THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT, DATED AS OF
FEBRUARY 9, 2000, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY AND ANY
SUCCESSOR THERETO.
February 9, 2000
201,923 shares Warrant No. 2
DATALINK.NET, INC.
STOCK PURCHASE WARRANT
Registered Owner: Brown Simpson Strategic Growth Fund, L.P.
This certifies that, for value received, Datalink.Net, Inc., a Nevada
corporation, the ("Company") grants the following rights to the Registered
Owner, or assigns, of this Warrant:
1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in the Purchase Agreement.
As used in this Warrant, the following terms have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under direct or
indirect common control with such Person. For the purposes of this
definition, "control," when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms of
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
"Amex" means the American Stock Exchange.
"Appraiser" means a nationally recognized or major regional investment
banking firm or firm of independent certified public accountants of recognized
standing.
"Approved Stock Plan" means any contract, plan or agreement which has
been approved by the Board of Directors of the Company or any committee
thereof, pursuant to which the Company's securities may be issued to any
employee, officer or director; provided, that such issuance or issuances shall
not exceed 10% of the Company's outstanding Common Stock and preferred stock
on the Closing Date.
"Average Price" on any date means (x) the sum of the Per Share Market
Value for the ten (10) Trading Days immediately preceding such date minus (y)
the highest and lowest Per Share Market Value during such 10 Trading Day
period, divided by (z) eight (8).
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state
of New York generally are authorized or required by law or other government
actions to close.
"Change of Control Transaction" means the occurrence of any of (i) any
acquisition or series of related acquisitions by an individual or legal entity
or "group" (as described in Section 13(d)(3) of the Exchange Act) of in excess
of 50% of the voting power of the Company, (ii) a replacement of more than
one-half of the members of the Company's board of directors which is not
approved by a majority of those individuals who are members of the board of
directors on the date hereof, or their duly elected successors who are
directors immediately prior to such transaction(s), in one or a series of
related transactions, (iii) the merger or consolidation of the Company with or
into another entity, unless the holders of the Company's securities
immediately prior to such transaction or series of transactions continue to
hold at least 50% of such securities following such transaction or series of
transactions, (iv) a sale, conveyance, lease, transfer or disposition of all
or substantially all of the assets of the Company in one or a series of
related transactions or (v) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the
events set forth above in (i), (ii), (iii) or (iv).
"Closing" and "Closing Date" have the meanings set forth in Section 1.2
of the Purchase Agreement.
"Common Stock" means the shares of the Company's Common Stock, par value
$.01 per share.
"Company" means Datalink.Net, Inc., a Nevada corporation.
"Excluded Securities" means (i) shares of Common Stock issued or issuable
pursuant to the Purchase Agreement, the Series B Certificate of Designation
and this Warrant, (ii) shares of Common Stock deemed to have been issued by
the Company in connection with an Approved Stock Plan, (iii) shares of Common
Stock (including options and warrants) issuable upon the exercise of any
options or warrants outstanding on the date hereof and listed in Schedule
2.1(c) of the Purchase Agreement or (iv) shares of Common Stock issued or
deemed to be issued by the Company in connection with a strategic acquisition
by the Company of the assets or business, or division thereof, of another
Person.
"Exercise Period" has the meaning assigned to it in Section 5 hereof.
"Exercise Price" has the meaning assigned to it in Section 4 hereof.
"Per Share Market Value" means on any particular date (i) the closing bid
price per share of the Common Stock on such date on the Amex or other
Subsequent Market on which the Common Stock is then listed or if there is no
such price on such date, then the closing bid price on such exchange or
quotation system on the date nearest preceding such date, or (ii) if the
Common Stock is not listed then on the Amex or other Subsequent Market, the
closing bid price for a share of Common Stock in the over-the-counter market,
as reported by the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (iii) if the Common Stock is not then
publicly traded the fair market value of a share of Common Stock as determined
by an Appraiser selected in good faith by the Company; provided, however, that
the registered owners of a majority of the Underlying Shares and Warrants then
outstanding, after receipt of the determination by such Appraiser, shall have
the right to select, in good faith, an additional Appraiser, in which case the
fair market value shall be equal to the average of the determinations by each
such Appraiser; and provided, further that all determinations of the Per Share
Market Value shall be appropriately adjusted for any stock dividends, stock
splits or other similar transactions during such period.
