E-COM TECHNOLOGIES CORP.
Debenture and Warrant Purchase Agreement
This Debenture and Warrant Purchase Agreement (this "Agreement") is entered into
as of November 15, 2000, by and between E-COM TECHNOLOGIES CORP., a Nevada
corporation (the "Company"), Xxxxxx Xxxx, ("Xxxx"), and Xxxxxxx Xxxxxxxxx
("Xxxxxxxxx") (together with Rein, the "Purchasers").
In consideration of the mutual promises hereinafter set forth, the parties
hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE
1.1 Sale and Purchase. Subject to the terms and conditions hereof, at the
Closing (as defined in Section 2 below), the Company hereby agrees to
issue and sell to Purchasers, and Purchasers agree to purchase
from the Company, the following convertible debentures (the
"Debentures") due November 15, 2005, in the respective principal amounts
set out opposite the name of each of the Purchasers below, each
Debenture to be in the form of the Debenture attached hereto as
Exhibit A and to be convertible (subject to adjustment and
therein provided) into the number of shares of the Company's common
stock ("Common Stock") at the conversion price ("Conversion Price")
and in accordance with the terms of the Debenture:
Purchaser Principal Amount
--------- ----------------
Rein US$12,430
Xxxxxxxxx US$12,430
1.2 Sale of Warrant. In connection with and in consideration for the
offering of the Debentures (the "Offering"), the Company will issue to
Purchasers warrants (the "Warrants") exercisable for two (2) years
from the date of issue to purchase from the Company the number of
shares of the Company's Common Stock set out opposite the name of each
of Purchasers below, at the respective exercise prices set out
below opposite the name of such Purchaser, each such Warrant to be in
the form of the Warrant attached hereto as Exhibit B:
Purchaser Shares Purchasable Exercise Price per Share
--------- ------------------ ------------------------
Rein 62,150 $0.10
Xxxxxxxxx 62,150 $0.10
1.3 Purchase Price. The purchase price shall be US$24,860 paid as
follows:
Purchaser Purchase Price
--------- ----------------
Rein US$12,430
Xxxxxxxxx US$12,430
1.4 Grant of Security Interest. To secure the prompt and full payment
of all principal and interest owing to the Purchasers pursuant to the
Debentures, the Company agrees to grant to each Purchaser a security
interest in all of the Company's assets, accounts receivable and
inventory, now existing or hereafter arising, and all proceeds
therefrom. Such security interest shall terminate on the earlier of
(i) the date the Company completes any unsecured financing in excess
of $1.0 million after November 15, 2000 or (ii) the date such Purchaser's
Debenture is redeemed or converted in full. The Company shall file UCC-1
Financing Statements in the State of Nevada at the written request of each
Purchaser, execute for filing, any additional financing statements or
continuation statements as may be required from time to time to perfect or
continue such Purchaser's security interest in such assets.
2. CLOSING, DELIVERY AND PAYMENT
2.1 The closing of the sale and purchase of the Debentures and the Warrants
under this Agreement (the "Closing") shall take place on November 15, 2000, at
388 - 1281 West Georgia Street, Vancouver, British Columbia, or at such other
time or place as the Company and the Purchasers may mutually agree (such date
being hereinafter referred to as the "Closing Date"). At the Closing, the
Purchasers shall pay to the Company, by certified check or wire transfer of
immediately available funds, the Purchase Price, and the Company shall, at the
Closing, deliver to Purchasers the Debentures and the Warrants, each dated the
Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of the Purchasers as follows:
3.1 Organization, Subsidiaries, Good Standing, Qualification and Power and
Authority. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. The Company
has all requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as presently
conducted and as presently proposed to be conducted, and is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business, properties, prospects or financial condition. The
Company has all requisite corporate power and authority (a) to execute and
deliver this Agreement, the Debentures, the Warrants and the other agreements,
instruments and documents contemplated to be executed and delivered by it
pursuant to this Agreement (this Agreement, the Debentures, and the Warrants,
and such other agreements instruments and documents being herein sometime
collectively referred to as, the "Transaction Documents"), (b) to issue and
sell the Debentures and to issue the shares of the Company's Common Stock
issuable upon conversion of the Debentures (the "Conversion Shares"), to
issue and sell the Warrants and to issue the shares of the Company's
Common Stock issuable upon exercise of the Warrants (the "Warrant Shares"),
and (d) to carry out the other provisions of the Transaction Documents. The
Company has no subsidiaries or affiliates other than E-Com Consultants (Canada)
Corp., a British Columbia corporation ("Subsidiary"), and does not, directly or
indirectly, own any interest in or control any corporation, partnership, joint
venture, or other business entity.
3.2 Capitalization. All issued and outstanding shares of the Common Stock
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable. The issued and outstanding capital stock
of the Company immediately prior to the Closing will be as set forth
on Schedule 3.2 attached hereto and incorporated by reference herein.
3.3 Authorization; Binding Obligations. All corporate action on the part
of the Company, its officers, directors and shareholders necessary for
the authorization of the Transaction Documents and the performance of
all of its obligations thereunder and for the authorization, sale,
issuance and delivery of the Debentures, the Warrants, the Conversion
Shares and the Warrant Shares has been taken or will be taken prior to
the Closing. The Conversion Shares and the Warrant Shares have been or
will prior to the Closing be duly and validly reserved for issuance
and, when issued upon conversion of the Debentures or upon the
exercise of the Warrants, as the case may be, will be validly issued,
fully paid and non-assessable. The Company shall take all such action
as may be necessary to assure that an adequate number of shares of
Common Stock is authorized and reserved for issuance of the Conversion
Shares and the Warrant Shares. This Agreement has been duly authorized
and executed by the Company. This Agreement constitutes, and the
Debentures, the Warrants and the other Transaction Documents will once
executed constitute, valid, legal and binding obligations of the
Company enforceable in accordance with their terms, except to such
limitations as may result from any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally.
3.4 No Real Property. The Company does not own or have any interest in any
real estate.
3.5 Consents and Approvals. Except as required by the Securities Act of
1933, as amended (the "Securities Act"), the Securities Exchange Act
of 1934, as amended
(the "Exchange Act") and any applicable state securities laws, no
filings with, notices to, or approvals of any governmental or
regulatory body are required to be obtained or made by the Company in
connection with the consummation of the transactions contemplated
hereby.
3.6 No Violations. The execution and delivery of this Agreement, the
Debentures, the Warrants or the other Transaction Documents and the
performance by the Company of its obligations hereunder and thereunder
(a) do not and will not conflict with or violate any provision of the
Company's Articles of Incorporation or bylaws, and (b) do not and will
not (i) conflict with or result in a breach of the terms, conditions
or provisions of, (ii) constitute a default under, (iii) result in the
creation of any encumbrance upon the capital stock or assets of the
Company pursuant to, (iv) give any third party the right to modify,
terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative
or governmental body or other third party pursuant to, any law,
statute, rule or regulation or any agreement or instrument or any
order, judgment or decree to which the Company is subject or by which
any of its assets are bound except for such consents which have been
obtained by the Company.
3.7 Compliance with Laws. The business of the Company to its knowledge has
been conducted in compliance with all applicable laws and regulations
of governmental authorities, except for such violations that have been
cured or that, individually or in the aggregate, may not reasonably be
expected to have a material adverse effect on the business,
operations, financial condition or prospects of the Company. To the
Company's knowledge, neither the real or personal properties leased,
operated or occupied by the Company, nor the use, operation or
maintenance thereof (i) violates any applicable laws, or regulations
of any government or governmental authorities, or (ii) violates any
restrictive or similar covenant, agreement, commitment, understanding
or arrangement.
