Exhibit 10.57
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WARRANT AGREEMENT
among
iXL Enterprises, Inc.
and
GE Capital Equity Investments, Inc.
Dated as of
April 7, 1999
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WARRANT AGREEMENT
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This WARRANT AGREEMENT is dated as of April 7, 1999 (the
"Agreement"), and entered into by and among iXL Enterprises, Inc., a Delaware
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corporation (the "Company"), and GE Capital Equity Investments, Inc. ("GECC,"
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and together with subsequent holders of the Warrants subject hereto, the
"Holders").
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WHEREAS, in consideration of GECC entering into a Master Services
Agreement with the Company on the date hereof (the "Services Agreement"), the
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Company is issuing to GECC warrants to purchase an aggregate of 1,000,000 shares
(subject to adjustment as provided herein) of the Company's Class A Common
Stock, par value $.01 per share (the "Common Stock"). The warrants referred to
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in this paragraph are referred to herein as the "Warrants"; and the shares of
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Common Stock issuable upon exercise of the Warrants are referred to herein as
the "Warrant Shares";
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
SECTION 1. Warrant Certificates. Simultaneously with the execution hereof,
the Company will issue and deliver to GECC a certificate or certificates shall
be substantially in the form set forth as Exhibit A attached hereto. Warrant
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Certificates shall be dated the date of issuance by the Company.
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SECTION 2. Execution of Warrant Certificates. Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board or its Chief
Executive Officer, President or any Vice President. Each Warrant Certificate
shall also be signed on behalf of the Company by its Secretary or an Assistant
Secretary.
SECTION 3. Restrictions on Transfer; Registration of Transfers and
Exchanges. Prior to any proposed transfer of the Warrants or the Warrant Shares,
unless such transfer is made pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"),
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the transferring Holder will deliver to the Company an opinion of counsel,
reasonably satisfactory in form and substance to the Company, to the effect that
the Warrants or Warrant Shares, as applicable, may be sold or otherwise
transferred without registration under the Securities Act. No Warrants may be
transferred to any Holder unless the issuance of Warrant Shares to such Holder
upon the exercise of such Warrants would be exempt from registration under the
Securities Act. Upon original issuance thereof, and until such time as the same
shall have been registered under the Securities Act or sold pursuant to Rule 144
promulgated thereunder (or any similar rule or regulation) each Warrant
Certificate shall bear the legend included on the first page of Exhibit A,
unless in such opinion of counsel, such legend is no longer required by the Act.
Notwithstanding the foregoing, each Holder of Warrants and Warrant Shares agrees
that it will not transfer such securities for 180 days after any public offering
of Common Stock (or security convertible into Common Stock) by the Company
unless the managing underwriter for such offering decides such restriction is
unnecessary, and each Holder agrees to execute any agreement or document
reasonably requested by any such underwriter which relates to such restriction.
Subject to the foregoing, the Company shall from time to time register the
transfer of any outstanding Warrant Certificates in the Warrant Register to be
maintained by the Company upon surrender thereof accompanied by a written
instrument or instruments of transfer in form reasonably satisfactory to the
Company, duly executed by the registered Holder or Holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney.
Upon any such registration of transfer, a new Warrant Certificate shall be
issued to the transferee Holder(s) and the surrendered Warrant Certificate shall
be canceled and disposed of by the Company.
SECTION 4. Warrants; Exercise of Warrants. Subject to the terms of this
Agreement, each Holder shall have the right, which may be exercised at any time
during the period commencing on the first anniversary of the date hereof and
ending at 5:00 p.m., New York City time, on the date which is three years after
the date hereof (the "Expiration Date"), to receive from the Company the number
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of fully paid and nonassessable Warrant Shares (and such other consideration)
which the Holder may at the time be entitled to receive on exercise of such
Warrants and payment of the Exercise Price (as defined below) for such Warrant
Shares. Each Warrant not exercised prior to 5:00 p.m., New York time, on the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time. No adjustments
as to dividends will be made upon exercise of the Warrants, except as otherwise
expressly provided herein.