"Person" means a corporation, association, partnership, organization,
business, individual, government or political subdivision thereof or
governmental agency.
"Purchase Agreement" means that certain Securities Purchase Agreement,
dated as of February 9, 2000, among the Company and the Purchasers.
"Purchases" has the meaning set forth in the Purchase Agreement.
"Registered Owner" means the person identified on the face of this
Warrant as the registered owner hereof or their assigns.
"Subsequent Market" means the New York Stock Exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of February 9, 2000, among the Company and the Purchasers.
"Trading Day(s)" means any day on which the primary market on which
shares of Common Stock are listed is open for trading.
"Underlying Shares" has the meaning assigned to it in Section 2.1(d) of
the Purchase Agreement.
"Warrant(s)" means the warrants issuable at the Closing.
"Warrant Shares" has the meaning assigned to it in Section 3 hereof.
2. Issue. Upon tender to the Company pursuant to Section 6 hereof, the
Company, within three (3) Business Days of the date thereof, shall issue to
the Registered Owner, or assigns, up to the number of shares specified in
Section 3 hereof of fully paid and nonassessable shares of Common Stock that
the Registered Owner, or assigns, is otherwise entitled to purchase.
3. Number of Shares. The total number of shares of Common Stock that
the Registered Owner, or assigns, of this Warrant is entitled to receive upon
exercise of this Warrant is 201,923 shares (the "Warrant Shares"), subject to
adjustment from time to time as provided herein. The Company shall at all
times reserve and hold available out of its authorized and unissued shares of
Common Stock or other securities, as the case may be, sufficient shares of
Common Stock to satisfy all conversion, exercise and purchase rights
represented by outstanding convertible securities, options and warrants,
including this Warrant. The Company covenants and agrees that all shares of
Common Stock that may be issued upon the exercise of this Warrant shall, upon
issuance, be duly and validly issued, fully paid and nonassessable, free from
all taxes, liens and charges with respect to the purchase and the issuance of
the shares, shall not have any legend or restrictions on resale, expect as
required by Section 3.2(b) of the Purchase Agreement and, subsequent to the
effectiveness of the Registration Statement (as defined in the Registration
Rights Agreement), shall be freely tradable.
4. Exercise Price. The initial per share exercise price of this
Warrant, representing the price per share at which each share of Common Stock
issuable upon exercise of this Warrant may be purchased, is $17.50, subject to
adjustment from time to time pursuant to the provisions of Section 7 hereof
(the "Exercise Price").
5. Exercise Period. This Warrant may be exercised, in whole or in
part, from the Closing Date up to and including February 8, 2005 (5 years less
1 day) (the "Exercise Period"). If not exercised during this period, this
Warrant and all rights granted under this Warrant shall expire and lapse.
6. Tender; Issuance of Certificates.
a. This Warrant may be exercised, in whole or in part, by (a)
delivery of the applicable Exercise Price for the number of Warrant Shares in
respect of which this Warrant is exercisable, (b) delivery of a duly executed
Warrant Exercise Form, a copy of which is attached to this Warrant as Exhibit
A, properly executed by the Registered Owner, or assigns, of this Warrant and
(c) surrender of this Warrant. The number of Warrant Shares so purchased
shall be designated on the Warrant Exercise Form and shall be deemed to be
issued to the Registered Owner as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Warrant Exercise
Form shall have been delivered and payment shall have been made for such
shares as set forth above. The payment and Warrant Exercise Form must be
delivered to the registered office of the Company or of the Company's transfer
agent, either in person or as set for in Section 13 hereof.
