EXHIBIT 5.38
No. __
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MUST BE HELD INDEFINITELY UNLESS
SUBSEQUENTLY REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR DISPOSED OF PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
"B" WARRANT
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Company: ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Nevada corporation
Number of Shares: 500,000
Class of Stock: Common Stock
Issue Date: January __, 2000
Expiration Date: July __, 2002
FOR VALUE RECEIVED, the adequacy and receipt of which is hereby
acknowledged, ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Nevada corporation (the "Company"), hereby
certifies that ICE Holdings North America, L.L.C., and its successors and
assigns, are entitled to purchase from the Company FIVE HUNDRED THOUSAND
(500,000) fully paid and non-assessable shares of Common Stock of the Company at
any time and from time to time on and after the date hereof until 12:00 midnight
New York local time on July __, 2002 at an exercise price of TWO DOLLARS ($2.00)
per share of Common Stock, on the terms and conditions hereinafter set forth.
1. Certain Definitions. Capitalized terms used herein and not otherwise
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defined shall have the meanings set forth in the Revolving Credit Agreement,
dated as of January __, 2000, by and between the Company and ICE Holdings North
America, L.L.C. (the "Revolving Credit Agreement"). As used in this Warrant,
the following terms have the following definitions:
"Additional Shares of Common Stock" means all shares of Common Stock
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issued or issuable by the Company after the date of this Warrant, except for
shares of Common Stock issued or issuable upon (i) the exercise of currently
outstanding options or warrants or (ii) the conversion of currently outstanding
Convertible Securities.
"Common Stock" means the Company's Common Stock, $.001 par value per
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share, and includes any common stock of the Company of any class or classes
resulting from any reclassification or reclassifications thereof which is not
limited to a fixed sum or percentage of par value in respect of the rights of
the holders thereof to participate in dividends and in the distribution of
assets upon the voluntary or involuntary liquidation, dissolution or winding up
of the Company.
"Company" means ▇▇▇▇▇▇▇▇▇.▇▇▇,Inc., a Nevada corporation.
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"Conversion Date" means the date that the Company receives this
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Warrant pursuant to the Warrantholders' Conversion Right pursuant to Section 3
hereof, or on such later date as specified by the Warrantholders.
"Conversion Right" has the meaning set forth in Section 3(a).
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"Convertible Securities" means evidence of indebtedness, shares of
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stock or other securities which are at any time directly or indirectly
convertible into or exchangeable for shares of Common Stock.
"Current Market Price" of a share of Common Stock or of any other
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security as of a relevant date means: (i) the Fair Value thereof as determined
in accordance with clause (ii) of the definition of Fair Value with respect to
Common Stock or any other security that is not listed on a national securities
exchange or traded on the over-the-counter market or quoted on NASDAQ (including
the OTC Electronic Bulletin Board), and (ii) the average of the daily closing
prices for the twenty (20) trading days before such date (excluding any trades
which are not bona fide arm's length transactions) with respect to Common Stock
or any other security that is listed on a national securities exchange or traded
on the over-the-counter market or quoted on NASDAQ (including the OTC Electronic
Bulletin Board). The closing price for each day shall be (i) the last sale price
of shares of Common Stock or such other security, regular way, on such date or,
if no such sale takes place on such date, the average of the closing bid and
asked prices thereof on such date, in each case as officially reported on the
principal national securities exchange on which the same are then listed or
admitted to trading, or (ii) if no shares of Common Stock or if no securities of
the same class as such other security are then listed or admitted to trading on
any national securities exchange, the average of the reported closing bid and
asked prices thereof on such date in the over-the-counter market as shown by the
National Association of Securities Dealers automated quotation system or, if no
shares of Common Stock or if no securities of the same class as such other
security are 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
Warrantholders.
"Exchange Act" means the Securities Exchange Act of 1934.
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"Exercise Period" means the period commencing on the Issue Date and
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ending at 12:00 midnight New York local time on the Expiration Date.
"Exercise Price" means the original exercise price set forth in the
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first paragraph of this Warrant, as may be adjusted from time to time pursuant
to Section 6.
"Expiration Date" means July __, 2002.
