_____________________________________________________________
Win-Gate Equity Group, Inc.
and
Florida Atlantic Stock Transfer, Inc.
________________________________________________
Warrant Agreement
________________________________________________
Dated as of _________ , 1997
_____________________________________________________________
TABLE OF CONTENTS
Page
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PARTIES........................................................................1
RECITALS.......................................................................1
Section 1. Appointment of Warrant Agent................................ 1
Section 2. Form of Warrant............................................. 1
Section 3. Countersignature and Registration........................... 2
Section 4. Transfers and Exchanges..................................... 2
Section 5. Exercise of Warrants........................................ 2
Section 6. Payment of Taxes............................................ 3
Section 8. Reservation of Common Stock................................. 4
Section 9. Warrant Price............................................... 4
Section 10. Adjustments................................................ 5
Section 11. Fractional Interest........................................ 6
Section 13. Disposition of Proceeds on Exercise of Warrants............ 6
Section 14. Merger or Consolidation or Change of Name of Warrant Agent. 7
Section 15. Reorganization of the Company.............................. 7
Section 16. When Issuance or Payment May Be Deferred................... 8
Section 17. Redemption................................................. 8
Section 18. Duties of Warrant Agent.................................... 9
Section 19. Change of Warrant Agent.................................... 10
Section 20. Identity of Transfer Agent................................. 11
Section 21. Notices.................................................... 11
Section 22. No Stockholder Rights...................................... 12
Section 23. Supplements and Amendments................................. 12
Section 24. Successors................................................. 12
Section 25. Governing Law.............................................. 12
Section 26. Benefits of This Agreement................................. 12
Section 27. Counterparts............................................... 13
EXHIBIT A - (Form of Common Stock Purchase Warrant, including election to
Purchase and Assignment).......................................A-1
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of , 1997, between Win-Gate Equity
Group, Inc., a Florida corporation (hereinafter called the "Company"), and
Florida Atlantic Stock Transfer, Inc., as warrant agent (hereinafter called the
"Warrant Agent").
WHEREAS, the Company proposes to issue and sell up to a maximum of
100,000 units (the "Units") at a purchase price of $1.00 per Unit. Each Unit
consists of one share of Common Stock, par value $.001 per share (the "Common
Stock" or the "Shares"), and ten Common Stock Purchase Warrants (the "Warrants")
of the Company. The Units, Shares and Warrants are not separately transferable
until the Company acquires a Business Combination as defined in the Company's
Prospectus dated ________________. Each Warrant entitles the holder thereof to
purchase one share of Common Stock at an exercise price of $1.20 per Warrant at
any time during the five (5) year period commencing on the date of the Company's
Prospectus dated ____________ relating to the Units.
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange and exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent.
-----------------------------
The Company hereby appoints the Warrant Agent to act as Agent for the
Company in accordance with the instructions hereinafter set forth in this
Agreement and the Warrant Agent hereby accepts such appointment.
Section 2. Form of Warrant.
----------------
The certificates evidencing the Warrants (the "Warrant Certificates")
and the form of election to purchase shares to be printed on the reverse thereof
shall be substantially as set forth in Exhibit "A" attached hereto. The per
share warrant price and the number of shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events, all as
hereinafter provided. The Warrants shall be executed on behalf of the Company by
the manual or facsimile signature of the present or any future Chairman of the
Board, President or Vice President of the Company, attested by the manual or
facsimile signature of the present or any future Secretary or Assistant
Secretary of the Company.
Warrants shall be dated as of the date of issuance by the Warrant Agent
either upon initial issuance or upon transfer or exchange.
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Section 3. Countersignature and Registration.
