<PAGE>
Exhibit 10.40
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE OFFERED OR
SOLD IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT.
THE TRANSFER OF THIS WARRANT IS
RESTRICTED AS DESCRIBED HEREIN.
BIZNESSONLINE.COM, INC.
Warrant for the Purchase of Shares of Common Stock,
par value $0.01 per Share
No. KB-1 200,000 Shares
THIS CERTIFIES that, for value received, KAUFMAN BROS., L.P.,
800 Third Avenue - 25th Floor, New York, New York 10022 (the "Holder"), is
entitled to subscribe for and purchase from BIZNESSONLINE.COM, INC., a Delaware
corporation (the "Company"), upon the terms and conditions set forth herein, at
any time or from time to time after June 19, 2000, and before 5:00 P.M. on June
19, 2005, New York time (the "Exercise Period"), 200,000 shares of the Company's
Common Stock, par value $0.01 per share ("Common Stock"), at a price of $5.63
per share (the "Exercise Price"). As used herein the term "this Warrant" shall
mean and include this Warrant and any Common Stock or Warrants hereafter issued
as a consequence of the exercise or transfer of this Warrant in whole or in
part. This Warrant may not be sold, transferred, assigned or hypothecated except
that it may be transferred, in whole or in part, to (i) not more that ten
officers or partners of the Holder (or the officers or partners of any such
partner); (ii) a successor to the Holder, or the officers or partners of such
successor; (iii) a purchaser of substantially all of the assets of the Holder;
or (iv) by operation of law; and the term the "Holder" as used herein shall
include any transferee to whom this Warrant has been transferred in accordance
with the above.
The number of shares of Common Stock issuable upon exercise of
the Warrant (the "Warrant Shares") and the Exercise Price may be adjusted from
time to time as hereinafter set forth.
1. This Warrant may be exercised during the Exercise Period,
as to the whole or any lesser number of whole Warrant Shares, by the surrender
of this Warrant (with the election at the end hereof duly executed) to the
Company at its office at 1720 Route 34, P.O. Box 1347, Wall, New Jersey 07719 or
at such other place as is designated in writing by the Company, together with a
certified or bank cashier's check payable to the order of the
<PAGE>
Company in an amount equal to the Exercise Price multiplied by the number of
Warrant Shares for which this Warrant is being exercised (the "Stock Purchase
Price").
2. (a) In lieu of the payment of the Stock Purchase Price, the
Holder shall have the right (but not the obligation), to require the
Company to convert this Warrant, in whole or in part, into shares of
Common Stock (the "Conversion Right") as provided for in this Section
2. Upon exercise of the Conversion Right, the Company shall deliver to
the Holder (without payment by the Holder of any of the Stock Purchase
Price) that number of shares of Common Stock (the "Conversion Shares")
equal to the quotient obtained by dividing (x) the value of this
Warrant (or portion thereof as to which the Conversion Right is being
exercised if the Conversion Right is being exercised in part) at the
time the Conversion Right is exercised (determined by subtracting the
aggregate Stock Purchase Price of the shares of Common Stock as to
which the Conversion Right is being exercised in effect immediately
prior to the exercise of the Conversion Right from the aggregate
Current Market Price (as defined in Section 6(d) hereof) of the shares
of Common Stock as to which the Conversion Right is being exercised) by
(y) the Current Market Price of one share of Common Stock immediately
prior to the exercise of the Conversion Right.
(b) The Conversion Right provided under this Section
2 may be exercised in whole or in part and at any time and from time to
time while this Warrant remains outstanding. In order to exercise the
Conversion Right, the Holder shall surrender to the Company, at its
offices, this Warrant with the Notice of Conversion at the end hereof
duly executed. The presentation and surrender shall be deemed a waiver
of the Holder's obligation to pay all or any portion of the aggregate
purchase price payable for the shares of Common Stock as to which such
Conversion Right is being exercised. This Warrant (or so much thereof
as shall have been surrendered for conversion) shall be deemed to have
been converted immediately prior to the close of business on the day of
surrender of such Warrant for conversion in accordance with the
foregoing provisions.
