EXHIBIT 4.7
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THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS COMMON STOCK PURCHASE WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE PROVISIONS OF ANY
APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE HOLDER FOR
PURPOSES OF INVESTMENT IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER SUCH
ACTS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS REGISTERED
PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OR AN OPINION OF COUNSEL IS
OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION.
COMPASS KNOWLEDGE HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF COMMON STOCK
THIS CERTIFIES THAT PIONEER VENTURES ASSOCIATES LIMITED PARTNERS
("Holder") or its designees or assigns, is entitled to purchase from COMPASS
KNOWLEDGE HOLDINGS, INC., a Nevada corporation (the "Company"), at the price and
during the periods hereinafter specified, 100,000 shares of Common Stock, $.001
par value, of the Company ("Common Stock").
This Common Stock Purchase Warrant ("Warrant") is the Warrant
referenced in that certain Letter Agreement between the parties, dated June 27,
2001 (the "Letter Agreement").
1. Warrant Term and Exercise Price. (a) This Warrant may be exercised
in whole or in part at any time and from time to time after June 30, 2001, but
not later than 5:00 p.m. Eastern Time, on December 31, 2002 (the "Warrant
Expiration Date"), at an exercise price of fifty-five cents ($.55) per Warrant
Share (such exercise price, as the same may be adjusted from time to time
pursuant to Section 7 hereof or otherwise, the "Exercise Price").
2. Manner of Exercise. The rights represented by this Warrant may be
exercised at any time within the period above specified, in whole or in part, by
the surrender of this Warrant to the Company with the "Form of Election to
Purchase" executed and substantially in the form attached hereto as Annex A, at
the principal executive office of the Company at 0000 Xxx Xxxxxx, Xxxxx 000,
Xxxxx, XX 00000 (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); and the payment to the Company of the
Exercise Price then in effect for the number of Warrant Shares specified in such
purchase form. The Warrant shall be deemed to have been exercised, in whole or
in part, prior to the close of business on the date this Warrant is surrendered
and payment is made in accordance with the foregoing provisions of this Section
2, and the person or persons in whose name or names the certificates for shares
of Common Stock shall be issuable upon such exercise shall become and be
registered as the holder or holders of record of such shares of Common Stock.
The certificates for the shares of Common Stock so purchased shall be delivered
to the Holder within a reasonable time, not exceeding twenty days, after the
rights represented by this Warrant shall have been so exercised. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new
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Warrant evidencing the rights of the Holder thereof to purchase the balance of
the securities purchasable hereunder. The Company agrees that it shall pay any
and all stock transfer taxes payable in connection with any exercise of this
Warrant (excluding any taxes relating to the transfer of this Warrant, which
shall be paid by the Holder).
3. Transfer of Warrant; Replacement. (a) Any transfer, sale or
assignment of this Warrant shall be effected by the Holder by (i) duly
executing the form of assignment attached hereto as Annex B and (ii)
surrendering this Warrant for cancellation at the office or agency of the
Company referred to in Section 2 hereof, whereupon the Company shall issue in
the name or names specified by the Holder a new Warrant or Warrants of like
tenor and representing in the aggregate rights to purchase the same number of
Warrant Shares as are purchasable hereunder, and, to such extent, such
transferee or transferees shall succeed, in all respects, as a Holder of this
Warrant. Each completed form of assignment shall be accompanied by an opinion
of counsel reasonably satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities
Act, provided however, that no such opinion shall be required if such transfer
shall cover a distribution of any portion of the Warrant by the Holder to its
directors, officers, employees, affiliated entities or selected dealers
("Permitted Transferee"), it being understood that the Company may request a
Permitted Transferee to make reasonable representations regarding its
sophistication in financial matters and investment intent with respect to the
Warrant to be transferred to it.
(b) Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and of reasonably
satisfactory indemnification of the Company, the Company will execute and
deliver a new Warrant of like tenor and date, provided that in the case of
mutilation, this Warrant will be surrendered and canceled. Any such new Warrant
so executed and delivered shall constitute an additional contractual obligation
on the part of the Company, whether or not this Warrant so lost, stolen,
destroyed or mutilated shall subsequently be enforceable by anyone at any time.
4. Valid Issuance and Reservation of Common Stock. The Company
represents, warrants and covenants that this Warrant has been duly authorized
and when delivered and paid for pursuant to the terms of the Letter Agreement,
will constitute a legal, valid and binding obligation of the Company
enforceable in accordance with its terms. The Warrant Shares have been duly
authorized, and when duly delivered and paid for (and upon the exercise of this
Warrant), will be validly issued, fully paid and nonassessable. A sufficient
number of shares of Stock have been reserved for issuance upon the exercise of
this Warrant. Each of this Warrant and the Warrant Shares conforms to all
statements relating thereto contained in the Letter Agreement, except as
otherwise described herein.
5. No Voting Rights. This Warrant shall not entitle the Holder to
any voting right or other rights as a shareholder of the Company.
