Void after 5:00 p.m., New York Time on April 30, 2003
Warrant to Purchase 50,000 Shares of Common Stock
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WARRANT TO PURCHASE COMMON STOCK
OF
INVU, INC.
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NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER RULE 506 OF REGULATION D PROMULGATED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION OR EXCLUSION FROM
THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS.
FOR VALUE RECEIVED, INVU, Inc., a Colorado corporation (the "Company"),
grants the following rights to Turbo International Ltd., a Bahamas corporation,
with its administrative office at 00 Xxxxxxx Xxxxxx, X.X. Box N 7755, Nassau,
Bahamas, and/or its assigns ("Holder"):
ARTICLE 1. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall have the meanings
given such terms in the Convertible Debenture Purchase Agreement by and between
the Company and the Holder (the "Purchase Agreement") and entered into on May 1,
2000. As used in this Agreement, the following terms shall have the following
meanings:
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"Corporate Office" shall mean the office of the Company (or its successor) at
which at any particular time its principal business shall be administered.
"Exercise Date" shall mean any date upon which the Holder shall give the Company
a Notice of Exercise.
"Exercise Price" shall mean US$0.01 per share of Common Stock, subject to
adjustment as provided herein.
"Expiration Date" shall mean 5:00 p.m. (New York time) on April 30, 2003.
"SEC" shall mean the United States Securities and Exchange Commission.
"Warrant Shares" shall mean the shares of the Common Stock issuable upon
exercise of the Warrant.
ARTICLE 2. EXERCISE AND AGREEMENTS.
2.1 Exercise of Warrant. This Warrant shall entitle Holder to purchase
up to fifty thousand (50,000) 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"). This Warrant and the
right to purchase Warrant Shares hereunder shall expire and become void on the
Expiration Date.
2.2 Manner of Exercise.
(a) Holder may exercise this Warrant at any time, starting at the time
of the issuance of this Warrant and from time to time during the Exercise
Period, in whole or in part (but not in denominations of fewer than 10,000
Warrant Shares, except upon an exercise of this Warrant with respect to the
remaining balance of Warrant Shares purchasable hereunder at the time of
exercise), by delivering to the Company (i) a duly executed Notice of Exercise
in substantially the form attached as Appendix 1 hereto, (ii) the Warrant
Certificate representing the Warrants, and (iii) a bank cashier's or certified
check for the aggregate Exercise Price of the Warrant Shares being purchased.
(b) The Holder may, at its option, in lieu of paying cash for the
Warrant Shares, exercise this Warrant by exchanging the Warrants, in whole or in
part (a "Warrant Exchange"), by by delivering to the Company (i) a duly executed
Notice of Exercise electing a Warrant Exchange and (ii) the Warrant Certificate
representing the Warrants. In connection with any Warrant Exchange, the Holder
shall be deemed to surrender or exchange, for the Warrant Shares to be issued to
it, the number of Warrant Shares equal to the quotient obtained by dividing (A)
the product of the number of Warrant Shares exercised and the existing Exercise
Price of the Warrants by (B) the average Per Share Market Value of a share of
Common Stock for the ten (10) Trading Days ending on the date the Notice of
Exercise is sent to the Company.
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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 Rights Prior to Exercise. Prior to its exercise pursuant to
Section 2.2 above, this Warrant shall not entitle the Holder to any voting or
other rights as a shareholder of the Company.
2.5 Fractional Shares. No fractional shares shall be issuable upon
exercise of this Warrant and the number of Warrant Shares to be issued shall be
rounded up to the nearest whole Share. If a fractional Share interest arises
upon any exercise of the Warrant, the Company shall eliminate such fractional
Share interest by issuing Holder an additional full Share.
2.6 [Reserved].
