FORM OF WARRANT TO PURCHASE 150,000 SHARES OF
COMMON STOCK OF eCONNECT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER
(THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO REGISTRATION UNDER OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT.
Exercisable Commencing May __, 1999;
Void after May __, 2002
THIS CERTIFIES that, for value received,
_________________________ or its registered assigns (the
"Warrantholder") is entitled, subject to the terms and conditions
set forth in this Warrant, to purchase from eConnect, a Nevada
corporation (the "Company"), one hundred fifty thousand (150,000)
fully paid, duly authorized and nonassessable shares (the
"Shares"), of Common Stock, one-tenth of one cent ($0.001) par
value per share, of the Company (the "Common Stock"), at any time
commencing May __, 1999 and continuing up to 5:00 p.m. New York
City time on May __, 2002 (the "Exercise Period") at an exercise
price of one hundred five percent (105%) of the five (5) day
average closing bid price of the Company's Common Stock as
reported by Bloomberg, LP for the five (5) trading days prior to
the "Closing Date" as that term is defined in the Subscription
Agreement entered into by the Company and Warrantholder, subject
to adjustment pursuant to Section 8 hereof.
This Warrant is subject to the following provisions,
terms and conditions:
Section 1. Transferability.
1.1 Registration. The Warrants shall be issued only
in registered form.
1.2 Transfer. This Warrant shall be transferable
only on the books of the Company maintained at its principal
executive
offices upon surrender thereof for registration of transfer duly
endorsed by the Warrantholder or by its duly authorized attorney
or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. Upon any
registration of transfer, the Company shall execute and deliver a
new Warrant or Warrants in appropriate denominations to the
person or persons entitled thereto.
1.3 Common Stock to be Issued. Upon the exercise
of any Warrants and upon receipt by the Company of a facsimile or
original of Warrantholder's signed Election to Exercise (See
Exhibit A), Company shall instruct its transfer agent to issue
stock certificates, subject to the restrictive legend set forth
below, in the name of
Warrantholder (or its nominee) and in such denominations to be
specified by Warrantholder representing the number of shares of
Common Stock issuable upon such exercise, as applicable. Company
warrants that no instructions, other than these instructions,
have been given or will be given to the transfer agent and that
the Common Stock shall otherwise be freely transferable on the
books and records of the
Company. It shall be the Company's responsibility to take all
necessary actions and to bear all such costs to issue the
certificate of Common Stock as provided herein, including the
responsibility and cost for delivery of an opinion letter to the
transfer agent, if so required. The person in whose name the
certificate of Common Stock is to be registered shall be treated
as a shareholder of record on and after the exercise date. Upon
surrender of any Warrant that is to be converted in part, the
Company shall issue to the Warrantholder a new Warrant equal to
the unconverted amount, if so requested by Purchaser:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER
(THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO REGISTRATION UNDER OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT.
Section 2. Exchange of Warrant Certificate. Any
Warrant certificate may be exchanged for another certificate or
certificates of like tenor entitling the Warrantholder to
purchase a like aggregate number of Shares as the certificate or
certificates surrendered then entitle such Warrantholder to
purchase. Any Warrantholder desiring to exchange a warrant
certificate shall make such request in writing delivered to the
Company, and shall surrender, properly endorsed, the certificate
evidencing the Warrant to be so exchanged. Thereupon, the
Company shall execute and
deliver to the person entitled thereto a new Warrant certificate
as so requested.
Section 3. Terms of Warrants: Exercise of Warrants.
(a) (i)Subject to the terms of this Warrant, the
Warrantholder shall have the right, at any time after May __,
1999, but before 5:00 p.m., New York City time on May __, 2002,
(the "Expiration Time"), to purchase from the Company up to the
number of Shares which the Warrantholder may at the time be
entitled to purchase pursuant to the terms of this Warrant, upon
surrender to the Company at its principal executive office, of
the certificate evidencing this Warrant to be exercised, together
with the attached Election to Exercise form duly filled in and
signed, and upon payment to the Company of the Warrant Price (as
defined in and determined in accordance with the provisions of
Section 7 and 8 hereof) or as provided in Section 3(a)(i) hereof,
for the number of Shares with respect to which such Warrant is
then exercised. Payment of the aggregate Warrant Price shall be
made in cash, wire transfer or by cashier's check or any
combination thereof.
