<PAGE> 1
EXHIBIT 10.10
THESE WARRANTS WILL EXPIRE AND BECOME NULL AND
VOID AT 4:00 P.M. (PACIFIC STANDARD TIME)
ON MAY 23, 2003
WARRANTS TO PURCHASE COMMON SHARES OF
NETSTAFF, INC.
THIS IS TO CERTIFY THAT ELLIOTT, LANE & ASSOCIATES, INC. (the
"Holder") has the right to purchase, upon and subject to the terms and
conditions hereinafter referred to, up to 30,000 fully paid and non-assessable
shares of common stock (the "Shares") in the capital of NETSTAFF, INC.
(hereinafter called the "Company") for a period of three years from May 24,
2000, until 4:00 p.m. (Pacific Standard Time) on May 23, 2003 (the "Expiry
Date") at a price of $5.50 per Share.
1. ONE WARRANT AND $5.50 ARE REQUIRED TO PURCHASE ONE SHARE. THIS
CERTIFICATE REPRESENTS 30,000 WARRANTS.
2. These Warrants are issued subject to the terms and conditions
attached to the Warrant issued by the Company (the "Terms and
Conditions") and dated May 24, 2000, and the Warrant Holder may
exercise the right to purchase Shares only in accordance with
those Terms and Conditions.
3. A copy of the Terms and Conditions may be obtained from the
offices of the Company in the City of San Francisco, California.
4. Nothing contained herein or in the Terms and Conditions will
confer any right upon the Holder hereof, or any other person, to
subscribe for, or purchase, any Shares at any time subsequent to
the Expiry Date, and from and after such time, these Warrants and
all rights hereunder will be void and of no value.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by the undersigned, its authorized signatory, this 24th
day of May, 2000.
NETSTAFF, INC.
Per: /s/PATRICK RYLEE
---------------------------------
Authorized Signatory
1
<PAGE> 2
PLEASE NOTE THAT ALL SHARE CERTIFICATES ISSUED UPON EXERCISE OF THESE WARRANTS,
IN WHOLE OR IN PART, MUST BE LEGENDED AS FOLLOWS:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
SECURITIES ACT), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
2
<PAGE> 3
FORM OF SUBSCRIPTION
TO: NETSTAFF, INC.
The undersigned Holder of the within Warrants hereby subscribes for __________
shares of common stock (the "Shares") of NetStaff, Inc. (the "Company"),
pursuant to the attached Warrant certificate, at $5.50 per Share on the terms
and conditions specified therein.
The undersigned hereby directs that the Shares be registered as follows:
<TABLE>
NAME(S) IN FULL ADDRESS(ES) NUMBER OF SHARES
--------------- ----------- ----------------
<S> <C> <C>
TOTAL:
</TABLE>
(Please print full name in which share certificates are to be issued, stating
whether Mr., Mrs. or Miss is applicable).
DATED this _______ day of ____________, 20___.
In the presence of:
___________________________________ _________________________________
Signature of Witness Signature of Warrant Holder
Please print below your name and address in full.
Name______________________________________________________
Address___________________________________________________
__________________________________________________________
3
<PAGE> 4
TERMS AND CONDITIONS DATED MAY 24, 2000, ATTACHED TO THE
WARRANTS ISSUED BY NETSTAFF, INC. TO ELLIOTT, LANE &
ASSOCIATES, INC.
ARTICLE 1 - INTERPRETATION
SECTION 1.1 - DEFINITIONS
In these Terms and Conditions, unless there is something in the subject matter
or context inconsistent therewith:
(a) "Company" means NETSTAFF, INC., until a successor corporation
will have become such as a result of consolidation, amalgamation
or merger with or into any other corporation or corporations, or
as a result of the conveyance or transfer of all or substantially
all of the properties and estates of the Company as an entirety
to any other corporation, and thereafter "Company" will mean such
successor corporation;
(b) "Company's Auditors" means an independent firm of accountants
duly appointed as auditors of the Company;
(c) "Director" means a director of the Company for the time being,
and reference, without more, to action by the directors means
action by the directors of the Company as a Board, or whenever
duly empowered, action by an executive committee of the Board;
(d) "herein," "hereby" and similar expressions refer to these Terms
and Conditions as the same may be amended or modified from time
to time; and the expression Article and Section, followed by a
number refer to the specified Article or Section of these Terms
and Conditions;
(e) "person" means an individual, corporation, partnership, trustee
or any unincorporated organization and words importing persons
have a similar meaning;
(f) "shares" means the common shares in the capital of the Company as
constituted at the date hereof and any shares resulting from any
subdivision or consolidation of the shares;
(g) "Warrant Holders" or "Holders" means the holders of the Warrants;
and
(h) "Warrants" means the warrants of the Company issued and presently
authorized, as set out in Section 2.1 hereof and for the time
being outstanding, to ELLIOTT, LANE & ASSOCIATES, INC.