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"Fair Value" means: (i) with respect to a share of Common Stock or any
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other security, the Current Market Price thereof, and (ii) with respect to any
other property, assets, business or entity, an amount determined in accordance
with the following procedure: The Company and the holders of the Warrants and
Warrant Shares, as applicable, shall use their best efforts to mutually agree to
a determination of Fair Value within ten (10) days of the date of the event
requiring that such a determination be made. If the Company and such holders
are unable to reach agreement within said ten (10) day period, the Company and
such holders shall within ten (10) days of the expiration of the ten (10) day
period referred to above each retain a separate independent investment banking
firm (which firm shall not be the investment banking firm regularly retained by
the Company). If either the Company or such holders fails to retain such an
investment banking firm during such period, then the independent investment
banking firm retained by such holders or the Company, as the case may be, acting
alone, shall take the actions outlined below. Such firms shall determine
(within thirty (30) days of their being retained) the Fair Value of the
security, property, assets, business or entity, as the case may be, in question
and deliver their opinion in writing to the Company and to such holders. If
such firms cannot jointly make the determination, then, unless otherwise
directed by agreement of the Company and such holders, such firms, in their sole
discretion, shall choose another investment banking firm independent of the
Company and such holders, which firm shall make the determination and render an
opinion as promptly as practicable. In either case, the determination so made
shall be conclusive and binding on the Company and such holders. The fees and
expenses of any such determination made by any and all such independent
investment banking firms shall be paid 50% by the Company and 50% by the
Warrantholders. If there is more than one holder of Warrants, and/or Warrant
Shares entitled to a determination of Fair Value in any particular instance,
each action to be taken by the holders of such Warrants and/or Warrant Shares
under this Section shall be taken by a majority in interest of such holders and
the action taken by such majority (including as to any mutual agreement with the
Company with respect to Fair Value and as to any selection of investment banking
firms) shall be binding upon all such holders. In the case of a determination
of the Fair Value per share of Common Stock, the Company and such holders shall
not take into consideration, and shall instruct all such investment banking
firms not
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to take into consideration, any premium for shares representing control of the
Company, any discount for any minority interest therein or any restrictions on
transfer under applicable federal and state securities laws or otherwise.
"Indemnified Party" and "Indemnifying Party" have the meanings set
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forth in Section 11(e)(iii).
"Issue Date" means January __, 2000.
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"Securities Act" means the Securities Act of 1933, as amended.
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"Warrant(s)" means this Warrant and any warrants issued in exchange or
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replacement of this Warrant or upon transfer hereof.
"Warrantholder(s)" means Phoenix Capital Corporation, a New York
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corporation and its successors and assigns.
"Warrant Shares" means shares of Common Stock issuable to
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Warrantholders pursuant to the Warrants.
2. Exercise of Warrant. This Warrant may be exercised, in whole or in
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part, at any time and from time to time during the Exercise Period by written
notice to the Company and upon payment to the Company of the Exercise Price for
the shares of Common Stock in respect of which the warrant is exercised.
3. Form of Payment of Exercise Price. Anything contained herein to the
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contrary notwithstanding, at the option of the Warrantholders, the Exercise
Price may be paid in any one or a combination of the following forms: (a) by
wire transfer to the Company, (b) by the Warrantholders' cashier's or bank check
to the Company, (c) by the cancellation of any indebtedness owed by the Company
and/or any subsidiaries of the Company to the Warrantholders, but only to the
extent such indebtedness represents (i) amounts drawn down by the Company under
the Revolving Credit Agreement (including accrued interest), (ii) all or a
portion of the Debt Financing Fee or the Retainer payable by the Company to the
Warrantholders; or (iii) all or a portion of the Warrantholders' legal fees for
documentation of the Revolving Credit Agreement payable by the Company to the
Warrantholders, and/or (d) by the surrender to the Company of Warrants, Warrant
Shares, Common Stock and/or other securities of the Company and/or any
subsidiaries of the Company having a Fair Value equal to the Exercise Price.
4. Cashless Exercise/Conversion. In lieu of exercising this Warrant as
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specified in Sections 2 and 3 above, the Warrantholders may from time to time at
the Warrantholders' option convert this Warrant, in whole or in part, into a
number of shares of Common Stock of the Company determined by dividing (A) the
aggregate Fair Value of such shares or other securities otherwise issuable upon
the exercise of this Warrant minus the aggregate Exercise Price of such shares
by (B) the Fair Value of one such share.
5. Certificates for Warrant Shares: New Warrant. The Company agrees
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that the Warrant Shares shall be deemed to have been issued to the
Warrantholders as the record owner of such Warrant Shares as of the close of
business on the date on which payment for such Warrant Shares has been made (or
deemed to be made by conversion) in accordance with the terms of this Warrant.
Certificates for the Warrant Shares shall be delivered to the Warrantholders
within a reasonable time, not exceeding five (5) business days, after this
Warrant has been exercised or converted. A new Warrant representing the number
of shares, if any, with respect to which this Warrant remains exercisable also
shall be issued to the Warrantholders within such time so long as this Warrant
has been surrendered to the Company at the time of exercise.
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6. Adjustment of Exercise Price, Number of Shares and Nature of
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Securities Issuable Upon Exercise of Warrants.
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(a) Exercise Price: Adjustment of Number of Shares. The Exercise
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Price shall be subject to adjustment from time to time as hereinafter provided.
Upon each adjustment of the Exercise Price (except for any adjustment under
Section 6(b), in which case the number of shares that can be purchased will not
be adjusted), the Warrantholders shall thereafter be entitled to purchase, at
the Exercise Price resulting from such adjustment, a number of shares determined
by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(b) Adjustment of Exercise Price Upon Issuance of Common Stock. If
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and whenever after the date hereof the Company shall (i) reprice any outstanding
options, warrants, or Convertible Securities or (ii) issue or sell Additional
Shares of Common Stock or options, warrants or Convertible Securities to any
person by virtue of such person's holding outstanding options, warrants or
Convertible Securities (except pursuant to an offer or issuance to all of the
Company's stockholders), then, if the lowest price relating to any such
repricing, issuance or sale, is lower than the Exercise Price in effect
immediately prior to such repricing, issuance or sale, then the Exercise Price
shall be reduced to equal such lowest price.
