WARRANT AGREEMENT, dated as of January 14, 2000 (the "Effective Date"),
between EDUCATIONAL VIDEO CONFERENCING, INC., a Delaware corporation (the
"Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇").
The Company has agreed to issue to ▇▇▇▇▇▇▇ warrants ("Warrants") to
purchase an aggregate of up to 25,000 shares ("Warrant Shares") of the Company's
common stock, par value $.0001 per share (the "Common Stock"), in connection
with the closing of a Stock Purchase Agreement (the "Purchase Agreement") among
▇▇▇▇▇▇▇, the Company and Interboro Institute, Inc. ("Interboro").
THEREFORE, in consideration of the mutual undertakings contained
herein, the Company and ▇▇▇▇▇▇▇ hereby agree as follows:
1. ISSUANCE OF WARRANTS. Subject to the conditions precedent in the
next two sentences, the Company shall issue, as of each of July 1, 2001, 2002,
2003, 2004 and 2005, and deliver within 100 days of each such date, Warrants to
purchase 5,000 Warrant Shares or, in case Interboro changes the last day of its
fiscal year to a calendar year, such issuance shall be as of January 1, 2002,
2003, 2004, 2005 and 2006 (each such date is a "Warrants Issue Date"). No
Warrants shall be issued on a Warrants Issue Date unless Interboro has at least
$500,000 of EBITDA (calculated as provided in the Purchase Agreement) for the
fiscal year of Interboro ending immediately prior to the Warrants Issue Date
(each, a "Measuring Year"). However, in the event that EBITDA is less than
$500,000 in any Measuring Year, the Warrants that cannot then be issued as of
the next Warrants Issue Date, will be issued on a subsequent Warrants Issue Date
provided cumulative EBITDA for all of the preceding Measuring Years is not less
than the product $500,000 and the number of such preceding Measuring Years.
Each certificate evidencing Warrants (a "Warrant Certificate")
shall be substantially in the form of Annex A attached hereto.
2. REGISTRATION. The Company shall maintain a register for the Warrants
at its principal executive offices for the registration of the issuance and
transfer of Warrants. The Company shall be entitled to treat the registered
holder of any Warrant (the "Holder") as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other person. The Warrants shall be
registered in the name of ▇▇▇▇▇▇▇.
3. TRANSFER AND EXCHANGE OF WARRANTS. Subject to compliance with
applicable securities laws, any Warrant shall be transferable only upon
surrender thereof at the Company's principal executive offices duly endorsed by
its Holder or by such Holder's duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the persons entitled thereto. In addition, a Warrant
Certificate may be exchanged, at the option of the Holder thereof, for another
Warrant Certificate or Warrant Certificates of different denominations, of like
tenor and representing in the aggregate the right to purchase a like number of
Warrant Shares upon surrender at the Company's principal executive offices.
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4. EXERCISE OF WARRANTS.
4.1 EXERCISE PRICE AND TERM. Each Warrant shall entitle the Holder
thereof to purchase from the Company one Warrant Share at 25.00 per share (the
"Exercise Price"), as such purchase price and number of Warrant Shares may be
adjusted from time to time pursuant to the provisions of Section 8 hereof,
payable in full at the time of exercise of such Warrant. The Warrants issued
pursuant to Section 1 hereof may be exercised, in whole or in part, at any time
or from time to time commencing on the Warrants Issue Date and ending at 5:00
p.m., New York City time on the sixth anniversary of the date of this Warrant
Agreement (the "Expiration Date"). After the Expiration Date, any unexercised
Warrants shall be void and all rights of the Holder(s) with respect thereto
shall cease.