(b) Subject to the terms of this Warrant, upon such
surrender of this Warrant and payment of such Warrant Price as
aforesaid, the Company shall promptly issue and cause to be
delivered to the Warrantholder or to such person or persons as
the Warrantholder may designate in writing, a certificate or
certificates (in such name or names as the Warrantholder may
designate in writing) for the number of duly authorized, fully
paid and non-assessable whole Shares to be purchased upon the
exercise of this Warrant, and shall deliver to the Warrantholder
Common Stock or cash, to the extent provided in Section 9 hereof,
with respect to any fractional Shares otherwise issuable upon
such surrender. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of such Shares as
of the close of business on the date of the surrender of this
Warrant and payment of the Warrant Price, notwithstanding that
the certificates representing such Shares shall not actually have
been delivered or that the Share and
Warrant transfer books of the Company shall then be closed. This
Warrant shall be exercisable, at the sole election of the
Warrantholder, either in full or from time to time in part and,
in the event that any certificate evidencing this Warrant (or any
portion thereof) is exercised prior to the Termination Date with
respect to less than all of the Shares specified therein at any
time prior to the Termination Date, a new certificate of like
tenor evidencing the remaining portion of this Warrant shall be
issued by the Company, if so requested by the Warrantholder.
(c) Upon the Company's receipt of a facsimile or
original of Warrantholder's signed Election to Exercise, the
Company shall
instruct its transfer agent to issue one or more stock
Certificates representing that number of shares of Common Stock
which the Warrantholder is entitled to purchase in accordance
with the terms and conditions of this Warrant and the Election to
Exercise attached hereto. The Company shall act as Registrar and
shall maintain an appropriate ledger containing the necessary
information with respect to each Warrant.
(d) Such exercise shall be effectuated by
surrendering to the Company, or its attorney, the Warrants to be
converted together with
a facsimile or original of the signed Election to Exercise which
evidences Warrantholder's intention to exercise those Warrants
indicated. The date on which the Election to Exercise is
effective ("Exercise Date") shall be deemed to be the date on
which the Warrantholder has delivered to the Company a facsimile
or original of the signed Election to Exercise, as long as the
original Warrants to be exercised are received by the Company or
its designated attorney within five (5) business days thereafter.
As long as the Warrants to be exercised are received by the
Company within five (5) business days after it receives a
facsimile or original of the signed Election to Exercise, the
Company shall deliver to the Warrantholder, or per the
Warrantholder's instructions, the shares of Common Stock within
three (3) business days of receipt of the Warrants to be
converted.
(e) Nothing contained in this Warrant shall be deemed to
establish or require the payment of interest to the Warrantholder
at
a rate in excess of the maximum rate permitted by governing law.
In the event that the rate of interest required to be paid
exceeds the maximum rate permitted by governing law, the rate of
interest required to be paid thereunder shall be automatically
reduced to the maximum rate permitted under the governing law and
such excess shall be returned with reasonable promptness by the
Warrantholder to the Company.
(f) It shall be the Company's responsibility to take all
necessary actions and to bear all such costs to issue the
Certificate of Common Stock as provided herein, including the
responsibility and cost for delivery of an opinion letter to the
transfer agent, if so required. The person in whose name the
certificate of Common Stock is to be registered shall be treated
as a shareholder of record on and after the exercise date. Upon
surrender of any Warrants that are to be converted in part, the
Company shall issue to the Warrantholder new Warrants equal to
the unconverted amount, if so requested by Warrantholder.
(g) In the event the Common Stock is not delivered
per the written instructions of the Warrantholder, within the
time set forth in Section 3(d) above, then in such event the
Company shall pay to Warrantholder one percent (1%) in cash of
the dollar value of the Warrants being converted per each day
after the fifth (5th) business day following the Exercise Date
that the Common Stock is not delivered. The Company acknowledges
that its failure to deliver the Common Stock within five (5)
business days after the Exercise Date will cause the
Warrantholder to suffer damages in an amount that
will be difficult to ascertain. Accordingly, the parties agree
that it is appropriate to include in this Warrant a provision for
liquidated damages. The parties acknowledge and agree that the
liquidated damages provision set forth in this section represents
the parties' good faith effort to qualify such damages and, as
such, agree that the form and amount of such liquidated damages
are reasonable and will not constitute a penalty. The payment of
liquidated damages shall not relieve the Company from its
obligations to deliver the Common Stock pursuant to the terms of
this Warrant.