6. Registration Rights.
6.1 Incidental Registration. The Company agrees that if at any
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time it shall propose to file a registration statement under the Securities Act
of 1933, as amended (the "Securities Act") on a form suitable for sales by
selling shareholders, it will give written notice to such effect to the Holder,
at least thirty (30) days prior to such filing, and, at the written request of
the Holder, made within ten (10) days after the receipt of such notice, will
include therein at the Company's cost and expense (except for the fees and
expenses of counsel to the Holder and underwriting discounts, commissions and
filing fees attributable to the Warrant Shares included therein) such of the
Warrant Shares held by the Holder as it shall request; provided, however, that
if the offering being registered by the Company is underwritten and if no other
outstanding shares of Company's common stock are included therein and if the
representative of the underwriters certifies that the inclusion therein of the
Warrant Shares would materially and adversely effect the sale of the securities
to be sold by the Company thereunder, the public
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offering of the Warrant Shares included in such registration statement either
shall be delayed for a period of ninety (90) days after the commencement of the
underwritten public offering, provided that the representative of the
underwriters certifies that such delay would not materially and adversely
effect the sale of the securities to be sold by the Company or, if the
representative of the underwriters will not so certify, the Holder shall not be
permitted to participate in such registration. Notwithstanding the foregoing,
if the representative of the underwriters certifies that the inclusion therein
of the Warrant Shares would materially and adversely effect the sale of the
securities to be sold by the Company, the Holder shall have the option to
retain on its behalf and at the expense of the Company (except for the fees and
expenses of counsel to the Holder and underwriting discounts, commissions and
filing fees attributable to the shares of the Warrant Shares included therein),
or to cause the Company to retain the services of underwriters reasonably
acceptable to the Company who will be able to sell the Warrant Shares
concurrently with that being offered for sale by the Company. The Company, at
its own expense, will cause the prospectus included in such registration
statement to meet the requirements of the Securities Act for such period of
time, not exceeding ninety (90) days, as may be necessary to effect the sale of
the Warrant Shares included at the request of the Holder.
6.2 Expenses.
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(a) With respect to the inclusion of the Shares pursuant to
Section 6.1 hereof, all fees, costs and expenses of and incidental to such
registration, inclusion and public offering (as specified in Section (b) below)
in connection therewith shall be borne by the Company; provided, however, that
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Holder shall bear its share of the underwriting discount and commissions and
transfer taxes, and Holder shall be responsible for the payment of its own
legal fees.
(b) The fees, costs and expenses of registration to be borne by
the Company as provided in Section 6.2(a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees
and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in Section 6.2(a) above). Fees
and disbursements of counsel and accountants for Holder not expressly included
above shall be borne by Holder.
7. Adjustments to Exercise Price and Number of Securities.
(a) If prior to the expiration or termination of this
Warrant the Company shall subdivide its outstanding shares of Common
stock into a greater number of shares, or declare and pay a dividend on
its Common Stock payable in additional shares of its Common Stock, the
Warrant Price as then in effect shall be proportionately reduced, and the
number of Warrant Shares then subject to exercise under this Warrant (and
not previously exercised) shall be proportionately increased.
(b) If prior to the expiration or termination of this
Warrant the Company shall combine its outstanding shares of the Common
Stock into a smaller number of shares, the Warrant Price, as then in
effect, shall be proportionately increased and the number of Warrant
Shares then subject to exercise under this Warrant (and not previously
exercised) shall be proportionately reduced.
(c) If any adjustment under this Section 7 would create
a fractional share of Common Stock or a right to acquire a fractional
Share such fractional Share be disregarded and the number of Shares
subject to this Warrant will be the next higher number of shares,
rounding all fractions upward. Whenever there is an adjustment under
this Section 7, the Company will forthwith notify the Holder of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
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(d) If all or any portion of this Warrant is exercised
after any merger, consolidation, exchange of shares, separation,
reorganization or liquidation of the Company or other similar event,
occurring after the date hereof and, as a result of, shares of Common
Stock are changed into the same or a different number of shares of the
same or another class or classes of securities of the Company or another
entity, then the Holder exercising this Warrant will receive, for the
aggregate price paid on such exercise, the aggregate number and class of
shares that the Holder would have received if this Warrant had been
exercised immediately before such merger, consolidation, exchange of
shares, separation, reorganization or liquidation or other similar event.
If any adjustment under this Section 7 would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share will be disregarded and the number of shares
subject to this Warrant will be the next higher number of shares,
rounding all fractions upward. Whenever there is an adjustment pursuant
to this Section 7, the Company will forthwith notify the Holder of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
8. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
(i) the Company shall take a record of the holders of its shares of Common
Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on
the books of the Company; or
(ii) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option
right or warrant to subscribe therefore; or
(iii) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
9. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(i) If to a Holder, to the address of such Holder as shown on the
books of the Company; or
(ii) If to the Company, to the address set forth in Section 2 hereof, or
to such other address as the Company may designate by notice to the Holders.
10. Supplements and Amendments. The Company and the Holder may from
time to time supplement or amend this Agreement without the approval of any
Holders in order to cure any ambiguity,
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to correct or supplement any provision contained herein which may be defective
or inconsistent with any provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holder may deem necessary or desirable and which the Company and the Holder
deem shall not adversely affect the interests of any Holders. Other amendments
to this Agreement may be made only with the written consent of Holders of a
majority of the Warrants Shares subject to the then outstanding portion of this
Warrant.
11. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
12. Governing Law: Submission to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Florida
applicable to contracts entered into and to be performed wholly within said
State.
