INTERNATIONAL SYNERGY HOLDING COMPANY, LTD.
WARRANT AGREEMENT
Date: August 27, 2001
To Joy W. Kimbell:
International Synergy Holding Company, Ltd. ("Company"), for value
received, hereby agrees to issue common stock purchase warrants entitling Joy W.
Kimbell ("Holder") and her assigns to purchase an aggregate of 100,000 shares of
the Company's common stock ("Common Stock"). Such warrant is evidenced by a
warrant certificate in the form attached hereto as Schedule 1 (such instrument
being hereinafter referred to as a "Warrant," and such Warrant and all
instruments hereafter issued in replacement, substitution, combination or
subdivision thereof being hereinafter collectively referred to as the
"Warrant"). The Warrant is issued in consideration for services rendered
pursuant to a consulting agreement dated July 27, 2001. The number of shares of
Common Stock purchasable upon exercise of the Warrant is subject to adjustment
as provided in Section 5 below. The Warrant will be exercisable by the Warrant
Holder (as defined below) as to all or any lesser number of shares of Common
Stock covered thereby, at an initial purchase price of $.50 per share (the
"Purchase Price"), subject to adjustment as provided in Section 5 below, for the
exercise period defined in Section 3(a) below. The term "Warrant Holder" refers
to the person whose name appears on the signature page of this agreement and any
transferee or transferees of any of them permitted by Section 2(a) below.
1. Representations and Warranties.
The Company represents and warrants to you as follows:
(a) Corporate and Other Action. The Company has all requisite power and
authority (corporate and other), and has taken all necessary corporate
action, to authorize, execute, deliver and perform this Warrant Agreement,
to execute, issue, sell and deliver the Warrant and a certificate or
certificates evidencing the Warrant, to authorize and reserve for issue
and, upon payment from time to time of the Purchase Price, to issue, sell
and deliver, the shares of the Common Stock issuable upon exercise of the
Warrant ("Shares"), and to perform all of its obligations under this
Warrant Agreement and the Warrant. The Shares, when issued in accordance
with this Warrant Agreement, will be duly authorized and validly issued and
outstanding, fully paid and nonassessable and free of all liens, claims,
encumbrances and preemptive rights. This Warrant Agreement and, when
issued, each Warrant issued pursuant hereto, has been or will be duly
executed and delivered by the Company and is or will be a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms.
No authorization, approval, consent or other order of any governmental
entity, regulatory authority or other third party is required for such
authorization, execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement, the
consummation of the transactions herein contemplated and the compliance
with the terms and provisions of this Warrant Agreement and of the Warrant
will not conflict with, or result in a breach of, or constitute a default
or an event permitting acceleration under, any statute, the Certificate of
Incorporation or Bylaws of the Company or any indenture, mortgage, deed of
trust, note, bank loan, credit agreement, franchise, license, lease,
permit, or any other agreement, understanding, instrument, judgment,
decree, order, statute, rule or regulation to which the Company is a party
or by which it is bound.
2. Transfer.
(a) Transferability of Warrant. You agree that the Warrant is being acquired as
an investment and not with a view to distribution thereof and that the
Warrant may not be transferred, sold, assigned or hypothecated except as
provided herein. You further acknowledge that the Warrant may not be
transferred, sold, assigned or hypothecated unless pursuant to a
registration statement that has become effective under the Securities Act
of 1933, as amended (the "Act"), setting forth the terms of such offering
and other pertinent data with respect thereto, or unless you have provided
the Company with an acceptable opinion from acceptable counsel that such
registration is not required. Certificates representing the Warrant shall
bear an appropriate legend. Notwithstanding the foregoing, any request to
transfer the Warrant must be accompanied by the Form of Assignment and
Transfer attached hereto as Schedule 2 executed by the Warrant Holder.
(b) Registration of Shares. You agree not to make any sale or other disposition
of the Shares except pursuant to a registration statement which has become
effective under the Act, setting forth the terms of such offering, the
underwriting discount and commissions and any other pertinent data with
respect thereto, unless you have provided the Company with an acceptable
opinion of counsel acceptable to the Company that such registration is not
required. Certificates representing the Shares, which are not registered as
provided in this Section 2, shall bear an appropriate legend and be subject
to a "stop-transfer" order.
3. Exercise of Warrant, Partial Exercise.
(a) Exercise Period. This Warrant shall expire and all rights hereunder shall
be extinguished on September 1, 2003.