To the extent that the failure of the Company to issue
the Common Stock pursuant to this Section 3 is due to the
unavailability of authorized but unissued shares of Common Stock,
the provisions of this Section 3(g) shall not apply but instead
the provisions of Section 3(h) shall apply.
The Company shall make any payments incurred under this
Section 3(g) in immediately available funds within three (3)
business days from the date of issuance of the applicable Common
Stock. Nothing herein shall limit a Warrantholder's right to
pursue actual damages for the Company's failure to issue and
deliver Common Stock to the Warrantholder within the time set
forth in Section 3(d) above
(h) The Company shall at all times reserve and have
available all Common Stock necessary to meet exercise of the
Warrants by all Warrantholders of the entire amount of Warrants
then outstanding.
If, at any time Warrantholder submits an Election to Exercise and
the Company does not have sufficient authorized but unissued
shares of Common Stock available to effect, in full, a exercise
of the Warrants (a "Exercise Default", the date of such default
being referred to herein as the "Exercise Default Date"), the
Company shall issue to the Warrantholder all of the shares of
Common Stock which are available, and the Election to Exercise as
to any Warrants requested to be converted but not converted (the
"Unconverted Warrants"), upon Warrantholder's sole option, may be
deemed null and void. The Company shall provide notice of such
Exercise Default ("Notice of Exercise Default") to all existing
Warrantholders of outstanding Warrants, by facsimile, within one
(1) business day of such default (with the original delivered by
overnight or two day courier), and the Warrantholder shall give
notice to the Company by facsimile within five (5) business days
of receipt of the original Notice of Exercise Default (with the
original delivered by overnight or two day courier) of its
election to either nullify or confirm the Election to Exercise.
The Company agrees to pay to all Warrantholders of
outstanding Warrants payments for a Exercise Default ("Exercise
Default
Payments") in the amount of (N/365) x (.24) x the initial
exercise price of the outstanding and/or tendered but not
converted Warrants held by each Warrantholder where N = the
number of days from the Exercise Default Date to the date (the
"Authorization Date") that the Company authorizes a sufficient
number of shares of Common Stock to effect exercise of all
remaining Warrants. The Company shall send notice
("Authorization Notice") to each Warrantholder of outstanding
Warrants that additional shares of Common Stock have been
authorized, the Authorization Date and the amount of
Warrantholder's accrued Exercise Default Payments. The accrued
Exercise Default shall be paid in cash or shall be convertible
into Common Stock at the Exercise Rate, at the Warrantholder's
option, payable as follows: (i) in the event Warrantholder
elects to take such payment in cash, cash payments shall be made
to such Warrantholder of outstanding Warrants by the fifth day of
the following calendar month, or (ii) in the event Warrantholder
elects to take such payment in stock, the Warrantholder may
convert such
payment amount into Common Stock at the exercise rate set forth
in Section 7 at anytime after the fifth (5th) day of the
calendar month following the month in which the Authorization
Notice was received, until the expiration of the Warrant.
The Company acknowledges that its failure to maintain a
sufficient number of authorized but unissued shares of Common
Stock to effect in full an exercise of all the Warrants will
cause the Warrantholder to suffer damages in an amount that will
be difficult to ascertain. Accordingly, the parties agree that
it is appropriate to include in this Warrant a provision for
liquidated damages. The parties acknowledge and agree that the
liquidated damages provision set forth in this section represents
the parties' good faith effort to quantify such damages and, as
such, agree that the form and
amount of such liquidated damages are reasonable and will not
constitute a penalty. The payment of liquidated damages shall
not relieve the Company from its obligations to deliver the
Common Stock pursuant to the terms of this Warrant.
Nothing herein shall limit the Warrantholder's right to
pursue actual damages for the Company's failure to maintain a
sufficient number of authorized shares of Common Stock.
