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EXHIBIT 10.19
THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS FOR NONPUBLIC OFFERINGS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, THESE SECURITIES MAY NOT
BE RESOLD OR OTHERWISE DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL FOR OR
SATISFACTORY TO THE ISSUER, REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE
SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION
REQUIREMENTS.
VOID AFTER 5:00 P.M. NEW YORK TIME, ON DECEMBER , 2002
WARRANT TO PURCHASE 350,000 SHARES OF COMMON STOCK
OF
ENTERWORKS, INC.
This is to certify that, FOR VALUE RECEIVED, BANK OF AMERICA, N.A. or
its registered assigns pursuant to Section (d) hereof ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from Enterworks, Inc., a
Delaware corporation (the "Company"), 350,000 fully paid, validly issued and
nonassessable shares of Common Stock, par value $.01 per share, of the Company
("Common Stock"), at the exercise price of $1.15 per share until December ,
2002. The number of shares of Common Stock to be received upon the exercise of
this Warrant and the price to be paid for each share of Common Stock may be
adjusted from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares," and the exercise price of
a share of Common Stock as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price."
(a) EXERCISE OF WARRANT; NOTIFICATION OF EXPIRATION DATE OF WARRANT.
The Warrant may be exercised as to a minimum of _____ Warrant Shares at any time
or from time to time, until 5:00 P.M. New York time on December , 2002 (the
"Expiration Date"), provided, however, that if such day is a day on which
banking institutions in the State of New York are authorized by law to close,
then on the next succeeding day which shall not be such a day. The Warrant may
be exercised by presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer agent, if any, with the
Purchase Form annexed hereto duly executed (with signature guaranteed if
required by the Company or its stock transfer agent) and accompanied by payment
of the Exercise Price for the number of Warrant Shares specified in such form
and any applicable taxes. The purchase price for any Warrant Shares purchased
pursuant to the exercise of this Warrant shall be paid in full upon such
exercise in cash or by certified or bank check or pursuant to a cashless
exercise procedure whereby the Warrant Shares issued upon exercise of this
Warrant will be sold with Holder receiving the
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difference between the Exercise Price and the sale price, in cash, and the
Company receiving the Exercise Price for the Warrant Shares, in cash, or any
combination of the foregoing methods of paying the Exercise Price. In the
alternative, the Warrant may be exchanged for Warrant shares as described in
Section (1). As soon as practicable after each such exercise of the Warrants,
but not later than seven (7) business days from the date of such exercise, the
Company shall issue and deliver to the Holder a certificate or certificates for
the Warrant Shares issuable upon such exercise, registered in the name of the
Holder or the Holder's designee, except in the case of a cashless exercise. If
the Warrant should be exercised in part only, the Company shall, upon surrender
of the Warrant for cancellation, execute and deliver a new Warrant evidencing
the rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable thereunder. In the event of a cash exercise, upon receipt by the
Company of the Warrant at its office, or by the stock transfer agent of the
Company at its office, in proper form for exercise, together with the exercise
price thereof and taxes as aforesaid in cash or certified or bank check and the
investment letter described below, the Holder shall be deemed to be the holder
of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be physically delivered to the Holder. In order to assure the availability
of an exemption from registration under the federal or applicable state
securities laws, the Company may condition the exercise of the Warrant upon the
Holder delivering to the Company an investment letter in the form as customarily
used by the Company from time to time in connection with the exercise of
non-registered options and warrants which are issued by the Company. It is
further understood that certificates for the Warrant Shares, if any, to be
issued upon exercise of the Warrant may contain a restrictive legend in
accordance with Section (j) hereof.
(b) RESERVATION OF SHARES. The Company shall at all times reserve
for issuance and/or delivery upon exercise of this Warrant such number of shares
of its Common Stock as shall be required for issuance and delivery upon exercise
of the Warrants. If the Common Stock is or becomes listed on any national
securities exchange or the NASDAQ National Market System, the Company shall also
list such shares on such exchange subject to notice of issuance or maintain the
listing of its Common Stock on the NASDAQ system, as the case may be.