3. Upon each exercise of the Holder's rights to purchase
Warrant Shares or Conversion Shares, the Holder shall be deemed to be the holder
of record of the Warrant Shares or Conversion Shares issuable upon such exercise
or conversion, notwithstanding that the transfer books of the Company shall then
be closed or certificates representing such Warrant Shares or Conversion Shares
shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise or conversion of this Warrant, the Company
shall issue and deliver to the Holder a certificate or certificates for the
Warrant Shares or Conversion Shares issuable upon such exercise or conversion,
registered in the name of the Holder or its designee. If this Warrant should be
exercised or converted in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the right
of the Holder to purchase the balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.
<PAGE>
4. Any Warrant issued upon the transfer or exercise or
conversion in part of this Warrant shall be numbered and shall be registered in
a Warrant Register as they are issued. The Company shall be entitled to treat
the registered holder of any Warrant on the Warrant Register as the owner in
fact thereof for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in such Warrant on the part of any other person,
and shall not be liable for any registration or transfer of Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with
applicable law, including without limitations, the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations thereunder
and any state securities laws or regulations.
5. The Company shall at all times reserve and keep available
out of its authorized and unissued Common Stock, solely for the purpose of
providing for the exercise of the rights to purchase all Warrant Shares and/or
Conversion Shares granted pursuant to this Warrant, such number of shares of
Common Stock as shall, from time to time, be sufficient therefor. The Company
covenants that all shares of Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company of the full Exercise Price therefor, and
all shares of Common Stock issuable upon conversion of this Warrant, shall be
validly issued, fully paid, non-assessable, and free of preemptive rights.
6. (a) In case the Company shall at any time after the date
hereof (i) declare a dividend on the outstanding shares of Common Stock
payable solely in the shares of its capital stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock
into a smaller number of shares, 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 Exercise Price, and the number and kind of securities issuable upon
exercise or conversion of this Warrant, 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 after such time shall be entitled to
receive the aggregate number and kind of shares
<PAGE>
which, if such Warrant had been exercised or converted immediately
prior to such time, he would have owned upon such exercise or
conversion 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) In case the Company shall issue or fix a record
date for the issuance to all holders of Common Stock of rights,
options, or warrants to subscribe for or purchase Common Stock (or
securities convertible into or exchangeable for Common Stock) at a
price per share (or having a conversion or exchange price per share, if
a security convertible into or exchangeable for Common Stock) less than
the lesser of (i) the current Exercise Price, or (ii) the Current
Market Price per share of Common Stock on such record date, whichever
applies (the "Trigger Price"), then, in each case, the Exercise Price
shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock
so to be offered (or the aggregate initial conversion or exchange price
of the convertible or exchangeable securities so to be offered) would
purchase at such Trigger Price and the denominator of which shall be
the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable).
Such adjustment shall become effective at the close of business on such
record date; PROVIDED, HOWEVER, that, to the extent the shares of
Common Stock (or securities convertible into or exchangeable for shares
of Common Stock) are not delivered, the Exercise Price shall be
readjusted after the expiration of such rights, options, or warrants
(but only with respect to Warrants exercised after such expiration), to
the Exercise Price which would then be in effect had the adjustments
made upon the issuance of such rights, options, or warrants been made
upon the basis of delivery of only the number of shares of Common Stock
(or securities convertible into or exchangeable for shares of Common
Stock) actually issued. In case any subscription price may be paid in a
consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith by
the board of directors of the Company, whose determination shall be
conclusive absent manifest error. Shares of Common Stock owned by or
held for the account of the Company or any majority-owned subsidiary
shall not be deemed outstanding for the purpose of any such
computation.
(c) In case the Company shall distribute to all
holders of Common Stock (including any such distribution made to the
stockholders of the Company in connection with a consolidation or
merger in which the Company is the continuing corporation) evidences of
its indebtedness or assets (other than cash dividends or distributions
and dividends payable in shares of Common Stock), or rights, options,
or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock (excluding
those with respect to the issuance of which an adjustment of the
Exercise Price is provided pursuant to Section 6(b)
<PAGE>
hereof), then, in each case, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the
record date for the determination of stockholders entitled to receive
such distribution by a fraction, the numerator of which shall be the
Trigger Market Price per share of Common Stock on such record date,
less the fair market value (as determined in good faith by the board of
directors of the Company, whose determination shall be conclusive
absent manifest error) of the portion of the evidences of indebtedness
or assets so to be distributed, or of such rights, options, or warrants
or convertible or exchangeable securities, applicable to one share, and
the denominator of which shall be such Trigger Market Price per share
of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the record date for
the determination of stockholders entitled to receive such
distribution.
