant.
6. Indemnification.
(a) In connection with any registration by the Company of the
Common Stock Issuable upon exercise or conversation thereof, to the extent
permitted by law, the Company will indemnify and hold the Holder harmless
against any losses, claims, damages, or liabilities, joint or several, to which
the Holder may become subject under the Securities Act of 1933 as amended
(Securities Act) or otherwise, insofar as such losses, claims, damage or
liabilities (or actions in
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respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in any registration statement filed by
the Company, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements 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
or arise out of any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration; and will reimburse the Holder for any legal or other expenses
reasonably incurred by the Holder in connection with investigating or defending
any loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably, withheld) nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished expressly for use by the Holder in connection with such registration.
(b) In connection with any registration statement described in
Section 6(a), to the extent permitted by law, the Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Securities Act, and each agent and any underwriter for
the Company (within the meaning of the Securities Act) against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, controlling person, agent or underwriter may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements 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 such registration statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by the Holder expressly for use in
connection with such registration; and the Holder will reimburse any legal or
other expenses reasonably incurred by the Company or any such director, officer,
controlling person, agent or underwriter in connection with investigating, or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the Holders consent (which consent shall
not be unreasonably withheld).
7. Survival of Representations and Warranties, etc. All agreements,
representations and warranties contained herein or made in writing by the Holder
or on behalf of
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the Company in connection with the transactions contemplated hereby shall
survive the execution and delivery of this Warrant. All the statements contained
in any instrument executed and delivered by the Company or its duly authorized
officers pursuant hereto in connection with the transactions contemplated hereby
shall be deemed representations by the Company hereunder.
8. Limitation of Liability; Not a Stockholder. No provision of this
Warrant shall be construed as conferring upon the Holder the right to vote or to
consent or to receive dividends or to receive notice as a stockholder in respect
of meetings of stockholders for the election of directors of the Company or any
other matter whatsoever as a stockholder of the Company. No provision hereof, in
the absence of affirmative action by the Holder to purchase shares of Common
Stock, and no enumeration herein of the rights or privileges of the Holder,
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,
creditors of the Company or others.
9. Loss, Destruction, etc. of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
this Warrant, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation upon surrender
and cancellation of the Warrant, the Company will make and deliver a new
Warrant, of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant. Any Warrant issued under the provisions of this Section in lieu of any
Warrant alleged to be lost, destroyed or stolen, or of any mutilated Warrant,
shall constitute an original contractual obligation on the part of the Company.
10. Adjustments. In the event the Company engages in any
reorganization, recapitalization, stock dividend, stock split, merger,
liquidation or any other transaction described in Section 3.3 hereof,
appropriate and equitable adjustment in the number and type of equity units
issuable upon exercise of this Warrant and in the purchase price thereof and in
the market price at which the Warrant granted in Section 1.1 vests shall be made
in order that the Holder's economic interest in this Warrant is preserved
without dilution or prejudice.
11. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by first-class registered or
certified mail, postage prepaid, if to the Holder, at c/o Xxxxxxx Xxxxxx Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as may
have been furnished to the Company by the Holder in writing, or if to the
Company, at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 or at such
other address as may have been furnished to the Holder in writing by the
Company.
12. Amendments and Waivers. Except as otherwise provided herein,
neither this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally or in writing, except that any term of this Agreement may be
amended and the observance of any such term many be waived (either generally or
in a particular instance and either retroactively or prospectively) with (but
only with) the written consent of the Holder and the Company.
13. Split Up, Combination, Exchange, Transfer and Assignment. This
Warrant may be split up, combined or exchanged for another Warrant or Warrants
containing the name
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terms to purchase a like aggregate number of Warrant Shares. If the Holder
desires to split up, combine or exchange this Warrant, he shall make such
request in writing delivered to the Company and shall surrender to the Company
this Warrant and any other Warrants to be so spilt-up, combined or exchanged.
Upon any such surrender for a split-up, combination or exchange, the Company
shall execute and deliver to the person entitled thereto a Warrant or Warrants,
as the case maybe, as so requested. The Company shall not be required to effect
any split-up, combination or exchange which will result in the issuance of a
Warrant entitling the Holder to purchase upon exercise a fraction of a share of
Common Stock or a fractional Warrant. The Company may require such Holder to pay
a sum sufficient to cover any tax or, governmental charge that may be imposed in
connection with any split-up, combination or exchange of Warrants.
This Warrant and the Warrant Shares may be sold, transferred, assigned,
encumbered, pledged or hypothecated in accordance with and subject to the
provisions of the Securities Act and the rules and regulations promulgated
thereunder.
14. Adjustments Affecting Registrable Securities. The Company will not
take any action outside the ordinary course of business, or permit any change
within its control to occur outside the ordinary course of business, with
respect to the Warrants or Warrant Shares which is without a bona fide business
purpose, and which is intended to interfere with the ability of the Company to
include such securities in a registration undertaken pursuant to this Agreement.
15. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provisions in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York. All the terms of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto. The headings in
this Agreement are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Expiration. This Warrant shall expire on the last day of the last
vesting period to be triggered pursuant to the terms of Section 1.1 hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and delivered by its duly authorized officer as of this 8th day of January 2001.
xXxxxx.xxx, Inc.
By: /s/ Xxxxx Xxxxxx
-------------------------------
Title:_____________________________
a Delaware corporation
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