No adjustment of the Exercise Price, however, shall be made in an
amount less than $.01 per share, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward, shall amount
to $.10 per share or more.
The provisions of this Section 6(b) shall not apply to any
Additional Shares of Common Stock which are distributed to holders of Common
Stock pursuant to a stock split or dividend for which an adjustment is provided
for under Section 6(e).
(c) Reorganization, Reclassification, Consolidation, Merger or Sale.
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If any capital reorganization or reclassification of the capital stock of the
Company, or any consolidation or merger of the Company with another corporation,
or the sale of all or substantially all of its assets to another corporation
shall be effected in such a way that holders of Common Stock shall be entitled
to receive cash, stock, securities or assets with respect to or in exchange for
Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions shall be made
whereby the Warrantholders shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified in this
Warrant upon exercise of this Warrant and in lieu of the shares of the Common
Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby, such cash, shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock equal to the number of shares
of such Common Stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby, and in any such case appropriate
provision shall be made with respect to the rights and interest of the
Warrantholders to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Exercise Price and of the number
of shares purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any consolidation, merger or sale of all or
substantially all of the assets of the Company unless prior to or simultaneous
with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation, merger or purchase of such assets
shall assume, by written instrument executed and mailed or delivered to the
Warrantholders, the obligation to deliver to such Warrantholders such cash (or
cash equivalent), shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Warrantholders may be entitled to receive and
containing the express assumption of such successor corporation of the due and
punctual performance and observance of each provision of this Warrant to be
performed and observed by the Company and of all liabilities and obligations of
the Company hereunder; provided, however, in the case during the 18-month period
following the Issue Date of any consolidation
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or merger of the Company with another corporation or the sale of all or
substantially all of its assets to another corporation effected in such a manner
that the holders of Common Stock shall be entitled to receive stock, securities
or assets with respect to or in exchange for Common Stock, then, at the election
of each Warrantholder, in lieu of receiving such stock, securities or assets,
such Warrantholder shall receive cash equal to the Fair Value of the Common
Stock issuable upon exercise of the Warrant, less the Exercise Price payable
upon exercise thereof.
In case any Additional Shares of Common Stock or Convertible
Securities or any rights or options to purchase any Additional Shares of Common
Stock or Convertible Securities shall be issued in connection with any merger of
another corporation into the Company, the amount of consideration therefor shall
be deemed to be the Fair Value of such portion of the assets of such merged
corporation as the Board of Directors of the Company shall in good faith
determine to be attributable to such Additional Shares of Common Stock,
Convertible Securities or rights or options, as the case may be, and the
Exercise Price shall be adjusted in accordance with this Section 6(c).
(d) Company to Prevent Dilution. In case at any time or from time
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to time conditions arise by reason of action taken by the Company which are not
adequately covered by the provisions of this Section 6, and which might
materially and adversely affect the exercise rights of the Warrantholders under
any provision of this Warrant, unless the adjustment necessary shall be agreed
upon by the Company and the Warrantholders, the Board of Directors of the
Company shall appoint a firm of independent certified public accountants of
recognized national standing (who have not been employed by the Company within
the last five years), acceptable to the Warrantholders, who at the Company's
expense shall give their opinion upon the adjustment, if any, on a basis
consistent with the standards established in the other provisions of this
Section 6, necessary with respect to the Exercise Price and the number of shares
purchasable upon exercise of the Warrants, so as to preserve, without dilution,
the exercise rights of the Warrantholders. Upon receipt of such opinion, such
Board of Directors shall forthwith make the adjustments described therein.
(e) Stock Splits, Stock Dividends and Reverse Splits. In case at
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any time the Company shall subdivide its outstanding shares of Common Stock into
a greater number of shares or shall effect a stock dividend, the Exercise price
in effect immediately prior to such subdivision or stock dividend shall be
proportionately reduced and the number of shares of Common Stock purchasable
pursuant to this Warrant immediately prior to such subdivision or stock dividend
shall be proportionately increased, and conversely, in case at any time the
Company shall combine it outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock purchasable upon the exercise of this Warrant immediately prior to
such combination shall be proportionately reduced.
(f) Dissolution, Liquidation and Wind-Up. In case the Company
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shall, at any time prior to the expiration of this Warrant, dissolve, liquidate
or wind up its affairs, the Warrantholders shall be entitled, upon the exercise
of this Warrant, to receive in lieu of the shares of Common Stock of the Company
which such Warrantholders would have been entitled to receive, the same kind and
amount of assets as would have been issued, distributed or paid to such
Warrantholders upon any such dissolution, liquidation or winding up with respect
to such shares of Common Stock of the Company, had such Warrantholders been the
holders of record of the Warrant Shares receivable upon the exercise of this
Warrant on the record date for the determination of those persons entitled to
receive any such liquidating distribution.
(g) Redemption. The Company may call the Warrant for redemption at a
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price of $0.01 for the Warrant, by written notice specifying the redemption
date, such notice to be mailed at least 30 days before such redemption date, to
the Holder; provided, however, that such notice may only be mailed following the
Company's accepting an equity public offering and only if at the time of mailing
the Warrant Shares have been registered under the Securities Act and such shares
are not subject to selling restrictions under the terms of the public offering,
as follows:
(i) 25% of the original amount of shares covered by the Warrant if
the offering is for at least $4,000,000 at a share price of at least $4.