(d) For the purpose of any computation under this
Section 6, the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices for
the 30 consecutive trading days immediately preceding the date in
question. The closing price for each day shall be the last reported
sales price regular way or, in case no such reported sale takes place
on such day, the closing bid price regular way, in either case on the
principal national securities exchange (including, for purposes hereof,
the NASDAQ SmallCap Market) on which the Common Stock is listed or
admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the highest reported
bid price for the Common Stock as furnished by the National Association
of Securities Dealers, Inc. through NASDAQ or a similar organization if
NASDAQ is no longer reporting such information. If on any such date the
Common Stock is not listed or admitted to trading on any national
securities exchange and is not quoted by NASDAQ or any similar
organization, the fair value of a share of Common Stock on such date,
as determined in good faith by the board of directors of the Company,
whose determination shall be conclusive absent manifest error, shall be
used.
(e) No adjustment in the Exercise Price shall be
required if such adjustment is less than $.05 PROVIDED, HOWEVER, that
any adjustments which by reason of this Section 6 are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 6 shall be
made to the nearest cent or to the nearest one-thousandth of a share,
as the case may be.
(f) In any case in which this Section 6 shall require
that an adjustment in the Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer,
until the occurrence of such event, issuing to the Holder, if the
Holder exercised or converted this Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise or
conversion over and above the shares of Common Stock, if any, issuable
upon such exercise or conversion on the basis of the Exercise Price in
effect prior to such adjustment; PROVIDED, HOWEVER, that the Company
shall deliver to the Holder a due bill or other appropriate instrument
<PAGE>
evidencing the Holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(g) Upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 6(b) or 6(c) hereof, this
Warrant shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated to the
nearest thousandth) obtained by dividing (i) the product obtained by
multiplying the number of shares purchasable upon exercise of this
Warrant prior to adjustment of the number of shares by the Exercise
Price in effect prior to adjustment of the Exercise Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise Price.
(h) Whenever there shall be an adjustment as provided
in this Section 6, the Company shall promptly cause written notice
thereof to be sent by registered mail, postage prepaid, to the Holder,
at its address as it shall appear in the Warrant Register, which notice
shall be accompanied by an officer's certificate setting forth the
number of Warrant Shares purchasable upon the exercise of this Warrant
and the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the computation
thereof, which officer's certificate shall be conclusive evidence of
the correctness of any such adjustment absent manifest error.
(j) Notwithstanding anything to the contrary herein,
the Company shall not be required to issue fractions of shares of
Common Stock or other capital stock of the Company upon the exercise or
conversion of this Warrant or any adjustment to the number of shares
this Warrant may be exercised for or converted into. If any fraction of
a share would be issuable on the exercise or conversion of this Warrant
(or specified portions thereof) or adjustment thereto, the Company
shall purchase such fraction for an amount in cash equal to the same
fraction of the Current Market Price of such share of Common Stock on
the date of exercise or conversion of this Warrant.
7. (a) In case of any consolidation with or merger of the
Company with or into another corporation (other than a merger or
consolidation in which the Company is the surviving or continuing
corporation), or in case of any sale, lease, or conveyance to another
corporation of the property and assets of the Company as an entirety or
substantially as an entirety, such successor, leasing, or purchasing
corporation, as the case may be, shall (i) execute with the Holder an
agreement providing that the Holder shall have the right thereafter to
receive upon exercise or conversion of this Warrant solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such consolidation, merger, sale,
lease, or conveyance by a holder of the number of shares of Common
Stock for which this Warrant might have been exercised or converted
immediately prior to such consolidation, merger, sale, lease, or
conveyance, and (ii) make effective provision in its certificate of
incorporation or otherwise, if necessary, to effect such agreement.
Such agreement shall provide for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 6.
<PAGE>
(b) In case of any reclassification or change of the
shares of Common Stock issuable upon exercise or conversion of this
Warrant (other than a change in par value or from no par value to a
specified par value, or as a result of a subdivision or combination,
but including any change in the shares into two or more classes or
series of shares), or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing
corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) of
the shares of Common Stock (other than a change in par value, or from
no par value to a specified par value, or as a result of a subdivision
or combination, but including any change in the shares into two or more
classes or series of shares), the Holder shall have the right
thereafter to receive upon exercise or conversion of this Warrant
solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the
number of shares of Common Stock for which this Warrant might have been
exercised or converted immediately prior to such reclassification,
change, consolidation, or merger. Thereafter, appropriate provision
shall be made for adjustments which shall be as nearly equivalent as
practicable to the adjustments in Section 6.
