SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported ) April 24, 2000
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NETCRUISE.COM, INC.
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(Exact name of registrant as specified in its charter)
New Jersey O-29188 22-2719541
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(state or other (Commission file number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
2401 Morris Avenue, Union, New Jersey 07083
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(address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code, (908) 801-8767
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Item 5: OTHER EVENTS
Settlement of Contract Dispute
On April 24, 2000, the Company completed a transaction with United
Internet Technologies, Inc. ("UIT") and its parent company, United Leisure
Corporation ("ULC"), which restructured agreements they originally entered into
in July 1998 and subsequently amended in 1998 and 1999 (the "July 1998
Agreement").
The July 1998 Agreement sold to the Company the rights to the travel
Web site named "netcruise.com," together with a business model, worldwide rights
and a license for UIT's proprietary "Parallel Addressing Video" ("PAV")
technology for travel related applications, computer software and other
intellectual property related to the travel business. In consideration for July
1998 Agreement, the Company issued to UIT 2,000,000 restricted shares of the
common stock and two warrants to purchase an additional 1,600,000 shares; one
for the purchase of up to 800,000 shares of common stock at an initial purchase
price of $2.50 per share (the "Class X Warrant") and the other for the purchase
of up to an additional 800,000 shares of common stock at an initial purchase
price of $6.00 per share (the "Class Y Warrant"). The July 1998 Agreement also
provided for the exchange of additional consideration consisting of UIT's
assignment of an office lease, the provision by UIT of managerial and technical
assistance and various payments to be made by the Company.
In the restructuring completed on April 24, 2000, various disputes that
had arisen between the Company and UIT regarding the implementation and
performance of the July 1998 Agreement were fully resolved and released. UIT
provided a revised and updated PAV software and technology license to the
Company, sold 1,500,000 shares of the Company's common stock in a private
transaction for a cash purchase price of $600,000 to Mr. Joseph Perri, the
Company's principal shareholder, and agreed to the Company's cancellation of the
Class X and Class Y Warrants to purchase an aggregate of 1,600,000 shares. In
this connection, the Company issued two new privately placed warrants to
purchase up to 500,000 shares; a Series U Warrant permitting UIT to purchase up
to 400,000 shares of common stock for a period of five years at an initial
purchase price of $1.00 per share and a Series V Warrant permitting a principal
shareholder of UIT to purchase up to 100,000 shares of common stock over a five
year period for an initial purchase price of $1.00 per share.
Item 7: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
10.24 Omnibus Stock Purchase, Restructuring and General Release Agreement among
the Company, Joseph Perri, United Leisure Corporation, United Internet
Technologies, Inc., Harry Schuster and Brian Schuster dated April 24, 2000.
10.25 Software License and Domain Name Assignment Agreement between the Company
and United Internet Technologies, Inc. dated April 24, 2000.
10.26 Warrant Agreement between the Company and United Internet Technologies,
Inc. dated April 24, 2000.
10.27 Warrant Agreement between the Company and Brian Schuster dated April 24,
2000.
2
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
May 5, 2000 NETCRUISE.COM, INC.
By: /s/ Lawrence E. Burk
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Lawrence E. Burk
President and Chief Executive Officer
3
EXHIBIT 10.24
OMNIBUS STOCK PURCHASE,
RESTRUCTURING AND GENERAL RELEASE AGREEMENT
This Omnibus Stock Purchase, Restructuring and General Release
Agreement (the "Agreement") is made and entered into as of the 24th day of
April, 2000, by and between United Leisure Corporation, a Delaware corporation
("ULC"), United Internet Technologies, Inc., a Delaware corporation and
wholly-owned subsidiary of ULC (formerly known as United Leisure Interactive,
Inc. and hereinafter referred to as "UIT"), Harry Shuster ("H. Shuster"), Brian
Shuster ("B. Shuster"), netcruise.com, inc., a New Jersey corporation (formerly
known as Genisys Reservations Systems, Inc. and hereinafter referred to as
"Netcruise"), Netcruise Interactive, Inc., a New Jersey corporation and
wholly-owned subsidiary of Netcruise ("NII"), and Joseph Perri ("Perri"), with
reference to the following facts:
Recitals:
1. ULC, UIT, Netcruise and NII heretofore entered into that certain Asset
Purchase Agreement, dated as of June 30th, 1998 (together with all exhibits
thereto and all documents and instruments of every type which were executed in
connection therewith, the "APA"), pursuant to which, among other things, UIT
sold, to NII, all of UIT's right, title and interest in and to the License (as
defined in the APA) and the other Assets (as defined in the APA), in exchange
for, among other things, (i) 2,000,000 shares (the "Shares") of the common
shares (the "Common Stock") of Netcruise, and (ii) two common stock purchase
warrants collectively exercisable for the purchase of up to an additional
1,600,000 shares of Common Stock (collectively, the "Old UIT Warrants").
Pursuant to the APA, Netcruise also issued, to B. Shuster, two common stock
purchase warrants collectively exercisable for the purchase of up to 400,000
shares of Common Stock (collectively, the "Old B. Shuster Warrants").
2. The APA was subsequently amended pursuant to that certain Agreement, dated as
of the 28th day of October, 1998 (the "First Amendment"); and the APA and the
First Amendment were subsequently amended pursuant to that certain Agreement,
dated as of January 25, 1999 (the "Second Amendment"). The APA, the First
Amendment and the Second Amendment, together with any and all documents and
instruments of every type which have heretofore been executed in connection
therewith, and all amendments to the foregoing, are sometimes hereinafter
collectively referred to as the "Amended APA."
3. Certain disputes have arisen between the parties (other than Perri) in
respect of the Amended APA, which all of the parties wish to fully, finally and
forever resolve pursuant to this Agreement. 1.
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7
4. Perri desires to purchase from UIT, and UIT desires to sell to Perri,
1,500,000 of the Shares (the "Perri Shares") pursuant to this Agreement; and
Netcruise and NII have consented to such purchase and sale.
5. UIT represents that it has not sold, encumbered or otherwise transferred any
of the Shares or any of the Old UIT Warrants, or any interest therein, except to
the extent contemplated by the Amended APA.
6. B. Shuster represents that he either has never received, or has misplaced,
the requisite instruments representing the Old B. Shuster Warrants
(collectively, the "Old B. Shuster Certificates"); but that he has not sold,
encumbered or otherwise transferred any of the Old B. Shuster Warrants, or any
interest therein.
7. Based upon the respective representations of UIT and B. Shuster contained in
Recital E and Recital F above, and Netcruise's and NII's failure to effect the
Delivery (as defined in the First Amendment) of the United Preferred Shares (as
defined in the First Amendment) to UIT (which failure, together with all other
outstanding issues between the parties, is being fully, finally and forever
resolved pursuant to this Agreement), Netcruise and NII represent that (i) the
Shares, the Old UIT Warrants and the Old B. Shuster Warrants are duly and
validly authorized, issued, outstanding and fully paid and nonassessable; (ii)
UIT owns all of the Shares and the Old UIT Warrants, of record and beneficially,
free and clear of all liens, claims and encumbrances of every type
(collectively, "Encumbrances"); (iii) B. Shuster owns all of the Old B. Shuster
Warrants, of record and beneficially, free and clear of all Encumbrances; (iv)
UIT has the right to sell the Perri Shares to Perri pursuant to this Agreement;
and (v) when the Perri Shares have been purchased by and sold to Perri pursuant
to the terms of this Agreement, Perri will own the Perri Shares free and clear
of all Encumbrances. Based upon the same reasons and also in reliance upon the
representation of Netcruise and NII contained in Recital G(i), UIT joins in the
representations made with respect to it by Netcruise and NII in Recital G(ii),
(iv) and (v), and B. Shuster joins in the representations made with respect to
him by Netcruise and NII in Recital G(iii).
8. Each of the parties represents that such party's execution and delivery of
this Agreement, and the performance by such party of such party's obligations
hereunder, have been duly and validly authorized by all necessary corporate and
other action, and that this Agreement is binding upon and enforceable against
such party in accordance with its terms.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
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1. Incorporation by Reference of Recitals. The foregoing Recitals are
incorporated herein by this reference; and the statements contained therein
shall be deemed to constitute representations, warranties, covenants and
agreements of the parties to which they relate.
2. Perri Shares; Etc.
(1) Purchase and Sale. In reliance upon the truth and accuracy of the
representations and warranties of Perri, Netcruise and NII contained in this
Agreement, but subject to UIT's receipt from Perri of the full Perri Shares
Purchase Price (hereinafter defined) by wire transfer (the "Wire Transfer") into
a bank account designated by UIT for such purpose to William J. Davis, Esq.
("Davis"), of Scheichet & Davis, P.C. (the "Account"), and further subject to
compliance by Netcruise and NII with their obligations contained in this Section
2 and in Sections 3(a)(ii)(B), 3(a)(ii)(C) and 3(ii)(D) hereof, UIT agrees to,
and hereby does, sell, transfer and convey to Perri all of UIT's right, title
and interest in and to the Perri Shares. Similarly, Perri agrees to, and hereby
does, purchase from UIT all of UIT's right, title and interest in and to the
Perri Shares for the aggregate purchase price of $600,000 (the "Perri Shares
Purchase Price"), which amount Perri agrees to immediately pay to UIT by Wire
Transfer of the full Perri Shares Purchase Price to the Account in immediately
available funds. Each of Netcruise and NII hereby consent to and approve of the
purchase and sale of the Perri Shares pursuant to this Agreement.
