CLASS "A"
WARRANT AGREEMENT
This WARRANT AGREEMENT dated as of __________, between Infinity Capital Group,
Inc., a Maryland corporation (the "Company") with its principal place of
business located at ▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and
_________ ("Warrant Holder"), together with any transferee of Warrants or
Warrant Shares, the "Warrant Holders(s)".
WHEREAS, the Company proposes to issue to Warrant Holder in consideration for
his _______ U.S. Dollar loan he made to the Company as evidenced by a Promissory
Note dated _______ which is made a part of herein, common stock purchase
warrants (the "Warrants") to purchase up to _________ shares (the "Warrant
Shares") of the Company's common stock, par value $0.001 per share (the "Common
Stock"), each Warrant entitling the holder thereof to purchase one share of
Common Stock at a redemption price of $0.25 per share.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein and in the Agreement set forth and for other good and valuable
consideration, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue and deliver the
Warrants to Warrant Holders on receipt. The aggregate number of Warrants to be
issued and delivered shall be _________(subject to further limitation as
provided herein). The Warrants shall be exercisable on or before November 15,
2008. The text of each Warrant shall be substantially as set forth in the
Warrant Certificate. 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 future Secretary or an Assistant Secretary
of the Company. A Warrant bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Company shall bind
the Company notwithstanding that such individuals or any of them shall have
ceased to hold such offices prior to the delivery of such Warrant or did not
hold such offices on the date of this Warrant Agreement.
Warrants shall be dated as of the date of execution thereof by the Company
either upon initial issuance or upon division, exchange, substitution or
transfer.
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company hereby represents and warrants as follows:
(i) POWER AND AUTHORITY. The Company has all requisite corporate
power and authority, and has taken all corporate action
necessary, to execute, deliver and perform this Warrant
Agreement, to grant, issue, and deliver the Warrants and to
authorize and reserve for issuance and, upon payment from time to
time of the Exercise Price, to issue and deliver the shares of
Common Stock or other securities issuable upon exercise of the
Warrants. This Warrant Agreement has been duly executed and
delivered by the Company.
(ii) RESERVATION, ISSUANCE AND DELIVERY OF COMMON STOCK. There have
been reserved for issuance, and the Company shall at all times
1
keep reserved, out of the authorized and unissued shares of
Common Stock, a number of shares sufficient to provide for the
exercise of the rights of purchase represented by the Warrants,
and such shares, when issued in accordance with the terms of the
Warrants and of this Warrant Agreement, will be legally and
validly issued, fully paid and non- assessable and will be free
of any preemptive rights of shareholders or any restrictions.
(b) The Warrant Holder hereby represents and warrants as follows:
(i) ACCREDITED INVESTOR. The Warrant Holder is an "accredited
investor" within the meaning of Rule 501 under Regulation D
promulgated under the Securities Act, is experienced in
evaluating investments in companies such as the Company, has such
knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of its investment
and has the ability to bear the entire economic risk of its
investment. The Warrant Holder has made its own evaluation of its
investment in the Warrants, based upon such information as is
available to it and without reliance upon the Company or any
other person or entity, and the Warrant Holder agrees that
neither the Company nor any other person or entity has any
obligation to furnish any additional information to the Warrant
Holder except as expressly set forth herein.
3. CONDITIONS PRECEDENT. Warrant Holder's obligations hereunder shall be subject
to satisfaction of the following conditions:
(a) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Warrant Agreement and the
Warrants and all other legal matters relating to this Warrant
Agreement, the Warrants and the transactions contemplated hereby shall
be satisfactory in all respects to Warrant Holder, in their reasonable
judgment, and the Company shall have furnished to Warrant Holder all
documents and information that they may reasonably request to enable
them to pass judgment upon such matters.
(b) There shall have been duly tendered to Warrant Holder or upon the
order of Warrant Holder a certificate or certificates representing the
Warrants.
4. REGISTRATION. The Warrants shall be numbered and shall be registered on the
books of the Company (the "Warrant Register") as they are issued. The Warrants
shall be registered initially in such names and such denominations as Warrant
Holder has specified to the Company.
5. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon transfer
set forth in this Warrant Agreement, each Warrant certificate may be exchanged
at the option of the Warrant Holder thereof for another certificate or
certificates of different denominations entitling the Warrant Holder thereof to
purchase upon surrender to the Company or its duly authorized agent a like
aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle such Warrant Holder to purchase. Any Warrant Holder
desiring to exchange a Warrant certificate or certificates shall make such
request in writing delivered to the Company, and shall surrender, properly
endorsed, the certificate or certificates to be so exchanged. Thereupon, the
2
Company shall execute and deliver to the person entitled thereto a new Warrant
certificate or certificates, as the case may be, as so requested. Any Warrant
issued upon exchange, transfer or partial exercise of the Warrants shall be the
valid obligation of the Company, evidencing the same generic rights and entitled
to the same generic benefits under this Warrant Agreement as the Warrants
surrendered for such exchange, transfer or exercise.
6. TRANSFER OF WARRANTS. Subject to the provisions of Section 14 hereof, the
Warrants shall be transferable only on the Warrant Register upon delivery to the
Company of the Warrant certificate or certificates duly endorsed by the Warrant
Holder or by his duly authorized attorney-in-fact or legal representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney- in-fact, the original power
of attorney, duly approved, or an official copy thereof, duly certified, shall
be deposited with the Company. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited with the
Company in its discretion. Upon any registration of transfer, the Company shall
deliver a new Warrant or Warrants to the person entitled thereto.
7. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the Warrant Holder thereof to purchase one share
of Common Stock during the time period and subject to the conditions
set forth in the respective Warrant Certificates at an exercise price
of $0.25 per share, subject to adjustment in accordance with Section
12 hereof (the "Exercise Price"). Each Warrant terminates on the fifth
anniversary of the date on which such Warrant becomes exercisable in
accordance with its terms (the "Expiration Date").
(b) The Exercise Price and the number of shares issuable upon exercise of
Warrants are subject to adjustment upon the occurrence of certain
events, pursuant to the provisions of Section 12 of this Warrant
Agreement. Subject to the provisions of this Warrant Agreement, each
Warrant Holder shall have the right, which may be exercised as
expressed in such Warrants, to purchase from the Company (and the
Company shall issue and sell to such Warrant Holder) the number of
fully paid and nonassessable shares of Common Stock specified in such
Warrants, upon surrender to the Company, or its duly authorized agent,
of such Warrants, with the purchase form on the reverse thereof duly
filled in and signed, and upon payment to the Company of the Exercise
Price, as adjusted in accordance with the provisions of Section 12 of
this Warrant Agreement for the number of shares in respect of which
such Warrants are then exercised. The Warrant Holder shall pay the
Exercise Price in cash, by certified or official bank check payable to
the order of the Company. The Company at its expense shall issue and
cause to be delivered with all reasonable dispatch to or upon the
written order of the Warrant Holder and in such name or names as the
Warrant Holder may designate, a certificate or certificates for the
number of full shares of Common Stock so purchased upon the exercise
of such Warrants, together with cash, as provided in Section 12 of
this Warrant Agreement, in respect of any fraction of a share of such
stock otherwise issuable upon such surrender. 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 Exercise Price. The rights of purchase
represented by the Warrants shall be exercisable, at the election of
the Warrant Holders thereof, either in full or from time to time in
part and, in the event that any Warrant is exercised in respect of
3
less than all of the shares purchasable on such exercise at any time
prior to the Expiration Date, a new certificate evidencing the
remaining Warrant or Warrants will be issued.
(c) So long as the Company satisfies the continued listing requirements of
the NASDAQ OTC: BB, the exercise rights set forth above shall be
limited so that upon the exercise of the Warrants, the Warrant
Holder's aggregate ownership of the Company will be less than 20% of
the shares of Common Stock outstanding on the date of issuance of the
Warrants; provided that such limitation shall cease and this Section
7(c) shall become null and void upon the approval of the issuance of
the Warrants by the shareholders of the Company, the National
Association of Securities Dealers, Inc. or upon such other event as
shall allow the conversion or exercise or both, as appropriate,
without violating the applicable requirements of the National
Association of Securities Dealers.
8. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that if any
share of Common Stock required to be reserved for purposes of exercise or
conversion of Warrants require, under any federal or state law or applicable
governing rule or regulation of any securities exchange, registration with or
approval of any governmental authority, or listing on any such securities
exchange, before such shares may be issued upon exercise, the Company will use
its commercially reasonable efforts to cause such shares to be duly registered,
approved or listed on the relevant securities exchange, as the case may be.
9. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants and any securities issued pursuant to Section 12 hereof; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue or delivery of
any Warrants or certificates for Warrant Shares and any securities issued
pursuant to Section 12 hereof in a name other than that of the Warrant Holder of
such Warrants.
10. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant, or
in lieu of and in substitution for the Warrant lost, stolen, or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest.
11. RESERVATION OF WARRANT SHARES; PURCHASE AND CANCELLATION OF WARRANTS. The
Company shall at all times reserve, out of the authorized and unissued shares of
Common Stock, a number of shares sufficient to provide for the exercise of the
rights of purchase represented by the Warrants, and the transfer agent for the
Common Stock ("Transfer Agent") 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 until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this Warrant Agreement on file with the Transfer Agent 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
Company will supply the Transfer Agent and any such subsequent transfer agent
with duly executed stock certificates for such purpose and will itself provide
or otherwise make available any cash which may be issuable as provided by
4
Section 13 of this Warrant Agreement. The Company will furnish to the Transfer
Agent and any such subsequent transfer agent a copy of all notices of
adjustments, and certificates related thereto, transmitted to each Warrant
Holder pursuant to Section 12.3 hereof. All warrants surrendered in the exercise
of the rights thereby evidenced shall be canceled, and such canceled Warrants
shall constitute sufficient evidence of the number of shares of stock which have
been issued upon the exercise of such Warrants (subject to adjustment as herein
provided). No shares of stock shall be subject to reservation in respect of the
Warrants subsequent to the Expiration Date except to the extent necessary to
comply with the terms of this Warrant Agreement.
12. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as hereafter defined.
12.1. MECHANICAL ADJUSTMENTS. The number of Warrant Shares issuable upon
the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend to holders of Common
Stock in shares of Common Stock or make a distribution to holders of
Common Stock in shares of Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a larger number of shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including
any such reclassification in connection with a consolidation or merger
in which the Company is the surviving corporation), the number of
Warrant Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the Warrant Holder shall be
entitled to receive the kind and number of Warrant Shares or other
securities of the Company which he would have owned or have been
entitled to receive after the happening of any of the events described
above, had such Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto
regardless of whether the Warrants are exercisable at the time of the
happening of such event or at the time of any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(b) In case the Company shall issue rights, options, or warrants to
holders of its outstanding Common Stock, without any charge to such
holders, entitling them to subscribe for shares of Common Stock at a
price per share which is lower at the record date mentioned below than
the Exercise Price, then (i) the Exercise in effect immediately prior
to such issuance shall immediately be reduced to the price that is
equivalent to such consideration received by the Company upon such
issuance and (ii) the number of Warrant Shares thereafter purchasable
upon the exercise of each Warrant shall be increased in direct
proportion to the increase in the number of shares of Common Stock
5
outstanding on a fully diluted basis immediately prior to such
issuance; provided that if such shares of Common Stock, options or
other convertible securities are issued for consideration per share
less than the Exercise Price at the date of such issue or sale, the
number of shares of Common Stock that immediately prior to such
issuance the Warrant Holder shall have been entitled to purchase
pursuant to this Warrant shall be increased to the greater of (i) that
number of shares of Common Stock that immediately prior to such
issuance the Warrant Holder shall have been entitled to purchase
pursuant to this Warrant multiplied by a fraction, the numerator of
which is the Exercise Price and the denominator of which is such
consideration per share, and (ii) the number of shares of Common Stock
otherwise calculated under this Section 12.1. Such adjustment shall be
made whenever such rights, options, or warrants are issued, and shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such rights,
options, or warrants; provided that this Section 12.1(b) shall expire
and be of no force and effect on or after November 15, 2008.
(c) In case the Company shall distribute to holders of its shares of
Common Stock evidences of its indebtedness or assets (including cash
dividends or other cash distributions) or rights, options, or
warrants, or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Common Stock (excluding
those referred to in paragraph (b) above), then in each case the
number of Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon the exercise of each Warrant by a
fraction, of which the numerator shall be the then current market
price per share of Common Stock (as determined in accordance with
paragraph (e) below) on the date of such distribution, and of which
the denominator shall be the then current market price per share of
Common Stock, less the then fair value (as determined in good faith by
the Board of Directors of the Company) of the portion of the assets or
evidences of indebtedness so distributed or of such subscription
rights, options, or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made, and shall become
effective on the date of distribution retroactive to the record date
for the determination of stockholders entitled to receive such
distribution.