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(ii) 50% of the original amount of shares covered by the Warrant if
the offering is for at least $5,000,000 at a share price of at least $5.
(iii) 100% of the original amount of shares covered by the Warrant if
the offering is for at least $6,000,000 at a share price of at least $6.
The Warrant may be exercised at any time prior to the close of business on the
date prior to the redemption date, and if not then exercised will terminate and
be cancelled as to that portion of the Warrant called for redemption. If the
Warrant is exercised and the public offering is not closed within 30 days
following such exercise, the Warrantholder shall have the right, exercisable by
delivering written notice to the Company within ten days following the
expiration of the foregoing 30-day period to rescind the exercise of the
Warrant. Upon exercise of the Warrant, the Warrantholder may request that the
proceeds of its exercise be escrowed pending expiration of the applicable
rescission period, in which case the Warrant Shares issuable upon such exercise
will also be escrowed during such period.
7. Special Agreements of the Company.
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(a) Reservation of Shares. The Company covenants and agrees that
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all Warrant Shares will, upon issuance, be validly issued, fully paid and
nonassessable and free from all preemptive rights of any Shareholder, and from
all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant. The Company
hereby covenants and agrees to take all such action as may be necessary to
assure that the par value per share of the Common Stock is at all times equal to
or less than the Exercise Price.
(b) Avoidance of Certain Actions. The Company will not, by
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amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, issue or sale of securities or
otherwise, avoid or take any action which would have the effect of avoiding the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in carrying
out all of the provisions of this Warrant and in taking all of such action as
may be necessary or appropriate in order to protect the rights of the
Warrantholders against dilution or other impairment of their rights hereunder.
(c) Securing Governmental Approvals. If any shares of Common
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Stock required to be reserved for the purposes of exercise of this Warrant
require registration with or approval of any governmental authority under any
federal law (other than the Securities Act) or under any state law before such
shares may be issued upon exercise of this Warrant, the Company will, at its
expense, as expeditiously as possible, cause such shares to be duly registered
or approved, as the case may be.
(d) Listing on Securities Exchanges; Registration. If, and so
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long as, any class of the Company's Common Stock shall be listed on any national
securities exchange (as defined in the Exchange Act), the Company will, at its
expense, obtain and maintain the approval for listing upon official notice of
issuance of all Warrant Shares and maintain the listing of Warrant Shares after
their issuance; and the Company will so list on such national securities
exchange, will register under the Exchange Act (or any similar statute then in
effect), and will maintain such listing of, any other securities that at any
time are issuable upon exercise of this Warrant if and at the time any
securities of the same class shall be listed on such national securities
exchange by the Company.
(e) Information Rights. So long as the Warrantholders hold this
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Warrant and/or any of the Warrant Shares, the Company shall deliver to the
Warrantholders (i) promptly after mailing, copies of all communications to the
shareholders of the Company, (ii) within one hundred five (105) days after the
end of each fiscal year of the Company, the annual audited financial statements
of the Company
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certified by the independent public accountants of recognized standing, and
(iii) within fifty (50) days after the end of each of the first three quarters
of each fiscal year, the Company's quarterly, unaudited financial statements.
(f) Preemptive Rights. In the event the Company offers to the
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Company's shareholders the right to purchase any securities of the Company, then
all shares of Common Stock issuable pursuant to the Warrants shall be deemed to
be issued and outstanding and held by the Warrantholders and the Warrantholders
shall be entitled to participate in such rights offering.
(g) Compliance with Law. The Company shall comply with all
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applicable laws, rules and regulations of the United States and of all states,
municipalities and agencies and of any other jurisdiction applicable to the
Company and shall do all things necessary to preserve, renew and keep in full
force and effect and in good standing its corporate existence and authority
necessary to continue its business.
8. Fractional Shares. No fractional shares or scrip representing
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fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon exercise hereof, the Company
shall pay to the Warrantholder an amount in cash equal to such fraction
multiplied by the Current Market Value of one share of Common Stock.
9. Notices of Stock Dividends, Subscriptions, Reclassifications,
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Consolidations, Mergers, etc. If at any time: (i) the Company shall declare a
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cash dividend (or an increase in the then existing dividend rate), or declare a
dividend on Common Stock payable otherwise than in cash out of its net earnings
after taxes for the prior fiscal year; or (ii) the Company shall authorize the
granting to the holders of Common Stock of rights to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or (iii) there
shall be any capital reorganization, or reclassification, or redemption of the
capital stock of the Company, or consolidation or merger of the Company with, or
sale of all or substantially all of its assets to, another corporation or firm;
or (iv) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company, then the Company shall give to the Warrantholders at
the addresses of such Warrantholders as shown on the books of the Company, at
least twenty (20) days prior to the applicable record date hereinafter
specified, a written notice summarizing such action or event and stating the
record date for any such dividend or rights (or, if a record date is not to be
selected, the date as of which the holders of Common Stock of record entitled to
such dividend or rights are to be determined), the date on which any such
reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected the holders of Common Stock of record shall be
entitled to effect any exchange of their shares of Common Stock for cash (or
cash equivalent), securities or other property deliverable upon any such
reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding up.