The Company and each of the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of Florida,
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company and each of the Holders hereby irrevocably waives any
objection to such exclusive jurisdiction or inconvenient forum. Any such
process or summons to be served upon any of the Company and the Holder (at the
option of the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address as set forth in
Section 9 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the party so served in any action, proceeding or claim.
The Company and each Holder, by its acceptance of an Warrant, agrees that the
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefore.
13. Entire Agreement. This Agreement contains the entire understanding
between the parties hereto and supersedes all prior agreements and
understandings, written or oral, with respect to the subject matter hereof.
14. Severability. If any provision of this Agreement shall be held to
be invalid and unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
15. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and any
Holder any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company and
any Holder.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
18. Redemption. If the Company's Common Stock is listed for trading on
the NASDAQ Stock Market, the New York Stock Exchange, the American Stock
Exchange or the OTC Bulletin Board Service or any similar exchange ("Listed")
and the average closing sales price of the Company's Common Stock during any
twenty (20) consecutive day trading period exceeds two (2) times the Exercise
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Price (such average, the "Current Market Price"), upon thirty (30) days prior
written notice to the Holder, the Company may redeem (during which time the
Investor may exercise this Warrant as provided herein) the Warrant at a price
equal to the Current Market Price multiplied by the number of shares of Warrant
Stock then subject to the Warrant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first written.
COMPASS KNOWLEDGE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx
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Authorized Officer
Attest:
/s/ Xxxxxx X. Xxxxxx
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President
PIONEER VENTURES ASSOCIATES LIMITED PARTNERS
By: /s/ Xxxx X. Xxxxxxx
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Authorized Officer
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ANNEX A
[FORM OF ELECTION TO PURCHASE]
(To be executed upon cash exercise of Common Stock Purchase Warrant)
The undersigned hereby irrevocably elects to exercise the right, set forth
in the Common Stock Purchase Warrant (the "Warrant"), dated ________, 2001, by
and between COMPASS KNOWLEDGE HOLDINGS, INC.("Company") and PIONEER VENTURES
ASSOCIATES LIMITED PARTNERS to purchase Warrant Shares of the Company and
herewith (i) tenders payment for such Warrant Shares to the order of the
Company in the Amount of ____________________ ($______) in accordance with the
terms of this Warrant, (ii) certifies that the undersigned has such knowledge
and experience in financial and business matters that the undersigned is
capable of evaluating the merits and risks of an investment in the Warrant
Shares, and (iii) agrees to be bound by the provisions of the Warrant.
Capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to them in the
Warrant.
The undersigned requests that a Warrant for the number of shares of Common
Stock represented by such payment be registered in the name of
_______________________whose address is , and that such certificate and Warrant
Shares be delivered to ____________________, whose address is If said number of
Warrant Shares is less than all of the Warrant Shares purchasable hereunder,
the undersigned requests that a new Warrant representing the remaining balance
of the Warrant Shares be registered in the name of ____________________________,
whose address is , and that such Warrant be delivered to
whose address is _____________________________________
Signature:__________________________
(Signature must conform in all respects to name of holder as specified in the
Common Stock Purchase Warrant.
Date: __________________
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ANNEX B
ASSIGNMENT
For Value Received, the undersigned registered owner hereby sells, assigns
and transfers unto the rights to purchase the number of Warrant Shares set
forth below as represented in the foregoing Common Stock Purchase Warrant of
COMPASS KNOWLEDGE HOLDINGS, INC., and appoints attorney to transfer said rights
on the books of said corporation, with full power of substitution in the
premises
Name of Registered Owner:
Number of Warrant Shares Transferred:
By:___________________________
Its:__________________________
Dated: _____________
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THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS COMMON STOCK PURCHASE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY
THE HOLDER FOR PURPOSES OF INVESTMENT IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER SUCH ACTS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT
OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
COMPASS KNOWLEDGE HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF COMMON STOCK
THIS CERTIFIES THAT PIONEER VENTURES ASSOCIATES LIMITED PARTNERS
("Holder") or its designees or assigns, is entitled to purchase from COMPASS
KNOWLEDGE HOLDINGS, INC., a Nevada corporation (the "Company"), at the price
and during the periods hereinafter specified, 100,000 shares of Common Stock,
$.001 par value, of the Company ("Common Stock").
This Common Stock Purchase Warrant ("Warrant") is the Warrant
referenced in that certain Letter Agreement between the parties, dated June 27,
2001 (the "Letter Agreement").
1. Warrant Term and Exercise Price. (a) This Warrant may be exercised
in whole or in part at any time and from time to time after June 30, 2001, but
not later than 5:00 p.m. Eastern Time, on June 30, 2004 (the "Warrant
Expiration Date"), at an exercise price of One Dollar ($1.00) per Warrant Share
(such exercise price, as the same may be adjusted from time to time pursuant to
Section 7 hereof or otherwise, the "Exercise Price").