In the event of distribution by the Company to holders of its shares
of Common Stock of stock of a subsidiary or securities convertible
into or exercisable for such stock, then in lieu of an adjustment in
the number of Warrant Shares purchasable upon the exercise of each
Warrant, the Warrant Holder, upon the exercise thereof at any time
after such distribution, shall be entitled to receive from the
Company, such subsidiary, or both, as the Company shall determine, the
stock or other securities to which such Warrant Holder would have been
6
entitled if such Warrant Holder had exercised such Warrant immediately
prior thereto regardless of whether the Warrants are exercisable at
such time, all subject to further adjustment as provided in this
subsection 12.1; provided, however, that no adjustment in respect of
dividends or interest on such stock or other securities shall be made
during the term of a Warrant or upon the exercise of a Warrant;
provided further that this Section 12.1(c) shall expire and be of no
force and effect on or after November 15, 2008.
(d) For the purpose of any computation under paragraphs (b) and (c) of
this Section, the current market price per share of Common Stock at
any date shall be the average of the daily closing prices of the
Company's Common Stock, for five consecutive trading days ending one
trading day before the date of such computation. The closing price for
each day shall be the last such reported sales price regular way or,
in case no such reported sale takes place on such day, the average of
the closing bid and asked prices regular way for such day, in each
case on the principal securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if not listed or
admitted to trading, the average of the closing bid and asked prices
of the Common Stock in the over-the-counter market as reported by
NASDAQ or any comparable system. In the absence of one or more such
quotations, the Board of Directors of the Company shall determine the
current market price, in good faith, on the basis of such quotations
as it considers appropriate. Notwithstanding the foregoing, for the
purpose of any calculation under paragraph (c) above (A) with respect
to any issuance of options under the Company's employee or director
compensation stock option plans as in effect or as adopted by the
Board of Directors of the Company on the date hereof, the term
"current market price", in such instances, shall mean the fair market
price on the date of the issuance of any such option determined in
accordance with the Company's employee compensation stock option plans
as in effect or adopted by the Board of Directors of the Company on
the date hereof; and (B) with respect to any issuances of Common Stock
(or rights, options, warrants, or convertible securities containing
the right to subscribe for or purchase shares of Common Stock) in
connection with bona fide corporate transactions (other than issuances
in such transactions for cash or similar consideration), the term
"fair market price" shall mean the fair market price per share as
determined in arm's-length negotiations by the Company and such other
parties (other than affiliates or subsidiaries of the Company) to such
transactions as reflected in the definitive documentation with respect
thereto, unless such determination is not reasonably related to the
closing market price on the date of such determination.
(f) In any case in which this Section 12.1 shall require that any
adjustment in the number of Warrant Shares be made effective as of
immediately after a record date for a specified event, the Company may
elect to defer until the occurrence of the event the issuing to the
holder of any Warrant exercised after that record date the shares of
Common Stock and other securities of the Company, if any, issuable
7
upon the exercise of any Warrant over and above the shares of Common
Stock and other securities of the Company, if any, issuable upon the
exercise of any Warrant prior to such adjustment; provided, however,
that the Company shall deliver to such Warrant Holder a due ▇▇▇▇ or
other appropriate instrument evidencing the holder's right to receive
such additional shares or securities upon the occurrence of the event
requiring such adjustment.
(g) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Warrant Shares
purchasable upon the exercise of each Warrant; provided, however, that
any adjustments which by reason of this paragraph (g) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest
one-thousandth of a share.
(h) Whenever the number of Warrant Shares purchasable upon the exercise of
each Warrant is adjusted, as herein provided, the Warrant Price
payable upon the exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of such Warrant immediately prior
to such adjustment, and of which the denominator shall be the number
of Warrant Shares purchasable immediately.