2.7 Adjustments to Exercise Price and Number of Securities
(a) Computation of Adjusted Exercise Price. In case the Company shall
at any time after the date hereof issue or sell any shares of Common Stock
(other than the issuances or sales referred to in Section 2.7 (g) hereof),
including shares held in the Company's treasury and shares of Common Stock
issued upon the exercise of any options, rights or warrants to subscribe for
shares of Common Stock and shares of Common Stock issued upon the direct or
indirect conversion or exchange of securities for shares of Common Stock
(excluding shares of Common Stock issuable upon exercise of options, warrants or
conversion rights granted as of the date hereof and 2,250,000 shares of Common
Stock issuable upon exercise of options to be granted to members of the
Company's management and up to a maximum of 750,000 of shares to be issued as
compensation to certain persons), for a consideration per share less than
Exercise Price on the date immediately prior to the issuance or sale of such
shares, or without consideration, then forthwith upon such issuance or sale, the
Exercise Price shall (until another such issuance or sale) be reduced to the
price (calculated to the nearest full cent) equal to the quotient derived by
dividing (A) an amount equal to the sum of (X) the product of (a) the Exercise
Price on the date immediately prior to the issuance or sale of such shares,
multiplied by (b) the total number of shares of Common Stock outstanding
immediately prior to such issuance or sale plus, (Y) the aggregate of the amount
of all consideration, if any, received by the Company upon such issuance or
sale, by (B) the total number of shares of Common Stock outstanding immediately
after such issuance or sale; provided, however, that in no event shall the
Exercise Price be adjusted pursuant to this computation to an amount in excess
of the Exercise Price in effect immediately prior to such computation, except in
the case of a combination of outstanding shares of Common Stock, as provided by
Section 2.7 (c) hereof.
For the purposes of any computation to be made in accordance with this
Section 2.7(a), the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of cash
consideration therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if shares of Common Stock are offered by the
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Company for subscription, the subscription price, or if either of such
securities shall be sold to underwriters or dealers for public offering without
a subscription offering, the initial public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing similar
services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company) of shares of Common Stock for a
consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash shall be deemed to be the value of such
consideration as determined in good faith by the Board of Directors of the
Company.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of stockholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(iv) The reclassification of securities of the Company other than
shares of the Common Stock into securities including shares of Common Stock
shall be deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (ii) of this Section 2.7(a).
(v) The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable (subject to
readjustment upon the actual issuance thereof) upon the exercise of options,
rights, warrants and upon the conversion or exchange of convertible or
exchangeable securities; provided, however, that shares issuable upon the
exercise of the Warrants shall not be included in such calculation.
(b) Options, Rights, Warrants and Convertible and Exchangeable
Securities. In case the Company shall at any time after the date hereof issue
options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock, for
a consideration per share less than the Exercise Price immediately prior to the
issuance of such options, rights or warrants (excluding shares of Common Stock
issuable upon exercise of options, warrants or conversion rights granted as of
the date hereof and 2,250,000 shares of Common Stock issuable upon exercise of
options to be granted to members of the Company's management and up to a maximum
of 750,000 of shares to be issued as compensation to certain persons), or such
convertible or exchangeable securities, or without consideration, the Exercise
Price in effect immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, as the case may be,
shall be reduced to a price determined by making a computation in accordance
with the provision of Section 2.7 (a) hereof, provided that:
(i) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable
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under such options, rights or warrants shall be deemed to be issued and
outstanding at the time such options, rights or warranties were issued, and for
a consideration equal to the minimum purchase price per share provided for in
such options, rights or warrants at the time of issuance, plus the consideration
(determined in the same manner as consideration received on the issue or sale of
shares in accordance with the terms of the Warrants), if any, received by the
Company for such options, rights or warrants.
(ii) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable securities shall
be deemed to be issued and outstanding at the time of issuance of such
securities, and for a consideration equal to the consideration (determined in
the same manner as consideration received on the issue or sale of shares of
Common Stock in accordance with the terms of the Warrants) received by the
Company for such securities, plus the minimum consideration, if any, receivable
by the Company upon the conversion or exchange thereof.