(b) Exercise in Full. Subject to Section 3(a), a Warrant may be exercised in
full by the Warrant Holder by surrender of the Warrant, with the Form of
Subscription attached hereto as Schedule 3 executed by such Warrant Holder,
to the Company c/o Vanderkam & Sanders, 440 Louisiana, Suite 475, Houston,
Texas, 77002 Attention: David Loev, accompanied by payment as determined by
3(d) below, in the amount obtained by multiplying the number of Shares
represented by the respective Warrant by the Purchase Price per share
(after giving effect to any adjustments as provided in Section 5 below).
(c) Partial Exercise. Subject to Section 3(a), each Warrant may be exercised in
part by the Warrant Holder by surrender of the Warrant, with the Form of
Subscription attached hereto as Schedule 3 at the end thereof duly executed
by such Warrant Holder, in the manner and at the place provided in Section
3(b) above, accompanied by payment as determined by 3(d) below, in amount
obtained by multiplying the number of Shares designated by the Warrant
Holder in the Form of Subscription attached hereto as Schedule 3 to the
Warrant by the Purchase Price per share (after giving effect to any
adjustments as provided in Section 5 below). Upon any such partial
exercise, the Company at its expense will forthwith issue and deliver to or
upon the order of the Warrant Holder a new Warrant of like tenor, in the
name of the Warrant Holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of Shares equal to the number of
such Shares called for on the face of the respective Warrant (after giving
effect to any adjustment herein as provided in Section 5 below) minus the
number of such Shares designated by the Warrant Holder in the
aforementioned form of subscription.
(d) Payment of Purchase Price. Payment of the Purchase Price may be made by any
of the following, or a combination thereof, at the election of the Warrant
Holder: cash, certified check or cashier's check, wire transfer, or
surrender of the Warrant at the principal office of the Company together
with notice of election, in which event the Company shall issue Warrant
Holder a number of Shares computed using the following formula:
X = Y (A-B)/A
where: X = the number of Shares to be issued to Warrant Holder.
Y = the number of Shares for which the Warrant is being exercised.
A = the Market Price of one Share (for purposes of this Section 2(d),
the "Market Price" shall be defined as the average closing price of
the Common Stock (if actual sales price information on any trading day
is not available, the closing bid price shall be used) for the five
trading days prior to the Date of Exercise of this Warrant (the
"Average Closing Bid Price"), as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or if the
Common Stock is not traded on NASDAQ, the Average Closing Bid Price in
the over-the-counter market; provided, however, that if the Common
Stock is listed on a stock exchange, the Market Price shall be the
Average Closing Bid Price on such exchange; and, provided further,
that if the Common Stock is not quoted or listed by any organization,
the fair value of the Common Stock, as determined by the Board of
Directors of the Company, whose determination shall be conclusive,
shall be used.
B = the Exercise Price.
4. Delivery of Stock Certificates on Exercise.
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Any exercise of the Warrant pursuant to Section 3 shall be deemed to
have been effected immediately prior to the close of business on the
date on which the Warrant together with the Form of Subscription and
the payment for the aggregate Purchase Price shall have been received
by the Company. At such time, the person or persons in whose name or
names any certificate or certificates representing the Shares or Other
Securities (as defined below) shall be issuable upon such exercise
shall be deemed to have become the holder or holders of record of the
Shares or Other Securities so purchased. As soon as practicable after
the exercise of any Warrant in full or in part, and in any event within
10 business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in
the name of, and delivered to the purchasing Warrant Holder, a
certificate or certificates representing the number of fully paid and
nonassessable shares of Common Stock or Other Securities to which such
Warrant Holder shall be entitled upon such exercise, plus in lieu of
any fractional share to which such Warrant Holder would otherwise be
entitled, cash in an amount determined pursuant to Section 6(e). The
term "Other Securities" refers to any stock (other than Common Stock),
other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the Warrant Holder at any time
shall be entitled to receive, or shall have received, upon the exercise
of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section
5 below or otherwise.