4.2 PAYMENT OF EXERCISE PRICE. At the election of any Holder, the
aggregate Exercise Price for any Warrants being exercised may be paid: (a) in
cash in the amount of the aggregate Exercise Price then in effect for the number
of Warrants being exercised, (b) by surrender to the Company of shares of Common
Stock having an aggregate Fair Market Value (as defined below) on the date of
exercise equal to the aggregate Exercise Price then in effect for the number of
Warrants being exercised, (c) by surrender to the Company of Warrants covering a
number of Warrant Shares having an aggregate Fair Market Value, net of the
applicable aggregate Exercise Price therefor, equal to the aggregate Exercise
Price then in effect for the number of Warrants being exercised, or (d) by a
combination of the aforementioned methods of payment. For purposes of this
Agreement, the "Fair Market Value" per share of Common Stock on a given date
shall be: (i) if the Common Stock is listed on a national securities exchange or
included on the Nasdaq National or Small Cap Markets, the closing price per
share of Common Stock on such date (or, if there was no trading on such date, on
the next preceding day on which there was trading); (ii) if the Common Stock is
not listed on a national securities exchange or included on the Nasdaq National
or Small Cap Markets, the average of the closing bid and asked quotations per
share of Common Stock as reported by Nasdaq (or the National Quotation Bureau
Incorporated or any similar organization) on such date (or, if there were no
quotations for the Common Stock on such date, on the next preceding day on which
there were quotations) as provided by such organization; and (iii) if the Common
Stock is not traded on a national securities exchange or included on the Nasdaq
National or Small Cap Markets and bid and asked quotations are not provided by
Nasdaq (or the National Quotation Bureau Incorporated or any similar
organization), as determined by the agreement of the parties in good faith or,
in the absence of such agreement, as determined pursuant to arbitration under
the auspices of the American Arbitration Association.
4.3 EXERCISE PROCEDURE. Warrants may be exercised by their surrender at
the Company's principal executive offices, with the Election to Purchase form
attached thereto duly completed and executed, accompanied by payment of the
aggregate Exercise Price for the Warrant Shares to be purchased upon such
exercise. Payment for the Warrant Shares shall be made: (a) if payment is to be
made in cash, by a certified or bank cashier's check payable to the order of the
Company or by wire transfer to an account designated by the Company, (b) if
payment is to be made through a surrender of shares of Common Stock, by
surrender of certificates duly endorsed for transfer (with all transfer taxes
paid or provided for), or (c) if payment is to be made by a surrender of
Warrants, by surrender of certificates representing such Warrants. Promptly
after the exercise of any Warrants, upon compliance with Section 5 hereof, the
Company shall issue a certificate or certificates, for the number of full
Warrant Shares to which the Holder thereof is entitled, registered in accordance
with the instructions set forth in the Election to Purchase, together with cash
as provided in Section 10 of this Warrant Agreement payable in respect of
fractional shares and (if applicable) a new Warrant Certificate or Certificates
representing all remaining unexercised Warrants. All Warrant Shares shall be
duly authorized, validly issued, fully paid, non-assessable and free of
preemptive rights, and free from all liens and charges other than those created
by the Holder. Upon compliance with Section 5 hereof, and applicable securities
laws, certificates representing such Warrant Shares and remaining unexercised
Warrants shall be issued by the Company in such names and denominations, and
shall be delivered to such persons, as are specified by written instructions of
the Holder.
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4.4 RECORD HOLDER. Each person in whose name any such certificate for
Warrant Shares is issued shall for all purposes be deemed to have become the
holder of record of the Warrant Shares represented thereby on the date upon
which such Warrants were surrendered for exercise, accompanied by payment of the
aggregate Exercise Price as aforesaid, irrespective of the date of issuance or
delivery of such certificate for Warrant Shares; provided, however, that if, at
the date of the surrender of such Warrants and payment of the aggregate Exercise
Price, the transfer books for the Common Stock or any other class of stock
purchasable upon the exercise of such Warrants shall be closed, the certificates
for the Warrant Shares or for shares of such other class of stock in respect of
which such Warrants are then exercisable shall be issuable as of the date on
which such books shall next be opened (whether before or after the Expiration
Date) and, until such date, the Company shall be under no duty to deliver any
certificate for such Warrant Shares or for shares of such other class of stock;
and, provided, further, that the transfer books of record, unless otherwise
required by law, shall not be closed at any one time for a period longer than 30
days.