(i) The Company shall furnish to Warrantholder such
number of prospectuses and other documents incidental to the
registration
of the shares of Common Stock underlying the Warrants, including
any amendment of or supplements thereto. Warrantholder shall
acknowledge in writing the receipt, the careful reading, and the
understanding thereof, prior to any exercise under this Section
3.
(j) Each person in whose name any certificate for
shares of Common Stock shall be issued shall for all purposes be
deemed to
have become the holder of record of the Common Stock represented
thereby on the date on which the Warrant was surrendered and
payment of the purchase price and any applicable taxes was made,
irrespective of date of issue or delivery of such certificate,
except that if the date of such surrender and payment is a date
when the Shares transfer books of the Company are closed, such
person shall be deemed to have become the holder of such Shares
on the next succeeding date on which such Share transfer books
are open. The Company shall not close such Share transfer books
at any one time for a period longer than seven (7) days.
Section 4. Payment of Taxes. The Company shall pay all
documentary stamp taxes, if any, attributable to the initial
issuance of the Shares; provided, however, that the Company shall
not be required to pay any tax or taxes which may be payable, (i)
with respect to any secondary transfer of this Warrant or the
Shares or (ii) as a result of the issuance of the Shares to any
person other than the Warrantholder, and the Company shall not be
required to issue or deliver any certificate for any Shares
unless and until the person requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have
produced evidence that such tax has been paid to the appropriate
taxing authority.
Section 5. Mutilated or Missing Warrant. In case
the certificate or certificates evidencing this Warrant shall be
mutilated, lost, stolen or destroyed, the Company shall, at the
request of the Warrantholder, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for
the certificate or certificates lost, stolen or destroyed, a new
Warrant certificate or certificates of like tenor and
representing an equivalent right or interest, but only upon
receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Warrant and of a bond of indemnity,
if requested, also satisfactory to the Company in
form and amount, and issued at the applicant's cost. Applicants
for such substitute Warrant certificate shall also comply with
such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 6. Reservation of Shares. The issuance, sale
and delivery of the Warrants have been duly authorized by all
required corporate action on the part of the Company and when
issued, sold
and delivered in accordance with the terms hereof and thereof for
the consideration expressed herein and therein, will be duly and
validly issued, fully paid, and non-assessable and enforceable in
accordance with their terms, subject to the laws of bankruptcy
and creditors' rights generally. The Company shall pay all taxes
in respect of the issue thereof. As a condition precedent to the
taking of any action that would result in the effective purchase
price per share of Common Stock upon the exercise of this Warrant
being less than the par value per share (if such shares of Common
Stock then have a par value), the Company will take such
corporate action as may, in the opinion of its counsel, be
necessary in order that the Company may comply with all its
obligations under this Agreement with regard to the exercise of
this Warrant.
Prior to exercise of all the Warrants, if at anytime
exercise of all the Warrants outstanding results in an
insufficient number of shares of Common Stock being available to
cover exercise of this Warrant in full, then in such event, the
Company will move to call and hold a shareholder's meeting within
forty-five (45) days of such event for the purpose of authorizing
additional Shares to cover exercise of this Warrant in full. in
such an event the Company shall: (1) recommend its current or
future officers, directors and other control people to vote their
shares in favor of increasing the authorized number of shares of
Common Stock and (2) recommend to all shareholders to vote their
shares in favor of increasing the authorized number of shares of
Common Stock to the extent permitted by law. As for any
shareholders who do not vote on the issue of increasing the
authorized number of shares of Common Stock, such failure to vote
shall automatically be taken as a vote in favor of increasing the
authorized number of shares of Common Stock. The proxy sent out
by the Company to all shareholders shall provide that if no vote
is received a consent to action will be executed on behalf of
those shares of Common Stock for which no vote was received, in
favor of increasing the authorized number of shares of Common
Stock of the Company to the extent permitted by law. Company
represents and warrants that under no circumstances will it deny
or prevent Warrantholder from exercising the Warrants as
permitted under the terms of the Warrants.