5. Adjustment of Purchase Price and Number of Shares Purchasable.
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The Purchase Price and the number of Shares are subject to adjustment
from time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Warrant
Agreement (i) declare a dividend on the Common Stock in shares of its
capital stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of Common
Stock, or (iv) issue any shares of its capital stock by
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then in each case the
Purchase Price, and the number and kind of Shares receivable upon
exercise, in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination, or
reclassification shall be proportionately adjusted so that the holder
of any Warrant exercised after such time shall be entitled to receive
the aggregate number and kind of Shares which, if such Warrant had
been exercised immediately prior to such record date, he would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed above
shall occur.
(b) No adjustment in the Purchase Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments
which by reason of this subsection (b) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 5 shall be made to the
nearest cent or to the nearest one-thousandth of a share, as the case
may be.
(c) Upon each adjustment of the Purchase Price as a result of the
calculations made in subsection (a) of this Section 5, the Warrant
outstanding prior to the making of the adjustment in the Purchase
Price shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Shares (calculated to the nearest
thousandth) obtained by (i) multiplying the number of Shares
purchasable upon exercise of the Warrant immediately prior to
adjustment of the number of Shares by the Purchase Price in effect
prior to adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
6. Further Covenants of the Company.
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(a) Dilution or Impairments. The Company will not, by amendment of its
certificate of incorporation or through any reorganization, transfer
of assets, consolidation, merger or dissolution, avoid or seek to
avoid the observance or performance of any of the terms of the Warrant
or of this Warrant Agreement, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the
rights of the Warrant Holder against dilution or other impairment.
Without limiting the generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely for
issuance and delivery upon the exercise of the Warrant, all
shares of Common Stock (or Other Securities) from time to time
issuable upon the exercise of the Warrant and shall take all
necessary actions to ensure that the par value per share, if any,
of the Common Stock (or Other Securities) is at all times equal
to or less than the then effective Purchase Price per share; and
(ii) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock or Other Securities upon
the exercise of the Warrant from time to time outstanding.
(b) Title to Stock. All Shares delivered upon the exercise of the Warrant
shall be validly issued, fully paid and nonassessable; each Warrant
Holder shall, upon such delivery, receive good and marketable title to
the Shares, free and clear of all voting and other trust arrangements,
liens, encumbrances, equities and claims whatsoever; and the Company
shall have paid all taxes, if any, in respect of the issuance thereof.
(c) Exchange of Warrant. Subject to Section 2(a) hereof, upon surrender
for exchange of any Warrant to the Company, the Company at its expense
will promptly issue and deliver to or upon the order of the holder
thereof a new Warrant or like tenor, in the name of such holder or as
such holder (upon payment by such Warrant holder of any applicable
transfer taxes) may direct, calling in the aggregate for the purchase
of the number of Shares called for on the face of the Warrant
surrendered. The Warrant and all rights thereunder are transferable in
whole or in part upon the books of the Company by the registered
holder thereof, subject to the provisions of Section 2(a), in person
or by duly authorized attorney, upon surrender of the Warrant, duly
endorsed, at the principal office of the Company.
(d) Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the
Company, at the expense of the Warrant Holder, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(e) Fractional Shares. No fractional Shares are to be issued upon the
exercise of any Warrant, but the Company shall round any fraction of a
share to the nearest whole Share.
7. Other Warrant Holders: Holders of Shares.
The Warrant is issued upon the following terms, to all of which each
Warrant Holder by the taking thereof consents and agrees: (a) any
person who shall become a transferee, within the limitations on
transfer imposed by Section 2(a) hereof, of a Warrant properly endorsed
shall take such Warrant subject to the provisions of Section 2(a)
hereof and thereupon shall be authorized to represent himself as
absolute owner thereof and, subject to the restrictions contained in
this Warrant Agreement, shall be empowered to transfer absolute title
by endorsement and delivery thereof to a permitted bona fide purchaser
for value; (b) any person who shall become a holder or owner of Shares
shall take such shares subject to the provisions of Section 2(b)
hereof; (c) each prior taker or owner waives and renounces all of his
equities or rights in such Warrant in favor of each such permitted bona
fide purchaser, and each such permitted bona fide purchaser shall
acquire absolute title thereto and to all rights presented thereby; and
(d) until such time as the respective Warrant is transferred on the
books of the Company, the Company may treat the registered holder
thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary.