5. PAYMENT OF TAXES. The Company shall promptly pay all documentary
stamp taxes attributable to the issuance of Warrants or the issuance of Warrant
Shares upon the exercise of any Warrants, except that any transfer taxes payable
in connection with the issuance of Warrants or Warrant Shares in any name other
than that of the Holder of the Warrants surrendered shall be paid by such Holder
and, if any such tax would otherwise be payable by the Company, no such issuance
or delivery shall be made unless and until the person requesting such issuance
has paid to the Company the amount of any such tax or it is established to the
reasonable satisfaction of the Company that any such tax has been paid.
6. REPLACEMENT WARRANTS. In case any Warrant Certificate 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
Certificate or in lieu of and substitution for the lost, stolen or destroyed
Warrant Certificate, a new Warrant Certificate of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
Certificate, together with an appropriate agreement regarding indemnification of
the Company relating to the issuance of a replacement Warrant Certificate.
7. RESERVATION OF WARRANT SHARES. The Company shall at all times
reserve and keep available for issuance the number of its authorized but
unissued shares of Common Stock or other stock sufficient to permit the exercise
in full of the Warrants and any transfer agent for the Common Stock or other
stock issuable upon the exercise of Warrants shall be directed at all times to
reserve such number as shall be sufficient for such purpose. The Company will
keep a copy of this Warrant Agreement on file with each such transfer agent and
will supply such transfer agent with duly executed stock certificates for such
purpose and will provide or otherwise make available any cash that may be
payable as provided in Section 10 hereof. All Warrants surrendered upon the
exercise thereof shall be canceled. After the Expiration Date, no shares shall
be subject to reservation in respect of any unexercised Warrants.
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8. ADJUSTMENTS.
8.1 ADJUSTMENT OF EXERCISE PRICE.
8.1.1 INITIAL EXERCISE PRICE. The Exercise Price, which
initially will be as provided in Section 4.1, shall be adjusted and readjusted
from time to time as provided in this Section 8.1 and, as so adjusted or
readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by this Section 8.1.
8.1.2 ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. In case
the Company, at any time after the date hereof, shall issue additional shares of
Common Stock for no consideration in connection with a dividend, stock split or
other distribution on the Common Stock (including, without limitation, any
distribution of Common Stock by way of spin-off, reclassification or corporate
rearrangement), then, and in each such case, the Exercise Price shall be reduced
concurrently with such issuance to a price (calculated to the nearest cent)
determined by multiplying such Exercise Price by a fraction of which:
(a) the numerator shall be the number of shares of Common
Stock outstanding immediately prior to such issuance, and
(b) the denominator shall be the number of shares of Common
Stock outstanding immediately after such issuance.
8.1.3 DIVIDENDS AND DISTRIBUTIONS. In case the Company, at any
time after the date hereof, shall pay or make a dividend or other distribution
on the Common Stock (including, without limitation, any distribution of stock
(other than Common Stock) or other securities, including securities that are
convertible into or exchangeable or exercisable for Common Stock, property or
options by way of dividend, spin-off, reclassification or corporate
rearrangement) then, and in each such case, the Exercise Price in effect
immediately prior to the close of business on the record date fixed for the
determination of the holders of the Common Stock entitled to receive such
dividend or other distribution shall be reduced, effective as of the close of
business on such record date, to a price (calculated to the nearest cent)
determined by multiplying such Exercise Price by a fraction of which:
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(a) the numerator shall be the Exercise Price in effect
immediately prior to the close of business on such record date minus the value
of such dividend or other distribution (as determined in good faith by the Board
of Directors of the Company) applicable to one share of Common Stock, and
(b) the denominator shall be such Exercise Price in effect
immediately prior to the close of business on such record date;
provided, however, that no such reduction shall be made pursuant to this Section
8.1.3 for a dividend payable in shares of Common Stock (which is subject to
Section 8.1.2) or payable in cash or other property and declared out of the
earned surplus (i.e., retained earnings) of the Company (excluding any portion
thereof resulting from a revaluation of property) or which is declared but is
then not paid or made. For purposes of the foregoing, a dividend or distribution
payable other than in cash shall be considered payable out of earned surplus
only to the extent that such earned surplus is charged an amount equal to the
fair value of such dividend or distribution at the time of payment as determined
in good faith by the Board of Directors of the Company. If a dividend or
distribution covered under this Section 8.1.3 is declared prior to the
Expiration Date but not paid by such date, the Expiration Date shall be extended
until the payment thereof.
