WARRANT EXERCISE FEE AGREEMENT
AGREEMENT dated as of the ____ day of ___________, 199___, by and among
Xxxxxx Xxxxxxx & Associates, Inc. (the "Representative"), NAVIDEC, Inc. (the
"Company") and American Securities Transfer & Trust, Incorporated Company (the
"Warrant Agent").
W I T N E S S E T H:
WHEREAS, in connection with a public offering of up to 1,150,000 shares of
Common Stock and 1,150,000 redeemable warrants to purchase common stock
(including the over-allotment option) and in connection with an exchange of the
Company's 7% Convertible Bridge Promissory Notes convertible into 428,565 shares
of Common Stock and 428,565 warrants to purchase Common Stock identical to those
issued in the public offering (collectively, the "Warrants"), the Company
proposes to issue, in accordance with an agreement dated as of ___________,
199___ by and among the Company and the Warrant Agent (the "Warrant Agreement"),
the Warrants; and
WHEREAS, the parties hereto wish to provide the Representative and members
of the National Association of Securities Dealers, Inc. ("NASD"), with certain
rights on an exclusive basis in connection with the exercise of the warrants.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
Section 1. DESCRIPTION OF THE WARRANTS. The Company's Warrants may be
exercised on or after ______________, 199___ and expire at 5:00 p.m. Mountain
time on ____________, 199___ (the "Expiration Date"), subject to redemption
rights commencing on or after _______________, 199____. In accordance with the
provisions of the Warrant Agreement, the holder of each Warrant shall have the
right to purchase from the Company, and the Company shall issue and sell to such
holders of Warrants, one fully paid and non-assessable share of the Company's
Common Stock for every Warrant exercised at an Exercise Price of $_____ per
share, subject to adjustment as provided in the Warrant Agreement (the "Exercise
Price").
Section 2. NOTIFICATION OF EXERCISE. Within twenty (20) days of the
last day of each month commencing __________, 199___ (one year from the date of
the Company's Registration Statement), the Warrant Agent or the Company will
notify the Representative of each Warrant certificate which has been properly
completed and delivered for exercise by holders of Warrants during each such
month, the determination of the proper completion to be in the sole and absolute
reasonable discretion of the Company and the Warrant Agent. The Company or the
Warrant Agent will provide the Representative with such other information, in
connection with the exercise of each Warrant, as the Representative shall
reasonably request.
Section 3. PAYMENT TO THE REPRESENTATIVE. The Company hereby agrees to
pay to the Representative an amount equal to three (3%) percent of the exercise
price (i.e. $_____ per share based on the initial exercise price of the Warrants
which is $____ per share) for each Warrant exercised (the "Exercise Fee") a
portion of which may be allowed by the Representative to the dealer who
solicited the exercise provided that:
(a) such Warrant is exercised on or after ________________, 199___,
which represents one year from the effective date of the Company's
Registration Statement;
(b) at the time of exercise, the market price of the Company's Common
Stock is higher than the applicable Exercise Price of the Warrant being
exercised;
(c) the holders of Warrants being exercised have specifically
indicated in writing, either in the Form of Election contained on the
Warrant Certificate or by written documents signed and dated by the holders
that the exercise of such Warrants was solicited by the Representative or
another member of the NASD; and
(d) the Representative and/or the member of the NASD which solicited
the exercise of Warrants delivers a certificate to the Company within five
(5) business days of receipt of information relating to such exercised
Warrants from the Company or the Warrant Agent in the form attached hereto
as Exhibit A, stating that:
(1) the Warrants exercised were not held in a discretionary
account;
(2) The member which solicited the exercise of Warrants did not
(unless granted an exemption by the Securities and Exchange Commission
from the provisions thereof), within the applicable number of business
days under Rule 10b-6 immediately preceding the date of exercise of
the Warrant, bid for or purchase the Common Stock of the Company or
any securities of the Company immediately convertible into or
exchangeable for the Common Stock (including the Warrants) or
otherwise engage in any activity that would be prohibited by Rule 10b-
6 under the Securities Exchange Act of 1934, as amended, to a broker-
dealer engaged in a distribution of the Company's securities; and
(3) in connection with the solicitation, it disclosed the
compensation it would receive upon exercise of the Warrant.
Section 4. PAYMENT OF THE EXERCISE FEE. The Company hereby agrees to
pay over to the Representative within two (2) business days after receipt by the
Company of the certificate described in Section 3(d) above, the Exercise Fee out
of the proceeds it received from the applicable Exercise Price paid for the
Warrants to which the certificate relates.
