EXHIBIT 10.17
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A STOCK PURCHASE AGREEMENT (THE "STOCK PURCHASE AGREEMENT"), DATED
THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE
PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE
RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE
COMPANY.
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CYBER PUBLIC RELATIONS, INC.
B WARRANT FOR THE PURCHASE OF COMMON STOCK
1,650,000 Shares Rancho Cucamonga, California
THIS IS TO CERTIFY that pursuant to that certain Stock Purchase
Agreement of even date herewith executed by the parties hereto (the "Stock
Purchase Agreement"), for value received, XXXXXX PARTNERS LP (the "Holder") is
entitled at any time from the date hereof, but prior to 5:00 p.m., Rancho
Cucamonga, California time on January __, 2009, or 18 months after the
effectiveness of a Registration Statement (hereinafter defined) subsequent to
the issuance hereof, whichever is longer, subject to and upon the terms and
conditions contained herein, to purchase up to 1,650,000 fully paid and
non-assessable shares of the common stock, par value $0.001 per share (the
"Common Stock") of CYBER PUBLIC RELATIONS, INC., a Florida corporation (the
"Company"), at a purchase price of $1.00 per share of the Common Stock (the
"Exercise Price") such number of the shares and the Exercise Price being subject
to adjustment as provided herein.
This B Warrant shall be void and of no effect and all rights hereunder
shall cease at 5:00 p.m., Rancho Cucamonga, California time on January , 2009,
or 18 months after the effectiveness of a Registration Statement subsequent to
the issuance hereof, whichever is longer, except to the extent theretofore
exercised; provided that in the case of the earlier dissolution of the Company,
this 13 Warrant shall become void on the date fixed for such dissolution. As
used herein, "Registration Statement" means a registration statement filed by
the Company on Form X-0, XX-0, xx X-0, or some other similar form pursuant to
the Securities Act of 1933, as amended (the "1933 Act") to register the resale
of the shares of the Common Stock upon the exercise of this B Warrant.
1. REGISTRATION OF THIS B WARRANT. The Company shall register this 13
Warrant upon records to be maintained by the Company for that purpose (the "B
Warrant Register"), in the name of the record Holder hereof from time to time.
The Company MAY deem and treat the registered Holder of this B Warrant as the
absolute owner hereof for the(degree)purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, and the Company shall
not be affected by notice to the contrary.
2. INVESTMENT REPRESENTATION. The Holder by accepting this B Warrant
represents that the Holder is acquiring this B Warrant for its own account or
the account of an affiliate for investment purposes and not with the view to any
offering or distribution and that the Holder will not sell or otherwise dispose
of this B Warrant or the underlying Common Stock in violation of applicable
securities laws. The Holder acknowledges that the certificates representing any
shares of the Common Stock will bear a legend indicating that they have not been
registered under the 1933 Act and may not be sold by the Holder except pursuant
to an effective Registration Statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws.
3. VALIDITY OF B WARRANT AND ISSUANCE OF THE COMMON STOCK. The Company
represents and warrants that this B Warrant has been duly authorized and validly
issued and warrants and agrees that the Common Stock that may be issued upon the
exercise of the rights represented by this B Warrant will, when issued upon such
exercise, be duly authorized, validly issued, fully paid and nonassessable and
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free from all taxes, liens and charges with respect to the issue thereof. The
Company further warrants and agrees that during the period within which the
rights represented by this B Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of the Common
Stock to provide for the exercise of the rights represented by this B Warrant.
4. REGISTRATION OF TRANSFERS AND EXCHANGE OF THIS B WARRANT.
(a) Subject to compliance with the legend set forth on the
face of this B Warrant, the Company shall register the transfer of any portion
of this B Warrant in the B Warrant Register, upon surrender of this B Warrant
with the Form of Assignment attached hereto duly completed and signed, to the
Company at the office specified in or pursuant to Paragraph 9 hereof. Upon any
such registration or transfer, a new warrant to purchase the Common Stock, in
substantially the form of this B Warrant (any such new warrant, a "New B
Warrant"), evidencing the portion of this B Warrant so transferred shall be
issued to the transferee and a New B Warrant evidencing the remaining portion of
this B Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New B Warrant by the transferee thereof shall be
deemed the acceptance of such transferee of all of the rights and obligations of
the Holder.
(b) This B Warrant is exchangeable, upon the surrender hereof
by the Holder to the office of the Company specified in or pursuant to Paragraph
9 for one or more New B Warrants, evidencing in the aggregate the right to
purchase the number of shares of the Common Stock which may then be purchased
hereunder. Any such New B Warrant will be dated the date of such exchange.