----------------------------------
The Warrant Agent shall maintain books for the transfer and
registration of the Warrants. Upon the initial issuance of the Warrants, the
Warrant Agent shall issue and register the Warrants in the names of the
respective holders thereof. The Warrants shall be countersigned manually or by
facsimile by the Warrant Agent (or by any successor to the Warrant Agent then
acting as warrant agent under this Agreement) and shall not be valid for any
purpose unless so countersigned. Warrants may be so countersigned, however, by
the Warrant Agent (or by its successor as warrant agent) and be delivered by the
Warrant Agent, notwithstanding that the persons whose manual or facsimile
signatures appear thereon as proper officers of the Company shall have ceased to
be such officers at the time of such countersignature or delivery, provided such
persons were proper officers of the Company at the time of such original
signing. The Warrant Agent shall deem and treat the registered holder(s) of the
Warrant Certificates as the absolute owner(s) thereof.
Section 4. Transfers and Exchanges.
------------------------
The Warrant Agent shall from time to time register the transfer of any
outstanding Warrant Certificate upon the books to be maintained by the Warrant
Agent for that purpose, upon surrender thereof for transfer properly endorsed or
accompanied by appropriate instructions for transfer in form satisfactory to the
Warrant Agent, duly executed by the registered holder(s) thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney. Upon
any such registration of transfer, a new Warrant Certificate shall be issued to
the transferee(s) and the surrendered Warrant Certificate shall be canceled by
the Warrant Agent. Warrant Certificates so canceled shall be delivered by the
Warrant Agent to the Company from time to time upon request. Warrant
Certificates may be exchanged at the option of the holder thereof, when
surrendered at the office of the Warrant Agent, for another Warrant Certificate,
or other Warrant Certificate of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of shares of
Common Stock. Warrant Certificates surrendered for exchange shall be canceled by
the Warrant Agent and delivered to the Company from time to time upon request.
Section 5. Exercise of Warrants.
---------------------
Each registered holder of Warrants shall have the right to exercise
such Warrants only if a current registration statement covering the shares of
Common Stock underlying the Warrants is effective. If a current effective
registration statement as described herein is effective, each registered holder
of Warrants may exercise such Warrant commencing at the opening of business
Florida time on and terminating at 5:00 p.m., Florida time, on (the "Expiration
Date"), to purchase from the Company (and the Company shall issue and sell to
such registered holder of Warrants) the number of fully paid and non-assessable
shares of Common Stock which the holder may at the time be entitled to receive,
upon surrender to the Company at the office of the Warrant Agent of the Warrant
Certificates evidencing such Warrants, with the form of election to purchase on
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the reverse thereof duly filled in and executed, and upon payment to the Company
of the Warrant Price, determined in accordance with the provisions of Sections 9
and 10 of this Agreement, for the number of shares in respect of which such
Warrants are then exercised. Payment of such Warrant Price shall be made in cash
or by certified check or bank draft payable, in United States dollars, to the
order of the Company. No adjustment shall be made for any dividends on any
shares of Common Stock issuable upon exercise of any warrant of the Company
outstanding on the date hereof. Subject to Section 6, upon such surrender of the
Warrants and payment of the Warrant Price as aforesaid, the Company shall issue
and cause to be delivered with all reasonable dispatch, upon the written order
of the registered holder of such Warrants, and in such name or names as such
registered holder may designate, a certificate or certificates for the number of
full shares of Common Stock so purchased upon the exercise of such Warrants. No
fractional shares of Common Stock will be issued. Such certificate or
certificates shall be deemed to have been issued and any person so designated to
be named therein shall be deemed to have become a holder of record of such
shares as of the date of the surrender of such Warrants and payment of the
Warrant Price as aforesaid; provided, however, that if, at the date of surrender
of such Warrants and payment of such Warrant Price, the transfer books for the
shares of Common Stock or other class of stock purchasable upon the exercise of
such Warrants shall be closed, the certificates for the shares in respect to
which such Warrants are then exercised shall be deemed to have been issued as of
the date on which such books shall be opened (whether before, on or after the
Expiration Date) and until such date the Company shall be under no duty to
deliver any certificate for such shares; provided, further, however, that such
transfer books, unless otherwise required by law or by applicable rule of any
national securities exchange, shall not be closed at any one time for a period
longer than 20 days. The rights of purchase represented by the Warrants shall be
exercisable, at the election of the registered holders thereof, either as an
entirety or from time to time for part only of the shares specified therein and,
in the event that any Warrant is exercised in respect of fewer than all of the
shares specified therein at any time prior to the Expiration Date, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued to such
registered holder for the remaining number of shares specified in the Warrant so
surrendered, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrants pursuant to the provisions
of this Section and of Section 3 of this Agreement; and the Company, whenever
requested by the Warrant Agent, will supply the Warrant Agent with Warrant
Certificates duly executed on behalf of the Company for such purpose. After the
respective Expiration Dates of the Warrants any such Warrants which have not
been exercised shall be void.
