AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON April __, 2000
REGISTRATION NO.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TEKINSIGHT.COM, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 7372 95-4228470
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation) Classification Code Number) Identification No.)
STEVEN J. ROSS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TEKINSIGHT.COM, INC.
5 HANOVER SQUARE
NEW YORK, NEW YORK 10004
(212) 271-8511
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
<PAGE>
COPIES TO:
PETER W. ROTHBERG
NIXON PEABODY LLP
437 Madison Avenue
New York, New York 10022
Telephone (212) 940-3000
Facsimile (212) 940-3111
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
------------------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------- ----------------------- ---------------------- --------------------- -----------------------
Title of Each Class of Number of Shares to Proposed Maximum Aggregate Offering Amount of
Security to be Registered be Registered Offering Price per Price Registration Fee
Share
- --------------------------- ----------------------- ---------------------- --------------------- -----------------------
- --------------------------- ----------------------- ---------------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Common Stock, Par value 4,129,542 (1)(2) (1) (1) $5,150(1)
$.0001 per share
- --------------------------- ----------------------- ---------------------- --------------------- -----------------------
</TABLE>
(1) This Registration Statement constitutes a post-effective amendment to
registration statement file numbers 33-50426, 33-95222 and 333-31157, declared
effective by the Securities and Exchange Commission on August 3, 1992, March 20,
1996 and July 11, 1997, respectively, and on which filing fees aggregating
$5,150 have previously been paid.
(2) Includes 3,679,542 shares of common stock of the Registrant reserved for
issuance upon exercise of various warrants and options.
- ------------------------
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
ii
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL __, 2000
PROSPECTUS
TEKINSIGHT.COM, INC.
4,129,542 SHARES OF COMMON STOCK
This prospectus covers the sale from time to time of shares of the
common stock, par value $.0001 per share, of TekInsight.Com, Inc., a Delaware
corporation, by or for the account of selling stockholders. TekInsight will not
receive any proceeds from the sale of these shares other than proceeds from the
issuance of common stock upon the exercise of outstanding options and warrants,
which funds will be added to working capital. All other proceeds will be
realized by the selling stockholders. All costs, expenses and fees in connection
with the registration of the shares offered by selling stockholders will be
borne by TekInsight.
The shares may be offered from time to time by the selling stockholders
through ordinary brokerage transactions in the over-the-counter market, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale or at negotiated prices. The selling stockholders may be deemed to be
"Underwriters" as defined in the Securities Act of 1933, as amended (the
"Securities Act"). No underwriting arrangements have been entered into by the
selling stockholders. If any broker-dealers are used by the selling
stockholders, any commissions paid to broker-dealers and, if broker-dealers
purchase any shares as principals, any profits received by such broker-dealers
on the resales of the shares, may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any profits realized by the
selling stockholders may be deemed to be underwriting commissions. Brokerage
commissions, if any, attributable to the sale of the shares will be borne by the
selling stockholders. TekInsight has agreed to indemnify the selling
stockholders against certain liabilities, including liabilities under the
Securities Act.
TekInsight's publicly traded Class A warrants are currently listed
separately on the automated quotation system of The Nasdaq SmallCap Market under
the symbols "TEKS" and "TEKSW," respectively. The common stock and Class A
warrants are also separately listed on the Boston Stock Exchange under the
symbols "TKI" and "TKI&W," respectively. On March 29, 2000, the last trading
prices for the common stock and Class A warrants reported on Nasdaq were $4.0625
per share and $3.875 per Class A warrant, respectively.
You should read this prospectus and any prospectus supplement carefully
before you decide to invest. For a discussion of certain matters which should be
considered by prospective investors, see "Risk Factors" commencing on page 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THE DATE OF THIS PROSPECTUS IS April__, 2000.
ii
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY............................................................1
USE OF PROCEEDS..............................................................12
PLAN OF DISTRIBUTION.........................................................12
LEGAL MATTERS................................................................15
EXPERTS......................................................................15
DOCUMENTS INCORPORATED BY REFERENCE..........................................15
ABOUT THIS PROSPECTUS........................................................16
WHERE YOU CAN FIND MORE INFORMATION..........................................16
iii
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make representations other than those contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by TekInsight or the selling
stockholders. Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that the
information herein is correct as of any time subsequent to its date. This
prospectus does not constitute an offer of solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer of solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in or incorporated by reference in
this prospectus, including documents incorporated by reference, may constitute
forward-looking statements for purposes of the securities act and the Securities
and Exchange Act of 1934, as amended (the "Exchange act"). Such forward-looking
statements may involve risks, uncertainties and other factors that may cause the
actual results and performance of the company to be materially different from
future results or performance expressed or implied by such statements.
Cautionary statements regarding the risks, uncertainties and other factors
associated with such forward-looking statements are discussed under "risk
factors" beginning on page 4 of this prospectus, such as "our quarterly
financial results are subject to significant fluctuations" and "we have a
limited operating history," and prospective investors are urged to carefully
consider such factors.
All written forward-looking statement attributable to the company are
expressly qualified by the foregoing cautionary statements.
iv
<PAGE>
PROSPECTUS SUMMARY
This summary highlights some information from this prospectus. Because
this is a summary, it may not contain all of the information that may be
important to you. You should read the entire prospectus, including the Risk
Factors, before making an investment decision.
We are involved (i) through our operating subsidiary, Astratek, Inc.,
in the development of computer software products and the provision of computer
network related services for the management of distributed client/server
networks operating on systems such as Microsoft Windows NT and Linux, and (ii)
through our subsidiary, Tadeo-E Commerce Corp., in the provision of consulting,
technical and related services to clients for the development of electronic
commerce businesses on the Internet, including consulting and development
services for the maintenance, design and enhancement of electronic commerce
Internet sites. Products and services provided by Astratek have included
software solutions for systems management, Year 2000 compliance, security
management and network-wide problem management and resolution.
We have also developed a number of innovative products for automated
data gathering and fault diagnostics for distributed client/server environments
and the Internet. Currently, we are engaged in the research and development of
products employing rich XML-based technology. Using innovative compression
technology, these products are expected to deliver significant improvements in
features and performance to distributed data acquisition and analysis.
We were incorporated in Delaware on May 12, 1989 as Universal Self
Care, Inc., changed our name to Tadeo Holdings, Inc. on February 2, 1998 and
subsequently changed our name to TekInsight.Com, Inc. on November 30, 1999.
On October 27, 1998 we acquired Astratek, a New York corporation,
pursuant to a merger of our wholly-owned subsidiary into Astratek, with Astratek
being the surviving corporation.
On May 25, 1999, we incorporated Tadeo-E in Delaware as a wholly-owned
subsidiary active in the electronic commerce industry.
Our principal executive offices are located at 5 Hanover Square, New
York, New York 10004 and our telephone number is (212) 271-8511.
ASTRATEK
Astratek began operations in 1995, developing software and related
products for Internet and intranet technology and providing consulting and
professional services for several companies. It originally was formed as the
Advanced Technology Consulting Group at Bankers Trust Corporation and split off
from Bankers Trust and began operating independently in April 1997.
Astratek's goal is to become a leading provider of professional
services and proprietary products related to development of software tools and
related services for client/server and distributed application technology
environments. We are continually developing innovative solutions to address
critical operational issues in distributed environments.
<PAGE>
TADEO-E
Tadeo-E Commerce Corp. was organized in May 1999 to develop business
opportunities related to electronic commerce involving the Internet. To date, it
has entered into agreements to provide consulting and development services for
the design, maintenance, enhancement and operation of Internet Web sites for two
public companies.
PROPOSED MERGER
On February 29, 2000, we announced that we had entered into a
definitive merger agreement with Data Systems Network Corporation, a Michigan
corporation, a leading provider of enterprise services and strategic technology
solutions to fortune 1000 companies and over 16 state and local government
agencies. DSNC provides a wide range of services, including application
development, network services, enterprise management, help desk and security
services. We believe that the merger will enhance our existing Internet
infrastructure and give us critical value-added sales channels for new products
which we intend to bring to market.
DSNC will be merged with and into our wholly-owned subsidiary Tadeo-E
Commerce Corp. We will accomplish the merger by issuing to shareholders of DSNC
common stock between $12.5 million and $18 million market value of our Series A
convertible preferred stock.
The Series A preferred stock will vote along with our common stock and
will be convertible into our common stock one year after the closing of the
merger. The market value and the number of shares of Series A preferred stock to
be issued as merger consideration will depend on the average trading price of
our common stock during the ten trading days immediately prior to the merger.
SUMMARY FINANCIAL INFORMATION
The following summary financial information as of and for the years
ended June 30, 1998 and 1999 for TekInsight and its subsidiaries on a
consolidated basis has been derived from the audited consolidated financial
statements of TekInsight. Financial information as of and for the six months
ended December 31, 1999 has been derived from the unaudited consolidated
financial statements of TekInsight. The audited and unaudited consolidated
financial statements of TekInsight have been incorporated by reference, and the
following summary financial information should be read in conjunction with those
financial statements.
<TABLE>
<CAPTION>
---------------------------------- ----------------------------
Six months ended
YEAR ENDED JUNE 30, DECEMBER 31,
---------------------------------- ----------------------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
1999 1998 1999 1998
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues........................................... $ 1,514,849 $ 997,433 $ 487,832 $ 363,594
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Cost of Goods Sold................................. 700,254 248,261 209,873 183,854
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Gross Profit....................................... 814,595 749,172 277,959 179,740
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Total Operating Expenses........................... 3,572,862 2,354,489 502,701 926,412
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Loss From Operations............................... (2,758,267) (1,605,317) (224,742) (746,672)
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Gain on Marketable Securities...................... 1,689,664 -- -- --
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
2
<PAGE>
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Interest Income.................................... 590,092 452,016 162,790 258,108
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Loss From Continuing Operations.................... (478,511) (1,153,301) -- --
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Total Income from Discontinued Operations 1,491,923 3,018,589 -- --
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
Net Income (Loss).................................. 1,013,412 1,865,288 (61,952) (488,564)
- ------------------------------------------------------ ----------------- ---------------- -------------- -------------
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------- ---------------------
AT JUNE 30 AT DECEMBER 31
---------- --------------
----------------------------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
1999 1998 1999
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
<S> <C> <C> <C>
Total Current Assets............................... $8,219,530 $3,025,538 $ 7,225,257
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Long Term Note Receivable.......................... 1,528,167 6,000,000 1,490,766
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Investments - Marketable Securities................ 5,533,177 -- 4,333,049
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Total Assets....................................... 16,487,663 9,912,512 14,428,236
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Total Current Liabilities.......................... 2,854,388 2,248,844 2,393,395
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Long-Term Liabilities.............................. 17,765 944,062 17,675
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Redeemable Preferred Stock -- 1,219,141 --
- ------------------------------------------------------ --------------------- ------------------- ---------------------
- ------------------------------------------------------ --------------------- ------------------- ---------------------
Stockholders' Equity............................... 13,615,600 5,500,465 12,017,166
- ------------------------------------------------------ --------------------- ------------------- ---------------------
</TABLE>
3
<PAGE>
THE OFFERING
Securities Offered.....................1,707,875 shares of common stock issuable
upon exercise of the same number of
publicly traded Class A warrants at
$3.30 until December 17, 2000.
450,000 shares of common stock to be
sold by selling stockholders.
1,971,667 shares of common stock issuable
upon exercise of the same number of
exercisable options and warrants held by
a diverse group of holders exercisable at
varying prices ranging from $1.00 per
share to $2.25 per share (the "New
Convertible Securities").
Risk Factors See "Risk Factors"
Use of Proceeds....................... Net proceeds from the exercise of the
Class A warrants and the New
Convertible Securities, will be used for
working capital and general corporate
purposes. Although TekInsight has
reserved $1.4 million in connection with
the results of an audit conducted on a
former subsidiary by the California
Controller's Office for violations of
California's medical regulations, which
resulted in a judgment against
TekInsight in the amount of $1.3
million. TekInsight may have to pay
more than the amount reserved, and, to
the extent that the proceeds from the
exercise of any options and warrants are
sufficient, it is possible TekInsight may
be obliged to use up to $1.3 million,
plus accrued interest thereon, of such
proceeds to pay the judgment to settle
such claims. On March 29th, 2000, the
last sales price on Nasdaq for a share of
common stock was $4.0625.
Nasdaq Symbol..........................Common Stock: TEKS
Public Warrants: TEKSW
Boston Stock Exchange Symbol...........Common Stock: TKI
Public Warrants: TKI&W
4
<PAGE>
RISK FACTORS
An investment in TekInsight involves material risks. Please carefully
consider all of the risks described in this section and elsewhere in this
prospectus. Additional risks that we are not presently aware of or that we
currently consider immaterial may also adversely affect our business.
WE MAY NOT ACHIEVE THE COST SAVINGS AND SALES INCREASES THAT WE EXPECT
TO RESULT FROM THE INTEGRATION OF TEKINSIGHT AND DSNC.
DSNC provides sales and marketing channels and experience that we do
not have. However, we are not expecting significant "synergies" to result from
the merger. The merger will not be successful unless DSNC can increase sales of
our existing products. DSNC's success and timing in realizing increased sales
depends on the quality and speed of the integration of TekInsight and DSNC. DSNC
may not realize the cost savings and sales increases that it anticipates
following completion of the merger as fully or as quickly as it expects:
TEKINSIGHT WILL FACE TECHNICAL, OPERATIONAL AND STRATEGIC CHALLENGES AS
A RESULT OF THE MERGER THAT MAY PREVENT IT FROM SUCCESSFULLY INTEGRATING WITH
DSNC.
The integration of DSNC will be a complex, time consuming and expensive
process and may disrupt our business. Following the merger, Tadeo-E (which we
intend to call TekInsight Services, Inc.) and DSNC must operate as a combined
organization using common information and communication systems, operating
procedures, financial controls and human resources practices. TekInsight may
encounter substantial difficulties, costs and delays involved in integrating the
operations of DSNC including:
o potential incompatibility of business cultures;
o perceived adverse changes in business focus;
o difficulties in integrating products and services;
o the loss of key employees or clients; and
o diversion of the attention of management from other ongoing business
concerns.
The integration of operations and technologies following the merger may
distract management of both companies from day-to-day business, the development
or acquisition of new products, services and technologies, and the pursuit of
other business acquisition opportunities. Successful integration of the two
companies' sales and marketing organizations will require TekInsight's sales and
marketing personnel to learn about the products, services and technologies of
DSNC.
WE HAVE LOST MONEY ON OUR OPERATIONS SINCE INCEPTION, AND WE EXPECT TO
LOSE MORE MONEY DURING THE NEXT SEVERAL YEARS.
As of December 31, 1999, we had an accumulated deficit of $8,319,800
million. We may continue to incur net losses and negative cash flow during the
next several years whether or not we consummate the merger. Our ability to
generate profits and positive cash flow will depend in
5
<PAGE>
large part on our obtaining enough customers for our services and products to
offset the costs of marketing and staffing our professional services business
and developing the software products that we sell. To the extent that we cannot
achieve operating profitability or positive cash flows from operating
activities, our business will be adversely affected.
FAILURE TO OBTAIN ADDITIONAL FUNDING WOULD LIMIT OUR ABILITY TO EXPAND
OUR BUSINESS.
Following consummation of the merger, we expect to make significant
capital expenditures in the next few years in an effort to expand the number of
proprietary products and professional and electronic commerce services that we
develop for public sale and increase the staffs of research and development and
sales and marketing personnel to further develop and increase sales of such
products and services. We also expect to make expenditures in connection with
the acquisition of businesses that either augment our existing or extend us into
new product lines. We will need significant additional capital to complete this
product and service expansion and for any additional acquisitions. We cannot
assure you that we can raise sufficient capital to follow through with our
plans. To the extent we cannot, our growth and prospects will be limited.
IF WE ARE NOT ABLE TO MANAGE OUR GROWTH AND CHANGING OPERATIONS, OUR
BUSINESS WILL BE ADVERSELY AFFECTED.
Our ability to grow depends in part, upon our:
o successfully implementing our strategy;
o valuating markets;
o securing financing; and
o hiring and retaining qualified personnel.