The price at which each Warrant shall be exercisable (the "Exercise
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Price") shall be equal $15.00.
A Warrant may be exercised upon surrender to the Company at its office
designated for such purpose of the Warrant Certificate or Certificates to be
exercised with the form of election to purchase attached thereto duly filled in
and signed, and upon
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payment to the Company of the Exercise Price for the number of Warrant Shares in
respect of which such Warrants are then exercised. Payment of the aggregate
Exercise Price shall be made by delivering for surrender and cancellation to the
Company Warrants with an aggregate Surrender Value (as hereinafter defined), as
of the date of such exercise, equal to the Exercise Price for the Warrants being
exercised. For the purposes of this paragraph, the "Surrender Value" of any
Warrant is equal to the Fair Market Value, as of the date of such surrender, of
the Warrant Shares issuable upon the exercise of such Warrant, minus the
Exercise Price of such Warrant. Fair Market Value means with respect to a
Warrant Share at any date: (i) if shares of Common Stock are being sold pursuant
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to a public offering under an effective registration statement under the
Securities Act which has been declared effective and Fair Market Value is being
determined as of the closing of the public offering, the higher of (x) the "per
share price to public" specified for such shares in the final prospectus for
such public offering and (y) the Fair Market Value determined under clauses
(ii), (iii) or (iv), as applicable below; (ii) subject to clause (i) above, if
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shares of Common Stock are then listed or admitted to trading on any national
securities exchange or traded on any national market system, the average of the
daily closing prices for the 20 trading days before such date; (iii) subject to
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clause (i) above if no shares of Common Stock are then listed or admitted to
trading on any national securities exchange or traded on any national market
system, the average of the reported closing bid and asked prices thereof on such
date in the over-the-counter market as shown by the Nasdaq Stock Market or, if
such shares are not then quoted in such system, as published by the National
Quotation Bureau, Incorporated or any similar successor organization, and in
either case as reported by any member firm of the New York Stock Exchange
selected by the Company; or (iv) subject to clause (i) above if no shares of
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Common Stock are then listed or admitted to trading on any national securities
exchange or traded on any national market system, if no closing bid and asked
prices thereof are then so quoted or published in the over-the-counter market,
the Fair Market Value of a Warrant Share as determined in good faith by the
Board of Directors of the Company.
Subject to the provisions of Section 5 hereof, upon such surrender of
Warrant Certificates and payment of the Exercise Price, the Company shall issue
and cause to be delivered, as promptly as practicable, to or upon the written
order of the Holder and in such name or names as such Holder may designate a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants (and such other consideration as may be
deliverable upon exercise of such Warrants) together with cash for fractional
Warrant Shares as provided in Section 9. The certificate or certificates for
such Warrant Shares shall be deemed to have been issued and the person so named
therein shall be deemed to have become a holder of record of such Warrant Shares
as of the date of the surrender of such Warrants and payment of the Exercise
Price, irrespective of the date of delivery of such certificate or certificates
for Warrant Shares.
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Each Warrant shall be exercisable, at the election of the Holder thereof,
either in full or from time to time in part and, in the event that a Warrant
Certificate is exercised in respect of fewer than all of the Warrant Shares
issuable on such exercise at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued and delivered pursuant to the provisions hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled and disposed of by the Company. The Company shall keep copies of this
Agreement and any notices given or received hereunder available for inspection
by the Holders during normal business hours at its office.