Section 5. INSPECTION OF RECORDS. The Representative may at any time
during business hours, at its expense, examine the records of the Company and
the Warrant Agent which relate to the exercise of the Warrants.
Section 6. TERMINATION. The Representative shall be entitled to
terminate this Agreement prior to the exercise of all Warrants at any time upon
five (5) business days' prior notice to the Company and the Warrant Agent.
Notwithstanding any such termination notice, the Representative shall be
entitled to receive an Exercise Fee for the exercise of any Warrant for which it
has already delivered to the Company prior to any such termination the
certificate required by Section 3(d) of this Agreement.
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Section 7. NOTICES. Any notice or other communication required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed sufficiently given if sent by first class certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Company: Xxxxx Xxxxxx, President
NAVIDEC, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
Xxxxx Xxxxx & Xxxxx Professional Corporation
Suite 1800
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to the Representative: Xxxxxxx X. Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxxx & Associates, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxx X. Xxxx, Esq.
Berliner Xxxxxx Xxxxxx & Xxxxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
And if to the Warrant
Agent: American Securities Transfer & Trust,
Incorporated
Xxxxx 000
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
or such other address as such party shall have given notice to other parties
hereto in accordance with this Section. All such notices or other
communications shall be deemed given three (3) business days after mailing, as
aforesaid.
Section 8. SUPPLEMENTS AND AMENDMENTS. The Company, the Warrant Agent
and the Representative may, from time to time, supplement or amend this
Agreement by a written instrument signed by the party to be charged, without the
approval of any holders of Warrants in order to cure any ambiguity or to correct
or supplement any provisions contained herein or to make any other provisions in
regard to matters or questions arising hereunder which the Company, the Warrant
Agent and the Representative may deem necessary or desirable and which do not
adversely affect the interest of the holders of Warrants.
Section 9. ASSIGNMENT. This Agreement may not be assigned by any party
without the express written approval of all other parties, except that either of
the Representative may assign this Agreement to its successors.
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Section 10. GOVERNING LAW. This Agreement will be deemed made under the
laws of the State of California with respect to matters of contract law and for
all purposes shall be governed by and construed in accordance with the internal
laws of said State, without regard to the conflicts of laws provisions thereof.
Section 11. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give any person or corporation other than the Company, the
Warrant Agent and the Representative any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of, and be binding upon, the Company, the Warrant Agent and
the Representative and their respective successors and permitted assigns.
Section 12. DESCRIPTIVE HEADINGS. The descriptive headings of the
sections of this Agreement are inserted for convenience only and shall not
control or affect the meanings or construction of any of the provisions hereof.
Section 13. SUPERSEDING AGREEMENT. This Agreement supersedes any and
all prior agreements between the parties with respect to the subject matter
hereof.
Section 14. EXCLUSIVE AGREEMENT. It is understood that this Agreement
is on an exclusive basis to solicit the exercise of the Warrants and that the
Company shall not engage other broker-dealers to solicit the exercise of
Warrants without the consent of the Representative.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXXX XXXXXXX & ASSOCIATES, INC.
By:
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NAVIDEC, INC.
By:
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AMERICAN SECURITIES TRANSFER
& TRUST, INCORPORATED
By:
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DCR\NAVIDEC\WAREXFEE.AGT
EXHIBIT A
CERTIFICATE
The undersigned, being the _______________ of _________________________
(the "NASD Member") pursuant to Section 3(d) of the Warrant Exercise Fee
Agreement dated ______, 199___ between NAVIDEC, Inc. (the "Company"), Xxxxxx
Xxxxxxx & Associates, Inc. and American Securities Transfer & Trust, Inc. (the
"Warrant Agent") hereby certifies that:
1. The Company or the Warrant Agent has notified the NASD Member that
____________ Warrants (as defined in the Agreement) have been exercised during
_______________, 19__.
2. The exercise of _________ of such Warrants was solicited by
_____________________.
3. Such Warrants were not held in a discretionary account.
4. The NASD Member did not, within _____ business days immediately
preceding _______________, 19___, bid for or purchase the Common Stock of the
Company or any securities of the Company immediately convertible into or
exchangeable for the Common Stock (including Warrants) or otherwise engage in
any activity that would be prohibited by Rule 10b-6 under the Securities
Exchange Act of 1934, as amended, to one engaged in a distribution of the
Company's securities.
5. In connection with the solicitation of the exercise of the Warrants,
the NASD Member disclosed to holders of the Warrants the compensation it will
receive.
DATED: _______________, 19___
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(Firm Name)
By:
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Title:
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