In addition, as we increase our service and product offerings and
expand our sales and marketing expenses, we will have additional demands on our
customer support, sales and marketing, administrative and research and
development resources. In order to manage growth and change effectively, we must
implement and improve our operational systems, procedures and controls on a
timely basis. If we cannot effectively manage our growth and implement and
improve these systems, our business and results of operations will be adversely
affected.
ACQUISITIONS AND JOINT VENTURES COULD STRAIN OUR BUSINESS AND
RESOURCES.
If we acquire additional companies or businesses, or enter into joint
ventures, we may be subject to:
o miscalculation of the value of the acquired company or joint venture;
o diversion of resources and management time;
o difficulties in integration of the acquired business or joint venture
with our operations;
o relationship issues as a result of changes in management;
o additional liabilities or obligations as a result of the acquisition
or joint venture; and
6
<PAGE>
o additional financial burdens or dilution incurred with the
transaction.
Our quarterly financial results are subject to significant
fluctuations.
OUR QUARTERLY REVENUES, EXPENSES AND OPERATING RESULTS MAY FLUCTUATE
SIGNIFICANTLY DUE TO A NUMBER OF FACTORS, INCLUDING:
o change in demand for our products;
o size and timing of significant orders and when they are filled;
o our ability to develop and upgrade our technology;
o changes in our level of operating expenses and unexpected expenses;
o our ability to compete in a highly competitive market; and
o undetected software errors and other product quality problems.
Our revenues for a quarter are based entirely on product orders and
services contracts received during that quarter. Our expenses tend to be fixed.
Consequently, because we have insignificant backlog, and cannot quickly adjust
expenses, we may experience liquidity problems from time to time.
WE DEPEND ON LIMITED SOURCES FOR OUR REVENUES.
We have derived substantially all of our revenues since 1998 from
limited sources including large financial institutions, certain independent
software vendors, or ISVs, and customers entering into electronic commerce. To
compete in this market, we believe that we must devote substantial resources to
expanding our marketing and advertising, to continuing product development, and
to diversifying. Our operating revenues have increased over the last two years
but our operations have not produced net income to date. Net income has resulted
solely from the sale of securities and the nonrecurring sale of our former
operating business. Therefore, unless we increase sales, it is unlikely that we
can achieve net income in the future.
OUR PRODUCTS AND SERVICES ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE.
The market for our products and services is characterized by rapid
technological change, frequent new product introductions, short product life
cycles, changes in customer demands and evolving industry standards. Our
products and services could be quickly rendered obsolete if new products are
introduced or new industry standards emerge and we fail to adapt quickly. We
rely on our relationships with Microsoft and attempt to coordinate our product
offerings with the future releases of its operating systems.
We also believe that operating system software vendors, particularly
Microsoft and Novell, could enhance their products to include functionality that
we currently provide in our products. If these vendors include our software
functionality as standard features of their operating system or other software,
our products could quickly become obsolete. Even if the functionality of the
standard software features of these vendors is more limited than ours, there is
a substantial risk
7
<PAGE>
that a significant number of customers would elect to keep this limited
functionality rather than purchase additional software.
The market for the professional services and the electronic commerce
services provided by our subsidiaries are fragmented and characterized by few
barriers to entry. Competitors include ISVs such as IBM and Microsoft (who are
also clients of ours) and consulting firms such as Andersen Consulting. Many of
these companies have much greater resources than we do, making it difficult for
us to compete.
Client/server computing environments and the Internet are inherently
complex and continually developing. New products and product enhancements can
require long development and testing periods, which depend significantly on our
ability to hire and retain or contract with increasingly scarce technically
competent personnel. Our ability to provide highly technical professional
services related to the Internet and LAN management are similarly constrained.
Significant delays in new product releases, or in hiring the necessary
technically skilled personnel, could seriously damage our business. We have, on
occasion, experienced delays in scheduled introduction of new products. We
cannot be certain that such delays will not occur again.
To be successful, we must enhance existing products, develop and
introduce new products, satisfy customer requirements for our products and
services and achieve market acceptance. We cannot be certain that we will
successfully identify new product opportunities and develop and bring new
products to market in a timely and cost-effective manner. Further, the products,
capabilities or technologies developed by others may render our products or
technologies obsolete or shorten their life cycles. Similarly, we cannot be
certain that we will be able to provide the right professional and electronic
commerce services at the right price in the future. To the extent that we cannot
do so, our business will be adversely affected.
IF WE FAIL TO PROPERLY MANAGE OUR CHANGING OPERATIONS, OUR BUSINESS
WILL SUFFER.
We intend to expand our operations in the foreseeable future to pursue
market opportunities. In order to manage growth effectively, we must implement
and improve our operational systems, procedures and controls on a timely basis.
If we fail to implement and improve these systems, our business, operating
results and financial condition will be materially, adversely affected.
LOSS OF KEY PERSONNEL WOULD ADVERSELY AFFECT US.
Our success depends largely on the efforts of our executive officers
and, most particularly, Alexander Kalpaxis, President of Astratek, a director of
Tadeo-E and Chairman of the Board of TekInsight. We have an employment contract
requiring Mr. Kalpaxis to continue his employment through October 2001. We do
not maintain key man life insurance policies on any of our executive officers.
The loss of the services of one or more of our key individuals or the failure to
attract and retain additional qualified personnel could adversely affect our
business.
THERE IS NO ASSURANCE OUR INTELLECTUAL PROPERTY RIGHTS CAN BE
PROTECTED.
We rely on a combination of trademark, trade secret, patent, and
copyright law and contractual restrictions to protect our technology. These
legal protections provide only limited
8
<PAGE>
protection. We may not be able to detect unauthorized use or take appropriate
steps to enforce our intellectual property rights. Litigation is expensive
regardless of the outcome, diverts management resources and may not be adequate
to protect our business in any event. We also could be subject to claims
alleging infringement by third-parties intellectual property rights. In
addition, we may be required to indemnify our distribution partners and
end-users for similar claims made against them. Any claims against us could
require us to spend significant time and money in litigation, pay damages,
develop non-infringing intellectual property or acquire licenses to intellectual
property that is the subject of the infringement claims.
OUR INVESTMENTS IN OTHER COMPANIES MAY NOT BE SUCCESSFUL.
We may continue to make investments in companies with technologies,
services or products that we find attractive. We may have difficulty integrating
the personnel and operations, technology, services or products acquired through
these acquisitions. Acquisitions can disrupt our ongoing business, distract
management and other resources and make it difficult to maintain our standards,
controls and procedures. We may also lose all or a part of our investment if
these businesses fail.
UNDETECTED SOFTWARE ERRORS MAY DAMAGE OUR BUSINESS REPUTATION.
Our software products are complex and may contain certain undetected
bugs or errors, particularly when first introduced or when new versions or
enhancements are released. Despite testing, we cannot be certain that bugs or
errors will be discovered in our products before we commence commercial
shipping. Undetected bugs or errors could result in adverse publicity, loss of
customer confidence, delay in market acceptance or claims against us, any of
which could adversely affect our business.
WE FACE RISK OF PRODUCT LIABILITY CLAIMS.
Our agreements with customers typically contain provisions intended to
limit liability claims. These limitations may not preclude all potential claims,
however. Liability claims could require us to spend significant time and money
in litigation or pay significant damages. As a result, these claims, whether or
not successful, could adversely impact our business and damage our reputation.
OUR STOCK PRICE IS VOLATILE WHICH PRESENTS AN ADDITIONAL LITIGATION
RISK.
The market price of our common stock is sometimes volatile. Trading
volume is sometimes low. In the past, companies that have experienced volatility
in the market price of their stock have been the object of securities class
action litigation in the event of a drop in market price. If we were the object
of litigation, it could result in substantial costs and diversion of
management's attention and resources.
SECURITY BREACHES COULD EXPOSE US TO A RISK OF LOSS, LITIGATION AND
POSSIBLY LIABILITY.
Although we are not aware of any attempts by hackers to penetrate our
network security, there can be no assurance that security breaches will not
occur in the future. A person able to penetrate our network security could
misappropriate our proprietary information or that of our
9
<PAGE>
clients, or cause interruptions in our operations, which may adversely effect
our business. We may be required to spend significant amounts of money to
protect against the threat of breaches or to alleviate problems caused by
security breaches, which could be expensive. Concerns over the security of
Internet transactions and the privacy of users may also inhibit the growth of
the Internet, particularly as a means of conducting commercial transactions.
OUR ELECTRONIC COMMERCE SERVICES BUSINESS WOULD BE ADVERSELY AFFECTED
IF INTERNET SERVICE WERE INTERRUPTED DUE TO HARDWARE, SOFTWARE,
TELECOMMUNICATIONS OR OTHER BREAKDOWNS.
Our operations may be interrupted if the computer or software owned by
us, our clients or by service providers upon whom we depend (including Internet
Service Providers) are damaged or prevented from operating. To the extent that
we experience temporary or permanent business interruptions, whether due to a
casualty or an operating malfunction, our business is adversely affected. If
interruptions happen often enough, loss of customer confidence may adversely
affect our business; and if such interruptions result from general Internet
service deprivations, the loss of generalized confidence in Internet operability
may adversely affect our business that is specifically targeted at electronic
commerce.
WE MAY BE LIABLE FOR ONLINE CONTENT PROVIDED BY THIRD PARTIES.
The law of the Internet is uncertain and is changing. We may face
potential liability for defamation, negligence, copyright, patent or trademark
infringement and other claims based on the nature and content of the materials
that appear on web sites that we host through our subsidiaries. Claims of this
type have been successfully prosecuted from time to time. Liability could be
material.
GOVERNMENT REGULATION OF INTERNET COMMUNICATIONS MAY INFLUENCE OUR
BUSINESS.
We currently are not subject to direct regulation by any governmental
agency, other than regulations applicable to business generally. However, in the
future we could become subject to specific industry regulation by regulatory
agencies. Changes in the regulatory environment could have a material adverse
impact on our business and financial condition.
IF OUR STOCK BECOMES SUBJECT TO THE SEC'S "PENNY STOCK" RULES IT COULD
BECOME MORE DIFFICULT TO BUY AND SELL OUR STOCK WHICH MAY ADVERSELY IMPACT OUR
TRADING MARKET.
Continued quotation of our common stock in The Nasdaq Small Cap Market
is conditioned upon continuing to meet Nasdaq eligibility requirements. In
addition, if the trading price of TekInsight common stock common stock drops
below $5.00 per share, sales of common stock would be subject to Rule 15g-9
under the Securities Exchange Act of 1934, applicable to "low price stocks,"
which imposes additional sales practice requirements on broker-dealers making
sales of low-priced stock to the public. For transactions covered by this rule,
a broker-dealer must make a special suitability determination respecting each
purchaser and have received each purchaser's written consent to the transaction
prior to sale. If the TekInsight fails to meet the Nasdaq's eligibility
requirements or the trading price of our common stock drops below $5.00 per
share, the ability of holders to sell their common stock in the secondary market
could be adversely affected.
10
<PAGE>
A SALE OF A SIGNIFICANT NUMBER OF OUR SHARES MAY ADVERSELY IMPACT US.
Sales of substantial amounts of common stock (including shares issued
upon the exercise of warrants or stock options and the common stock to be issued
upon conversion of the shares of Series A preferred stock to be issued in the
merger), or the possibility that such sales could occur, could adversely affect
the market price of the common stock and could also impair our ability to raise
capital through an offering of our equity securities in the future. Assuming
exercise of all outstanding convertible securities, we would have 19,593,071
shares of common stock outstanding, of which 11,651,829 shares will be
transferable without restriction under the Securities Act. Upon conversion to
common stock of all of the shares of Series A preferred stock proposed to be
issued in the merger, there will be approximately an additional 2.5 to 3.3
million shares of common stock issued and outstanding, depending on the market
price of TekInsight common stock at the closing date. The remaining 7,941,242
shares of common stock to be outstanding on completion of this Offering are
"restricted securities" under Rule 144 which may be publicly sold only if
registered under the Securities Act or if sold pursuant to an applicable
exemption. In general, under Rule 144, assuming satisfaction of other
conditions, a person, including an affiliate of TekInsight, who has beneficially
owned restricted securities for at least one year, is entitled to sell within
any three-month period, up to the greater of 1% of the total number of
outstanding shares of the same class or, since our common stock is quoted on The
Nasdaq SmallCap Market the average weekly trading volume during the four
calendar weeks preceding the sale. A person who has not been an affiliate of
TekInsight for three months and who has beneficially owned the restricted
securities for at least two years, is entitled to sell such restricted shares
under Rule 144 without regard to any of the limitations described above.
11
<PAGE>
USE OF PROCEEDS
If all of the Class A warrants and New Convertible Securities being
registered hereunder are exercised, TekInsight will receive net proceeds of
approximately $9,000,000, after deduction of the expenses of this offering.
TekInsight intends to utilize the net proceeds of the offering for working
capital and general corporate purposes. If no warrants and options are
exercised, TekInsight will receive no proceeds from this offering. TekInsight
will not receive any proceeds from the resale by the holders of any of the Class
A warrants or the New Convertible Securities. It is not possible to predict how
many of the warrants and options will be exercised and the magnitude of the
proceeds, if any, realizable therefrom, as they have widely varying exercise
prices and some have exercise prices which are above the current market price of
TekInsight's common stock.
PLAN OF DISTRIBUTION
The common stock offered hereby may be sold from time to time in the
over-the-counter market, through underwriters, dealers, brokers or other agents.
TekInsight will receive approximately $9,000,000 if the various warrants and
options, the underlying common stock of which is being registered hereunder, are
exercised in their entirety; however, TekInsight will receive no proceeds from
the sale of the 450,000 shares of outstanding common stock included in this
prospectus.
The common stock offered may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. The selling
stockholder will determine the selling price at the time of the transaction or
by an agreement with its underwriters, dealers, brokers or other agents.
The selling stockholders and, under certain circumstances, any
broker-dealers that act as principals in connection with the sale of the shares
as principals may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, and any commissions received by them and any profit
on the resale of the shares of common stock while acting as principals might be
deemed to be underwriting discounts and commissions under the Securities Act.
The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares of
common stock against certain liabilities, including liabilities arising under
the Securities Act.
At the time a particular offer of shares is made by or on behalf of the
selling stockholders, to the extent required, we have been advised that the
selling stockholders will comply with the prospectus delivery requirements under
the Securities Act.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
selling stockholders for whom TekInsight is registering shares of common stock
for resale to the public. TekInsight will not receive any of the proceeds from
the sale of the shares by the selling stockholders. Beneficial ownership of the
shares by such selling stockholders after this offering will depend on the
number of shares sold by each selling stockholder. Assuming all of the shares of
common
12
<PAGE>
stock being offered hereby are sold, the selling stockholders will not
beneficially own any common stock in TekInsight, except as identified below.
Damon Testaverde has been a director of TekInsight for the last three
years. Brian Bookmeier has been a Director of TekInsight for the last three
years, and, until his resignation February 16, 2000, had been the President and
Chief Executive Officer of TekInsight for the prior three years.
13
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------- ---------------------- ----------------------- -------------------------------
SHARES OF COMMON
SHARES OF COMMON STOCK REGISTERED FOR
STOCK BENEFICIALLY OFFERING WITH THIS PERCENTAGE OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) PROSPECTUS COMMON STOCK OWNED
- ----------------------------------------------- ---------------------- ----------------------- -------------------------------
- ----------------------------------------------- ---------------------- ----------------------- --------------- ---------------
BEFORE
OFFERING AFTER OFFERING
- ----------------------------------------------- ---------------------- ----------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Estate of Fred Kassner 2,809,455 550,040(2) 17.6% 3.4%
430 East 86th Street
New York, New York 10028
Susan Kaufman and Peter Fishbein 50,000 50,000(3) * -0-
430 East 86th Street
New York, New York 10028
Edward Buchholz 566,667 566,667(4) 3.5% -0-
9122 Chatsworth Cascade
Boca Raton, FL 33434
Brian Bookmeier 327,867 125,000(5) 2.0% *
19327 Augusta Drive
Livonia, MI 48152
Alan Korby 209,172 125,000(6) 1.3% *
42705 Wintergreen Circle
Novi, MI 48374
Matthew Gietzen 209,167 125,000(7) 1.3% *
23304 Mystic Forest
Novi, MI 48375
Robert M. Rubin 100,000 100,000(8) * -0-
25 Highland Blvd.
Dix Hills, NV 11746
Damon Testaverde 659,189 50,000(9) 4.1% 3.0%
580 Oakdale Street
Staten Island, NY 13012
Heller Healthcare Finance Holdings, Inc. 600,000 600,000(10) 3.6% -0-
c/o Heller Financial, Inc.