3.8 Licenses; Permits; Related Approvals. The Company to its knowledge
possesses all licenses, permits, consents, approvals, authorizations,
qualifications, and orders of all governments and governmental
authorities legally required to enable the Company to conduct its
business in all jurisdictions in which such business is conducted.
3.9 Title to Assets. Except as set forth on Schedule 3.9 attached hereto
and incorporated by reference herein, the Company to its knowledge has
good and marketable title to its property and assets free and clear of
all mortgages, security interests, liens, claims, and other
encumbrances. With respect to the property and assets it leases, the
Company is in material compliance with such leases and, to its
knowledge, holds a valid leasehold interest free of any security
interests, liens, claims, or other encumbrances.
3.10 Defaults. The Company and its Subsidiary is not in default in the
performance, observance or fulfillment of any obligation, agreement,
covenant, or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it is a party or by which it or any
of its properties may be bound, other than such violations or defaults
that would not individually or in the aggregate have a material
adverse effect on the Company's or such Subsidiary's business,
prospects, properties, condition (financial or other), results of
operations or net worth.
3.11 Intellectual Property. Except as set forth on Schedule 3.11 attached
hereto and incorporated by reference herein, the following statements
are correct, other than such exceptions that would not have a material
adverse effect on the Company. The Company owns or has a license to
use all intellectual property used in its business. The Company to its
knowledge has not infringed, and is not now infringing, on any
proprietary right belonging to any other person, firm, or entity. The
Company has the exclusive right and authority to use all of its
creations and inventions, trade secrets, processes, models, designs,
software and formulas as are necessary to enable the Company to
conduct and to continue to conduct all phases of its business in the
manner presently conducted by it and in accordance with the its
business plan. The Company is the sole owner of its trade secrets,
free and clear of any liens, encumbrances, restrictions, or legal or
equitable claims of others and the Company has taken all reasonable
security measures to protect the secrecy, confidentiality, and value
of these trade secrets. Any of the Company's employees and any other
persons who, either alone or in concert with others, developed,
invented, discovered, derived, programmed, or designed these secrets,
or who have knowledge of or access to information relating to them,
have assigned and transferred their rights to such trade secrets to
the Company and each such person has been put on notice and, if
necessary, has entered into agreements that these secrets are
proprietary to the Company and are not to be divulged or misused.
3.12 Proprietary Rights. The Company has not received any communications
alleging that it has violated or, by conducting its business as
proposed would violate, any proprietary rights of any other person,
and the Company is not aware of any basis for the foregoing.
3.13 No Litigation. There is no action, suit or proceeding pending or, to
the knowledge of the Company, threatened against or affecting the
Company, its Subsidiary or any of their properties or rights before
any court or by or before any governmental body or arbitration board
or tribunal, and the Company and its Subsidiary are not in default
with respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or federal, state, local or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
3.14 Financial Statements; Undisclosed Liabilities. Attached hereto as
Schedule 3.14 and incorporated by reference herein are copies of the Company's
consolidated balance sheet as of December 31, 1999 and June 30, 2000, and the
Company's consolidated statement of operations and retained earnings for the
year ended December 31, 1999 and the period ended June 30, 2000, and the
Company's consolidated statement of cash flows for the Year ended December
31, 1999 and the period ended June 30, 2000 (hereinafter collectively
referred to as the "Financial Statements"). The Financial Statements are in
accordance with the books and records of the Company, are true, correct and
complete and accurately present the Company's financial position as of the dates
set forth therein and the results of the Company's operations and changes
in the Company's financial position for the periods then ended, all in
conformity with generally accepted accounting principles applied on a
consistent basis during each period and on a basis consistent with that of
prior periods. Except (i) as disclosed in the Financial Statements, (ii) as
disclosed in this Agreement, and (iii) as are incurred in the ordinary course
of the routine daily affairs of the Company's and its Subsidiary's
business, neither the Company nor its Subsidiary has any liabilities or
obligations of any nature or kind, known or unknown, whether accrued,
absolute, contingent, or otherwise. There is no basis for assertion against
the Company or its Subsidiary of any material
claim, liability or obligation not fully disclosed in the Financial
Statements or in this Agreement.
3.15 Tax Matters. The Company and its Subsidiary has duly and timely filed,
or obtained extensions of time for filing, all material tax returns
required by federal, state and local authorities (the "Returns"). All
information reported on the Returns is true, accurate, and complete.
The Company is not a party to, and is not aware of, any pending or
threatened action, suit, proceeding, or assessment against it for the
collection of taxes by any government. The Company and its Subsidiary
has paid in full all taxes, interest, penalties, assessments and
deficiencies owed by it to all taxing authorities.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Purchasers each severally and not jointly hereby represent and warrant to the
Company as follows:
4.1 Requisite Power and Authority. Such Purchaser has all necessary power
and authority to execute and deliver this Agreement and to carry out
its provisions. All actions on such Purchaser's part required for the
lawful execution and delivery of this Agreement have been or will be
effectively taken prior to the Closing.
4.2 Investment Representations. Such Purchaser understands that none of
the "Securities" (collectively the Debentures, the Warrants, the
Conversion Shares and the Warrant Shares) to be acquired by such
Purchaser has been registered under the Securities Act. Such Purchaser
also understands that such Debenture and such Warrants are being
offered and sold pursuant to an exemption from registration contained
in regulations under the Securities Act based in part upon such
Purchaser's representations contained in this Agreement.
4.3 Acquisition for Own Account. Such Purchaser is acquiring the
Debentures and/or the Conversion Shares and the Warrants and/or the Warrant
Shares to be acquired by it for its own account for investment only, and not
with a view towards their distribution in violation of applicable securities
laws.
4.4 Accredited Investor. Each Purchaser represents that it is an
"accredited investor" within the meaning of Rule 501(a) of Regulation D under
the Securities Act.
4.5 Non-U.S. Person. Such Purchaser represents, warrants and agrees:
(a) Purchaser is not a "U.S. Person," as such term is defined by Rule 902
of Regulation S under the Securities Act (the definition of which
includes, but is not limited to, an individual resident in the United
States and an estate or trust of which any executor or administrator
or trustee, respectively, is a U.S. Person and any partnership or
corporation organized or incorporated under the laws of the United
States);
(b) Purchaser was outside the United States at the time of execution and
delivery of the Agreement;
(c) no offers to sell the Securities were made by any person to the
Purchaser while the Purchaser was in the United States;
(d) the Securities are not being acquired, directly or indirectly, for the
accountor benefit of a U.S. Person or a person in the United States;
(e) that the Securities have not been registered under the Securities Act,
and the Purchaser undertakes and agrees that it will not offer or sell
the Securities unless such Securities are sold in accordance with
Regulation S under the Securities Act, the Securities are registered
under the Securities Act and the securities laws of all applicable
states of the United States, or such Securities are sold pursuant to
an available exemption from such registration requirements that does
not require registration under the Securities Act or any applicable
state laws and regulations governing the offer and sale of securities.
The Purchaser understands that the Company presently has no obligation
or present intention of filing a registration statement under the
Securities Act for the Securities; and
(f) hedging transactions involving the Securities may not be conducted
unless in compliance with the Securities Act.
4.6 Such Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
of an investment in the Debenture, the Warrants, the Debenture Shares
and the Warrant Shares and it is able to bear the economic risk of
loss of its entire investment.
4.7 The Company has provided to such Purchaser the opportunity to ask
questions and receive answers concerning the terms and conditions of
the Offering and it has had access to such information concerning the
Company as it has considered necessary or appropriate in connection
with its investment decision to acquire the Securities.