5. EXERCISE OF THIS B WARRANT.
(a) Upon surrender of this B Warrant with the Form of Election
to Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Paragraph 9 hereof, and upon payment and delivery of the
Exercise Price multiplied by the number of shares of the Common Stock that the
Holder intends to purchase hereunder, in lawful money of the United States of
America, in cash or by certified or official bank check or checks, to the
Company, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly but in no event later than five business days after the
Date of Exercise (as defined herein) issue or cause to be issued and delivered
to or upon the written order of the Holder AND in such name or names as the
Holder may designate (subject to the restrictions on transfer described in the
legend set forth on the face of this B Warrant), a certificate for the shares of
the Common Stock issuable upon such exercise, with such restrictive legend as
required by the 1933 Act. Any person so designated by the Holder to receive the
shares OF the Common Stock shall be deemed to have become holder of record of
the Common Stock as of the Date of Exercise of this B Warrant.
(b) "Date of Exercise" means the date on which the Company
shall have received (i) this B Warrant (or any New B Warrant, as applicable),
with the Form of Election to Purchase attached hereto (or attached to such New B
Warrant) appropriately completed and duly signed, and (ii) payment of the
Exercise Price for the number of shares of the Common Stock so indicated by the
Holder to be purchased.
(c) This B Warrant shall be exercisable at any time and from
time to time for such number of shares of the Common Stock as is indicated in
the attached Form of Election to Purchase, If less than all of the shares of the
Common Stock which may be purchased under this B Warrant are purchased at any
time, the Company shall issue or cause to be issued, at its expense, a New B
Warrant evidencing the right to purchase the remaining number of shares of the
Common Stock for which no exercise has been evidenced by this B Warrant.
(d) Notwithstanding anything contained herein to the contrary,
the holder of this B Warrant may, at its election exercised in its sole
discretion, exercise this B Warrant in whole or in part and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Exercise Price, elect instead to receive upon such
exercise the "Net Number" of shares of the Common Stock determined according to
the following formula (a "Cashless Exercise"):
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NET NUMBER = (A X B) - (A X C)
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B
For purposes of the foregoing formula:
A = the total number shares with respect to
which this B Warrant is then being
exercised.
B = the last reported sale price (as reported
by Bloomberg) of the Common Stock on the
date immediately preceding the date of the
notice of exercise of this B Warrant.
C = the Exercise Price then in effect at the
time of such exercise.
Provided, however, notwithstanding anything herein contained to the
contrary, the Holder may not affect a Cashless Exercise of this B Warrant until
after July ________ 2004, and thereafter-so long as there is an effective
Registration Statement with respect to the shares of the Common Stock.
6. CALL BY THE COMPANY. In the event that the closing price of the Common
Stock as listed on a nationally public securities market is $1.75 or more for a
period of 20 consecutive trading days and the Registration Statement for the
Common Stock is effective for such 20 consecutive trading days, the Company may
call this B Warrant upon 30 days notice and pay to the Holder the sum of $0.001
per share of the Common Stock covered by this 13 Warrant, for all such shares
not purchased under the exercise provisions at the expiration of the 30 days
notice period.
7. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The shares of the
Common Stock or other securities at the time issuable upon exercise of this B
Warrant and the Exercise Price therefor, are subject to adjustment upon the
occurrence of the following events:
(a) ADJUSTMENT OF THE EXERCISE PRICE DUE TO EBIT. The Exercise
Price will be adjusted on a sliding scale if the earnings before interest and
taxes ("EBIT") of the Company, not including any non recurring gains or losses,
is less than $3,000,000 for the fiscal year of the Company ending September 30,
2004 (the "Adjustment Date") as hereinafter described. If the EBIT of the
Company is $2,000,000 or less as of the Adjustment Date, then the Exercise Price
will be $0.25 per share of the Common Stock. If the EBIT of the Company is less
than $3,000,000 but more than $2,000,000 as of the Adjustment Date, then the
Exercise Price will equal $1.00 - [$.75 x ($3,000,000-E)/$1,000,000j, where E is
the actual EBIT as of Adjustment Date. For example, if EMT is $2,500,000, the
Exercise Price will be $1.00 - [$.75 x ($3,000,000-$2,500,000)/$1,000,000], or
$0.63. In no event will the Exercise Price be less than $0.25 per share of the
Common Stock.
(b) ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS,
RECAPITALIZATIONS, ETC. The Exercise Price of this B Warrant and the number of
shares of the Common Stock or other securities at the time issuable upon the
exercise of this B Warrant shall be appropriately adjusted to reflect any stock
dividend, stock split, combination of shares, reclassification, recapitalization
or other similar event affecting the number of outstanding shares of the Common
Stock or other securities of the Company.