10. Registered Holder; Transfer of Warrants or Warrant Shares.
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(a) Maintenance of Registration Books; Ownership of this Warrant.
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The Company shall keep at its principal office a register in which the Company
shall provide for the registration, transfer and exchange of this Warrant. The
Company shall not at any time, except upon the dissolution, liquidation or
winding-up of the Company, close such register so as to result in preventing or
delaying the exercise or transfer of this Warrant.
(b) Exchange and Replacement. This Warrant is exchangeable upon
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surrender hereof by the registered holder to the Company at its principal office
for new Warrants of like tenor and date representing in the aggregate the right
to purchase the number of shares purchasable hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by said registered holder at the time of surrender. Subject to
compliance with all restrictions and provisions of this Warrant, this Warrant
and all rights hereunder are transferable in whole or in part upon the books of
the Company by the registered holder hereof in person or by duly authorized
attorney, and new Warrants shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of the
transferee(s), upon surrender of this Warrant, duly endorsed, to
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said office of the Company accompanied by a Form of Assignment in the form
attached hereto as Exhibit "B". Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and upon surrender and cancellation of this Warrant, if mutilated,
the Company will make and deliver a new Warrant of like tenor, in lieu of this
Warrant, without requiring the posting of any bond or the giving of any other
security, and the holder of such Warrant will indemnify and hold the Company and
its officers, directors, affiliates, agents, employees, successors and assigns,
harmless against all claims, losses, liabilities, damages, deficiencies, costs
and expenses, including reasonable attorneys' fees and expenses of investigation
and defense incurred, suffered or accrued by any of them, directly or
indirectly, as a result of or based upon the making or deliverance of such new
Warrant. This Warrant shall be promptly cancelled by the Company upon the
surrender hereof in connection with any exchange, transfer or replacement. The
Company shall pay all expenses, taxes and other charges payable in connection
with the preparation, execution and delivery of Warrants pursuant to this
Section 10.
(c) Warrants and Warrant Shares Not Registered. The holder of this
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Warrant, by accepting this Warrant, represents and acknowledges that this
Warrant and the Warrant Shares are not being registered under the Securities Act
on the grounds that the issuance of this Warrant and the offering and sale of
such Warrant Shares are exempt from registration under Section 4(2) of the
Securities Act as not involving any public offering and that the Warrantholders
are acquiring this Warrant for investment and not with a view to distribution.
11. Registration.
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(a) Registration Under the Securities Act. The Warrant and the
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shares of Common Stock issuable upon exercise of the Warrant and any of the
other securities issuable upon exercise of the Warrant have not been registered
under the Securities Act for public resale. Upon exercise, in part or in whole,
of the Warrant, certificates representing the shares of Common Stock and any
other securities issuable upon exercise, of the Warrant (collectively, the
"Warrant Securities") shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") for public resale, and may not be offered or sold
except pursuant to (i) an effective registration statement under the
Securities Act, or (ii) an opinion of counsel, if such opinion shall
be reasonably satisfactory to counsel to the issuer, that an exemption
from registration under the Securities Act is available.
(b) Piggyback Registration. If the Company proposes for any reason
----------------------
to register Primary Shares under the Securities Act (other than on Form S-4 or
Form S-8 promulgated under the Securities Act or any successor forms thereto) by
filing a registration statement with the Securities and Exchange Commission (the
"Commission") and such registration, together with any prior registration(s) of
Primary Shares (as hereinafter defined) (other than on Form S-4 or Form S-8
promulgated under the Securities Act or any successor forms thereto), would
cause the Company to have registered in excess of $3,000,000 of Primary Shares
(other than on Form S-4 or Form S-8 promulgated under the Securities Act or any
successor forms thereto), then the Warrantholders shall be entitled to piggyback
registration rights, as set forth herein, with respect to such registration and
all subsequent registrations of Primary Shares or Other Shares (other than on
Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms
thereto). If the Company proposes for any reason to register Primary Shares or
Other Shares, and such registration is a registration as to which the
Warrantholders have piggyback registration rights pursuant to the previous
sentence, the Company shall promptly give written notice to the Warrantholders
of its intention to so register such Primary Shares or Other Shares and, upon
the written request, delivered to the Company within 15 days after delivery of
any such notice by the Company, of the Warrantholders to include in such
registration Warrant Securities (which request shall specify the number of
Warrant Securities proposed to be included in such registration), the Company
shall use its commercially reasonable best efforts to cause all such Warrant
Securities of the Warrantholders delivering such notice to be included in such
registration on the same terms and conditions as the securities otherwise being
sold in such registration; provided, however, that if the managing underwriter,
if
8
any, for the offering in good faith advises the Company that the inclusion of
all Warrant Securities requested to be included in such registration would
interfere with the successful marketing (including pricing) of the Primary
Shares or Other Shares proposed to be registered by the Company, then the number
of Primary Shares, Warrant Securities and Other Shares proposed to be included
in such registration shall be included in the following order:
(i) if the Company proposes to register Primary Shares:
(A) first, the Primary Shares; and
(B) second, the Warrant Securities and Other Shares requested
to be included in such registration (or, if necessary, such Warrant Securities
and Other Shares pro rata among the holders thereof based upon the number of
Warrant Securities and Other Shares requested by each such holder); or
(ii) if the Company proposes to register Other Shares pursuant to a
request for registration by the holders of such Other Shares:
(A) first, the Other Shares held by the parties demanding such
registration;
(B) second, the Warrant Securities and Other Shares (other
than shares registered pursuant to Section 11(b)(ii)(A) hereof) requested to be
registered by the holders thereof (or, if necessary, pro rata among the holders
thereof based on the number of Warrant Securities and Other Shares requested to
be registered by such holders); and
(C) Third, the Primary Shares.