8.1.4 ADJUSTMENTS FOR COMBINATIONS, etc. In case the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Exercise Price in effect immediately prior to such combination or
consolidation shall be proportionately increased concurrently with the
effectiveness of such combination or consolidation.
8.1.5 MINIMUM ADJUSTMENT OF EXERCISE PRICE. If the amount of
any adjustment of the Exercise Price required pursuant to this Section 8.1 would
be less than $.05, such amount shall be carried forward, and an adjustment with
respect thereto shall be made at the time of and together with any subsequent
adjustment that, together with such amount and any other amount or amounts so
carried forward, shall aggregate at least $.05.
8.1.6 MINIMUM EXERCISE PRICE. Notwithstanding anything to the
contrary set forth herein, no adjustment provided for in this Section 8.1 shall
reduce the Exercise Price below the par or stated value of the Common Stock and
the Company shall have no obligation to change such value to permit a further
reduction of the Exercise Price; provided, however, that, except in the event of
any transactions of the type contemplated under Section 8.1.4 hereof, the
Company agrees not to change the par or stated value of the Common Stock.
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8.2 ADJUSTMENT OF NUMBER OF WARRANT SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of Section 8.1, the number of Warrant
Shares that the Holder of a Warrant shall be entitled to receive upon exercise
thereof shall be adjusted to equal that number of Warrant Shares determined by
multiplying the number of Warrant Shares issuable upon exercise of such Warrant
immediately prior to such adjustment of the Exercise Price by a fraction of
which:
(a) the numerator shall be the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and
(b) the denominator shall be the Exercise Price in effect
immediately following such adjustment of the Exercise Price.
8.3 NOTICE, EVIDENCE OF ADJUSTMENTS. Whenever the Exercise Price is
adjusted as herein provided, the Company shall promptly cause a notice setting
forth the adjusted Exercise Price and adjusted number of Warrant Shares,
issuable upon exercise of each Warrant to be mailed to each Holder, at the
Holder's last address appearing in the Warrant register, and shall cause a copy
thereof to be mailed to each transfer agent for the Common Stock. The Company
shall retain a firm of independent public accountants of recognized standing
selected by the Board of Directors (who may be the regular accountants employed
by the Company) to make any computation required by this Section 8, and a
certificate signed by such firm shall accompany said notice and shall be
conclusive evidence of the correctness of such adjustments, absent manifest
error.
9. CONSOLIDATION, MERGER, SALE OF ASSETS, REORGANIZATION, etc.
9.1 GENERAL PROVISIONS. In case the Company at any time after the
Effective Date (a) shall consolidate with or merge into any other person and not
be the continuing or surviving person of such consolidation or merger, or (b)
shall permit any other person to consolidate with or merge into the Company and
the Company shall be the continuing or surviving person but, in connection with
such consolidation or merger, the Common Stock or other securities then issuable
upon exercise of the Warrants shall be changed into or exchanged for cash, stock
or other securities or property, or (c) shall transfer, directly or indirectly,
all or substantially all its properties and assets to any other person, or (d)
shall effect a capital reorganization or reclassification of the Common Stock or
other securities then issuable upon exercise of the Warrants (other than a
capital reorganization or reclassification resulting in an adjustment of the
Exercise Price as provided in Section 8.1), then, and in the case of each such
transaction, the Company shall make proper provision such that, upon the terms
and in the manner provided in this Warrant Agreement, the Holder of each
Warrant, upon the exercise thereof at any time after the consummation of such
transaction, shall be entitled to receive, at the Exercise Price then in effect,
in lieu of the Common Stock or other securities issuable upon such exercise
immediately prior to such transaction, the amount of cash, stock or other
securities or property to which such Holder would have been entitled if such
Warrant had been exercised in full immediately prior to such transaction,
subject to adjustments subsequent to such transaction as nearly equivalent as
possible to the adjustments provided for in Section 8 and this Section 9.
