1
EXHIBIT 10.02
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON THE
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
Warrant No. 129906 Number of Shares: 25,000
(subject to adjustment)
Date of Issuance: December 29, 1999
ESAT, INC.
Common Stock Purchase Warrant
(Void after December 29, 2004)
eSat, Inc., a Nevada corporation (the "Company"), for value received,
hereby certifies that ▇▇▇▇▇▇▇ & Associates, Inc. or its registered assigns (the
"Registered Holder"), is entitled, subject to the terms set forth below, to
purchase from the Company, at any time or from time to time on or after the date
of issuance and on or before December 29, 2004 at not later than 5:00 pm at
Fountain Valley, California, 25,000 shares of Common Stock, $.001 par value per
share (the "Common Stock"), of the Company. The shares purchasable upon exercise
of this Warrant, and the Purchase Price per share (defined below), each as
adjusted from time to time pursuant to the provisions of this Warrant, are
hereinafter referred to as the "Warrant Shares" and the "Purchase Price,"
respectively.
1. Exercise.
a. This Warrant may be exercised on or before the expiration date
of December 29, 1999 by the Registered Holder, in whole or in part, by
surrendering this Warrant, with the purchase form appended hereto as Exhibit I
duly executed by such Registered Holder or by such Registered Holder's duly
authorized attorney, at the principal office of the Company, or at such other
office or agency as the Company may designate, accompanied by payment in full,
in lawful money of the United States, of the Purchase Price payable in respect
of the number of Warrant Shares purchased upon such exercise. For purposes
hereof, the Purchase Price per share shall be $3.139.
b. Notwithstanding any provisions herein to the contrary, if the
Fair Market Value of one share of Common Stock is greater than the Purchase
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, the Registered Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise and notice of such
election in which event the Company shall issue to the Registered Holder the
number of shares of Common Stock computed using the following formula:
2
Y (A-B)
X = -------
A
Where X = the number of shares of Common Stock to be issued
to the Registered Holder
Y = the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the
Warrant being canceled (at the date of such
calculation)
A = the Fair Market Value of one share of the
Company's Common Stock (at the date of such
calculation)
B = Purchase Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, if the Common Stock is listed or
quoted on a national securities exchange, the Nasdaq Stock Market, or another
nationally recognized exchange or trading system as of the Exercise Date, the
Fair Market Value per share of the Common Stock shall be deemed to be the
average of the last reported sales price per share of Common Stock thereon for
the five trading days immediately preceding the Exercise Date; provided,
however, that if no such price is reported during such five-day period, or if
the Common Stock is not listed or quoted on a national securities exchange, the
Nasdaq Stock Market, or another nationally recognized exchange or trading system
as of the Exercise Date, the Fair Market Value per share of Common Stock shall
be deemed to be the amount most recently determined by the Board of Directors to
represent the fair market value per share of the Common Stock (including without
limitation a determination for purposes of granting Common Stock options or
issuing Common Stock under an employee benefit plan of the Company); and upon
request of the Registered Holder, the Board of Directors (or a representative
thereof) shall promptly notify the Registered Holder of the Fair Market Value
per share of Common Stock. Notwithstanding the foregoing, if the Board of
Directors has not made such a determination within the three-month period prior
to the Exercise Date, then (A) the Fair Market Value per share of Common Stock
shall be the amount next determined by the Board of Directors to represent the
fair market value per share of the Common Stock (including without limitation a
determination for purposes of granting Common Stock options or issuing Common
Stock under an employee benefit plan of the Company), (B) the Board of Directors
shall make such a determination within 10 days of a request by the Registered
Holder that it do so, and (C) the exercise of this Warrant pursuant to
subsection 1.b. shall be delayed until such determination is made.
c. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsections
1.a. and 1.b. above. At such time, the person or persons in whose name or names
any certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection 1.d. below shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates.
d. As soon as practicable after the exercise of this Warrant in
full or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated
2
3
the date hereof) of like tenor, calling in the aggregate on the face or faces
thereof for the number of Warrant Shares equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise (and in the case of exercise under the net exercise provision of
Subsection 1.b., minus the number of shares underlying the Warrant which were
surrendered in accordance therewith).