(i) No adjustment in the number of Warrant Shares purchasable upon the
exercise of each Warrant need be made under paragraphs (b) and (c) if
the Company issues or distributes to each Warrant Holder the rights,
options, warrants, or convertible or exchangeable securities, or
evidences of indebtedness or assets referred to in those paragraphs
which each Warrant Holder would have been entitled to receive had the
Warrants been exercised prior to the happening of such event or the
record date with respect thereto regardless of whether the Warrants
are exercisable at the time of the happening of such event or at the
time of any record date with respect thereto. No adjustment need be
made for a change in the par value of the Warrant Shares.
(j) For the purpose of this Section 12.1, the terms "shares of Common
Stock" shall mean (i) the class of stock designated as the Common
Stock of the Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or reclassifications
of such shares consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. In the event
that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Warrant Holders shall become entitled to
purchase any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so purchasable
upon exercise of each Warrant and the Exercise Price of such
8
securities shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in paragraphs
(a) through (i), inclusive, above, and the provisions of Section 7 and
Section 12.2 through 12.5, inclusive, with respect to the Warrant
Shares, shall apply on like terms to any such other securities.
(k) Upon the expiration of any rights, options, warrants, or conversion or
exchange privileges, if any thereof shall not have been exercised, the
Warrant Price and the number of shares of Common Stock purchasable
upon the exercise of each warrant shall, upon such expiration, be
readjusted and shall thereafter be such as it would have been had it
been originally adjusted (or had the original adjustment not been
required, as the case may be) as if (A) the only shares of Common
Stock so issued were the shares of Common Stock, if any, actually
issued or sold upon the exercise of such rights, options, warrants, or
conversion or exchange rights and (B) such shares of Common Stock, if
any, were issued or sold for the consideration actually received by
the Company upon such exercise plus the aggregate consideration, if
any, actually received by the Company for the issuance, sale or grant
of all such rights, options, warrants, or conversion or exchange
rights whether or not exercised; provided, however, that no such
readjustment shall have the effect of increasing the Warrant Price or
decreasing the number of Warrant Shares by an amount in excess of the
amount of the adjustment initially made with respect to the issuance,
sale or grant of such rights, options, warrants, or conversion or
exchange rights.
12.2.VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its option,
at any time during the term of the Warrants, reduce the then current Exercise
Price to any amount determined appropriate by the Board of Directors of the
Company.
12.3. NOTICE OF ADJUSTMENT. When the number of Warrant Shares purchasable
upon the exercise of each Warrant or the Exercise Price of such Warrant Shares
is adjusted, as herein provided, the Company shall promptly mail by first class,
postage prepaid, to each Warrant Holder notice of such adjustment or adjustments
and a certificate of a firm of independent public accountants selected by the
Board of Directors of the Company (who may be the regular accountants employed
by the Company) setting forth the number of Warrant Shares purchasable upon the
exercise of each Warrant and the Exercise Price of such Warrant Shares after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
Such certificate, absent manifest error, shall be conclusive evidence of the
correctness of such adjustment.
12.4. STATEMENT ON WARRANTS. Even though Warrants heretofore or hereafter
issued may continue to express the same price and number and kind of shares as
are stated in the Warrants initially issuable pursuant to this Warrant
Agreement, the parties understand and agree that such Warrants will represent
rights consistent with any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants.
9
13. FRACTIONAL INTERESTS. The Company shall not be required to issue fractional
Warrant Shares on the exercise of Warrants. If more than one Warrant shall be
presented for exercise in full at the same time by the same Warrant Holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 13, be issuable
on the exercise of any Warrant (or specified portion, thereof), the Company
shall pay an amount in cash equal to the closing price for one share of the
Common Stock on the trading day immediately preceding the date the Warrant is
presented for exercise, multiplied by such fraction.
14. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Warrant Holder represents and
warrants to the Company that it will not dispose of the Warrant or Warrant
Shares except pursuant to (i) an effective registration statement, or (ii) an
applicable exemption from registration under the Securities Act of 1933 (the
"Act"). In connection with any sale by Harmonic pursuant to clause (ii) of the
preceding sentence, it shall furnish to the Company an opinion of counsel
reasonably satisfactory to the Company to the effect that such exemption from
registration is available in connection with such sale.
