WARRANT NO. 001
WARRANT FOR PURCHASE OF COMMON STOCK
THIS WARRANT AND THE COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
OR OTHER JURISDICTIONS SECURITIES LAW. NEITHER THIS WARRANT NOR THE
COMMON STOCK PURCHASABLE HEREUNDER MAY BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO SUCH SECURITIES UNDER SUCH ACT AND ANY
APPLICABLE STATE OR OTHER JURISDICTION SECURITIES LAWS OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
(the "Company" or "Corporation")
Purchase Warrant for
Common Stock
THIS INSTRUMENT certifies that, FOR VALUE RECEIVED, _________with an
address of _________________________(the "Holder"), or his registered assigns,
is entitled, subject to the terms and conditions set forth in this Warrant for
Purchase of Common Stock (this "Warrant"), to purchase from ▇▇▇▇▇▇▇▇.▇▇▇, Inc.,
a Delaware corporation (the "Company" or the "Corporation"),
______________________________shares of Common Stock, US$.001 par value, of the
Company (the "Shares"), commencing immediately, and ending at 5:00 p.m., New
York time, November 12, 2012, for a purchase price of six and one-half cents
(US$0.065) per Share (the "Exercise Price"), such number of Shares and Exercise
Price being subject to adjustment from time to time as set forth in Sections 3
and 4 below.
This Warrant is subject to the following provisions, terms and conditions:
SECTION 1. Warrant Exercise. This Warrant may be exercised by the holder
hereof, in whole or in part, by the presentation and surrender of this Warrant
with the form of the Exercise Form attached hereto as SCHEDULE A duly executed,
at the principal office of the Company, and by tender to the Company of the
purchase price set forth above as the Exercise Price, either (a) in cash or by
certified check or bank cashier's check, payable to the order of the Company,
or, at the option of the Holder, (b) by surrendering such number of shares of
Common Stock received upon exercise of this Warrant with a "fair market value"
(as hereinafter defined) equal to the Exercise Price (a "Cashless Exercise").
Upon receipt of the foregoing, the Company will without delay and as promptly as
possible to the Holder, as promptly as possible, a certificate or certificates
representing the shares of Common Stock so purchased, registered in the name of
the Holder. With respect to any exercise of this Warrant, the Holder will for
all purposes be deemed
to have become the holder of record of the number of shares of Common Stock
purchased hereunder on the date this Warrant, a properly Executed Exercise and
payment of the Exercise Price is received by the Company (the "Exercise Date"),
irrespective of the date of delivery of the certificate evidencing such shares,
except that, if the date of such receipt is a date on which the stock transfer
books of the Company are closed, such person will be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. Fractional shares of Common Stock will
not be issued upon the exercise of this Warrant. In lieu of any fractional
shares that would have been issued but for the immediately preceding sentence,
the Holder will be entitled to receive cash equal to the fair market value of
such fraction of a share of Common Stock on the trading day immediately
preceding the Exercise Date. In the event this Warrant is exercised in part,
the Company shall issue a new Warrant Certificate to the Holder covering the
aggregate number of shares of Common Stock as to which this Warrant remains
exercisable.
If the Holder elects to conduct a Cashless Exercise, the Company shall
cause to be delivered to the Holder a certificate or certificates representing
the number of shares of Common Stock computed using the following formula:
X = Y(A-B)
------
A
Where:
The number of shares of Common Stock to be issued to
X = Holder;
The number of shares of Common Stock for which Holder
Y = has exercised this Warrant;
The fair market value of one share of the Company's
A = Common Stock (on the Exercise Date); and
B = Exercise Price (as adjusted to the date of such calculation)
For purposes of this Section, the "fair market value" of the Company's Common
Stock on the Exercise Date shall mean: (i) if the principal trading market for
such securities is a national or regional securities exchange, the average
closing price on such exchange for the thirty (30) trading days immediately
prior to the Exercise Date; or (ii) if sales prices for shares of Common Stock
are reported by the NASDAQ National Market System (or a similar system then in
use), the average last reported sales price so reported for the thirty (30) days
immediately prior to the Exercise Date; or (iii) if neither (i) nor (ii) above
are applicable, and if bid and ask prices for shares of Common Stock are
reported in the OTC Bulletin Board by NASDAQ (or, if not so reported, by the
National Quotation Bureau or any successor service, including the BBX), the
average of the high bid and low ask prices so reported for the thirty (30)
trading days immediately prior to the Exercise Date. Notwithstanding the
foregoing, if there is no reported closing price, last reported sales price, or
bid and ask prices, as the case may be, for the period in question, then that
current market price shall be determined as of the latest thirty (30) day period
2
for which such closing price, last reported sales price, or bid and ask prices,
as the case may be, are available, unless such securities have not been traded
on an exchange or in the OTC Bulletin Board for 30 or more days immediately
prior to the date in question, in which case the fair market value shall be
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company. Upon any partial exercise of this Warrant, there
shall be countersigned and issued to the holder hereof a new Warrant in respect
of the Shares as to which this Warrant shall not have been exercised.