2 Wisconsin Circle, Fourth Floor
Chevy Chase, MD 20815
Tod Robinson 30,000 30,000(11) * -0-
5694 Weatherstone Court
San Diego, CA 92130
Richard Hough 100,000 100,000(12) * -0-
5106 Hunting Hills Drive
Roanoke, VA 24014
- ----------------------------------------------- ---------------------- ----------------------- --------------- ---------------
</TABLE>
* Less than 1%
(1) Includes any shares as to which the individual has sole or
shared voting or investment power and also any shares which the individual has
the right to acquire as of the date of this prospectus through the exercise of
any stock option, warrant or other right, including those granted under
TekInsight's 1992 Employee Stock Option Plan and 1997 Stock Option Plan for
Non-Employee Directors.
(2) Includes 100,040 shares of common stock issuable upon exercise of warrants
and 450,000 restricted shares which Mr. Kassner received upon exercise of
warrants.
(3) Represents shares of common stock issuable upon exercise of warrants.
(4) Represents shares of common stock issuable upon exercise of options.
14
<PAGE>
(5) Represents shares of common stock issuable upon exercise of options.
(6) Represents shares of common stock issuable upon exercise of options.
(7) Represents shares of common stock issuable upon exercise of options.
(8) Represents shares of common stock issuable upon exercise of warrants.
(9) Represents shares of common stock issuable upon exercise of warrants.
(10) Represents shares of common stock issuable upon exercise of warrants.
(11) Represents shares of common stock issuable upon exercise of options.
(12) Represents shares of common stock issuable upon exercise of options.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for
TekInsight by Nixon Peabody LLP, 437 Madison Avenue, New York, New York 10022.
EXPERTS
The financial statements of TekInsight have been incorporated by
reference in this prospectus from TekInsight's 1999 Annual Report on Form 10-K
and have been audited by Feldman Sherb Horowitz & Co., P.C., independent
auditors, as stated in their report.
DOCUMENTS INCORPORATED BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus,
and information that we file later with the Securities and Exchange Commission
will automatically update and supercede this information. We are incorporating
by reference in this prospectus the following documents:
1. Our annual report on Form 10-K for the fiscal year ended June 30,
1999.
2. Our quarterly reports on Form 10-Q for the quarters ended
o September 30, 1999
o December 31, 1999
4. Our current reports on Form 8-K dated
o July 30, 1999
o December 6, 1999
o January 26, 2000
o February 29, 2000
5. Our definitive proxy material filed on November 17, 1999 on Schedule
14A in connection with our special meeting of stockholders which took place on
November 30, 1999.
15
<PAGE>
5. The description of our common stock, par value $.0001 per share,
contained in the prospectus dated December 10, 1992, forming a part of our
registration statement on Form S-1 (Registration No. 33-50426) filed with the
Securities and Exchange Commission pursuant to Rule 424(b) on December 14, 1992.
We are also incorporating by reference in this prospectus all reports
and other documents that we file after the date of this prospectus pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination
of the offering of securities under this prospectus. These reports and documents
will be incorporated by reference in and considered to be a part of this
prospectus as of the date of filing of such reports and documents.
Any statement contained in this prospectus or in a document which is
incorporated by reference herein will be modified or superseded for purposes of
this prospectus to the extent that a statement in any document that we file
after the date of this prospectus that also is incorporated by reference herein
modifies or supersedes such prior statement. Any such statement so modified or
superseded will not, except as so modified or superseded, constitute a part of
this prospectus.
This prospectus incorporates by reference documents which are not
presented in this prospectus or delivered to you with it. You may request, and
we will send to you, without charge, copies of these documents, other than
exhibits to these documents, which we will send to you for a reasonable fee.
Requests should be directed to Katrina Kostes, Communications Director, 5
Hanover Square, 24th Floor, New York, New York 10004; telephone number (212)
271-8511.
ABOUT THIS PROSPECTUS
This prospectus does not contain all of the information included in the
registration statement. We have omitted parts of the registration statement as
permitted by the rules and regulations of the Securities and Exchange
Commission. For further information, we refer you to the registration statement
on Form S-3, including its exhibits. If the Securities and Exchange Commission
rules and regulations require that any agreement or document be filed as an
exhibit to the registration statement, you should refer to that agreement or
document for a complete description of these matters. The registration statement
on form S-3 filed by TekInsight is available for inspection and copying at the
Securities and Exchange Commission as described below.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy materials that we have filed with the Securities and Exchange Commission,
including the registration statement, at the Securities Exchange Commission's
public reference room at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, DC 20549. You can also obtain copies of filed documents, at
prescribed rates, by mail from the Public Reference Section of the Securities
and Exchange Commission at its Judiciary Plaza location, listed above, or by
telephone at 1-800-SEC-0330 or electronically through the Commission's Web Site
at http://www.sec.gov.
16
<PAGE>
Our common stock is listed on The Nasdaq SmallCap Market under the
symbol "TEKS," and our Securities and Exchange Commission filings can also be
read and obtained at the following Nasdaq address:
The Nasdaq Stock Market
Reports Section
1735 K Street, N.W.
Washington, D.C. 20006
We furnish our stockholders with annual reports containing our audited
financial statements and with proxy material for our annual meetings complying
with the proxy requirements of the Exchange Act.
17
<PAGE>
------------------------
TEKINSIGHT.COM, INC.
4,129,542 Shares of Common Stock
---------------------
PROSPECTUS
---------------------
APRIL , 2000
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses (other than selling
commissions) which will be paid by TekInsight.Com, Inc. (the "Registrant") in
connection with the issuance and distribution of the securities being
registered. With the exception of the NASD filing fee, all amounts shown are
estimates.
NASDAQ fee 10,000
Boston Stock Exchange Fee............................................. 10,000
Blue sky fees and expenses (including legal and filing fees).......... 15,000*
Printing and engraving expenses....................................... 10,000*
Legal fees and expenses............................................... 30,000*
Accounting fees and expenses.......................................... 5,000*
Transfer Agent fees and expenses...................................... 3,000*
Miscellaneous expenses................................................ 2,000*
Total $75,000*
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Seventh of the Certificate of Incorporation of the Registrant
eliminates the personal liability of directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director;
provided, however, that such elimination of the personal liability of a director
of the Registrant does not apply to (i) any breach of the director's duty of
loyalty to the Registrant or its stockholders, including, but not limited to,
any appropriation, in violation of his duties, of any business opportunity of
the Registrant, (ii) acts or omissions which involve intentional misconduct or a
knowing violation of law, (iii) actions prohibited under Section 174 of the
Delaware General Corporation Law (i.e., liabilities imposed upon directors who
vote for or assent to the unlawful payment of dividends, unlawful repurchases or
redemption of stock, unlawful distribution of assets of the Registrant to the
stockholders without the prior payment or discharge of the Registrant's debts or
obligations, or unlawful making or guaranteeing of loans to directors), or (iv)
any transaction from which the director derived an improper personal benefit. In
addition, Article Ninth of the Registrant's Certificate of Incorporation, as
amended, provides that the Registrant shall indemnify its corporate personnel,
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law, as amended from time to time.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation,
20
<PAGE>
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
Section 145 further provides that a corporation may indemnify a person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper. To the extent
that a director, officer, employee or agent of a corporation has been successful
on the merits or otherwise in defense of any action, suit or proceeding referred
to above, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith. Expenses (including attorneys' fees)
incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of any undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this section.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Section 145 of the Delaware General Corporation Law shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
Each executive officer and director of TekInsight has signed an
indemnity agreement providing indemnification of such officer or director by
TekInsight to the fullest extent allowed under the Delaware General Corporation
Law. The indemnification agreement provides for
20
<PAGE>
payment by TekInsight of all expenses, judgments and other amounts required to
be paid by an officer or director in connection with a proceeding or suit to
which he is a party or witness or is otherwise involved by reason of the fact
that he acted as an officer, employee, director and/or agent of TekInsight.
TekInsight is not obligated to pay any expenses with respect to any proceeding
arising out of acts or omissions for which such officer or director is
prohibited by applicable law from receiving indemnification or where the
attorney representing the officer or director seeking indemnification has
concluded that such officer or director is not entitled to indemnification of
any amounts.
The Selling Stockholder Agreements that Selling Stockholders are being
asked to sign contain, among other things, provisions whereby the Selling
Stockholders agree to indemnify the Registrant, each officer and director of the
Registrant who has signed the Registration Statement and each person who
controls the Registrant within the meaning of Section 15 of the Securities Act,
against any losses, liabilities, claims or damages arising out of alleged untrue
statements or alleged omissions of material facts with respect to information
furnished to the Registrant by Selling Stockholders for use in the Registration
Statement or Prospectus. See "Undertakings."
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. EXHIBITS.
NUMBER DESCRIPTION OF EXHIBIT
3.1(a) Amendment to Certificate of Incorporation of TekInsight. (8)
3.1(b) Certificate of Incorporation of TekInsight. (1)
3.1(c) Certificate of Renewal of Charter of TekInsight. (1)
3.1(d) Certificate of Amendment of Charter of TekInsight. (3)
3.2 By-Laws of TekInsight. (3)
3.3 Certificate of designations, Preferences and relative,
Participating, Optional or other special rights of Series A
Redeemable Preferred Stock. (4)
3.4 Certificate of designations, Preferences and relative,
Participating, Optional or other special rights of Series B
Redeemable Preferred Stock. (4)
4.1(a) Specimen Certificate of TekInsight's common stock. (2)
4.1(b) Specimen of Redeemable common stock Purchase Warrant. (5)
5.1 Opinion of Nixon Peabody LLP
10.1 Consulting & Professional Services Agreement, dated as of
August 31, 1999, between Astratek, Inc. and 4th Peripheral
Technologies, Inc. (6)
21
<PAGE>
10.2 Agreement between TekInsight and BusinessTalkRadio.Net, Inc.,
dated as of June 30, 1999. (6)
10.3 Form of Web Site Design and Consulting Agreement, dated as of
June 1, 1999, by and between Azurel and E Commerce Corp. (6)
10.4 Credit Note, dated May 28, 1999 made by Azurel in favor of
TekInsight (the "Credit Note"). (7)
10.5 First Allonge to Credit Note, made by Azurel in favor of
Tadeo-E, dated June 1, 1999. (7)
10.6 Credit Agreement, dated May 28, 1999, by and between
TekInsight and Azurel. (7)
10.7 Pledge Security Agreement, dated May 28, 1999, by and between
TekInsight and Azurel. (7)
10.8 Warrants to acquire 300,000 shares of Azurel common stock,
dated May 28, 1999. (7)
10.9 First Amendment to Credit Agreement, dated June 1, 1999, by
and between TekInsight, Tadeo-E and Azurel. (7)
10.10 Registration Rights Agreement, dated May 28, 1999, by and
between TekInsight and Azurel. (7)
10.11 Warrants to acquire 200,000 shares of Azurel common stock,
dated June 1, 1999. (7)
10.12 Form of On-Line Hosting Agreement, dated as of June 30, 1999,
by and between Tadeo-E and Style Site Marketing Inc.
("Style"). (7)
10.13 Web Site and Consulting Agreement, dated as of June 30, 1999,
by and between Tadeo-E and Style. (7)
10.14 Security Purchase Agreement, dated June 30, 1999, by and
between TekInsight, Tadeo-E and Style. (7)
10.15 Registration Rights Agreement, dated June 30, 1999, by and
between Tadeo-E and Style. (7)
10.16 Pledge Security Agreement, dated June 30, 1999, by and between
Tadeo-E, the Rubin Family Irrevocable Trust and Style. (6)
10.17 Amended Warrant Agreement, dated as of November 30, 1999,
between TekInsight and American Stock Transfer & Trust
Company. (8)
22
<PAGE>
10.18 Web Site Design and Consulting Agreement, dated November 5,
1999, by and between Tadeo-E and Med-Emerg International, Inc.
("Med-Emerg").
10.19 Securities Purchase Agreement, dated November 5, 1999, between
Tadeo-E and Med-Emerg.
10.20 Registration Rights Agreement, dated November 5, 1999, by and
between Tadeo-E and Med-Emerg.
10.21 Letter of Intent, dated January 18, 2000, between TekInsight
and Data Systems. (10)
10.22 Agreement and Plan of Merger, dated Febraury 18, 2000, among
TekInsight, Tadeo-E and Data Systems. (11)
10.23 Financial Advisory and Investment Banking Agreement, dated
February 15, 2000, between TekInsight and
EarlyBirdCapital Inc.("EarlyBird").
10.24 Warrants dated February 15, 2000 to acquire 200,000 shares of
common stock of TekInsight granted to
EarlyBird.
10.25 Warrants dated February 15, 2000 to acquire 100,000 shares of
common stock of TekInsight granted to
EarlyBird.
23.1 Consent of Feldman Sherb Horowitz & Co., P.C.
23.2 Consent of Nixon Peabody LLP. Included in Exhibit 5.1.
(1) Incorporated by reference, filed as an exhibit to the
Registrant's Registration Statement on Form S-1 filed on
August 3, 1992, SEC File No. 33-50426.
(2) Incorporated by reference, filed as an exhibit to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 filed on October 13, 1992.
(3) Incorporated by reference, filed as an exhibit to Amendment
No. 2 to the Registrant's Registration Statement on Form
S-1 filed on November 10, 1992.
(4) Incorporated by reference, filed as an exhibit to the
Registrant's Current Report on 8-K, filed on April 19, 1995.
(5) Incorporated by reference, filed as an exhibit to Amendment
No. 4 to the Registrant's Registration Statement on Form
S-1 filed on December 4, 1992.
(6) Incorporated by reference, filed as an exhibit to the
Registrant's Annual Report on Form 10-K for the year ended
June 30, 1999, filed on October 13, 1999.
23
<PAGE>
(7) Incorporated by reference, filed as an exhibit to Registrant's
Current Report on Form 8-K, filed on July 30, 1999.
(8) Incorporated by reference, filed as an exhibit to Registrant's
Current Report on Form 8-K, filed on December 6, 1999.
(9) Incorporated by reference, filed as an exhibit to Form S-3
Registration Statement and Post-Effective Amendment No. 1
to form SB-2 Registration Statement on Form S-3 Registration
Statement, filed on July 11, 1997.
(10) Incorporated by reference, filed as an exhibit to the
Registrant's Current Report on Form 8-K, filed on January 26,
2000.
(11) Incorporated by reference, filed as an exhibit to th
Registrant's Current Report on Form 8-K, filed on
February 29, 2000.
B. FINANCIAL STATEMENT SCHEDULES
None Required.
ITEM 17. UNDERTAKINGS.
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(1) To include any additional or changed material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
24
<PAGE>
3. The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 of Rule 14c-3 under the Securities Exchange Act 1934;
and, where interim financial information required to be presented by Article 3
of Regulation S-X are not set forth in the prospectus, to deliver, or cause to
be delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
5. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has fully caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of New York, New York, on the 5th day of April,
2000.
TEKINSIGHT.COM, INC.