SECTION 5. Payment of Taxes. The Company will pay all documentary stamp
taxes and other governmental charges (excluding all foreign, federal or state
income, franchise, property, estate, inheritance, gift or similar taxes) in
connection with the issuance or delivery of the Warrants hereunder, as well as
all such taxes attributable to the initial issuance or delivery of Warrant
Shares upon the exercise of Warrants and payment of the Exercise Price. The
Company shall not, however, be required to pay any tax that may be payable in
respect of any subsequent transfer of the Warrants or any transfer involved in
the issuance and delivery of Warrant Shares in a name other than that in which
the Warrants to which such issuance relates were registered, and, if any such
tax would otherwise be payable by the Company, no such issuance or delivery
shall be made unless and until the person requesting such issuance has paid to
the Company the amount of any such tax, or it is established to the reasonable
satisfaction of the Company that any such tax has been paid.
SECTION 6. Mutilated or Missing Warrant Certificates. If a mutilated
Warrant Certificate is surrendered to the Company, or if the Holder of a Warrant
Certificate claims and submits an affidavit or other evidence satisfactory to
the Company to the effect that the Warrant Certificate has been lost, destroyed
or wrongfully taken, the Company shall issue a replacement Warrant Certificate.
If reasonably required by the Company, such Holder must provide an indemnity
bond, or other form of indemnity, sufficient in the reasonable judgment of the
Company to protect the Company from any loss which it may suffer if a Warrant
Certificate is replaced. If GECC or any other institutional Holder (or nominee
thereof) is the owner of any such lost, stolen or destroyed Warrant Certificate,
then the affidavit of an authorized officer of such owner, setting forth the
fact of loss, theft or destruction and of its ownership of the Warrant
Certificate at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Warrant Certificate other than
the unsecured written agreement of such owner to indemnify the Company.
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SECTION 7. Reservation of Warrant Shares. The Company shall at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum number
of shares of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.
The Company or, if appointed, any transfer agent for the Common Stock (the
"Transfer Agent") will be irrevocably authorized and directed at all times to
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reserve such number of authorized shares as shall be required for such purpose.
The Company shall keep a copy of this Agreement on file with any such Transfer
Agent. The Company will supply any such Transfer Agent with duly executed
certificates for such purposes and will provide or otherwise make available all
other consideration that may be deliverable upon exercise of the Warrants. The
Company will furnish any such Transfer Agent a copy of all notices of
adjustments and certificates related thereto, transmitted to each Holder
pursuant to Section 10 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 8 hereof to reduce the Exercise Price below the then par value of the
Warrant Shares, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
The Company covenants that all Warrant Shares and other capital stock
issued upon exercise of Warrants will, upon payment of the Exercise Price
therefor and issue thereof, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights and free, subject to Section 5 hereof,
from all taxes, liens, charges and security interests with respect to the issue
thereof.
SECTION 8. Adjustment of Exercise Price and Warrant Number. The number of
shares of Common Stock issuable upon the exercise of each Warrant (the "Warrant
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Number") is initially one. The Warrant Number is subject to adjustment from time
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to time upon the occurrence of the events enumerated in, or as otherwise
provided in, this Section 8.
(a) Adjustment for Change in Capital Stock
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If the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
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(2) subdivides or reclassifies its outstanding shares of Common Stock
into a greater number of shares;
(3) combines or reclassifies its outstanding shares of Common Stock
into a smaller number of shares; or
(4) issues by reclassification of its Common Stock any shares of its
capital stock (other than reclassification arising solely as a result of a
change in the par value or no par value of the Common Stock);
then the Warrant Number and the Exercise Price in effect immediately prior to
such action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised shall receive the aggregate number and kind of shares of
capital stock of the Company which it would have received immediately following
such action if such Warrant had been exercised immediately prior to such action
for the same aggregate consideration that such holder would have paid if such
Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed above
shall occur.
The Company shall not issue shares of Common Stock as a dividend or
distribution on any class of capital stock other than Common Stock unless (i)
the Warrant Holders also receive such dividend or distribution on a ratable
basis or (ii) the appropriate adjustment to the Warrant Number and Exercise
Price is made under this Section 8.
(b) Notice of Adjustment
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Whenever the Warrant Number is adjusted, the Company shall provide the
notices required by Section 10 hereof.