(c) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of the Warrant. With respect
to any fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on the NASDAQ National Market
System, the current market value shall be the last reported sale
price of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant or if
no such sale is made on such day, the average closing bid and
asked prices for such day on such exchange or system;
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(2) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean
of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc., on the last business day prior
to the date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported,
the current market value shall be an amount, not less than the
book value thereof as at the end of the most recent fiscal year
of the Company ending prior to the date of the exercise of the
Warrant, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. The Warrant
is exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
Holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to Section (j) hereof, the Holder may
transfer or assign the Warrant, in whole or in part and from time to time. Upon
surrender of this Warrant to the Company at its principal office or at the
office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed (with signature guaranteed, if required by the Company or
its stock transfer agent) and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee or assignees named in such instrument of assignment and this
Warrant shall promptly be canceled. This Warrant may be divided by or combined
with other Warrants which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant my be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and in the case
of loss, theft or destruction, of reasonable satisfactory indemnification
(including a surety bond), and upon surrender and cancellation of this Warrant,
if mutilated, the Company will execute and deliver a new Warrant of like tenor,
date and amount. Any such new Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the Company, whether or not the
original Warrant shall be at any time enforceable (subject to the Company's
right of indemnification as provided above) by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION PROVISIONS. So long as this Warrant shall be
outstanding, the Exercise Price in effect at any time and the number and kind of
securities purchasable upon the
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exercise of the Warrants shall be subject to adjustment from time to time upon
the happening of certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares
of Common Stock, (ii) issue shares of Common Stock or securities
convertible into Common Stock (other than shares of Series A
Preferred Stock issued during December, 1999; warrants
outstanding as of December __, 1999 including without limitation
warrants to purchase 1,054,560 shares of Common Stock issued to
Deutsche Banc Securities, Inc., and Common Stock issued upon
exercise thereof; stock options, or rights to purchase up to
12,760,900 shares of Common Stock available for issuance to
officers, directors and employees of the Company at not less
than fair market value, including stock options outstanding as
of December 28, 1999 and Common Stock issued upon exercise
thereof) for consideration less than the Exercise Price of the
Warrant on the date of issuance of such securities; (iii)
subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (iv) combine or reclassify
its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect at the time of the record
date for such dividend or distribution, the sale of such
securities or the effective date of such subdivision,
combination or reclassification shall be proportionately
adjusted as of the effective date of such event by multiplying
such Exercise Price by a fraction, the denominator of which
shall be the number of shares of Common Stock outstanding
immediately following such event and the numerator of which
shall be the number of shares of Common Stock outstanding
immediately prior thereto. For example, if the Company declares
a 2 for 1 stock distribution and the Exercise Price immediately
prior to such event was $1.00 per share, the adjusted Exercise
Price immediately after such event would be $.50 per share. Such
adjustment shall be made successively whenever any event listed
above shall occur.
(2) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to subsection (A) above, the number
of Warrant Shares purchasable upon exercise of the Warrant shall
simultaneously be adjusted by multiplying the number of Warrant
Shares issuable upon exercise of this Warrant by the Exercise
Price in effect on the date hereof and dividing the product so
obtained by the Exercise Price, as adjusted pursuant to
subsection (1).
(3) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at
least $.05 in such price; provided, however, that any
adjustments which by reason of this subsection (f) (3) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment required to be made
hereunder.
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(4) Each computation required by this Section (f) for purposes
of determine whether the Exercise Price shall be adjusted shall
be performed by the Company's Chief Financial Officer on the
basis of the Company's internally prepared unaudited financial
statements. Such unaudited financial statements shall be
accompanied by a certificate signed by the President and Chief
Financial Officer certifying that such unaudited statements have
been prepared in accordance with GAAP on a basis consistently
applied and included all adjustments (consisting only of normal,
recurring accruals) necessary for a fair presentation of the
financial position and results of the Company as of the end each
such period. Any dispute between a holder and the Company in
regard to such a computation shall be referred to and decided by
the Company's then engaged firm of independent certified public
accountants, which shall be a firm of recognized national
reputation (the "Accounting Firm") The computations of the
Accounting Firm shall be final and binding on the Company and
the Holder.
(5) 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 the
Holder, at its address appearing in the Warrant Register, and
shall cause a certified copy thereof to be mailed to its
transfer agent, if any.
(6) All calculations under this Section (f) shall be made to the
nearest cent or to the nearest Warrant Share, as the case may
be.
(7) In the event that at any time, as a result of an adjustment
made pursuant to this Section (f) above, the Holder of this
Warrant thereafter shall become entitled to receive any shares
of the Company, other than Common Stock, thereafter the number
of such other shares so receivable upon exercise of this Warrant
shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in subsection (A)
above.