b. Commencing on the first day that the Securities and Exchange
Commission declares effective the Initial Registration Statement (as defined
in the Registration Rights Agreement), if, and only if, at the time of
exercise of this Warrant, the Warrant Shares are not saleable pursuant to an
effective registration statement, then in addition to the exercise of all or a
part of this Warrant by payment of the Exercise Price in cash as provided
above, and in lieu of such payment, the Registered Owner shall have the right
to effect a cashless exercise (a "Cashless Exercise"). In the event of a
Cashless Exercise the Registered Owner may exercise this Warrant in whole or
in part by surrendering this Warrant in exchange for the number of shares of
Common Stock equal to the product of (i) the number of shares as to which this
Warrant is being exercised multiplied by (ii) a fraction, the numerator of
which is the Per Share Market Value on such date less the Exercise Price then
in effect and the denominator of which is the Per Share Market Value on such
date (in each case adjusted for fractional shares as herein provided). The
Registered Owner shall be responsible for any and all taxes payable in respect
of such Cashless Exercise.
c. In lieu of physical delivery of this Warrant, provided the
Company's transfer agent is participating in the Depositary Trust Company
("DTC") Fast Automated Securities Transfer (FAST) program, upon request of the
Registered Owner and in compliance with the provisions hereof, the Company
shall use its best efforts to cause its transfer agent to electronically
transmit the Warrant Shares to the Registered Owner by crediting the account
of the Registered Owner's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission system. The time period for delivery described herein shall
apply to any such electronic transmittals.
d. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Warrant Exercise Form, and any
cash payments due under Section 15 hereof shall be delivered to the Registered
Owner within three (3) Business Days after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as
may be requested by the Registered Owner and shall be registered in the name
of the Registered Owner or such other name as shall be designated by such
Registered Owner. If this Warrant shall have been exercised only in part
then, unless this Warrant has expired, the Company shall, at its expense and
at the time of delivery of such certificates, deliver to the Registered Owner
a new Warrant representing the number of shares with respect to which this
Warrant shall not then have been exercised.
7. Adjustment of Exercise Price.
a. Common Stock Dividends; Common Stock Splits; Reclassification.
If the Company, at any time while this Warrant is outstanding, (a) shall pay a
stock dividend on its Common Stock, (b) subdivide outstanding shares of Common
Stock into a larger number of shares or (c) issue by reclassification of
shares of Common Stock any shares of capital stock of the Company, then (i)
the Exercise Price shall be multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding before such event
and the denominator of which shall be the number of shares of Common Stock
outstanding after such event and (ii) the number of Warrant Shares shall be
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately after such event and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such event. Any adjustment made pursuant to this paragraph 7(a)
shall become effective immediately after the record date for the determination
of shareholders entitled to receive such dividend or distribution or, in the
case of a subdivision or re-classification, shall become effective immediately
after the effective date thereof.
b. Rights; Options; Warrants or Other Securities. If the Company,
at any time while this Warrant is outstanding, shall fix a record date for the
issuance of rights, options, warrants or other securities to the holders of
its Common Stock entitling them to subscribe for or purchase, convert to,
exchange for or otherwise acquire shares of Common Stock for no consideration
or at a price per share less than the Exercise Price, the Exercise Price shall
be multiplied by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
plus the number of shares of Common Stock which the aggregate consideration
received by the Company would purchase at the Exercise Price, and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance date plus the number of additional shares
of Common Stock offered for subscription, purchase, conversion, exchange or
acquisition, as the case may be. Such adjustment shall be made whenever such
rights, options, warrants or other securities are issued, and shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such rights, options, warrants or other
securities.
c. Subscription Rights. If the Company, at any time while this
Warrant is outstanding, shall fix a record date for the distribution to
holders of its Common Stock evidence of its indebtedness or assets or rights,
options, warrants or other security entitling them to subscribe for or
purchase, convert to, exchange for or otherwise acquire any security
(excluding those referred to in paragraphs 7(a) and (b) above), then in each
such case the Exercise Price at which this Warrant shall thereafter be
exercisable shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Per Share Market Value on such record date less the then fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common
Stock as determined by the Board of Directors in good faith, and the
denominator of which shall be the Exercise Price as of such record date;
provided, however, that in the event of a distribution exceeding ten percent
(10%) of the net assets of the Company, such fair market value shall be
determined by an Appraiser selected in good faith by the registered owners of
a majority of the Warrants and Underlying Shares then outstanding; and
provided, further, that the Company, after receipt of the determination by
such Appraiser shall have the right to select in good faith an additional
Appraiser meeting the same qualifications, in which case the fair market value
shall be equal to the average of the determinations by each such Appraiser.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.