BY:/s/Steven J. Ross
-------------------------------------
Steven J. Ross,
President and Chief Executive Officer
26
POWER OF ATTORNEY
TEKINSIGHT.COM, INC. and each of the persons whose signature appears
below hereby constitutes and appoints STEVEN J. ROSS and ARION KALPAXIS, and
each of them singly, such person's true and lawful attorneys-in-fact, with full
power to them and each of them to sign for such person and in such person's
name, in the capacities indicated below, any and all amendments to this
Registration Statement, hereby ratifying and confirming such person's signature
as it may be signed by said attorney-in-fact to any and all amendments to said
Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/Steven J. Ross President and Chief Executive Officer April 5, 2000
- ---------------------
Steven J. Ross
/s/Alexander Kalpaxis Chief Technology Officer and Chairman April 5, 2000
- --------------------- of the Board
Alexander Kalpaxis
/s/Arion Kalpaxis Chief Operating Officer, Acting Chief April 5, 2000
- --------------------- Financial Officer and Acting
Arion Kalpaxis Principal Accounting Officer
/s/Brian D. Bookmeier Director April 5, 2000
- ---------------------
Brian D. Bookmeier
/s/Damon Testaverde Director April 5, 2000
- ---------------------
Damon Testaverde
/s/James Linesch Director April 5, 2000
- ---------------------
James Linesch
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Post-Effective Amendment No. 1 to Form S-3
Registration Statement (the "Registration Statement") of our report dated
September 15, 1999 relating to the consolidated balance sheets of
TekInsight.Com, Inc.(formerly Tadeo Holdings, Inc. and Subsidiaries) as of June
30, 1999 and 1998 and the related statements of operations, changes in
stockholders' equity and cash flows for the years ended June 30, 1999, 1998 and
1997. We also consent to the reference to us under the caption "Experts" in the
accompanying Prospectus.
/S/ FELDMAN SHERB HOROWITZ & CO., P.C.
--------------------------------------
FELDMAN SHERB HOROWITZ & CO., P.C.
Certified Public Accountants
April 5, 2000
New York, New York
Exhibit 23.2
CONSENT OF COUNSEL
We consent to the use our name as it appears under the caption "Legal Matters"
in this Post-Effective Amendment No. 1 to Form S-3 Registration Statement (the
"Registration Statement"). In giving such consent, we do not thereby admit we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
April 5, 2000
/S/ NIXON PEABODY LLP
----------------------
Nixon Peabody LLP
Exhibit 5.1
990 Stewart Avenue
Garden City, New York 11530-4838
(516) 832-7500
Fax: (516) 832-7555
Direct Dial: (516) 832-7500
April 3, 2000
TekInsight.Com, Inc.
5 Hanover Square
New York, New York 10004
Ladies and Gentlemen:
We have acted as counsel to TekInsight.Com, Inc., a Delaware
corporation (the "Company"), in connection with Post-Effective Amendment No. 1
to Form S-3, File No. 333-1153 (the "Registration Statement"). The Registration
Statement is to be filed on or about April 3, 2000 with the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Act"), for the purpose of registering with the SEC up to 4,129,542 shares
of common stock, par value $.0001 per share, of the Company (the "Common
Stock"). This opinion is being delivered to you in connection with the
Registration Statement.
In connection with the foregoing, we have examined the Registration
Statement and the prospectus contained therein (the "Prospectus"), and the
Certificate of Incorporation and the By-Laws of the Company, both as amended
through the date hereof. We also have examined originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records,
certificates and other documents and have made such investigations of law as we
have deemed necessary or appropriate as a basis for the opinions expressed
below.
As to questions of fact material to our opinions expressed herein, we
have, when relevant facts were not independently established, relied upon
certificates of, and information received from, the Company and/or
representatives of the Company. We have made no independent investigation of the
facts stated in such certificates or as to any information received from the
Company and/or representatives of the Company and do not opine as to the
accuracy of such factual matters. We also have relied, without investigation,
upon certificates and other documents from, and conversations with, public
officials.
In rendering the following opinions, we have assumed, without
investigation, the authenticity of any document or other instrument submitted to
us as an original, the conformity to the originals of any document or other
instrument submitted to us as a copy, the genuineness of all signatures on such
originals or copies, and the legal capacity of natural persons who executed any
such document or instrument at the time of execution thereof.
<PAGE>
TekInsight.Com, Inc.
April 3, 2000
Page 2
We have also assumed that, prior to the issuance of any shares of
Common Stock pursuant to the exercise of any options or warrants of the Company,
the Common Stock underlying which is being registered by the Registration
Statement (the "Derivative Securities"), there will exist under the Certificate
of Incorporation of the Company the requisite number of authorized but unissued
shares of Common Stock of the Company, and that all actions necessary for the
authorization and issuance of the Derivative Securities of the Company shall
have been taken.
We have further assumed that the issuance, amount and terms of the
Common Stock to be offered and sold from time to time under the Registration
Statement, upon exercise of any Derivative Securities, will have been authorized
and determined by proper action of the Board of Directors of the Company or a
duly designated committee of such Board of Directors (a "Committee") in
accordance with the parameters described in the Registration Statement (each, a
"Board Action") and in accordance with the Company's Certificate of
Incorporation, By-laws and applicable law.
In addition, we have assumed that, at or prior to the time of the
issuance and sale, as applicable, of any of the Common Stock upon the exercise
of any Derivative Securities, (i) no stop order shall have been issued in
respect of the Registration Statement, (ii) there shall not have occurred, since
the date of this opinion, any change in law affecting the validity of the Common
Stock or the ability or capacity of the Company to issue any of the Common Stock
to be issued upon exercise of any Derivative Securities, and (iii) the Company
shall not have effected any material change to its Certificate of Incorporation
or By-laws. We have also assumed, as appropriate, that neither the issuance and
delivery of any of the Common Stock which shall be issued and delivered upon
exercise of any Derivative Securities, nor the compliance by the Company with
the any of the terms of the Common Stock, will violate any applicable law, rule
or regulation, or will result in a violation of any provision of any instrument
or agreement then binding upon the Company, or any order or restriction imposed
by any court or governmental body having jurisdiction over the Company.
Members of our firm involved in the preparation of this opinion are
licensed to practice law in the State of New York and we do not purport to be
experts on, nor to express any opinion herein concerning, the laws of any other
jurisdiction other than the laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America, to the extent specifically referred to herein.
Based upon and subject to the foregoing, and the other qualifications
and limitations contained herein, and after (a) the above-referenced
Registration Statement has become effective under the Act, and assuming that
such effectiveness remains in effect throughout the period during which shares
of Common Stock are offered and sold, (b) the shares of Common Stock, if
required, have been duly qualified or registered, as the case may be, for sale
under applicable
<PAGE>
TekInsight.Com, Inc.
April 3, 2000
Page 3
state securities laws and all applicable securities laws have been complied
with, and (c) all necessary action by the shareholders of the Company and the
Board of Directors or Committees of the Board of Directors of the Company shall
have been taken duly to authorize the offer, issuance and sale of Common Stock
to be offered and sold under the Registration Statement, we are of the opinion
that the shares of Common Stock to be offered and sold under the Registration
Statement will have been duly authorized, validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name as it appears under the
caption "Legal Matters" in the Prospectus. In giving such consent, we do not
thereby admit we come within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the SEC thereunder.
We further consent to the filing of this opinion as an exhibit to
applications to the securities commissioners of the various states of the United
States, to the extent so required, in connection with the registration of the
shares of Common Stock under the Registration Statement.
This opinion is limited to the matters stated herein, and no opinion or
belief is implied or may be inferred beyond the matters expressly stated herein.
We wish to advise you that certain attorneys with Nixon Peabody LLP
have beneficial ownership of certain shares of the Common Stock.
Very truly yours,
Nixon Peabody LLP
Exhibit 10.18
WEB SITE DESIGN AND CONSULTING AGREEMENT
Agreement, effective as of November 5, 1999, by and between TADEO
E-COMMERCE CORP, a Delaware corporation having an address at 5 Hanover Square,
New York, NY 10004 ("DEVELOPER") and Med-Emerg International, Inc., a Canadian
corporation having an address at 2550 Argentia Road, Suite 205, Mississauga,
Ontario, Canada L5N 5R1 ("CLIENT"), regarding Client's interest in securing the
services of Developer to design, develop, test, implement, launch and service a
World Wide Web Site which will be owned by Client and to provide various
additional consulting and other services after the site is successfully launched
(the "PROJECT").
The parties hereby agree as follows:
1. THE SITE. Client is planning to launch a new World Wide Web Site and portal
tentatively entitled ["HealthyConnect.com"] in conjunction and with the
cooperation of Developer (with the hosting company hosting the World Wide Web
Site being identified herein as the "COLLABORATOR") and which will be devoted,
at least initially, to issues related to the medical industry, and the Client's
products and services and other materials and services distributed, or otherwise
provided, by the Client (the "SITE"). The Site, as presently contemplated, will
consist of the initial components set forth in EXHIBIT A (the "SITE
COMPONENTS"). The Site Components, as well as the contents therein and all
aspects whatsoever of the Site, may change as the Site is designed and
developed, and, thereafter from time to time as specified by Client (subject to
Developer's right to terminate this Agreement under Paragraph 9.1). All aspects
of the Site shall be subject to Client's approval, in its reasonable discretion.
Client shall be solely responsible for the editorial content of the Site.
2. DEVELOPER'S SERVICES. Developer confirms that it is experienced in the custom
design, development, launch and delivery of Web sites and agrees to provide the
following services for the Site:
a) THE SITE DESIGN. During Phase I of the Project, the Developer shall
design and commence development of the overall Site structure and programming.
b) THE SITE LAUNCH. During Phase II of the Project, the Developer shall
develop, test, implement and launch the overall Site and shall develop the Site
components both for the initial version of the Site to be launched (the "LAUNCH
MODULE") and so as to accommodate Additional Modules (see Paragraph 2(c) below).
During Phase II of the Project Developer shall deliver, to Client's reasonable
satisfaction, all materials, information, software, source
<PAGE>
code, documentation, guides, manuals and similar material as are necessary for
Client to maintain, update, edit, modify, terminate, redesign and otherwise
operate and service the Site. Developer shall be responsible for the design,
structure and implementation of all aspects of the Site to Client's reasonable
satisfaction (other than the gathering and delivery to Developer of editorial
content therefor, which shall be the responsibility of Client).
The specifications/requirements for Developer's services in Phase II
(the "SPECIFICATIONS") shall be as mutually agreed to by Developer and Client,
and such Specifications shall be included in EXHIBIT A prior to the commencement
of Phase II work by Developer.
As part of Developer's services required hereunder, but not in
limitation thereof, Developer shall generally:
(i) work and confer with Client throughout the design process to
ascertain both Client and Collaborator's design needs and requirements for the
Site;
(ii) design the look, operation, and programming of the Site,
including, without limitation, the functional specifications, user interface and
user interface specifications, technical design specifications, search and
retrieval software and graphic elements of the Site design (such as layout,
typeface, illustrations and photographs), both to accommodate Client's current
needs and so as to accommodate modifications and additions thereto as the Site
expands and changes;
(iii) develop and deliver necessary HTML programming;
(iv) incorporate Client Content (as hereinafter defined in Paragraph
3.1) for the launch;
(v) transfer Site files to Client's server;
(vi) fully test (and correct where needed) the Site and all Site
Components and aspects (conduct a soft launch - a Beta test in the staging area)
to Client's reasonable satisfaction and as described in EXHIBIT A;
(vii) launch the Site; and
(viii) provide Client with all technical and design documents as well
as a troubleshooting guide needed to ensure that Client can with ease maintain,
update, modify, edit, cancel and otherwise operate the Site.
-2
<PAGE>
The fees for Developer's services with respect to Phase I and Phase II are as
set forth on EXHIBIT B.
c) ADDITIONAL MODULES. At Client's request from time to time during the
Development Term (as defined in Paragraph 5), as Phase III of the Project, and
if the additional terms and conditions of such activities can be agreed to
between Client and Developer, Developer agrees, if requested, to design,
develop, implement, test and launch additional components ("ADDITIONAL
MODULES"). Additional Modules may update and expand the entire Site, but also
may include new material for the original Launch Module.
d) DELIVERY. Developer agrees to submit to Client for its approval all
of the Phase I Deliverables and all of the Phase II Deliverables to be requested
in accordance with the conditions of Paragraph 2(b) above and to be set forth on
EXHIBIT A (collectively, the "DELIVERABLES," and each separate item a
"DELIVERABLE"). Upon receipt, Client shall promptly review the Deliverables.
Client shall give Developer prompt written notice if Client reasonably
determines that such Deliverables do not materially conform with the
Specifications as set forth in Exhibit A, and such notice shall in detail set
forth the deficiencies found in such Deliverables by Client. Developer shall, at
no cost to Client, promptly correct any such deficiencies. Upon completion of
the corrective action by Developer, Client will reconsider acceptance of the
Deliverable. If the Deliverable still does not meet the requirements and
Specifications as set forth on Exhibit A, to the reasonable satisfaction of the
Client, within thirty (30) days of Client 's notice of disapproval, Client may:
(i) terminate this Agreement in accordance with Paragraph 9; or (ii) require
Developer to continue to attempt to correct the deficiencies, reserving the
right to terminate in accordance with Paragraph 9. It is understood that Client
also may be obligated to obtain the approval of Collaborator.
e) ONGOING CONSULTATION. Developer agrees to consult, strategize and
coordinate with Client and, if requested by Client, with Collaborator,
throughout the provision of Developer's services hereunder to ensure Client's
reasonable satisfaction with and reasonable approval of each aspect of the Site.
f) MAINTENANCE, AND ONGOING SERVICE.
(i) If requested by Client, Developer agrees to provide, at its sole
cost and expense, all maintenance required to correct defects, bugs, viruses,
design flaws and similar inherent problems in the Site, during the Development
Term and for a period of one year thereafter (the "MAINTENANCE TERM"); PROVIDED,
that the Developer is not obligated to provide additional maintenance services
requested by Client during periods beyond
-3-
<PAGE>
the Maintenance Term, without its specific written approval, which approval may
be withheld in Developer's full discretion; and further PROVIDED, that the
Developer shall at no time be obligated to provide such maintenance services in
the event that such services are required due to Client's modification or
editing of the Site without Developer's written approval thereof, Client's
destruction of the Site, or Client's license of the Site for use and/or
operation by any other person without Developer's prior written consent.
(ii) In addition, but only during the Development Term, Developer
agrees to provide other design, maintenance and other services requested by
Client at fees and on a time schedule to be mutually agreed to by Client and
Developer; PROVIDED, that Developer shall have the ability to reject such
requests based upon Developer's reasonable determination of Client's inability
to pay in a timely manner for such services.
3. CLIENT-PROVIDED CONTENT.
3.1. Client shall be responsible for obtaining all licenses,
sublicenses, assignments, permissions, waivers or other rights or clearances
necessary for Developer 's incorporation of any content provided by Client
("CLIENT CONTENT") into the Deliverables. Client shall deliver one (1) copy of
each item of Client Content to be provided by Client to be incorporated into a
Deliverable. Client shall provide to Developer as part of that copy all credits
and/or attributions, which are to be mutually agreed upon, with each party
acting reasonably, to be included in the Deliverable. Developer shall use each
item of Client Content provided by Client only in conjunction with the
Deliverable for which it was provided.
3.2. In the event that Client does not obtain the licenses,
sublicenses, assignments, permits, waivers or other rights or clearances
necessary to use particular materials as Client Content in a Deliverable,
Developer shall not be obligated to incorporate such materials into the
Deliverable.
4. RIGHTS IN DELIVERABLE.
4.1. Developer acknowledges that Client shall retain all title to and
all rights in any intellectual property provided by Client to Developer under
this Agreement.
4.2. The original content component of the Deliverables produced by
Developer shall be considered to be works made for hire for all purposes,
including for purposes of interpretation under the U.S. Copyright Law, 17 U.S.C.
ss.101 ET SEQ. To the extent that such Deliverables are not construed to be
works made for hire, Developer shall, and hereby does, perpetually, and without
further consideration, assign all right, title and interest to such
-4-
<PAGE>
Deliverables to Client. All right, title and interest in the original content
component of the Deliverables produced by Developer, including any copyright or
other proprietary right in the Deliverables, shall be the sole property of
Client. Notwithstanding the foregoing, except as provided in Section 4.3,
nothing herein should be construed to vest ownership in Client of any right,
title or interest to any computer software component ("SOFTWARE") of a
Deliverable under this Agreement.