4
<PAGE> 5
SECTION 1.2 - GENDER
Words importing the singular number include the plural and vice versa and words
importing the masculine gender include the feminine and neuter genders.
SECTION 1.3 - INTERPRETATION NOT AFFECTED BY HEADINGS
The division of these Terms and Conditions into Articles and Sections, and the
insertion of headings, are for convenience of reference only and will not affect
the construction or interpretation thereof.
SECTION 1.4 - APPLICABLE LAW
The Warrants will be construed in accordance with the laws of the State of
California applicable thereto and will be treated in all respects as California
contracts.
ARTICLE 2 - ISSUE OF WARRANTS
SECTION 2.1 - ISSUE OF WARRANTS
Warrants entitling the Holders thereof to purchase up to an aggregate of 30,000
shares have been authorized and are herewith issued by the Company. This Warrant
certificate represents 30,000 Warrants.
SECTION 2.2 - ADDITIONAL WARRANTS
The Company may, at any time, and from time to time, issue additional warrants
or grant options or similar rights to purchase shares of its capital stock.
SECTION 2.3 - WARRANTS TO RANK PARI-PASSU
These Warrants and additional warrants, options or similar rights to purchase
shares from time to time issued or granted by the Company, will rank pari-passu,
whatever may be the actual dates of issue or grant thereof, or of the dates of
the certificates by which they are evidenced.
SECTION 2.4 - ISSUE IN SUBSTITUTION FOR LOST WARRANTS
(1) In case a Warrant certificate becomes mutilated, lost, destroyed or
stolen, the Company, at its discretion, may issue and deliver a new
Warrant certificate of like date and tenor as the one mutilated, lost,
destroyed or stolen, in exchange for and in place of and upon
cancellation of such mutilated Warrant certificate, or in lieu of, and
in substitution for such lost, destroyed or stolen Warrant certificate
and the substituted Warrant
5
<PAGE> 6
certificate will be entitled to the benefit hereof and rank equally in
accordance with its terms with all other Warrants issued or to be issued
by the Company.
(2) The applicant for the issue of a new Warrant certificate pursuant hereto
will bear the cost of the issue thereof and in case of loss, destruction
or theft furnish to the Company such evidence of ownership and of loss,
destruction, or theft of the Warrant certificate so lost, destroyed or
stolen as will be satisfactory to the Company in its discretion and such
applicant may also be required to furnish indemnity in amount and form
satisfactory to the Company in its discretion, and will pay the
reasonable charges of the Company in connection therewith.
SECTION 2.5 - WARRANT HOLDER NOT A SHAREHOLDER
The holding of a Warrant will not constitute the holder thereof a shareholder of
the Company, nor entitle him to any right or interest in respect thereof except
as in the Warrant expressly provided.
ARTICLE 3 - NOTICE
SECTION 3.1 - NOTICE TO WARRANT HOLDERS
Any notice to be given to the Holders shall be given in writing and will be
given by personal delivery, telecopied or sent by prepaid, registered post,
addressed to the Holders at the address of the Holders appearing on the Holder's
Warrant certificate or to such other address as the Holders may advise the
Company by notice in writing, or by electronic means of communication.
The date of receipt of such notice shall be the date of delivery thereof if
delivered or telecopied, or, if given by registered mail, shall be deemed to be
the fourth business day after the same shall have been so mailed, except in the
case of interruption of postal services for any reason whatever, in which case,
the date of receipt shall be the date on which the notice, demand or other
communication is actually received by the addressee.
SECTION 3.2 - NOTICE TO THE COMPANY
Any notice to be given to the Company shall be given in writing and will be
given by personal delivery, telecopied or sent by prepaid, registered post,
addressed to the Company, at its business office, or delivered to the Company,
at its business office or to such other address as the Company may advise the
Holders by notice in writing, or by electronic means of communication.
The date of receipt of such notice shall be the date of delivery thereof if
delivered or telecopied, or, if given by registered mail, shall be deemed to be
the fourth business
6
<PAGE> 7
day after the same shall have been so mailed except in the case of interruption
of postal services for any reason whatever, in which case the date of receipt
shall be the date on which the notice, demand or other communication is actually
received by the addressee.
ARTICLE 4 - EXERCISE OF WARRANTS
SECTION 4.1 - METHOD OF EXERCISE OF WARRANTS
The right to purchase shares conferred by the Warrants may be exercised by the
Holders of such Warrant surrendering it, with a duly completed and executed
subscription form and a bank draft, or certified check, payable to, or to the
order of, the Company, at par, in San Francisco, California, for the purchase
price applicable at the time of surrender in respect of the shares subscribed
for in lawful money of the United States of America, to the Company, at its
principal office in San Francisco, California.