4.8 Such Purchaser understands and agrees that the certificates
representing the Securities will bear a legend stating that such shares
have not been registered under the Securities Act or the securities laws
of any state of the United States and may not be offered for sale or sold unless
registered under the Securities Act and the securities laws of all applicable
states of the United States or an exemption from such registration
requirements is available.
4.9 Such Purchaser consents to the Company making a notation on its
records or giving instructions to any transfer Purchasers of the Company in
order to implement the restrictions on transfer set forth and described
herein.
4.10 Such Purchaser acknowledges the Company is relying on the
representations, warranties and agreements of the Purchaser and that this
offering is being made in reliance on the exemption from registration
provided by Regulation S of the Securities Act and Section 4(2) of the
Securities Act, as interpreted by Rule 506 of Regulation D under the
Securities Act.
5. REGISTRATION RIGHTS RELATING TO CONVERSION SHARES AND WARRANT SHARES
5.1 Definitions. As used in this Article 5, the following terms shall have
the following respective meanings:
(a) "Equity Securities" means (i) any securities of the Company
entitled
to participate with the Common Stock in a distribution of the
Company's remaining assets (after distribution to all holders of
securities entitled to such distribution in priority to the holders of
Common Stock) and (ii) any securities convertible into or exercisable
or exchangeable for securities of the type referred to in Section
5.1(a)(i).
(b) "Public Offering" shall mean an underwritten public offering (with a
nationally recognized underwriter) of Common Stock pursuant to an
effective registration statement under the Securities Act.
(c) "Public Sale" means any sale of Registrable Securities to the public
pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the
provisions of Rule 144.
(d) "registers," "registered," and "registration" shall refer to a
registration effected by preparing and filing a registration statement
in compliance with the Securities Act and the declaration or ordering
of the effectiveness of such registration statement by the SEC.
(e) "Registrable Securities" shall mean (i) the Conversion Shares, (ii)
the Warrant Shares, if the Warrants are exercised and (iii) any shares
of Common Stock or Equity Securities issued as a dividend or other
distribution with respect to or in exchange for or in replacement of
the Conversion Shares or the Warrant Shares, provided, however, that
Registrable Securities shall not include any such shares or Equity
Securities that have previously been registered under the Securities
Act or that have otherwise been sold to the public in an open-market
transaction under Rule 144.
(f) "Registration Expenses" shall mean all expenses incurred in connection with
effecting any registration pursuant to this Agreement, including
without limitation all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for
the Company, blue sky fees and expenses, expenses of any regular or
special audits incident to or required by any such registration, and
the fees and expenses of one counsel for the selling holders of
Registrable Securities, but excluding Selling Expenses.
(g) "Rule 144" shall mean Rule 144 as promulgated by the SEC under the
Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the SEC.
(h) "SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
(i) "Selling Expenses" shall mean all stock transfer taxes, underwriting
discounts, expenses for special counsel of a selling stockholder and
selling commissions applicable to the sale of Registrable Securities.
5.2 Piggyback Registrations.
(a) Request for Inclusion. If the Company shall determine to register
any
of its securities for its own account or for the account of other
security holders of the Company on any registration form in a Public
Offering or other registration of Equity Securities (other than a
registration relating to either Form S-4 or S-8), which permits the
inclusion of Registrable Securities (a "Piggyback Registration"), the Company
will promptly give Purchasers, as set forth in Section 8.2 written notice
thereof (the "Registration Notice") and, subject to Section 5.2(c), shall
include in such registration all of the Registrable
Securities requested to be included therein pursuant to the written
request of Purchasers received within thirty (30) days after delivery of
the Company's notice.
(b) Underwriting. If the Piggyback Registration relates to an underwritten
Public Offering, the Company shall so advise Purchasers as a part of the
written notice given pursuant to Section 5.2(a). In such event, the
right of any holder of Registrable Securities to participate in such
registration shall be conditioned upon such holder's participation in
such underwriting in accordance with the terms and conditions thereof.
Purchasers shall be responsible for answering that all holders of
Registrable Securities proposing to distribute their securities
through such underwriting enter into an underwriting agreement in
customary form with the underwriter or underwriters selected by the
Company.
(c) Priorities. If such proposed Piggyback Registration is an
underwritten
offering and the managing underwriter for such offering advises the
Company that the amount of securities requested to be included therein
exceeds the amount of securities that can be sold in such offering, or
if the Company and the managing underwriter shall in good faith
determine to reduce the number of shares to be
offered by the Company pursuant to a reasonable assessment of market
conditions (an "Underwriter's Cutback"), (i) the number of Registrable
Securities requested to be included in such Piggyback Registration,
(ii) the number of securities determined by the directors of the
Company in good faith to be sold by the Company, and (iii) the number
of securities, if any, to be sold by any other security holders of the
Company exercising demand registration rights, if any, in such
offering, shall each be reduced pro rata among the holders on the
basis of the percentage of the outstanding Common Stock held by such
holders (assuming the complete conversion of the Debenture and the
exercise in full of the Warrant and any other options, warrants and
similar rights held by such holders). Notwithstanding the foregoing,
in no event shall the Underwriter's Cutback reduce the number of
Registrable Securities included in such Public Offering or other
registration of Equity Securities to less than fifty percent (50%) of
the Registrable Securities held by Purchasers on the date of the
Registration Notice.
5.3 Expenses of Registration. Except as provided in this Section 5.4, the
Company shall bear all Registration Expenses incurred in connection
with any Piggyback Registrations. All Selling Expenses incurred by the
Company relating to Registrable Securities included in any Piggyback
Registration, shall be reimbursed by each Purchaser, pro rata based on
the number of Registrable Securities being registered on their behalf.
5.4 Registration Procedures. In the case of each registration effected by
the Company pursuant to this Article 5, the Company will keep Purchasers
advised in writing as to the initiation of such registration and as to
the completion thereof. The Company will use its reasonable efforts
to:
(a) cause such registration to be declared effective by the SEC;
(b) prepare and file with the SEC such amendments and supplements to
such
registration statement and the prospectus used in connection with such
registration statement (including post-effective amendments) as may be
necessary to comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all securities covered
by such registration statement;
(c) obtain appropriate qualifications of the securities covered by
such
registration under state securities or "blue sky" laws in such
jurisdictions as may be requested by Purchasers;
(d) furnish such number of prospectuses and other documents
incident
thereto, including any amendment of or supplement to the prospectus,
as Purchasers from time to time may reasonably request;
(e) notify Purchasers at any time when a prospectus relating
thereto is
required to be delivered under the Securities Act, of the happening of
any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances
then existing, and at the request of Purchasers, prepare and furnish to
Purchasers a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter
delivered to Purchasers of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing; cause all Registrable Securities covered
by such registration to be listed on each securities exchange or
inter-dealer quotation system on which similar securities issued by
the Company are then listed;
(f) provide a transfer Purchasers and registrar for all Registrable
Securities
covered by such registration and, if necessary, a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(g) otherwise comply with all applicable rules and regulations of the
SEC,
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least 12
months, but not more than 18 months, beginning with the first month
after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act; and
5.5 Indemnification.
(a) The Company will indemnify each Purchaser, each of such
Purchaser's
officers and directors, and each person controlling such Purchaser
within the meaning of Section 15 of the Securities Act, with respect
to each registration, qualification or compliance effected pursuant to
this Article 5 or otherwise, against all expenses, claims, losses,
damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any 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 any violation by the Company of the Securities Act
applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification
or compliance, and will reimburse each such indemnified person for any
legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such claim, loss, damage,
liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claims, loss,
damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the
Company by such Purchaser and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this
Section 5.5(a) 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 has not been
unreasonably withheld).