(8) Irrespective of any adjustments in the Exercise Price or the
number or kind of Warrant Shares purchasable upon exercise of
this Warrant, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of shares
as are stated in the similar Warrants initially issuable
pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each
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such officer's certificate shall be made available at all reasonable times for
inspection by the Holder or any holder of a Warrant executed and/or delivered
pursuant to Section (a) or Section (d), and the Company shall, forthwith after
each such adjustment, mail, by certified mail, a copy of such certificate to the
Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any shares of any class or any
other rights, or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder or any holder of a Warrant executed
and/or delivered pursuant to Section (a) or Section (d), at least 15 days prior
to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any is to be fixed, as of which the holders of Common Stock or
other securities shall receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification or capital reorganization of outstanding shares of Common Stock
of the Company, or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with another corporation in which
merger the Company is the continuing corporation and which does not result in
any reclassification or capital reorganization of outstanding shares of Common
Stock of the class issuable upon exercise of this Warrant) or in case of any
sale, lease or conveyance to another corporation of the property of the Company
as an entirety, the Company shall, as a condition precedent to such transaction,
cause effective provisions to be made so that the Holder or any holder of a
Warrant executed and/or delivered pursuant to Section (a) or Section (d) shall
have the right thereafter by exercising the Warrant at any time prior to the
expiration of the Warrant, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such reclassification or
capital reorganization and consolidation, merger, sale or conveyance. Any such
provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in the Warrant.
The foregoing provisions of this Section (i) shall similarly apply to successive
reclassifications or capital reorganizations of shares of Common Stock and to
successive consolidations, mergers, sales or conveyances. In the event that in
connection with any such capital reorganization or reclassification,
consolidation, merger, sale or conveyance, additional shares of Common Stock
shall be issued in exchange, conversion, substitution or payment, in whole or in
part, for a security of the Company other than Common Stock, any such issue
shall be treated as an issue of Common Stock covered by the provisions of
subsection (1) of Section (f) hereof.
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(j) SECURITIES LAW COMPLIANCE
(1) The Holder of the Warrant, by acceptance hereof,
acknowledges that the Warrant and the shares of Common
Stock to be issued upon exercise hereof or conversion
thereof are being acquired solely for the Holder's own
account and not as a nominee for any other party, and
for investment, and that the Holder will not offer,
sell, transfer, assign or otherwise dispose of this
Warrant or any shares of Common Stock to be issued upon
exercise hereof or conversion thereof except under
circumstances that will not result in a violation of the
Act or any state securities laws. Upon exercise of the
Warrant, the Holder shall, if requested by the Company,
confirm in writing, in a form satisfactory to the
Company, that the shares of Common Stock so purchased
are being acquired solely for the Holder's own account
and not as a nominee for any other party, for
investment, and not with a view toward distribution or
resale.
(2) If appropriate, the Warrant and any Warrants issued
upon exercise or substitution or upon assignment or
transfer pursuant to Section (a) or Section (d), as the
case may be, and all shares of Common Stock issued upon
exercise hereof or conversion thereof shall be stamped
or imprinted with legends setting forth the restrictions
on transfer arising under applicable federal and state
securities laws.
(k) REGISTRATION RIGHTS UNDER THE SECURITIES ACT OF 1933
(1) Commencing the date hereof, the Company shall advise
the Holder of the Warrant or of the Warrant Shares or
any then Holder of Warrants or Warrant Shares (such
persons being collectively referred to herein as
"Holders") by written notice at least 21 days prior to
the filing of any registration statement or
post-effective amendment thereto ("Registration
Statement") under the Securities Act of 1933, as amended
(the "Act"), covering an underwritten public offering of
equity securities of the Company and, subject to the
provisions herein contained, shall register in any such
Registration Statement the number of Warrant Shares that
the Holder shall notify the Company it desires to
register and shall include in any such Registration
Statement such information as may be required to permit
a public offering of such Warrant Shares by the
Company's underwriter(s). The Company shall supply
prospectuses and other documents as the Holder may
reasonably request in order to facilitate the public
sale or other disposition of the Warrant Shares. The
Company shall bear the entire cost and expense of a
registration of securities initiated by it under this
Paragraph (1), except that the Holder shall, however,
bear the fees of its own counsel and any transfer taxes
and underwriting discounts or commissions applicable to
the Warrant Shares sold by it. The Company may include
other securities in any such
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registration statement. The Company shall do any and all
other acts and things which may be necessary or
desirable to enable the Holder to consummate the public
sale or other disposition of the Warrant Shares, and
furnish indemnification in the manner as set forth in
Paragraph (2) (a) of this Section (k), but shall not be
required to qualify as a foreign corporation to qualify
the Warrant Shares for sale under the securities laws of
any state. The Holder shall furnish information and
indemnification as set forth in Paragraph (2) (b) of
this Section (k). All decisions as to whether and when
to proceed with any Registration Statement shall be made
solely by the Company.