Section 7. Warrant Price. From May __, 1999 through
5:00 p.m. New York City time on May __, 2002, the price per Share
(the "Warrant price") at which Shares shall be purchasable upon
the exercise of this Warrant shall be one hundred five percent
(105%) of the five (5) day average closing bid price of the
Company's Common Stock as reported by Bloomberg, LP for the five
(5) trading days prior to the "Closing Date" as that term is
described in the Subscription Agreement entered into by the
Company and
Warrantholder, subject to adjustment pursuant to Section 8
hereof.
Section 8. Adjustment of Warrant Price and Number of
Shares.
The number and kind of securities purchasable upon the exercise
of
this Warrant and the Warrant Price shall be subject to adjustment
from time to time after the date hereof upon the happening of
certain events, as follows:
8.1 Adjustments. The number of Shares purchasable
upon the exercise of this Warrant shall be subject to adjustments
as follows:
(a) In case the Company shall (i) pay a dividend on
Common
Stock in Common Stock or securities convertible into,
exchangeable for or otherwise entitling a holder thereof to
receive Common Stock, (ii) declare a dividend payable in cash on
its Common Stock and at substantially the same time offer its
shareholders a right to purchase new Common Stock (or securities
convertible into, exchangeable for or other entitling a holder
thereof to receive Common Stock) from the proceeds of such
dividend (all Common Stock so issued shall be deemed to have been
issued as a stock dividend), (iii) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common
Stock, (iv) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (v) issue by
reclassification of its Common Stock any shares of Common Stock
of the Company, the number of shares of Common Stock issuable
upon exercise of the Warrants immediately prior thereto shall be
adjusted so that the holders of the Warrants shall be entitled to
receive after the happening of any of the events described above
that number and kind of shares as the holders would have received
had such Warrants been converted immediately prior to the
happening of such event or any record date with respect thereto.
Any adjustment made pursuant to this subdivision shall become
effective immediately after the close of business on the record
date in the case of a stock dividend and shall become effective
immediately after the close of business on the effective date in
the case of a stock split, subdivision, combination or
reclassification.
(b) In case the Company shall distribute, without
receiving consideration therefor, to all holders of its Common
Stock evidences
of its indebtedness or assets (excluding cash dividends other
than as described in Section (8)(a)(ii)), then in such case, the
number of shares of Common Stock thereafter issuable upon
exercise of the Warrants shall be determined by multiplying the
number of shares of Common Stock theretofore issuable upon
exercise of the Warrants, by a fraction, of which the numerator
shall be the closing bid price per share of Common Stock on the
record date for such distribution, and of which the denominator
shall be the closing bid price of the Common Stock less the then
fair value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive) of the portion
of the assets or evidences of indebtedness so distributed per
share of Common Stock. Such adjustment shall be made whenever
any such distribution is made and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(c) Any adjustment in the number of shares of Common
Stock issuable hereunder otherwise required to be made by this
Section 8 will not have to be adjusted if such adjustment would
not require an increase or decrease in one percent (1%) or more
in the number of shares of Common Stock issuable upon exercise of
the Warrant. No adjustment in the number of Shares purchasable
upon exercise of this Warrant will be made for the issuance of
shares of capital stock to directors, employees or independent
contractors pursuant to the Company's or any of its subsidiaries'
stock option, stock ownership
or other benefit plans or arrangements or trusts related thereto
or for issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest
payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under such
plan.
(d) Whenever the number of shares of Common Stock
issuable upon the exercise of the Warrants is adjusted, as herein
provided
the Warrant Price shall be adjusted (to the nearest cent) by
multiplying such Warrant Price immediately prior to such
adjustment
by a fraction, of which the numerator shall be the number of
shares of Common Stock issuable upon the exercise of each share
of the Warrants immediately prior to such adjustment, and of
which the
denominator shall be the number of shares of Common Stock
issuable immediately thereafter.
(e) The Company from time to time by action of its
Board of Directors may decrease the Warrant Price by any amount
for any
period of time if the period is at least twenty (20) days, the
decrease is irrevocable during the period and the Board of
Directors of the Company in its sole discretion shall have made a
determination that such decrease would be in the best interest of
the Company, which determination shall be conclusive. Whenever
the Warrant Price is decreased pursuant to the preceding
sentence, the Company shall mail to holders of record of the
Warrants a notice of the decrease at least fifteen (15) days
prior to the date the decreased Warrant Price takes effect, and
such notice shall state the decreased Warrant Price and the
period it will be in effect.