(b) Each of the Purchasers, to the extent it is a holder of
Registrable
Securities included in any registration effected pursuant to this
Article 5, shall indemnify the Company, each of its directors,
officers, Purchasers, employees and representatives, and each person who
controls the Company within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and will reimburse such indemnified persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in strict conformity with written information furnished to
the Company by Purchasers on behalf of such Purchaser; provided, however, that
(x) such Purchaser shall not be liable hereunder for any amounts in excess of
the net proceeds received by such Purchaser pursuant to such registration, and
(y) the obligations of such Purchaser hereunder shall not apply to amounts
paid in settlement of any such claims, losses, damages or liabilities (or
actions in respect thereof) if such settlement is effected without the consent
of such Purchaser (which consent has not been unreasonably withheld).
(c) Each party entitled to indemnification under this Section 5.5
(the
"Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel selected by the Indemnifying Party,
who shall conduct the defense of such claim or any litigation
resulting therefrom, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 5.5 to the extent such failure is
not prejudicial. No Indemnifying Party in the defense of any such
claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement
which does not include an unconditional release of such Indemnified
Party from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 5.5 is held
by a
court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense
referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on
indemnification and contribution contained in an underwriting
agreement entered into in connection with an underwritten public
offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
5.6 Other Obligations. With a view to making available the benefits of
certain rules and regulations of the SEC which may effectuate the
registration of Registrable Securities or permit the sale of
Registrable Securities to the public without registration, the Company
agrees to:
(a) after its initial registration under the Securities Act, exercise
best
efforts to cause the Company to be eligible to utilize Form S-3 (or
any similar form) for the registration of Registrable Securities;
(b) at such time as any Registrable Securities are eligible for
transfer
under Rule 144(k), upon the request of Purchasers on behalf of the holder of
such Registrable Securities, promptly remove any restrictive legend from the
certificates evidencing such securities, at no cost to Purchasers or such
holder where such holder is a Purchaser hereunder, and at the cost of
Purchasers in any other case;
(c) make and keep available public information as defined in Rule
144
under the Securities Act at all times from and after its initial
registration under the Securities Act;
(d) file with the SEC in a timely manner all reports and other
documents
required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting
requirements; and
(e) furnish Purchasers upon request a written statement by the
Company as to
its compliance with the reporting requirements of Rule 144 (at any
time following the effective date of the first registration statement filed
by the
Company under the Securities Act for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act
(at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents as a holder of
Registrable Securities may reasonably request in availing itself of
any rule or regulation of the Commission (including Rule 144A)
allowing a holder of Registrable Securities to sell any such
securities without registration.
5.7 Termination of Registration Rights. The right of Purchasers to
request
inclusion of Registrable Securities in any registration pursuant to
this Article 5 shall terminate at the date that is the earlier of: (a)
that date that all Registrable Securities have been registered under
the Securities Act has or otherwise been sold to the public in an
open-market transaction under Rule 144; and (b) the earlier of (i) the
fifth anniversary of the Closing Date, and (ii) the first anniversary
of the date on which the last Registrable Securities obtainable by
each Purchaser have been obtained by conversion or exercise of such
Purchaser's Debenture or Warrant, as applicable.
6. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS
The obligation of Purchasers to purchase and pay for the Debentures and the
Warrants to be delivered to it at the Closing shall be subject to the
satisfaction of the following conditions as of the Closing Date:
6.1 the representations and warranties of the Company contained in this
Agreement, the Debenture and the Warrant shall be true and correct on
and as of the Closing Date.
7. COMPANY COVENANTS AND PURCHASER COVENANTS.
7.1 Company Covenants. The Company covenants and agrees with the
Purchasers that:
(a) Reservation of Common Stock. The Company will reserve and keep
available that maximum number of its authorized but unissued Common
Stock as may be required for the issuance of Conversion Shares and the
Warrant Shares.
(b) Security Interests in Software. The Company will not grant a
security
interest or encumber any of its properties or assets which are
material individually or in the
aggregate, to its and its business, taken as a whole, to secure the
repayment of debt in excess of $50,000, except in the ordinary course
of business consistent with past practice, without the expressed
written consent of the Purchasers, which shall not be unreasonably
withheld.
7.2 Purchaser Covenants. Each of Purchasers covenants and agrees with
Purchasers that it will not either directly or indirectly take any
short position or hedge position in the Company's Common Stock until
all of the Purchasers have converted all of the Debentures into
Debenture Shares and exercised all of the Warrants for Warrant Shares,
nor will any Purchaser make any promissory notes and/or pledges to
that effect on the Company's Common Stock.
8. MISCELLANEOUS
8.1 Currency. Except as may be otherwise expressly provided, all dollar
amounts herein are references to United States dollars.
8.2 Governing Law. This Agreement shall be governed by the internal law,
and not the law of conflicts, of the State of Nevada.
8.3 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by or on behalf of
the Purchasers and the closing of the transactions contemplated
hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such
certificate or instrument.
8.4 Successors and Assigns. Neither Purchaser shall be entitled to assign
its rights under this Agreement or any of the other Transaction
Documents, without the consent of the Company, which consent shall not
be unreasonably withheld or delayed; provided always, however, that no
such consent shall be required for either Purchaser to assign such
rights to any person or group of persons controlling or owning the
majority of all beneficial interests in such Purchaser, any other
entity controlled by such person or persons, or an entity controlled
by such Purchaser, provided that such entity shall continue to be so
controlled by such persons or such Cutters applicable. The provisions
hereof shall inure to the benefit of, and be binding upon, the
successors, permitted assigns, heirs, executors and administrators of
the parties hereto.
8.5 Entire Agreement; Amendment and Waiver. This Agreement, the Schedules
and Exhibits hereto and the other documents expressly delivered
pursuant hereto or thereto supersede any other agreement, whether
written or oral, that may have been made or entered into by the
parties hereto relating to the matters contemplated hereby, and
constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof, and no party
shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as
specifically set forth or incorporated by reference herein and therein.
Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated except by a written instrument signed by the
Company and Purchasers.
8.6 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
8.7 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified; (ii) when sent by confirmed
telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day; (iii) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a
nationally recognized overnight courier, special next day delivery,
with verification of receipt. All communications shall be sent:
to the Company at:
E-Com Technologies Corp.
000-0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attn: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxx and Associates Ltd.
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxx X. Xxxx
Fax: (000) 000-0000
to Purchasers:
Xxxxxx Xxxx
0000 Xxxxx Xxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxxx Xxxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
or at such other address as the Purchasers may
designate by ten (10) days advance written notice to the other parties hereto.
8.8 Counterparts; Facsimile. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. This Agreement may be
executed and delivered by facsimile.
8.9 Broker's Fees. Each party hereto represents and warrants that no
Purchasers, broker, investment banker, person or firm acting on behalf of
or under the authority of such party hereto is or will be entitled to any
broker's or finder's fee or any other commission directly or indirectly in
connection with the
transactions contemplated herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the first paragraph hereof.
COMPANY:
E-Com Technologies Corp.