2. Adjustments.
a. If outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced. In the event of a
financing of the Company within 2 years of the date of this warrant, for a
consideration per share on a fixed price or a formula basis, less than the
Purchase Price, the Purchase Price of any shares not yet exercised under this
warrant shall be reduced to such fixed price or an approximation at the date of
the financing of the common stock equivalent to the formula price. If
outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of Warrant Shares purchasable upon the exercise of
this Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment multiplied by the Purchase Price in effect
immediately prior to such adjustment, by (ii) the Purchase Price in effect
immediately after such adjustment.
b. If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in subsection 2.a. above), or
any consolidation or merger of the Company with or into another corporation, or
a transfer of all or substantially all of the assets of the Company, then, as
part of any such reorganization, reclassification, consolidation, merger or
sale, as the case may be, lawful provision shall be made so that the Registered
Holder of this Warrant shall have the right thereafter to receive upon the
exercise hereof the kind and amount of shares of stock or other securities or
property which such Registered Holder would have been entitled to receive if,
immediately prior to any such reorganization, reclassification, consolidation,
merger or sale, as the case may be, such Registered Holder had held the number
of shares of Common Stock which were then purchasable upon the exercise of this
Warrant. In any such case, appropriate adjustment (as reasonably determined in
good faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interest thereafter of the Registered Holder of this Warrant such that the
provisions set forth in this Section 2 (including provisions with respect to
adjustment of the Purchase Price) shall thereafter be applicable, as nearly as
is reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this Warrant.
c. When any adjustment is required to be made in the Purchase
Price, the Company shall promptly mail to the Registered Holder a certificate
setting forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in subsection 2.a or b. above.
d. In the event that the Company shall make any distribution of
its assets upon or with respect to its Common Stock, as a liquidating or partial
liquidating dividend, or other than as a dividend payable out of earnings or any
surplus legally available for dividends under the laws of the state of
incorporation of the Company, the Registered Holder shall be entitled to receive
upon exercise of this Warrant the amount of such assets (or, at the option of
the Company, an amount equal to the value thereof at the time of distribution,
as determined by the Company's Board of Directors in its sole discretion) which
would have been distributed to such Registered Holder if it had exercised its
right to exercise immediately prior to the record date for such distribution or,
in the absence of a record date, immediately prior to the
3
4
date of such distribution.
3. Fractional Shares. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the Fair Market Value per share of
Common Stock. For purposes hereof, Fair Market Value shall be determined as set
forth in subsection 1.b. above.
4. Requirements for Transfer.
a. This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.
b. Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
partnership to a partner of such partnership, a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner, if the transferee agrees in writing to be subject to
the terms of this Section 4, or (ii) a transfer made in accordance with Rule 144
under the Act.
c. Each certificate representing Warrant Shares shall bear a
legend substantially in the following form:
The securities represented by this certificate have
not been registered under the Securities Act of
1933, as amended, or applicable state securities
laws, and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and
until such securities are registered or qualified
under such Act, or applicable state securities laws,
or an exemption is available therefrom and
established satisfactory to the Company.
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
5. Company Registration.
a. If the Company shall determine to register any of its
securities either for its own account or the account of a security holder or
holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, or a registration
relating to a corporate reorganization or other transaction under Rule 145, or a
registration on any registration form that does not permit secondary sales, the
Company will:
(i) promptly give to each Registered Holder written notice
thereof; and
(ii) use its best efforts to include in such registration
(and any related qualification under blue sky laws or other compliance), except
as set forth in Section 6.b. below, and in any underwriting involved therein,
all the Warrant Shares specified in a written request or requests, made by any
Registered Holder and received by the Company within twenty (20) days after the
written notice from the Company described in clause (i) above is received by the
Registered Holder. Such written request may specify all or a part of a Holder's
Warrant Shares.
b. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Registered Holders as a part of the written notice given pursuant to
Section 6.a. In such event the right of any Registered Holder to registration
pursuant to this Section 6 shall be conditioned upon such Registered Holder's
participation in such underwriting and the inclusion of such Registered Holder's
Warrant Shares in the underwriting to the
4
5
extent provided herein. All Registered Holders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other holders of securities of the Company with registration rights to
participate therein distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 6, if the representative of
the underwriters advises the Company in writing that marketing factors require a
limitation on the number of shares to be underwritten, the representative may
(subject to the limitations set forth below) exclude all Warrant Shares from, or
limit the number of Warrant Shares to be included in, the registration and
underwriting. The Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated first to the
Company for securities being sold for its own account. If any person does not
agree to the terms of any such underwriting, such person shall be excluded
therefrom by written notice from the Company or the underwriter. Any Warrant
Shares or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
6. The Company Covenants.
a. In the event of a registration pursuant to the provisions of
Sections 5, the Company shall use all reasonable efforts to cause the Warrant
Shares so registered to be registered or qualified for sale under the securities
or blue sky laws of such jurisdictions as the Registered Holder may reasonably
request; provided, however, that the Company shall not be required to qualify to
do business in any state by reason of this Section 7.a. in which it is not
otherwise required to qualify to do business.