For purposes hereof the term "Other Shares" means at any time those shares
of Common Stock held by any person (or issuable upon exercise or conversion of
any security held by such person) that do not constitute Primary Shares or
Warrant Securities. The term "Primary Shares" means at any time the authorized
but unissued shares of Common Stock and shares of Common Stock held by the
Company in its treasury.
(c) Demand Registration.
-------------------
(i) At any time following 180 days from the date hereof, the
Warrantholders shall have the right (which right is in addition to the
registration rights under Section 11(b) hereof), exercisable by written notice
to the Company after that date, to have the Company prepare and file with the
Commission, on one occasion, a registration statement and such other documents,
including a prospectus, as may be necessary in the opinion of both counsel for
the Company and counsel for the Warrantholders, in order to comply with the
provisions of the Securities Act, so as to permit a public offering and sale of
the Warrant Securities for the earlier of (i) one year following the
effectiveness of the registration statement or (ii) until all of the Warrant
Securities are sold.
(ii) Notwithstanding the foregoing, the Company may delay the
filing or effectiveness of any registration statement for a period of up to 180
days after the receipt of a demand for registration pursuant to subsection (a)
above if at the time of receipt of such demand the Company is engaged, or has
fixed plans to engage within 90 days of the time of such request, in a firm
commitment underwritten public offering of Primary Shares in which the Company
may include Warrant Securities pursuant to and subject to the limitations of
Section 11(b);
(iii) The Warrantholders, upon receipt of any notice from the
Company of any event of the kind described in Section 11(d)(ix) hereof, shall
forthwith discontinue disposition of the Warrant Securities pursuant to the
registration statement covering such Warrant Securities until such holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section
9
11(d)(ix) hereof, and, if so directed by the Company, such holder shall deliver
to the Company all copies, other than permanent file copies then in such
holder's possession, of the prospectus covering such Warrant Securities at the
time of receipt of such notice.
(d) Covenants of the Company With Respect to Registration. In
-----------------------------------------------------
connection with any registration under Section 11(b) or 11(c) hereof, the
Company covenants and agrees as follows:
(i) The Company shall use commercially reasonable best efforts
to file a registration statement within 45 days of receipt of any demand
therefor, shall use commercially reasonable best efforts to have any
registration statements declared effective at the earliest possible time, and
shall furnish the holders desiring to sell Warrant Securities such number of
prospectuses as shall reasonably be requested.
(ii) The Company shall pay all costs (excluding any
underwriting or selling commissions or other charges of any broker-dealer or any
attorney or other person acting on behalf of holders of Warrant Securities),
fees and expenses in connection with all registration statements filed pursuant
to Sections 11(b) and 11(c)(i) hereof including, without limitation, the
Company's legal and accounting fees, printing expenses, blue sky fees and
expenses.
(iii) The Company will take all necessary action which may be
reasonably required in qualifying or registering the Warrant Securities included
in a registration statement for offering and sale under the securities or blue
sky laws of the states requested by the holders of Warrant Securities.
(iv) The Company shall indemnify each of the holders of the
Warrant Securities to be sold pursuant to any registration statement and each
person, if any, who controls such holder within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement; provided, however, that (i)
-------- -------
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the holder specifically for inclusion therein.
(v) Nothing contained in this Agreement shall be construed as
requiring the Warrantholders to exercise the Warrant prior to the initial filing
of any registration statement or the effectiveness thereof.
(vi) If the offering is underwritten, the Company shall furnish
to each holder of Warrant Securities participating in the offering and to each
underwriter a signed counterpart, addressed to such holder or underwriter, of
(i) an opinion of counsel to the Company, dated the effective date of such
registration statement (and, an opinion dated the date of the closing under the
underwriting agreement), and (ii) a "cold comfort" letter dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing under the
underwriting agreement) signed by the independent public accountants who have
issued a report on the Company's financial statements included in such
registration statement, in each case covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offering of securities that utilize the
particular form of registration statement which is then being utilized by the
Company.
(vii) The Company shall as soon as practicable after the
effective date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its
10
security holders" (within the meaning of Rule 158 under the Securities Act) an
earnings statement (which need not be audited) complying with Section 11(a) of
the Securities Act and covering a period of at least 12 consecutive months
beginning after the effective date of the registration statement.