By: -------------------------------
Name: -----------------------------
Title: ----------------------------
PURCHASERS:
Xxxxxx Xxxx
By: -------------------------------
Title: ----------------------------
Xxxxxxx Xxxxxxxxx
By: -------------------------------
Name: -----------------------------
SCHEDULE 3.2
Issued and outstanding shares of Common Stock
12,513,913
SCHEDULE 3.9
Mortgages, security interests, liens, claims, and other encumbrances on assets
NONE
SCHEDULE 3.11
Intellectual Property Exceptions
NONE
SCHEDULE 3.14
Financial Statements
CONVERTIBLE DEBENTURE
EXHIBIT A
THIS DEBENTURE HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY STATE
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS DEBENTURE SHALL
NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
DEBENTURE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL.
THIS DEBENTURE MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION
UNDER THE PROVISIONS OF THE 1933 ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS.
E-COM TECHNOLOGIES CORP.
9% CONVERTIBLE DEBENTURE
US$_______ November 15, 2000
E-COM TECHNOLOGIES CORP., a Nevada corporation (the "Company"), the
principal office of which is located at 000-0000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, XX, X0X 0X0, for value received hereby promises to pay
______________________, or
its registered assigns (the "Holder"), the sum of US$________ or such lesser
amount as shall then equal the outstanding principal amount hereof (the
"Principal Amount") and any unpaid accrued interest hereon, (together with the
Principal Amount, the "Outstanding Amount") as set forth below, on November 15,
2005,
(the "Maturity Date"). Payment for all amounts due hereunder shall be made by
mail to the registered address of the Holder. This 9% Convertible Debenture (the
"Debenture") is issued pursuant to that Debenture and Warrant Purchase Agreement
between the Company and certain purchasers dated as of November 15, 2000
(the
"Purchase Agreement").
The following is a statement of the rights of the Holder of this Debenture and
conditions to which this Debenture is subject, and to which the Holder hereof,
by the acceptance of this Debenture, agrees:
1. Definitions. As used in this Debenture, the following terms, unless
the
context otherwise requires, have the following meanings:
(i) "Average Closing Price" shall mean the average of the three
lowest consecutive closing bid prices of the Common Stock on the NASD Over The
Counter Bulletin Board ("OTCBB") or such other public market or exchange that is
the primary public market for such Common Stock as quoted by Bloomberg L.P. or,
if not reported thereby, another authoritative source, in the thirty day period
prior to the Conversion Date.
(ii) "Closing Date" shall have the meaning given that term in the
Purchase Agreement.
(iii) "Company" includes the Company and any corporation which shall
succeed to or assume the obligations of the Company under this Debenture.
(iv) "Common Stock" shall mean the shares of common stock of the
Company.
(v) "Holder" when the context refers to a Holder of this Debenture,
shall mean any person who shall at the time be the registered Holder of this
Debenture.
(vi) "Conversion Date" shall mean, with respect to each Conversion,
the date on which the Holder delivers to the Company a Notice of Conversion
pursuant to Section 4.1 or the date on which the Company delivers to the Holder
a Redemption Notice pursuant to Section 4.4.
(vii) "Conversion Price" shall mean the lesser of (a) $0.10 and (b)
eighty percent (80%) of the Average Closing Price. Notwithstanding the
foregoing, the Conversion Price shall not be less than the minimum conversion
price or, if applicable, adjustment price related to any financing in excess of
US$500,000 by the Company pursuant to which the Company issues securities that
(i) are convertible into Common Stock or (ii) subject to reset and/or
adjustment
by issuance of Common Stock based on the market price of Common Stock (the
"Floor Price"). In no event shall the Floor Price be greater than $1.00. If the
Company completes a subsequent financing of securities convertible into Common
Stock at a price per share less than the Floor Price, the Floor Price with
respect to any outstanding balance under the Debenture shall be readjusted to
the lower price per share of Common Stock of such financing.
(viii) "Notice of Conversion" shall mean the written notice by the
Holder to the Company at its principal corporate office of the election to
convert any vested portion of this Debenture, in whole or in part, into shares
of Common Stock, pursuant to Section 4.1.
2. Interest.
(I) The Company shall pay interest (computed on the basis of a
365-day year) at a rate of nine percent (9%) per annum on the Outstanding Amount
during the period beginning on the date of issuance of this Debenture and ending
on the later of the date the Outstanding Amount is paid in full or the date of
the final conversion the Principal Amount.
(II) Interest shall be paid in Common Stock issued at the Conversion
Price, or at the Company's option, paid in cash on the later of the date of the
Outstanding Amount is paid in full or the final conversion of the Principal
Amount.
3. Events of Default. If one or more of the following described "Events
of
Default" shall occur,
a. Any of the representations or warranties made by the Company
herein,
or in the Purchase Agreement shall have been incorrect when made in any material
respect; or
b. The Company shall fail to perform or observe in any material respect
any covenant, term, provision, condition, agreement or obligation of the Company
under this Debenture (other than those contained in paragraphs 3.a., 3.c., 3.d.,
3.e., and 3.f. herein) or the Purchase Agreement, and such failure shall
continue uncured for a period of ten (10) days after written notice from the
Holder specifically describing such failure or, if such failure is by its nature
curable but not curable within thirty (30) days from the date of such notice, if
the Company shall have failed to commence within such thirty (30) day period in
good faith to cure such failure and shall have failed to cure such failure
within a reasonable time longer than thirty (30) days; or
c. A trustee, liquidator or receiver shall be appointed by the Company or
for a substantial part of its property or business without its consent and shall
not be discharged within thirty (30) days after such appointment; or
d. Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Company and shall
not be dismissed within thirty (30) calendar days thereafter;
e. Bankruptcy reorganization, insolvency or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for the relief
or debtors shall be instituted by or against the Company and, if instituted
against the Company, the Company shall by any action or answer approve of,
consent to or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding
or such proceedings shall not be dismissed within thirty (30) days thereafter;
f. If the Common Stock to be issued pursuant to conversion as set out in
Paragraph (4) of this Debenture is not delivered to the Holder within ten (10)
business days, then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default) at
the option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment, demand
protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and Holder may immediately, and without expiration of any
period of grace, enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law. It is agreed
that in the event of such action such Holders of Debentures shall be entitled to
receive all reasonable fees, costs and expenses incurred, including with
limitation such reasonable fees and expenses of attorneys (if litigation is
commenced).
4. Conversion.
4.1 Voluntary Conversion. The Principal Amount of this Debenture shall
be
convertible into Common Stock, at the Holder's sole discretion, at any time
beginning May 15, 2001, in accordance with the terms of this Agreement.
Notwithstanding the foregoing, if the Company completes an unsecured financing
in excess of US$250,000 after May 30, 2001, the Holder shall not convert more
than one-third of the Principal Amount in any 30-day period (the "Vested
Principal Amount" for such period). If an Event of Default occurs, the entire
Outstanding Amount shall be convertible immediately into Common Stock at the
sole discretion of the Holder.
Common Stock issuable upon conversion of the Debenture will be issued only in
respect to such Vested Principal Amount. The accrued interest payable under this
Debenture shall be added to the Principal Amount or may be paid in cash, at the
Company's sole option.
If the number of resultant shares of Common Stock would as a matter of law or
pursuant to regulatory authority require the Company to seek shareholder
approval of such issuance, the Company shall, as soon as practicable, take the
necessary step to obtain such approval.
This Debenture may not be converted by, or on behalf of, a "U.S. Person" as such
term as defined by Regulation S under the Securities Act of 1933, as amended
(the "1933 Act"), unless the Common Stock issuable upon exercise thereof has
been registered under the 1933 Act and the securities laws of all applicable
states of the United States, or an exemption from such registration requirements
is available.