(2) New Certificates. In furtherance of its transfer of the Perri Shares to
Perri pursuant to Section 2(a) hereof, promptly after the date hereof UIT will,
by delivering the same to Davis, deliver to Netcruise (for the benefit of Perri
and UIT) UIT's stock certificate (the "Old UIT Certificate") evidencing the
Shares, accompanied by (i) an appropriate assignment separate from certificate
(the "Stock Assignment") covering the Perri Shares, and (ii) a copy of a written
consent (the "Board Consent") of UIT's sole director adopting resolutions
approving the sale of the Perri Shares to Perri. Promptly following receipt by
Davis of the foregoing, Netcruise shall (i) validly issue two new stock
certificates evidencing the Shares, one in the amount of 1,500,000 of the Shares
(the "Perri Related New Certificate") and one in the amount of 500,000 of the
Shares (the "New UIT Certificate"); and (ii) deliver the Perri Related New
Certificate to Perri and the New UIT Certificate to UIT. Each of Perri and
Netcruise acknowledges and agrees that UIT will be deemed to have satisfied its
obligations to Perri under Section 2(a) above and this Section 2(b) upon
delivery of the Old UIT Certificate, Stock Assignment and Board Consent to Davis
in such manner and at such time as may be agreed to by Davis and counsel for
UIT.
(3) [Intentionally omitted].
<PAGE>
(4) Certain Representations and Warranties of Perri. In order to induce UIT to
consummate the purchase and sale of the Perri Shares to Perri pursuant to this
Agreement, Perri represents and warrants to UIT and ULC, as follows: (i) he is
an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as amended), and his net worth
exceeds $1,000,000; (ii) he already, independent of his acquisition of the Perri
Shares pursuant to this Agreement, is a significant investor in the Company,
and, as such, already is thoroughly familiar with the Company and its status,
business, prospects and financial condition; (iii) he has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of his investment in the Perri Shares; (iv) neither UIT, ULC,
H. Shuster or B. Shuster has provided him with any information or
representations of any type in respect of the Company or its status, business,
prospects or financial condition, and, instead, he has, for purposes of his
investment in the Perri Shares, relied solely upon his own knowledge of the
Company and its status, business and financial condition and upon disclosures
which have been provided to him by others (in respect of which disclosures, he
agrees, UIT, ULC, H. Shuster and B. Shuster shall have no responsibility
whatsoever); (v) he has been given the opportunity to ask questions of, and
receive answers from, Netcruise and its representatives concerning the Company
and its status, business, prospects and financial condition, and obtained all
such information as he deems necessary to verify the accuracy of the information
which has been provided to him in order for him to be able, on a fully informed
basis, to evaluate the merits and risks of his investment in the Perri Shares
(in respect of which, he agrees, UIT, ULC, H. Shuster and B. Shuster shall have
no responsibility whatsoever); (vi) he understands that his investment in the
Perri Shares involves a high degree of risk; (vii) he has, in connection with
his investment in the Perri Shares, independently retained and utilized such
financial, legal and other advisors as he deems necessary for purposes of
evaluating the merits and risks of his investment in the Perri Shares; (viii) he
has determined that his investment in the Perri Shares is a suitable investment
for him in view of his actual and anticipated financial needs, and he can afford
to bear the complete loss of such investment without affecting his lifestyle;
(ix) he is acquiring the Perri Shares for investment purposes only and without a
view to any distribution, subdivision or fractionalization thereof, and he has
no plans, or agreements or arrangements with any person, firm or entity in
respect of any sale, transfer, pledge or other disposition of any of the Perri
Shares or any interest therein; (x) he understands that the sale of the Perri
Shares to him pursuant to this Agreement has not been registered or qualified
under applicable federal and state securities laws, and agrees not to sell,
encumber or otherwise transfer any of the Perri Shares, or any interest therein,
without compliance with the registration and qualification requirements of such
laws unless and except to the extent that applicable exemptions therefrom exist
(and he further understands and agrees that no one has any obligation to
register or qualify under federal or state securities laws any disposition by
him of the Perri Shares); (xi) he understands that, by virtue of the foregoing,
he must bear the economic risk of his investment in the Perri Shares for an
indefinite period of time; (xii) he understands that Netcruise will be entitled
to impose an appropriate legend on his stock certificate(s) evidencing the Perri
Shares to reflect the foregoing, and issue appropriate stop transfer
instructions to its transfer agent (in respect of which, he agrees, UIT, ULC, H.
Shuster and B. Shuster shall have no responsibility whatsoever); (xiii) on March
6, 2000, he consummated a transaction with Netcruise in connection with which he
purchased from Netcruise an aggregate of 9,487,500 shares of theretofore
unissued Common Stock for a cash purchase price of $1,897,500 and converted
$375,000 of his cash loans to the Company into an aggregate of 2,875,000
additional theretofore unissued shares of Common Stock (the "March 6
Transaction"); (xiv) he received no other Netcruise securities and received no
registration rights in connection with the March 6 Transaction, and has no
registration rights in respect of any of the other Netcruise securities owned by
him; (xv) all of his representations and warranties contained in this Agreement
are true and correct; and (xvi) his option from Netcruise to acquire an
additional 4,625,000 shares of Common Stock for $600,000 has not been exercised
and will expire unexercised upon the consummation of the transactions
contemplated by this Agreement; (xvii) he has read and is thoroughly familiar
with the Amended APA and this Agreement, and approves of and consents to this
Agreement and all of the transactions contemplated hereby.
<PAGE>
(5) Certain Representations and Warranties of Netcruise and NII. In order to
induce the UIT Parties (hereinafter defined) to enter into this Agreement and
perform their respective obligations hereunder, each of Netcruise and NII
represents and warrants to the UIT Parties that the representations and
warranties of Perri contained in Sections 3(d)(xiii), 3(d)(xiv) and 3(d)(xvi)
and in the parenthetical at the end of Section 3(d)(x) above are true and
correct; and that, attached hereto as Exhibit 2(e) are pro forma financial
statements of Netcruise which accurately reflect the financial condition and
capitalization of Netcruise both immediately before and immediately after the
March 6 Transaction.
3. Restructuring and General Release.
(1) Restructuring. Each of UIT, ULC, H. Shuster and B. Shuster (collectively,
the "UIT Parties"), on the one hand, and each of Netcruise and NII
(collectively, the "Netcruise Parties"), on the other hand, hereby agrees that
their past relationships shall be, and they hereby are, restructured, as
follows:
<PAGE>
(1) Termination of Amended APA. Except as specifically herein provided in
respect of the Shares, the Amended APA, and all of the respective rights and
obligations of the parties thereunder and in respect thereof, are hereby
terminated in their entirety. By way of illustration only, and not by way of
limitation, (A) all rights and obligations of every type between the UIT Parties
(or any of them), on the one hand, and the Netcruise Parties (or any of them),
on the other hand, under or in respect of the License (and in respect of the
Technology, as defined in the License) are hereby terminated in their entirety;
(B) Netcruise shall be entitled to immediately cancel the Old UIT Warrants and
the Old B. Shuster Warrants (and B. Shuster agrees to promptly redeliver to
Netcruise the Old B. Shuster Certificates at such time(s), if ever, as he
locates them); (C) the June 30, 1998 assignment by UIT of that certain
Commercial Lease, dated March 1, 1996, between 1990 Westwood Blvd., Inc. and ULI
with respect to premises at 1990 Westwood Blvd., Penthouse, Los Angeles, CA
(including the use of furniture in such offices) is hereby terminated; and (D)
all indebtedness and any other payment rights and obligations of every type
(including without limitation, such thereof as exist by virtue of the mandatory
dividend payments contemplated by the First Amendment) between the UIT Parties
(or any of them), on the one hand, and the Netcruise Parties (or any of them),
on the other hand, are hereby terminated; and (E) to the extent that they have
not already done so, each of H. Shuster and B. Shuster resigns from any and all
positions he has heretofore held with either of the Netcruise Parties.
(2) Continuing Relationship. Notwithstanding the provisions of Section 3(a)(i)
above:
(1) The Shares. UIT shall continue to own the Shares (until such time(s) as they
are disposed of by UIT), except to the extent that the Perri Shares included
therein are being transferred to Perri pursuant to Section 2 hereof.
(2) The New UIT Warrants. Concurrently with the execution hereof, Netcruise
shall execute and deliver to UIT new common stock purchase warrants (the "New
UIT Warrants") pursuant to documents in the form of Exhibit 3(a)(ii)(B) hereto,
exercisable for the purchase of up to 400,000 shares of Common Stock at a
purchase price of $1.00 per share (in each case, subject to adjustment as
provided therein) in substitution for the Old UIT Warrants.
(3) New B. Shuster Warrants. Concurrently with the execution hereof, Netcruise
shall execute and deliver to B. Shuster new common stock purchase warrants (the
"New B. Shuster Warrants") pursuant to documents in the form of Exhibit
3(a)(ii)(C) hereto, exercisable for the purchase of up to 100,000 shares of
Common Stock at a purchase price of $1.00 per share (in each
case, subject to adjustment as provided therein), in substitution for the Old B.
