THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED OR DISPOSED OF IN THE ABSENCE
OF A REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND APPLICABLE QUALIFICATION
REQUIREMENTS UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR PURSUANT TO
REGULATION S AS PROMULGATED UNDER THE ACT.
THIS WARRANT WILL BE VOID AND OF NO VALUE UNLESS EXERCISED WITHIN THE
LIMITS HEREIN PROVIDED
ESYNCH CORPORATION
(a Delaware corporation)
WARRANT FOR THE PURCHASE OF 150,000 COMMON SHARES
WITH REGISTRATION RIGHTS
THIS IS TO CERTIFY THAT, for value received, Xxxxxxxx Xxxxxxxxx & Company
Incorporated, or its permitted successors or assigns (the "Holder") is entitled
to subscribe for and purchase one hundred fifty thousand (150,000) fully paid
and non-assessable common shares (the "Common Shares") of eSynch Corporation
(the "Company"), par value $.001 per share, at an Exercise Price per Share of
$1.25 (the "Exercise Price") per share. This Warrant is exercisable at any time
up to 4:30 P.M. Pacific time on November 30, 2005 (the "Date of Expiration")
subject, however, to the provisions and upon the terms and conditions
hereinafter set forth.
Cashless Exercise Provision: In lieu of the payment of the exercise price, at
any time the exercise price is $3.00 per share or less, to exercise the Warrant,
the Holder may tender the Warrant or any portion thereof at any time or from
time to time and receive stock without the payment of the exercise price per
share of common stock by surrendering back to the company the right to a certain
number of shares as determined by the formula below: shares to be surrendered
equals the exercise price times the number of shares of common stock subscribed
for divided by the closing price of the common stock from the day prior to
exercise. The number of shares of common stock to be delivered to the Holder who
elects a cashless exercise equals the amount subscribed for less the amount
surrendered. After the cashless exercise has been completed, Company will issue
one or more new Warrants to Holder convertible into an amount of common stock
equal to the total face amount on the Warrant less the amount subscribed for.
The rights represented by this Warrant may be exercised by the Holder, in whole
or in part (but not as to a fractional Share), by surrender of this Warrant at
the office of the Company's transfer agent, or the principal executive office of
the Company if it is acting as its own transfer agent, during its normal
business hours, together with the subscription form attached hereto completed
and signed by the Holder and, in payment of the Exercise Price for the number of
Common Shares subscribed, a certified check payable to or to the order of the
Company.
Upon the exercise of the rights represented by this Warrant and payment of the
Exercise Price in accordance with the terms hereof, the Common Shares for which
the Holder has subscribed and purchased shall be deemed to have been issued and
the Holder shall be deemed to have become the holder of record of such shares on
the date of such exercise and payment.
In the event of any exercise of the rights represented by this Warrant,
certificates for the Common Shares so purchased shall be delivered to the Holder
within a reasonable time, not exceeding ten days after the rights represented by
this Warrant have been duly exercised and, unless this Warrant has expired, a
new Warrant representing the number of Common Shares, if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Holder within such time.
The Company covenants and agrees that the Common Shares which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
fully paid and non-assessable and free of all liens, charges and encumbrances.
The Company further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved, a sufficient number of common shares to
provide for the exercise of the rights represented by this Warrant.
THE FOLLOWING ARE THE TERMS AND CONDITIONS
REFERRED TO IN THIS WARRANT
1. In case the Company shall at any time subdivide its outstanding Common
Shares into a greater number of shares, the Exercise Price shall be
proportionately reduced and the number of subdivided Common shares entitled
to be purchased proportionately increased, and conversely, in case the
outstanding Common Shares of the Company shall be consolidated into a smaller
number of shares, the Exercise Price shall be proportionately increased and
the number of consolidated Common Shares entitled to be purchased hereunder
shall be proportionately decreased.
If any capital reorganization or reclassification of the capital stock
of the Company, or the merger, amalgamation or arrangement of the Company
with another corporation shall be effected, then as a condition of such
reorganization, reclassification, merger, amalgamation or arrangement,
adequate provision shall be made whereby the holder hereof shall have the
right to purchase and receive upon the basis and upon the terms and
conditions specified in this Warrant and in lieu of the Common Shares
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, or other securities as may
be issued with respect to or in exchange for such number of outstanding
Common Shares equal to the number of Common Shares purchasable and receivable
upon the exercise of this Warrant had such reorganization, reclassification,
merger, amalgamation or arrangement not taken place. The Company shall not
effect any merger, amalgamation or arrangement unless prior to or
simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such merger, amalgamation or
arrangement assumes by written instrument executed and mailed or delivered to
the holder of this Warrant the obligation to deliver to such holder such
shares of stock or securities in accordance with the foregoing provisions as
such holder may be entitled to purchase.