Section 6. Payment of Taxes.
-----------------
The Company will pay any documentary stamp taxes attributable to the
initial issuance of Common Stock upon the exercise of the Warrants by the
registered holder thereof; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect to any transfer
of a Warrant or in respect to any transfer involved in the issue or delivery of
any certificates for shares of Common Stock in a name other than that of the
registered holder of Warrants in respect of which such shares are issued, and in
such case neither the Company nor the Warrant Agent shall be required to issue
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or deliver any certificate for shares of Common Stock or any Warrant until the
person requesting the same has paid to the Company or Warrant Agent the amount
of such tax or has established to the Company's and to the Warrant Agent's
satisfaction that such tax has been paid.
Section 7. Mutilated or Missing Warrants.
------------------------------
In case any of the Warrant Certificates shall be mutilated, lost,
stolen or destroyed, the Company may in its discretion issue, and the Warrant
Agent shall then countersign and deliver, in exchange and substitution for and
upon cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the Company and the
Warrant Agent of such loss, theft or destruction of such Warrant Certificate
and, in the case of a lost, stolen or destroyed Warrant Certificate, indemnity,
if requested, also satisfactory to them. Applicants for such substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay
such reasonable charges as the Company or the Warrant Agent may prescribe.
Section 8. Reservation of Common Stock.
----------------------------
There has been reserved, and the Company shall at all times keep
reserved, free from preemptive rights, out of the authorized and unissued shares
of Common Stock, or its authorized and issued Common Stock held in its treasury,
a number of shares sufficient to satisfy any obligation to issue shares of
Common Stock upon the exercise of the Warrants; and the Transfer Agent for the
shares of Common Stock and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid are hereby irrevocably authorized and directed at all times
to reserve such number of authorized and unissued shares as shall be requisite
for such purpose. The Company agrees that all shares of Common Stock issued upon
exercise of the Warrants shall be, at the time of delivery of the certificates
for such shares of Common Stock, duly authorized, validly issued and
outstanding, fully paid and non-assessable. The Company will keep a copy of this
Agreement on file with the Transfer Agent for the shares of Common Stock and
with every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from
time to time from such Transfer Agent stock certificates required to honor
outstanding Warrants. The Company will supply such Transfer Agent with duly
executed stock certificates for such purpose. All Warrants surrendered in the
exercise of the rights thereby evidenced shall be canceled by the Warrant Agent
and shall thereafter be delivered to the Company, and such canceled Warrants
shall constitute sufficient evidence of the number of shares of Common Stock
which have been issued upon the exercise of such Warrants. Promptly after the
Expiration Date, the Warrant Agent shall certify to the Company as to the total
aggregate amount of Warrants then outstanding, and thereafter no shares of
Common Stock shall be subject to reservation in respect of such Warrants which
shall have expired.
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Section 9. Warrant Price.
--------------
The Warrant Price at which Common Stock shall be purchasable pursuant
to the Warrants shall be $1.20 per share. The Warrant Price is subject to
adjustment, as provided in Section 10 hereof.
Section 10. Adjustments.
------------
Any and all of the shares of the Common Stock of the Company which may
be acquired by a Warrant holder or his registered assigns as a result of the
exercise, in whole or in part, of this Warrant, shall be subject to the
anti-dilution adjustments set forth below. It is expressly understood that the
Warrant Price set forth below (before giving effect to any adjustments) shall
mean $1.20 per share of Common Stock. Notwithstanding the foregoing, the Company
shall have the right to reduce the exercise price and/or extend the term of the
Warrants in compliance with the requirements of Rule 13e-4 to the extent
applicable.