2. Manner of Exercise. The rights represented by this Warrant may be
exercised at any time within the period above specified, in whole or in part,
by the surrender of this Warrant to the Company with the "Form of Election to
Purchase" executed and substantially in the form attached hereto as Annex A, at
the principal executive office of the Company at 0000 Xxx Xxxxxx, Xxxxx 000,
Xxxxx, XX 00000 (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); and the payment to the Company of the
Exercise Price then in effect for the number of Warrant Shares specified in
such purchase form. The Warrant shall be deemed to have been exercised, in
whole or in part, prior to the close of business on the date this Warrant is
surrendered and payment is made in accordance with the foregoing provisions of
this Section 2, and the person or persons in whose name or names the
certificates for shares of Common Stock shall be issuable upon such exercise
shall become and be registered as the holder or holders of record of such
shares of Common Stock. The certificates for the shares of Common Stock so
purchased shall be delivered to the Holder within a reasonable time, not
exceeding twenty days, after the rights represented by this Warrant shall have
been so exercised. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the securities purchasable hereunder. The Company agrees that it
shall pay any and all stock transfer taxes payable in connection with any
exercise of this Warrant (excluding any taxes relating to the transfer of this
Warrant, which shall be paid by the Holder).
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3. Transfer of Warrant; Replacement. (a) Any transfer, sale or
assignment of this Warrant shall be effected by the Holder by (i) duly
executing the form of assignment attached hereto as Annex B and (ii)
surrendering this Warrant for cancellation at the office or agency of the
Company referred to in Section 2 hereof, whereupon the Company shall issue in
the name or names specified by the Holder a new Warrant or Warrants of like
tenor and representing in the aggregate rights to purchase the same number of
Warrant Shares as are purchasable hereunder, and, to such extent, such
transferee or transferees shall succeed, in all respects, as a Holder of this
Warrant. Each completed form of assignment shall be accompanied by an opinion
of counsel reasonably satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities
Act, provided however, that no such opinion shall be required if such transfer
shall cover a distribution of any portion of the Warrant by the Holder to its
directors, officers, employees, affiliated entities or selected dealers
("Permitted Transferee"), it being understood that the Company may request a
Permitted Transferee to make reasonable representations regarding its
sophistication in financial matters and investment intent with respect to the
Warrant to be transferred to it.
(b) Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and of reasonably
satisfactory indemnification of the Company, the Company will execute and
deliver a new Warrant of like tenor and date, provided that in the case of
mutilation, this Warrant will be surrendered and canceled. Any such new Warrant
so executed and delivered shall constitute an additional contractual obligation
on the part of the Company, whether or not this Warrant so lost, stolen,
destroyed or mutilated shall subsequently be enforceable by anyone at any time.
4. Valid Issuance and Reservation of Common Stock. The Company
represents, warrants and covenants that this Warrant has been duly authorized
and when delivered and paid for pursuant to the terms of the Letter Agreement,
will constitute a legal, valid and binding obligation of the Company
enforceable in accordance with its terms. The Warrant Shares have been duly
authorized, and when duly delivered and paid for (and upon the exercise of this
Warrant), will be validly issued, fully paid and nonassessable. A sufficient
number of shares of Stock have been reserved for issuance upon the exercise of
this Warrant. Each of this Warrant and the Warrant Shares conforms to all
statements relating thereto contained in the Letter Agreement, except as
otherwise described herein.
5. No Voting Rights. This Warrant shall not entitle the Holder to any
voting right or other rights as a shareholder of the Company.
6. Registration Rights.
6.1 Incidental Registration. The Company agrees that if at any
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time it shall propose to file a registration statement under the Securities Act
of 1933, as amended (the "Securities Act") on a form suitable for sales by
selling shareholders, it will give written notice to such effect to the Holder,
at least thirty (30) days prior to such filing, and, at the written request of
the Holder, made within ten (10) days after the receipt of such notice, will
include therein at the Company's cost and expense (except for the fees and
expenses of counsel to the Holder and underwriting discounts, commissions and
filing fees attributable to the Warrant Shares included therein) such of the
Warrant Shares held by the Holder as it shall request; provided, however, that
if the offering being registered by the Company is underwritten and if no other
outstanding shares of Company's common stock are included therein and if the
representative of the underwriters certifies that the inclusion therein of the
Warrant Shares would materially and adversely effect the sale of the securities
to be sold by the Company thereunder, the public offering of the Warrant Shares
included in such registration statement either shall be delayed for a period of
ninety (90) days after the commencement of the underwritten public offering,
provided that the representative of the underwriters certifies that such delay
would not materially and adversely effect the sale of the securities to be sold
by the Company or, if the representative of the underwriters will not so
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certify, the Holder shall not be permitted to participate in such registration.
Notwithstanding the foregoing, if the representative of the underwriters
certifies that the inclusion therein of the Warrant Shares would materially and
adversely effect the sale of the securities to be sold by the Company, the
Holder shall have the option to retain on its behalf and at the expense of the
Company (except for the fees and expenses of counsel to the Holder and
underwriting discounts, commissions and filing fees attributable to the shares
of the Warrant Shares included therein), or to cause the Company to retain the
services of underwriters reasonably acceptable to the Company who will be able
to sell the Warrant Shares concurrently with that being offered for sale by the
Company. The Company, at its own expense, will cause the prospectus included in
such registration statement to meet the requirements of the Securities Act for
such period of time, not exceeding ninety (90) days, as may be necessary to
effect the sale of the Warrant Shares included at the request of the Holder.
6.2 Expenses.
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(a) With respect to the inclusion of the Shares pursuant to
Section 6.1 hereof, all fees, costs and expenses of and incidental to such
registration, inclusion and public offering (as specified in Section (b) below)
in connection therewith shall be borne by the Company; provided, however, that
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Holder shall bear its share of the underwriting discount and commissions and
transfer taxes, and Holder shall be responsible for the payment of its own
legal fees.