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9.2 ASSUMPTION OF OBLIGATIONS. Notwithstanding anything contained in
this Warrant Agreement to the contrary, the Company shall not effect any of the
transactions described in Section 9.1(a), (b), (c) or (d) unless, prior to the
consummation thereof, the person (other than the Company) that may be required
to deliver any cash, stock or other securities or property upon exercise of any
Warrant as provided herein shall assume, by written instrument delivered to the
Holder(s) of the Warrants, (a) the obligations of the Company under this Warrant
Agreement and the Warrants (and if the Company shall survive the consummation of
any such transaction, such assumption shall not release the Company from any
continuing obligations of the Company under this Warrant Agreement and the
Warrants) and (b) the obligation to deliver to such Holder such cash, stock or
other securities or other property as such Holder may be entitled to receive in
accordance with the provisions of this Section 9; provided, however, that this
Section 9.2 shall not be applicable to any transaction described in Section 9.1
if all such cash, stock, property or other consideration receivable upon
consummation of such transaction is delivered to the Company at such time. Such
person shall similarly deliver to the Company an opinion of counsel to the
effect that this Warrant Agreement and the Warrants shall continue in full force
and effect after any such transaction and that the terms hereof (including,
without limitation all of the provisions of Section 8 and this Section 9.2) and
thereof shall be applicable to the cash, stock or other securities or property
that such person may be required to deliver upon any exercise of the Warrants.
9.3 NO DILUTION OR IMPAIRMENT. The Company shall not, by amendment of
its certificate of incorporation or by-laws or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue, sale, grant or
assumption of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant Agreement or
the Warrants, but will at all times, whether or not requested to do so, 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(s) against dilution or other impairment. Without limiting the generality
of the foregoing, the Company agrees that it shall take all such reasonable
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of stock upon the
exercise of all Warrants from time to time outstanding.
10. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of shares of Common Stock upon the exercise of any Warrants. If more
than one Warrant shall be presented for exercise at the same time by the same
Holder, the number of Warrant Shares that 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 share
of Common Stock would, except for the provisions of this Section 10, be issuable
on the exercise of any Warrant, the Company shall purchase such fraction for an
amount in cash equal to the same fraction of the Fair Market Value of one share
of Common Stock on the date of exercise.
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11. RESTRICTIONS ON DISPOSITIONS. ▇▇▇▇▇▇▇ acknowledges that the
Warrants and the Warrant Shares have not been registered under the Securities
Act of 1933, as amended (the "Act") and accordingly that the Warrants and the
Warrant Shares may not be transferred except pursuant to (i) an effective
registration statement under the Act or (ii) any available exemption from
registration under the Act permitting such disposition of securities and upon
delivery to the Company of an opinion of counsel, reasonably satisfactory to
counsel for the Company, that such exemption from registration is available.
▇▇▇▇▇▇▇ agrees that the certificates representing the Warrants and Warrant
Shares shall bear an appropriate restrictive legend to such effect and that the
Company has no obligation to register the Warrants and Warrant Shares under the
Act except as provided in Section 12.
12. REGISTRATION RIGHTS.
12.1 PIGGYBACK REGISTRATION. If, at any time within the period
commencing after the first Warrants Issue Date and ending at 5:00 p.m., New York
City time, on the Expiration Date, the Company proposes to register any voting
equity securities under the Act in a primary registration on behalf of the
Company and/or in a secondary registration on behalf of holders of such
securities, and the registration form to be used may be used for registration of
the Warrant Shares, the Company shall give prompt written notice (which shall be
at least 30 days prior to the date of the initial filing of the applicable
registration statement) to the Holders of Warrants and/or Warrant Shares of its
intention to effect registration and shall offer to include in such registration
such number of Warrant Shares with respect to which the Company has received
written requests for inclusion therein within 10 business days after receipt of
such notice from the Company, upon generally the same terms and conditions as
the person or persons for whom such registration is being effected has agreed
to. This Section 12.1 is not applicable to any registration statement to be
filed by the Company on Forms S-4 or S-8 or any successor forms. The Company
shall not be obligated to cause to be effective any registration statement as to
which it has given notice to the Holders of Warrants and/or Warrant Shares and
shall have discretion to withdraw any such registration without liability to
Holders of Warrants and/or Warrant Shares.