Shuster Warrants.
(4) New Software License and Domain Assignment Agreement. Concurrently with the
execution hereof, each of UIT and Netcruise shall execute and deliver to the
other a new Software License and Domain Assignment Agreement in the form of
Exhibit 3(a)(ii)(D) hereto, in substitution for the License and all other rights
of every type that the Netcruise Parties (or any of them) might otherwise be
deemed to have in respect of the Technology.
(5) Current Public Information. For so long as UIT owns any of the Shares and
for so long as UIT or B. Shuster owns any of the New UIT Warrants or the New B.
Shuster Warrants or any shares of Common Stock acquired upon exercise of the New
UIT Warrants or the New B. Shuster Warrants, Netcruise shall cause there to be
available, at all times, adequate current public information with respect to
Netcruise within the meaning of paragraph (c) of Rule 144 promulgated under the
Securities Act of 1933, as amended (or any successor such Rule).
(6) Non-Competition. UIT agrees that, for so long as Netcruise is in compliance
with the terms and provisions of the Software License and Domain Assignment
Agreement referred to in Section 3(a)(ii)(D) above (the "Software License"), UIT
will not utilize or license others to utilize its video technology (i.e., the
video technologies known as "PAV" and "DIVO") for Travel Related Applications
(as defined in Section 2 of the Software License) in competition with Netcruise
except in the territory of the United Kingdom and Europe.
<PAGE>
(2) Mutual General Releases.
(1) Release By UIT Parties. The UIT Parties, and each of them, hereby fully,
finally and forever release and discharge the Netcruise Parties, and each of
them, their affiliates and their respective past and present officers,
directors, employees, agents, shareholders, heirs, successors and assigns, from
and against any and all claims of any nature whatsoever, whether known, unknown,
concealed or hidden, which any of them now has or heretofore has had or now or
hereafter may be deemed to have for any reason whatsoever, whether arising under
the Amended APA or otherwise; provided, however, that the foregoing shall be
inapplicable to any claims arising under or by virtue of this Agreement.
(2) Release By Netcruise Parties. The Netcruise Parties, and each of them,
hereby fully, finally and forever release and discharge the UIT Parties, and
each of them, and their respective past and present officers, directors,
employees, agents, shareholders, heirs, successors and assigns, from and against
any and all claims of any nature whatsoever, whether known, unknown, concealed
or hidden, which any of them now has or heretofore has had or now or hereafter
may be deemed to have for any reason whatsoever, whether arising under the
Amended APA or otherwise; provided, however, that the foregoing shall be
inapplicable to any claims arising under or by virtue of this Agreement.
(3) Certain Acknowledgments. Each of the UIT Parties, on the one hand, and each
of the Netcruise Parties, on the other hand, acknowledges that he or it may
hereafter discover facts which are different from or in addition to those known
or believed to be true with respect to the foregoing; and agree that this
Agreement shall be and remain in full force and effect in all respects
notwithstanding such different or additional facts. Each of the UIT Parties, on
the one hand, and each of the Netcruise Parties, on the other hand, represents
and warrants to the others that he or it has not sold, encumbered or otherwise
transferred any of the claims being released pursuant to this Section 3(b); and
agrees to fully indemnify and hold harmless the others in respect thereof.
(4) Waiver of Section 1542 of California Civil Code. Each of the UIT Parties, on
the one hand, and each of the Netcruise Parties, on the other hand, hereby
expressly waives the provisions of Section 1542 of the Civil Code of the State
of California (and of all similar laws), which provides as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
<PAGE>
(3) Press Releases. Each of the UIT Parties, on the one hand, and each of the
Netcruise Parties, on the other hand, acknowledges and agrees that it is their
mutual intention and agreement to coordinate all press releases and the filing
of all public documents in respect of the transactions contemplated by this
Agreement. In furtherance thereof, (i) each of the UIT Parties agrees not to
issue any press release or file any public document that refers to this
Agreement or any of the Netcruise Parties without the prior consent of Netcruise
(which consent will be provided promptly and will not unreasonably withheld),
and (ii) each of the Netcruise Parties agrees not to issue any press release or
file any public document that refers to this Agreement or any of the UIT Parties
without the prior consent of UIT and ULC (which consents will be provided
promptly and will not be unreasonably withheld), in either case except to the
extent required by applicable law.
(4) Obligations of UIT Parties. The obligations of the UIT Parties under this
Section 3 are hereby expressly made subject to the prior receipt by UIT of the
full Perri Shares Purchase Price by UIT from Perri pursuant to Section 2(a)
above.
4. Miscellaneous.
(1) Survival. All of the representations, warranties, covenants and agreements
of the parties contained in this Agreement shall survive the execution hereof
and remain in full force and effect until the expiration of all applicable
statutes of limitations.
(2) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California.
(3) Exhibits. Exhibits referred to in this Agreement are hereby made a part
hereof.
(4) Notices. Any notice or other communication given by any of the parties
hereto to any of the other parties hereto pursuant to or in connection with this
Agreement shall be in writing and personally delivered, faxed (with the
transmission of such fax confirmed by a fax transmission report) or mailed by
certified mail, postage prepaid, as follows:
(1) If to Joseph Perri or any of the Netcruise Parties, to such party:
c/o Scheichet & Davis, P.C.
505 Park Avenue
New York, New York 10022
Attn: William Davis, Esq.
Fax No. (212) 371-7634
and
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c/o Steven Goldman, Esq.
2013 O Street, N.W.
Washington, D.C. 20036
Fax No. (202) 293-2556
(2) If to any of the UIT Parties, to such party:
c/o Richman, Mann, Chizever, Phillips & Duboff
9601 Wilshire Boulevard, Penthouse
Beverly Hills, CA 90210
Attention: Gerald M. Chizever, Esq.
Fax No. (310) 274-2831
or to such other address as hereafter shall be furnished in writing by any of
the parties hereto to the other parties hereto, as aforesaid. Notices shall not
be deemed delivered until received at the address or facsimile number to which
they are sent.
(5) Entire Understanding. This Agreement sets forth the entire understanding of
the parties, and shall not be changed or terminated orally. All prior
discussions between the parties pertaining to the subject matter of this
Agreement, both written and oral, and all prior agreements, both written and
oral, between the parties (whether or not relating to the subject matter of this
Agreement), are superseded by their entirety by and merged into this Agreement.
(6) Headings. The headings herein are inserted only for convenient reference,
and in no way define, limit or describe the scope of this Agreement, or the
intent of any of the provisions hereof; and they shall not be used in construing
this Agreement.
(7) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(8) Further Acts. Each party to this Agreement agrees to execute any and all
documents and perform any and all acts reasonably requested by any of the other
parties in order to more fully effectuate the purposes of this Agreement.
<PAGE>
(9) Attorneys' Fees. In the event that any party to this Agreement commences
legal proceedings against any of the other parties under or in respect of this
Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses and court costs.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
/s/ Joseph Perri
UNITED INTERNET TECHNOLOGIES, INC.
By: /s/ Sonia Mikic - CEO
UNITED LEISURE CORPORATION
By: /s/ Brian Shuster - CEO
/s/ Harry Shuster
/s/ Brian Shuster
netcruise.com, inc.
By: /s/ Lawrence E. Burk - President
NETCRUISE INTERACTIVE, INC.
By: /s/ Lawrence E. Burk - President
EXHIBIT 10.25
SOFTWARE LICENSE AND DOMAIN NAME ASSIGNMENT AGREEMENT
THIS AGREEMENT is made and entered into effective this 24th day of
April , 2000 by and between United Internet Technologies, Inc. a Delaware
corporation, having a principal place of business at 1990 Westwood Boulevard,
Los Angeles, California (hereinafter referred to as "LICENSOR"), and
netcruise.com, inc., a New Jersey corporation, having a principal place of
business at 2401 Morris Avenue, Union, New Jersey (hereinafter referred to as
"LICENSEE").
RECITALS
1. LICENSOR has designed, developed and/or acquired rights in certain
computer software and technology, which software and technology is described
more fully in Appendix "A" attached hereto and by this reference, incorporated
herein. Hereinafter said software and technology is referred to as the "LICENSED
SOFTWARE. In addition, LICENSOR is the owner of one or more domain names which
include the term "netcruise."
2. LICENSEE desires an exclusive license to use the LICENSED SOFTWARE
in connection with Travel Related Applications as defined below, and LICENSOR is
willing to grant such license, subject to the terms and conditions hereinafter
set forth. Further, LICENSEE desires to be the owner of domain names which
include the term "netcruise" and LICENSOR is willing to assign such domain names
to LICENSEE.