4.3. Developer, or any third party from which Developer licenses any
Software, shall retain all right, title and interest to such Software. Developer
hereby grants, which Developer represents it has full right, power and authority
to grant, to Client an unassignable (whether or not by operation of law),
perpetual, worldwide, royalty-free license, or sublicense, to duplicate,
exhibit, perform, transmit, broadcast, distribute, maintain and modify Software
in connection with substantially all of the content component of the
Deliverables provided by Developer to Client for use in connection with the
Site.
4.4. Developer agrees to execute and deliver any documents and take all
such other actions as may be necessary or desirable in order to carry into
effect the provisions of this Paragraph 4, including, without limitation, the
execution of assignments, copyright registrations and patent applications.
5. TERM. The term of this Agreement during which period Developer shall be
obligated to provide to Client the services described in Paragraph 2 shall
extend for a period of six (6) months from the date of this Agreement (the
"DEVELOPMENT TERM"). The parties may extend the Development Term of this
Agreement by mutual written agreement.
6. CLIENT'S SERVICES AND DELIVERABLES. Client shall be responsible for
a) obtaining and securing a domain name and address for the Site;
b) preparing, gathering and/or writing all Client Content (including
illustrations, photographs, charts, graphs and similar information and material
to accompany the editorial content) to be included in the Site, including all
licenses, etc., as referenced in Paragraph 3 of this Agreement;
c) delivering to Developer fully edited editorial content in a mutually
agreed upon digital format;
d) housing the Site on Client's server; and
e) coordinating with Collaborator on all aspects of the Site
development, design and operation.
-5-
<PAGE>
7. TERMINATION.
7.1.
a) Client may terminate upon ten (10) days' prior written notice this
Agreement in the event (i) Client has rejected any Deliverable in accordance
with the provisions of Paragraph 2(d) and Developer has failed to correct the
deficiencies during the time period specified therein or (ii) Developer
otherwise materially breaches any of its obligations, representations or
warranties under this Agreement.
b) Developer may terminate this Agreement upon ten (10) days' prior
written notice in the event that (i) Client fails to pay to Developer when due,
after three (3) days' prior notice of such failure to pay, the compensation
amounts required to be paid pursuant to Paragraph 9, (ii) Client materially
changes the parameters for development of the Site or the Site Components, (iii)
Collaborator, other than Developer, unreasonably withholds its approval of
Developer's work product under this Agreement, to the extent its approval is
necessary to launch the Site (if the initial collaborator is other than
Developer) or augment or maintain the Site, or (iv) Client otherwise materially
breaches any of its obligations, representations or warranties under this
Agreement.
7.2. Either party may terminate this Agreement, effective immediately upon
written notice if: (i) all or a substantial portion of the assets of the other
party are transferred to an assignee for the benefit of creditors or to a
receiver or to a trustee in bankruptcy; (ii) a proceeding is commenced by or
against the other party for relief under bankruptcy or similar laws and such
proceeding is not dismissed within sixty (60) days; or (iii) the other party is
adjudged bankrupt or insolvent. Termination of this Agreement shall not relieve
either party of any obligation accrued prior to the termination date.
7.3. In the event Developer terminates this Agreement other than in
accordance with Paragraph 7.1(b) or Client terminates this Agreement in
accordance with Paragraph 7.1(a), then Client shall have no obligation to pay
any amounts owing under Paragraph 9, except for fees under Paragraph 9 incurred
prior to such termination. 7.4. In the event Developer terminates this Agreement
in accordance with Paragraph 7.1(b) or Client terminates this Agreement other
than in accordance with Paragraph 7.1(a), then Client shall be obligated to pay
the amounts owing under Paragraph 9 incurred prior to the date of termination.
7.5. Termination of this Agreement shall not limit either party from pursuing
any remedies available to it for any breach of this Agreement. All
-6-
<PAGE>
obligations of either party set forth in Paragraphs 4, 7, 9, 10, 11 and 12 of
this Agreement shall survive the termination or expiration of this Agreement.
8. OWNERSHIP. Client shall own the Site and all aspects thereof, except as set
forth in Paragraphs 3 and 4. Client shall have the right to modify, edit,
destroy, license, exploit or use the Site in any way, without compensation or
consultation with Developer, subject to the provisions of Paragraph 2(f).
9. CONSIDERATION. a) In full consideration for all of Developer's services and
Deliverables provided hereunder for Phase I and Phase II, Client shall
compensate Developer by payment of the related fees and other compensation,
including the delivery of shares of Client's common stock having an aggregate
market value of $400,000 (the "SHARES") on the date hereof, all as set forth on
EXHIBIT B, and in accordance with the provisions of Paragraph 9(b) below.
b) As a condition to Developer's execution of this Agreement, Developer and
Client do hereby agree to enter into (i) that certain Securities Purchase
Agreement, between Client and Developer dated as of the date hereof, in the form
of that annexed hereto as ANNEX I, with respect to Developer's purchase of the
Shares in partial consideration for Developer's services under the terms of this
Agreement and (ii) that certain Registration Rights Agreement, between Client
and Developer, dated as of the date hereof, in the form of that annexed hereto
as ANNEX II, with respect to Client's registration of Developer's distribution
of the Shares in partial consideration for Developer's services under the terms
of this Agreement.
10. REPRESENTATIONS AND WARRANTIES.
10.1. Developer represents and warrants to Client that: (i) Developer has the
full right, power and authority to enter into and to perform fully this
Agreement; (ii) the design of the Site and all design and programming aspects of
the Site as delivered by Developer shall be original and shall be owned by
Client (except as reserved in Paragraphs 3 and 4) as works for hire or by
transfer of all rights, including without limitation the copyright thereto;
(iii) the design of the Site and all design and programming aspects of the Site
as delivered by the Developer shall be in conformity with industry standards and
with the descriptions and requirements for them as set forth in the Exhibits;
(iv) all Software used in the Site and all Deliverables are Y2K compliant; (v)
Developer owns or has the rights to use all trademarks, copyrights, patents,
trade secrets and other intellectual property rights used in connection with the
design, programming and development of the Site (the "INTELLECTUAL PROPERTY")
and neither the use of the Intellectual Property by Developer in the design,
programming and development of the Site nor the license granted to
-7-
<PAGE>
Client therein infringes, alters or impairs such rights in the Intellectual
Property; (vi) neither the design nor programming of the Site, nor any other
material or facet added to the Site by Developer (other than Client Content
supplied by Client) contains any libelous material or any material which
constitutes an invasion of privacy or publicity, and (vii) the Site as delivered
by Developer shall be free of "bugs," viruses, defects or design flaws and the
Site has been developed using means to detect and prevent tampering or
unauthorized modifications which meet industry standards.
10.2. Client represents and warrants to Developer that: (i) Client has the
full right, power and authority to enter into and to fully perform this
Agreement; (ii) to the extent that Client is required to obtain rights,
permissions and credit and/or attribution information with respect to the Client
Content, Client will do so accurately and completely; and (iii) the Client
Content provided by Client will not contain any libelous material or any
material which constitutes an invasion of any right of privacy or publicity, or
infringes upon any registered trademark, copyright, patent, trade secret or
other intellectual property right.
10.3. No party shall in any circumstances be liable to the other party or any
other party for any loss of business or profits, or any other indirect,
consequential, incidental, punitive or similar damages arising from the breach
of this Agreement, even if it has been advised of the possibility of such
damages.
10.4. THE WARRANTIES STATED HEREIN ARE LIMITED WARRANTIES AND THE ONLY
WARRANTIES MADE BY THE PARTIES. THE PARTIES WAIVE ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
11. INDEMNIFICATION.
11.1. During the Term of this Agreement and for one (1) year thereafter,
Developer shall indemnify and hold Client and its directors, officers, employees
and agents harmless from and against any and all claims, demands, actions,
losses, liabilities, damages, costs and expenses (including, but not limited to,
reasonable attorneys' fees) arising out of or resulting from Developer 's
material breach of Paragraph 10.1 of this Agreement, provided that Client (i)
notifies Developer promptly of any written claims or demands against Client,
(ii) gives Developer the opportunity to defend or settle any such claim at
Developer 's expense, and (iii) cooperates with Developer, at Developer 's
expense, in defending or settling such claim.
-8-
<PAGE>
11.2. During the Development Term of this Agreement and for one (1) year
thereafter, Client shall indemnify and hold Developer and its directors,
officers, employees and agents harmless from and against any and all claims,
demands, actions, losses, liabilities, damages, costs and expenses (including,
but not limited to, reasonable attorneys' fees) arising out of or resulting from
Client's material breach of Paragraph 10.2 of this Agreement, provided that
Developer (i) notifies Client promptly of any written claims or demands against
Developer, (ii) gives Client the opportunity to defend or settle any such claim
at Client's expense, and (iii) cooperates with Client, at Client's expense, in
defending or settling such claim.
12. CONFIDENTIALITY.
12.1. Each party shall retain in confidence and shall not, without the prior
written consent of the other party (the "DISCLOSING PARTY"), disclose in any
manner or use, except under the terms and prior to the termination of this
Agreement, any materials disclosed to a party (the "RECEIVING PARTY") by the
Disclosing Party and either marked at the time of disclosure as being
confidential or identified in writing by the Disclosing Party within thirty (30)
days of disclosure to the Receiving Party as being confidential ("CONFIDENTIAL
INFORMATION"); PROVIDED, that if the receiving Party is compelled by law
(whether through court order or subpoena) to disclose such Confidential
Information, the Receiving Party shall provide the Disclosing Party with prompt
notice of such compelled disclosure.
12.2. This Paragraph 12 shall impose no obligation upon the Receiving Party
with respect to any Confidential Information: (i) in the public domain at the
time received by Receiving Party; (ii) which enters the public domain other than
by breach of the Receiving Party's obligations hereunder; (iii) known to the
Receiving Party prior to receipt from the Disclosing Party; (iv) received by
Receiving Party from a third party if such third party has the right to make
such disclosure; or (v) independently developed by the Receiving Party without
access to Confidential Information.
12.3. Upon the Disclosing Party's request or termination of this Agreement,
the Receiving Party will, at its election, either promptly deliver to the
Disclosing Party or destroy all Confidential Information in every form in the
Receiving Party's possession.
-9-
<PAGE>
13. GENERAL.
13.1. The relationship between the parties shall be that of independent
contractors. Nothing in this Agreement shall create, or be deemed to imply the
creation of, any partnership, joint venture or other relationship. Neither party
shall have the authority to incur any obligation, contractual or otherwise, in
the name or on behalf of the other party. Each party shall bear its own costs
and expenses in connection with performance of this Agreement.
13.2. This Agreement and any exhibits, appendices and schedules hereto
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous communications.
Neither this Agreement nor any exhibits or appendices hereto shall be modified
except by a written agreement dated subsequent to the date of this Agreement and
signed on behalf of the parties by their respective duly authorized
representatives.
13.3. If this Agreement shall be terminated or held by a court of competent
jurisdiction to be invalid, illegal or unenforceable as to particular
provisions, this Agreement shall remain in full force and effect as to the
remaining provisions.
13.4. No waiver of any breach of any provisions of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof or thereof, and no waiver shall be effective unless
made in writing and signed by the duly authorized representative of the party to
be charged.
13.5. All notices that Developer or Client may give to the other pursuant to
this Agreement shall be in writing and shall be hand delivered or sent by
registered or certified mail postage prepaid, return receipt requested, by
facsimile (with confirmation back), or by overnight courier service, postage
prepaid, to the parties at the addresses provided above or to such other address
or as either party shall designate by written notice given in accordance with
this Section, with notice being deemed given five days' after being deposited
with the United States mail, upon hand delivery, upon receipt of confirmation
back that a facsimile was received and one day after deliver to a nationally
recognized overnight courier service (if so deposited or delivered as described
above).
13.6. This Agreement shall be binding on Developer and Client and the
respective successors and permitted assigns of each party. Except as permitted
in this Agreement, no party may assign any of its rights or delegate any of its
obligations under this Agreement to any third party without the
-10-
<PAGE>
express written consent of the other party, which consent may be withheld in
either party's sole discretion.
13.7. This Agreement between Developer and Client is not exclusive and the
parties are free to engage in other relationships of a similar nature with other
parties.
13.8. Client hereby grants Developer its permission to (i) disclose to
potential customers of Developer that Client is a customer of Developer, and
(ii) duplicate, exhibit, perform, transmit, broadcast and distribute
Deliverables to potential customers of Developer for purposes of publicizing
Developer's services.
13.9. This Agreement shall be governed and construed in accordance with the
internal substantive laws of the State of New York without regard to its
conflicts of laws principles.
13.10. The section headings contained in this Agreement are for purposes of
convenience and reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.11. Neither party shall be in material breach if failure to perform any
obligation hereunder is caused solely by supervening conditions beyond that
party's control, including acts of God, civil commotions, strikes, labor
disputes and governmental demands or requirements.
13.12. This Agreement may be executed in counterparts which, when taken
together, shall constitute one and the same instrument.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, each acting with proper authority, have
executed this Agreement under seal as of the 5th day of November, 1999.
TADEO E-COMMERCE CORP. MED-EMERG INTERNATIONAL, INC.
By:/s/Alexander Kalpaxis By:/s/Ramesh Zacharias
---------------------------- -----------------------------
-12-
<PAGE>
EXHIBIT B
Phase I -- Date of Agreement:* $50,000
-- 1st Month Anniversary of Date of Agreement: $50,000
Phase II -- 3rd, 4th, 5th and 6th Month Anniversaries of Date of
Agreement: $50,000 per month
-- 320,000 shares of Med-Emerg International, Inc. common
stock having a market value of $400,000 on the Date of
Agreement, delivered on the 7th Month Anniversary of Date
of Agreement.
- -----------------------
* Date of Agreement is November 5, 1999.
Exhibit 10.19
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of November 5, 1999,
between MED-EMERG INTERNATIONAL, INC. a Canadian corporation with principal
executive offices located at 2550 Argentia Road, Suite 205, Mississauga,
Ontario, Canada L5N 5R1 (the "Company") and Tadeo E-Commerce Corp., a Delaware
corporation having an address at 5 Hanover Square, New York, New York 10004
("Buyer").
W I T N E S S E T H:
WHEREAS, the Company desires to sell, and the Buyer desires to
purchase, upon the terms and subject to the conditions of this Agreement,
$400,000 market value as of the date hereof shares (the "Shares") of Common
Stock of the Company (the " Common Stock"); and
WHEREAS, the Company has agreed to register on behalf of Buyer
the Shares under the terms of that certain Registration Rights Agreement, of
even date herewith, by and between the Company and Buyer (the "Registration
Agreement");
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
I. PURCHASE AND SALE OF PREFERRED STOCK
A. TRANSACTION. Buyer hereby agrees to purchase from the
Company, and the Company has offered and hereby agrees to issue and sell to the
Buyer in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Shares.
B. PURCHASE PRICE; FORM OF PAYMENT. The purchase price (the
"Purchase Price") for the Shares to be purchased by Buyer hereunder shall be (i)
Buyer's agreement to provide services to the Company in accordance with the
terms of that certain Web Site Design and Consulting Agreement, dated as of
November 5, 1999 (the "Web Agreement"), by and between Company and Buyer (the
"Services"), and (ii) a cash payment equal to the aggregate par value of the
Shares, with the Shares being delivered to Buyer on the Delivery Date (as
hereinafter defined).
II. BUYER'S REPRESENTATIONS, WARRANTIES; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
Buyer represents and warrants to and covenants and agrees with
the Company, as follows:
<PAGE>
A. Buyer is purchasing the Shares for its own account, for
investment purposes only and not with a view towards or in connection with the
public sale or distribution thereof in violation of the Securities Act.
B. Buyer is (i) experienced in making investments of the kind
contemplated by this Agreement, (ii) capable, by reason of its business and
financial experience, of evaluating the relative merits and risks of an
investment in the Securities, and (iii) able to afford the loss of its
investment in the Shares.
