EXHIBIT 4.4
FORM OF WARRANT TO PURCHASE
75,000 SHARES OF INCOMNET, INC.
EXHIBIT 4.4
WARRANTS FOR PRICE INTERNATIONAL, INC.
[ORIGINAL WARRANTS PROVIDED TO PRICE INTERNATIONAL ON OCTOBER 21, 1994]
THESE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY
AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF, AND SUCH SECURITIES MAY NOT
BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT OR
REGULATION.
TRANSFER OF THIS WARRANT IS RESTRICTED
Warrant to Purchase 100,000 Shares
WARRANT OF
INCOMNET, INC. October 21, 1994
Void After December 31, 1997
This certifies that, for value received Price International, Inc.
("Holder"), or registered assigns, is entitled, subject to the terms set
forth below, at any time until December 31, 1997, to purchase from Incomnet,
Inc. (the "Company") a California corporation, 100,000 shares of Common Stock
of the Company, at a price per share of $11.25 (the "Purchase Price"),
subject to adjustment.
1. Exercise
(a) The Warrant may be exercised as follows until December 31, 1997 upon
surrender to the Company at its principal office, or at such other office or
agency as the Company may designate, together with the form of subscription
attached hereto, duly executed by the holder and accompanied by payment in
cash of check, in lawful money of the United States in an amount equal to the
product of the Purchase Price and the number of shares to be acquired on such
exercise:
(i) 25,000 shares are vested immediately and may be exercised
immediately.
(ii) 75,000 shares will be vested based upon the performance requirement
defined in "Article VI. Stock Warrants." Of the document entitled "Business
Agreement Between Incomnet. Inc. and Price International, Inc." dated October
21, 1994. The requirement states that shares will be vested based upon a
ratio of one share per $10 in pre-tax earnings generated by the business
venture between Price International and Incomnet.
(b) Upon any partial exercise, the Company shall promptly issue and deliver
to the holder hereof a new Warrant or Warrants of like tenor and dated the
date hereof, in the name of the holder and providing for the right to
purchase the number of shares with respect to which this Warrants has not
been exercised.
(c) Upon the exercise of this Warrant, in whole or in part, the holder shall
be entitled to receive a certificate or certificates for the number of fully
paid and nonassessable shares of the Common Stock of the Company purchasable
upon such exercise. If a fraction of a share would be issuable on any
exercise of
this Warrant, in lieu of the issuance of such fractional share, the Company
will pay the cash value of that fractional share, as determined is good faith
by its Board of Directors.
(d) The Company will at all time reserve and keep available, solely for
issuance on exercise of the Warrant, all shares of Common Stock issuable on
such exercise.
(e) The Company will pay all taxes and other governmental charges that may be
imposed in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant. The Company shall not be required, however, to pay
any tax or other charge imposed in connection with any transfer involved in
the issue of any certificate for shares of Common Stock in any name other
than that of the registered holder of the Warrant surrendered in connection
with the purchase of such shares, and in such case the Company shall not be
required to issue or deliver any stock certificate until such tax or other
charge has been paid or it has been established to the Company's satisfaction
that no tax or other charge is due.
2. Rights of Holders
No holder of the Warrant, by virtue of the ownership of this Warrant, shall
be considered a shareholder of the Company for any purpose, nor shall
anything in this Warrant be construed to confer on any holder of this Warrant
any rights of a shareholder of the Company, including, without limitation,
any right to vote, give or withhold consent to any corporation action,
receive notice of meetings of shareholders or receive dividends.
3. Adjustments in the Purchase Price and Number of Shares
(a) In case the outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of share of Common Stock or dividend in
stock shall be paid on the 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 and, conversely, in case the outstanding shares of Common Stock shall
be combined into a small number of shares of Common Stock, the Purchase Price
in effect immediately prior to such combination shall, simultaneously with
the effectiveness of such combination, be proportionately increased.
(b) No adjustment of the Purchase Price shall be made if the amount of such
adjustment shall be less than five cents per hare, but in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next
subsequent adjustment of the Purchase Price which, together with any
adjustment so carried forward, shall amount to five cents per share or more.
(c) When any adjustment is required to be made in the Purchase Price, the
number of shares of Common Stock purchasable upon exercise of the Warrant
shall be changed to the number determined by dividing (i) an amount equal to
the number of shares issuable pursuant to exercise of the 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.
(d) In the event of the merger or consolidation of the Company where the
Company is not the surviving corporation or becomes a wholly-owned
subsidiary, the Company will have the right to call and cancel the Warrant
upon 30 days prior written notice to the Holder. The Holder will have the
right to exercise the Warrant during such period. In case of any other change
in the Common Stock of the Company through merger, consolidation,
reclassification, reorganization, recapitalization, or other change in the
capital structure of the Company or in the case of a sale of all or
substantially all of the property of the Company, appropriate adjustment
shall be made so that the holder of the Warrant shall have the right
thereafter to receive upon exercise of the Warrant the kind and amount of
shares of stock or other securities or property to which he would have been
entitled if, immediately prior to such merger, consolidation,
reclassification, reorganization, recapitalization, or other change in the
capital structure of the Company or in the case of a sale of all or
substantially all of the property of the Company, he 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 shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the holder of this Warrant, to the end that the
provisions set forth herein (including provisions with respect to
adjustments of the Purchase Price) shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of this Warrant.
