<PAGE> 1
EXHIBIT 4.1
THE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS ("BLUE SKY
LAWS"). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THIS WARRANT OR THE SECURITIES OR ANY INTEREST THEREIN MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE BLUE SKY LAWS OR (B) IF THE COMPANY HAS BEEN
FURNISHED WITH BOTH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND
COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT NO
REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS, AND
ASSURANCES THAT THE TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION WILL BE MADE ONLY IN COMPLIANCE WITH THE CONDITIONS OF ANY SUCH
REGISTRATION OR EXEMPTION.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF POPMAIL.COM, INC.
WARRANT NO. CB-1 Irving, Texas
July 19, 2000
This certifies that, for value received, CAM BIRGE or his successors or
assigns ("Holder") is entitled to purchase from PopMail.com, inc. (the
"Company") Fifty Thousand (50,000) fully paid and nonassessable shares (the
"Shares") of the Company's Common Stock, $.01 par value (the "Common Stock") at
any time and from time to time from the date hereof until July 19, 2005, at an
exercise price of $.75 per share (the "Exercise Price"), subject to adjustment
as herein provided.
This Warrant is subject to the following provisions, terms and
conditions:
1. Vesting of Warrant Shares. Holder's rights to purchase the Shares
under this Warrant are only exercisable in the event the closing sale price of
the Company's Common Stock, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") SmallCap Market,
has been at least One Dollar ($1.00) for five (5) consecutive trading days.
2. Exercise of Warrant.
a. Exercise for Cash. Subject to Section 1 hereof, the rights
represented by this Warrant may be exercised by the Holder, in whole or in part
(but not as to a fractional share of Common Stock), by the surrender of this
Warrant (properly endorsed, if required, at the Company's principal office in
Irving, Texas, or such other office or agency of the Company as the Company may
designate by notice in writing to the Holder at the address of such Holder
appearing on the books of the Company at any time within the period above
named), and upon payment to it by certified check, bank draft or cash of the
purchase price for such Shares. The Company agrees that the Shares so purchased
shall have and are deemed to be issued to the Holder as the record owner of such
Shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such Shares as aforesaid. Certificates for
the Shares of Common Stock so purchased shall be delivered to the Holder within
a reasonable time, not exceeding ten (10) days, after the rights represented by
this Warrant shall have been so exercised, and, unless this Warrant has expired,
a new Warrant representing the number of Shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be delivered to the
Holder within such time. The Company may require that any such new Warrant or
any certificate for Shares purchased upon the exercise hereof bear a legend
substantially similar to that which is contained on the face of this Warrant.
<PAGE> 2
b. Cashless Exercise. Subject to Section 1 hereof, upon receipt of a
notice of cashless exercise, the Company shall deliver to the Holder (without
payment by the Holder of any exercise price) that number of Shares that is equal
to the quotient obtained by dividing (x) the value of the Warrant on the date
that the Warrant shall have been surrendered (determined by subtracting the
aggregate exercise price for the Shares in effect on the Exercise Date from the
aggregate Fair Market Value (hereinafter defined) for the Shares by (y) the Fair
Market Value of one share of Common Stock. A notice of "cashless exercise" shall
state the number of Shares as to which the Warrant is being exercised. "Fair
Market Value" for purposes of this Section (b) shall mean the average of the
Common Stock closing prices reported by the principal exchange on which the
Common Stock is traded, or the last sale prices as reported by the Nasdaq
National Market or SmallCap Market, as the case may be, for the ten (10)
business days immediately preceding the Exercise Date or, in the event no public
market shall exist for the Common Stock at the time of such cashless exercise,
Fair Market Value shall mean the fair market value of the Common Stock as the
same shall be determined in the good faith discretion of the Board of Directors,
after full consideration of all factors then deemed relevant by such Board in
establishing such value, including by way of illustration and not limitation,
the per share purchase price of Common Stock or per security convertible into
one share of Common Stock of the most recent sale of shares of Common Stock or
securities convertible into Common Stock by the Company after the date hereof
all as evidenced by the vote of a majority of the directors then in office.
3. Transferability of this Warrant. This Warrant is issued upon the
following terms, to which each Holder consents and agrees:
a. Until this Warrant is transferred on the books of the Company,
the Company will treat the Holder of this Warrant registered as such on
the books of the Company as the absolute owner hereof for all purposes
without being affected by any notice to the contrary.
b. This Warrant may not be exercised, and this Warrant and the
Shares underlying this Warrant shall not be transferable, except in
compliance with all applicable state and federal securities laws,
regulations and orders, and with all other applicable laws, regulations
and orders.
c. Prior to making any disposition of this Warrant or of any of the
Shares underlying this Warrant, the Holder will give written notice to
the Company describing the manner of any such proposed disposition. The
Warrant may not be transferred, and the Shares may not be transferred,
without the Holder obtaining an opinion of counsel satisfactory in form
and substance to the Company's counsel stating that the proposed
transaction will not result in a prohibited transaction under the
Securities Act of 1933, as amended ("Securities Act"), and applicable
Blue Sky laws. By accepting this Warrant, the Holder agrees to act in
accordance with any conditions reasonably imposed on such transfer by
such opinion of counsel.
d. Neither this issuance of this Warrant nor the issuance of the
Shares underlying this Warrant have been registered under the
Securities Act.