(b) The fees, costs and expenses of registration to be borne
by the Company as provided in Section 6.2(a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees
and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in Section 6.2(a) above). Fees
and disbursements of counsel and accountants for Holder not expressly included
above shall be borne by Holder.
7. Adjustments to Exercise Price and Number of Securities.
(a) If prior to the expiration or termination of this
Warrant the Company shall subdivide its outstanding shares of Common stock
into a greater number of shares, or declare and pay a dividend on its
Common Stock payable in additional shares of its Common Stock, the Warrant
Price as then in effect shall be proportionately reduced, and the number
of Warrant Shares then subject to exercise under this Warrant
(and not previously exercised) shall be proportionately increased.
(b) If prior to the expiration or termination of this Warrant
the Company shall combine its outstanding shares of the Common Stock into
a smaller number of shares, the Warrant Price, as then in effect, shall be
proportionately increased and the number of Warrant Shares then subject to
exercise under this Warrant (and not previously exercised) shall be
proportionately reduced.
(c) If any adjustment under this Section 7 would create a
fractional share of Common Stock or a right to acquire a fractional Share
such fractional Share be disregarded and the number of Shares subject to
this Warrant will be the next higher number of shares, rounding all
fractions upward. Whenever there is an adjustment under this Section 7,
the Company will forthwith notify the Holder of such adjustment, setting
forth in reasonable detail the event requiring the adjustment and the
method by which such adjustment was calculated.
(d) If all or any portion of this Warrant is exercised after any
merger, consolidation, exchange of shares, separation, reorganization or
liquidation of the Company or other similar event, occurring after the
date hereof and, as a result of, shares of Common Stock are changed into
the
11
same or a different number of shares of the same or another class or
classes of securities of the Company or another entity, then the Holder
exercising this Warrant will receive, for the aggregate price paid on such
exercise, the aggregate number and class of shares that the Holder would
have received if this Warrant had been exercised immediately before such
merger, consolidation, exchange of shares, separation, reorganization or
liquidation or other similar event. If any adjustment under this Section 7
would create a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share will be
disregarded and the number of shares subject to this Warrant will be the
next higher number of shares, rounding all fractions upward. Whenever
there is an adjustment pursuant to this Section 7, the Company
will forthwith notify the Holder of such adjustment, setting forth in
reasonable detail the event requiring the adjustment and the method by
which such adjustment was calculated.
8. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
(i) the Company shall take a record of the holders of its shares of Common
Stock for the purpose of entitling them to receive a dividend or distribution
payable otherwise than in cash, or a cash dividend or distribution payable
otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(ii) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option
right or warrant to subscribe therefore; or
(iii) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be. Failure to give such notice or any defect therein shall not affect the
validity of any action taken in connection with the declaration or payment of
any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
9. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(i) If to a Holder, to the address of such Holder as shown on the
books of the Company; or
(ii) If to the Company, to the address set forth in Section 2 hereof,
or to such other address as the Company may designate by notice to the Holders.
10. Supplements and Amendments. The Company and the Holder may from
time to time supplement or amend this Agreement without the approval of any
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Holder may deem necessary or
desirable and which the Company and the
12
Holder deem shall not adversely affect the interests of any Holders. Other
amendments to this Agreement may be made only with the written consent of
Holders of a majority of the Warrants Shares subject to the then outstanding
portion of this Warrant.
11. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
12. Governing Law: Submission to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Florida
applicable to contracts entered into and to be performed wholly within said
State.
The Company and each of the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of Florida,
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company and each of the Holders hereby irrevocably waives any
objection to such exclusive jurisdiction or inconvenient forum. Any such
process or summons to be served upon any of the Company and the Holder (at the
option of the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address as set forth in
Section 9 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the party so served in any action, proceeding or claim.
The Company and each Holder, by its acceptance of an Warrant, agrees that the
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefore.
13. Entire Agreement. This Agreement contains the entire understanding
between the parties hereto and supersedes all prior agreements and
understandings, written or oral, with respect to the subject matter hereof.
14. Severability. If any provision of this Agreement shall be held to
be invalid and unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
15. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and any
Holder any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company and
any Holder.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
18. Redemption. If the Company's Common Stock is listed for trading on
the NASDAQ Stock Market, the New York Stock Exchange, the American Stock
Exchange or the OTC Bulletin Board Service or any similar exchange ("Listed")
and the average closing sales price of the Company's Common Stock during any
twenty (20) consecutive day trading period exceeds two (2) times the Exercise
Price (such average, the "Current Market Price"), upon thirty (30) days prior
written notice to the Holder, the Company may redeem (during which time the
Investor may exercise this Warrant as provided herein)
13
the Warrant at a price equal to the Current Market Price multiplied by the
number of shares of Warrant Stock then subject to the Warrant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first written.