d. Rounding. All calculations under this Section 7 shall be made
to the nearest cent or the nearest l/l00th of a share, as the case may be.
e. Notice of Adjustment. Whenever the Exercise Price is adjusted
pursuant to this Section 7 the Company shall promptly deliver to the
Registered Owner a notice setting forth the Exercise Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment. Such notice shall be signed by the chairman, president or chief
financial officer of the Company.
f. Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held
shall be considered an issue or sale of Common Stock by the Company.
g. Change of Control; Compulsory Share Exchange. In case of (A)
any Change of Control Transaction or (B) any compulsory share exchange
pursuant to which the Common Stock is converted into other securities, cash or
property (each, an "Event"), lawful provision shall be made so that the
Registered Owner shall have the right thereafter to exercise this Warrant for
shares of stock and other securities, cash and property receivable upon or
deemed to be held by holders of Common Stock following such Event, and the
Registered Owner shall be entitled upon such Event to receive such amount of
shares of stock and other securities, cash or property as the shares of the
Common Stock of the Company into which this Warrant could have been exercised
immediately prior to such Event (without taking into account any limitations
or restrictions on the exercisability of this Warrant) would have been
entitled. The provisions of this Section 7(g) shall similarly apply to
successive Events.
h. Issuance's Below Exercise Price. If the Company, at any time
while this Warrant is outstanding, takes any of the actions described in this
Section 7(h), the Registered Owner shall have the right to amend this Warrant
as set forth below:
(i) issues or sells, or is deemed to have issued or sold, any
Common Stock;
(ii) in any manner grants, issues or sells any rights,
options, warrants, options to subscribe for or to purchase Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(other than any Excluded Securities) (such rights, options or warrants being
herein called "Options" and such convertible or exchangeable stock or
securities being herein called "Convertible Securities"); or
(iii) in any manner issues or sells any Convertible
Securities;
for (a) with respect to paragraph (h)(i), above, a price per share, or (b)
with respect to paragraphs h(ii) or h(iii), above, a price per share for which
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities is, less than the Exercise Price in
effect immediately prior to such issuance or sale, then, immediately after
such issuance, sale or grant, the Registered Owner shall have the right to
amend the issuance terms of the Common Stock issuable upon exercise of this
Warrant (including adjustment of the Exercise Price) so that the issuance
terms hereof are equivalent to the issuance terms of such offering. No
modification of the issuance terms shall be made upon the actual issuance of
such Common Stock upon conversion or exchange of such Options or Convertible
Securities. If there is a change at any time in (i) the exercise price
provided for in any Options, (ii) the additional consideration, if any,
payable upon the issuance, conversion or exchange of any Convertible
Securities or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock, then immediately after such
change the Registered Owner shall have the right to amend the issuance terms
of the Common Stock issuable upon exercise of this Warrant accordingly,
including, without limitation, by reducing the Exercise Price in effect to the
Exercise Price which would have been in effect at such time had such Options
or Convertible Securities still outstanding provided for such changed exercise
price, additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold; provided that no adjustment
shall be made if such adjustment would result in an increase of the Exercise
Price then in effect.
i. Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 7(h), the following
shall be applicable:
(i) Calculation of Consideration Received. If any Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be
deemed to be the net amount received by the Company therefor, without
deducting any expenses paid or incurred by the Company or any commissions or
compensations paid or concessions or discounts allowed to underwriters,
dealers or others performing similar services in connection with such issue or
sale. In case any Common Stock, Options or Convertible Securities are issued
or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of securities listed
or quoted on a national securities exchange or national quotation system, in
which case the amount of consideration received by the Company will be the
arithmetic average of the closing sale price of such security for the five (5)
consecutive Trading Days immediately preceding the date of receipt thereof.