4. Certain Covenants of the Company. The Company covenants and agrees
that all Shares which may be issued upon the exercise of the rights represented
by this Warrant, upon issuance and full payment for the Shares so purchased,
will be duly authorized and issued, fully paid
2
<PAGE> 3
and nonassessable and free from all taxes, liens and charges with respect to the
issue hereof, except those that may be created by or imposed upon the Holder or
its property, and without limiting the generality of the foregoing, the Company
covenants and agrees that it will from time to time take all such actions as may
be requisite to assure that the par value per share of the Common Stock is at
all times equal to or less than the effective purchase price per share of the
Common Stock issuable pursuant to this Warrant. The Company further covenants
and agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved free of preemptive or other rights for the exclusive purpose of issue
upon exercise of the purchase rights evidenced by this Warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
5. Adjustment of Exercise Price and Number of Shares. The Exercise
Price and number of Shares are subject to the following adjustments:
a. Adjustment of Exercise Price for Stock Dividend, Stock Split or
Stock Combination. In the event that (i) any dividends on any class of
stock of the Company payable in Common Stock or securities convertible
into or exercisable for Common Stock ("Common Stock Equivalents") shall
be paid by the Company, (ii) the Company shall subdivide its then
outstanding shares of Common Stock into a greater number of shares, or
(iii) the Company shall combine its outstanding shares of Common Stock,
by reclassification or otherwise, then, in any such event, the Exercise
Price in effect immediately prior to such event shall (until adjusted
again pursuant hereto) be adjusted immediately after such event to a
price (calculated to the nearest full cent) determined by dividing (a)
the number of shares of Common Stock outstanding immediately prior to
such event, multiplied by the then existing Exercise Price, by (b) the
total number of shares of Common Stock outstanding immediately after
such event, and the resulting quotient shall be the adjusted Exercise
Price per share. No adjustment of the Exercise Price shall be made if
the amount of such adjustment shall be less than $.05 per share, but in
such case any adjustment that would otherwise be required then to be
made shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to not less
than $.05 per share.
b. Adjustment of Number of Shares Purchasable on Exercise of
Warrants. Upon each adjustment of the Exercise Price pursuant to this
Section, the Holder shall thereafter (until another such adjustment) be
entitled to purchase at the adjusted Exercise Price the number of
shares, calculated to the nearest full share, obtained by multiplying
the number of shares specified in such Warrant (as adjusted as a result
of all adjustments in the Exercise Price in effect prior to such
adjustment) by the Exercise Price in effect prior to such adjustment
and dividing the product so obtained by the adjusted Exercise Price.
c. Notice as to Adjustment. Upon any adjustment of the Exercise
Price and any increase or decrease in the number of shares of Common
Stock purchasable upon the exercise of the Warrant, then, and in each
such case, the Company within thirty (30) days thereafter shall give
written notice thereof, by first class mail, postage prepaid, addressed
to each Holder as shown on the books of the Company, which notice shall
state the adjusted Exercise Price and the increased or decreased number
of shares purchasable upon the exercise of the Warrants, and shall set
forth in reasonable detail the method of calculation and the facts upon
which such calculation is based.
3
<PAGE> 4
d. Effect of Reorganization, Reclassification, Merger, etc. If at
any time while any Warrant is outstanding there should be any capital
reorganization of the capital stock of the Company (other than the
issuance of any shares of Common Stock in subdivision of outstanding
shares of Common Stock by reclassification or otherwise and other than
a combination of shares provided for in Section 4(a) hereof), or any
consolidation or merger of the Company with another corporation, or any
sale, conveyance, lease or other transfer by the Company of all or
substantially all of its property to any other corporation, which is
effected in such a manner that the holders of Common Stock shall be
entitled to receive cash, stock, securities, or assets with respect to
or in exchange for Common Stock, then, as a part of such transaction,
lawful provision shall be made so that each Holder shall have the right
thereafter to receive, upon the exercise hereof, the number of shares
of stock or other securities or property of the Company, or of the
successor corporation resulting from such consolidation or merger, or
of the corporation to which the property of the Company has been sold,
conveyed, leased or otherwise transferred, as the case may be, which
the Holder would have been entitled to receive upon such capital
reorganization, reclassification of capital stock, consolidation,
merger, sale, conveyance, lease or other transfer, if such Warrant had
been exercised immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger, sale,
conveyance, lease or other transfer. In any such case, appropriate
adjustments (as determined by the Board of Directors of the Company)
shall be made in the application of the provisions set forth in this
Warrant (including the adjustment of the Exercise Price and the number
of Shares issuable upon the exercise of the Warrants) to the end that
the provisions set forth herein shall thereafter be applicable, as near
as reasonably may be, in relation to any shares or other property
thereafter deliverable upon the exercise of the Warrants as if the
Warrants had been exercised immediately prior to such capital
reorganization, reclassification of capital stock, such consolidation,
merger, sale, conveyance, lease or other transfer and the Warrant
Holders had carried out the terms of the exchange as provided for by
such capital reorganization, consolidation or merger. The Company shall
not effect any such capital reorganization, consolidation, merger or
transfer unless, upon or prior to the consummation thereof, the
successor corporation or the corporation to which the property of the
Company has been sold, conveyed, leased or otherwise transferred shall
assume by written instrument the obligation to deliver to each Holder
such shares of stock, securities, cash or property as in accordance
with the foregoing provisions such Holder shall be entitled to
purchase.