Notwithstanding the foregoing, if the managing underwriter of the
offering shall determine in good faith and advise the Company in writing that
the inclusion of the Warrant Shares with the other securities being offered in
such registration would materially and adversely affect the marketability of the
offering, then the Company and the managing underwriter may reduce the number of
Warrant Shares to be registered on a pro rata basis proportionate to the
reduction of all other holders of securities participating in such registration
pursuant to the exercise of piggyback registration rights. In such event, the
Company may reduce the number of Warrant Shares to be registered to zero as long
as no other securities are registered in such registration statement pursuant to
an exercise of piggyback registration rights.
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12.2 REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of this Section 12 to effect the registration of any Warrant
Shares under the Act, the Company will:
(a) furnish to each seller of Warrant Shares such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or other disposition of the Warrant
Shares covered by such registration statement;
(b) use its reasonable best efforts to register or qualify the
Warrant Shares covered by such registration statement under such securities or
blue sky laws of such jurisdictions as each seller shall request, and do any and
all other acts and things which may be necessary under such securities or blue
sky laws to enable such seller to consummate the public sale or other
disposition in such jurisdictions of the securities to be sold by such seller,
except that the Company shall not for any such purpose be required to qualify to
do business as a foreign corporation in any jurisdiction wherein it is not
qualified or to file any general consent to service of process;
(c) use its reasonable best efforts to list the Warrant Shares
covered by such registration statement with any securities exchange or automated
quotation system on which the Common Stock of the Company is then listed;
(d) immediately notify each seller of Warrant Shares, at any
time when a prospectus relating thereto is required to be delivered under the
Act, of the happening of any event of which the Company has knowledge as result
of which the prospectus contained in such registration statement, as then in
effect, included an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and
(e) make available upon reasonable notice for inspection by
each seller of Warrant Shares, any underwriter participating in any distribution
pursuant to such registration statement, and any attorney, accountant or other
agent retained by such seller of Warrant Shares or underwriter, all financial
and other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement.
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12.3. SELLER COVENANTS. In connection with each registration hereunder
the sellers of Warrant Shares will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
reasonably shall be necessary and shall be requested by the Company in order to
comply with federal and applicable state securities laws.
In connection with each registration pursuant to this Section
12 covering an underwritten public offering, each seller of Warrant Shares
agrees to enter into a written agreement with the managing underwriter (unless
the Holder is the managing underwriter) in such form and containing such
provisions as are customary in the securities business for such an arrangement
between such underwriter and companies of the Company's size and investment
stature.
Each seller of Warrant Shares severally agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 12.2 (d), such seller will immediately discontinue
disposition of Warrant Shares pursuant to the registration statement until such
seller's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 12.2 (d) hereof, and, if so directed by the Company,
such seller will deliver to the Company all copies, other than permanent file
copies then in such seller's possession, of the most recent prospectus covering
such Warrant Shares at the time of receipt of such notice. If the Company shall
give such notice, the Company shall extend the period during which the
registration statement shall be maintained effective by the number of days
during the period from and including the date of the giving of notice pursuant
to Section 12.2 (d) to the date when the Company shall make available to such
seller a prospectus supplemented or amended to conform with the requirements of
Section 12.2 (d).
Each seller of Warrant Shares agrees that, if requested, such
seller will enter into an agreement containing customary indemnification and
contribution provisions as a condition to registration of such seller's Warrant
Shares.
12.4 EXPENSES. All expenses incurred by the Company in complying with
Sections 12.1 and 12.2, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, costs of insurance, but
excluding any Selling Expenses, are herein referred to as "Registration
Expenses." "Selling Expenses," as used herein, means all underwriting discounts
and selling commissions applicable to the sale of Warrant Shares and expenses of
counsel for the sellers of Warrant Shares.
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The Company will pay or cause to be paid all Registration
Expenses of the participating sellers of Warrant Shares in connection with each
registration statement under Section 12.1. All Selling Expenses in connection
with each registration statement under Section 12.1 shall be borne by the
participating sellers of Warrant Shares in proportion to the number of Warrant
Shares sold by each, or by such participating sellers of Warrant Shares as they
may agree.