8.2 Mergers. Etc. In the case of any (i)
consolidation or merger of the Company into any entity (other
than a consolidation or merger that does not result in any
reclassification, exercise, exchange or cancellation of
outstanding shares of Common Stock of
the Company), (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of the Company as an entirety or
substantially as an entirety, or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a
change in par value, or from par value to no par value), in each
case as a result of which shares of Common Stock shall be
converted into the right to receive stock, securities or other
property (including cash or any combination thereof), each holder
of Warrants then outstanding shall have the right thereafter to
exercise such Warrant only into the kind and amount of
securities, cash and other property receivable upon such
consolidation, merger, sale, transfer, capital reorganization or
reclassification by a holder of the number of shares of Common
Stock of the Company into which such Warrants would have been
converted immediately prior to such consolidation, merger, sale,
transfer, capital reorganization or reclassification, assuming
such holder of Common Stock of the Company (A) is not an entity
with which the Company consolidated or into which the Company
merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("constituent entity"), or
an affiliate of a constituent entity, and (B) failed to exercise
his or her rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the
kind or amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer is not the same
for each share of Common Stock of the Company held immediately
prior to such consolidation, merger, sale or transfer by other
than a constituent entity or an affiliate thereof and in respect
of which such rights or election shall not have been exercised
("non-electing share"), then for the purpose of this Section 8.2
the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by
each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing
shares). If necessary, appropriate adjustment shall be made in
the application of the provision set forth herein with respect to
the rights and interests thereafter of the holder of Warrants, to
the end that the provisions set forth herein shall thereafter
correspondingly be made applicable, as nearly as may reasonably
be, in relation to any shares of stock or other securities or
property thereafter deliverable on the exercise of the Warrants.
The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers, capital
reorganizations and reclassifications. The Company shall not
effect any such consolidation, merger, sale or transfer unless
prior to or simultaneously with the consummation thereof the
successor company or entity (if other than the Company) resulting
from such
consolidation, merger, sale or transfer assumes, by written
instrument, the obligation to deliver to the holder of Warrants
such shares of stock, securities or assets as, in accordance with
the foregoing provision, such holder may be entitled to receive
under this Section 8.2.
8.3 Statement of Warrants. Irrespective of any
adjustments in the Warrant Price of the number or kind of shares
purchasable
upon the exercise of this Warrant, this Warrant certificate or
certificates hereafter issued may continue to express the same
price and number and kind of shares as are stated in this
Warrant.
Section 9. Fractional Shares. Any fractional shares
of Common Stock issuable upon exercise of the Warrants shall be
rounded to the nearest whole share or, at the election of the
Company, the Company shall pay the holder thereof an amount in
cash equal to the closing bid price thereof. Whether or not
fractional shares are issuable upon exercise shall be determined
on the basis of the total number of Warrants the holder is at the
time exercising and the number of shares of Common Stock issuable
upon such exercise.
Section 10. No Rights as Stockholders: Notices to
Warrantholders. Nothing contained in this Warrant shall be
construed as conferring upon the Warrantholder or its transferees
any rights as a stockholder of the Company, including the right
to vote, receive dividends, consent or receive notices as a
stockholder with respect to any meeting of stockholders for the
election of directors of the Company or any other matter. If,
however, at any time prior to 5:00 p.m., New York City time, on
May __, 2002, (the "Expiration Time") and prior to the exercise
of this Warrant, any of the following events shall occur:
(a) any action which would require an adjustment
pursuant to Section 8.1; or
(b) a dissolution, liquidation or winding up of the
Company or any consolidation, merger or sale of its property,
assets and business as an entirety; then in any one or more of
said events, the Company shall give notice in writing of such
event to the
Warrantholder at least ten (10) days prior to the date fixed as a
record date or the date of closing the transfer books for the
determination of the shareholders entitled to any relevant
dividend, distribution, subscription rights, or other rights or
for the effective date of any dissolution, liquidation of winding
up or any merger, consolidation, or sale of substantially all
assets, but failure to mail or receive such notice or any defect
therein or in the mailing thereof shall not affect the validity
of any such action taken. Such notice shall specify such record
date or the effective date, as the case may be.