(c) The above provisions of this Section 7 shall
similarly apply to successive reclassifications and changes of shares
of Common Stock and to successive consolidations, mergers, sales,
leases, or conveyances.
8. In case at any time the Company shall propose
(a) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or make any other
distribution (other than regularly scheduled cash dividends which are
not in a greater amount per share than the most recent such cash
dividend) to all holders of Common Stock; or
(b) to issue any rights, warrants, or other
securities to all holders of Common Stock entitling them to purchase
any additional shares of Common Stock or any other rights, warrants, or
other securities; or
(c) to effect any reclassification or change of
outstanding shares of Common Stock, or any consolidation, merger, sale,
lease, or conveyance of property, described in Section 7; or
(d) to effect any liquidation, dissolution, or
winding-up of the Company; or
(e) to take any other action which would cause an
adjustment to the Exercise Price;
<PAGE>
then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an adjustment to the Exercise Price.
9. The issuance of any shares or other securities upon the
exercise or conversion of this Warrant, and the delivery of certificates or
other instruments representing such shares or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not be
required to issue or deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
10. (a) If, at any time prior to June 16, 2005, while any
Warrant or Warrant Shares are outstanding, the Company shall file a registration
statement with the Securities and Exchange Commission (the "Commission") to
register the sale any of its equity securities for its own account (and not for
the account of a security holder or holders) for cash, other than (w) a
registration relating to employee benefit plans and/or on Form S-8 or a
comparable or successor Form, (x) a registration relating to a corporate
reorganization or other transaction under Rule 145 and/or on Form S-4 or a
comparable or successor Form, or (y) a registration on any registration form
that does not permit secondary sales, the Company shall give the Holder at least
15 days prior written notice of the filing of such registration statement. If
requested by the Holder in writing within 10 days after receipt of any such
notice, the Company shall, at the Company's sole expense (other than the fees
and disbursements of counsel for the Holder and the underwriting discounts, if
any, payable in respect of the Warrant Shares sold by the Holder), register or
qualify all or, at the Holders' option, any portion of the Warrant Shares of the
Holder concurrently with the registration of such other securities, all to the
extent requisite to permit the public offering and sale of the Warrant Shares
through the facilities of all appropriate securities exchanges and the
over-the-counter market. As a condition to the registration of any Warrant
Shares in an underwritten public offering, the Holder shall (together with the
Company and the other holders of securities of the Company with registration
rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the
<PAGE>
underwriter or underwriters selected by the Company. Notwithstanding the
foregoing, if the representative of the underwriter or underwriters of any such
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Warrant Shares requested to be included
in the registration concurrently with the securities being registered by the
Company would adversely affect the distribution of such securities by the
Company for its own account, the number of shares that may be included in such
registration in such offering shall be allocated as follows: (i) first, the
Company shall be permitted to include all shares of capital stock to be
registered thereby and (ii) second, the Holder shall be allowed to include such
additional amount as the lead managing underwriter deems appropriate, such
amount to be allocated among such Holder and any other selling stockholders on a
pro rata basis based on the total number of shares of capital stock held
thereby. As used herein, "Warrant Shares" shall mean the Warrant Shares and the
Conversion Shares which, in each case, have not been previously sold pursuant to
a registration statement or Rule 144 promulgated under the Act.
(b) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall use its best efforts to cause
the Warrant Shares so registered to be registered or qualified for sale under
the securities or blue sky laws of such jurisdictions as the Holder may
reasonably request; PROVIDED, HOWEVER, that the Company shall not be required to
qualify to do business in any state by reason of this Section 10(b) in which it
is not otherwise required to qualify to do business.
(c) The Company shall keep effective any registration
or qualification contemplated by this Section 10 and shall from time to time
amend or supplement each applicable registration statement, preliminary
prospectus, final prospectus, application, document, and communication for such
period of time as shall be required to permit the Holder to complete the offer
and sale of the Warrant Shares covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of 90 days from the date on which the Holder is first free to sell
such Warrant Shares; PROVIDED, HOWEVER, that, if the Company is required to keep
any such registration or qualification in effect with respect to securities
other than the Warrant Shares beyond such period, the Company shall keep such
registration or qualification in effect as it relates to the Warrant Shares for
so long as such registration or qualification remains or is required to remain
in effect in respect of such other securities.
