THIS AMENDED AND RESTATED COMMON STOCK PURCHASE WARRANT HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ACT, AS AMENDED (THE "1933
ACT"). THE HOLDER HEREOF, BY PURCHASING THIS AMENDED AND RESTATED COMMON
STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT,
OR (C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
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a21, Inc.
AMENDED AND RESTATED
COMMON STOCK PURCHASE WARRANT
Number of shares: 4,000,000
Holder: CRT Capital Group LLC
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Expiration Date: March 31, 2006 (or earlier, as adjusted)
Exercise Price per Share: $0.25 (or greater, as adjusted)
a21, Inc., a company organized and existing under the laws of the State of Texas
(the "Company"), hereby certifies that, for value received, CRT Capital Group
LLC, or its registered assigns (the "Warrant Holder"), is entitled, subject to
the terms set forth below, to purchase from the Company 4,000,000 shares (the
"Warrant Shares") of common stock, $0.001 par value (the "Common Stock"), of the
Company (each such share, a "Warrant Share" and all such shares, the "Warrant
Shares") in exchange for (a) one (1) Warrant and (b) $0.25 per Warrant Share (as
adjusted from time to time as provided in Sections 6 and 7), per Warrant Share
(the "Exercise Price"), at any time and from time to time from and after the
date thereof and through and including 5:00 p.m. New York City time upon the
earlier to occur of (a) March 31, 2006, and (b) ten (10) days, or twenty (20)
days if the Warrant Shares are not then Eligible for Resale, as hereinafter
defined, pursuant to a registration statement under the Securities Act of 1933,
as amended, declared effective by the Securities and Exchange Commission, after
written notice from a21 to the Warrant Holder that the five-day Volume Weighted
Average Price ("VWAP"), as hereinafter defined, is greater than or equal to
forty cents ($0.40) (the "Expiration Date"), and subject to the following terms
and conditions:
1. Registration of Warrant. The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Warrant Holder hereof from time to time.
The Company may deem and treat the registered Warrant Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Warrant Holder, and for all other purposes, and the Company
shall not be affected by notice to the contrary.
2. Investment Representation. The Warrant Holder by accepting this Warrant
represents that the Warrant Holder is acquiring this Warrant for its own account
or the account of an affiliate for investment purposes and not with the view to
any offering or distribution and that the Warrant Holder will not sell or
otherwise dispose of this Warrant or the underlying Warrant Shares in violation
of applicable securities laws. The Warrant Holder acknowledges that the
certificates representing any Warrant Shares will bear a legend indicating that
they have not been registered under the United States Securities Act of 1933, as
amended (the "1933 Act") and may not be sold by the Warrant Holder except
pursuant to an effective registration statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws. If this Warrant was acquired by the Warrant Holder
pursuant to the exemption from the registration requirements of the 1933 Act
afforded by Regulation S thereunder, the Warrant Holder acknowledges and
covenants that this Warrant may not be exercised by or on behalf of a Person
during the one year distribution compliance period (as defined in Regulation S)
following the date hereof. "Person" means an individual, partnership, firm,
limited liability company, trust, joint venture, association, corporation, or
any other legal entity.
3. Validity of Warrant and Issue of Shares. The Company represents and
warrants that this Warrant has been duly authorized and validly issued and
warrants and agrees that all of the Common Stock that may be issued upon the
exercise of the rights represented by this Warrant will, when issued upon such
exercise, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue thereof. The
Company further warrants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of Common Stock to
provide for the exercise of the rights represented by this Warrant.
4. Registration of Transfers and Exchange of Warrants.
a. Subject to compliance with the legend set forth on the face of
this Warrant, the Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant with the Form of
Assignment attached hereto duly completed and signed, to the Company at the
office specified in or pursuant to Section 9. Upon any such registration or
transfer, a new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a "New Warrant"), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Warrant Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder of a
Warrant.
b. This Warrant is exchangeable, upon the surrender hereof by the
Warrant Holder to the office of the Company specified in or pursuant to Section
9 for one or more New Warrants, evidencing in the aggregate the right to
purchase the number of Warrant Shares which may then be purchased hereunder. Any
such New Warrant will be dated the date of such exchange.