(viii) The Company shall deliver promptly to each holder of
Warrant Securities participating in the offering requesting the correspondence
and memoranda described below and the managing underwriter copies of all
correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff with
respect to the registration statement and permit the holder and underwriter to
do such investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the registration statement as it deems
reasonably necessary to comply with applicable securities laws or rules of the
National Association of Securities Dealers, Inc. ("NASD"). Such investigation
shall include access to books, records and properties and opportunities to
discuss the business of the Company with its officers and independent auditors,
all to such reasonable extent and at such reasonable times and as often as any
such holder shall reasonably request as it deems necessary to comply with
applicable securities laws or NASD rules.
(ix) The Company shall notify the holder of such Warrant
Securities on a timely basis at any time when a prospectus relating to such
Warrant Securities is required to be delivered under the Securities Act within
the appropriate period set forth in Section 11(c)(i), of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing and, at the request of the holder, prepare and furnish to the holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the offerees
of such shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make statements therein not misleading in light of the
circumstances then existing.
12. Representation and Warranties. The Company hereby represents and
-----------------------------
warrants to and covenants with Warrantholder that:
(a) Organization and Capitalization of the Company. The Company is a
----------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. As of the date hereof, the authorized capital of the
Company consists of 100,000,000 shares of Common Stock of which 6,425,569 shares
of Common Stock are issued and outstanding. The Company has, and at all times
during the Exercise Period will have, reserved for issuance pursuant to the
Warrants that number of shares of Common Stock that are issuable pursuant to the
Warrants. No unissued shares of Common Stock are reserved for any purpose other
than for issuance upon the exercise of the Warrants, except that there are
1,136,438 shares of Common Stock reserved for issuance upon the exercise of
outstanding warrants and options. Except under this Warrant, there are no
preemptive rights in effect with respect to the issuance of any shares of Common
Stock. All of the outstanding shares of Common Stock and Preferred Stock have
been validly issued without violation of any preemptive or similar rights, are
fully paid and nonassessable and have been issued in compliance with all federal
and applicable state securities laws.
(b) Authority. The Company has full corporate power and authority
---------
to execute and deliver this Warrant, to issue the shares of Common Stock
issuable upon exercise of this Warrant, and to perform all of its obligations
hereunder, and the execution, delivery and performance hereof has been duly
authorized by all necessary corporate action on its part. This Warrant has been
duly executed on behalf of the Company and constitutes the legal, valid and
binding obligation of the Company enforceable in accordance with its terms.
(c) No Legal Bar. Neither the execution, delivery or performance
------------
of this Warrant nor the issuance of the shares of Common Stock issuable upon
exercise of this Warrant will (a) conflict with or result in a violation of the
Articles of Incorporation or By-Laws of the Company, (b) conflict with or result
11
in a violation of any law, statute, regulation, order or decree applicable to
the Company or any affiliate, (c) require any consent or authorization or filing
with, or other act by or in respect of any governmental authority, or (d) result
in a breach of, constitute a default under or constitute an event creating
rights of acceleration, termination or cancellation under any mortgage, lease,
contract, franchise, instrument or other agreement to which the Company is a
party or by which it is bound.
(d) Validity of Shares. When issued upon the exercise of this
---------------------
Warrant as contemplated herein, the shares of Common Stock so issued will have
been validly issued and will be fully paid and nonassessable. On the date
hereof, the par value of the Common Stock is less than the Exercise Price per
share of Common Stock.
(e) From and after the hereof, the Company shall (whether or not it
shall then be required to do so) timely file such information, documents and
reports as the Commission may require or prescribe under Section 13 or 15(d)
(whichever is applicable) of the Exchange Act. The Company shall forthwith upon
request furnish any holder of Registrable Stock (i) a written statement by the
Company that it has complied with such reporting requirements, (ii) a copy of
the most recent annual or quarterly report of the Company, and (iii) such other
reports and documents filed by the Company with the Commission as such holder
may reasonably request in availing itself of an exemption for the sale of
Registrable Stock without registration under the Securities Act. The Company
acknowledges and agrees that the purpose of the requirements contained in this
Section 12(e) is to enable any such holder to comply with the current public
information requirement contained in Rule 144 under the Securities Act should
such holder ever wish to dispose of any of the securities of the Company
acquired by it without registration under the Securities Act in reliance upon
Rule 144 (or any other similar exemptive provision). In addition, the Company
shall take such other measures and file such other information, documents and
reports as shall hereafter be required by the Commission as a condition to the
availability of Rule 144 and Rule 144A under the Securities Act (or any similar
exemptive provision hereafter in effect).
13. Miscellaneous Provisions.
------------------------
(a) CHOICE OF LAW AND VENUE.
-----------------------
(i) THE VALIDITY OF THIS WARRANT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT AND THE RIGHTS OF THE PARTIES HERETO SHALL
BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEVADA.
(ii) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE
FEDERAL OR STATE COURTS LOCATED IN CITY, COUNTY AND STATE OF NEW YORK, OR, AT
THE SOLE OPTION OF THE WARRANTHOLDER, IN ANY OTHER COURT IN WHICH THE
WARRANTHOLDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. THE PARTIES
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN ANY SUCH COURT, AND THE PARTIES HEREBY WAIVE ANY
OBJECTION WHICH EITHER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION AND
HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY ANY SUCH COURT. FURTHERMORE, THE COMPANY AND WARRANTHOLDER EACH
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF "FORUM NON CONVENIENS" OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(a)(ii).