15. CERTIFICATE TO BEAR LEGENDS. The Warrants shall be subject to a
stop-transfer order and the certificate or certificates therefor shall bear the
following legend by which each Warrant Holder shall be bound:
"THE WARRANTS REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY OTHER STATE. THE WARRANTS REPRESENTED HEREBY AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED, EXCEPT
PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (II) AN APPLICABLE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT. ANY SALE PURSUANT TO CLAUSE (II) OF THE
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH
SALE."
The Warrant Shares or other securities issued upon exercise of the Warrants
shall, unless issued pursuant to an effective registration statement, be subject
to a stop-transfer order and the certificate or certificates evidencing any such
Warrant Shares or securities shall bear the following legend by which the
Warrant Holder thereof shall be bound:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED,
EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (II) AN APPLICABLE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT. ANY SALE PURSUANT TO CLAUSE (II) OF THE
10
PRECEDING SENTENCE MUST BE ACCOMPANIED BY AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
EXEMPTION FROM REGISTRATION IS AVAILABLE IN CONNECTION WITH SUCH
SALE."
16. REGISTRATION RIGHTS. The Warrant Shares shall be subject to the registration
rights set forth in Section 4.1.11 of the Note and Warrant Purchase Agreement.
17. NO RIGHTS AS STOCKHOLDERS; NOTICE TO WARRANT HOLDERS. Nothing contained in
this Warrant Agreement or in any of the Warrants shall be construed as
conferring upon the Warrant Holders or their transferees the right to vote or to
receive dividends or to consent or to receive notice as stockholders in respect
of any meeting of stockholders for the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company.
18. NOTICES. Any notice pursuant to this Warrant Agreement to be given or made
by the holder of any Warrant or Warrant Shares to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Infinity Capital Group, Inc. ▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Chairman of the Board and
President
Warrant Holder:
Notices or demands authorized by this Warrant Agreement to be given or made to
or on the Warrant Holder of any Warrant or Warrant Shares shall be sufficiently
given or made (except as otherwise provided in this Warrant Agreement) if sent
by registered mail, return receipt requested, postage prepaid, addressed to such
Warrant Holder at the address of such Warrant Holder as shown on the Warrant
Register or the Common Stock Register, as the case may be.
21. GOVERNING LAW. THIS WARRANT AGREEMENT, THE WARRANTS AND ALL RELATED
DOCUMENTS SHALL BE DEEMED TO BE CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. ANY DISPUTE HEREUNDER OR UNDER
THE WARRANTS OR RELATED DOCUMENTS SHALL BE DETERMINED EXCLUSIVELY IN ACCORDANCE
WITH SECTION 8.7 OF THE NOTE PURCHASE AGREEMENT.
22. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Holders may from
time to time supplement or amend this Warrant 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 provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Holder may deem necessary or desirable and which shall
not be inconsistent with the provisions of the Warrants and which shall not
adversely affect the interests of the Warrant Holders. Any amendment to this
Warrant Agreement may be effected with the consent of Warrant Holders of at
least a majority of the total then outstanding Warrants (for this purpose
Warrant Shares shall be deemed to be Warrants in the proportion that Warrant
Shares are then issuable upon the exercise of Warrants); provided that any
amendment which shall have the effect of materially adversely affecting the
11
interests of any Warrant Holder shall not be effective with respect to such
Warrant Holder if such Warrant Holder shall not have consented thereto.
23. SURVIVAL OF COVENANTS. All covenants and agreements made herein shall
survive the execution and delivery of this Warrant Agreement and the Warrants
and shall remain in force and effect until the Expiration Date of all Warrants.
24. SUCCESSORS. All representations and warranties of the Company and all
covenants and agreements of this Warrant Agreement by or for the benefit of the
Company or the Warrant Holders shall bind and inure to the benefit of their
respective successors and assigns hereunder.
25. BENEFITS OF THIS WARRANT AGREEMENT. Nothing in this Warrant Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders, any legal or equitable right, remedy, or claim under this
Warrant Agreement, but this Warrant Agreement shall be for the sole and
exclusive benefit of the Company and the holders of the Warrants and Warrant
Shares.
26. CAPTIONS. The captions of the sections and subsections of this Warrant
Agreement have been inserted for convenience and shall have no substantive
effect.
27. COUNTERPARTS. This Warrant Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be
duly executed on the day, month and year first above written.
INFINITY CAPITAL GROUP, INC.
--------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Executive Officer
12