(d) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall furnish to the Holder such
number of copies of the registration statement and of each amendment and
supplement thereto (in each case, including all exhibits), such reasonable
number of copies of each prospectus contained in such registration statement and
each supplement or amendment thereto (including each preliminary prospectus),
all of which shall conform to the requirements of the Act and the rules and
regulations thereunder, and such other documents, as the Holder may reasonably
request to facilitate the disposition of the Warrant Shares included in such
registration.
<PAGE>
(e) In the event of a registration pursuant to the
provisions of this Section 10, the Company shall furnish the Holder so
registered with an opinion of its counsel covering such matters as are
customarily the subject of opinions of issuer's counsel provided to underwriters
in underwritten public offerings.
(f) The Company agrees that until the Warrant has
expired or all of the Warrant Shares have been sold under a registration
statement or pursuant to Rule 144 under the Act, it shall keep current in filing
all reports, statements and other materials required to be filed with the
Commission to permit the Holder to sell the Warrant Shares under Rule 144.
11. (a) Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Holder, its officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Act or
Section 20(a) of Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all loss, liability, charge, claim, damage, and
expense whatsoever (which shall include, for all purposes of this Section 11,
but not be limited to, reasonable attorneys' fees and any and all reasonable
expense whatsoever incurred in investigating, preparing, or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), as and when
incurred, arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
registration statement, preliminary prospectus, or final prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto,
relating to the sale of the Warrant Shares, or (B) in any application or other
document or communication (in this Section 11 collectively called an
"application") executed by or on behalf of the Company filed in any
jurisdiction in order to register or qualify any of the Warrant Shares under
the securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, unless such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company with respect to
the Holder by or on behalf of the Holder expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Warrant. The foregoing agreement to indemnify shall
be in addition to any liability the Company may otherwise have, including
liabilities arising under this Warrant.
If any action is brought against the Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability pursuant to this Section 11(a) except to the extent
that such failure shall result in prejudice to the Company) and the Company
shall promptly assume the
<PAGE>
defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties) and payment of reasonable
expenses. Such indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such indemnified party or
parties to have charge of the defense of such actionor such indemnified party or
parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to the Companyin any of which
events such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties. The Company shall not be obligated to pay the fees
and expenses of more than one such separate counsel for any one such action or
proceeding in any one jurisdiction. Anything in this Section 11 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of each indemnified party that is not released as described in this sentence,
settle or compromise any action, or permit a default or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action, in
respect of which indemnity may be sought hereunder (whether or not any
indemnified party is a party thereto), unless such settlement, compromise,
consent, or termination includes an unconditional release of each indemnified
party from all liability in respect of such action. The Company agrees promptly
to notify the Holder of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection with the
sale of any Warrant Shares or any preliminary prospectus, prospectus,
registration statement, or amendment or supplement thereto, or any application
relating to any sale of any Warrant Shares.
(b) The Holder agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Warrant Shares held by the
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and its or their
respective counsel, to the same extent as the foregoing indemnity from the
Company to the Holder in Section 11(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary prospectus,
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, or in any application, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Holder expressly for inclusion in any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be. If any action shall be
brought against the Company or any other person so indemnified based on any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, and in respect of which
indemnity may be sought against the Holder pursuant to this Section 11(b), the
Holder shall have the rights and duties given to the
<PAGE>
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
11(a).