(c) Voluntary Increase
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The Company from time to time may increase the Warrant Number by any
amount for any period of time (including, without limitation, permanently) if
the period is at least 20 Business Days and if the increase is irrevocable
during the period.
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Whenever the Warrant Number is increased, the Company shall mail to the Holders
a notice of the increase. The Company shall mail the notice at least 15 days
before the date the increased Warrant Number takes effect. The notice shall
state the increased Warrant Number and the period it will be in effect.
An increase of the Warrant Number under this Subsection (c) (other than a
permanent increase) does not change or adjust the Warrant Number otherwise in
effect for purposes of subsection (a) of this Section 8.
(d) Reorganizations
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In case of any capital reorganization or reclassification, other than in
the cases referred to in Section 8(a) hereof, or the consolidation or merger of
the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of any of the outstanding shares of the
Company's capital stock into shares of other stock or other securities or
property), or the sale of the property of the Company as an entirety or
substantially as an entirety (collectively, such actions being hereinafter
referred to as "Reorganizations"), there shall thereafter be deliverable upon
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exercise of any Warrant (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization if such Warrant had been exercised in
full immediately prior to such Reorganization. In the event that the Warrants
are not exercised in connection with such Reorganization, appropriate
adjustment, as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a duly adopted resolution
certified by the Company's Secretary or Assistant Secretary, shall be made in
the application of the provisions herein set forth with respect to the rights
and interests of Holders so that the provisions set forth herein shall
thereafter be applicable, as nearly as possible, in relation to any shares or
other property thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof, (i) notice of such Reorganization
shall be given to each of the Holders of the Warrants, and (ii) the successor
corporation (if other than the Company) resulting from such Reorganization or
the corporation purchasing or leasing such assets or other appropriate
corporation or entity shall expressly assume, by a supplemental Warrant
Agreement or other acknowledgment executed and delivered to the Holder(s), the
obligation to deliver to each such Holder
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such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase, and all other obligations
and liabilities under this Agreement.
If any event occurs of the type similar to the provisions of this Section
8 but not expressly provided for by such provisions, then the Board of Directors
of the Company will make an appropriate adjustment in the Warrant Number so as
to protect the Holders, provided, that no such adjustment will decrease the
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applicable Warrant Number as otherwise determined by this Section 8.
(e) Form of Warrants
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Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement but shall nevertheless be exercisable for the
adjusted number of Warrant Shares at the adjusted Exercise Price.
SECTION 9. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 9,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall, pay an amount in cash equal to the Fair Market Value of the
Warrant Share so issuable, multiplied by such fraction.
SECTION 10. Notices to Warrant Holders. Upon any adjustment pursuant to
Section 8 hereof, the Company shall promptly thereafter (i) cause to be filed
with the Company a certificate of an officer of the Company setting forth the
Warrant Number and Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based, and (ii) cause to be given to each of the Holders at its
address appearing on the Warrant Register written notice of such adjustments.
Where appropriate, such notice may be given in advance and included as a part of
the notice required to be mailed under the other provisions of this Section 10.
In case:
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(a) the Company shall authorize the issuance to all holders of shares of
Common Stock of rights, options or warrants to subscribe for or purchase shares
of Common Stock or of any other subscription rights or warrants;
(b) the Company shall authorize the distribution to all holders of shares
of Common Stock of assets, including cash, evidences of its indebtedness, or
other securities;
(c) of any consolidation or merger to which the Company is a party and for
which approval of any shareholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for shares of
Common Stock;
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
(e) the Company proposes to take any action that would require an
adjustment to the Warrant Number pursuant to Section 8 hereof; then the Company
shall cause to be given to each of the Holders at its address appearing on the
Warrant Register, at least 20 days prior to the applicable record date
hereinafter specified, or the date of the event in the case of events for which
there is no record date, in accordance with the provisions of Section 11 hereof,
a written notice stating (i) the date as of which the holders of record of
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shares of the capital stock of the Company to be entitled to receive any such
rights, options, warrants or distribution are to be determined, or (ii) the
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initial expiration date set forth in any tender offer or exchange offer for
shares of the capital stock of the Company, or (iii) the date on which any such
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consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of the capital stock of the Company
shall be entitled to exchange such shares for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure to give the notice
required by this Section 10 or any defect therein shall not affect the legality
or validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
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Nothing contained in this Agreement or in any Warrant Certificate shall be
construed as conferring upon the Holders (prior to the exercise of such
Warrants) the right to vote or to consent or to receive notice as shareholder in
respect of the meetings of shareholders or the election of Directors of the
Company or any other matter, or any rights whatsoever as shareholders of the
Company; provided, however, that nothing in the foregoing provision is intended
to detract from any rights explicitly granted to any Holder hereunder.