3. LICENSEE acknowledges LICENSOR's proprietary rights and interest in
the LICENSED SOFTWARE, and is willing to accept the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth hereinbelow, LICENSOR and LICENSEE hereby agree as follows:
1. License Grant:
(a) LICENSOR hereby grants to LICENSEE, for the term hereof, an
exclusive, even as to LICENSOR, non-transferable, worldwide except for Europe
and the United Kingdom, fully paid up license to use for Travel Related
Applications as defined below the LICENSED SOFTWARE delivered to it by LICENSOR
hereunder, to create videos distributed on CD-ROM which run inside a standalone
window comprising the items identified in Appendix "A." Expressly excluded from
this grant is the right to use the LICENSED SOFTWARE to create videos which may
be embedded within a window which contains web page data in addition to a
created video, or which utilizes any of LICENSOR's technology other than that
which was used to create the Sample PAV files identified in Appendix A. As to
Europe and the United Kingdom, this grant is non-exclusive. This grant does not
provide LICENSEE with any right to sub-license or otherwise transfer any of the
rights granted herein.
(b) "Use" or "use" as used herein in connection with LICENSED SOFTWARE
means (i) entering any portion of the LICENSED SOFTWARE from storage units or
media into a computer; (ii) running any portion of the LICENSED SOFTWARE in the
course of operating or supporting the operation of a computer; and (iii) making
copies of the LICENSED SOFTWARE for internal use as needed, for safekeeping
(archival) and for backup purposes, but not for distribution to others, except
for the UL Player which may be copied and distributed to others on an
unrestricted basis. Notwithstanding LICENSEE's right to copy and distribute the
UL Player, it is understood and agreed that LICENSOR retains all ownership of
the copyright and technology contained in the UL Player. Under no circumstances
may LICENSEE make modifications to the LICENSED SOFTWARE.
2. Definition of Travel Related Applications: For purposes of the
license granted hereunder, Travel Related Applications means using the LICENSED
SOFTWARE to develop CD-ROMs with video files and audio files showing and
describing food, lodging, transportation and travel arrangements and travel
destinations for use by customers to assist them in making decisions as to
transportation destinations and lodging for business and personal travelling,
which CD-ROMs are for use in conjunction with an Internet based web site. All
other uses of the LICENSED SOFTWARE by LICENSEE are outside the scope of the
license grant and are strictly prohibited. Further, even with respect to Travel
Related Applications, LICENSEE is prohibited from using the LICENSED SOFTWARE to
develop a CD-ROM which contains video files which include any form of
pornography or sexually explicit "adult entertainment.".
3. Term: The term of this Agreement shall commence as of the effective date of
this Agreement, and shall continue indefinitely, unless earlier terminated
pursuant to Paragraph 11 hereinbelow.
4. Delivery: LICENSOR shall undertake delivery to LICENSEE of the
LICENSED SOFTWARE within ten (10) days of execution of this Agreement, except
for the Updates referred to in Appendix "A" which will be delivered in the
ordinary course of business after they become available.
5. Title: Except for distributed copies of the UL Player, all copies of
the LICENSED SOFTWARE shall be and remain the tangible property of LICENSOR.
With respect to the proprietary rights and copyrights in the LICENSED SOFTWARE,
LICENSEE also acknowledges LICENSOR's sole ownership of all rights, title and
interests therein. Further, LICENSEE acknowledges and agrees that it has no
claim, right, title, property or interest of any kind or nature whatsoever in
the LICENSED SOFTWARE, except for the limited license granted herein.
6. Notices and Legends: LICENSEE shall include and reproduce appropriate notices
and legends, as prescribed by LICENSOR, on all copies of the LICENSED SOFTWARE
made by LICENSEE hereunder. The initial copyright notice shall be in the
following form: (C) 1999 and name of copyright owner* ALL RIGHTS RESERVED
*(to be specified by LICENSOR upon execution of this Agreement)
7. Confidentiality; Security: LICENSEE acknowledges and agrees that all
knowledge, information and material that it may receive hereunder comprising or
concerning the LICENSED SOFTWARE is and shall be received as secret and
confidential and proprietary information (hereinafter referred to as
"Confidential Information"). LICENSEE shall hold such Confidential Information
in strict confidence, except for the uses permitted herein, and shall not
disclose it to others, nor permit others to use it in any way, commercially or
otherwise, and shall not allow any unauthorized person access to it, either
before or after termination of this Agreement, without the prior written consent
of LICENSOR. LICENSEE shall take all actions reasonably necessary to protect the
confidentiality of the Confidential Information, including without limitation,
protecting it as it protects its own corporate proprietary information of a
similar nature and limiting the disclosure of the Confidential Information to
employees or consultants with a bona fide need to know the same, who have been
advised of the confidential nature thereof and are under an express obligation
to maintain such confidentiality. The obligations of this Paragraph shall not
extend to any item which (i) now or hereafter may be in the public domain as a
result of acts not attributable to LICENSEE; (ii) was in the possession of or
known to LICENSEE prior its receipt from LICENSOR as evidenced by tangible
records; or (iii) is required to be produced by LICENSEE pursuant to a court or
governmental order.
8. Disclaimers Of Warranty: LICENSOR LICENSES THE LICENSED SOFTWARE TO
LICENSEE HEREUNDER SOLELY ON AN "AS IS" BASIS. LICENSOR MAKES NO WARRANTIES,
EITHER EXPRESSED OR IMPLIED, REGARDING SAID SOFTWARE, ITS MERCHANTABILITY OR ITS
FITNESS FOR ANY PARTICULAR PURPOSE. However, LICENSOR does represent and warrant
that the LICENSED SOFTWARE will operate to enable LICENSEE to create files of
the type identified in Appendix A as Sample PAV and Sample ULI files and to
otherwise substantially perform the functions of ULI File Editor Rev. 2.51 and
PAV Encrypter Rev. 2.51 in the hardware and software environments identified and
described in Appendix A. While the LICENSED SOFTWARE may operate in other
hardware and software environments, this representation and warranty does not
extend to such other environments. Moreover, neither party shall be liable to
the other for any indirect, special or consequential damages, such as lost
profits, regardless of the cause of action, or for any loss, cost or expense
incurred by the other arising from or related to (i) the operation, use,
performance, or failure to perform of the LICENSED SOFTWARE; or (ii) any claim
or demand on the other by any third party. With regards to this disclaimer, in
the event of any claim or demand on LICENSOR by any third party, LICENSEE shall
fully protect, indemnify and hold harmless LICENSOR from and against any and all
costs, expenses, liabilities, or claims of whatsoever nature or kind of any
injury or damage, including consequential damages, asserted by such third party.
9. Unauthorized Reproduction Or Use: LICENSEE agrees to indemnify
LICENSOR and hold it harmless from any and all claims, liabilities, losses,
costs, expenses or damages incurred by LICENSOR as a result of or arising from
any unauthorized reproduction or use of the LICENSED SOFTWARE by LICENSEE, or
any other breach of this agreement.
10. Default: If either party is in breach of any of the terms,
conditions, representations or warranties contained herein, the non-breaching
party shall have the right to notify the breaching party of such default and of
the non-breaching party's intention to terminate this Agreement or bring action
for enforcement of this Agreement unless such default is corrected by the
breaching party within one month from the date of such written notice. If such
default is not corrected within said one month, the non-breaching party shall be
entitled, without prejudice to any of its other rights under this Agreement or
bring action for encorcement of this Agreement , to terminate this Agreement at
any time thereafter by sending a written notice to the breaching party to take
effect immediately. In addition, in the event LICENSEE files a petition for
bankruptcy or one is filed against it by a creditor which is not dismissed
within 60 days of that filing, exercises an assignment for the benefit of
creditors, goes into liquidation or has a receiver or a trustee appointed for
the benefit of creditors, whether voluntary or otherwise, LICENSOR shall be
entitled to terminate this Agreement by sending written notice of such
termination to LICENSEE. Termination of this Agreement shall be understood to
include, without limitation, the termination of all licenses granted hereunder.
11. Termination Rights: Upon termination of this Agreement, LICENSEE
shall immediately return to LICENSOR or erase, at LICENSOR's option, all copies
of the LICENSED SOFTWARE. In the event LICENSOR elects to have LICENSEE erase
the copies, LICENSEE agrees to erase each such copy in its entirety, and upon
LICENSOR's written request, certify to LICENSOR, in writing, that such erasure
has been completed. In addition, upon termination of this Agreement, all rights
granted hereunder to reproduce and use the LICENSED SOFTWARE shall revert
immediately to LICENSOR.
12. Assignment of Domain Names: LICENSOR shall undertake all acts
reasonably necessary to promptly assign all domain names which it owns which
include the term "netcruise" to LICENSEE within ten (10) days from the date of
execution of this agreement. However, it is understood that since there are
third parties involved, it may take longer than ten (10) days for such
assignment to take effect.
13. Waiver: Waiver by LICENSOR of any specific default or breach of this
Agreement by LICENSEE shall not be deemed to be a waiver of any other or
subsequent default or breach.
14. Notice: Notices for the LICENSEE should be delivered or addressed as
follows:
Netcruise.com, Inc.,
2401 Morris Avenue, Union,
New Jersey 07683,
Attn: Lawrence Burk, President, Fax No. (908) 810-8769, with a copy to
William J. Davis, Esq.,
Scheichet & Davis, P.C.,
505 Park Avenue, 20th Floor, New York, NY 10022, Fax No. (212) 371-7634
If to LICENSOR:
United Internet Technologies, Inc.