SECTION 2. Reservation of Shares. The Company covenants and agrees:
(i) That all Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue thereof;
and
(ii) 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 for the purpose of issue and delivery upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant.
SECTION 3. Adjustment of the Warrant Exercise Price.
a. Adjustments for Subdivision, Dividends, Combinations
----------------------------------------------------
or Consolidations of Common Stock.
---------------------------------
(i) If the Corporation shall at any time or from
time to time after the date that this Warrant is issued (the "Original
Issue Date") effect a combination or consolidation of the outstanding
Common Stock, by reclassification or otherwise, into a lesser number
of shares of Common Stock, the Exercise Price in effect immediately
prior to such combination or consolidation shall, concurrently with
the effectiveness of such combination or consolidation, be
proportionately increased.
(ii) In the event the Corporation shall declare or
pay any dividend on the Common Stock payable in Common Stock or in the
event the outstanding shares of Common Stock shall be subdivided, by
reclassification or otherwise than by payment of a dividend in Common
Stock, into a greater number of shares of Common Stock, the Exercise
Price in effect immediately prior to such dividend or subdivision
shall be proportionately decreased.
a. in the case of any such dividend,
immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to
receive such dividend, or
b. in the case of any such subdivision, at
the close of business on the date immediately prior to the date upon
which such corporate action becomes effective.
3
If such record date shall have been fixed and such
dividend shall not have been fully paid on the date fixed therefor,
the adjustment previously made in the applicable Exercise Price that
became effective on such record date shall be canceled as of the close
of business on such record date, and thereafter the applicable
Exercise Price shall be adjusted as of the time of actual payment of
such dividend.
b. Adjustment for Other Dividends and Distributions. If
---------------------------------------------------
the Corporation at any time or from time to time after the Original
Issue Date makes, or fixes a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in securities of the Corporation other than
shares of Common Stock, in each such event provision shall be made so
that the holder of the Warrant shall receive upon Exercise thereof, in
addition to the number of shares of Common Stock receivable thereupon,
the amount of other securities of the Corporation that it would have
received had its Warrant been exercised for Common Stock on the date
of such event and had it thereafter, during the period from the date
of such event to and including the exercise date, retained such
securities receivable by them as aforesaid during such period, subject
to all other adjustments called for during such period under this
Section 3 with respect to the rights of the holder of the Warrant or
with respect to such other securities by their terms.
c. Adjustment for Reclassification, Exchange and
-------------------------------------------------
Substitution. If at any time or from time to time after the Original
------------
Issue Date, the Common Stock issuable upon the exercise of the Warrant
is changed into the same or a different number of shares of any class
or classes of stock, whether by recapitalization, reclassification or
otherwise (other than a subdivision or combination of shares or stock
dividend or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this Section 3), in any such event the
holder of this Warrant shall have the right thereafter to exercise
this Warrant for the kind and amount of stock and other securities and
property receivable upon such recapitalization, reclassification or
other change by holders of the maximum number of shares of Common
Stock into which this Warrant could have been exercised immediately
prior to such recapitalization, reclassification or change, all
subject to further adjustment as provided herein or with respect to
such other securities or property by the terms thereof.
d. Certificate as to Adjustments. Upon the occurrence of
-------------------------------
each adjustment or readjustment of the Exercise Prices pursuant to
this Section 3, the Corporation at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof
and furnish to each holder of a Warrant, a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based. The Corporation shall,
upon the written request at any time of any holder of a Warrant,
furnish or cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the
Exercise Prices at the time in effect,
4
and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the
exercise of the Warrant.
SECTION 4. Adjustments of Number of Shares Issuable Upon Exercise. Upon
each adjustment of the Exercise Price pursuant to Section 3 hereof, the holder
of this Warrant shall thereafter (until another such adjustment) be entitled to
purchase, at the adjusted Exercise Price in effect on the date purchase rights
under this Warrant are exercised, the number of Shares of Common Stock,
calculated to the nearest number of shares, determined by (a) multiplying the
number of Shares of Common Stock purchasable hereunder immediately prior to the
adjustment of the Exercise Price by the Exercise Price in effect immediately
prior to such adjustment, and (b) dividing the product so obtained by the
adjusted Exercise Price in effect on the date of such exercise.