COMPASS KNOWLEDGE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx
-------------------------
Authorized Officer
Attest:
/s/ Xxxxxx X. Xxxxxx
----------------------
President
PIONEER VENTURES ASSOCIATES LIMITED PARTNERS
By: /s/ Xxxx X. Xxxxxxx
-----------------------
Authorized Officer
14
ANNEX A
[FORM OF ELECTION TO PURCHASE]
(To be executed upon cash exercise of Common Stock Purchase Warrant)
The undersigned hereby irrevocably elects to exercise the right, set forth
in the Common Stock Purchase Warrant (the "Warrant"), dated ________, 2001, by
and between COMPASS KNOWLEDGE HOLDINGS, INC. ("Company") and PIONEER VENTURES
ASSOCIATES LIMITED PARTNERS to purchase Warrant Shares of the Company and
herewith (i) tenders payment for such Warrant Shares to the order of the
Company in the Amount of ___________________($_______) in accordance with the
terms of this Warrant, (ii) certifies that the undersigned has such knowledge
and experience in financial and business matters that the undersigned is
capable of evaluating the merits and risks of an investment in the Warrant
Shares, and (iii) agrees to be bound by the provisions of the Warrant.
Capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to them in the Warrant.
The undersigned requests that a Warrant for the number of shares of Common
Stock represented by such payment be registered in the name of
_______________________whose address is , and that such certificate and Warrant
Shares be delivered to ____________________, whose address is If said number of
Warrant Shares is less than all of the Warrant Shares purchasable hereunder,
the undersigned requests that a new Warrant representing the remaining balance
of the Warrant Shares be registered in the name of
____________________________________________, whose address is , and that such
Warrant be delivered to
whose address is_____________________________________
Signature:__________________________
(Signature must conform in all respects to name of holder as specified in the
Common Stock Purchase Warrant.
Date: __________________
15
ANNEX B
ASSIGNMENT
For Value Received, the undersigned registered owner hereby sells, assigns
and transfers unto the rights to purchase the number of Warrant Shares set
forth below as represented in the foregoing Common Stock Purchase Warrant of
COMPASS KNOWLEDGE HOLDINGS, INC., and appoints attorney to transfer said rights
on the books of said corporation, with full power of substitution in the
premises
Name of Registered Owner:
Number of Warrant Shares Transferred:
By: ___________________________
Its:___________________________
Dated: _____________
16
THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS COMMON STOCK PURCHASE WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE
PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY
THE HOLDER FOR PURPOSES OF INVESTMENT IN RELIANCE UPON EXEMPTIONS FROM
REGISTRATION UNDER SUCH ACTS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT
OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
COMPASS KNOWLEDGE HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF COMMON STOCK
THIS CERTIFIES THAT PIONEER VENTURES ASSOCIATES LIMITED PARTNERS
("Holder") or its designees or assigns, is entitled to purchase from COMPASS
KNOWLEDGE HOLDINGS, INC., a Nevada corporation (the "Company"), at the price
and during the periods hereinafter specified, 100,000 shares of Common Stock,
$.001 par value, of the Company ("Common Stock").
This Common Stock Purchase Warrant ("Warrant") is the Warrant
referenced in that certain Letter Agreement between the parties, dated June 27,
2001 (the "Letter Agreement").
1. Warrant Term and Exercise Price. (a) This Warrant may be exercised
in whole or in part at any time and from time to time after June 30, 2001, but
not later than 5:00 p.m. Eastern Time, on December 31, 2002 (the "Warrant
Expiration Date"), at an exercise price of fifty-five cents ($.55) per Warrant
Share (such exercise price, as the same may be adjusted from time to time
pursuant to Section 7 hereof or otherwise, the "Exercise Price").
2. Manner of Exercise. The rights represented by this Warrant may be
exercised at any time within the period above specified, in whole or in part,
by the surrender of this Warrant to the Company with the "Form of Election to
Purchase" executed and substantially in the form attached hereto as Annex A, at
the principal executive office of the Company at 0000 Xxx Xxxxxx, Xxxxx 000,
Xxxxx, XX 00000 (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); and the payment to the Company of the
Exercise Price then in effect for the number of Warrant Shares specified in
such purchase form. The Warrant shall be deemed to have been exercised, in
whole or in part, prior to the close of business on the date this Warrant is
surrendered and payment is made in accordance with the foregoing provisions of
this Section 2, and the person or persons in whose name or names the
certificates for shares of Common Stock shall be issuable upon such exercise
shall become and be registered as the holder or holders of record of such
shares of Common Stock. The certificates for the shares of Common Stock so
purchased shall be delivered to the Holder within a reasonable time, not
exceeding twenty days, after the rights represented by this Warrant shall have
been so exercised. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the securities purchasable hereunder. The Company agrees that it
shall pay any and all stock transfer taxes payable in connection with any
exercise of this Warrant (excluding any taxes relating to the transfer of this
Warrant, which shall be paid by the Holder).
17
3. Transfer of Warrant; Replacement. (a) Any transfer, sale or
assignment of this Warrant shall be effected by the Holder by (i) duly executing
the form of assignment attached hereto as Annex B and (ii) surrendering this
Warrant for cancellation at the office or agency of the Company referred to in
Section 2 hereof, whereupon the Company shall issue in the name or names
specified by the Holder a new Warrant or Warrants of like tenor and representing
in the aggregate rights to purchase the same number of Warrant Shares as are
purchasable hereunder, and, to such extent, such transferee or transferees shall
succeed, in all respects, as a Holder of this Warrant. Each completed form of
assignment shall be accompanied by an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, provided however, that no such opinion
shall be required if such transfer shall cover a distribution of any portion of
the Warrant by the Holder to its directors, officers, employees, affiliated
entities or selected dealers ("Permitted Transferee"), it being understood that
the Company may request a Permitted Transferee to make reasonable
representations regarding its sophistication in financial matters and investment
intent with respect to the Warrant to be transferred to it.