Section 11. Successors. All the covenants and
provisions of this Warrant by or for the benefit of the Company
or the
Warrantholder shall bind and inure to the benefit of their
respective successors and permitted assigns hereunder.
Section 12. Applicable Law. This Warrant shall be
construed and enforced in accordance with and the rights of the
parties shall
be governed by the laws of the State of California.
Section 13. Benefits of this Agreement. Nothing in
this Warrant shall be construed to give to any person or
corporation
other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant, and this
Warrant shall be for the sole and exclusive benefit of the
Company and the Warrantholder.
Section 14. Piggy-back Registration Rights. If at
any time the Company shall propose to prepare on its own behalf
or on behalf
of any of its stockholders (other than Warrantholder) a
registration statement in connection with an underwritten public
offering of any equity securities of the Company, the Company
shall give Warrantholder written notice at least twenty (20) days
before the anticipated filing date of such registration
statement. Should Warrantholder desire to have any of the Shares
included in such registration statement Warrantholder shall so
advise the Company in writing no later than fifteen (15) days
after the Company's notice is given, setting forth the number or
amount of Shares which Warrantholder requests to be included in
the registration statement, and the Company shall include the
securities specified in such request in such registration
statement and keep such registration statement in effect and
maintain compliance with each federal and state law and
regulation as set forth herein. The Company may, at its option,
require that the amount of Shares offered for sale by
Warrantholder pursuant to this Section 14 be decreased if, in the
opinion of the Company's investment banking firm, such reduction
is necessary in order to permit the orderly distribution and sale
of the securities being offered. If the Company shall require
such a reduction, Warrantholder shall have the right to withdraw
from the offering.
Section 15. Definitions.
"Common Stock" shall mean (i) Common Stock, one-tenth of
one cent ($0.001) par value per share, of the Company and (ii)
any other security purchasable upon the exercise of this Warrant
upon the happening of certain events.
IN WITNESS WHEREOF, the parties have caused this Warrant to be
duly executed, all as of the day and year first above written.
eConnect
By
Name:____________________
_______
Title:___________________
_________
EXHIBIT A
eCONNECT
ELECTION TO EXERCISE
The undersigned hereby irrevocably elects to exercise the right
of
purchase represented by the within Warrant for, and to purchase
thereunder, _______shares of Common Stock (the "Share") provided
for therein, and requests that certificates for the Shares be
issued in the name of:*
Name:___________________________________________________________
Address:_________________________________________________________
Social Security
No.________________________________________________ or Tax ID
Number:_________________________________________________
and, if such number of Shares shall not be all of the Shares
purchasable under the Warrant, that a new Warrant certificate for
the balance of the Shares purchasable under the within Warrant be
registered in the name of the undersigned Warrantholder or his
Assignee* as indicated below and delivered to the address stated
below:
Dated:________, 19___
Name of Warrantholder of
Assignee (Please
Print)_____________________________________________
Address:_________________________________________________________
Signature:_______________________________________________________
_
Signature Guaranteed:____________________________________________
__ Signature of Guarantor
____________________
* The Warrant contains restrictions on sale, assignment or
transfer.
** Note: The above signature must correspond with the name
as written on the face of this Warrant certificate in every
particular, without alteration or enlargement or any change
whatever, unless this warrant has been assigned.
FORM OF ASSIGNMENT
(To be signed only upon assignment of Warrant)*
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________
________________________________________________________________
(Name and Address of Assignee must be Printed or Typewritten)
the within Warrant, hereby irrevocably constituting and
appointing _________Attorney to transfer said Warrant on the
books of the Company, with full power of substitution in the
premises.
Dated:______________, 19____
_________________________
_______** Signature of
Registered Holder
Signature Guaranteed: ________________________________
Signature of Guarantor
____________________
* The Warrant contains restrictions on sale, assignment or
transfer.
** Note: The signature of this assignment must correspond
with
the name as it appears upon the face of the Warrant certificate
in every particular, without alteration or enlargement or any
change whatever.