SECTION 11. Notices to the Company and Warrant Holders. All notices and
other communications provided for or permitted hereunder shall be made by hand-
delivery, first-class mail, telex, telecopier, or overnight air courier
guaranteeing next day delivery:
(a) if to GECC, to the address specified on the signature page executed by
GECC; and
(b) if to the Company, iXL Enterprises, Inc., 0000 Xxxxx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx, 00000, Telecopy no. (000) 000-0000, Attention: Mr. M. Xxxxx
Xxxxxxxx, with a copy to Xxxxxx & Xxxxxx PC, One Buckhead Plaza, 0000 Xxxxxxxxx
Xxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Telecopy No. (000) 000-0000,
Attention: Xxxxx X. Xxxxxxxxx, Esq., with an additional copy to Debevoise &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy No. (212) 909-
6836, Attention: Xxxxxxxx X. Xxxxxxxxx, Esq. and with an additional copy to
Xxxxx & Company, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxxx XX, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed (so long as a
fax copy is sent and receipt acknowledged within two business days after
mailing); when answered back if telexed; when receipt acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. The parties may
change the addresses to which notices are to be given by giving five days' prior
written notice of such change in accordance herewith.
SECTION 12. Certain Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any Holders
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other provision
herein; provided that any such supplement or amendment shall not in any way
adversely affect the interests of the Holders.
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SECTION 13. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or GECC shall bind and inure to
the benefit of their respective successors and assigns hereunder, provided that
this Agreement shall not be assignable by any Holder if such Holder has not
complied with the transfer restrictions of Section 3 hereof. Any such
assignment in violation of Section 3 shall be null and void.
SECTION 14. Termination. This Agreement shall terminate if all Warrants
have been exercised or shall have expired or been canceled pursuant to this
Agreement, provided, that any rights of any party accrued with respect hereto
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prior to the termination of this Agreement shall survive such termination.
SECTION 15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK (PROVIDED THAT DETERMINATIONS RELATING TO
CORPORATE LAW SHALL BE CONSTRUED IN ACCORDANCE WITH THE DELAWARE GENERAL
CORPORATION LAW). THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND THE WARRANTS, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY AGREES THAT IT WILL NOT
COMMENCE ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OTHER JURISDICTION. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL AFFECT
THE RIGHT OF ANY HOLDER OF A WARRANT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF
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THE OTHER DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER
OF GECC'S INVESTMENT IN THE COMPANY CONTEMPLATED HEREBY. THE SCOPE OF THIS JURY
TRIAL WAIVER SHALL BE LIMITED TO DISPUTES BETWEEN THE COMPANY AND GECC AND SHALL
NOT EXTEND TO DISPUTES BETWEEN THE COMPANY AND ANY OTHER PERSON.
SECTION 16. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Holders any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company and
the Holders.