C. Buyer understands that the Shares are being offered and
sold by the Company in reliance on an exemption from the registration
requirements of the Securities Act and equivalent state securities and "blue
sky" laws, and that the Company is relying upon the accuracy of, and Buyer's
compliance with, Buyer's representations, warranties and covenants, respectively
and severally, as set forth in this Agreement to determine the availability of
such exemption and the eligibility of Buyer to purchase the Shares;
D. Buyer has been furnished with or provided access to all
materials relating to the business, financial position and results of operations
of the Company, and all other materials requested by Buyer to enable it to make
an informed investment decision with respect to the Shares.
E. Buyer acknowledges that it has been furnished with copies
of the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 and all other reports and documents heretofore filed by the Company
with the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since the filing of the Annual Report (collectively the
"Commission Filings").
F. Buyer acknowledges that in making its decision to purchase
the Shares it has been given an opportunity to ask questions of and to receive
answers from the Company's executive officers, directors and management
personnel concerning the terms and conditions of the private placement of the
Shares by the Company.
G. Buyer understands that the Shares have not been approved or
disapproved by the Commission or any state or Canadian securities commission,
and that the foregoing authorities have not reviewed any documents or
instruments in connection with the offer and sale to it of the Shares, and have
not confirmed or determined the adequacy or accuracy of any such documents or
instruments.
H. This Agreement has been duly and validly authorized,
executed and delivered by Buyer and is a valid and binding agreement of Buyer
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally.
I. AUTHORITY; VALIDITY AND ENFORCEABILITY. Buyer has the
requisite corporate power and authority to enter into this Agreement and the
Registration Agreement of even date
-2-
<PAGE>
herewith between the Company and the Buyer. The execution, delivery and
performance by Buyer of this Agreement and the Registration Agreement, and the
consummation by Buyer of the transactions contemplated hereby and thereby has
been duly authorized by all necessary corporate action on the part of Buyer.
Each of this Agreement and the Registration Agreement has been duly validly
executed and delivered by Buyer, and each such instrument constitutes a valid
and binding obligation of Buyer enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally.
III. COMPANY'S REPRESENTATIONS
The Company represents and warrants to Buyer that:
A. CAPITALIZATION. 1. The Company had 3,095,544 shares of its
common stock (the "Common Stock") outstanding as of November 4, 1999 and 500,000
shares of preferred stock outstanding as of November 4, 1999, which can be
converted into a maximum of 750,000 shares of Common Stock (not including the
payment of dividends thereon in additional shares of Common Stock), subject to
anti-dilution and similar provisions. All of the issued and outstanding shares
of Common Stock and preferred stock have been duly authorized and validly issued
and are fully paid and non-assessable. As of the date hereof, the Company has
outstanding stock options and warrants to purchase 2,758,400 shares of Common
Stock. The Shares have been duly and validly authorized and reserved for
issuance by the Company, and when issued by the Company pursuant to the terms of
this Agreement will be duly and validly issued, fully paid and non-assessable
and will not subject the holder thereof to personal liability by reason of being
such holder. There are no preemptive, subscription, "call" or other similar
rights to acquire the Common Stock or the Company's preferred stock that have
been issued or granted to any person, except as disclosed on Schedule III. A.1.
2. The Company does not own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, unincorporated business organization, association, trust or
other business entity, except as disclosed on Schedule III.A.2.
B. ORGANIZATION; REPORTING COMPANY STATUS. 1. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Ontario, Canada and is duly qualified as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a material adverse
effect on the business, properties, prospects, condition (financial or
otherwise) or results of operations of the Company or on the consummation of any
of the transactions contemplated by this Agreement (a "Material Adverse
Effect").
2. The Company has registered the Common Stock pursuant to
Section 12 of the Exchange Act and has timely filed with the Commission all
reports and information required to be filed by it pursuant to all reporting
obligations under Section 13(a) or 15(d), as applicable, of the Exchange Act for
the 12-month period immediately preceding the date hereof. The Common Stock is
listed and traded on the NASDAQ SmallCap Stock Market ("NASDAQ") and the
-3-
<PAGE>
Company has not received any notice regarding, and to its knowledge there is no
threat of, the termination or discontinuance of the eligibility of the Common
Stock for such listing.
C. AUTHORITY; VALIDITY AND ENFORCEABILITY. The Company has the
requisite corporate power and authority to enter into this Agreement and the
Registration Agreement. The execution, delivery and performance by the Company
of this Agreement and the Registration Agreement, and the consummation by the
Company of the transactions contemplated hereby and thereby (the issuance of the
Shares and the registration of the Shares), has been duly authorized by all
necessary corporate action on the part of the Company. Each of this Agreement
and the Registration Agreement has been duly validly executed and delivered by
the Company and each instrument constitutes a valid and binding obligation of
the Company enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally.
The Shares have been duly and validly authorized for issuance by the Company.
D. NON-CONTRAVENTION. The execution and delivery by the
Company of this Agreement and the Registration Agreement, the issuance of the
Shares, and the consummation by the Company of the other transactions
contemplated hereby and thereby, do not and will not conflict with or result in
a breach by the Company of any of the terms or provisions of, or constitute a
default (or an event which, with notice, lapse of time or both, would constitute
a default) under (i) the articles of incorporation or by-laws of the Company or
(ii) except for such conflict, breach or default which would not have a Material
Adverse Effect, any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Company is a party or by which its
properties or assets are bound, or any law, rule, regulation, decree, judgment
or order of any court or public or governmental authority having jurisdiction
over the Company or any of the Company's properties or assets, including the
Rules of The Nasdaq Stock Market, Inc.
E. APPROVALS. No authorization, approval or consent of any
court or public or governmental authority is required to be obtained by the
Company for the issuance and sale of the Shares to Buyer as contemplated by this
Agreement, except such authorizations, approvals and consents that have been
obtained by the Company prior to the date hereof.
F. COMMISSION FILINGS. None of the Commission Filings
contained at the time they were filed any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
G. ABSENCE OF CERTAIN CHANGES. Except as disclosed on Schedule
III.A.I., Schedule III.A.II, or Schedule III.G. or in the Financial Statements
(as defined in Section III.K. hereto), since the Balance Sheet Date (as defined
in Section III.K.), there has not occurred any change, event or development in
the business, financial condition, prospects or results of operations of the
Company, and there has not existed any condition having or reasonably likely to
have, a Material Adverse Effect.]
-4-
<PAGE>
H. FULL DISCLOSURE. There is no fact known to the Company
(other than general economic or industry conditions known to the public
generally) that has not been fully disclosed in writing to the Buyer that (i)
reasonably would be expected to have a Material Adverse Effect or (ii)
reasonably would be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to this Agreement or the
Registration Agreement.
I. ABSENCE OF LITIGATION. There is no action, suit, claim,
proceeding, inquiry or investigation pending or, to the Company's knowledge,
threatened, by or before any court or public or governmental authority, or under
the aegis of the Listing Investigations Division of The Nasdaq Stock Market,
Inc., which, if determined adversely to the Company, would have a Material
Adverse Effect.
J. ABSENCE OF EVENTS OF DEFAULT. No "Event of Default" (as
defined in any agreement or instrument to which the Company is a party) and no
event which, with notice, lapse of time or both, would constitute an Event of
Default (as so defined), has occurred and is continuing, which could have a
Material Adverse Effect.
K. FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES. The
Company has delivered to Buyer true and complete copies of its audited balance
sheet as at December 31, 1998 and the related audited statements of operations
and cash flows for the three fiscal years ended December 31, 1996, 1997 and
1998, including the related notes and schedules thereto, as well as the same
financial statements as of and for the three and nine-month periods ended
September 30, 1999 (collectively, the "Financial Statements"), and all
management letters, if any, from the Company's independent auditors relating to
the dates and periods covered by the Financial Statements. Each of the Financial
Statements is complete and correct in all material respects, has been prepared
in accordance with United States General Accepted Accounting Principles ("GAAP")
(subject, in the case of the interim Financial Statements, to normal year end
adjustments and the absence of footnotes) and in conformity with the practices
consistently applied by the Company without modification of the accounting
principles used in the preparation thereof, and fairly presents the financial
position, results of operations and cash flows of the Company as at the dates
and for the periods indicated. For purposes hereof, the audited balance sheet of
the Company as at December 31, 1998 is hereinafter referred to as the "Balance
Sheet" and December 31, 1998 is hereinafter referred to as the "Balance Sheet
Date". The Company has no indebtedness, obligations or liabilities of any kind
(whether accrued, absolute, contingent or otherwise, and whether due or to
become due) that would have been required to be reflected in, reserved against
or otherwise described in the Balance Sheet or in the notes thereto in
accordance with GAAP, which was not fully reflected in, reserved against or
otherwise described in the Balance Sheet or the notes thereto or otherwise
described and reflected in the Financial Statements, or was not incurred in the
ordinary course of business consistent with the Company's past practices since
the Balance Sheet Date.
L. NO MISREPRESENTATION. No representation or warranty of the
Company contained in this Agreement, any schedule, annex or exhibit hereto or
any agreement, instrument or certificate furnished by the Company to Buyer
pursuant to this Agreement, contains any
-5-
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, not
misleading.
IV. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
A. RESTRICTIVE LEGEND. Buyer acknowledges and agrees that,
upon issuance pursuant to this Agreement, the Shares shall have endorsed thereon
a legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the Shares):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE, AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE
SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER
LAWS."
B. FILINGS. The Company shall make all necessary SEC, Nasdaq
and "blue sky" filings required to be made by the Company in connection with the
sale of the Shares as contemplated under the terms of this Agreement, and as
required by all applicable laws and the Rules of The Nasdaq Stock Market, Inc.,
and shall provide copies thereof to the Buyer promptly after such filing.
C. REPORTING STATUS. So long as the Buyer beneficially owns
any of the Shares, the Company shall use its best efforts timely to file all
reports required to be filed by it with the Commission pursuant to Section 13 or
15(d) of the Exchange Act.
D. LISTING. Except to the extent the Company lists its Common
Stock on The New York Stock Exchange or the Nasdaq National Market System, the
Company shall use its best efforts to maintain its listing of the Common Stock
on the NASDAQ.
V. TRANSFER AGENT INSTRUCTIONS.
The Company undertakes and agrees that no instruction other
than the instructions referred to in this Section V and customary stop transfer
instructions prior to the registration and sale of the Shares pursuant to an
effective Securities Act registration statement will be given to its transfer
agent for the Shares and that the Shares otherwise shall be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement, the Registration Agreement and applicable law. Nothing contained in
this Section V shall affect in any way Buyer's obligations and agreement to
comply with all applicable securities laws upon resale of such Shares. If, at
any time, Buyer provides the Company with an opinion of counsel reasonably
satisfactory to the Company that registration of the resale by Buyer of such
Shares is
-6-
<PAGE>
not required under the Securities Act and that the removal of restrictive
legends is permitted under applicable law, the Company shall permit the transfer
of such Shares and, promptly instruct the Company's transfer agent to issue one
or more certificates for Common Stock without any restrictive legends endorsed
thereon.
VI. DELIVERY INSTRUCTIONS.
The Shares shall be delivered by the Company on the Delivery
Date.
VII. DELIVERY DATE.
The date and time of the issuance and sale of the Shares (the
"Delivery Date") shall be the later of: (i) May 8, 2000; PROVIDED, that Buyer
has delivered the Services to the Company in accordance with the terms of the
Web Agreement; or (ii) such other date as shall be mutually agreed upon in
writing by the Company and the Buyer. The issuance and sale of the Shares shall
occur on the Delivery Date at the offices of Nixon Peabody LLP, 437 Madison
Avenue, New York, New York.
VIII. SURVIVAL; INDEMNIFICATION.
A. The representations, warranties and covenants made by each
of the Company, on the one hand, and Buyer on the other hand, in this Agreement,
the annexes, schedules and exhibits hereto and in each instrument, agreement and
certificate entered into and delivered by them pursuant to this Agreement, shall
survive the consummation of the transactions contemplated hereby. In the event
of a breach or violation of any of such representations, warranties or
covenants, the party to whom such representations, warranties or covenants have
been made shall have all rights and remedies for such breach or violation
available to it under the provisions of this Agreement or otherwise, whether at
law or in equity, irrespective of any investigation made by or on behalf of such
party on or prior to the Closing Date.
B. The Company hereby agrees to indemnify and hold harmless
the Buyer, its Affiliates and their respective officers, directors, partners and
members (collectively, the "Buyer Indemnitees"), from and against any and all
losses, claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "Losses"), and agrees to reimburse the Buyer Indemnitees for all
out-of-pocket expenses (including the reasonable fees and expenses of legal
counsel), in each case promptly as incurred by the Buyer Indemnitees and to the
extent arising out of or in connection with:
1. any misrepresentation, omission of fact or breach of any of
the Company's representations or warranties contained in this Agreement, the
annexes, schedules or exhibits hereto or any instrument, agreement or
certificate entered into or delivered by the Company pursuant to this Agreement;
or
-7-
<PAGE>
2. any failure by the Company to perform in any material
respect any of its covenants, agreements, undertakings or obligations set forth
in this Agreement, the annexes, schedules or exhibits hereto or any instrument,
agreement or certificate entered into or delivered by the Company pursuant to
this Agreement.
C. Buyer hereby agrees to indemnify and hold harmless the
Company, its Affiliates and their respective officers, directors, partners and
members (collectively, the "Company Indemnitees"), from and against any and all
Losses, and agrees to reimburse the Company Indemnitees for all out-of-pocket
expenses (including the reasonable fees and expenses of legal counsel), in each
case promptly as incurred by the Company Indemnitees and to the extent arising
out of or in connection with:
1. any misrepresentation, omission of fact, or breach of any
of Buyer's representations or warranties contained in this Agreement,
the annexes, schedules or exhibits hereto or any instrument, agreement
or certificate entered into or delivered by Buyer pursuant to this
Agreement; or
2. any failure by Buyer to perform in any material respect any
of its covenants, agreements, undertakings or obligations set forth in
this Agreement or any instrument, certificate or agreement entered into
or delivered by Buyer pursuant to this Agreement.
D. Promptly after receipt by either party hereto seeking
indemnification pursuant to this Section XI (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section XI is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel (together with appropriate local counsel) and to
participate in the defense of such Claim, and the Indemnifying Party shall bear
the reasonable fees, out-of- pocket costs and expenses of such separate legal
counsel to the Indemnified Party if (and only if): (x) the Indemnifying Party
shall have agreed to pay such fees, out-of-pocket costs and expenses, (y) the
Indemnified Party and the Indemnifying Party reasonably shall have concluded
that representation of the Indemnified Party and the Indemnifying Party by the
same legal counsel would not be appropriate due to actual or, as reasonably
determined by legal counsel to the Indemnified Party, (i) potentially differing
interests between such parties in the conduct of the defense of such Claim, or
(ii) if there may be legal defenses available to the Indemnified Party that are
in addition to or disparate from those available to the Indemnifying Party and
which can not be presented by counsel to the Indemnifying Party, or (z) the
Indemnifying Party shall have failed to employ legal counsel reasonably
satisfactory to the Indemnified Party within a reasonable period of time after
notice of
-8-
<PAGE>
the commencement of such Claim. If the Indemnified Party employs separate legal
counsel in circumstances other than as described in clauses (x), (y) or (z)
above, the fees, costs and expenses of such legal counsel shall be borne
exclusively by the Indemnified Party. Except as provided above, the Indemnifying
Party shall not, in connection with any Claim in the same jurisdiction, be
liable for the fees and expenses of more than one firm of legal counsel for the
Indemnified Party (together with appropriate local counsel). The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party
(which consent shall not unreasonably be withheld), settle or compromise any
Claim or consent to the entry of any judgment that does not include an
unconditional release of the Indemnified Party from all liabilities with respect
to such Claim or judgment.
E. In the event one party hereunder should have a claim for
indemnification that does not involve a claim or demand being asserted by a
third party, the Indemnified Party promptly shall deliver notice of such claim
to the Indemnifying Party. If the Indemnified Party disputes the claim, such
dispute shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.