(a) In case the Company shall (i) declare a dividend on its Common
Stock in shares of its capital stock, (ii) subdivide its outstanding Common
Stock into a greater number of shares, (iii) combine its outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares by
reclassification of its Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation), the Warrant Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the warrantholder
shall be entitled to receive the kind and aggregate number of shares of Common
Stock which it would have owned or would have been entitled to receive after the
happening of any of the events described above on any record date with respect
thereto, if this Warrant had been exercised immediately prior to such time such
dividend, subdivision, combination or reclassification occurred. Such adjustment
shall be made successively whenever any event listed above shall occur. If after
an adjustment a holder of a Warrant upon exercise of it may receive shares of
two or more classes of capital stock of the Company, the Company shall determine
the allocation of the adjusted Warrant Price between the classes of capital
stock. After such allocation, the exercise privilege and the Warrant Price of
each class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section.
(b) Whenever the Warrant Price payable upon exercise of this Warrant
is adjusted pursuant to paragraph (a) above, the number of shares of Common
Stock purchasable upon exercise of this Warrant shall simultaneously be adjusted
by multiplying the number of shares of Common Stock initially issuable upon
exercise of this Warrant by the Warrant Price in effect on the date immediately
preceding such event and dividing the product so obtained by the Warrant Price,
as adjusted.
(c) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price,
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provided, however, that any adjustments which by reason of this paragraph (c)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 10 shall be made
to the nearest cent or to the nearest one-tenth of a share, as the case may be.
Anything in this Section 10 to the contrary notwithstanding, the Company shall
be entitled, but shall not be required, to make such changes in the Warrant
Price, in addition to those required by this Section 10, as it, in its
discretion, shall determine to be advisable in order that any share, dividend or
subdivision of Common Stock shall not result in any tax to the holders of its
Common Stock or securities convertible into Common Stock.
(d) The form of Warrants need not be changed because of any change
pursuant to this Section, and Warrants issued after such change may state the
same Warrant Price and the same number of shares as is stated in such Warrants
initially issued pursuant to this agreement. However, the Company may at any
time in its sole discretion (which shall be conclusive) make any change in the
form of Warrants that the Company may deem appropriate and that does not affect
the substance thereof; and any Warrant thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant or otherwise, may
be in the form as so changed.
Section 11. Fractional Interest.
--------------------
The Company shall not be required to issue fractions of shares of
Common Stock on the exercise of the Warrants. If more than one Warrant shall be
surrendered for exercise at one time by the same holder, the number of full
shares which shall be issuable upon exercise thereof shall be computed on the
basis of the aggregate number of shares of Common Stock purchasable on exercise
Warrants so presented. If any fraction of a share would, except for the
provisions of this Section 11, be issuable upon exercise of a Warrant, the
Company shall pay an amount in cash equal to the Warrant Price on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction.
Section 12. Notices to Warrantholders.
--------------------------
Upon any adjustment of the Warrant Price and the number of shares
issuable on exercise of a Warrant, then and in each such case the Company shall
give written notice thereof to the Warrant Agent, which notice shall state the
Warrant Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
Section 13. Disposition of Proceeds on Exercise of Warrants.
------------------------------------------------
(a) The Warrant Agent shall promptly forward to the Company all
monies received by the Warrant Agent for the purchase of shares of Common Stock
through the exercise of Warrants.
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(b) The Warrant Agent shall keep copies of this Agreement available
for inspection by holders of Warrants during normal business hours.
Section 14. Merger or Consolidation or Change of Name of Warrant Agent.