13. NOTICES TO HOLDERS.
13.1 Nothing contained in this Warrant Agreement or in any of the Warrants shall
be construed as conferring upon the Holder(s) thereof as such the right to vote
or to receive dividends or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter or any other rights whatsoever as stockholders of
the Company.
13.2 In the event the Company intends to:
(a) make any distribution on or with respect to its Common
Stock (or other securities that may then be issuable in lieu thereof upon the
exercise of Warrants), including without limitation any dividend or distribution
from earned surplus, any dividend or distribution of stock, assets or evidences
of indebtedness, or any similar distribution,
(b) issue subscription rights or warrants to holders of its
Common Stock,
(c) consolidate or merge with or into another entity,
(d) liquidate, dissolve or sell or otherwise dispose of
substantially all its assets, or
(e) take any other action that would result in an adjustment
to the Exercise Price or an adjustment to the number of Warrant Shares that the
Holder of a Warrant shall be entitled to receive upon exercise thereof, then the
Company shall cause a notice of its intention to take such action to be sent by
first-class mail, postage prepaid, at least 20 days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such distribution or issuance or to vote upon such
proposed consolidation, merger, liquidation, sale or conveyance to each Holder
at the Holder's address appearing on the Warrant register, but failure to mail
or to receive such notice or any defect therein or in the mailing thereof shall
not affect the validity of any action taken in connection with such
distribution, issuance, consolidation, merger, liquidation, sale or conveyance.
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14. NOTICES. Any notice or demand required by this Warrant Agreement to
be given or made by any Holder to or on the Company shall be sufficiently given
or made if sent by registered or certified mail, postage prepaid, or by
facsimile transmission address as follows:
Educational Video Conferencing, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 914.395.3498
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Any notice or demand required by this Warrant Agreement to be given or made by
the Company to or on the Holder of any Warrant shall be sufficiently given or
made, whether or not such Holder receives the notice, if sent by first-class
mail, postage prepaid, addressed to such Holder at his last address as shown on
the books of the Company.
15. GOVERNING LAW. The validity, interpretation and performance of this
Warrant Agreement, of each Warrant issued hereunder and of the respective terms
and provisions thereof shall be governed by the laws of the State of New York
without giving effect to principles of conflicts of law.
16. COUNTERPARTS. This Warrant Agreement may be executed in two
counterparts, each of which when so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Warrant Agreement as
of the date first set forth above.
EDUCATIONAL VIDEO CONFERENCING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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ANNEX A
THE WARRANTS REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE
THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"); AND, NONE OF SUCH SECURITIES MAY BE OFFERED, OR SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT, OR (ii) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO
THE DISPOSITION OF SECURITIES AND UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT SUCH EXEMPTION
FROM REGISTRATION UNDER THE ACT IS AVAILABLE. IN ADDITION, THE WARRANTS
REPRESENTED HEREBY MAY NOT BE TRANSFERRED OR EXERCISED EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF THE WARRANT AGREEMENT DATED AS OF JANUARY 14, 2000 BETWEEN
EDUCATIONAL VIDEO CONFERENCING, INC. AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
No. ___ ______ Warrants
Void After 5:00 p.m. New York City Time
On ____________
Educational Video Conferencing, Inc.
Warrant Certificate
THIS CERTIFIES THAT, for value received, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or
registered assigns, is the Holder of the number of Warrants set forth above,
each Warrant entitling the owner thereof to purchase at any time after
_________________ and prior to 5:00 p.m., New York City time, on ____________
(the "Expiration Date"), one fully paid and non-assessable share of common
stock, par value $.0001 per share ("Common Stock"), of Educational Video
Conferencing, Inc., a Delaware corporation (the "Company"), at a purchase price
per share (the "Exercise Price") initially equal to $25.00 upon presentation and
surrender of this Warrant Certificate with the Form of Election to Purchase
(attached hereto) duly executed. The number of Warrants evidenced by this
Warrant Certificate (and the number of shares that may be purchased upon
exercise hereof (the "Warrant Shares") set forth above and the Exercise Price
set forth above are the number and Exercise Price as of the date of original
issuance of this Warrant Certificate, based on the Common Stock as constituted
at such date. As provided in the Warrant Agreement referred to below, the
Exercise Price and the number or kind of shares that may be purchased upon the
exercise of the Warrants evidenced by this Warrant Certificate are subject to
modification and adjustment upon the happening of certain events.
