PURCHASERS' WARRANT
Warrant No. _______
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
(COLLECTIVELY, THE "SECURITIES"), HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR HAVE THEY BEEN REGISTERED OR
QUALIFIED UNDER THE SECURITIES LAWS OF ANY U.S. STATE OR TERRITORY. THIS WARRANT
IS BEING OFFERED AND SOLD PURSUANT TO REGULATION S OF THE U.S. SECURITIES AND
EXCHANGE COMMISSION UNDER THE ACT. THE SECURITIES, ARE "RESTRICTED SECURITIES"
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON (AS
DEFINED IN REGULATION S) UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR PURSUANT TO REGULATION S, OR PURSUANT TO OTHER AVAILABLE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT. A HOLDER OF ANY OF THE
SECURITIES MAY NOT ENGAGE IN HEDGING TRANSACTION WITH REGARD TO SUCH SECURITIES
UNLESS IN COMPLIANCE WITH THE ACT.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION
Warrant for the Purchase
of Shares of Common Stock
August __, 2000 __________ Shares
FOR VALUE RECEIVED, ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation., a Nevada corporation
(the "Company"), hereby certifies that ___________________ or other holder
hereof (collectively, the "Holder"), is entitled, subject to the provisions of
this Warrant, to purchase from the Company, at any time or from time to time
beginning on the date hereof, and ending at 5:00 pm, Toronto time, on the fifth
anniversary of the date hereof (the "Exercise Period") __________ fully paid and
nonassessable shares of common stock of the Company, par value $_____ per share
(the "Common Stock") at the exercise price of $ ___________ (the "Exercise
Price"). This Warrant is a Purchasers' Warrant described in and is being issued
pursuant to the Securities Purchase Agreement (the "Agreement") effective
June27, 2000, among the Company, the Lenders named therein, and Thomson
Kernaghan & Co. Limited as Agent (the "Agent"). Capitalized terms not defined in
this Warrant shall have the meanings ascribed to them in the Agreement
For purposes of this Warrant, "Warrant Shares" means the shares of
Common Stock deliverable upon exercise of this Warrant, as adjusted from time to
time. Unless the context requires otherwise all references to Common Stock and
Warrant Shares in this Warrant shall, in the event of an adjustment pursuant to
Section 7 hereof, be deemed to refer also to any securities or property then
issuable upon exercise of this Warrant as a result of such adjustment
Section 1. Exercise of Warrant. (a) This Warrant may be exercised, as a
whole or in part, at any time or from time to time during the Exercise Period
or, if such day is not a Trading Day (as defined in the Agreement), then on the
next succeeding Trading Day. The Holder may exercise this Warrant by telecopying
an executed and completed Notice of Exercise in the form annexed hereto as
Exhibit A (a "Notice of Exercise") to the Company and sending the original by
mail or overnight delivery service; provided however, that the Holder will t.
Each Trading Day on which a Notice of Exercise is telecopied to the Company in
accordance with the provisions hereof shall be deemed an "Exercise Date." Within
three Trading Days after an Exercise Date, the Company will transmit, or
instruct its transfer agent to transmit, the certificates representing the
Warrant Shares issuable upon such exercise to the Holder by express overnight
courier or by electronic transfer. Notices of Exercise and any other notices
given under this Warrant shall be delivered as provided in Section 13.
The Holder will pay the Company the Exercise Price within three (3)
Trading Days after receipt of the Warrant Shares, by check or wire transfer as
the Company shall specify.
If the Company does not deliver the Warrant Shares within five Trading
Days after the Holders send a Notice of Exercise, the, in addition to all other
remedies the Holder may have, the Company shall pay to the Holder, on demand and
in immediately available funds, as liquidated damages for such failure and not
as a penalty, the amounts stated in the following schedule, which liquidated
damages shall begin to accrue on the sixth Trading Day after the Conversion
Date.
Late Payment For Each $10,000
No. Business Days Late of the Warrant Exercise Price
1 $100
2 $200
3 $300
4 $400
5 $500
More than 5 $500 +$200 for each Business Day
Late beyond 5 days from The
Delivery Date
Nothing in this Warrant shall limit the holder's right to seek specific
performance of the Company's obligations hereunder and other remedies and
damages for the Company's actions or inactions resulting in the transfer agent's
failure to issue and deliver the Warrant Shares to the Holder.