In case any Common Stock, Options or Convertible Securities are issued to the
owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be
deemed to be the fair value of such portion of the net assets and business of
the non-surviving entity as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. The fair value of any
consideration other than cash or securities will be determined jointly by the
Company and the registered owners of a majority of the Underlying Shares and
Warrants then outstanding. If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation (the
"Valuation Event"), the fair value of such consideration will be determined
within forty-eight (48) hours of the tenth (10th) day following the Valuation
Event by an Appraiser selected in good faith by the Company and agreed upon in
good faith by the registered owners of a majority of the Underlying Shares and
Warrants then outstanding. The determination of such Appraiser shall be
binding upon all parties absent manifest error.
(ii) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options will be deemed
to have been issued for an aggregate consideration of $.01.
(iii) Record Date. If the Company takes a record of the
holders of Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(iv) Other Events. If any event occurs that would adversely
affect the rights of the Registered Owner of this Warrant but is not expressly
provided for by Section 7 hereof (including, without limitation, the granting
of stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price so as to protect the rights of the Registered
Owner; provided, however, that no such adjustment will increase the Exercise
Price.
j. Notice of Certain Events. If:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock;
(ii) the Company shall declare a special nonrecurring cash
dividend on or a redemption of its Common Stock;
(iii) the Company shall authorize the granting to the holders
of its Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights;
(iv) the approval of any shareholders of the Company shall be
required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory
share exchange whereby the Common Stock is converted into other securities,
cash or property; or
(v) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of exercise of this Warrant, and shall cause to be delivered
to the Registered Owner, at least 30 calendar days prior to the applicable
record or effective date hereinafter specified, a notice (provided such notice
shall not include any material non-public information) stating (a) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined
or (b) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, however, that the failure to mail
such notice or any defect therein or in the mailing thereof shall not affect
the validity of the corporate action required to be specified in such notice.
Nothing herein shall prohibit the Registered Owner from exercising this
Warrant during the 30-day period commencing on the date of such notice.
k. Increase in Exercise Price. In no event shall any provision in
this Section 7 cause the Exercise Price to be greater than the Exercise Price
on the date of issuance of this Warrant.
8. Call Option. If, at any time during the Exercise Period and
following the one-year anniversary of the date that the Securities and
Exchange Commission declares effective the Initial Registration Statement (as
defined in the Registration Rights Agreement), the Per Share Market Value
equals or exceeds $35.00 for any period of thirty (30) consecutive Trading
Days ending not more than ten (10) Trading Days after the Call Notice Date (as
defined below), then so long as (i) any Registration Statement required to be
filed and be effective pursuant to the Registration Rights Agreement is then
in effect and has been in effect and sales of all of the Registrable
Securities can be made thereunder for at least twenty (20) days prior to the
Call Option Date (as defined below), (ii) the Company has a sufficient number
of authorized shares of Common Stock reserved for issuance upon full exercise
of the Warrants and (iii) the Company is not then in breach of any of the
provisions of this Warrant, the Company shall have the right (the "Call
Option"), to be exercised on one (1) occasion only during the two (2) month
period commencing on the Call Notice Date (as defined below), to cause the
Registered Owner to exercise this Warrant in full in accordance with the
provisions of Section 6 hereof (such date that the Call Option is exercised,
the "Call Option Date"). The Company shall exercise its Call Option by
delivering to the Registered Owner a call notice (the "Call Notice" and, such
date that the Call Notice is given, the "Call Notice Date"), by facsimile and
overnight courier, at least ten (10) Business Days prior to the Call Option
Date. The Call Notice shall indicate the Call Option Date and shall include a
brief statement of the facts evidencing the Company's right to exercise the
Call Option. Nothing herein shall prohibit the Registered Owner from
exercising this Warrant in accordance with the provisions of Section 6 hereof
at any time after receipt of the Call Notice and prior to the Call Option
Date, and the Company shall deliver certificates for Warrant Shares in
accordance with Section 6 hereof with respect to any Warrants so exercised.