(iii) WAIVER OF JURY TRIAL. THE COMPANY AND WARRANTHOLDER
--------------------
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS WARRANT. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
12
(b) Notices. All notices or demands by any party relating to
-------
this Warrant shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested, or by
receipted overnight delivery service to the Company and Warrantholder, as the
case may be, at their addresses set forth below:
If to Company: ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President, Finance and
Business Development
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ & ▇▇▇▇▇ Professional Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Warrantholder: ICE Holdings North America, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The parties hereto may change the address at which they
are to receive notices hereunder by notice in writing in the foregoing manner
given to the other. All notices or demands sent in accordance with this Section
13(b) shall be deemed received on the earlier of the date of actual receipt or
three (3) calendar days after the deposit thereof in the mail or one (1)
calendar day after deposit thereof with an overnight delivery service.
(c) Successors and Assigns. This Warrant shall bind and
----------------------
inure to the benefit of the respective successors and assigns of each of the
parties hereto. Warrantholder and its successors and assigns may assign this
Warrant and its rights and duties hereunder. Warrantholder reserves the right to
sell, assign and/or transfer all or any part of, or any interest in
Warrantholder's rights and benefits hereunder.
(d) Attorneys' Fees. Should the Company or any Warrantholder
---------------
retain counsel for the purpose of enforcing, or preventing the breach of, any
provision hereof including the institution of any action or proceeding, whether
by arbitration, judicial or quasi-judicial action or otherwise, to enforce any
provision hereof or for damages for any alleged breach of any provision hereof,
or for a declaration of such party's rights or obligations hereunder, then,
whether such matter is settled by negotiation, or by arbitration or judicial
determination, the prevailing party shall be entitled to be reimbursed by the
losing party for all costs and expenses incurred thereby, including reasonable
attorneys' fees for the services rendered to such prevailing party.
Notwithstanding the foregoing, Warrantholder shall be entitled to attorneys'
fees in connection with the protection and exercise of its rights hereunder
incurred pursuant to proceedings arising under the Bankruptcy Code.
(e) Entire Agreement; Amendments and Waivers. This Warrant
----------------------------------------
sets forth the entire understanding of the parties with respect to the
transactions contemplated hereby. The failure of any party to seek redress for
the violation or to insist upon the strict performance of any term of this
Warrant shall not constitute a waiver of such term and such party shall be
entitled to enforce such term without regard to such forbearance. This Warrant
may be amended, the Company may take any action herein prohibited or omit to
take action herein required to be performed by it, and any breach of or
compliance
13
with any covenant, agreement, warranty or representation may be waived, only if
the Company has obtained the written consent or written waiver of the majority
in interest of the Warrantholders, and then such consent or waiver shall be
effective only in the specific instance and for the specific purpose for which
given.
(f) Severability. If any term of this Warrant as applied to any
------------
person or to any circumstance is prohibited, void, invalid or unenforceable in
any jurisdiction, such term shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or invalidity without in any way affecting any
other term of this Warrant or affecting the validity or enforceability of this
Warrant or of such provision in any other jurisdiction.
(g) Headings. The headings in this Warrant are inserted only for
--------
convenience of reference and shall not be used in the construction of any of its
terms.
(h) Survival of Representations, Warranties and Covenants. All
-----------------------------------------------------
representations, warranties and covenants contained herein shall survive the
exercise or conversion of this Warrant (or any part hereof) or the termination
or expiration of the rights hereunder. Warrantholder and each holder of Warrant
Shares shall continue to be entitled to the rights contained herein indefinitely
until, by their respective terms, they are no longer operative.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officers effective as of the date first set forth above.
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
a Nevada corporation,
By:_______________________________________
Name:
Title:
14
EXHIBIT "A"
FORM OF EXERCISE
(To be signed only upon exercise of Warrant)
To: ________________________________
________________________________
________________________________
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _____________* shares of Common Stock of
___________________ and herewith makes payment therefor by the following method
or methods described in the Warrant ___________________________________, and
requests that the certificates for such shares be issued in the name of, and
delivered to, ______________________, whose address is
_________________________________________.
Dated: ____________________
_____________________________________________________________________________
(Signature must conform in all respects to name of holder as specified
on the face of the Warrant)
_____________________________________________________________________________
(Address)
_____________________
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the
Warrant, may be deliverable upon exercise.
15
EXHIBIT "B"
FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto _____________________________ the right represented by the within Warrant
to purchase ________ shares of Common Stock of ____________________ to which
the within Warrant relates, and appoints ___________________________ as
Attorney-in-Fact to transfer such right on the books of ________________________
with full power of substitution in the premises. The Warrant being transferred
hereby is the Common Stock Purchase Warrant issued by __________________ as of
January __, 2000.
Dated: ____________________
__________________________________________________________________________
(Signature must conform in all respects to name of holder as specified
on the face of the Warrant)
__________________________________________________________________________
(Address)
16