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WARRANT TO PURCHASE COMMON STOCK
OF
UPGRADE INTERNATIONAL CORPORATION
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THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE
FOR VALUE RECEIVED
Upgrade International Corporation, a Florida corporation (the "Company"), grants
the following rights to Xxx Xxxxxxxx, having an address at 0000 Xxxxxx Xxxx
Xxxx, Xxxxxxxx, XX 00000 ("Holder").
ARTICLE 1. DEFINITIONS
As used herein, the following terms shall have the following meanings, unless
the context shall otherwise require:
(a) "Common Stock" shall mean the common stock, par value $0.001 per
share, of the Company.
(b) "Corporate Office" shall mean the office of the Company (or its
successor) at which at any particular time its principal business
shall be administered, which office is located at the date hereof at
0000 Xxxxxx Xxxxxx, Xxxxx #000, Xxxxxxx, XX 00000.
(c) "Effective Date" shall mean September 30, 1999
(d) "Exercise Date" shall mean any date upon which the Holder shall give
the Company a Notice of Exercise, which shall be deemed the date the
Notice of Exercise was first deposited in the U.S. Mails, if mailed,
or the date received by the courier company if delivered by recognized
courier company, or the date received by the Company if otherwise
given or delivered.
(e) "Exercise Price" shall mean the price to be paid to the Company for
each share of Common Stock to be purchased upon exercise of this
Warrant in accordance with the terms hereof, which shall be $2.50 per
share.
(f) "Expiration Date" shall mean 5:00 PM (Pacific Standard time) on
September 30, 2009.
(g) "SEC" shall mean the United States Securities and Exchange Commission.
ARTICLE 2. EXERCISE
2.1 EXERCISE OF WARRANT
This Warrant shall entitle Holder to purchase up to 100 shares of Common
Stock (the "Shares") at the Exercise Price. This Warrant shall be
exercisable at any time and from time to time prior to the Expiration Date
(the "Exercise Period") upon execution. This Warrant and the right to
purchase Shares hereunder shall expire and become void at the Expiration
Date.
2.2 MANNER OF EXERCISE
(a) Holder may exercise this Warrant at any time and from time to time
during the Exercise Period, in whole or in part (but not in
denominations of fewer than 5,000 Shares, except upon an exercise of
this Warrant with respect to the remaining balance of Shares
purchasable hereunder at the time of exercise), by delivering to the
Company at its Corporate Office (i) a duly executed Notice of Exercise
in substantially the form attached as Appendix II hereto and (ii) a
bank cashier's or certified check for the aggregate Exercise Price of
the Shares being purchased.
(b) The Holder, in lieu of exercising this Warrant for cash in the manner
provided for in Section 2.2 (a) above, may elect a "cashless" exercise
pursuant to which Holder would receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the
Company together with a duly executed Notice of Cashless Exercise, in
which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y (A - B)
------------
A
Where X = the number of shares of Common Stock to be issued to Holder
Y = the number of shares of Common Stock purchasable under the
Warrant (or the portion thereof being canceled)
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B = Exercise Price of $2.50 per share
(c) From time to time upon exercise of this Warrant, in whole or part, in
accordance with its terms, the Company will cause its transfer agent
to coutersign and deliver stock certificates to the Holder
representing the number of Shares being purchased pursuant to such
exercise, subject to adjustment as described herein.
(d) Promptly following any exercise of this Warrant, if the Warrant has
not been fully exercised and has not expired, the Company will deliver
to the Holder a new Warrant for the balance of the Shares covered
hereby.
2.3 TERMINATION
All rights of the Holder in this Warrant, to the extent they have not been
exercised, shall terminate on the Expiration Date.
2.4 NO RIGHT PRIOR TO EXERCISE
Prior to its exercise pursuant to Section 2.3 above, this Warrant shall not
entitle the Holder to any voting or other rights as holder of Shares.