(c) To provide for just and equitable contribution,
if (i) an indemnified party makes a claim for indemnification pursuant to
Section 11(a) or 11(b) (subject to the limitations thereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this Agreement
expressly provides for indemnification in such case, or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made by
or on behalf of any director of the Company, any officer of the Company who
signed any such registration statement, any controlling person of the Company,
and its or their respective counsel), as one entity, and the Holder (including
for this purpose any contribution by or on behalf of an indemnified party), as a
second entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
such Holder in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission, or alleged omission,
shall be determined by, among other things, whether such statement, alleged
statement, omission, or alleged omission relates to information supplied by the
Company or by such Holder, and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. The Company and the Holder agree that
it would be unjust and inequitable if the respective obligations of the Company
and the Holder for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages, and expenses
(even if the Holder and the other indemnified parties were treated as one entity
for such purpose) or by any other method of allocation that does not reflect the
equitable considerations referred to in this Section 11(c). In no case shall the
Holder be responsible for a portion of the contribution obligation imposed on it
in excess of its pro rata share based on the number of shares of Common Stock
owned (or which would be owned upon exercise of all Warrant or Warrant Shares)
by it and included in such registration as compared to the total number of
shares of Common Stock included in such registration. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 11(c), each person,
if any, who controls the Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partner, employee,
agent, and counsel of each such Holder or control person shall have the same
rights to contribution as such Holder or control person and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed any
such registration statement, each director of the Company, and its or their
respective counsel shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 11(c). Anything in this
Section 11(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action
<PAGE>
effected without its written consent. This Section 11(c) is intended to
supersede any right to contribution under the Act, the Exchange Act or
otherwise.
12. Unless registered pursuant to the provisions of Section 10
hereof, the Warrant Shares or Conversion Shares issued upon exercise or
conversion of the Warrants shall be subject to a stop transfer order and the
certificate or certificates evidencing such Warrant Shares shall bear the
following legend:
"THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES CANNOT BE SOLD OR TRANSFERRED WITHOUT SUCH REGISTRATION AND
QUALIFICATION UNLESS AN EXEMPTION FROM SUCH REGISTRATION AND
QUALIFICATION IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO THAT EFFECT."
13. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant (and upon surrender
of this Warrant if mutilated), and upon reimbursement of the Company's
reasonable incidental expenses, the Company shall execute and deliver to the
Holder thereof a new Warrant of like date, tenor, and denomination.
14. The Holder shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided in this Warrant.
15. This Warrant shall be construed in accordance with the
laws of the State of New York applicable to contracts made and performed within
such State, without regard to principles of conflicts of law.
16. The Company irrevocably consents to the jurisdiction of
the courts of the federal courts located in the City of New York in connection
with any action or proceeding arising out of or relating to this Warrant, any
document or instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or any such
document or instrument. In any such action or proceeding, the Company waives
personal service of any summons, complaint or other process and agrees that
service thereof may be made by registered mail, return receipt requested. Within
30 days after such service, or such other time as may be allowed under New York
law or as mutually agreed upon in writing by the attorneys for the parties to
such action or proceeding, the Company shall appear to answer such summons,
complaint or other process. Should the Company so served fail to appear or
answer within such period or such extended period, as the case may be, the
Company shall be deemed in default and judgment may be entered against the
Company for the amount as demanded in any summons, complaint or other process so
served.
<PAGE>
Dated: June 20, 2000
BIZNESSONLINE.COM, Inc.
By:/s/ S. Keith London
-----------------------------------------
S. Keith London, Executive Vice President
<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder is permitted to transfer
the attached Warrant.)
FOR VALUE RECEIVED, ____________ hereby sells, assigns, and
transfers unto __________________ a Warrant to purchase __________ shares of
Common Stock, par value $.01 per share, of FastComm Communications Corporation
(the "Company"), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint _________________ attorney to transfer
such Warrant on the books of the Company, with full power of substitution.
Dated:
--------------------------
By:
-----------------------------
Signature
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Warrant in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE>
To: BiznessOnline.com, Inc.
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to purchase _______
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________ in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and delivered to:
____________________________________________
____________________________________________
____________________________________________
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Dated:
----------------------
By:
--------------------------------
Print Name
--------------------------------
Signature
Address:
__________________________________________
__________________________________________
__________________________________________
<PAGE>
To: BiznessOnline.com, Inc.
CASHLESS EXERCISE FORM
(To be executed upon conversion of the attached Warrant)
The undersigned hereby irrevocably elects to surrender its Warrant for
the number of shares of Common Stock as shall be issuable pursuant to the
cashless exercise provisions of the within Warrant, in respect of __________
shares of Common Stock underlying the within Warrant, and requests that
certificates for such securities be issued in the name of and delivered to:
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Warrant Shares covered by the within Warrant be registered in the name of, and
delivered to, the undersigned at the addressed stated below.
Dated: _________________________ Name _____________________________
(Print)
Address: _____________________________________________________________
________________________________
(Signature)