1990 Westwood Boulevard
Los Angeles, California 90025
Attn: Sonja Mikic, CEO, Fax No. (310) 441-4903, with a copy to:
Richman, Mann, Chizever, Phillips & Duboff
9601 Wilshire Boulevard, Penthouse
Beverly Hills, CA 90210
Attn: Gerald M. Chizever, Esq., Fax No (310) 274-2831
Any notice or other communication given under this Agreement shall be
in writing and personally delivered, faxed (with the transmission of such fax
confirmed by a fax transmission report) or mailed by certified mail, or by
Federal Express or US Postal Express Mail service, postage prepaid, sent to the
party to whom it is given at the address set forth immediately above, or such
other address as any party hereto may direct by written notice given in
accordance with these provisions. Notices shall not be deemed to have been given
until received at the address or facsimile number to which they are sent.
15. Right to Inspect: LICENSEE agrees that it will permit a
representative or representatives of LICENSOR to visit and inspect the premises
where the LICENSED SOFTWARE is kept and/or used, during ordinary business hours,
for the limited purpose of observing and verifying LICENSEE's compliance with
the terms and conditions of this Agreement, and subject to such representative
signing an appropriate non-disclosure agreement to protect LICENSEE's
proprietary information. Request for such visit shall be by written request.
LICENSEE further agrees to make available to such representative or
representatives, all information reasonably required for the accomplishment of
the foregoing purposes and to otherwise cooperate with him or them toward such
end. In addition, LICENSEE shall provide to LICENSOR a copy of each CD-ROM it
creates for distribution to third parties at least five business days prior to
such distribution and, at the same time, the URL of all web pages which contain
links to the files on each CD-ROM. LICENSOR understands and agrees that the
audio and video content of each such CD-ROM is owned by LICENSEE or by a party
who has granted to LICENSEE the right to reproduce such content and that
LICENSOR has no right to reproduce or modify such audio and/or video content.
16. Remedies; Attorneys' Fees: LICENSEE acknowledges and agrees that
LICENSOR would not have an adequate remedy at law in the event that disclosure
of any or all of the LICENSED SOFTWARE, or use thereof not in accordance with
the provisions of this Agreement, is threatened, and that injunctive relief to
prevent such disclosure or misappropriation should be obtainable by LICENSOR. If
any legal action or proceeding is brought for the enforcement of this Agreement,
the successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding in
addition to any other relief to which it may be entitled, if so awarded by the
Court.
17. Disclaimer of Legal Association: This Agreement shall not be
construed as creating a partnership between the parties or to create any other
form of legal association which would impose liability upon one party for the
act or failure to act of the other party. Moreover, all costs, expenses and
taxes, if any, incurred by LICENSEE in connection with its use and reproduction
of the LICENSED SOFTWARE shall be its sole responsibility.
18. Complete Understanding; Modification: This Agreement constitutes
the full and complete understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior negotiations,
understanding and agreements. Any waiver, modification or amendment of any
provisions of this Agreement shall be effective only if in writing and signed by
the parties hereto.
19. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
20. Successors; Non-Assignment: All of the terms, provisions and
conditions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their representatives, heirs, successors, trustees,
transferees, lawful assigns and legal representatives. Neither this Agreement,
nor any right granted herein, is assignable, even to a wholly owned subsidiary
of LICENSEE, by LICENSEE without the prior written consent of LICENSOR. Any
attempt to assign any said rights, or to delegate the duties or obligations
imposed on LICENSEE by this Agreement, without LICENSOR's prior written consent,
which consent shall not be unreasonably withheld, shall be void. LICENSOR may
assign any and all of its rights, or delegate any and all of its the duties or
obligations under this Agreement without first obtaining LICENSEE's consent
21. Representation: The parties each acknowledge that there are no
representations or warranties, expressed or implied, relied upon by any party as
an inducement to entering into this Agreement except as expressly stated herein.
22. Validity: In the event that any of the terms of this Agreement are
in conflict with any rule of law or statutory provision, or otherwise
unenforceable under the laws or regulation of the federal or any state
government, or subdivision thereof, such terms shall be deemed stricken from
this Agreement, but such invalidity or unenforceability shall not invalidate any
of the other terms of this Agreement, and this Agreement shall continue in force
and effect. To the extent possible, a likely valid provision which meets the
objective of the invalid provision shall be substituted for any invalid
provision hereto.
23. Export License: The LICENSED SOFTWARE may fall within the group of
"strategic" electronic products or technical data that are wholly or partly of
U.S. origin or technology, the export of which are subject to export license
control by the U.S. Government. Prior to exportation of the LICENSED SOFTWARE,
if any, LICENSEE agrees to obtain any licenses which may be required under the
applicable laws of the United States, including the Export Administration Act
and Regulations. The obligations of LICENSEE pursuant to this paragraph shall
survive and continue after any termination of rights under this Agreement.
24. Construction: This Agreement and the provisions hereof shall not be
construed for or against either party by virtue of the fact that it was proposed
by that party and/or drafted by that party's attorney.
25. Headings: The Article and Paragraph headings used herein are for
convenience only and shall not be deemed to be substantive, or to affect in any
way the language or meaning of the provisions to which they refer; nor shall
such headings be construed to broaden or narrow such provisions.
26. Binding Effect: This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and legal
representatives.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the date(s) set forth below.
United Internet Technologies, Inc.
Dated: April 24, 2000 /s/ Sonia Mikic
---------------
Name: Sonya Mikic
Title: Chief Executive Officer
netcruise.com, inc.
Dated: April 24, 2000 /s/ Lawrence E. Burk
-------------------
Name: Lawrence E. Burk
Title: President & CEO
<PAGE>
APPENDIX A
Licensed Software
1. UL Player Rev. 2.51 executable and related files
2. ULI File Editor Rev. 2.51 executable for editing ULI trigger files
3. PAV Encrypter Rev. 2.51 executable to convert MPEG files to video files which
can only be played using UL Player
4. Sample ULI files
5. Sample PAV files
6. Available documentation for the above Updates to the above as generally
released by LICENSOR to all or substantially all of its Licensees
Functional Description of Licensed Software and System Requirements
1) ULI Player v2.51
This application is used by the end-user of distributed PAV media to read PAV
files on the distributed PAV media and play the audio and video content of such
files. It is to be distributed with every CD that includes PAV files. It is
known to work with Internet Explorer and Netscape Navigator/Communicator
versions 3.0 and above. It has been tested on several hundred configurations and
is known to work with most video and audio cards.
System Requirements:
Microsoft Windows 95 or 98
Microsoft IE3.0 or higher, Netscape v3.0 or higher Intel Pentium 166Mhz or
above. 16 MB of free RAM and 50MB of free hard disk space. Compatible sound and
video card.
2) ULI Editor v2.51
This application allows Netcruise developers to create the .uli files that are
sent to the browser client and are read by the ULI Player. These files include
the name of the video file and associated information. This application is known
to work on clean Windows 98 systems, i.e., without any third party software with
the exception of the ULI Editor.
System Requirements:
Standard Windows 98
64 Megabytes of RAM
5MB free disk space for application + additional space as needed for output
files.
3) PAV Encoder v2.51
This application allows Netcruise developers to convert standard MPEG1 files
into PAV files that cannot be read by regular MPEG players. It provides the
encryption key that is to be entered into the ULI Editor when the developer
creates a ULI file. This application is known to work on clean Windows 98
systems without other applications with the exception of the PAV Encoder.
System Requirements:
Standard Windows 98
64 Megabytes of RAM
5MB free disk space for application + space for MPEG input files and PAV output
files.
EXHIBIT 10.26
WARRANT AGREEMENT dated as of April 24, 2000 (the "Agreement") between
netcruise.com, inc., a New Jersey corporation (the "Company"), whose principal
place of business is 2401 Morris Avenue, Union, NJ 07083, United Internet
Technologies, Inc., a Delaware corporation ("UIT"and the "Holder"), with its
principal place of business at 1990 Westwood Boulevard, Suite P, Los Angeles, CA
90025.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company proposes to issue to the Holder warrants (the
"Series U Warrant") to purchase up to an aggregate of 400,000 shares of the
Company's common stock, $.0001 par value, (the "Common Stock").
NOW, THEREFORE, in consideration of the premises, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Company hereby agrees to issue to the Holder the warrants
described in Section 1.1 below.
1.1 Series U Warrant. The Series U Warrant grants to the Holder the
right to purchase, at any time from April 24, 2000 until 5:00 P.M., New York
time, on April 23, 2005, up to an aggregate of 400,000 shares (subject to
adjustment as provided in Section 8 hereof) of Common Stock (the "Shares") at an
initial exercise price (subject to adjustment as provided in Section 8 hereof)
of $1.00 per share subject to the terms and conditions of this Agreement. Except
as set forth herein, the shares issuable upon exercise of the Series U Warrant
are in all respects identical to the shares of Common Stock held by all of the
Company's other shareholders.