SECTION 5. Fractional Interests. Except as provided in Section 1, if any
fraction of a Share is issuable on the exercise of this Warrant, the Company
shall be required to and shall issue such fractional Share on the exercise of
this Warrant.
SECTION 6. No Rights as Shareholder. Nothing contained in this Warrant
shall be construed as conferring upon the Holder or his transferees any rights
as a shareholder of the Company.
SECTION 7. Successors. All the covenants and provisions of this Warrant by
or for the benefit of the Company or the Holder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 8. Applicable Law. This Warrant shall be deemed to be a contract
made under and construed in accordance with the laws of the State of Delaware.
SECTION 9. Benefits. This Warrant shall not be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or claim under this Warrant, and this Warrant shall be
for the sole and exclusive benefit of the Company and the Holder.
SECTION 10. Transferability. This Warrant shall not be transferrable by the
Holder for a period of one (1) year from the date of issue. Thereafter, no
transfer of this Warrant shall be effective unless and until registered on the
books of the Company maintained for such purpose, and the Company may treat the
registered holder as the absolute owner of this Warrant for all purposes and the
person entitled to exercise the rights represented hereby. No such transfer of
this Warrant shall be effective unless prior to any transfer or attempted
transfer of Warrant, or any interest herein, the Holder shall give the Company
written notice of his or its intention to make such transfer, describing the
manner of the intended transfer and the proposed transferee. Promptly after
receiving such written notice, the Company shall present copies thereof to
counsel for the Company and to any special counsel designated by the Holder. If
in the opinion of each of such counsel the proposed transfer may be effected
without registration of either the Warrant or the Common Stock purchasable
hereunder under applicable federal or state securities laws (or other applicable
jurisdiction's law), the Company, as promptly as practicable, shall notify the
Holder of such opinions, whereupon this Warrant (or the interests therein)
proposed to be transferred shall be transferred in accordance with the terms of
said notice. The Company shall
5
not be required to effect any such transfer prior to the receipt of such
favorable opinion(s); provided, however, the Company may waive the requirement
that Holder obtain an opinion of counsel, in its sole and absolute discretion.
As a condition to such favorable opinion, counsel for the Company may require an
investment letter to be executed by the proposed transferee. Any transferee of
this Warrant, by acceptance hereof, agrees to be bound by all of the terms and
conditions of this Warrant.
SECTION 11. Investment Representation and Legend. Each Holder by acceptance
of this Warrant represents and warrants to the Company that the Holder is
acquiring this Warrant, and unless at the time of exercise a registration
statement under the Securities Act of 1933, as amended, is effective with
respect to the Shares, that upon the exercise hereof the Holder will acquire the
Shares issuable upon such exercise, for investment purposes only and not with a
view towards the resale or other distribution thereof.
The Holder by acceptance of this Warrant agrees that the Company may affix,
unless the Shares issuable upon exercise of this Warrant are registered at the
time of exercise, the following legend to certificates for Shares upon the
exercise of this Warrant:
The securities represented by this certificate have not been registered
under the Securities Act of 1933 (the "Securities Act"), and have not been
registered under any state or other jurisdiction's securities law, and may not
be offered, sold, transferred, encumbered or otherwise disposed of unless there
is an effective registration statement under the Securities Act and any
applicable state securities laws, or other jurisdiction, relating thereto or
unless, in the opinion of counsel acceptable to the Company, such registration
is not required.
IN WITNESS WHEREOF, the Company has duly authorized the issuance of this
Warrant as of November 12, 2002.
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
By: ______________________________
Name: ____________________________
Title: ___________________________
6
SCHEDULE A
▇▇▇▇▇▇▇▇.▇▇▇, INC.
EXERCISE FORM
▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
Suite 1400
Ft. Lauderdale, FL 33301
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the attached Warrant for, and to purchase thereunder, ____ of the
Shares provided for therein (originally, _____ of the ___________ Shares, and as
presently adjusted pursuant to Section 3 thereof, ______ of the _____Shares),
and requests that certificates for such Shares be issued in the name of the
undersigned and addressed as follows:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
(Please Print Name, Address, and
Social Security or Tax Identification Number)
Dated: ________________, 20___.
Name of Warrantholder: __________________________________________________
(Must be the same as that on the books and records
of the Company)
Signature:
__________________________________________________