(b) Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and of reasonably
satisfactory indemnification of the Company, the Company will execute and
deliver a new Warrant of like tenor and date, provided that in the case of
mutilation, this Warrant will be surrendered and canceled. Any such new Warrant
so executed and delivered shall constitute an additional contractual obligation
on the part of the Company, whether or not this Warrant so lost, stolen,
destroyed or mutilated shall subsequently be enforceable by anyone at any time.
4. Valid Issuance and Reservation of Common Stock. The Company
represents, warrants and covenants that this Warrant has been duly authorized
and when delivered and paid for pursuant to the terms of the Letter Agreement,
will constitute a legal, valid and binding obligation of the Company enforceable
in accordance with its terms. The Warrant Shares have been duly authorized, and
when duly delivered and paid for (and upon the exercise of this Warrant), will
be validly issued, fully paid and nonassessable. A sufficient number of shares
of Stock have been reserved for issuance upon the exercise of this Warrant. Each
of this Warrant and the Warrant Shares conforms to all statements relating
thereto contained in the Letter Agreement, except as otherwise described herein.
5. No Voting Rights. This Warrant shall not entitle the Holder to any
voting right or other rights as a shareholder of the Company.
6. Registration Rights.
6.1 Incidental Registration. The Company agrees that if at any
-----------------------
time it shall propose to file a registration statement under the Securities Act
of 1933, as amended (the "Securities Act") on a form suitable for sales by
selling shareholders, it will give written notice to such effect to the Holder,
at least thirty (30) days prior to such filing, and, at the written request of
the Holder, made within ten (10) days after the receipt of such notice, will
include therein at the Company's cost and expense (except for the fees and
expenses of counsel to the Holder and underwriting discounts, commissions and
filing fees attributable to the Warrant Shares included therein) such of the
Warrant Shares held by the Holder as it shall request; provided, however, that
if the offering being registered by the Company is underwritten and if no other
outstanding shares of Company's common stock are included therein and if the
representative of the underwriters certifies that the inclusion therein of the
Warrant Shares would materially and adversely effect the sale of the securities
to be sold by the Company thereunder, the public offering of the Warrant Shares
included in such registration statement either shall be delayed for a period of
ninety (90) days after the commencement of the underwritten public offering,
provided that the representative of the underwriters certifies that such delay
would not materially and adversely effect the sale of the securities to be sold
by the Company or, if the representative of the underwriters will not so
18
certify, the Holder shall not be permitted to participate in such registration.
Notwithstanding the foregoing, if the representative of the underwriters
certifies that the inclusion therein of the Warrant Shares would materially and
adversely effect the sale of the securities to be sold by the Company, the
Holder shall have the option to retain on its behalf and at the expense of the
Company (except for the fees and expenses of counsel to the Holder and
underwriting discounts, commissions and filing fees attributable to the shares
of the Warrant Shares included therein), or to cause the Company to retain the
services of underwriters reasonably acceptable to the Company who will be able
to sell the Warrant Shares concurrently with that being offered for sale by the
Company. The Company, at its own expense, will cause the prospectus included in
such registration statement to meet the requirements of the Securities Act for
such period of time, not exceeding ninety (90) days, as may be necessary to
effect the sale of the Warrant Shares included at the request of the Holder.
6.2 Expenses.
--------
(a) With respect to the inclusion of the Shares pursuant to
Section 6.1 hereof, all fees, costs and expenses of and incidental to such
registration, inclusion and public offering (as specified in Section (b) below)
in connection therewith shall be borne by the Company; provided, however, that
--------- --------
Holder shall bear its share of the underwriting discount and commissions and
transfer taxes, and Holder shall be responsible for the payment of its own legal
fees.
(b) The fees, costs and expenses of registration to be borne
by the Company as provided in Section 6.2(a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in Section 6.2(a) above). Fees and
disbursements of counsel and accountants for Holder not expressly included above
shall be borne by Holder.
7. Adjustments to Exercise Price and Number of Securities.
(a) If prior to the expiration or termination of this
Warrant the Company shall subdivide its outstanding shares of Common
stock into a greater number of shares, or declare and pay a dividend on
its Common Stock payable in additional shares of its Common Stock, the
Warrant Price as then in effect shall be proportionately reduced, and the
number of Warrant Shares then subject to exercise under this Warrant (and
not previously exercised) shall be proportionately increased.
(b) If prior to the expiration or termination of this
Warrant the Company shall combine its outstanding shares of the Common
Stock into a smaller number of shares, the Warrant Price, as then in
effect, shall be proportionately increased and the number of Warrant
Shares then subject to exercise under this Warrant (and not previously
exercised) shall be proportionately reduced.
(c) If any adjustment under this Section 7 would create
a fractional share of Common Stock or a right to acquire a fractional
Share such fractional Share be disregarded and the number of Shares
subject to this Warrant will be the next higher number of shares,
rounding all fractions upward. Whenever there is an adjustment under this
Section 7, the Company will forthwith notify the Holder of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
(d) If all or any portion of this Warrant is exercised
after any merger, consolidation, exchange of shares, separation,
reorganization or liquidation of the Company or other similar event,
occurring after the date hereof and, as a result of, shares of Common
Stock are changed into the
19
same or a different number of shares of the
same or another class or classes of securities of the Company or another
entity, then the Holder exercising this Warrant will receive, for the
aggregate price paid on such exercise, the aggregate number and class of
shares that the Holder would have received if this Warrant had been
exercised immediately before such merger, consolidation, exchange of
shares, separation, reorganization or liquidation or other similar event.