4.2 Conversion Procedure.
(a) Notice of Conversion pursuant to Section 4.1. The Holder shall be
entitled to convert any Vested Principal Amount of this Debenture in whole or in
part into shares of Common Stock, by giving written notice by way of a Notice of
Conversion to the Company at its principal corporate office of the election to
convert the same pursuant to Section 4, and shall state therein the name or
names in which the certificate or certificates for, shares of Common Stock are
to be issued. Such conversion shall be deemed to have been made on the date that
the Notice of Conversion and the Debenture is actually sent and received by the
Company at its principal offices (each, a "Conversion Date").
(b) Surrender of Debenture. The Holder at its sole expense shall surrender
the Debenture and the signed Notice of Conversion to the Company, at the
principal offices of the Company. The person or persons entitled to receive
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of any such shares of Common Stock
immediately prior to the close of business on the date the Notice of Conversion
and the Debenture is delivered. A new Debenture representing the Outstanding
amount, if any, with respect to which this Debenture has not been converted
shall be delivered to the Holder with the certificate issued pursuant to Section
4.2(c).
(c) Delivery of Stock Certificates. As promptly as practicable after the
conversion of this Debenture (but in no case later than ten (10) business days
after receipt of the Debenture and the signed Notice of Conversion), the
Company, at its expense, will issue and deliver by express courier service for
delivery to the Holder of this Debenture a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion, pursuant to
Section (4.1) of this Debenture. In the event that the Common Stock issuable
upon conversion of the Debenture, is not delivered within ten (10) business days
of the date the Company receives the Debenture and the Notice of Conversion, the
Company shall pay to the Holder, by wire transfer, as liquidated damages for
such failure and not as a penalty, an amount equal to the difference between (a)
the price of the Common Stock issuable upon conversion of the Debenture pursuant
to the Notice of Conversion (calculated as the median price of the closing bid
and offer price on the 11th day as reported by Bloomberg L.P.) and (b) the price
of the Common Stock on delivery of the certificates (calculated as the median
price of the closing bid and offer price as reported by Bloomberg L.P. on the
date the Company's transfer Purchasers sends the stock certificate plus
three (3) business days). Notwithstanding the foregoing, the Company
shall not be
obligated to pay such liquidated damages if the median price in (b) is greater
than the median price in (a) or the late delivery of such certificate results
from an event beyond the control of the Company. Any and all payments required
pursuant to this paragraph shall be payable only in cash. The Company
understands that a delay in the issuance of the Common Stock could result in
economic loss to the Holder.
The share certificates shall bear a restrictive legend in substantially the
following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE
FOREGOING LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS (i) PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR (ii) IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS. HEDGING TRANSACTIONS RELATED TO THESE SECURITIES ARE
PROHIBITED UNLESS CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.
(d) Mechanics and Effect of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of this Debenture. In lieu of the Company
issuing any fractional shares to the Holder upon the conversion of this
Debenture, the Company shall pay to the Holder the amount of outstanding
principal that is not so converted, such payment to be in the form as provided
below. Upon conversion of this Debenture, the Company shall be forever released
from all its obligations and liabilities under this Debenture, except that the
Company shall be obligated to pay the Holder, upon conversion, any interest
accrued and unpaid or unconverted to and including the date of such
conversion, and no more.
4.3 Conversion Default. Subject to Section 4.4 herein, if, at any time
the
Holder submits a Notice of Conversion and the Company does not have sufficient
authorized but unissued shares of Common Stock available to effect, in full, a
conversion of the Debentures (a "Conversion Default", the date of such default
being referred to herein as the "Conversion Default Date"), the Company shall
issue to the Holder all of the shares of Common Stock which are available, and
the Notice of Conversion as to any Debentures requested to be converted but not
converted (the "Unconverted Shares") shall become null and void. The Company
shall provide notice of such Conversion Default ("Notice of Conversion Default")
to all existing Holders of outstanding Debentures, by facsimile, within three
(3) business days of such default (with the original delivered by overnight or
two day courier). No Holder may submit a Notice of Conversion after receipt of a
Notice of Conversion Default until the date additional shares of Common Stock
are authorized by the Company.
4.4 Redemption by the Company.
(a) Right to Redeem. Prior to receipt of a Notice of Conversion, the
Company may, but shall not be required to, redeem for cash the Outstanding
Amount
of this Debenture, in whole or in part, at a price equal to one hundred
twenty percent (120%) of the redeemed Outstanding Amount (the "Redemption
Price"), with 100% payable in cash and 20% payable, at the sole option of the
Company, in cash or in common shares as calculated at the Conversion Price.
(b) Notice of Redemption pursuant to Section 4.4(a). Subject to the
Holder's right to convert under Section 4.4 , the Company shall be entitled to
redeem in cash any outstanding Amount outstanding under this Debenture, in whole
or in part, by giving written notice to the Holder of its intent to redeem such
Outstanding Amount (in accordance with Section 14) pursuant to Section 4.4(a)
(the "Notice of Redemption"), and shall state the amount of the Outstanding
Amount to be redeemed. Such Notice of Redemption shall be deemed to have been
made on the date that the Notice of Redemption is actually sent by the Company
(each, a "Redemption Notice Date").
(C) Election to Convert Upon Notice of Redemption. Upon receipt of a
Notice of Redemption, the Holder shall be entitled to convert any Vested
Principal Amount of this Debenture, in whole or in part, into shares of Common
Stock, by giving written notice by way of a Notice of Conversion pursuant to
Section 4.2(a), no later than ten (10) business days after receipt of the
Redemption Notice Date (the "Election Period"). Upon such election, the Vested
Principal Amount of this Debenture pursuant to which the Notice of Conversion is
given shall be converted in accordance with the terms of Sections 4.1, 4.2 and
4.3, and the Company may not redeem that particular amount of the Vested
Principal Amount. Any remaining Vested Principal Amount for which Notice of
Redemption is given shall be redeemed in accordance with Section 4.4.
(D) Payment of Redemption Price. Within five (5) business days after the
Election Period, the Company shall, redeem for cash the Outstanding Amount for
which Notice of Redemption is given at the Redemption Price, plus outstanding
interest if the entire Debenture is redeemed. If the Company fails to pay the
redemption amount in cash, within five(5) business days following the Election
Period, then the redemption will be declared null and void. The Outstanding
Amount for which such redemption is made shall be treated for all purposes as
redeemed immediately prior to the close of business on the date the Redemption
Price is paid.
5. Conversion Price Adjustments.
5.1 Adjustments for Stock Splits and Subdivisions. In the event the
Company
should at any time or from time to time after the date of issuance hereof fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or the distribution payable in additional shares of Common
Stock or other securities or rights convertible into, or entitling the holder
thereof to receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as "Common Stock Equivalents") without payment of any
consideration by such holder for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of Common Stock'
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Conversion Price of this Debenture shall be appropriately
decreased so that the number of shares of Common Stock issuable upon conversion
of this Debenture shall be increased in proportion to such increase of
outstanding shares.
5.2 Adjustments for Reverse Stock Splits. If the number of shares of
Common
Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then following the record
date of such combination, the Conversion Price for this Debenture shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.
6. Merger. If the Company merges or consolidates with another corporation
or
sells or transfers all or substantially all of its assets to another person and
the Holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee shall amend this Debenture to provide that it
may thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, entities or property receivable upon
such merger, consolidation, sale or transfer by a Holder of the number of shares
of Common Stock into which this Debenture might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable to adjustments
provided for in Section 5.
The Company shall not consolidate or merge into, or transfer all or
substantially all of its assets to, any person, unless such person assumes the
obligations of the Company under this Debenture and immediately after such
transaction no Event of Default exists. Any reference herein to the Company
shall refer to such surviving or transferee corporation and the obligations of
the Company shall terminate upon such assumption.