SECTION 4.2 - ALTERNATE METHOD OF EXERCISE
In lieu of exercising Warrants as provided for in Section 4.1 above, the Holders
may elect to receive shares equal to the value of the Warrants (or any portion
thereof) by surrendering the Warrant certificate, together with a notice of such
election, to the Company, at its principal office in San Francisco, California,
in which case the Holders shall be entitled to receive that number of shares of
the Company calculated as follows:
X = Y (A-B)
-------
A
where:
X = the number of shares of the Company to be issued to the
Holders
Y = the number of Warrants which are being exercised
A = the fair market value of one share of the Company as at
the date the notice of exercise is received by the
Company; and
B = the exercise price of the Warrants
and for the purposes of this section the "fair market value" of one share of the
Company shall be the average closing price of the Company's shares for the five
trading days immediately preceding the date the notice of exercise is received
by the Company where the Company's shares trade on a recognized stock exchange
or national market system and shall be the average of the mean of the closing
bid and ask prices for such shares for the five trading days immediately
preceding the date the notice of exercise is received by the Company where the
Company's shares trade over-the-counter.
7
<PAGE> 8
SECTION 4.3 - EFFECT OF EXERCISE OF WARRANTS
(1) Upon exercise as aforesaid the shares so subscribed for will be deemed
to have been issued and such person or persons will be deemed to have
become the holder or holders of record of such shares on the date of
such surrender and payment, and such shares will be issued at the
subscription price in effect on the date of such exercise.
(2) Within ten business days after exercise as aforesaid, the Company will
forthwith cause to be delivered to the person or persons in whose name
or names the shares so subscribed for are to be issued as specified in
such subscription or mailed to him or them at his or their respective
addresses specified in such subscription, a certificate or certificates
for the appropriate number of shares not exceeding those which the
Warrant Holder is entitled to purchase pursuant to the Warrant
Certificate surrendered.
SECTION 4.4 - SUBSCRIPTION FOR LESS THAN ENTITLEMENT
The Holders of any Warrant certificate may subscribe for, and purchase, a number
of shares less than the number which the Holders are entitled to purchase,
pursuant to the surrendered Warrant. In the event of any purchase of a number of
shares less than the number which can be purchased pursuant to a Warrant
certificate, the Holders, upon exercise thereof, will, in addition, be entitled
to receive, on that same date (the "New Date"), a new Warrant certificate
effective as of the New Date, in respect of the balance of the shares which the
Holders were entitled to purchase pursuant to the surrendered Warrant
certificate and which were not then purchased.
SECTION 4.5 - WARRANTS FOR FRACTIONS OF SHARES
To the extent that the Holders of any Warrant are entitled to receive on the
exercise or partial exercise thereof a fraction of a common share, such right
may be exercised in respect of such fraction only in combination with another
Warrant or other Warrants which in the aggregate entitle the holder to receive a
whole number of such common shares.
SECTION 4.6 - EXPIRATION OF WARRANTS
After the expiration of the period within which a Warrant is exercisable, all
rights thereunder will wholly cease and terminate, and such Warrant will be void
and of no effect.
SECTION 4.7 - TIME OF ESSENCE
Time will be of the essence hereof.
8
<PAGE> 9
SECTION 4.8 - SUBSCRIPTION PRICE
One Warrant and $5.50, during the term of the Warrants, are required to
subscribe for each share.
SECTION 4.9 - ADJUSTMENT OF EXERCISE PRICE
The exercise price and the number of common shares deliverable upon the exercise
of the Warrants will be subject to adjustment in the event and in the manner
following:
(1) If, and whenever, the shares at any time outstanding are
subdivided into a greater or consolidated into a lesser number of
shares the exercise price will be decreased or increased
proportionately as the case may be; upon any such subdivision or
consolidation the number of shares deliverable upon the exercise
of the Warrants will be increased or decreased proportionately as
the case may be.
(2) (a) In case of any capital reorganization or of any
reclassification of the capital of the Company, or in the case of
the consolidation, merger or amalgamation of the Company with or
into any other Company (hereinafter collectively referred to as a
"Reorganization"), each Warrant will after such Reorganization
confer the right to purchase the number of shares or other
securities of the Company (or of the Company resulting from such
Reorganization) which the Warrant Holders would have been
entitled to upon Reorganization if the Warrant Holders had been
shareholders at the time of such Reorganization.
(b) In any such case, if necessary, appropriate adjustments will be
made in the application of the provisions of this Article Four
relating to the rights and interest thereafter of the Holders of
the Warrants so that the provisions of this Article Four will be
made applicable as nearly as reasonably possible to any shares or
other securities deliverable after the Reorganization on the
exercise of the Warrants.