IX. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, without regard to the
conflicts of law principles of such state. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on FORUM NON CONVENIENS, to the bringing of any such
proceeding in such jurisdictions. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
X. NOTICES.
Except as may be otherwise provided herein, any notice or
other communication or delivery required or permitted hereunder shall be in
writing and shall be delivered personally or sent by certified mail, postage
prepaid, or by a nationally recognized overnight courier service,
-9-
<PAGE>
and shall be deemed given when so delivered personally or by overnight courier
service, or, if mailed, three (3) days after the date of deposit in the United
States mails, as follows:
(1) if to the Company, to: (3) if to Buyer, to
Med-Emerg International, Inc. Tadeo E-Commerce Corp.
2550 Argentia Road, Suite 205 5 Hanover Square
Mississauga, Ontario New York, NY 10004
Canada L5N 5R1 Attention: Damon Testaverde, President
Attention: Katherine Gamble
With a copy to: With a copy to:
Gersten, Savage & Kaplowitz LLP Nixon Peabody LLP
101 East 52nd Street 437 Madison Avenue
New York, New York 10022 New York, New York 10022-7001
Attention: Arthur Marcus, Esq. Attention: Peter W. Rothberg, Esq.
The Company or Buyer may change its foregoing address by
notice given pursuant to this Section XII.
XI. CONFIDENTIALITY.
Each of the Company and Buyer agrees to keep confidential and
not to disclose to or use for the benefit of any third party the terms of this
Agreement or any other information which at any time is communicated by the
other party as being confidential without the prior written approval of the
other party; PROVIDED, HOWEVER, that this provision shall not apply to
information which, at the time of disclosure, is already part of the public
domain (except by breach of this Agreement) and information which is required to
be disclosed by law (including, without limitation, pursuant to Item 10 of Rule
601 of Regulation S-K under the Securities Act and the Exchange Act).
XII. ASSIGNMENT.
This Agreement shall not be assignable by any of the parties
hereto prior to the Closing without the prior written consent of the other
party, and any attempted assignment contrary to the provisions hereby shall be
null and void; PROVIDED, HOWEVER, that Buyer may assign its rights and
obligations hereunder, in whole or in part, to any affiliate of Buyer who
furnishes to the Company the representations and warranties set forth in Section
II hereof and otherwise agrees to be bound by the terms of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement on the date first above written.
MED-EMERG INTERNATIONAL, INC.
By:/s/Ramesh Zacharias
------------------------------------
Name: Ramesh Zacharias
Title: Chief Executive Officer and
President
TADEO E-COMMERCE CORP.
By:/s/Alexander Kalpaxis
------------------------------------
Name: Alexander Kalpaxis
Title: Executive Vice President
Exhibit 10.20
REGISTRATION RIGHTS AGREEMENT
DATED AS OF NOVEMBER 5, 1999
BY AND BETWEEN
MED-EMERG INTERNATIONAL, INC.
AND
TADEO E-COMMERCE CORP.
This Registration Rights Agreement (this "Agreement") is made and
entered into as of November 5, 1999, by and between MED-EMERG INTERNATIONAL,
INC. a corporation organized and existing under and by virtue of the laws of
Ontario, Canada (the "Company"), and TADEO E-COMMERCE CORP., a corporation
organized and existing under and by virtue of the laws of the State of Delaware
(the "Investor").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of November 5, 1999, by and among the Company and the Investor (the
"Securities Agreement"). The Company has agreed to provide the Investor the
registration rights with respect to the Registerable Securities, as defined and
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the provision of the Services by Investor under the terms of that
certain Web Design and Consulting Agreement, dated the date hereof, by and
between the Company and the Investor. Unless otherwise separately defined
herein, all capitalized terms used in this Agreement shall have the meanings
ascribed to them as set forth in the Securities Purchase Agreement, of even date
hereof, by and between the Company and the Investor (the "Securities Purchase
Agreement").
The parties hereby agree as follows:
1. SECURITIES SUBJECT TO THIS AGREEMENT
(a) DEFINITIONS. The term "Registerable Securities" means the Shares as
defined in the Securities Purchase Agreement. The term "1933 Act" means the
securities Act of 1933, as amended. The term "1934 Act" means the Securities
Exchange Act of 1934, as amended. The terms "register", "registered", and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the 1933 Act, and
the declaration or ordering of effectiveness of such registration statement or
document.
<PAGE>
(b) RESTRICTED SECURITIES. The Shares are "restricted securities", as
that term is defined in Rule 144 promulgated under the 1933 Act (the "Restricted
Securities"). For the purposes of this Agreement, any Registerable Security will
cease to be a Restricted Security when (i) a registration statement covering
such Restricted Security has been declared effective by the United States
Securities and Exchange Commission (the "Commission"), and the Restricted
Security has been disposed of pursuant to such effective registration statement;
(ii) it can be distributed to the public pursuant to Rule 144(k) (or any similar
provision then in force) under the 1933 Act; or (iii) it is exchanged (without
additional cost, expense or tax liability to the Investor) for an identical or
substantially identical security which is or has been registered under the 1933
Act or may be sold and disposed of without an effective registration statement
under the 1933 Act.
(c) REGISTERABLE SECURITIES. As to any particular Registerable
Security, such security will cease to be a Registerable Security when it ceases
to be a Restricted Security.
(d) HOLDERS OF REGISTERABLE SECURITIES. A Person is deemed to be a
holder of Registerable Securities whenever such Person owns Registerable
Securities or has a right to acquire such Registerable Securities, whether or
not such acquisition has actually been effected; PROVIDED, that in no event will
any Registerable Security be deemed to be owned by more than one Person.
(e) STOCK SPLITS, DIVIDENDS, ETC. The provisions of this Agreement
shall apply to any shares or other securities resulting from any stock split or
reverse split, stock dividend, reclassification of the capital stock of the
Company, consolidation or reorganization of the Company, and any shares or other
securities of the Company or of any successor company which may be received by
the Investor by virtue of its ownership of Registerable Securities.
2. REQUIRED REGISTRATION
(a) DEMAND REGISTRATION. (i) If the Company is then eligible to file
with the SEC a registration statement on Form S-3, the Company agrees to file
within 30 days of the written request of Investor, and (ii) if the Company is
not then eligible to file with the SEC a registration statement on Form S-3 the
Company agrees to file within 60 days of the written request of Investor, one
"shelf" registration statement on any appropriate form pursuant to Rule 415
under the 1933 Act and/or any similar rule that may be adopted by the SEC with
respect to the Registerable Securities (the "Shelf Registration"). The Company
agrees to use its best efforts to have the Shelf Registration declared effective
as soon as reasonably practicable after such filing, and to keep the Shelf
Registration continuously effective (x) for a period of three (3) years in the
case of subprovision (i) above and (y) for a period of nine (9) months in the
case of subprovision (ii) above, in either case with respect to the Shares (or,
if for any reason the effectiveness of the Shelf Registration is suspended, such
period shall be extended by the aggregate number of days of each such
suspension), following the date on which the Shelf Registration is declared
effective; PROVIDED, HOWEVER, that the effectiveness of the Shelf Registration
may be terminated earlier with respect to any issue of securities if and to the
extent that none of the securities of such issue registered therein are
Restricted Securities or are outstanding.
-2-
<PAGE>
The Company further agrees if necessary, to supplement or
amend any Shelf Registration, as required by the registration form utilized by
the Company or by the instructions applicable to such registration form or by
the 1933 Act or the rules and regulations thereunder, and the Company agrees to
furnish to the holders of Registerable Securities copies of any such supplement
or amendment prior to its being used and/or filed with the SEC. The Company
agrees to pay all of its Registration Expenses (as hereinafter defined) in
connection with the Shelf Registration, whether or not it becomes effective.
The holders of the Registerable Securities to be registered
shall pay, PRO RATA, all underwriting discounts and commissions or placement
fees of any investment banker or bankers and/or manager or managers used in
connection with the sale of their Registerable Securities pursuant to the
Registration Statement.
(b) PIGGY-BACK REGISTRATION
(i) In the event that the Company proposes to register any
shares of its common stock (the "Common Stock"), under the 1933 Act, other than
(i) pursuant to a registration statement on Forms S-4 or S-8 or any successor to
such Forms and (ii) other than pursuant to Section 2(a) above, for the purpose
of the sale of Common Stock by the Company for its own account, or of Common
Stock owned by any present or future holder of Common Stock, or any other
obligation of the Company to register securities on Form S-1, S-2 or S-3, or any
successor to such Forms, the Company shall mail or deliver to all holders of
Registerable Securities, at least 10 days prior to the filing with the SEC of
the registration statement covering such Common Stock, a written notice (a
"Registration Notice") of its intention so to register such Common Stock.
(ii) In the event that a Registration Notice shall have been
so mailed or delivered, each holder of Registerable Securities may elect to
include in such registration statement such percentage of its Registerable
Securities as equals the percentage derived by adding all of the shares of
Common Stock registered on behalf of each of the holders on whose behalf such
registration statement is being filed (excluding the holders of Registerable
Securities) and dividing such number by the total number of shares of Common
Stock owned by such holders (excluding the holders of Registerable Securities).
To the extent that a holder of Registerable Securities chooses to include such
Registerable Securities as it is entitled to include pursuant to the preceding
sentence such holder shall mail or deliver to the Company, a written notice (a
"Supplemental Notice") (A) specifying the number of shares of Registerable
Securities proposed to be sold or otherwise transferred by such holder, (B)
describing the proposed manner of sale or other transfer thereof under the
Securities Act; PROVIDED, HOWEVER, that such Supplemental Notice shall be so
mailed or delivered by such holder not more than 5 days after the date of
delivery to such holder of a Registration Notice.
3. HOLDBACK AGREEMENT; RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTERABLE
SECURITIES.
-3-
<PAGE>
In connection with the piggyback registration statement referred to in
Section 2 above, to the extent not inconsistent with applicable law, each holder
of Registerable Securities whose securities are included in such registration
statement agrees not to effect any public sale or distribution of the issue
being registered or a similar security of the Company or any securities
convertible into or exchangeable or exercisable for such securities, including a
sale pursuant to Rule 144 under the Act, during the 14 Business Days prior to,
and for such period of time following the effective date not to exceed a 9-month
period as the Company or any managing underwriter of an offering of securities
subject to such piggyback registration may specify, if and to the extent timely
notified of such restriction in writing by the Company, in the case of a
non-underwritten public offering, or by the managing underwriter or
underwriters, in the case of an underwritten public offering, and the Company or
such underwriter(s) provide a written opinion to the effect that earlier sale of
the Registerable Securities would materially, adversely affect the Company's
primary offering of securities.
4. REGISTRATION EXPENSES
Subject to the limitation on expenses provided in Section 2, all
expenses incident to the Company's performance of or compliance with this
Agreement, including, without limitation, all registration and filing fees, all
fees and expenses associated with filings required to be made with the National
Association of Securities Dealers, Inc. ("NASD") and/or The NASDAQ Stock Market
("NASDAQ"), as may be required by the rules and regulations of the NASD or
NASDAQ, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registerable Securities), rating agency fees, printing
expenses (including expenses of printing certificates for the Registerable
Securities in a form eligible for deposit with the Depositary Trust Company and
of printing prospectuses if the printing of prospectuses is requested by a
holder of Registerable Securities), messenger and delivery expenses, internal
expenses (including, without limitation, all, salaries and expenses of their
officers and employees performing legal or accounting duties), fees and expenses
of counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), fees and expenses of other Persons
retained by the Company (all such expenses being herein called "Registration
Expenses") will be borne by the Company; PROVIDED that in no event shall
Registration Expenses include any underwriting discounts, commissions or fees
attributable to the sale of the Registerable Securities.
-4-
<PAGE>
5. FURTHER OBLIGATIONS OF THE COMPANY
(a) The Company shall, as soon as reasonably possible, use its best
efforts to register and qualify the Registrable Securities covered by any
registration statement described herein under such other securities or "blue
sky" laws of such jurisdictions as shall be reasonably requested by the
Investor, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions unless
the Company is already subject to such service in such jurisdiction and except
as may be required by the 1933 Act.
(b) The Company shall as soon, as reasonably possible, furnish to the
Investor (or one broker or agent designated by the Investor) such numbers of
copies of a prospectus in conformity with the requirement of the 1933 Act, and
such other documents as the Investor may reasonably request in order to
facilitate the resale or other disposition of the Registerable Securities owned
by them.
(c) Prior to filing any registration statement pursuant to this
Agreement, the Company shall provide a draft of the registration statement to
the Investor and its counsel within 10 days prior to filing, and the Company
shall use commercially reasonable efforts to include the comments of the
Investor and its counsel in the registration statement.
6. INDEMNIFICATION: CONTRIBUTION
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
each holder of Registerable Securities, its general partners, general partners
of the general partner, limited partners, officers, directors, employees and
agents and each Person who controls such holder (within the meaning of the 1933
Act), against all losses, damages, liabilities (joint or several) and expenses
(including reasonable costs of investigation and legal expenses) arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary prospectus,
or any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus or preliminary prospectus,
in light of the circumstances under which they are made) not misleading, except
insofar as the same are contained in any information with respect to such holder
furnished in writing to the Company by such holder expressly for use therein or
any violation by the Company of the 1933 Act, 1934 Act, or the rules promulgated
thereunder that does not result from conduct by the Persons indemnifiable by the
Company under this Section 6(a). The Company also agrees to reimburse each such
holder and each such officer, director, partner and controlling Person for any
legal or other expenses reasonably incurred by such holder or such officer,
director, partner or controlling person in connection with investigating or
defending any such loss, damage, liability or action to the extent that the same
are not incurred in connection with the proviso of the preceding sentence.
(b) INDEMNIFICATION BY HOLDERS OF REGISTERABLE SECURITIES. In
connection with any registration statement in which a holder of Registerable
Securities is participating, each such holder will furnish to the Company in
writing, such information and affidavits with respect to
-5-
<PAGE>
such holder as the Company reasonably requests for use in connection with any
such registration statement or prospectus and agrees to indemnify, to the extent
permitted by law, the Company, the directors, officers, employees and agents and
each Person who controls the Company (within the meaning of the Act), and any
investment advisor thereof or agent therefor against any losses, damages,
liabilities and expenses resulting from any untrue statement of a material fact
or any omission of a material fact required to be stated in the registration
statement or prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in or failed to be contained in any information or affidavit with
respect to such holder so furnished in writing by such holder specifically for
inclusion therein or resulting from the violation of applicable securities laws
by such holder or its agents in connection with the sale of the Registerable
Securities.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such person of any written notice of the
commencement of any action, suit, proceeding against such person or
investigation thereof made in writing for which such person will claim
indemnification or contribution pursuant to this Agreement and, unless in the
reasonable judgment of counsel to such indemnified party a conflict of interest
may exist between such indemnified party and the indemnifying party with respect
to such claim which would not permit the same counsel to represent the
indemnifying and indemnified parties, permit the indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to such
indemnified party. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim (including as the result of a conflict of
interest which, in the reasonable judgment of counsel to such indemnified party,
does not permit the same counsel to represent the indemnified and indemnifying
parties), it will not be obligated to pay the fees and expenses of more than one
counsel with respect to such claim other than counsel to the indemnifying party.
No indemnifying party will be required to consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation. The
indemnifying party will not be subject to any liability for any settlement made
without its consent. The failure of any indemnified party to give such notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Agreement unless, and only to the extent that, the failure of the
indemnified party to give such notice is (i) deliberate and wilful and (ii)
results in actual harm to the indemnifying party.
(d) CONTRIBUTION. If the indemnification provided for in this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, damages, liabilities or expenses referred to therein by
reason other than that set forth in the exception in the first sentence of
Section 6(a) hereof and Section 6(b) hereof, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions or inactions which resulted in such
-6-
<PAGE>
losses, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 6(c), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by PRO
RATA allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 6, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Sections 6(a) and (b) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 6(d).
In the event that any provision of an indemnification clause
in an underwriting agreement executed by or on behalf of a holder of
Registerable Securities differs from a provision in this Section 6, such
provision in the underwriting agreement shall determine such holder's rights in
respect thereof.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
The Investor may not participate in any underwritten registration with
respect to the Registerable Securities unless it (a) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements (including applicable "lock-up" arrangements described in Section 3
of this Agreement) and (b) agrees to pay its pro rata portion of all
underwriting discounts, commissions and fees.