6. Registration Rights. If at any time, the Company shall propose to
file any registration statement (other than any registration on Form S-4, S-8 or
any other similarly inappropriate form, or any successor forms thereto) under
the 1933 Act covering a public offering of the Company's Common Stock, it will
notify the Holder hereof at least thirty (30) days prior to each such filing and
will use its best efforts to include in the Registration Statement (to the
extent permitted by applicable regulation), the Shares purchased or purchasable
by the Holder upon the exercise of the Warrant to the extent requested by the
Holder hereof within twenty (20) days after receipt of notice of such filing
(which request shall specify the interest in this Warrant or the Shares intended
to be sold or disposed of by such Holder and describe the nature of any proposed
sale or other disposition thereof); provided, however, that if a greater number
of Warrants and Shares is offered for participation in the proposed offering
than in the reasonable opinion of the managing underwriter of the proposed
offering can be accommodated without adversely affecting the proposed offering,
then the amount of Warrant and Shares proposed to be offered by such Holders for
registration, as well as the number of
4
<PAGE> 5
securities of any other selling shareholders participating in the registration,
shall be proportionately reduced to a number deemed satisfactory by the managing
underwriter. The Company shall bear all expenses and fees incurred in connection
with the preparation, filing, and amendment of the Registration Statement with
the Commission, except that the Holder shall pay all fees, disbursements and
expenses of any counsel or expert retained by the Holder and all underwriting
discounts and commissions, filing fees and any transfer or other taxes relating
to the Shares included in the Registration Statement. The Holder of this Warrant
agrees to cooperate with the Company in the preparation and filing of any
Registration Statement, and in the furnishing of information concerning the
Holder for inclusion therein, or in any efforts by the Company to establish that
the proposed sale is exempt under the 1933 Act as to any proposed distribution.
7. No Rights as Stockholders. This Warrant shall not entitle the Holder
as such to any voting rights or other rights as a stockholder of the Company.
8. Company Redemption Option. Notwithstanding anything to the contrary
contained in this Warrant, following the effectiveness of the Registration
Statement, the Company's Board of Directors shall have the right to redeem the
Warrant at a redemption price of $.01 per Share if the average closing price of
the Company's Common Stock for any ten (10) consecutive trading days is at least
$6.00 per share (as appropriately adjusted for stock splits, stock dividends and
combinations). Notice of redemption to the Holder shall be given by mailing via
first class mail a notice of such redemption not less than thirty (30) days
prior to the date fixed for redemption. Any notice given in the manner described
above shall be conclusively presumed to have been given whether or not the
Holder receives the notice.
9. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Minnesota.
10. Amendments and Waivers. The provisions of this Warrant may not be
amended, modified or supplemented, and waiver or consents to departures from the
provisions hereof may not be given, unless the Company agrees in writing and has
obtained the written consent of the Holders.
11. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the Holder
shall be mailed, delivered, or telefaxed and confirmed to the Holder at his or
her address set forth on the records of the Company; or if sent to the Company
shall be mailed, delivered, or telefaxed and confirmed to PopMail.com, inc.,
1333 Corporate Drive, Suite 350, Irving, Texas, 75038 or to such other address
as the Company or the Holder shall notify the other as provided in this Section.
IN WITNESS WHEREOF, PopMail.com, inc. has caused this Warrant to be
signed by its duly authorized officer in the date set forth above.
POPMAIL.COM, INC.
By:
---------------------------------------------
Its:
--------------------------------------------
5
<PAGE> 6
SUBSCRIPTION FORM
To be signed only upon exercise of Warrant.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ____________________ of the shares of Common Stock of
PopMail.com, inc. (the "Shares") to which such Warrant relates and herewith
makes payment of $_____________ therefor in cash, certified check or bank draft
and requests that a certificate evidencing the Shares be delivered to,
_____________________________, the address for whom is set forth below the
signature of the undersigned:
Dated:
----------------------------
-----------------------------------------
[Signature]
-----------------------------------------
[Printed]
-----------------------------------------
-----------------------------------------
[Address]
~ ~ ~
ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto _____________________________________ the right to purchase
shares of Common Stock of PopMail.com, inc. to which the within Warrant relates
and appoints ____________________ attorney, to transfer said right on the books
of _________________ with full power of substitution in the premises.
Dated:
----------------------------
-----------------------------------------
[Signature]
-----------------------------------------
[Printed]
-----------------------------------------
-----------------------------------------
[Address]
6