(b) Cashless Exercise. Notwithstanding the foregoing, in lieu of paying
the Exercise Price, the Holder may, by designating a "cashless" exercise on the
Purchase Form and surrendering a part of the Warrant having an aggregate Spread
equal to the aggregate Exercise Price of the part Warrant being exercised,
acquire a number of Warrant Shares equal to (i) the difference between (x) the
Current Market Value of the Common Stock (defined below) and (y) the Exercise
Price, (ii) multiplied by the number of shares of Common Stock purchasable under
the portion of the Warrant tendered to the Company, and (iii) divided by the
Market Value of the Company's Common Stock. "Spread" means the Current Market
Value of the Warrant Shares issuable upon exercise of such part of the Warrant
less the Exercise Price of such part of the Warrant, in each case as adjusted as
provided herein.
(c) The Company shall pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of the
Warrant Shares.
(d) Limitation on Right and Power to Exercise. Any provision in this
Warrant, the Securities Purchase Agreement or any other document to the contrary
not withstanding, the Holder shall not have the right or power to exercise this
warrant, either in whole or in part, if, and any attempt to do so shall be void,
after having given effect to such exercise, the Holder shall be or shall be
deemed to be the beneficial owner of 10% or more of the then outstanding Common
Stock within the meaning or for the purposes of Section 13(d) or 13(g) of the
U.S. Securities Exchange Act of 1934, as amended, or as the term "beneficial
owner" is defined in Rule 13d-3 of the U.S. Securities and Exchange Commission
or otherwise.
Section 2. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company or other property from time to time issuable upon exercise of this
Warrant. All such shares shall be duly authorized and, when issued upon such
exercise in accordance with the terms of this Warrant, shall be validly issued,
fully paid and nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale (other than any
restrictions on sale pursuant to applicable federal and state securities laws)
and free and clear of all preemptive rights.
Section 3. Fractional Shares. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of this Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 4, be issuable on the exercise of this Warrant (or specified portion
thereof), the Company shall pay an amount in cash calculated by it to be equal
to the then Current Market Value (as hereinafter defined) per share of Common
Stock multiplied by such fraction computed to the nearest whole cent. For the
purposes of any computation under this Warrant, the Current Market Value per
share of Common Stock or of any other equity security (herein collectively
referred to as a "security") at the date herein specified shall be:
(i) if the security is not registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the "Current Market Value" per share
of the security shall be determined in good faith by the Board of Directors of
the Company, or
(ii) if the security is registered under the Exchange Act, the "Current
Market Value" per share of the security shall be deemed to be the average of the
daily market prices of the security for the 10 consecutive trading days
immediately preceding the day as of which Current Market Value is being
determined or, if the security has been registered under the Exchange Act for
less than ten (10) consecutive Trading Days before such date, then the average
of the daily market prices for all of the trading days before such date for
which daily market prices are available. The market price for each such trading
day shall be: (A) in the case of a security listed or admitted to trading on any
securities exchange, the Closing Bid Price on the primary exchange on which the
Common Stock is then listed, on such day, (B) in the case of a security not then
listed or admitted to trading on any securities exchange, the Closing Bid Price
reported by Bloomburg LP on such day, (C) in the case of a security not then
listed or admitted to trading on any securities exchange and as to which no such
reported sale price or bid and asked prices are available, the reported high bid
on such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New York,
customarily published on each business day, designated by the Holder, or if
there shall be no bid prices on such day, the high bid price, as so reported, on
the most recent day (not more than 10 days prior to the date in question) for
which prices have been so reported, and (D) if there are no bid prices reported
during the 10 days prior to the date in question, the Current Market Value of
the security shall be determined as if the security were not registered under
the Exchange Act.
Section 4. Exchange, Transfer, Assignment or Loss of Warrant.
(a) This Warrant is exchangeable, without expense, at the option of the
Holder, upon presentation and surrender hereof to the Company or at the office
of its stock transfer agent or warrant agent, if any, for other warrants of
different denomination, entitling the Holder thereof to purchase in the
aggregate the same number of Warrant Shares and otherwise carrying the same
rights as this Warrant.