-----------------------------------------------------------
(a) Any corporation or company which may succeed to the business of
the Warrant Agent by any merger or consolidation or otherwise to which the
Warrant Agent shall be a party, or any corporation or company succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 18 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, any of the Warrants shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent and deliver such Warrants so countersigned; and in case
at that time any of the Warrants shall not have been countersigned, any
successor to the Warrant Agent shall countersign such Warrants in its own name;
and in all such cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
(b) In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrants shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignature under its prior
name and deliver Warrants so countersigned; and in case at that time any of the
Warrants shall have been countersigned, the Warrant Agent may countersign such
Warrants either in its prior name or in its changed name; and in all such cases
such Warrants shall have the full force provided in the Warrants and in this
Agreement.
Section 15. Reorganization of the Company.
------------------------------
If the Company consolidates or merges with or into, or transfers or
leases all or substantially all its assets to, any person, upon consummation of
such transaction the Warrants shall automatically become exercisable for the
kind and amount of securities, cash or other assets which the holder of a
Warrant would have owned immediately after the consolidation, merger, transfer
or lease if the holder had exercised the Warrant immediately before the
effective date of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such consolidation or
merger if other than the Company, or the person to which such sale or conveyance
shall have been made, shall enter into a supplemental Warrant Agreement so
providing and further providing for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in Section 10
hereof. The successor Company shall mail to Warrant holders a notice describing
the supplemental Warrant Agreement or the primary exchange on which the Common
Stock is traded. If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement. If this Section 15 applies, subsection (a) of
Section 10 shall not apply.
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Section 16. When Issuance or Payment May Be Deferred.
-----------------------------------------
In any case in which Section 10 hereof shall require that an adjustment
in the Warrant Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the shares
of Common Stock or other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Warrant Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to Section 12;
provided, however, that the Company shall deliver to such holder a due ▇▇▇▇ or
other appropriate instrument evidencing such holder's right to receive such
additional shares of Common Stock, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
Section 17. Redemption.
-----------
(a) The Warrants are redeemable by the Company for $.01 per Warrant,
at any time commencing thirty days from the closing of a Business Acquisition as
defined in the Company's Prospectus dated , upon thirty (30) days prior written
notice, and upon thirty (30) days prior written notice to all holders of the
Warrants.
(b) In the event the conditions set forth in Section 17(a) are met,
and the Company shall desire to exercise its right so to redeem the Warrants, it
shall mail a notice of redemption to the holders of the Warrants to be redeemed,
first class, postage prepaid, not later than the twentieth day before the date
fixed for redemption, at his/her last address as shall appear on the records of
the Company. Any notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given whether or not the holder receives
such notice.
(c) The notice of redemption shall specify the (i) redemption price,
(ii) the date fixed for redemption, (iii) the place where the Warrant
Certificates shall be delivered and the redemption price paid, and (iv) that the
right to exercise the Warrant shall terminate at 5:00 p.m. (New York time) on
the business day immediately proceeding the date fixed for redemption. The date
fixed for redemption of the Warrants shall be the Redemption Date. No failure to
mail such notice nor any defect therein or in the mailing thereof shall affect
the validity of the proceedings for such redemption except as to a holder (a) to
whom notice was not mailed; or (b) whose notice was defective. An affidavit of
the Secretary or an Assistant Secretary of the Company that notice of redemption
has been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(d) Except as provided herein, any right to exercise a Warrant shall
terminate at 5:00 p.m. (Florida time) on the business day immediately proceeding
the Redemption Date. On and after the Redemption Date, the Warrantholders shall
have no further rights except to receive, upon surrender of the Warrant, the
redemption price.
(e) From and after the Redemption Date, the Company shall, at the
place specified in the notice of redemption, upon presentation and surrender to
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the Company by or on behalf of the holder thereof of one or more Warrants to be
redeemed, deliver or cause to be delivered to or upon the written order of such
holder a sum in cash equal to the redemption price of each such Warrant. From
and after the date fixed for redemption and upon the deposit or setting aside by
the Company of a sum sufficient to redeem all the Warrants called for
redemption, such Warrants shall expire and become void and all rights hereunder
and under the Warrant Certificates, except the right to receive payment of the
redemption price, shall cease.