b. The Company shall notify the Registered Holder promptly when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed.
c. The Company shall advise the Registered Holder, promptly after
it shall receive notice or obtain knowledge of the issuance of any stop order by
the Commission suspending the effectiveness of such registration statement, or
the initiation or threatening of any proceeding for that purpose, and promptly
use all reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
d. The Company shall promptly notify the Registered Holder, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included in such registration statement, as then
in effect, would include an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and at the reasonable request of each Registered Holder prepare and
furnish to them such number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Warrant Shares or securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made.
e. If requested by the underwriter for any underwritten offering
of Warrant Shares on behalf of the Registered Holder pursuant to a registration
requested under Sections 5, the Company and the Registered Holder will enter
into an underwriting agreement with such underwriter for such offering, which
shall be reasonably satisfactory in substance and form to the Company, the
Registered Holder, and the underwriter, and such agreement shall contain such
representations and warranties by the Company and each Registered Holder and
such other terms and provisions as are customarily contained in an underwriting
agreement with respect to secondary distributions solely by selling
stockholders, including, without limitation, indemnities substantially to the
effect and to the extent provided in Section 8.
5
6
To the extent requested by the underwriter, the Registered Holder agrees
not to sell or otherwise transfer or dispose of any Warrant Shares held by it
during the period commencing on its receipt of written notice from the Company
of such underwritten public offering and ending 180 days following the effective
date of a registration statement of the Company filed under the Act in
connection with such firmly underwritten public offering of the Company's Common
Stock, provided that all executive officers and directors of the Company enter
into similar agreements.
7. Indemnification: Miscellaneous Operative Provisions.
a. Subject to the conditions set forth below, the Company agrees
to indemnify and hold harmless the Registered Holder, its respective officers,
directors, partners, employees, agents, shareholders and counsel, and each
person, if any, who controls any such person within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") from and against any and all loss, liability,
charge, claim, damage, and expense whatsoever (which shall include, for all
purposes of this Section 8, but not be limited to, reasonable attorneys' fees
and any and all reasonable expenses whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever), arising out of, based upon, or in connection with any untrue
statement or alleged untrue statement of a material fact contained (A) in any
registration statement, preliminary prospectus, or final prospectus (as from
time to time amended and supplemented) or any amendment or supplement thereto,
relating to the sale of any of the Warrant Shares, or (B) in any application or
other document or communication (in this Section 8 collectively called an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Warrant Shares under the securities
or blue sky laws thereof or filed with the Commission, the Nasdaq Stock Market
or any securities exchange, or (C) in any reports or documents filed under the
Exchange Act; or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements made therein
not misleading, unless (x) such statement or omission was made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Registered Holder for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (y) such loss, liability,
charge; claim, damage or expense arises out of the Registered Holder's failure
to comply with the terms and provisions of this Agreement. The foregoing
agreement to indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this Agreement.
If any action is brought against the Registered Holders or any of
their respective officers, directors, partners, employees, agents, shareholders,
or counsel, or any controlling persons of such person (an "indemnified party")
in respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly notify the
Company in writing of the institution of such action (but the failure to so
notify shall not relieve the Company from any liability other than pursuant to
this Section 8.a. unless, the failure to so notify shall prejudice any rights or
defenses with respect to such claim) and the Company shall promptly assume the
defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties) provided that the indemnified
party shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless:
(i) the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action; or
(ii) such indemnified party or parties shall have reasonably
concluded, based on an opinion of counsel, that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to the Company, in any material
respect, and that as a result thereof a conflict of interest would arise absent
separate representation of the parties.
6
7
In the event of clauses (i) or (ii) above, such fees and expenses shall be born
by the Company and the Company shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties. Anything in this
Section 8 to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action affected without its written consent,
which shall not be unreasonably withheld. The Company shall not, without the
prior written consent of each indemnified party that is not released as
described in this sentence, settle or compromise any action, or permit a default
or consent to the entry of judgment in or otherwise seek to terminate any
pending or threatened action, in respect of which indemnity may be sought
hereunder in which any indemnified party is or could have been a party unless
such settlement compromise, consent, or termination includes an unconditional
release of each indemnified party from all liability in respect of such action.