Nothwithstanding the foregoing paragraph, in the
event that there is an underwritten offering of the
Company's securities offered pursuant to said
registration statement pursuant to the immediately
preceding Paragraph, the underwriter(s) shall have the
right to refuse to permit any Warrant Shares, or to
limit the amount of Warrant Shares, to be sold by the
Holder to such underwriter(s) as such underwriter(s) may
determine in its discretion, and the Holder shall
refrain from selling such remainder of its Warrant
Shares covered by such registration statement for the
period of 180 days following the effective date and
shall also refrain at any time when notified by the
Company that an amendment or supplement to the
prospectus is required. The Company shall not be
obligated to keep any Registration Statement effective
for a total of more than 90 days.
(2) (a) Whenever pursuant to this Section (k) a
Registration Statement relating to the Warrant Shares is
filed under the Act, amended or supplemented, the
Company will indemnify and hold harmless each Holder of
Warrant Shares covered by such Registration Statement,
amendment or supplement (such Holder being hereinafter
called the "Distributing Holder"), and each person, if
any who controls (within the meaning of the Act) the
Distributing Holder, against any losses, claims, damages
or liabilities, joint or several, to which the
Distributing Holder or any such controlling person may
become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any
material fact contained in any such Registration
Statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment
or supplement thereto, or arise out of or are based upon
the omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading; and will reimburse the
Distributing Holder and each such controlling person for
any legal or other expenses reasonably incurred by the
Distributing Holder and each controlling person for any
legal or other expenses reasonable incurred by the
Distributing Holder or such controlling person or
underwriter in connection with investigating or
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defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be
liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said
Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement, in reliance upon
and in conformity with written information furnished by
the Distributing Holder or underwriter for use in the
preparation thereof.
(b) The Distributing Holder will indemnify and
hold harmless the Company, each of its directors, each
of its officers who have signed said Registration
Statement and such amendments and supplements thereto,
each person, if any, who controls the Company (within
the meaning of the Act) and the Company's underwriter(s)
and each person, if any, who controls such
underwriter(s) (within the meaning of the Act) against
any losses, claims, damages or liabilities to which the
Company or any such director, officer, underwriter or
controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained
in said Registration Statement, preliminary prospectus,
final prospectus, or amendment or supplement, or arise
out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but
only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was
made in said Registration Statement, preliminary
prospectus, final prospectus or amendment or supplement,
in reliance upon and in conformity with written
information furnished by such Distributing Holder for
use in the preparation thereof; and will reimburse the
Company or underwriter or any such director, officer or
controlling person for any legal or other expenses
reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified
party under this Paragraph 2 of notice of the
commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice
of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party
otherwise than under this Paragraph 2.
(d) In case any such action is brought against
any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, the
extent
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that it may wish, jointly with any other indemnifying
party similarly notified to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be
liable to such indemnified party under this Paragraph 2
for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.
(e) The Company's agreements with respect to
Warrant Shares in this Section (k) shall continue in
effect regardless of the exercise or surrender of the
Warrant.
(l) RIGHT TO CONVERT WARRANT INTO COMMON STOCK.
(1) Right to Convert. The Holder shall have the right to
require the Company to convert this Warrant provided in
this Section (l), into common stock (the "Net Conversion
Right"). Upon exercise of the Net Conversion Right, the
Company shall deliver to the Holder (without payment by
the Holder of any Exercise Price or of any other cash or
consideration) that number of shares of Common Stock
equal to the quotient obtained by dividing (x) the value
of this Warrant at the time the Conversion Right is
exercised (determined by subtracting the aggregate
Exercise Price in effect immediately prior to the
exercise of the Conversion Right from the aggregate fair
market value of the shares of Common Stock issuable upon
exercise of this Warrant immediately prior to the
exercise of the Conversion Right) by (y) the fair market
value of one share of Common Stock immediately prior to
the exercise of the Conversion Right.
(2) Method of Exercise. The Net Conversion Right may be
exercised by the Holder by the surrender of this Warrant
at the principal office of the Company together with a
written statement specifying that the Holder thereby
intends to exercise the Net Conversion Right.
Certificates for the shares of Common Stock issuable
upon exercise of the Net Conversion Right shall be
delivered to the Holder within five (5) days following
the Company's receipt of this Warrant together with the
aforesaid written statement.
(3) Determination of Fair Market Value. For purposes of
this Section (f), fair market value of a share of Common
Stock as of a particular date (the "Determination Date")
shall be determined in accordance with Section (c) of
this Warrant.