5. Exercise of Warrants.
a. Upon surrender of this Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Section 9, and upon payment and delivery of the Exercise
Price per Warrant Share multiplied by the number of Warrant Shares that the
Warrant Holder intends to purchase hereunder, in lawful money of the United
States of America, in cash or by certified or official bank check or checks, to
the Company, all as specified by the Warrant Holder in the Form of Election to
Purchase, the Company shall promptly (but in no event later than seven business
days after the Date of Exercise as defined herein) issue or cause to be issued
and cause to be delivered to or upon the written order of the Warrant Holder and
in such name or names as the Warrant Holder may designate (subject to the
restrictions on transfer described in the legend set forth on the face of this
Warrant), a certificate for the Warrant Shares issuable upon such exercise, with
such restrictive legend as required by the 1933 Act. Any person so designated by
the Warrant Holder to receive Warrant Shares shall be deemed to have become
holder of record of such Warrant Shares as of the Date of Exercise of this
Warrant.
b. "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the Warrant Holder to be
purchased.
c. This Warrant shall be exercisable at any time and from time to
time for such number of Warrant Shares as is indicated in the attached Form of
Election To Purchase. If less than all of the Warrant Shares which may be
purchased under this Warrant are exercised at any time, the Company shall issue
or cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares for which no exercise has been
evidenced by this Warrant.
6. Exercise Price.
a. The Exercise Price per Share shall be adjusted as provided in
Section 6(i) and (ii), provided the Warrants are exercised and the Exercise
Price per Share paid to the Company upon the earlier to occur of (a) March 31,
2006, and (b) ten (10) days, or twenty (20) days if the shares of Common Stock
into which the Warrants may be exercised are not then Eligible for Resale
pursuant to an effective registration statement declared effective by the
Securities and Exchange Commission, after written notice from the Company to the
Warrant Holder that the five-day VWAP, as hereinafter defined, is greater than
or equal to forty cents ($0.40):
(i) If the shares Common Stock into which the Warrant may be
exercised are Eligible for Resale pursuant to an effective registration
statement, then the Exercise Price per Share shall be the greater of (i)
twenty-five cents ($0.25), and (ii) eighty percent (80%) of the five-day VWAP;
and
(ii) If the shares of Common Stock into which the Warrants may be
exercised are not Eligible for Resale pursuant to an effective registration
statement, then the Exercise Price per Share shall be the greater of (i)
twenty-five cents ($0.25), and (ii) sixty percent (60%) of the five-day VWAP if
the Warrant is exercised and the applicable Exercise Price per Share paid to the
Company on or before December 31, 2005, and seventy percent (70%) of the
five-day VWAP if the Warrant is exercised and the applicable Exercise Price per
Share paid to the Company after December 31, 2005.
b. For the purposes hereof, "VWAP" means the weighted average
selling price of the Common Stock for five consecutive Trading Days, as
hereinafter defined, weighted by the number of shares of Common Stock sold at
each such price. "Trading Day" shall mean any day on which the shares of Common
Stock are traded on their principal trading market. For purposes of this
Warrant, Eligible for Resale means that shares of Common Stock may be resold
under an effective Registration Statement and that (i) such Registration
Statement is not interfered with by any stop order, injunction or other order or
requirement of the Securities and Exchange Commission or other governmental
agency or court for any reason, (ii) the Company has not notified any holder of
its securities or its transfer agent of the occurrence of any event as a result
of which the prospectus included in such Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading, or (iii) no act or omission to act has
occurred which would otherwise prohibit or prevent the lawful resale of the
Common Stock under such Registration Statement.
