EXHIBIT 10.22
WARRANT PURCHASE AGREEMENT
THIS AGREEMENT is entered into as of November 29, 1999 by
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a Nevada corporation ("Company"), and SPRINT
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COMMUNICATIONS COMPANY L.P. ("Purchaser"),
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W I T N E S S E T H:
WHEREAS, Company provides an extensive business-to-business bidding
and procurement environment via a series of Company and/or co-branded websites
and underlying Company-proprietary software ("PurchasePro Solution") that is
made available for access by users on a subscription basis;
WHEREAS, the parties have agreed to enter into a Strategic Marketing
Partner Agreement with respect to the PurchasePro Solution (the "Strategic
Agreement"), as set forth in Section 2 and Exhibit A; and
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WHEREAS, as part of the consideration for Purchaser entering into the
Strategic Agreement, the Company hereby agrees to issue to Purchaser a warrant
in the form attached as Exhibit B ("Warrant") to purchase shares of the
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Company's common stock, par value $0.01 per share ("Warrant Stock") at an
Exercise Price equal to $143.688 per share, on the terms and conditions set
forth therein;
NOW, THEREFORE, for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Issuance. The Company has authorized the sale and issuance to
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Purchaser of the Warrant to purchase up to 1,800,000 shares of Warrant Stock in
accordance with the terms thereof. The right to purchase shares of Warrant Stock
upon exercise of the Warrant shall vest in Purchaser accordance with the
provisions of the Warrant. The issuance of the Warrant shall take place at such
time and place as the Company and Purchaser agree (the "Closing"), but in no
event later than 5 business days after the execution of this Agreement by both
parties.
2. Strategic Agreement. During the 30 day period following the
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Closing, Company and Purchaser will negotiate, reasonably and in good faith, a
definitive Strategic Agreement that obligates Purchaser to actively market and
promote subscriptions to access and use the PurchasePro Solution to Company's
current and future business customers, on mutually agreeable terms and
conditions that are consistent with Exhibit A. If the parties are unable to
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mutually agree upon the wording of any provision of the Strategic Agreement,
then at the request of either party the issue shall be resolved, consistent with
Exhibit A, by binding arbitration under the commercial arbitration rules of the
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American Arbitration Association, in Las Vegas, Nevada.
3. Company Representations. The Company represents and warrants to
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Purchaser that, as of the Closing:
(a) Organization and Standing. The Company is a corporation duly
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organized, in good standing and validly existing under the laws of the State of
Nevada and has requisite corporate power to own and operate its properties and
assets and carry on its business as presently conducted.
(b) Authorization. The execution, delivery and performance of this
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Agreement by the Company has been duly authorized by all requisite corporate
action, and this Agreement constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its terms, subject as to
enforcement of remedies to applicable bankruptcy, insolvency, reorganization or
similar laws relating to
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or affecting the enforcement of creditors' rights. The execution, delivery and
performance of this Agreement, and the Warrant and compliance with the
provisions hereof and thereof by the Company does not conflict with, or result
of breach or violation of the terms, conditions or provisions of, or constitute
a default (or an event with which the giving of notice or passage of time, or
both could result in a default) under, or result in the creation or imposition
of any lien pursuant to the terms of, the Articles of Incorporation or the
Bylaws of the Company.
(c) Securities. The shares of Warrant Stock issued upon exercise of
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the Warrant will be validly issued, fully paid and non-assessable; provided,
however, that such securities shall be subject to restrictions on transfer under
applicable state or federal securities laws.
4. Purchaser Representations. Purchaser represents and warrants to
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the Company, with respect to both its purchase of the Warrant and the issuance
of Warrant Shares upon its exercise, that:
(a) Company Affairs: Purchaser's Account: Accredited Investor.
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Purchaser is aware of the Company's business affairs and financial condition,
has had sufficient opportunity to ask questions of and receive answers from
representatives of the Company and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to purchase the Warrant.
Purchaser is purchasing the Warrant for investment for Purchaser's own account
only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). Purchaser is an "accredited investor" as such
term is defined in Rule 501(a) of Regulation D under the Securities Act and has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of investing in the Note, Warrant and the
securities issuable upon conversion or exercise thereof (collectively, the
"Securities"), including a complete loss of its investment.