(c) The subdivision or consolidation of shares at any time
outstanding into a greater or lesser number of shares (whether
with or without par value) will not be deemed to be a
Reorganization for the purposes of this paragraph (2).
(3) The adjustments provided for in this Section are cumulative and
will become effective immediately after the record date or, if no
record date is fixed, the effective date of the event which
results in such adjustments.
SECTION 4.10 - DETERMINATION OF ADJUSTMENTS
If any questions will at any time arise with respect to the exercise price or
any adjustment provided for in Section 4.8, such questions will be conclusively
determined
9
<PAGE> 10
by the Company's Auditors, or, if they decline to so act, any other firm of
chartered accountants, in San Francisco, California that the Company may
designate and who will have access to all appropriate records, and such
determination will be binding upon the Company and the Holders of the Warrants.
ARTICLE 5 - COVENANTS BY THE COMPANY
SECTION 5.1 - RESERVATION OF SHARES
The Company will reserve, and there will remain unissued out of its authorized
capital, a sufficient number of shares to satisfy the rights of purchase
provided for herein and in the Warrants should the Holders of all the Warrants
from time to time outstanding determine to exercise such rights in respect of
all shares which they are or may be entitled to purchase pursuant thereto and
hereto.
SECTION 5.2 - COMPANY MAY PURCHASE
The Company may, from time to time, offer to purchase, and purchase, for
cancellation only, any Warrants in such manner, from such persons, and on such
terms and conditions as it determines.
SECTION 5.3 - REGISTRATION RIGHTS
(1) If the Company determines to register any of its securities for the
account of a shareholder or holders, other than in a registration relating
solely to employee benefit plans, a registration relating solely to a Rule 145
transaction, or a registration on any registration form that does not permit
secondary sales, the Company will (i) promptly give to each person who is a
Warrant Holder at the effective date notice and (ii) use its best efforts to
include in such registration (and any related qualification under blue sky laws
or other compliance), and in any underwriting involved therein, all the
Registerable Securities of such shareholder, as requested, such request to be
made in writing and received by the Company within twenty (20) days after it
delivers its notice of the proposed registration. Such request may specify all
or part of the Holders' Registerable Securities. As used herein, the term
Registerable Securities means shares of the Company's common stock issued or
issuable to the Warrant Holders pursuant hereto.
(2) If any shares issuable as a result of the exercise of Warrants hereunder
cannot be registered as a result of limitations of the aggregate number of
shares of Registerable Securities that may be so included, the number of shares
of Registerable Securities that may be included shall be allocated among the
Holders requesting inclusion of shares, pro rata, on the basis of the number of
shares of Registerable Securities, provided that such allocation shall not
operate to reduce the aggregate number of Registerable Securities that may be
included in such registration if any Holder does not request inclusion of the
maximum number of shares of Registerable Securities allocated to it pursuant to
the procedure described in this section, and the remaining portion of its
allocation shall be reallocated among those requesting
10
<PAGE> 11
Holders whose allocation did not satisfy the request pro rata on the basis of
the number of shares of Registerable Securities which will be held by such
Holders and any selling shareholders.
(3) Notwithstanding the rights set forth herein, the Company shall have no
registration obligation to any Holder in the event that the Company is advised
by its underwriter or other selling agent that the underwriter is not willing to
register shares issuable pursuant to the Warrants by reason of market conditions
or any other reason relating to the primary obligation of such underwriter or
agent to sell the shares of the Company, its being the intention of the parties
that the Company's ability to sell all of the shares that it wishes to sell
pursuant to any registration statement shall be paramount to, and shall
supersede, the rights of any Holder hereunder.
ARTICLE 6 - WAIVER OF CERTAIN RIGHTS
SECTION 6.1 - IMMUNITY OF SHAREHOLDERS, ETC.
The Warrant Holders, as part of the consideration for the issue of the Warrants,
waive and will not have any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any past, present or future incorporator,
shareholder, Director or Officer (as such) of the Company, for the issue of
shares, pursuant to any Warrant or on any covenant, agreement, representation or
warranty by the Company herein contained or in the Warrant.
ARTICLE 7 - MODIFICATION OF TERMS, MERGER, SUCCESSORS
SECTION 7.1 - MODIFICATION OF TERMS AND CONDITIONS FOR CERTAIN PURPOSES
From time to time, the Company may, subject to the provisions of these presents,
modify the Terms and Conditions hereof, for the purpose of correction or
rectification of any ambiguities, defective provisions, errors or omissions
herein.
SECTION 7.2 - TRANSFERABILITY
The Warrants and all rights attached to them are not transferable or assignable.
DATED this 24th day of May, 2000.
NETSTAFF, INC.
By: /s/ PATRICK RYLEE
-------------------------------
Authorized Signatory
11