9. Restriction on Exercise by Either the Registered Owner or the
Company. Prior to the one-year anniversary of the date that the Securities
and Exchange Commission declares effective the Initial Registration Statement
(as defined in the Registration Rights Agreement), and notwithstanding
anything herein to the contrary, in no event shall the Registered Owner or the
Company have the right or be required to exercise this Warrant if as a result
of such exercise the aggregate number of shares of Common Stock beneficially
owned by such Registered Owner and its Affiliates would exceed 4.99% of the
outstanding shares of the Common Stock following such exercise. For purposes
of this Section 9, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended. The
provisions of this Section 9 may be waived by a Registered Owner as to itself
(and solely as to itself) upon not less than 65 days prior written notice to
the Company, and the provisions of this Section 9 shall continue to apply
until such 65th day (or later, if stated in the notice of waiver).
10. Registration on Company Books. This Warrant shall be numbered and
shall be registered as they are issued in a warrant register maintained the
Company. The Company may deem and treat the Registered Owner of this Warrant
as the absolute owner thereof, unless the Registered Owner shall have
presented this Warrant to the Company for transfer and the transferee shall
have been entered in the register as a subsequent holder. The ownership of
this Warrant shall be proven by such register, absent manifest error.
11. Registration Rights. The Company will undertake the registration
of the Common Stock into which this Warrant is exercisable at such times and
upon such terms pursuant to the provisions of the Registration Rights
Agreement.
12. Reservation of Underlying Shares; Listing. The Company covenants
that it will at all times reserve and keep available out of its authorized
shares of Common Stock, free from preemptive rights, solely for the purpose of
issue upon exercise of this Warrants as herein provided, such number of shares
of the Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants into Common Stock. The Company shall promptly secure the
listing of the shares of Common Stock issuable upon exercise of this Warrant
upon each national securities exchange or automated quotation system upon
which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all shares of
Common Stock form time to time issuable upon the exercise of this Warrant.
13. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
received (a) upon hand delivery (receipt acknowledged) or delivery by telex
(with correct answer back received), telecopy or facsimile (with transmission
confirmation report) at the address or number designated below (if received by
5:00 p.m. eastern time where such notice is to be received), or the first
Business Day following such delivery (if received after 5:00 p.m. eastern
time where such notice is to be received) or (b) on the second Business Day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications are (i) if to the
Company or the Company's transfer agent to the address set forth in the
Purchase Agreement, and (ii) if to the Registered Owner to the addresses set
forth on the Purchase Agreement with copies to Akin, Gump, Strauss, Hauer &
Feld, L.L.P., 590 Madison Avenue, New York, New York 10022, Attn: James Kaye,
fax no. (212) 872-1002 or such other address as may be designated in writing
hereafter, in the same manner, by such person.
14. Compliance With Governmental Requirements. The Company covenants
that if any shares of Common Stock required to be reserved for purposes of
exercise this Warrant requires registration with or approval of any
governmental authority under any Federal or state law, or any national
securities exchange, before such shares may be issued upon exercise, the
Company will use its best efforts to cause such shares to be duly registered
or approved, as the case may be.
15. Fractional Shares. Upon any exercise hereunder, the Company shall
not be required to issue stock certificates representing fractions of shares
of the Common Stock, but may if otherwise permitted make a cash payment in
respect of any final fraction of a share based on the Per Share Market Value
at such time. If the Company elects not, or is unable, to make such a cash
payment, the Registered Owner shall be entitled to receive, in lieu of the
final fraction of a share, one whole share of Common Stock.
16. Payment of Tax Upon Issue of Transfer. The issuance of
certificates for shares of the Common Stock upon exercise of this Warrant
shall be made without charge to the Registered Owner hereof for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be
required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon exercise in
a name other than that of the Registered Owner of this Warrant and the Company
shall not be required to issue or deliver such certificates unless or until
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
17. Warrants Owned by Company Deemed Not Outstanding. In determining
whether the holders of the outstanding Warrants have concurred in any
direction, consent or waiver under this Warrant, warrants which are owned by
the Company or any other obligor on the warrants shall be disregarded and
deemed not to be outstanding for the purpose of any such determination;
provided, that any Warrants owned by the Registered Owner shall be deemed
outstanding for purposes of making such a determination.
18. Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
19. No Rights as Stockholder. This Warrant shall not entitle the
Registered Owner to any rights as a stockholder of the Company, including
without limitation, the right to vote, to receive dividends and other
distributions, or to receive notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, unless and to the extent exercised
into shares of Common Stock in accordance with the terms hereof.
20. Certain Actions Prohibited. The Company will not, by amendment of
its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by the
Registered Owner in order to protect the exercise privilege of the Registered
Owner against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing,
the Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant.
21. Shareholder Rights Plan. In the event that the Company shall
distribute "poison pill" rights pursuant to a "poison pill" shareholder rights
plan (the "Rights"), the Company shall, in lieu of making any adjustment
pursuant to Section 7 hereof, make proper provision so that each Registered
Owner who exercises this Warrant after the record date for such distribution
and prior to the expiration or redemption of the Rights shall be entitled to
receive upon such exercise, in addition to the shares of Common Stock issuable
upon such exercise, a number of Rights to be determined as follows: (i) if
such exercise occurs on or prior to the date for the distribution to the
holders of Rights of separate certificates evidencing such Rights (the
"Distribution Date"), the same number of Rights to which a holder of a number
of shares of Common Stock equal to the number of shares of Common Stock
issuable upon such exercise at the time of such exercise would be entitled in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such exercise occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares into which this Warrant was
exercisable immediately prior to the Distribution Date would have been
entitled on the Distribution Date, in accordance with the terms and provisions
of such Rights, and in each case subject to the terms and conditions of the
Rights.
22. Successors and Assigns. This Warrant shall be binding upon and
inure to the benefit of the Registered Owners and its assigns, and shall be
binding upon any entity succeeding to the Company by merger or acquisition of
all or substantially all the assets of the Company. The Company may not
assign this Warrant or any rights or obligations hereunder without the prior
written consent of the Registered Owner. The Registered Owner may assign this
Warrant without the prior written consent of the Company.
23. Governing Law. The corporate laws of the State of Nevada shall
govern all issues concerning the relative rights of the Company and the
Registered Owners as securities holders. All other issues shall be governed
by and 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. Each party hereby irrevocably submits to the nonexclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
24. Remedies. In the event of a breach by the Company of any of their
obligations under this Warrant, the Registered Owner, in addition to being
entitled to exercise all rights granted by law and under the Purchase
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that
monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Warrant
and hereby further agree that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a
remedy at law would be adequate.
25. Mutilated or Missing Warrants. In case this Warrant shall be
mutilated, lost, stolen or destroyed, the Company, upon request of the
Registered Owner, shall issue and deliver in exchange and substitution for and
upon cancellation of such mutilated Warrant, or in the event that this Warrant
is lost, stolen or destroyed, a new Warrant of like tenor and representing an
equivalent right or interest.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of the date first set forth above.
DATALINK.NET, INC.
By: /s/ Anthony LaPine
Name: Anthony LaPine
Title: CEO
EXHIBIT A
Warrant Exercise Form
TO: DATALINK.NET, INC.
The undersigned hereby: (1) irrevocably subscribes for and offers to purchase
_______ shares of Common Stock of Datalink.net, Inc., pursuant to Warrant No.
___ heretofore issued to ___________________ on ____________, ____ ; (2)
encloses either (a) a cash payment of $__________ or (b) a Warrant
representing _____ shares of Common Stock valued at the Per Share Market Price
of $ _____ on ________, ____, for these shares at a price of $____ per share
(as adjusted pursuant to the provisions of the Warrant); and (3) requests that
a certificate for the shares be issued in the name of the undersigned, or the
undersigned's designee, and delivered to the undersigned, or the undersigned's
designee, at the address specified below.
Date: ______________________________
Investor Name: ______________________________
Taxpayer Identification Number: ______________________________
By: ______________________________
Printed Name: ______________________________
Title: ______________________________
Address: ______________________________
______________________________
Cashless Exercise (Y or N): _________________
Note: The above signature should correspond exactly with the name on the face
of this Warrant Certificate or with the name of assignee appearing in
assignment form below.
AND, if said number of shares shall not be all the shares purchasable under
the within Warrant, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the shares purchasable
thereunder less any fraction of a share paid in cash and delivered to the
address stated above.