Section 18. Duties of Warrant Agent.
------------------------
The Warrant Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Warrants, by their acceptance thereof, shall be bound:
(a) The statements of fact and recitals contained herein and in the
Warrants shall be taken as statements of the Company; and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent and assumes no responsibility with respect to the
distribution of the Warrants except as herein expressly provided.
(b) The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this Agreement or
in the Warrants to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement except as a result of the Warrant
Agent's negligence, willful misconduct or bad faith.
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(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expenses unless the Company or one or more registered holders of Warrants shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the Warrant Agent may consider
proper, whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable benefit
of the registered holders of the Warrants, as their respective rights or
interests may appear.
(g) The Warrant Agent and any stockholder, director, officer,
partner or employee of the Warrant Agent may buy, sell or deal in the Warrants
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not the Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent and not in
a ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence, willful misconduct or bad faith.
(i) The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Warrant Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from such neglect or
misconduct, provided reasonable care had been exercised in the selection and
continued employment thereof.
(j) Any request, direction, election, order or demand of the Company
shall be sufficiently evidenced by an instrument signed in the name of the
Company by its President or Vice President or its Secretary or an Assistant
Secretary or its Treasurer or an Assistant Treasurer (unless other evidence in
respect thereof be herein specifically prescribed); and any resolution of the
Board of Directors may be evidenced to the Warrant Agent by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company.
Section 19. Change of Warrant Agent.
------------------------
The Warrant Agent may resign and be discharged from its duties under
this Agreement by giving to the Company notice in writing, and to the holders of
the Warrants notice by mailing such notice to the holders at their addresses
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appearing on the Warrant register, of such resignation, specifying a date when
such resignation shall take effect. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company and by like mailing of notice to
the holders of Warrants. If the Warrant Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the registered holder of a Warrant (who shall,
with such notice, submit his Warrant for inspection by the Company), then the
registered holder of any Warrant may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Any
successor warrant agent, whether appointed by the Company or by such a court,
shall be a bank or trust company, in good standing, incorporated under the laws
of any state in the United States of America. After appointment, the successor
warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor warrant agent all canceled Warrants, records and property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to file or mail any
notice provided for in this Section, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the case may be.
Section 20. Identity of Transfer Agent.
---------------------------
Forthwith upon the appointment of any Transfer Agent for the shares of
Common Stock or of any subsequent transfer agent for shares of Common Stock or
other shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by the Warrants, the Company shall file with the
Warrant Agent a statement setting forth the name and address of such Transfer
Agent.
Section 21. Notices.
--------
Any notice pursuant to this Agreement to be given or made by the
Warrant Agent or by the registered holder of any Warrant to or on the Company
shall be sufficiently given or made if sent by prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:
Win-Gate Equity Group, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any notice pursuant to this Agreement to be given or made by the
Company or by the registered holder of any Warrant to or on the Warrant Agent
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shall be sufficiently given or made if sent by first-class mail of the United
States Postal Service, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company) as follows:
Florida Atlantic Stock Transfer, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 22. No Stockholder Rights.
----------------------
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
Section 23. Supplements and Amendments.
--------------------------
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, or to make any other provision in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrants and which shall not adversely affect the interest of the holders
of Warrants.
Section 24. Successors.
----------
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 25. Governing Law.
-------------
This Agreement and each Warrant issued hereunder shall be deemed to be
a contract made under the laws of the State of Florida and for all purposes
shall be construed in accordance with the internal laws of said State applicable
to agreements and instruments made and to be performed entirely in such state
without giving effect to the conflicts of law principles thereof.
Section 26. Benefits of This Agreement.
--------------------------
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent, the Representative and
the registered holders of the Warrants any legal or equitable right, remedy or
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claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the registered holders
of the Warrants.
Section 27. Counterparts.
-------------
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
WIN-GATE EQUITY GROUP, INC.
By:
______________________________________
FLORIDA ATLANTIC STOCK TRANSFER, INC.
By:
_____________________________________
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