2. Warrant Certificate. The warrant certificate (the "Warrant
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Warrant. The purchase rights represented by the Warrant
Certificate are exercisable from time to time at the option of the Holder in
whole or part (but not as to fractional
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<PAGE>
shares of the Common Stock). In the case of the purchase of less than all Common
Stock purchasable under a Warrant Certificate, the Company shall cancel that
Warrant Certificate upon the surrender thereof and shall execute and deliver a
new Warrant Certificate of like tenor for the balance of the Common Stock
purchasable thereunder. Upon surrender of a Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with payment of the
Exercise Price (as hereinafter defined in Section 6) for the Common Stock
purchased at the Company's principal offices (presently located at 2401 Morris
Avenue, Union, NJ 07083) the Holder shall be entitled to receive a certificate
or certificate for the shares of Common Stock so purchased.
3.1 Method of Exercise. Payment of the Exercise Price shall at the option of the
Holder be by any one or more of the following three methods:
(a) by payment to the Company of the Exercise Price in cash by delivery to the
Company of an electronic transfer or certified or official bank check in good
funds;
(b) by surrender to the Company of the number of shares of
Common Stock held of record by the Holder which, when valued at the Market Price
(as hereinafter defined in Section 3.2), have an aggregate value equal to the
Exercise Price for the Shares to be issued upon exercise of the Series U
Warrant; or
(c) by delivering to the Company written instructions signed
by the Holder to issue that number of Shares issuable upon the exercise of a
Series U Warrant determined by multiplying the number of Shares in respect of
which the Series U Warrant is being exercised by a fraction, the numerator of
which shall be the Exercise Price on the date of exercise and the denominator of
which shall be the Market Price on the date of exercise.
3.2 Definition of Market Price. As used herein, the phrase "Market Price" at any
date shall be deemed to be the price of the Common Stock determined as follows:
(a) If the Common Stock is listed, or admitted to unlisted
trading privileges on the New York Stock Exchange ("NYSE") or the American Stock
Exchange ("AMEX"), or is traded on the Nasdaq National Market System ("NSM"),
the Market Price shall be the closing sale price of the Common Stock at the end
of the regular trading session on the last business day prior to the date of
exercise of the Series U Warrant on whichever of such exchanges or NSM had the
highest average daily trading volume for the Common Stock on such day; or
(b) If the Common Stock is not listed or admitted to unlisted
trading privileges, on either the NYSE or the AMEX and is not traded on NSM, but
is quoted or reported on Nasdaq, the Market Price shall be the closing price (or
the last sale price, if then reported by Nasdaq) of the
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<PAGE>
Common Stock at the end of the regular trading session on the last business day
prior to the date of exercise of the Series U Warrant as quoted or reported on
Nasdaq; or
(c) If the Common Stock is not listed, or admitted to unlisted
trading privileges, on either of the NYSE or the AMEX, and is not traded on NSM
or quoted or reported on Nasdaq, but is listed or admitted to unlisted trading
privileges on the Boston Stock Exchange ("BSE") or another national securities
exchange (other than the NYSE or the AMEX), the Market Price shall be the
closing price of the Common Stock at the end of the regular trading session on
the last business day prior to the date of exercise of the Series U Warrant on
whichever of such exchanges has the highest average daily trading volume for the
Common Stock on such day; or
(d) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading on
NSM or quoted or reported on Nasdaq, but is traded in the over-the-counter
market, the Market Price shall be the average of the last reported bid and asked
prices of the Common Stock reported by the Nasdaq Bulletin Board or the National
Quotation Bureau, Inc. on the last business day prior to the date of exercise of
the Series U Warrant, whichever is highest; or
(e) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading on
NSM or quoted or reported on Nasdaq, and bid and asked prices of the Common
Stock are not reported by the Nasdaq Bulletin Board or National Quotation
Bureau, Inc., the Market Price shall be the book value thereof as of the end of
the most recently completed fiscal quarter of the Company ending prior to the
date of exercise, determined in accordance with generally acceptable accounting
principles, consistently applied.
4. Issuance of Certificate. Upon the exercise of a Series U Warrant,
the issuance of certificate for shares of Common Stock shall be made forthwith
(and in any event within five (5) business days thereafter) without charge to
the Holder thereof including, without limitation, any tax which may be payable
in respect of the issuance thereof, and such certificate shall (subject to the
provisions of Section 5 hereof) be issued in the name of, or in such names as
may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder and the Company shall not be required to issue or
deliver such certificate unless or until the person or persons requesting the
issuance 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.
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<PAGE>
The Warrant Certificate and the certificate representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the then present Chairman or Vice Chairman of the Board of Directors or
President or Vice President of the Company under its corporate seal reproduced
thereon, attested to by the manual or facsimile signature of the then present
Secretary or Assistant Secretary of the Company. The Warrant Certificate shall
be dated the date of execution by the Company upon initial issuance, division,
exchange, substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by acceptance thereof, covenants and agrees that the Series U
Warrant is being acquired as an investment and not with a view to the
distribution thereof. The Series U Warrant and the securities issuable upon
exercise thereof may not be offered or sold except pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "Act")
or, to the extent applicable, Rule 144 under such Act (or any similar rule under
such Act relating to the disposition of securities), or an opinion of counsel,
if such opinion shall be reasonably satisfactory to counsel for the Company,
that an exemption from registration under such Act is available.
6. Initial and Adjusted Exercise Price. Except as otherwise provided in
Section 8 hereof, the "Exercise Price" of the Series U Warrant to purchase
Common Stock shall be equal to the initial exercise price set forth in Section
1.1 above, subject to the adjustments which shall result from time to time from
in accordance with the provisions of Section 8 hereof.
7. No Right To Registration. The Holder does not have any right to require that
the Company register the Series U Warrant, or the shares of Common Stock
underlying the Series U Warrant, under the Act or under any other law, rule or
regulation of any jurisdiction.
8. Adjustments to Exercise Price and Number of Securities.
8.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
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<PAGE>
8.2 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 8, the number of
shares of Common Stock issuable upon the exercise at the adjusted exercise price
of the Series U Warrant shall be adjusted to the nearest full amount. The
adjustment shall be determined by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of the Series U Warrant immediately prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
8.3 Definition of Common Stock. For the purpose of this Agreement, the
term "Common Stock" shall mean (i) the class of stock designated as Common
Shares in the Certificate of Incorporation of the Company as amended as of the
date hereof, or (ii) any other class of stock resulting from successive changes
or reclassifications of such Common Stock.
8.4 Merger or Consolidation. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder of the
Series U Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Series U Warrant) to receive, upon
exercise of such warrant, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger, by a
holder of the number of shares of Common Stock of the Company for which such
Series U Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be identical to the adjustments
provided in Section 8. The above provision of this subsection shall similarly
apply to successive consolidations or mergers.
8.5 No Adjustment of Exercise Price in Certain Cases. No adjustment of the
Exercise Price shall be made:
(a) upon the issuance or sale of a Series U Warrant or the shares of Common
Stock issuable upon the exercise of a Series U Warrant;
(b) the issuance of any other class of stock resulting from successive changes
or reclassifications of such Common Stock consisting solely of changes in par
value, or
(b) if the amount of said adjustment shall be less than two
(2) cents per share of Common Stock, provided, however, that 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 of and together with the next
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subsequent adjustment which, together with any adjustment so carried forward,
shall amount to at least two (2) cents per share of Common Stock.
9. Exchange and Replacement of Warrant Certificate. The Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Common Stock in such denominations as shall
be designed by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of a Series U Warrant,
if mutilated, the Company will make and deliver a new Warrant Certificate of
like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
required to issue fractional shares of Common Stock upon the exercise of a
Series U Warrant. Warrants may only be exercised in such multiples as are
required to permit the issuance by the Company of one or more whole shares of
Common Stock. If one or more Series U Warrant shall be presented for exercise in
full at the same time by the same Holder, the number of whole shares of Common
Stock which shall be issuable upon such exercise thereof shall be computed on
the basis of the aggregate number of shares of Common Stock purchasable on
exercise of the Series U Warrants so presented. If any fraction of a share of
Common Stock would, except for the provisions provided herein, be issuable on
the exercise of any Series U Warrant (or specified portion thereof), the Company
shall pay an amount in cash equal to such fraction multiplied by the then Market
Price determined as set forth in Section 3.2 above.
11. Reservation of Securities. The Company shall at all times reserve
and keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon the exercise of a Series U Warrant such number of
shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of a Series U Warrant and payment of the Exercise Price therefor, all
shares of Common Stock and other Securities issuable upon such exercise shall be
duly and validly issued, fully paid, non- assessable and not subject to the
preemptive rights of any stockholder.
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12. Notices to Warrant Holder. Nothing contained in this Agreement
shall be construed as conferring upon the Holder the right to vote or to consent
or to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Series U Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the Holder of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable other than in cash, or a cash dividend or distribution;
or
(b) the Company shall offer to all the Holder of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
(c) a merger or consolidation, dissolution, liquidation or
winding up of the Company, or a sale of all or substantially all of its
property, assets and business as an entirety shall be proposed; then, in any one
or more of said events, the Company shall give written notice of such event at
least thirty (30) days prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the stockholders entitled to
such dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date or
the date of closing the transfer book, as the case may be.
13. Notice.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of a Series U Warrant, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to the
Holder.
14. Successors. All the covenants and provisions of this Agreement shall be
binding upon and inure to the benefit of the Company, the Holder and their
respective successors and assigns hereunder.
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15. Termination. This Agreement shall terminate at the close of business on
April 23, 2005.