(e) When any adjustment is required to be made in the Purchase Price, the
Company shall forthwith determine the new Purchase Price and (i) prepare and
retain on file a statement describing in reasonable detail the method used in
arriving at the new Purchase Price; and (ii) cause a copy of such statement
to be mailed to the registered owner or owners of the Warrants, as of the
date within ten (10) days after the date when the circumstances giving rise
to the adjustment occurred.
4. Transfer and Exchange
(a) This Warrant and all rights hereunder may be transferred, subject to
compliance with the legend set forth on page one of this Warrant, in whole or
in part, by surrender of this Warrant properly endorsed to the Company at its
principal office, or at such other office or agency as the Company may
designate, and upon payment of any necessary transfer taxes. Upon any partial
transfer, the Company will issue and deliver to the holder hereof a new
Warrant and Warrants with respect to the shares of Common Stock not so
transferred.
(b) Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder of this Warrant as the absolute owner
for all purposes, notwithstanding any notice to the contrary.
(c) This Warrant is exchangeable at such office or agency for Warrants for
the same aggregate number of shears of Common Stock, each new Warrant to
represent the right to purchase such number of shares as the holder hereof
shall designate at the time of such exchange.
5. Notices
(a) All notices and other communications from the Company to the holder of
this Warrant shall be mailed by first class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the
last holder of this Warrant who shall have furnished an address to the
Company in writing.
6. Headings
The headings in this Warrant are for purposes of convenience in reference
only, and shall not be deemed to constitute a part hereof.
7. Governing Law
This Warrant shall be governed by, and construed and enforced in accordance
with, the laws of the State of California applicable to contracts made and to
be performed wholly within that state.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
authorized officer as of the date first set forth above.
INCOMNET, INC.
By: /s/ SAM D. SCHWARTZ By: /s/ STEPHEN A. CASWELL
------------------- ----------------------
Name: Sam D. Schwartz Name: Stephen A. Caswell
Title: Chairman Title: Secretary
SUBSCRIPTION FORM
TO: INCOMNET INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by said Warrant for, and
to purchase under said Warrant, ________________ shares of Common Stock of
Incomnet, Inc., and herewith make payment therefor, all at the price and on
the terms and conditions specified in the within Warrant.
DATED: _____________________________ By: _____________________________
[AMENDMENT TO BUSINESS AGREEMENT THAT CHANGES TERMS OF ORIGINAL WARRANTS]
INCOMNETFAX
May 10, 1995
To: Brian Price
Price International
416-630-9234 (fax)
CC: Sam Schwartz
From: Steve Caswell
(818) 587-5697 (fax)
(818) 587-5694 (voice)
Re: Amendment to Business Agreement Dated October 21, 1994 Between Incomnet
and Price International ("Agreement")
Here is the offer that we can make to you regarding the vesting of the
additional 75,000 warrants subject to a performance requirement as specified
in Article VI - Stock Warrants of the Agreement. We will vest the 75,000
warrants at $11.25 that are now subject to specific performance requirements
based upon the following terms:
1. You exercise the 25,000 warrants that you now have at $11.25 per share to
commence the deal. Because these warrants are registered, you will receive
25,000 shares of free-trading common stock as soon as the stock can be
transferred in your name.
2. You agree to exercise at least 25,000 of the additional 75,000 warrants
within 30 days of the stock underlying the 75,000 warrants being registered,
provided that the bid price for our stock average at least $13.25 per share
during the 30 day period from the date of registration. Should you fail to
exercise the 25,000 warrants, you would retain vesting on 25,000 of the
75,000 warrants for your initial early exercise, but would lose vesting on
the remaining 50,000 warrants, which would become subject to the performance
provision in our original deal.
3. You agree to negotiate with the NHLPA so that your license to provide
NHLPA telecards is extended for an additional year without any minimum
guarantee.
4. Provided that the license with the NHLPA to provide telephone calling
cards of NHLPA players is retained, you agree to provide to our business
agreement the use of the Parkhurst name on hockey phone cards and related
infotainment system products for a five year period, with each year renewable
at our option on terms as follows:
Year 1 -- No royalty or minimum guarantee.
Year 2 -- Five percent royalty on sales, no minimum guarantee.
Year 3 -- Five percent royalty on sales, $20,000 minimum guarantee.
Year 4 -- Five percent royalty on sales, $35,000 minimum guarantee.
Year 4 -- Five percent royalty on sales, $50,000 minimum guarantee.
Should the license with the NHLPA not be retained, you have to option to cancel
the Parkhurst license when it is due for renewal.
5. Incomnet agrees that an adequate portion of the proceeds of the warrant
exercise will be used to properly fund the hockey card business program,
including the completion and launch of the Goalie and up-coming fall series
and, in particular, the development of an interactive hockey card information
system, which will allow hockey news and player reports across multiple
leagues, as well as the ability to play hockey trivia interactively and the
development and promotion of the Parkhurst North America Hockey Trivia
Shootout.
Should this be acceptable, we will add this to our business agreement dated
October 21, 1994 as an amendment. The Agreement would commence with our
receiving from Price International a check for US$281,250 to exercise the
25,000 warrants now vested.
Accepted: /s/ Stephan A. Caswell
Stephen A. Caswell
Incomnet
Accepted: /s/ Brian Price
Brian Price
Price International