SECTION 17. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 18. Amendments and Waivers. Subject to Section 13, the Company
agrees it will not solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions of this Agreement or any
Warrant unless each Holder (irrespective of the amount of Warrants then owned by
it) shall substantially concurrently be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be supplied
by the Company with sufficient information (including any offer of remuneration)
to enable it to make an informed decision with respect thereto which information
shall be the same as that supplied to each other Holder. The Company will not,
directly or indirectly, pay or cause to be paid any remuneration whether by way
of supplement or additional interest fee or otherwise, to any Holder as
consideration for or as an inducement to the entering into by any Holder of any
waiver or amendment of any of the terms and provisions of this Agreement or any
Warrant unless such remunerations is concurrently paid on the same terms,
ratably to each Holder whether or not such Holder signs such waiver or consent,
provided that the foregoing is not intended to preclude the adoption of any
amendment or the giving of any waiver by the Holders of a majority of the
Warrants to the extent permitted by the other provisions of this Section 18.
SECTION 19. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Holder that:
(a) none of the Company's filings with the SEC, including, without
limitation, the Company's Registration Statement on Form S-1 relating to the
initial public offering of the Company's common stock, contain any untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(b) this Agreement has been duly authorized by all necessary corporate
action on the part of the Company and has been validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by GECC, constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The Company has duly authorized and reserved a sufficient number of shares of
Common Stock for issuance upon exercise of the Warrants and the Warrant Shares,
when issued upon exercise of the Warrants in accordance with the terms of this
Agreement and the Warrants, will be duly authorized, validly issued and fully
paid and nonassessable, free of preemptive rights with no personal liability
attached to the ownership thereof.
(c) No Violation or Conflict; No Default. (1) Neither the execution,
delivery or performance of this Agreement, nor the compliance with its
obligations hereunder, nor the consummation of the transactions contemplated
hereby will:
(i) violate or conflict with any provision of the certificate of
incorporation or bylaws of the Company or any of its subsidiaries;
(ii) violate or conflict with any statute, law, rule or regulation or
any judgment, decree, order, regulation or rule of any court or
governmental authority or body (collectively, "Laws") applicable to the
Company or any of its subsidiaries or by which any of their respective
properties or assets may be subject; or
(iii) violate, be in conflict with, or constitute a breach or default
(or any event which, with the passage of time or notice or both, would
become a default) under, or permit the termination of, or require the
consent of any person or entity under, result in the creation or
imposition of any lien upon any property of the Company or its
subsidiaries under, result in the loss (by the Company or any
subsidiary) or modification in any manner adverse to the Company and
its subsidiaries of any right or benefit under, or give to any other
person or entity any right of termination, amendment, acceleration,
repurchase or repayment, increased payments or cancellation under, any
mortgage, indenture, note, debenture, agreement, lease, license,
permit, franchise or other instrument or obligation, whether written or
oral (collectively, "Contracts") to which the Company or any of its
subsidiaries is a party or by which their properties may be bound or
affected, except as would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect upon the
business, operations, prospects, properties, assets or condition
(financial or otherwise) of the Company and its subsidiaries, taken as
a whole, or a material adverse effect on the ability of the Company to
perform its obligations under this Agreement.
(2)The execution and delivery of this Agreement does not, and the
performance of its obligations under this Agreement and the consummation of the
transaction contemplated hereby will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
body under any Laws, except for required filings under the Securities Act or
state "blue sky" laws.
(d) Assuming the correctness of the representations and warranties of GECC
set forth in Section 20 hereof, the offer and sale of the Warrants to GECC
hereunder is exempt from the registration and prospectus delivery requirements
of the Securities Act.
(e) The representations and warranties of the Company contained in this
Section 19 shall survive until the first anniversary of the date hereof.
SECTION 20. GECC represents and warrants to the Company that:
(a) it is purchasing the Warrants solely for its own account and not as
nominee or agent for any other person and not with a view to, or for offer or
sale in connection with, any current distribution thereof (within the meaning of
the Securities Act) that would cause the original purchase of the Warrants to be
in violation of the securities laws of the United States of America or any state
thereof, without prejudice, however, to its right at all times to sell or
otherwise dispose of all or any part of the Warrants pursuant to a registration
statement under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act, and subject, nevertheless, to
the disposition of its property being at all times within its control.