(iii) If any change shall occur in the price per share provided for in
any of the options, rights or warrants referred to in subsection (a) of this
Section 2.7 (b), or in the price per share at which the securities referred to
in subsection (b) of this Section 2.7 (b) are convertible or exchangeable, such
options, rights or warrants or conversion or exchange rights, as the case may
be, shall be deemed to have expired or terminated on the date when such price
change became effective in respect of shares not theretofore issued pursuant to
the exercise or conversion or exchange thereof, and the Company shall be deemed
to have issued upon such date new options, rights or warrants or convertible or
exchangeable securities at the new price in respect of the number of shares
issuable upon the exercise of such options, rights or warrants or the conversion
or exchange of such convertible or exchangeable securities.
(iv) If any options, rights or warrants referred to in subsection (a)
of this Section 2.7, or any convertible or exchangeable securities referred to
in subsection (b) of this Section 2.7, expire or terminate without exercise or
conversion, as the case may be, then the Exercise Price of the remaining
outstanding Warrants shall be readjusted as if such options, rights or warrants
or convertible or exchangeable securities, as the case may be, had never been
issued.
(c) Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
(d) Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 2.7, the number of
Warrant Shares issuable upon the exercise of each Warrant shall be adjusted to
the nearest full amount by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares
issuable upon exercise of the Warrants immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
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(e) [Reserved].
(f) Merger or Consolidation. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the Holder of each
Warrant then outstanding or to be outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise of such
Warrant, the kind and amount of shares of stock and other securities and
property (except in the event the property is cash, then the Holder shall have
the right to exercise the Warrant and receive cash in the same manner as other
stockholders) receivable upon such consolidation or merger, by a holder of the
number of shares of Common Stock of the Company for which such warrant might
have been exercised immediately prior to such consolidation, merger, sale or
transfer. Such supplemental warrant agreement shall provide for adjustments
which shall be identical to the adjustments provided in Section 2.7. The above
provision of this Subsection shall similarly apply to successive consolidations
or mergers.
(g) No Adjustment of Exercise Price in Certain Cases. No adjustment of
the Exercise Price shall be made upon the issuance of the Shares upon conversion
of the convertible debentures of this warrant, or upon the exercise of any
options, rights, or warrants outstanding as of the date of the Purchase
Agreement and disclosed in Section 3.1(c) therein.
(h) Dividends and Other Distributions. In the event that the Company
shall at any time prior to the exercise of all Warrants declare a dividend
(other than a dividend consisting solely of shares of Common Stock) or otherwise
distribute to its stockholders any assets, property, rights, evidences of
indebtedness, securities (other than shares of Common Stock), whether issued by
the Company or by another, or any other thing of value, the Holders of the
unexercised Warrants shall thereafter be entitled, in addition to the shares of
Common Stock or other securities and property receivable upon the exercise
thereof, to receive, upon the exercise of such Warrants, the same property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that they would have been entitled to receive at the time of such dividend
or distribution as if the Warrants had been exercised immediately prior to such
dividend or distribution. At the time of any such dividend or distribution, the
Company shall make appropriate reserves to ensure the timely performance of the
provisions of this subsection 2.7 (h). Nothing contained herein shall provide
for the receipt or accrual by a Holder of cash dividends prior to the exercise
by such Holder of the Warrants.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. In addition to the representations
and warranties contained in Article 3.1 of the Convertible Debenture Purchase
Agreement, 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
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Warrant shall, upon issuance, be 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 Colorado, 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 Warrant 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, rule, regulation, judgment, order, writ, injunction or decree of 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.
(d) The Company is subject to the reporting requirements of Section 13
or Section 15(d) of the Securities Exchange Act of 1934, as amended, and is
current in its reporting requirements. The Company is eligible to issue the
Warrants and the Warrant Shares pursuant to Rule 506 of Regulation D promulgated
under the Securities Act.