(b) Unregistered Securities. Purchaser understands that neither the
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Warrant nor any shares of Warrant Stock issued upon exercise thereof have been
registered under the Securities Act, by reason of a specific exemption therefrom
which depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
(c) Holding Period: Legends. Purchaser further acknowledges and
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understands that the Warrant and any shares of Warrant Stock issued upon
exercise thereof must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Purchaser understands that the Warrant and, when and if issued,
certificates evidencing the shares of Warrant Stock issuable upon exercise
thereof, will be imprinted with a legend that prohibits the transfer of such
Warrant or securities, unless they are registered or such registration is not
required in the opinion of legal counsel for the Company.
(d) Restricted Securities. Purchaser understands that the securities
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it is purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations, such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
Purchaser represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
(e) No Market. Purchaser further understands that, at the time
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Purchaser wishes to sell shares Warrant Stock issued upon exercise of the
Warrant, there may be no public market upon which to make such a sale, and that,
even if such a public market then exists, the Company may not be satisfying the
current public information requirements of Rule 144, and that, in such event,
Purchaser will be
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precluded from selling such securities under Rule 144 even if any minimum
holding period has been satisfied; provided, however, that the Company shall use
its best efforts to satisfy the current public information requirements of Rule
144.
5. General Provisions.
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(a) Entire Agreement: Amendment. This Agreement and the Warrant
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represent the entire agreement between the Company and Purchaser with respect to
the subject matter hereof, supersede all prior agreements and understandings
with respect to the subject matter hereof, and may be amended only in a writing
signed by the Company and the Purchaser.
(b) Successors and Assigns. This Agreement shall bind and benefit the
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successors, assigns, heirs, executors and administrators of the parties
(including, without limitation, any successor corporation to the Company and the
Purchaser). The rights of Purchaser under this Agreement may not be assigned
without the written consent of the Company.
(c) Press Release. The parties will issue a joint press release
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announcing this Agreement and the Strategic Agreement within 10 business days
after the date this Agreement is executed by both parties.
(d) Governing Law. This Agreement shall be governed in all respects
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by the laws of the State of Nevada.
(e) Notices. All notices and other communications required or
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permitted hereunder shall be in writing and shall be transmitted by telex or
facsimile, or, if sent within the United States, mailed by first-class mail,
postage prepaid, to the address at the address set forth below the recipient's
signature, or at such other address as the recipient shall have furnished to the
other party in writing. All notices shall be deemed effectively delivered upon
transmission or mailing.
(f) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
The parties hereto have executed this Agreement as of the Effective
Date set forth above.
COMPANY
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▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. Carton
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Its President
PURCHASER
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SPRINT COMMUNICATIONS CO., L.P.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its Vice President
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EXHIBIT A
STRATEGIC AGREEMENT
TERMS AND CONDITIONS
The parties will negotiate, reasonably and in good faith, a definitive
Strategic Agreement with mutually agreeable terms and conditions that include
the following:
1. Marketing and operations during the 18 month warrant agreement period:
. Purchaser will actively market and promote the PurchasePro Solution,
as the preferred business-to-business eCommerce solution for
procurement of goods and services, to Purchaser's current and future
business customers, including in each of the following segments of
Purchaser's business: (1) long distance, (2) pager, and (3)
collaborative solutions
. Purchaser will actively promote the PurchasePro Solution, including by
use of text, material or other formats reasonably acceptable to
Company in Purchaser's marketing and promotional literature, customer
billing inserts and other promotional items or materials
. Purchaser and Company will conduct joint marketing and promotional
efforts as mutually agreed
. Purchaser will promote the sale to Purchaser's customers of
subscriptions ("Subscriptions") to access and use the PurchasePro
Solution
. Purchaser and Company will establish a co-branded website, through
which Purchaser's customers who purchase Subscriptions ("Customers")
will access the PurchasePro Solution
. Purchaser will provide level one ("first call") support for Customers
as it relates to the referral process
. Customers will access and use the PurchasePro Solution under Company's
standard terms and conditions
2. Financial consideration
. Company will book 100% of the net revenue from Subscriptions sold by
Purchaser (determined and tracked in accordance with Company's
standard practices) and shall pay to Purchaser a quarterly sales
commission equal to 25% of net collected revenues
. Each party will bear its own costs and expenses
3. Company agrees to designate purchaser as the preferred communications
provider on the ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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