2. In case at any time:
(a)
the Company shall pay any dividend payable in stock upon its Common
Shares or make any distribution to the holders of its Common Shares;
(b)
the Company shall offer for subscription pro rata to the holders of
its Common Shares any additional shares of stock of any class or other
rights;
(c)
there shall be any subdivision, consolidation, capital
reorganization, or reclassification of the capital stock of the
Company, or merger, amalgamation or arrangement of the Company with,
or sale of all or substantially all of its assets to, another
corporation; or
(d)
there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
then, and in any one or more of such cases, the Company shall give to the
holder of this Warrant, at least twenty day's prior written notice of the
date on which the books of the Company shall close or a record shall be taken
for such dividend, distribution or subscription rights, or for determining
rights to vote with respect to such subdivision, consolidation,
reorganization, reclassification, merger, amalgamation, arrangement,
dissolution, liquidation or winding-up and in the case of any such
subdivision, consolidation, reorganization, reclassification, merger,
amalgamation, arrangement, sale, dissolution, liquidation or winding-up, at
least twenty days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause, shall also
specify, in the case of any such dividend, distribution or subscription
rights, the date on which the holders of Common Shares shall be entitled
thereto, and such notice in accordance with the foregoing shall also specify
the date on which the holders of Common Shares shall be entitled to exchange
their Common Shares for securities or other property deliverable upon such
subdivision, consolidation, reorganization, reclassification, merger,
amalgamation, arrangement, sale, dissolution, liquidation or winding-up as
the case may be. Each such written notice shall be given by first class mail,
registered postage prepaid, addressed to the holder of this Warrant at the
address of such holder, as shown on the books of the Company.
3. As used herein, the term "Common Shares" shall mean and include the
Company's presently authorized Common Shares and shall also include any
capital stock of any class of the Company hereafter authorized which shall
not be limited to a fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends and in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding-up of
the Company.
4. This Warrant shall not entitle the Holder to any rights as a shareholder of
the Company, including without limitation, voting rights, except that the
Company shall concurrently furnish to the Holder a copy of all notices which are
furnished to holders of the common shares.
5. This Warrant is not transferable except pursuant to an exemption from
registration and qualification requirements in accordance with federal and
applicable state or other securities laws.
6. This Warrant and any Common Shares acquired pursuant to this Warrant will
be subject to restrictions under federal and applicable state or other
securities laws and shall bear substantially the following legend, and all
other legends as may from time to time be required by any then applicable
securities laws:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED
OR DISPOSED OF IN THE ABSENCE OF A REGISTRATION STATEMENT AND
QUALIFICATION IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION
REQUIREMENTS UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR PURSUANT TO REGULATION S AS PROMULGATED UNDER THE ACT.
7. This Warrant is exchangeable upon its surrender by the Holder at the
Company's principal office, for new Warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the number of shares 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 Common Shares
as shall be designated by the Holder at the time of such surrender.
8. Any notice or other communication required to be given by the Company under
this Warrant, whether to the Holder or otherwise, shall be delivered or
telecopied as follows:
Xxxxxxxx Xxxxxxxxx & Co. Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000)000-0000
Any notice or other communication so given shall be deemed to have been
given and received when delivered, if delivered, and upon transmission,
if telecopied, and if the date of such transmission is not a business
day, on the next ensuing business day.
9. Time is of the essence hereof.
10. This Warrant shall be governed by and construed in accordance with the laws
of the State of California.
11. The Common Shares purchaseable upon exercise of this Warrant shall be
entitled to the registration rights set forth in the Registration Rights
Agreement between Xxxxxxxx Xxxxxxxxx & Company Incorporated and the Company
dated December __, 2000.
ESYNCH CORPORATION, intending to be contractually bound, has caused this Warrant
to be signed by its duly authorized officers, and this Warrant to be dated
____________, 2000.
ESYNCH CORPORATION
By:
---------------------------------
PRESIDENT
By:
---------------------------------
SECRETARY
SUBSCRIPTION FORM
TO:
_________________________, the holder of the within Share Purchase Warrant (the
"Warrant"), subscribes for __________ of the common shares of referred to in the
Warrant (the "Common Shares") according to the conditions thereof, and herewith
makes payment of the Exercise Price in full for the said number of shares at the
rate of $_____ per share by a certified check in the amount of $__________ is
enclosed herewith for such payment. The undersigned hereby directs that the
shares hereby subscribed for be issued and delivered as follows:
NAME ADDRESS
---- --------
---------------------------------- ----------------------------------
DATED at ____________________ this _____ day of ____________________, _____.
Signature of Holder