This Warrant Certificate is subject to, and entitled to the benefits of
all of the terms, provisions and conditions of the Warrant Agreement dated as of
January 14, 2000 between the Company and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, which Warrant
Agreement is hereby incorporated herein reference and made a part hereof and to
which reference is hereby made for a full description of the rights, limitations
of rights, duties and immunities hereunder of the Company and the Holders of the
Warrant Certificates. A copy of the Warrant Agreement is on file at the
principal office of the Company.
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This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor, evidencing
Warrants entitling the Holder to purchase a like aggregate number of shares of
Common Stock as the Warrants evidenced by the Warrant Certificate or Warrant
Certificates surrendered entitled such Holder to purchase. If this Warrant
Certificate shall be exercised in part, the Holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
The Exercise Price shall be paid in cash or by surrender of the
appropriate number of Warrants or shares of Common Stock in a cashless exercise
or in a combination thereof as provided in Section 4.2 of the Warrant Agreement.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made as provided in the Warrant Agreement.
No Holder of this Warrant Certificate, as such, shall be entitled to
vote or to receive dividends or to consent or to receive notice as a stockholder
of the meetings of stockholders for the election of directors of the Company or
any other matter or to any rights whatsoever as stockholder of the Company,
until the Warrant or Warrant evidenced by this Warrant Certificate shall have
been exercised and the Warrant Shares shall have been delivered as provided in
the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Common Stock or other class
of stock issuable upon exercise of this Warrant Certificate are closed for any
purpose, the Company shall not be required to make delivery of certificates for
shares issuable upon such exercise until the date of the reopening of said
transfer books as provided in the Warrant Agreement.
IN WITNESS WHEREOF, Educational Video Conferencing, Inc. has caused the
signature (or facsimile signature) of its Chairman and Secretary to be printed
hereon.
EDUCATIONAL VIDEO CONFERENCING, INC.
BY: ------------------------------------
Name: ------------------------------------
Title: ------------------------------------
Attest: ------------------------------------
Secretary
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FORM OF ASSIGNMENT
(To be executed by the Holder if such Holder desires to transfer this Warrant
Certificate).
TO EDUCATIONAL VIDEO CONFERENCING, INC.
FOR VALUE RECEIVED, __________________________________________ hereby
sells, assigns and transfers unto ________________________ this Warrant
Certificate, together with all rights, title and interest therein, and does
hereby irrevocably constitute and appoint ______________________, to transfer
the within Warrant Certificate on the books of the within-named Company, with
full power of substitution.
DATED: ____________________
SIGNATURE ____________________________
Signature Guaranteed:
NOTICE:
The signature on the foregoing assignment 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.
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FORM OF ELECTION TO PURCHASE
(To be executed if Holder desires to exercise the Warrants evidenced by this
Warrant Certificate).
TO EDUCATIONAL VIDEO CONFERENCING, INC.
The undersigned hereby (1) irrevocably elects to exercise
___________________________________ Warrants represented by this Warrant
Certificate to purchase __________ shares of Common Stock issuable upon the
exercise of such Warrants, (2) makes payment in full of the aggregate Exercise
Price for such Warrants by enclosure of a bank cashier's check or money order
therefor or by surrendering Warrants or shares of Common Stock for application
to the aggregate Exercise Price, upon condition that new Warrants be issued for
the balance of the Warrants remaining, and (3) requests that certificates for
shares and Warrants be issued in the name of.
(Please insert social security or other
identifying number)____________________
(Please print name and address)
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:
(Please insert social security or other
identifying number)_____________________
(Please print name and address)
DATED:_________________, 20___
SIGNATURE_____________________
Signature Guaranteed:
NOTICE: The signature on the foregoing election to purchase 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.
17