(b) This Warrant may be divided or combined by the Holder with other
warrants that carry the same rights upon presentation hereof at the office of
the Company or at the office of its stock transfer agent or warrant agent, if
any, together with a written notice specifying the names and denominations in
which new warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any warrants into which this Warrant may be
divided or for which it may be exchanged.
(c) Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
Section 5. Restrictions on Issuance of Securities. So long as this
Warrant is outstanding, the Company will not issue, or permit any Subsidiary to
issue, any common stock or other equity securities, or any other stock, option,
warrant, right or other instrument that is convertible into or exercisable or
exchangeable for common stock or other equity securities, except for (i)
securities issued pursuant to the Securities Purchase Agreement (which includes
Warrant Shares), (ii) securities of a Subsidiary that are issued to the Company;
and (iii) securities sold and options granted to directors, officers and
employees of the Company pursuant to bona fide employee benefit plans; provided,
however, that the Company may issue such securities with the prior written
consent of the Holder, which consent the Holder agrees not to unreasonably
withhold.
Section 6. Reclassification, Reorganization, Consolidation or Merger.
In the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company or in the event of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which merger the Company is the continuing corporation and that
does not result in any reclassification, capital reorganization or other change
of outstanding shares of Common Stock of the class issuable upon exercise of
this Warrant) or in the event of any sale, lease, transfer or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, the Company shall, as a condition precedent to
such transaction, cause effective provisions to be made so that such other
corporation shall assume all of the obligations of the Company hereunder and the
Holder shall have the right thereafter, by exercising this Warrant, to purchase
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, capital reorganization
and other change, consolidation, merger, sale, lease, transfer or conveyance by
a holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such reclassification,
capital reorganization, change, consolidation, merger, sale, lease or
conveyance. Any such provision shall include provision for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 8 shall similarly apply
to successive reclassification, capital reorganizations and changes of shares of
Common Stock and to successive changes, consolidations, mergers, sales, leases,
transfers or conveyances. In the event that in connection with any such capital
reorganization, or reclassification, consolidation, merger, sale, lease,
transfer or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, as a whole or in part, for, or
of, a security of the Company other than Common Stock, any such issue shall be
treated as an issue of Common Stock covered by the provisions of Section 5.
Section 7. Transfer to Comply with the Securities Act. Neither this
Warrant nor any of the Warrant Shares may be offered or sold in the United
States or to a U.S. Person (as defined in Regulation S) unless pursuant to an
effective registration statement under the Act, or pursuant to Regulation S, or
pursuant to other available exemptions from the registration requirements of the
Act. The Holder of this Warrant or any of the Warrant Shares may not engage in
hedging transaction with regard to such securities unless in compliance with the
Act.
Section 8. Availability of Information. So long as any of this Warrant
remains unexercised and this Warrant has not expired, the Company shall comply
with the reporting requirements of Sections 13 and 15(d) of the Exchange Act to
the extent it is required to do so under the Exchange Act, and shall likewise
comply with all other applicable public information reporting requirements of
the Securities and Exchange Commission (including those required to make
available the benefits of Rule 144 under the Securities Act) to which it may
from time to time be subject. The Company shall also cooperate with the Holder
of this Warrant and the Holder of any Warrant Shares in supplying such
information as may be necessary for such holder to complete and file any
information reporting forms currently or hereafter required by the Commission as
a condition to the availability of Rule 144 or any successor rule under the
Securities Act for the sale of this Warrant or the Warrant Shares. The
provisions of this Section 8 shall survive termination of this Warrant, whether
upon exercise of this Warrant in full or otherwise. The Company shall also
provide to holders of this Warrant the same information that it provides to
holders of its Common Stock.
Section 9. Registration Rights. The Company is obligated to register
the shares of Common Stock into which the principal and interest of this
Debenture are convertible pursuant to a Registration Rights Agreement (the
"Registration Rights Agreement") dated June __, 2000, among the Company, the
Holder, other holders of Debentures and the Agent.
Section 10. Successors and Assigns. All the 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, assigns, heirs and personal
representatives.
Section 11. Headings. The headings of sections of this Warrant have
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 12. Amendments. This Warrant may not be amended except by
the written consent of the Company and the Holder.