ARTICLE 4. MISCELLANEOUS.
4.1 Transfer. This Warrant may not be transferred or assigned, in whole
or in part, at any time, except in compliance with applicable federal and state
securities laws by the transferor and the transferee (including, without
limitation, the delivery of an investment representation letter and a legal
opinion reasonably satisfactory to the Company), provided that this Warrant may
not be transferred or assigned such that either the Holder or any transferee
will, following such transfer or assignment, hold a Warrant for the right to
purchase fewer than 10,000 Warrant Shares.
4.2 Transfer Procedure. Subject to the provisions of Section 4.1,
Holder may transfer or assign this Warrant by giving the Company notice setting
forth the name, address and taxpayer identification number of the transferee or
assignee, if applicable (the "Transferee") and surrendering this Warrant to the
Company for reissuance to the Transferee and the Holder, in the event of a
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transfer or assignment of this Warrant in part. (Each of the persons or entities
in whose name any such new Warrant shall be issued are herein referred to as a
"Holder").
4.3 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 Warrant so destroyed, lost or stolen, upon the Holder
filing with the Company an affidavit 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
reasonably acceptable indemnity 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.
4.4 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 with confirmation sheet 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.
4.5 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.
4.6 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
principles regarding conflicts of law. Any action to enforce the terms of this
Warrant shall be exclusively heard in the State and Federal Courts of New York
County and State and Country of the United States of America.
4.7 Signature. In the event that any signature on this Warrant is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same, with the same force and effect as if such facsimile
signature page were an original thereof.
4.8 Legal Fees. In the event any Party commences a legal action to
enforce its rights under this Warrant, the non-prevailing shall pay all
reasonable costs and expenses (including reasonable attorney's fees) incurred in
enforcing such rights.
4.9 Attorney-in-Fact. To effectuate the terms and provisions of the
Purchase Agreement and this Warrant, the Company hereby agrees to give a power
of attorney as is evidenced by Exhibit F to the Convertible Debenture Purchase
Agreement. All acts done under the such power of attorney are hereby ratified
and approved and neither the Attorney-in-Fact nor any designee or agent thereof
shall be liable for any acts of commission or omission, for any error of
judgment or for any mistake
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of fact or law, as long as the Attorney-in-Fact is operating within the scope of
the power of attorney and this Warrant and the Purchase Agreement, the Debenture
and the Escrow Agreement. The power of attorney being coupled with an interest
shall be irrevocable while any amount of this Warrant remains unexercised or any
portion of the Purchase Agreement or the Escrow Agreement remains unsatisfied.
In addition, the Company shall give the Attorney-in-Fact a corporate resolution
executed by the Board of Directors of the Company which authorizes future
issuances of the shares for the Debentures, and which resolution states that it
is irrevocable while any amount of the Debenture remains unpaid, any amount of
this Warrant remains unexercised or any portion of the Purchase Agreement or the
Escrow Agreement remains unsatisfied.
(Remainder of this page left intentionally blank)
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Dated: May 1, 2000 INVU, INC.
By:
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Name:
Title:
Attest:
--------------------------------
Name:
Title:
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects (please check the appropriate box and fill in
the blank spaces):
|_| to purchase ______ shares of Common Stock, no par value per share, of
INVU, Inc. at $_____ per share for a total of $_____________ and pursuant to
the terms of the attached Warrant, and tenders herewith payment of the
purchase price of such Warrant Shares in full; or
|_| to purchase _______ shares of Common Stock, no par value per share, of
INVU, Inc. pursuant to the cashless exercise provision under Section 2.2 (b)
of the Warrant, and tenders herewith the number of Warrant Shares to
purchase such Warrant Shares based on the average closing bid price of the
Common Stock for the ten trading days prior to the date hereof of $ per
share.
2. Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:
Date By:
-------------------- ------------------------------
Name:
Title:
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