The Company agrees promptly to notify each Registered Holder of the commencement
of any litigation or proceedings against the Company or any of its officers or
directors in connection with the sale of any Warrant Shares or any preliminary
prospectus, prospectus, registration statement, or amendment or supplement
thereto, or any application relating to any sale of any Warrant Shares.
b. Each Registered Holder agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Warrant Shares by the Registered
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and
its or their respective counsel, to the same extent as the foregoing indemnity
from the Company to the Registered Holder in Section 8.a. but only with respect
to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented) or any amendment or supplement thereto, or in any application, in
reliance upon and in conformity with written information furnished to the
Company with respect to the Registered Holder by or on behalf of the Registered
Holder, expressly for inclusion in any registration statement, preliminary or
final prospectus, or application, as the case may be. If any action shall be
brought against the Company or any other person so indemnified based on any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, and in respect of which
indemnity may be sought against the Registered Holder pursuant to this Section
8.b., the Registered Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
8.a.
c. If the indemnification provided for in this Section 8 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
d. In the event of a breach by any party of its obligations under
this Warrant, the other party, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. Such rights shall be in
addition to, and not in lieu of, the Registered Holder's right to receive
monetary damages.
e. The provisions of this Warrant, including the provisions of
this sentence, may not be amended, modified or supplemented, unless such
amendment, modification or supplement is in writing and signed by the parties
hereto.
f. All notices and other communications provided for or permitted
hereunder shall be
7
8
made in writing by hand delivery, reputable overnight courier, registered
first-class mail, telex, or telecopied, initially to the address set forth
below, and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 8.f.
(i) if to the Company:
eSat, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇. ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Registered Holder at the address specified
from time to time by the Registered Holder.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered or by reputable overnight
courier; three business days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; and when receipt is acknowledged, if
telecopied.
g. The Registered Holder shall cooperate in all reasonable
respects with the filing of the registration statement contemplated hereby.
Without limiting the foregoing, the Registered Holder shall furnish to the
Company (or any regulatory authority) such written information and
representations that the Company may reasonably request in order to facilitate
any registration of the Warrant Shares hereunder.
8. No Impairment. The Company will not, by amendment of its charter
documents or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, and will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holder of this Warrant against impairment.
9. Notices of Record Date, Etc. In case:
a. the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of stock of any class or any other securities, or to receive
any other right; or
b. of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer or series of transfers of at least 30% of the assets of the Company; or
c. of the voluntary or involuntary dissolution, spin-off,
liquidation or winding-up of the Company, then, and in each such case, the
Company will mail or cause to be mailed to the Registered Holder of this Warrant
a notice specifying, as the case may be, (i) the date on which a record is to be
taken for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
-transfer, dissolution, liquidation or winding-up.
8
9
Such notice shall be mailed at least twenty (20) days prior to the record date
or effective date for the event specified in such notice.
10. Reservation of Shares. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this
Warrant, such number of Warrant Shares and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.
11. Exchange of Warrants. Upon the surrender by the Registered Holder of
any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof; issue and deliver to or upon the order of such Registered Holder, at the
Company's expense, a new Warrant or Warrants of like tenor, in the name of such
Registered Holder or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct, representing in the
aggregate on the face or faces thereof for the number of shares of Common Stock
represented for on the face or faces of the Warrant or Warrants so surrendered.
12. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
unsecured indemnity agreement in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of this
Warrant the Company will issue, in lieu thereof, a new Warrant of like tenor.
13. Transfers, etc.
a. The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
b. Subject to the provisions of Section 4 hereof; this Warrant
and all rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant with a properly executed assignment (in the form of Exhibit II
hereto) at the principal office of the Company.
c. Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
14. No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
15. Change or Waiver. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
16. Headings. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
17. Governing Law. This Warrant will be governed by and construed in
accordance with the laws of the State of California.
ESAT, INC
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Chief Executive Officer and Secretary
Print Name and Title
9
10
[Corporate Seal]
ATTEST:
----------------------
NOTE: ESAT ISSUED SEVEN (7) WARRANT AGREEMENTS FOR A TOTAL OF 159,286 SHARES OF
COMMON STOCK.
10
11
EXHIBIT I
PURCHASE FORM
To: ________________________ Dated: _______________________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.______), hereby irrevocably elects to purchase ___________ shares of
Common Stock covered by such Warrant. The undersigned herewith makes payment of
$____________ representing the full purchase price for such shares at the price
per share provided for in such Warrant. Such payment takes the form of
$_____________ in lawful money of the United States.
Signature:
--------------------------
Address:
-----------------------------
-----------------------------
11
12
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED,_______________________________________________________
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (No.____) with respect to the number of shares of Common
Stock covered thereby set forth below, unto:
Name of Assignee Address No. of Shares
Dated: ______________ Signature: ______________________
Dated: ______________ Signature: ______________________
12