7. Worn or Lost Debentures. If this Debenture becomes worn, defaced
or
mutilated but is still substantially intact and recognizable, the Company or its
Purchasers may issue a new Debenture in lieu hereof upon its surrender.
Where the Holder of this Debenture claims that the Debenture has been lost,
destroyed or wrongfully take, the Company shall issue a new Debenture in
place of the
original Debenture if the Holder so requests by written notice to the Company
actually received by the Company before it is notified the Debenture has been
acquired by a bona fide purchaser and Holder has delivered to the Company an
indemnity bond in such amount and issued by such surety as the Company deems
satisfactory together with an affidavit of the Holder setting forth the facts
concerning such loss, destruction or wrongful taking and such other information
in such form with such proof or verification as the Company may request.
8. Notices of Record Date.
In the event of:
(i) Any taking by the Company of record of the holders of any class of
securities of the Company for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend payable out of
earned surplus at the same rate as that of the last such cash dividend
heretofore paid) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or
(ii) Any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all of the assets of the Company to any other person or any
consolidation or merger involving the Company; or
(iii) Any voluntary or involuntary dissolution, liquidation or winding up of
the Company.
the Company will mail to the holder of this Debenture at least five (5) days
prior to the earliest date specified therein, a notice specifying (A) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right; and (B) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective and the record date for determining
stockholders entitled to vote thereon.
9. Authorized Shares, of Common Stock, Reservation of Shares. The
Company
shall at the Closing date and from time to time as required, so long as any of
the Debentures are outstanding, reserve and keep available out of its authorized
and unissued Common Stock, solely for the purpose of effecting the conversion of
the Debentures, such number of shares of Common Stock equal to or greater than
200% of the number of shares of Common Stock for which are issuable upon
conversion of all of the then outstanding Debentures which are then outstanding
or which could be issued at any time under this Debenture.
10. Assignment. Subject to the restrictions or transfer described in Section
12
below, the rights and obligations of the Company and the Holder of this
Debenture shall be binding upon and benefit the successors, assigns, heirs,
administrators, and transferees of the parties.
11. Waiver and Amendment. This Debenture and the Purchase Agreement
constitute
the full and entire understanding and agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements with respect to
the subject matter hereof. Any provision of this Debenture may be amended,
waived or modified upon the written consent of the Company and Holder thereof.
12. Restrictions on Transfer. This Debenture and the Common Stock issuable
upon
the conversion hereof have not been registered under the Securities Act of 1933,
as amended, (the "Securities Act") and have been sold pursuant to Regulation S
under the Securities Act ("Regulation S"). The Debenture may not be transferred
or resold, or to a U.S. Person, or to or for the account or benefit of a U.S.
Person (as defined in Regulation S) for a period of one (1) year from the date
hereof and thereafter this Debenture and the Common Stock issuable upon the
conversion thereof may only be offered or sold pursuant to registration under or
an exemption from the Securities Act.
13. Automatic Conversion. In the event all or any portion of this
Debenture
remains outstanding on November 15, 2005, the unconverted portion of such
Debenture will automatically be converted into shares of Common Stock on such
date in the manner set forth in Section 4.
14. Grant of Security Interest. To secure the prompt and full payment of
all
principal and interest owing to Holder pursuant to this Debenture, the Company
hereby grants to Holder a security interest in all of its assets, accounts
receivable and inventory, now existing or hereafter arising, and all proceeds
therefrom. Such security interest shall terminate on the earlier of (i) the date
the Company completes any unsecured financing in excess of $2.5 million after
November 15, 2000 or (ii) this Debenture is redeemed or converted in full.
The Company shall file UCC-1 Financing Statements in the State of Nevada, and,
at the written request of the Holder, execute for filing, any additional
financing statements or continuation statements as may be required from
time to time to perfect or continue Holder's security interest in such assets.
15. Notices. Any notice, request or other communication required or
permitted
hereunder shall be in writing and shall be deemed to have been duly given if
made by hand delivery, by an express courier company, by registered or certified
mail, or by facsimile transmission, at the respective addresses and/or facsimile
number of the parties as set forth herein.
16. Governing Law; Interpretation. This Agreement, and all exhibits
attached,
shall be governed by and construed under the laws of the State of Nevada and
the laws applicable therein without regard to its choice of law principles. All
disputes should be determined and litigated in the courts of Nevada.
Any litigation based thereon, or arising out of, under, or in connection with,
this Agreement shall be brought and maintained exclusively in the courts of the
State of Nevada. The Company and the Holder hereby expressly and irrevocably
submit to the jurisdiction of the state and federal Courts of Nevada for the
purpose of any such litigation as set forth above and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with such litigation.
The Company and the Holder further irrevocably consents to the service of
process by
registered mail, postage prepaid, or by personal service within or without the
State of Nevada. The Company and the Holder hereby expressly and irrevocably
waive, to the fullest extent permitted by law, any objection which it may have
or hereafter may have to the laying of venue of any such litigation brought in
any such court referred to above and any claim that any such litigation has been
brought in any inconvenient forum. To the extent that the Company and the
Holder
have or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise) with respect to itself or
its property. The Company and the Holder hereby irrevocably waives such
immunity in respect of its obligations under this agreement and the other loan
documents.
Holder and the Company hereby knowingly, voluntarily and intentionally waive any
rights they may have to a trial by jury in respect of any litigation based
hereon, or arising out of, under, or in connection with, this Agreement. The
Company and the Holder acknowledge and agree that they have received full and
sufficient consideration for this provision and that this provision is a
material inducement for the Company and the Holder entering into this agreement.
Any legal action or proceeding in connection with this Agreement or the
performance hereof may be brought in the state and federal courts located in
Nevada, and the parties hereby irrevocably submit to the non-exclusive
jurisdiction of such courts for the purpose of any such action or proceeding.
17. Heading; References. All headings used herein are used for convenience
only
and shall not be used to construe or interpret this Debenture. Except where
otherwise indicated, all references herein to Sections refer to Sections hereof.
18. Attorney's Fees. Should any party bring an action to enforce the terms
of
this Debenture, then the prevailing party in the action shall be entitled to
recovery of its attorney's fees from the other party.
IN WITNESS WHEREOF, the Company has caused this Debenture to be issued this __th
day of November, 2000.
E-COM TECHNOLOGIES CORP.
By:
---
NAME: XXX XXXXXXXXX
TITLE: CHIEF FINANCIAL OFFICER
Address: 000-0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Facsimile: (000) 000-0000
HOLDER:
By: ------------------------------
Name: ----------------------------
Title: ---------------------------
Address:
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debentures)
The undersigned hereby irrevocably elects, as of -------------- , 200- to
convert $---------- of the Debentures into Shares of Common Stock (the "Shares")
of E-COM TECHNOLOGIES CORP. (the "Company") according to the conditions
set forth in the Agreement dated November 15, 2000.
The undersigned hereby represents that it is not a U.S. Person as defined
in Regulation S promulgated under the Securities Act of 1933, as amended, and is
not converting the Debentures on behalf of any U.S. Person, and is not within
the United States at the time of execution and delivery of this Notice of
Conversion.
Date of Conversion: ---------------------
Number of Shares Issuable
upon this conversion: -------------------
Signature: ------------------------------
[Name]
Address: --------------------------------
Phone: --------------------- Facsimile: ---------------------
NOTICE OF REDEMPTION
E-COM TECHNOLOGIES CORP. (the "Company") according to the conditions
set forth in the Debenture dated November 15, 2000 hereby elects, as
of
---------------, 200- to redeem $------------ of the Outstanding Principal
Amount
and, if applicable, accrued interest of the Debentures.