(b) (1) GECC is knowledgeable, sophisticated and experienced in business
and financial matters and in investing in privately held and public business
enterprises; it has previously invested in securities similar to the Warrants
and it acknowledges that the Warrants have not been registered under the
Securities Act and understands that the Warrants must be held indefinitely
unless they are subsequently registered under the Securities Act or such sale is
permitted pursuant to an available exemption from such registration requirement;
it is able to bear the economic risk of its investment in the Warrants and is
presently able to afford the complete loss of such investment; and it is an
"accredited investor" as defined in Regulation D promulgated under the
Securities Act.
(c) GECC did not make its investment decision to purchase the Warrants
based on any form of general solicitation or general advertising used by the
Company, including, but not limited to, advertisements, articles, notices or
other communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) GECC is a "qualified institutional buyer" as defined in Rule 144A
promulgated under the Securities Act.
SECTION 21. Issue Taxes. The Company agrees to pay (A) all income
taxes (including any tax on or based upon net income, or gross income, or income
as specially defined, or earnings, or profits, or selected items of income,
earnings or profits) and all gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, alternative or add-on
minimum taxes, customs duties or other taxes, fees, assessments or charges of
any kind whatsoever, together with any interest and any penalties, additions to
tax or additional amounts imposed by any taxing authority (domestic or foreign)
and (B) any liability for the payment of any amount of the type described in the
immediately preceding clause (A) as a result of being a "transferee" (within the
meaning of Section 6901 of the U.S Internal Revenue Code or any other law) of
another individual or entity or a member of an affiliated or combined group
("Taxes") (other than Taxes in the nature of income, franchise or gift taxes)
and governmental fees arising in connection with the issuance, sale, delivery or
transfer by the Company to each Holder of the Warrants and the Warrant Shares,
as the case may be, and any modification of any of such Warrants or Warrant
Shares and will hold such Holder harmless without limitation as to time against
any and all liabilities with respect to all such Taxes and fees.
SECTION 22. Initial Public Offering. Upon the initial public offering of
the Company (the "IPO"), the Warrant Shares shall automatically be defined as
shares of the common stock of the Company, which will be identical to the Common
Stock, except that there will be one vote per share of such common stock (it
being understood that as of the IPO, there will be only one class of common
stock of the Company).
12
[Signature pages follow]
13
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be duly executed as of the day and year first above written.
iXL ENTERPRISES, INC.
/s/ M. Xxxxx Xxxxxxxx
By:__________________________________
Name: M. Xxxxx Xxxxxxxx
Title: Executive Vice President
Addresses for Notices:
GE CAPITAL EQUITY INVESTMENTS, INC.
/s/ Xxxxxxx Xxxxx
By:__________________________________
Name: Xxxxxxx Xxxxx
Title: Vice President
14
EXHIBIT A
[Form of Warrant Certificate]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
______________, 1999, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE ACT, OR IN COMPLIANCE WITH RULE 144 OR
PURSUANT TO ANOTHER EXEMPTION THEREFROM. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A WARRANT AGREEMENT DATED AS OF APRIL 7, 1999, AMONG
THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND GE CAPITAL EQUITY INVESTMENTS,
INC. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN
SUCH AGREEMENT AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF THIS
CERTIFICATE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH
TRANSFER. A COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
No. _________ _________ Warrants
Warrant Certificate
iXL Enterprises, Inc.