If any adjustment under this Section 7 would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share will be disregarded and the number of shares
subject to this Warrant will be the next higher number of shares,
rounding all fractions upward. Whenever there is an adjustment pursuant
to this Section 7, the Company will forthwith notify the Holder of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
8. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(i) the Company shall take a record of the holders of its shares of Common
Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings,
as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(ii) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company,
or any option right or warrant to subscribe therefore; or
(iii) a dissolution, liquidation or winding up of the Company(other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least (15) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
(i) If to a Holder, to the address of such Holder as shown on the
books of the Company; or
(ii) If to the Company, to the address set forth in Section 2
hereof, or to such other address as the Company may designate by notice to the
Holders.
10. Supplements and Amendments. The Company and the Holder may from
time to time supplement or amend this Agreement without the approval of any
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Holder may deem necessary or
desirable and which the Company and the
20
Holder deem shall not adversely affect the interests of any Holders. Other
amendments to this Agreement may be made only with the written consent of
Holders of a majority of the Warrants Shares subject to the then outstanding
portion of this Warrant.
11. Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
12. Governing Law: Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of Florida applicable to contracts entered into and to be performed wholly
within said State.
The Company and each of the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of Florida,
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company and each of the Holders hereby irrevocably waives any
objection to such exclusive jurisdiction or inconvenient forum. Any such process
or summons to be served upon any of the Company and the Holder (at the option of
the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address as set forth in
Section 9 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the party so served in any action, proceeding or claim.
The Company and each Holder, by its acceptance of an Warrant, agrees that the
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefore.
13. Entire Agreement. This Agreement contains the entire
understanding between the parties hereto and supersedes all prior agreements and
understandings, written or oral, with respect to the subject matter hereof.
14. Severability. If any provision of this Agreement shall be
held to be invalid and unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Agreement.
15. Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended, nor should
they be construed as, a part of this Agreement and shall be given no substantive
effect.
16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and any
Holder any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company and
any Holder.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
18. Redemption. If the Company's Common Stock is listed for
trading on the NASDAQ Stock Market, the New York Stock Exchange, the American
Stock Exchange or the OTC Bulletin Board Service or any similar exchange
("Listed") and the average closing sales price of the Company's Common Stock
during any twenty (20) consecutive day trading period exceeds two (2) times the
Exercise Price (such average, the "Current Market Price"), upon thirty (30)
days prior written notice to the Holder, the Company may redeem (during which
time the Investor may exercise this Warrant as provided herein)
21
the Warrant at a price equal to the Current Market Price multiplied by the
number of shares of Warrant Stock then subject to the Warrant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first written.
COMPASS KNOWLEDGE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx
------------------------
Authorized Officer
Attest:
/s/ Xxxxxx X. Xxxxxx
------------------------
President
PIONEER VENTURES ASSOCIATES LIMITED PARTNERS
By: /s/ Xxxx X. Xxxxxxx
------------------------
Authorized Officer
22
ANNEX A
[FORM OF ELECTION TO PURCHASE]
(To be executed upon cash exercise of Common Stock Purchase Warrant)
The undersigned hereby irrevocably elects to exercise the right, set forth
in the Common Stock Purchase Warrant (the "Warrant"), dated __________, 2001,
by and between COMPASS KNOWLEDGE HOLDINGS, INC. ("Company") and PIONEER
VENTURES ASSOCIATES LIMITED PARTNERS to purchase Warrant Shares of the Company
and herewith (i) tenders payment for such Warrant Shares to the order of the
Company in the Amount of ______________________($________) in accordance with
the terms of this Warrant, (ii) certifies that the undersigned has such
knowledge and experience in financial and business matters that the undersigned
is capable of evaluating the merits and risks of an investment in the Warrant
Shares, and (iii) agrees to be bound by the provisions of the Warrant.
Capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to them in the Warrant.
The undersigned requests that a Warrant for the number of shares of Common
Stock represented by such payment be registered in the name of________________
______________whose address is, and that such certificate and Warrant Shares be
delivered to____________________, whose address is. If said number of Warrant
Shares is less than all of the Warrant Shares purchasable hereunder, the
undersigned requests that a new Warrant representing the remaining balance of
the Warrant Shares be registered in the name of______________________________ ,
whose address is, and that such Warrant be delivered to
whose address is_____________________________________.
Signature:__________________________
(Signature must conform in all respects to name of holder as specified in the
Common Stock Purchase Warrant.
Date: __________________
23
ANNEX B
ASSIGNMENT
For Value Received, the undersigned registered owner hereby sells, assigns
and transfers unto the rights to purchase the number of Warrant Shares set
forth below as represented in the foregoing Common Stock Purchase Warrant of
COMPASS KNOWLEDGE HOLDINGS, INC., and appoints attorney to transfer said rights
on the books of said corporation, with full power of substitution in the
premises
Name of Registered Owner:
Number of Warrant Shares Transferred:
By:_______________________________
Its:______________________________
Dated: _______________
24