7. Adjustment of Exercise Price and Number of Shares. The character of the
shares of stock or other securities at the time issuable upon exercise of this
Warrant and the Exercise Price therefor, are subject to further adjustment upon
the occurrence of the following events:
a. Adjustment for Stock Splits, Stock Dividends, Recapitalizations,
Etc. The Exercise Price of this Warrant and the number of shares of Common Stock
or other securities at the time issuable upon exercise of this Warrant shall be
appropriately adjusted to reflect any stock dividend, stock split, combination
of shares, reclassification, recapitalization or other similar event affecting
the number of outstanding shares of stock or securities.
b. Adjustment for Reorganization, Consolidation, Merger, Etc. In
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being hereinafter
referred to as a "Reorganization"), then, in each case, the holder of this
Warrant, on exercise hereof at any time after the consummation or effective date
of such Reorganization (the "Effective Date"), shall receive, in lieu of the
shares of stock or other securities at any time issuable upon the exercise of
the Warrant issuable on such exercise prior to the Effective Date, the stock and
other securities and property (including cash) to which such holder would have
been entitled upon the Effective Date if such holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).
c. Certificate as to Adjustments. In case of any adjustment or
readjustment in the price or kind of securities issuable on the exercise of this
Warrant under this Section, the Company will promptly give written notice
thereof to the holder of this Warrant in the form of a certificate, certified
and confirmed by the Board of Directors of the Company, setting forth such
adjustment or readjustment and showing in reasonable detail the facts upon which
such adjustment or readjustment is based.
8. Fractional Shares. The Company shall not be required to issue or cause
to be issued fractional Warrant Shares on the exercise of this Warrant. The
number of full Warrant Shares that shall be issuable upon the exercise of this
Warrant shall be computed on the basis of the aggregate number of Warrants
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 8, be issuable
on the exercise of this Warrant, the Company shall, at its option, (i) pay an
amount in cash equal to the Exercise Price multiplied by such fraction or (ii)
round the number of Warrant Shares issuable, up to the next whole number.
9. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as follows:
If to the Company:
a21, Inc.
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Direct Dial: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Warrant Holder:
To the address in this Warrant or to the address provided to
the Company by an Investor.
10. Miscellaneous.
a. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Warrant may be amended only in writing and signed by the Company and the Warrant
Holder.
b. Nothing in this Warrant shall be construed to give to any person
or corporation other than the Company and the Warrant Holder any legal or
equitable right, remedy or cause of action under this Warrant; this Warrant
shall be for the sole and exclusive benefit of the Company and the Warrant
Holder.
c. This Warrant shall be governed by, construed and enforced in
accordance with the internal laws of the State of New York without regard to the
principles of conflicts of law thereof.
d. The headings herein are for convenience only, do not constitute
a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
e. In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceablilty of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
f. The Warrant Holder shall not, by virtue hereof, be entitled to
any voting or other rights of a shareholder of the Company, either at law or
equity, and the rights of the Warrant Holder are limited to those expressed in
this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by the authorized officer as of the date first above stated.
a21, Inc.
By:
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Name:
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Title:
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Signature Guaranteed
FORM OF ASSIGNMENT
To Be Executed by the Registered Warrant Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ____________________ hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
------------------------
[please print or type name and address]
_________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
____________________________________ _______________________________ Attorney to
transfer this Warrant Certificate on the books of the Company, with full power
of substitution in the premises.
Dated: ____________________
X________________________
Signature Guaranteed
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THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
8
FORM OF ELECTION TO PURCHASE
(To be executed by the Warrant Holder to exercise the right to purchase shares
of Common Stock under the foregoing Warrant)
To: a21, Inc.:
In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase ______________ shares of
Common Stock ("Common Stock"), $0.001 par value, of a21, Inc. and encloses one
warrant and $0.25 (as adjusted) for each Warrant Share being purchased or an
aggregate of $________________ in cash or certified or official bank check or
checks, which sum represents the aggregate Exercise Price (as defined in the
Warrant) together with any applicable taxes payable by the undersigned pursuant
to the Warrant.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:
____________________________________
____________________________________
(Please print name and address)
____________________________________
____________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Warrant, the undersigned requests that a New
Warrant (as defined in the Warrant) evidencing the right to purchase the shares
of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
in the name of and delivered to:
____________________________________
____________________________________
(Please print name and address)
Dated: Name of Warrant Holder:
----------------
(Print)
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(By:)
-----------------------------------
(Name:)
---------------------------
(Title:)
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Signature must conform in all respects to
name of Warrant Holder as specified on the
face of the Warrant
9