Date of Redemption: ---------------------
Outstanding Principal Amount and, if applicable,
accrued interest Redeemed: ---------------------
x 1.20 = Redemption Amount: ---------------------
HOLDER:
[Name]
Phone: --------------------- Facsimile: ---------------------
E-COM TECHNOLOGIES CORP.
By: --------------------------------
Its: -------------------------------
WARRANT TO PURCHASE SHARES OF COMMON STOCK
EXHIBIT B
THIS WARRANT HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY STATE
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS DEBENTURE SHALL
NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
WARRANT IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL.
THIS WARRANT MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION
UNDER THE PROVISIONS OF THE 1933 ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS; AND IN THE CASE OF AN EXEMPTION.
E-COM TECHNOLOGIES CORP.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
For value received, ______________ at __________________________________
______________________________________its successors or assigns ("Holder"), is
entitled to purchase from E-COM TECHNOLOGIES CORP., a Nevada corporation
(the "Company"), the principal office of which is located at 000-0000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0, up to ___________ fully paid
and nonassessable shares of the Company's common stock or such greater or lesser
number of such shares as may be determined by application of the anti-dilution
provisions of this warrant, at the price of $0.10 per share, subject to
adjustments as noted below (the "Warrant Exercise Price").
This warrant may be exercised by Holder at any time or from time to time
prior to the close of business on November 15, 2002.
This warrant is subject to the following terms and conditions:
1. Exercise. The rights represented by this warrant may be exercised by the
Holder, in whole or in part, by written election, in the form set forth below,
by the surrender of this warrant (properly endorsed if required) at the
principal office of the Company, by payment to it by cash, certified check or
bank draft of the Warrant Exercise Price for the shares to be purchased. The
shares so purchased shall be deemed to be issued as of the close of business on
the date on which this warrant has been exercised by payment to the Company of
the Warrant Exercise Price. Certificates for the shares of stock so purchased,
bearing an appropriate restrictive legend, shall be delivered to the Holder
within 10 days after the rights represented by this warrant shall have been so
exercised, and, unless this warrant has expired, a new warrant representing the
number of shares, if any, with respect to which this warrant has not been
exercised shall also be delivered to the Holder hereof within such time. No
fractional shares shall be issued upon the exercise of this warrant.
2. Shares. All shares that may be issued upon the exercise of the rights
represented by this warrant shall, upon issuance, be duly authorized and issued,
fully paid and nonassessable shares. During the period within which the rights
represented by this warrant may be exercised, the Company shall at all times
have authorized and reserved for the purpose of issue or transfer upon exercise
of the subscription rights evidenced by this warrant a sufficient number of
shares of its common stock to provide for the exercise of the rights represented
by this warrant.
The share certificates evidencing the common stock shall bear the following
restrictive legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE
FOREGOING LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS (i) PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR (ii) IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS. HEDGING TRANSACTIONS RELATED TO THESE SECURITIES ARE
PROHIBITED UNLESS CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.
3. Adjustment. The Warrant Exercise Price shall be subject to adjustment
from time to time as hereinafter provided in this Section 3:
(a) If the Company at any time divides the outstanding shares of its
common stock into a greater number of shares (whether pursuant to a stock
split, stock dividend or otherwise), and conversely, if the outstanding
shares of its common stock are combined into a smaller number of shares,
the Warrant Exercise Price in effect immediately prior to such division or
combination shall be proportionately adjusted to reflect the reduction or
increase in the value of each such common share.
(b) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of the
Company's common stock shall be entitled to receive stock, securities or
assets with respect to or in exchange for such common stock, then, as a
condition of such reorganization, reclassification, consolidation, merger
or sale, the Holder 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 shares of the common stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, other securities or assets
as would have been issued or delivered to the Holder if Holder had
exercised this warrant and had received such shares of common stock
immediately prior to such reorganization, reclassification, consolidation,
merger or sale. The Company shall not effect any such consolidation, merger
or sale unless prior to the consummation thereof the successor corporation
(if other than the Company) resulting from such consolidation or merger or
the corporation purchasing such assets shall assume by written instrument
executed and mailed to the Holder at the last address of the Holder
appearing on the books of the Company the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to purchase.
(c) If the Company takes any other action, or if any other event
occurs, which does not come within the scope of the provisions of Section
3(a) or 3(b), but which should result in an adjustment in the Warrant
Exercise Price and/or the number of shares subject to this warrant in order
to fairly protect the purchase rights of the Holder, an appropriate
adjustment in such purchase rights shall be made by the Company.
(d) Upon each adjustment of the Warrant Exercise Price, the Holder
shall thereafter be entitled to purchase, at the Warrant Exercise Price
resulting from such adjustment, the number of shares obtained by
multiplying the Warrant Exercise Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Warrant
Exercise Price resulting from such adjustment.
(e) Upon any adjustment of the Warrant Exercise Price, the Company
shall give written notice thereof to the Holder stating the Warrant
Exercise Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares purchasable at such price upon the exercise
of this warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4. No Rights as Shareholder. This warrant shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company.
5. Transfer. This warrant and all rights hereunder are transferable, in
whole or in part, at the principal office of the Company by the holder hereof in
person or by duly authorized attorney, upon surrender of this warrant properly
endorsed. The bearer of this warrant, when endorsed, may be treated by the
Company and all other persons dealing with this warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented by this warrant, or to the transfer hereof on the books of the
Company, any notice to the contrary notwithstanding; but until such transfer on
such books, the Company may treat the registered owner hereof as the owner for
all purposes.
6. Notices. All demands and notices to be given hereunder shall be
delivered or sent by first class mail, postage prepaid; in the case of the
Company, addressed to its corporate headquarters, located at 000-0000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX X0X 0X0, until a new address shall have
been substituted by like notice; and in the case of Holder,
addressed to Holder at the address written below, until a new address shall have
been substituted by like notice.
IN WITNESS WHEREOF, the Company has caused this warrant to be executed and
delivered by a duly authorized officer.
Dated: November 15, 20
E-COM TECHNOLOGIES CORP.
By: ------------------------------
Name: ----------------------------
Title: ---------------------------
Xxxxx:
WARRANT EXERCISE
(To be signed only upon exercise of this warrant)
The undersigned, the Holder of the foregoing warrant, hereby irrevocably elects
to exercise the purchase right represented by such warrant for, and to purchase
thereunder, __________ shares of common stock of E-Com Technologies Corp.,
to which such warrant relates and herewith makes payment of $__________ therefor
in cash, certified check or bank draft and requests that the certificates for
such shares be issued in the name of, and be delivered to ____________________,
whose address is set forth below the signature of the undersigned.
Dated: ---------------------
SIGNATURE
If shares are to be issued other than to Holder: Social Security No. /
(Name/Address) Tax Identification No.
---------------------------------------------- -------------------------
WARRANT ASSIGNMENT
(To be signed only upon transfer of this warrant)
For value received, the undersigned hereby sells, assigns and transfers unto
_______________ the right represented by the foregoing warrant to purchase the
shares of common stock of E-Com Technologies Corp. and appoints
____________________ attorney to transfer such right on the books of E-Com
Technologies Corp., with full power of substitution in the premises.
Dated: ---------------------
SIGNATURE
If shares are to be issued other than to Holder: Social Security No. /
(Name/Address) Tax Identification No.
---------------------------------------------- -------------------------