2.5 ADJUSTMENTS
In case of any reclassification, capital reorganization, stock dividend, or
other change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification,
capital reorganization, stock dividend, or other change of outstanding
shares of Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as, or substantially as, an
entirety (other than a sale/leaseback, mortgage or other financing
transaction), the Company shall cause effective provision to be made so
that the Holder shall have the right thereafter, by exercising this
Warrant, to purchase the kind and number of shares of stock or other
securities or property (including cash) receivable upon such
reclassification, capital reorganization, stock dividend, or other change,
consolidation, merger, sale or conveyance as the Holder would have been
entitled to receive had the Holder exercised this Warrant in full
immediately before such reclassification, capital reorganization, stock
dividend, or other change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments that shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Section 2.6. The foregoing provisions shall similarly apply to
successive reclassifications, capital reorganizations, stock dividends, and
other changes of outstanding shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
2.6 FRACTIONAL SHARES
No fractional Shares shall be issuable upon exercise or conversion of this
Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional Share interest arises upon any
exercise or conversion of the Warrant, the Company shall eliminate such
fractional Share interest by paying Holder the amount computed by
multiplying the fractional interest by the closing bid price of a full
Share on the date of the Notice of Exercise.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1 REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to the Holder as follows:
(a) All Shares which may be issued upon the exercise of the purchase right
represented by this Warrant shall, upon issuance, by duly authorized,
validly issued, fully-paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for
herein or under applicable federal and state securities laws, and not
subject to any pre-emptive rights.
(b) The Company is a corporation duly organized and validly existing under
the laws of the State of Florida, and has the full power and authority
to issue this Warrant and to comply with the terms hereof. The
execution, delivery and performance by the Company of its obligations
under this Warrant, including, without limitation, the issuance of the
Shares upon any exercise of the Warrant, have been duly authorized by
all necessary corporate action. This Warrant has been duly executed
and delivered by the Company and is a valid and binding obligation of
the Company, enforceable in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting enforceability of creditors'
rights generally and except as the availability of the remedy of
specific enforcement, injunctive relief or other equitable relief is
subject to the discretion of the court before which any proceeding
therefor may be brought.
(c) The Company is not subject to or bound by any provision of any
certificate or articles of incorporation or by-laws, mortgage, deed of
trust, lease, note, bond, indenture, other instrument or agreement,
license, permit, trust, custodianship, other restriction or any
applicable provision of any law, statute, any court, governmental
body, administrative agency or arbitrator which could prevent or be
violated by or under which there would be a default (or right of
termination) as a result of the execution, delivery and performance by
the Company of this Warrant.
ARTICLE 4. MISCELLANEOUS
4.1 TRANSFER
This Warrant may not be transferred or assigned, in whole or in part, at
any time without the consent of the Company.
4.2 LOSS, THEFT, DESTRUCTION OR MUTILATION
If this Warrant shall become mutilated or defaced or be destroyed, lost or
stolen, the Company shall execute and deliver a new Warrant in exchange for
and upon surrender and cancellation of such mutilated or defaced Warrant
or, in lieu of and in substitution for such Warrants so destroyed, lost or
stolen, upon the
Holder filing with the Company evidence satisfactory to it that such
Warrant has been so mutilated, defaced, destroyed, lost or stolen. However,
the Company shall be entitled, as a condition to the execution and delivery
of such new Warrant, to demand indemnity satisfactory to it and payment of
the expenses and charges incurred in connection with the delivery of such
new Warrant. Any Warrant so surrendered to the Company shall be canceled.
4.3 NOTICES
All notices and other communications from the Company to the Holder or vice
versa shall be deemed delivered and effective when given personally, by
facsimile transmission and confirmed in writing, or mailed by first-class
registered or certified mail, postage prepaid, at such address and/or
facsimile number as may have been furnished to the Company or the Holder,
as the case may be, in writing by the Company or the Holder from time to
time; provided, however, that the Notice of Exercise may not be delivered
by facsimile transmission.
4.4 WAIVER
This Warrant and any term hereof may be changed, waived, or terminated only
by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
4.5 GOVERNING LAW
This Warrant shall be governed by and construed in accordance with the laws
of the State of Washington, without giving effect to its principles
regarding conflicts of law.
UPGRADE INTERNATIONAL CORP.
___________________________________
By: Xxxxxx Xxxxx
Its: President
Attest:__________________________
APPENDIX I
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ____________ shares of the Common
Stock of Upgrade International Corporation pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of
such shares in full.
2. Please issue a certificate or certificates representing said shares in the
name of the undersigned or in such other name as specified below.
_________________________________
(Name)
_________________________________
_________________________________
(Address)
3. The undersigned represents it is acquiring the shares solely for its own
account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
_________________________________ ________________________________
(Signature) (Date)
APPENDIX II
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ____________ shares of
the Common Stock of Upgrade International Corporation pursuant
to the terms of the attached Warrant, pursuant to the "cashless"
Exercise option in Article 2.2 (b) of theWarrant.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as specified
below.
____________________________
(Name)
____________________________
____________________________
(Address)
3. The undersigned represents it is acquiring the shares solely for
its own account and not as a nominee for any other party and not
with a view toward the resale or distribution thereof except in
compliance with applicable securities laws.
____________________________ ______________
(Signature) (Date)