Section 13. Notices. All notices given under this Agreement and under
the other Transaction Documents shall be in writing, addressed to the parties as
set forth below, or to such other address as a party may specify by notice given
in accordance with this paragraph and shall be effective on the earliest of (i)
the date received, or (ii) if given by facsimile transmittal on the date given
if transmitted before 5:00 p.m. the recipient's time, otherwise it is effective
the next day, or (iii) on the second Trading Day after delivery to a major
international air delivery or air courier service (such as Federal Express or
Network Couriers):
If to the Agent:
Thomson Kernaghan & Co. Ltd.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. V.P.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇▇ ▇▇. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holder
c/o Thomson Kernaghan & Co. Ltd.
as Agent
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. V.P.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (that does not constitute
notice) to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.O. Box 1368
Clearwater, Florida 33757-1368
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
In either case, with a copy (that does not
constitute notice) to:
▇▇▇▇ ▇. ▇▇▇▇
Attorney at Law
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Section 14. Law Governing; Jurisdiction. This Warrant shall be governed
by and construed in accordance with the laws of the Province of Ontario, Canada,
provided however, that if any provision of this Warrant is unenforceable under
the laws of Ontario but is enforceable under the laws of the U.S. State of
Florida, then that provision shall be governed by and construed in accordance
with the laws the State of Florida. The courts of the Province of Ontario,
Canada, shall have jurisdiction and venue for the adjudication of any civil
action between or among any of them arising out of relating to this Debenture.
The Company and the Holder irrevocably consent to such jurisdiction and venue,
and irrevocably waive any claim of forum non conveniens or right to change
venue. The prevailing party in any action or proceeding to enforce or construe
this Warrant is entitled to recover reasonable attorney's fees.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed, as of the day and year first above written.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORPORATION
By _____________________________
President and CEO
Date Signed _______________________
ATTEST:
----------------------
Secretary
NOTICE OF EXERCISE
To: ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation:
The undersigned irrevocably exercises this Warrant for the
purchase of ____________________ shares (subject to adjustment) of Common Stock
of ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation (the "Company"): for this Warrant and agrees to
make payment of $____________________ (the "Exercise Price") through the
following method:
-- such payment of the Exercise Price being in cash or by certified
or official bank check payable to the order of the Company .
or
-- By a "cashless exercise," with payment of the Exercise Price made
by surrendering of such additional part of this Warrant having an
aggregate Spread (as such term is defined in this Warrant) equal
to the aggregate Exercise Price,
all at the Exercise Price and on the terms and conditions specified in this
Warrant, and directs that the shares of Common Stock deliverable upon the
exercise of this Warrant be registered or placed in the name and at the address
specified below and delivered thereto.
Date: ________________, _______
-----------------------------------
(Signature of Owner)1
-----------------------------------
(Street Address)
-----------------------------------
(City) (State or Province) (Postal Code)
-----------------------------------
(Country)
-----------------------------------
(1) The signature must correspond with the name as written upon the face of the
within Warrant in every particular, without alteration or enlargement or any
change whatsoever.
Securities and/or check to be issued to:
Please insert social security or identifying number if U.S. citizen or resident:
Name:
Street Address:
City, State and Zip Code:
Any unexercised part of the Warrant evidenced by the within Warrant to be issued
to:
Please insert social security or identifying number if U.S. citizen or resident:
Name:
Street Address:
City, State and Zip Code:
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the
within Warrant hereby sells, assigns, and transfers unto the Assignee(s) named
below (including the undersigned with respect to any part of the Warrant not
being assigned hereby) all of the right of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock set forth below:
Name of Assignee Address of Assignee Social Security Number of
or Other Shares of
Identifying Common Stock
Number of Assigned to
Assignee Assignee
and does hereby irrevocably constitute and appoint ______________________ as the
undersigned's attorney to make such transfer on the books of
______________________ ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Corporation maintained for that purpose,
with full power of substitution in the premises.
Date: ______________, ____
--------------------------------
(Signature of Owner)1
--------------------------------
(Street Address)
--------------------------------
(City) (State) (Zip Code)
--------
(1) The signature must correspond with the name as written upon the face of
the within Warrant in every particular, without alteration or
enlargement or any change whatever.