(m) AMENDMENTS. Neither the Warrant nor any term hereof may be
changed, waived, discharged or terminated without the prior written consent of
the Holder.
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(n) NO IMPAIRMENT. The Company will not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, 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 be necessary or appropriate in order to protect the rights of any
Holder. Without limiting the generality of the foregoing, the Company: (i) will
not set nor increase the par value of any Warrant Shares above the amount
payable therefor upon such exercise, and (ii) will take all actions that are
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares upon the exercise of the Warrants.
(o) GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware.
(p) NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, addressed (a) if to the Holder, to BT Alex. Incorporated, 1
South Street, Baltimore, Maryland 21202, Attention: Geoffrey Stengel III, or (b)
if to the Company, to ENTERWORKS, Inc. 19886 Ashburn Road, Ashburn, VA 20147, or
at such other address as to the Company shall have furnished to the Holder in
writing.
(q) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Holder that:
(a) Organization, Standing and Qualification. The Company is
a corporation duly organization, validly existing and in good standing under the
laws of the State of Delaware; has all requisite corporate power and authority
to own or lease and operate its properties and to carry on its business as now
conducted; and is duly qualified or licensed to do business as a foreign
corporation in good standing in all jurisdictions in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed.
(b) Authority and Noncontravention. The Company has all
requisite power and authority to enter into and perform all of its obligations
under this Warrant and to carry out the transactions contemplated hereby. The
Company has taken all corporate or stockholder actions necessary to authorize it
to enter into and perform all of its obligations under this Warrant and to
consummate the transactions contemplated hereby. The execution and delivery of
this Warrant does not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any lien upon any of the properties or assets of the Company or any
of its subsidiaries under, (i) any of their organizational documents, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, guarantee, lease,
agreement or other instrument, permit, concession, franchise, license or similar
authorization application to the Company or any of its subsidiaries or their
respective properties or assets or (iii) any judgment, order, decree, statute,
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law, ordinance, rule or regulation applicable to the Company or any of its
subsidiaries or their respective properties or assets.
(c) Validity. This Warrant is the legal, valid and binding
obligation of the company, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights of creditors generally.
(d) No Brokers. There are no valid claims for brokerage
commissions, finder's fees or similar sales compensation in connection with this
Warrant based upon any arrangement or agreement made by or on behalf of the
Company, and the Company agrees to indemnify and hold harmless any holder of
this Warrant against any liability or expense to it arising out of such a claim
to the extent that such claim arises out of actions or alleged actions of the
Company.
(e) Indemnity. The Company agrees to indemnify and hold
harmless the holder of this Warrant and any affiliates, employees and agents of
the holder of this Warrant against any and all loss, liability, claim, damage,
and expense whatsoever (including, but not limited to, any and all expenses
whatsoever, including the fees and disbursements of counsel, reasonably incurred
in investigating, preparing, or defending against any litigation commenced or
threatened or any claim whatsoever), arising out of or based upon any breach or
failure by the Company to comply with any representation, warranty, covenant, or
agreement made by the Company herein.
IN WITNESS WHEREOF, __________ ENTERWORKS, Inc. has caused this Warrant
to be executed by its officer thereunto duly authorized.
Dated: December __, 1999
COMPANY: ENTERWORKS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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PURCHASE FORM
Dated _______________, 19___
The undersigned hereby irrevocably elects to exercise its rights
pursuant to this Warrant to the extent of purchasing ______ shares of Common
Stock of Enterworks, Inc., and hereby makes payment of $1.15, in cash, in
payment of the exercise price thereof.
[The undersigned hereby irrevocably elects to exercise its rights
pursuant to this Warrant to the extent of purchasing _____ shares of Common
Stock and hereby authorizes you to deliver such shares of Common Stock for sale
to ___________, and to retain from the proceeds of such sale $__________, in
cash, in payment of the exercise price thereof and to remit to the undersigned
the balance of such proceeds.]
-----------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
-------------------------------------------------------------
(Please typewrite or print in block letters)
Address
----------------------------------------------------------
Signature
--------------------------------------------------------
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ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________________________ hereby
sells, assigns and transfers unto
Name
--------------------------------------------------------------
(Please typewrite or print in block letters)
Address
-----------------------------------------------------------
the right to purchase Common Stock of __________ _________________ (the
"Company"), represented by this Warrant to the extent of ____ ______ shares as
to which such right is exercisable and does hereby irrevocably constitute and
appoint _____________________________ as Attorney, to transfer the same on the
books of the Company with full power of substitution in the premises.
Date ___________, 19___
Signature
--------------------------
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