8. Miscellaneous.
All notices, certificates and other communications from or at the
request of the Company to any Warrant Holder shall be mailed by first
class, registered or certified mail, postage prepaid, to such address
as may have been furnished to the Company in writing by such Warrant
Holder, or, until an address is so furnished, to the address of the
last holder of such Warrant who has so furnished an address to the
Company, except as otherwise provided herein. This Warrant Agreement
and any of the terms hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Nevada. The headings in this Warrant Agreement are for purposes of
reference only and shall not limit or otherwise affect any of the
terms hereof. This Warrant Agreement, together with the forms of
instruments annexed hereto as exhibits, constitutes the full and
complete agreement of the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this 27th day of August, 2001, in _______________, by its
proper corporate officers, thereunto duly authorized.
INTERNATIONAL SYNERGY HOLDING COMPANY,
LTD.
By /s/ Kenta Rooks
-----------------------------
KENTA ROOKS, PRESIDENT
SCHEDULE 1
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT AND REGULATION D PROMULGATED THEREUNDER; OR (B) ANY
STATE SECURITIES LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THESE
WARRANTS MUST BE ACQUIRED FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR,
AND NEITHER THE WARRANTS NOR THE UNDERLYING STOCK MAY BE TRANSFERRED OR
EXERCISED EXCEPT IN COMPLIANCE WITH ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase 100,000 Shares
of Common Stock
INTERNATIONAL SYNERGY HOLDING COMPANY, LTD.
This certifies that, for value received, the hereafter named registered owner is
entitled, subject to the terms and conditions of this Warrant, until the
expiration date, to purchase the number of shares (the "Shares") set forth above
of the common stock ("Common Stock"), of INTERNATIONAL SYNERGY HOLDING COMPANY,
LTD. (the "Company") from the Company at the purchase price per share hereafter
set forth, on delivery of this Warrant to the Company with the exercise form
duly executed and payment of the purchase price (in cash or by certified or bank
cashier's check payable to the order of the Company) for each Share purchased.
This Warrant is subject to the terms of the Warrant Agreement between the
parties thereto dated as of August 27, 2001, the terms of which are hereby
incorporated herein. Reference is hereby made to such Warrant Agreement for a
further statement of the rights of the holder of this Warrant.
Registered Owner: Joy W. Kimbell Date: August 27, 2001
Purchase Price
Per Share: $.50
Expiration Date: Subject to Section 3(a) of the Warrant Agreement, 5:00 p.m.
Central Standard Time.
WITNESS the signature of the Company's authorized officer:
INTERNATIONAL SYNERGY HOLDING COMPANY, LTD.
By________________________________________
KENTA ROOKS, PRESIDENT
SCHEDULE 2
FORM OF ASSIGNMENT AND TRANSFER
For value received, the undersigned hereby sells, assigns and transfers unto
__________________________________ the right represented by the enclosed Warrant
to purchase _________________ shares of Common Stock of INTERNATIONAL SYNERGY
HOLDING COMPANY, LTD. to which the enclosed Warrant relates, and appoints
_____________________ Attorney to transfer such right on the books of
INTERNATIONAL SYNERGY HOLDING COMPANY, LTD. with full power of substitution in
the premises.
The undersigned represents and warrants that the transfer of the enclosed
Warrant is permitted by the terms of the Warrant Agreement pursuant to which the
enclosed Warrant has been issued, and the transferee hereof, by his acceptance
of this Agreement, represents and warrants that he is familiar with the terms of
said Warrant Agreement and agrees to be bound by the terms thereof with the same
force and effect as if a signatory thereto.
Dated:______________
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(Signature must conform in all respects to name of holder
as specified on the face of the enclosed Warrant)
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(Address)
Signed in the presence of:
------------------------------------
SCHEDULE 3
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To INTERNATIONAL SYNERGY HOLDING COMPANY, LTD.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to purchase
thereunder, _________* shares of Common Stock of INTERNATIONAL SYNERGY HOLDING
COMPANY, LTD. and herewith makes payment of $_______________ therefore, and
requests that the certificate or certificates for such shares be issued in the
name of and delivered to the undersigned.
Dated:______________
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(Signature must conform in all respects to name of holder
as specified on the face of the enclosed Warrant)
--------------------------------------------
(Address)
---------------------------
(*) Insert here the number of shares called for on the face of the Warrant
or, in the case of a partial exercise, the portion thereof as to which
the Warrant is being exercised, in either case without making any
adjustment for additional Common Stock or any other stock or other
securities or property which, pursuant to the adjustment provisions of
the Warrant Agreement pursuant to which the Warrant was granted, may be
delivered upon exercise.