16. Governing Law; Legal Expenses. This Agreement and the Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company and the Holder agree that the prevailing party in any
action or proceeding filed in connection with this Agreement shall be entitled
to recover from the other party all of its costs and expenses relating to such
action or proceeding and incurred in connection with the preparation therefor,
including but not limited to reasonable legal fees.
17. Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.
18. Severability. If any provision of this Agreement shall be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
19. Captions. The caption headings of the Sections of this Agreement are for
convenience of reference only and are not intended, nor should they be construed
as, a part of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole benefit of the Company and the Holder.
21. Counterparts. This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
netcruise.com, inc.
By: _______________________
Name: Lawrence E. Burk
Title: Chief Executive Officer
United Internet Technologies, Inc.
By: _______________________
Name: Sonia Mikic
Title: Chief Executive Officer
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EXHIBIT A
[FORM OF SERIES U WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, April 23, 2005
No. U-1 Series U Warrants to Purchase
400,000 Shares of Common Stock
SERIES U WARRANT CERTIFICATE
This Warrant Certificate certifies that United Internet Technologies,
Inc., or registered assigns, is the registered holder of Four Hundred Thousand
(400,000) Warrants to purchase initially, at any time from April 24, 2000 until
5:00 p.m. New York time on April 23, 2005 ("Expiration Date"), up to Four
Hundred Thousand (400,000) fully-paid and non-assessable shares of common stock,
$.0001 par value ("Common Stock") of netcruise.com, inc., a New Jersey
corporation (the "Company"), at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), equal to $1.00 per share
upon surrender of this Warrant Certificate and payment of the Exercise Price at
an office or agency of the Company, but subject to the conditions set forth
herein and in the Warrant Agreement dated as of April 24, 2000 between the
Company and United Internet Technologies, Inc. (the "Warrant Agreement").
Payment of the Exercise Price shall be made in accordance with the provisions of
Section 3.1 of the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holder (the word "holder" meaning the registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new
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Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificate shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate of
like tenor and evidencing in the aggregate a like number of Warrants shall be
issued to the transferee(s) in exchange for this Warrant Certificate, subject to
the limitations provided herein and in the Warrant Agreement, without any charge
except for any tax or other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder hereof as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of April 24, 2000
Attest: netcruise.com, inc.
/s/ John H. Wasko By: /s/ Lawrence E. Burk
- ----------------- --------------------
Name: John H. Wasko Name: Lawrence E. Burk
Title: Secretary Title: Chief Executive Officer
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
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desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED, hereby sells, assigns and unto
- --------------------------------------------
(Please print name and address of transferee
this Warrant Certificate, together with all right, title and interest therein,
and does hereby reasonably constitute and appoint ___________________________,
as Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Date:
Signature: ------------------------------ (Signature must conform in all
respects to name of holder as specified on the face of the Warrant Certificate.)
(Insert Social Security or Other Identifying Number of Assignee)
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
Shares
----------------------
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Series U Warrants
and herewith tenders payment for such securities, in accordance with the
provisions of Section 3.1 of the Warrant Agreement dated April 24, 2000 between
the undersigned and netcruise.com, inc., in the amount of $__________. The
undersigned requests that a certificate for such securities be registered in the
name of whose address is and that such Certificate be delivered to whose address
is .
Signature (Signature must conform in all respects to name of holder as specified
on the face of the Warrant Certificate.)
(Insert Social Security or Other Identifying Number of Holder)
Exhibit 10.27
WARRANT AGREEMENT dated as of April 24, 2000 (the "Agreement") between
netcruise.com, inc., a New Jersey corporation (the "Company"), whose principal
place of business is 2401 Morris Avenue, Union, NJ 07083 and Brian Shuster
("Shuster"), with his principal place of business at 1990 Westwood Boulevard,
Suite P, Los Angeles, CA 90025 (the "Holder").
W I T N E S S E T H:
- - - - - - - - - -
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WHEREAS, the Company proposes to issue to the Holder warrants (the
"Series V Warrant") to purchase up to an aggregate of 100,000 shares of the
Company's common stock, $.0001 par value, (the "Common Stock").
NOW, THEREFORE, in consideration of the premises, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Company hereby agrees to issue to the Holder the warrants
described in Section 1.1 below.
1.1 Series V Warrant. The Series V Warrant grants to the Holder the
right to purchase, at any time from April 24, 2000 until 5:00 P.M., New York
time, on April 23, 2005, up to an aggregate of 100,000 shares (subject to
adjustment as provided in Section 8 hereof) of Common Stock (the "Shares") at an
initial exercise price (subject to adjustment as provided in Section 8 hereof)
of $1.00 per share subject to the terms and conditions of this Agreement. Except
as set forth herein, the shares issuable upon exercise of the Series V Warrant
are in all respects identical to the shares of Common Stock held by all of the
Company's other shareholders.
2. Warrant Certificate. The warrant certificate (the "Warrant
Certificate") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Warrant. The purchase rights represented by the Warrant
Certificate are exercisable from time to time at the option of the Holder in
whole or part (but not as to fractional shares of the Common Stock). In the case
of the purchase of less than all Common Stock purchasable under a Warrant
Certificate, the Company shall cancel that Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Common Stock purchasable thereunder. Upon
surrender of a Warrant Certificate with the annexed Form of Election to Purchase
duly executed, together with payment of the Exercise Price (as hereinafter
defined in Section 6) for the Common Stock purchased at the Company's principal
offices (presently located at 2401 Morris Avenue, Union, NJ 07083) the Holder
shall be entitled to receive a certificate or certificate for the shares of
Common Stock so purchased.
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3.1 Method of Exercise. Payment of the Exercise Price shall at the option of the
Holder be by any one or more of the following three methods:
(a) by payment to the Company of the Exercise Price in cash by delivery to the
Company of an electronic transfer or certified or official bank check in good
funds;
(b) by surrender to the Company of the number of shares of
Common Stock held of record by the Holder which, when valued at the Market Price
(as hereinafter defined in Section 3.2), have an aggregate value equal to the
Exercise Price for the Shares to be issued upon exercise of the Series V
Warrant; or
(c) by delivering to the Company written instructions signed
by the Holder to issue that number of Shares issuable upon the exercise of a
Series V Warrant determined by multiplying the number of Shares in respect of
which the Series V Warrant is being exercised by a fraction, the numerator of
which shall be the Exercise Price on the date of exercise and the denominator of
which shall be the Market Price on the date of exercise.
3.2 Definition of Market Price. As used herein, the phrase "Market Price" at any
date shall be deemed to be the price of the Common Stock determined as follows:
(a) If the Common Stock is listed, or admitted to unlisted
trading privileges on the New York Stock Exchange ("NYSE") or the American Stock
Exchange ("AMEX"), or is traded on the Nasdaq National Market System ("NSM"),
the Market Price shall be the closing sale price of the Common Stock at the end
of the regular trading session on the last business day prior to the date of
exercise of the Series V Warrant on whichever of such exchanges or NSM had the
highest average daily trading volume for the Common Stock on such day; or
(b) If the Common Stock is not listed or admitted to unlisted
trading privileges, on either the NYSE or the AMEX and is not traded on NSM, but
is quoted or reported on Nasdaq, the Market Price shall be the closing price (or
the last sale price, if then reported by Nasdaq) of the Common Stock at the end
of the regular trading session on the last business day prior to the date of
exercise of the Series V Warrant as quoted or reported on Nasdaq; or
(c) If the Common Stock is not listed, or admitted to unlisted
trading privileges, on either of the NYSE or the AMEX, and is not traded on NSM
or quoted or reported on Nasdaq, but is listed or admitted to unlisted trading
privileges on the Boston Stock Exchange ("BSE") or another national securities
exchange (other than the NYSE or the AMEX), the Market Price shall be the
closing price of the Common Stock at the end of the regular trading session on
the last business day prior to the date of exercise of the Series V Warrant on
whichever of such exchanges has the highest average daily trading volume for the
Common Stock on such day; or
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(d) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading on
NSM or quoted or reported on Nasdaq, but is traded in the over-the-counter
market, the Market Price shall be the average of the last reported bid and asked
prices of the Common Stock reported by the Nasdaq Bulletin Board or the National
Quotation Bureau, Inc. on the last business day prior to the date of exercise of
the Series V Warrant, whichever is highest; or
(e) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading on
NSM or quoted or reported on Nasdaq, and bid and asked prices of the Common
Stock are not reported by the Nasdaq Bulletin Board or National Quotation
Bureau, Inc., the Market Price shall be the book value thereof as of the end of
the most recently completed fiscal quarter of the Company ending prior to the
date of exercise, determined in accordance with generally acceptable accounting
principles, consistently applied.
4. Issuance of Certificate. Upon the exercise of a Series V Warrant,
the issuance of certificate for shares of Common Stock shall be made forthwith
(and in any event within five (5) business days thereafter) without charge to
the Holder thereof including, without limitation, any tax which may be payable
in respect of the issuance thereof, and such certificate shall (subject to the
provisions of Section 5 hereof) be issued in the name of, or in such names as
may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder and the Company shall not be required to issue or
deliver such certificate unless or until the person or persons requesting the
issuance 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.