This Warrant Certificate certifies that GE Capital Equity Investments,
Inc., or registered assigns, is the registered holder of the number of
Warrants (the "Warrants") set forth above to purchase Common Stock, par value
--------
$.01 per share (the "Common Stock"), of iXL Enterprises, Inc., a Delaware
------------
corporation (the "Company"). Each Warrant entitles the Holder upon exercise to
-------
receive from the Company one fully paid and nonassessable share of Common Stock
(a "Warrant Share"), at an exercise price (the "Exercise Price") of $15.00
------------- --------------
payable as provided in the Warrant Agreement, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office of the Company
designated for such purpose, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to hereinafter. The number of Warrant
Shares issuable upon exercise of the Warrants and the Exercise Price are subject
to adjustment upon the occurrence of certain events, as set forth in the Warrant
Agreement. Each
Warrant is exercisable at any time during the period commencing on the first
anniversary of the date hereof and ending at 5:00 p.m., New York City time, on
the date which is five years after the date hereof.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, and are issued or to be issued pursuant to a
Warrant Agreement dated as of April 7, 1999 (the "Warrant Agreement"),
-----------------
duly executed and delivered by the Company, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders or holder" meaning the registered holders or registered holder) of the
-------- ------
Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof
upon written request to the Company. Capitalized terms used and not defined
herein shall have the meaning ascribed thereto in the Warrant Agreement.
The holder of Warrants evidenced by this Warrant Certificate may exercise
such Warrants under and pursuant to the terms and conditions of the Warrant
Agreement by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon (and by this reference made a part hereof) properly
completed and executed, together with payment of the Exercise Price made by
delivering for surrender and cancellation to the Company Warrants with an
aggregate Surrender Value (as defined in Section 4 of the Warrant Agreement), as
of the date of such exercise, equal to the Exercise Price for the Warrants being
exercised. In the event that upon any exercise of Warrants evidenced hereby the
number of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued by the Company to the holder hereof or
its registered assignee a new Warrant Certificate evidencing the number of
Warrants not exercised.
Warrant Certificates, when surrendered at the office of the Company by the
registered holder thereof in person or by legal representative or attorney duly
authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Subject to the terms and conditions of the Warrant Agreement, upon due
presentation for registration of transfer of this Warrant Certificate at the
office of the Company a new Warrant Certificate or Warrant Certificates of like
tenor and evidencing in the aggregate a like number of Warrants shall be issued
to the transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement,
2
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
Upon the initial public offering of the Company (the "IPO"), the Warrant
Shares shall automatically be defined as shares of the common stock of the
Company, which will be identical to the Common Stock, except that there will be
one vote per share of such common stock (it being understood that as of the IPO,
there will be only one class of common stock of the Company).
IN WITNESS WHEREOF, iXL Enterprises, Inc. has caused this Warrant
Certificate to be signed by its Chairman of the Board, President or Vice
President and by its Secretary or Assistant Secretary.
Dated: _____________, 1999
iXL ENTERPRISES, INC.
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
3
FORM OF ELECTION TO PURCHASE
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and herewith tenders payment for such shares to the Company in the form of
Warrants to purchase __________ Warrant Shares with an aggregate Surrender Value
(as defined in Section 4 of the Warrant Agreement) of $__________.
The undersigned requests that a certificate for such shares be registered
in the name of _______________, whose address is
_______________________________, and that such shares be delivered to
__________________, whose address is ___________________________.
If said number of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
________________________, whose address is _______________________________, and
that such Warrant Certificate be delivered to _____________________, whose
address is ________________________________.
Signature(s):_________________________
NOTE: The above signature(s) must
correspond with the name
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever. If this Warrant is
held of record by two or more
joint owners, all such owners
must sign.
Date: ____________
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant Certificate)
FOR VALUE RECEIVED, hereby sells, assigns and transfers unto
_____________ whose address is _________________________ and whose social
security number or other identifying number is _________________________, the
within Warrant Certificate, together with all right, title and interest therein
and to the Warrants represented thereby, and does hereby irrevocably constitute
and appoint _____________________, attorney, to transfer said Warrant
Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Signature(s):_________________________
NOTE: The above signature(s) must
correspond with the name
written upon the face of this
Warrant Certificate in every
particular, without alteration
or enlargement or any change
whatever. If this Warrant is
held of record by two or more
joint owners, all such owners
must sign.
Date: ____________