(c) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being referred to
as a "Reorganization"), then, in each case, the Holder, on exercise hereof at
any time after the consummation or effective date of such Reorganization (the
"Effective Date"), shall receive, in lieu of the shares of the Common Stock or
other securities of the Company at any time issuable upon the exercise of this B
Warrant prior to the Effective Date, the shares of the Common Stock and other
securities of the Company and property (including cash) to which the Holder
would have been entitled upon the Effective Date if the Holder had exercised
this B Warrant immediately prior thereto (all subject to further adjustment as
provided in this B Warrant).
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(d) CERTIFICATE AS TO ADJUSTMENTS. In case of any adjustment
or readjustment in the price or kind of securities issuable on the exercise of
this B Warrant, the Company will promptly give written notice thereof to the
Holder in the form of a certificate, certified and confirmed by the Board of
Directors of the Company, setting forth such adjustment or readjustment and
showing in reasonable detail the facts upon which such adjustment or
readjustment is based.
8. FRACTIONAL SHARES. The Company shall not be required to issue or
cause to be issued fractional shares of the Common Stock on the exercise of this
B Warrant. The number of full shares of the Common Stock that shall be issuable
upon the exercise of this B Warrant shall be computed on the basis of the
aggregate number of shares of the Common Stock purchasable on exercise of this B
Warrant so presented. If any fraction of shares of the Common Stock would,
except for the provisions of this Paragraph 8, be issuable on the exercise of
this B Warrant, the Company shall, at its option, (a) pay an amount in cash
equal to the Exercise Price multiplied by such fraction or (b) round the number
of shares of the Common Stock issuable, up to the next whole number.
9. NOTICE. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Xx. Xxxxxx X. Xxxxxxxxx at 0000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxx,
Xxxxxxxxxx 00000, with a copy to Xxxxxx X. Xxxxxxxx, Esq. at 000 Xxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000, and if to the Holder addressed to Mr. Xxxxxx
Xxxxxx Warden 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
10. MISCELLANEOUS.
(a) This B Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This B Warrant may be amended only in writing and signed by the Company
and the Holder.
(b) Nothing in this B Warrant shall be construed to give to
any person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this B Warrant. This B Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
(c) This B Warrant shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflicts of laws provisions thereof. Each party hereby irrevocably submits to
the personal jurisdiction of the United States District Court for the Central
District of California, as well as of the Superior Courts of the State of
California in Riverside County, California over any suit, action or proceeding
arising out of or relating to this Agreement. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such mediation, arbitration,
suit, action or proceeding brought in any such county and any claim that any
such mediation, arbitration, suit, action or proceeding brought in such county
has been brought in an inconvenient forum.
(d) The headings herein are for convenience only, do not
constitute a part of this B Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(e) In case any one or more of the provisions of this B
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this B Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this B Warrant.
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(f) The Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
AND the rights of the Holder are limited to those expressed in this B Warrant.
(g) In the event of any conflict between the teens of this B
Warrant or the Stock Purchase Agreement, the terms of the Stock Purchase
Agreement shall control.
IN WITNESS WHEREOF, the Company has caused this B Warrant to be duly
executed by the authorized officer as of the date first above stated.
CYBER PUBLIC RELATIONS, INC.
By: Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Chief Executive
Officer
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FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of
Common Stock under the foregoing B Warrant)
To: Cyber Public Relations, Inc.
In accordance with the B Warrant enclosed with this Form of
Election to Purchase, the undersigned hereby irrevocably elects to purchase
______________ shares of the Common Stock (the "Common Stock"), $0.001 par
value, of Cyber Public Relations, Inc. and encloses this B Warrant and
$_________ for each share of the Common Stock being purchased or an aggregate of
$________ in cash or certified or official bank check or checks, which sum
represents the aggregate Exercise Price (as defined in the B Warrant) together
with any applicable taxes payable by the undersigned pursuant to the B Warrant.
The undersigned requests that certificates for the shares of the
Common Stock issuable upon this exercise be issued in the name of:
____________________________________
____________________________________
____________________________________
(Please print name and address)
____________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of the Common Stock issuable upon this exercise
shall not be all of the shares of the Common Stock which the undersigned is
entitled to purchase in accordance with the enclosed B Warrant, the undersigned
requests that a New B Warrant (as defined in the B Warrant) evidencing the right
to purchase the shares of the Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:
____________________________________
____________________________________
____________________________________
(Please print name and address)
Dated: Name of Holder:
(Print)__________________________________
By_______________________________________
Name_____________________________________
Title____________________________________
Signature must conform in all respects to
name of Holder as specified on the face of
the B Warrant