The Warrant Certificate and the certificate representing the Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the then present Chairman or Vice Chairman of the Board of Directors or
President or Vice President of the Company under its corporate seal reproduced
thereon, attested to by the manual or facsimile signature of the then present
Secretary or Assistant Secretary of the Company. The Warrant Certificate shall
be dated the date of execution by the Company upon initial issuance, division,
exchange, substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant Certificate, by
acceptance thereof, covenants and agrees that the Series V Warrant is being
acquired as an investment
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and not with a view to the distribution thereof. The Series V Warrant and the
securities issuable upon exercise thereof may not be offered or sold except
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Act") or, to the extent applicable, Rule 144 under such
Act (or any similar rule under such Act relating to the disposition of
securities), or an opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel for the Company, that an exemption from registration
under such Act is available.
6. Initial and Adjusted Exercise Price. Except as otherwise provided in
Section 8 hereof, the "Exercise Price" of the Series V Warrant to purchase
Common Stock shall be equal to the initial exercise price set forth in Section
1.1 above, subject to the adjustments which shall result from time to time from
in accordance with the provisions of Section 8 hereof.
7. No Right To Registration. The Holder does not have any right to require that
the Company register the Series V Warrant, or the shares of Common Stock
underlying the Series V Warrant, under the Act or under any other law, rule or
regulation of any jurisdiction.
8. Adjustments to Exercise Price and Number of Securities.
8.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
8.2 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 8, the number of
shares of Common Stock issuable upon the exercise at the adjusted exercise price
of the Series V Warrant shall be adjusted to the nearest full amount. The
adjustment shall be determined by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of the Series V Warrant immediately prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
8.3 Definition of Common Stock. For the purpose of this Agreement, the
term "Common Stock" shall mean (i) the class of stock designated as Common
Shares in the Certificate of Incorporation of the Company as amended as of the
date hereof, or (ii) any other class of stock resulting from successive changes
or reclassifications of such Common Stock.
8.4 Merger or Consolidation. In case of any consolidation of the Company with,
or merger of the Company with, or merger of the Company into, another
corporation (other than a
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consolidation or merger which does not result in any reclassification or change
of the outstanding Common Stock), the corporation formed by such consolidation
or merger shall execute and deliver to the Holder a supplemental warrant
agreement providing that the holder of the Series V Warrant then outstanding or
to be outstanding shall have the right thereafter (until the expiration of such
Series V Warrant) to receive, upon exercise of such warrant, the kind and amount
of shares of stock and other securities and property receivable upon such
consolidation or merger, by a holder of the number of shares of Common Stock of
the Company for which such Series V Warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in Section 8. The above provision of this
subsection shall similarly apply to successive consolidations or mergers.
8.5 No Adjustment of Exercise Price in Certain Cases. No adjustment of the
Exercise Price shall be made:
(a) upon the issuance or sale of a Series V Warrant or the shares of Common
Stock issuable upon the exercise of a Series V Warrant;
(b) the issuance of any other class of stock resulting from successive changes
or reclassifications of such Common Stock consisting solely of changes in par
value, or
(b) if the amount of said adjustment shall be less than two
(2) cents per share of Common Stock, provided, however, that 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 of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least two (2) cents per share of Common Stock.
9. Exchange and Replacement of Warrant Certificate. The Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Common Stock in such denominations as shall
be designed by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of a Series V Warrant,
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if mutilated, the Company will make and deliver a new Warrant Certificate of
like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
required to issue fractional shares of Common Stock upon the exercise of a
Series V Warrant. Warrants may only be exercised in such multiples as are
required to permit the issuance by the Company of one or more whole shares of
Common Stock. If one or more Series V Warrant shall be presented for exercise in
full at the same time by the same Holder, the number of whole shares of Common
Stock which shall be issuable upon such exercise thereof shall be computed on
the basis of the aggregate number of shares of Common Stock purchasable on
exercise of the Series V Warrants so presented. If any fraction of a share of
Common Stock would, except for the provisions provided herein, be issuable on
the exercise of any Series V Warrant (or specified portion thereof), the Company
shall pay an amount in cash equal to such fraction multiplied by the then Market
Price determined as set forth in Section 3.2 above.
11. Reservation of Securities. The Company shall at all times reserve
and keep available out of its authorized shares of Common Stock, solely for the
purpose of issuance upon the exercise of a Series V Warrant such number of
shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of a Series V Warrant and payment of the Exercise Price therefor, all
shares of Common Stock and other Securities issuable upon such exercise shall be
duly and validly issued, fully paid, non- assessable and not subject to the
preemptive rights of any stockholder.
12. Notices to Warrant Holder. Nothing contained in this Agreement
shall be construed as conferring upon the Holder the right to vote or to consent
or to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Series V Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the Holder of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable other than in cash, or a cash dividend or distribution;
or
(b) the Company shall offer to all the Holder of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
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(c) a merger or consolidation, dissolution, liquidation or
winding up of the Company, or a sale of all or substantially all of its
property, assets and business as an entirety shall be proposed; then, in any one
or more of said events, the Company shall give written notice of such event at
least thirty (30) days prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the stockholders entitled to
such dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date or
the date of closing the transfer book, as the case may be.
13. Notice.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of a Series V Warrant, to the address of such
Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to the
Holder.
14. Successors. All the covenants and provisions of this Agreement shall be
binding upon and inure to the benefit of the Company, the Holder and their
respective successors and assigns hereunder.
15. Termination. This Agreement shall terminate at the close of business on
April 23, 2005.
16. Governing Law; Legal Expenses. This Agreement and the Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company and the Holder agree that the prevailing party in any
action or proceeding filed in connection with this Agreement shall be entitled
to recover from the other party all of its costs and expenses relating to such
action or proceeding and incurred in connection with the preparation therefor,
including but not limited to reasonable legal fees.
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17. Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.
18. Severability. If any provision of this Agreement shall be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
19. Captions. The caption headings of the Sections of this Agreement are for
convenience of reference only and are not intended, nor should they be construed
as, a part of this Agreement and shall be given no substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole benefit of the Company and the Holder.
21. Counterparts. This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
netcruise.com, inc.
By: ________________________
Name: Lawrence E. Burk
Title: Chief Executive Officer
-----------------------
Brian Shuster
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EXHIBIT A
[FORM OF SERIES V WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, April 23, 2005
No. V-1 Series V Warrants to Purchase
100,000 Shares of Common Stock
SERIES V WARRANT CERTIFICATE
This Warrant Certificate certifies that Brian Shuster, or registered
assigns, is the registered holder of One Hundred Thousand (100,000) Warrants to
purchase initially, at any time from April 24, 2000 until 5:00 p.m. New York
time on April 23, 2005 ("Expiration Date"), up to One Hundred Thousand (100,000)
fully-paid and non-assessable shares of common stock, $.0001 par value ("Common
Stock") of netcruise.com, inc., a New Jersey corporation (the "Company"), at the
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), equal to $1.00 per share upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, but subject
to the conditions set forth herein and in the Warrant Agreement dated as of
April 24, 2000 between the Company and Brian Shuster (the "Warrant Agreement").
Payment of the Exercise Price shall be made in accordance with the provisions of
Section 3.1 of the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holder (the word "holder" meaning the registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and number of the Company's securities
issuable thereupon may, subject to certain
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conditions, be adjusted. In such event, the Company will, at the request of the
holder, issue a new Warrant Certificate evidencing the adjustment in the
Exercise Price and the number and type of securities issuable upon the exercise
of the Warrants; provided, however, that the failure of the Company to issue
such new Warrant Certificate shall not in any way change, alter, or otherwise
impair, the rights of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate of
like tenor and evidencing in the aggregate a like number of Warrants shall be
issued to the transferee(s) in exchange for this Warrant Certificate, subject to
the limitations provided herein and in the Warrant Agreement, without any charge
except for any tax or other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder hereof as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of April 24, 2000
Attest: netcruise.com, inc.
_/s/ John H. Wasko By: /s/ Lawrence E. Burk
----------------- --------------------
Name: John H. Wasko Name: Lawrence E. Burk
Title: Secretary Title: Chief Executive Officer
[FORM OF ASSIGNMENT]
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(To be executed by the registered holder if such
holder desires to transfer the Warrant
Certificate.)
FOR VALUE RECEIVED, hereby sells, assigns and unto
- --------------------------------------------
(Please print name and address of transferee
this Warrant Certificate, together with all right, title and interest therein,
and does hereby reasonably constitute and appoint ___________________________,
as Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Date: Signature:
------------------------------
(Signature must
conform in all
respects to name
of holder as
specified on the
face of the
Warrant
Certificate.)
(Insert Social Security or Other Identifying Number of Assignee)
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
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Shares
Series V Warrants
and herewith tenders payment for such securities, in accordance with the
provisions of Section 3.1 of the Warrant Agreement dated April 24, 2000 between
the undersigned and netcruise.com, inc., in the amount of $__________. The
undersigned requests that a certificate for such securities be registered in the
name of whose address is and that such Certificate be delivered to whose address
is .
Signature
(Signature must
conform in all
respects to name
of holder as
specified on the
face of the
Warrant
Certificate.)
(Insert Social Security or Other Identifying Number of Holder)
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