8. RULE 144
The Company covenants that it will file the reports required to be filed by
it under the 1933 Act and the 1934 Act and the rules and regulations adopted by
the SEC thereunder (or, if it is not required to file such reports, it will make
publicly available such information including information required by Rule
15c2-11 promulgated under the 1934 Act as will enable the holders of
Registerable Securities to sell any Registerable Securities held by them without
registration as described in this Section 8); and it will take such further
action as any holder of Registerable
-7-
<PAGE>
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registerable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (a) Rule 144
under the 1933 Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the reasonable
request of any holder of Registerable Securities, the Company will deliver to
such holder a written statement as to filings made by the Company with the SEC.
9. MISCELLANEOUS
(a) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of holders of at least a
majority of the then outstanding Registerable Securities affected by such
amendment, modification, supplement, waiver or departure.
(b) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made by hand delivery, facsimile (with confirmation back),
nationally recognized overnight courier, or registered first-class mail:
(i) if to a holder of Registerable Securities, at the most current
address, and with a copy to be sent to each additional address given by such
holder to the Company, in writing, with a copy to such holder's counsel, which
current information is as follows:
With a copy to:
Tadeo E-Commerce Corp.
5 Hanover Square
New York, NY 10004
Attention: Damon Testaverde, President
With a copy to:
Nixon Peabody LLP
437 Madison Avenue
New York, New York 10022
Attention: Peter W. Rothberg, Esq.
Telephone #: 212-940-3000
Facsimile: 212-940-3111
-8-
<PAGE>
if to the Company at:
Med-Emerg International, Inc.
2550 Argentia Road, Suite 205
Mississiga, Ontario
Canada L5N 5R1
Attention: Katherine Gamble
Telephone #: (905) 858-1368
Facsimile #: (905) 858-1399
With a copy to:
Gersten Savage & Kaplowitz LLP
101 East 52nd Street
New York, New York 10022
Attention: Arthur Marcus
Telephone #: (212) 752-9700
Facsimile #: (212) 980-5192
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered, upon receipt if delivered
by facsimile, one-day after delivery to overnight courier priority delivery, or
five Business Days after being deposited in the mail, postage prepaid, if
mailed.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties hereto.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within that jurisdiction. The parties hereto agree to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Agreement.
(g) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
-9-
<PAGE>
thereby, it being intended that all of the rights and privileges of the holders
of Registerable Securities shall be enforceable to the fullest extent permitted
by law.
(h) ENTIRE AGREEMENT. This Agreement, together with the Purchase Agreement
the Warrant and the Settlement Agreement, is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement and the Purchase Agreement (including the
exhibits and schedules thereto) supersede all prior agreements, negotiations,
and understandings between the parties with respect to such subject matter.
(i) ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is successfully
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
MED-EMERG INTERNATIONAL, INC.
By:/s/Ramesh Zacharis
-----------------------------
Name: Ramesh Zacharis
Title: Chief Executive Officer and President
THE INVESTOR:
TADEO E-COMMERCE CORP.
By:/s/Alexander Kalpaxis
-----------------------------
Name: Alexander Kalpaxis
Title: Executive Vice President
-11-
Exhibit 10.23
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into on the 15th day of Feb
2000 (the "Effective Date") between EarlyBirdCapital Inc. ("Earlybird" or the
"Consultant") and TekInsight.com, Inc. (the "Company").
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. The Company hereby engages Consultant for the term
specified in Paragraph 2 hereof to render financial consulting and investment
banking advice to the Company upon the terms and conditions set forth herein.
2. This Agreement shall commence on Feb 15, 2000 and continue
for a term of 24 months, provided, however, that the Company may terminate this
agreement at the end of one year upon 30 days prior written notice given to
EarlyBird.
3. During the term of this Agreement, Consultant and
Consultant's affiliates shall provide the Company with such regular and
customary financial consulting advice as is reasonably requested by the Company,
provided that Consultant shall not be required to undertake duties not
reasonably within the scope of this Agreement. It is understood and acknowledged
by the parties that the value of Consultant's advice is not readily
quantifiable, and that although Consultant shall be obligated to render the
advice contemplated by this Agreement upon the reasonable request of the
Company, in good faith, Consultant shall not be obligated to spend any specific
amount of time in so doing. Consultant's duties may include, but will not
necessarily be limited to, providing recommendations concerning the following
financial and related matters:
(a) Rendering advice with regard to regard to internal
operations, including:
(i) the formation of corporate goals and their
implementation;
(ii) the Company's financial structure and its divisions
or subsidiaries;
(iii) securing, when and if necessary and possible,
additional financing through banks and/or insurance
companies; and
(iv) corporate organization and personnel; and
(b) Rendering advice with regard to any of the following
corporate finance matters:
(i) changes in the capitalization of the Company;
(ii) changes in the Company's corporate structure;
<PAGE>
(iii) redistribution of shareholdings of the Company's
stock;
(iv) offerings of securities in public and private
transactions;
(v) alternative uses of corporate assets;
(vi) structure and use of debt; and
(vii) sales of stock by insiders pursuant to Rule 144 or
otherwise.
"Consultant" and "Earlybird" as used herein shall also mean
and refer to any of Consultant's affiliates rendering services here under.
"The Company and TeKInsight" as used herein shall also mean
and refer to any of its subsidiaries or affiliates.
In addition to the foregoing, Consultant agrees to furnish
advice to the Company in connection with (A) the acquisition of and/or merger
with other companies, the sale of the Company itself, or any of its assets,
subsidiaries or affiliates, or similar type of transaction (hereinafter referred
to as a "Transaction"), and (B) financings from financial institutions,
including but not limited to lines of credit, performance bonds, letters of
credit, loans or other financings (hereinafter referred to as a "Bank
Financing").
Consultant shall also render such other financial consulting
and/or investment banking services as may from time to time be agreed upon by
Consultant and the Company.
4. The Company shall pay Consultant the following
compensation:
(a) an annual fee of $90,000 in monthly installments of
$7,500, the first payment due upon
the execution of this Agreement;
(b) upon execution of this Agreement, the Company is issuing
to Earlybird (or its designees) warrants ('Warrants") to purchase 300,000 shares
of the Company's Common Stock, exercisable for a period of five years commencing
from the date of this agreement with respect to 200,000 shares and thirteen
months from the date hereof with respect to 100,000 shares, at an exercise price
equal to the average closing bid price of the Company's common stock over the 5
business day period prior to the date of this agreement. If the Company
terminates this Agreement after 12 months in accordance with paragraph 2 hereof,
the Company may, in its sole discretion, cancel 100,000 of the Warrants that
have been issued. The Warrants are evidenced by a warrant agreement(s) in the
form of Exhibit A hereto.
In addition to the Warrants referred to in paragraph 4(b) the
Company agrees to issue to EarlyBirdCapital or its designees Warrants to
purchase 100,000 shares in each subsidiary of the company created during the
term of this agreement at an exercise price of $1.00 per share. The Warrants
shall have an exercise period of five years from the date of issuance and are
not subject to cancellation. The Warrants shall be in a form substantially
similar to the Warrant in the form of Exhibit A hereto.
-2-
<PAGE>
5. In addition to the above,
(a) In the event Consultant directly or indirectly originates
a Bank Financing, the Company and Consultant will mutually agree on a
satisfactory fee.
(b) If Consultant acts as an underwriter, placement agent or
advisor in the sale or distribution of securities by the Company to the public
or in a private transaction (an "Offering"), Consultant shall receive, as
compensation for services rendered, an amount to be mutually agreed upon.
(c) Fees and expenses payable to Consultant with regard to
fairness opinions and valuations will be determined by mutual agreement at such
time as the nature and terms of such opinions and valuations are affirmed.
All fees to be paid pursuant to this paragraph 5, except as
otherwise agreed in writing, are due and payable to Consultant in cash at the
closing or closings of any transaction. In the event that this Agreement shall
not be renewed, or if this Agreement is terminated for any reason, then
notwithstanding any such non-renewal or termination, Consultant shall be
entitled to receive the full fee provided for hereunder for any transaction
taking place within 24 months of the date hereof for which the discussions or
introductions were initiated during the term of this Agreement.
6. In addition to the fees payable hereunder, and regardless
of whether any transaction set forth in Paragraph 5 is proposed or consummated,
the Company shall reimburse Consultant for all reasonable travel and
out-of-pocket expenses incurred in connection with the services performed by
Consultant pursuant to this Agreement, promptly after submission to the Company
of appropriate evidence of such expenditures. All such expenditures in excess of
$500 will be submitted to the Company for approval in advance.
7. (a) The Company acknowledges that all opinions and advice
(written or oral) given by Consultant to the Company in connection with
Consultant's engagement are intended solely for the benefit and use of the
Company in considering the transaction to which they relate, and the Company
agrees that no person or entity other than the Company shall be entitled to make
use of or rely upon the advice of Consultant to be given hereunder, and no such
opinion or advice shall be used for any manner or for any purpose, nor may the
Company make any public references to Consultant, or use the Consultant's name
in any annual reports or any other reports or releases of the Company, without
Consultant's prior written consent.
(b) The Company acknowledges that Consultant makes no
commitment to make a market in the Company's securities, to recommend or advise
its clients to purchase the Company's securities, or to prepare research or
corporate finance reports.
8. Consultant will hold in confidence any confidential
information which the Company provides to Consultant pursuant to this Agreement
which is designated by an appropriate stamp or legend as being confidential.
Notwithstanding the foregoing, Consultant shall not be required to maintain
confidentiality with respect to information (i) which is or becomes part of the
public domain not due to the breach of this Agreement by Consultant; (ii) of
which it had independent knowledge prior to disclosure; (iii) which comes into
the possession of
-3-
<PAGE>
Consultant in the normal and routine course of its own business from and through
independent non-confidential sources; or (iv) which is required to be disclosed
by Consultant by laws, rules or regulators. If Consultant is requested or
required to disclose any confidential information supplied to it by the Company,
Consultant shall, unless prohibited by law, promptly notify the Company of such
request(s) so that the Company may seek an appropriate protective order.
9. The Company acknowledges that Consultant or its affiliates
are in the business of providing financial services and consulting advice to
others. Nothing herein contained shall be construed to limit or restrict
Consultant in conducting such business with others, or in rendering such advice
to others.
10. The Company recognizes and confirms that, in advising the
Company hereunder, Consultant will use and rely on data, material and other
information furnished to Consultant by the Company, without independently
verifying the accuracy, completeness or veracity of same.
11. The Company agrees to indemnify and hold harmless
Earlybird, its employees, agents, representatives and controlling persons from
and against any and all losses, claims, damages, liabilities, suits, actions,
proceedings, costs and expenses (collectively, "Damages"), including, without
limitation, reasonable attorney fees and expenses, as and when incurred, if such
Damages were directly or indirectly caused by, relating to, based upon or
arising out of the rendering by Earlybird of services pursuant to this
Agreement, so long as Earlybird shall not have engaged in intentional or willful
misconduct, or shall have acted grossly negligently, in connection with the
services provided which form the basis of the claim for indemnification;
provided, however, that (a) the Company receives prompt written notification of
any claim for which it is being requested to provide indemnification pursuant to
this Section, (b) the Company may assume, in a prompt fashion, sole control of
the defense or settlement of such a claim, including the right to choose counsel
for such defense or settlement, provided, however, that in the event that
counsel chosen by Company has a conflict of interest in defending Consultant,
Consultant may at the Company's expense choose its own counsel and (c) the
Company receives, at its expense, such reasonable assistance from Consultant as
the Company may request. In the event that the Company assumes sole control of
the defense or settlement of such claim, Consultant may, at its expense,
participate in such defense or settlement. This paragraph shall survive the
termination of this Agreement.
12. Consultant shall perform its services hereunder as an
independent contractor and not as an employee or agent of the Company or any
affiliate thereof. Consultant shall have no authority to act for, represent or
bind the Company or any affiliate thereof in any manner, except as may be
expressly agreed to by the Company in writing from time to time.
13. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. No provision of this
Agreement may be amended, modified or waived, except in writing signed by both
parties. This Agreement shall be binding upon and inure to the benefit of each
of the parties and their respective successors, legal representatives and
assigns. This Agreement may be executed in counterparts. In the event of any
dispute under this Agreement, then and in such event, each party agrees that the
same shall be submitted to the American Arbitration Association ("AAA") in the
City of New York or nearest city, for its
-4-
<PAGE>
decision and determination in accordance with its rules and regulations then in
effect. Each of the parties agrees that the decision and/or award made by the
AAA may be entered as judgment of the Courts of the State of New York, and shall
be enforceable as such. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
EarlyBirdCapital Inc. Tekinsight.com, Inc.
By:/s/Steven A. Levine By:/s/Alexander Kalpaxis
------------------------------ -------------------------------
Title: Executive Vice President Title:Chief Technology Officer and Chairman
--------------------------- -----------------------------
------------------------ ------------------------
-5-
Exhibit 10.24
THE REGISTERED HOLDER OF THIS WARRANT, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT
SELL, TRANSFER OR ASSIGN THIS WARRANT
EXCEPT AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, FEBRUARY 15, 2005
WARRANT
FOR THE PURCHASE OF 200,000 SHARES OF COMMON STOCK
OF
TEKINSIGHT.COM, INC.
1. WARRANT.
THIS CERTIFIES THAT, in consideration of $10.00 and other good and valuable
consideration, duly paid by or on behalf of EarlyBirdCapital Inc. ("EBC" or
"Holder"), as registered owner of this Warrant, to TekInsight.Com, Inc.
("Company"), Holder is entitled, at or before 5:00 p.m., Eastern Time on
February 15, 2005 ("Expiration Date"), but not thereafter, to subscribe for,
purchase and receive, in whole or in part, up to Two Hundred Thousand (200,000)
shares of Common Stock of the Company ("Common Stock") in accordance with
Section 2.4 hereof. If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Warrant may be exercised
on the next succeeding day which is not such a day in accordance with the terms
herein. During the period ending on the Expiration Date, the Company agrees not
to take any action that would terminate the Warrant. This Warrant is exercisable
at a price equal to the closing bid price of the Common Stock on February 14,
2000; provided, however, that upon the occurrence of any of the events specified
in Section 6 hereof, the rights granted by this Warrant, including the exercise
price and the number of shares of Common Stock to be received upon such
exercise, shall be adjusted as therein specified. The term "Exercise Price"
shall mean the initial exercise price or the adjusted exercise price, depending
on the context, of a share of Common Stock. The term "Securities" shall mean the
shares of Common Stock issuable upon exercise of this Warrant.
2. EXERCISE.
2.1 EXERCISE FORM. In order to exercise this Warrant, the exercise form
attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
Securities being purchased. If the subscription rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.
2.2 LEGEND. Each certificate for Securities purchased under this Warrant
shall bear a legend as follows, unless such Securities have been registered
under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act") or applicable state law.
The securities may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act, or
pursuant to an exemption from registration under the Act and applicable state
law."
<PAGE>
2.3 CONVERSION RIGHT.
2.3.1 DETERMINATION OF AMOUNT. In lieu of the payment of the Exercise
Price in cash, the Holder shall have the right (but not the obligation) to
convert this Warrant, in whole or in part, into Common Stock ("Conversion
Right"), as follows: upon exercise of the Conversion Right, the Company shall
deliver to the Holder (without payment by the Holder of any of the Exercise
Price) that number of shares of Common Stock equal to the quotient obtained by
dividing (x) the "Value" (as defined below) of the portion of the Warrant being
converted at the time the Conversion Right is exercised by (y) the Market Price.
The "Value" of the portion of the Warrant being converted shall equal the
remainder derived from subtracting (a) the Exercise Price multiplied by the
number of shares of Common Stock being converted from (b) the Market Price of
the Common Stock multiplied by the number of shares of Common Stock being
converted. As used herein, the term "Market Price" at any date shall be deemed
to be the last reported sale price of the Common Stock on such date, or, in case
no such reported sale takes place on such day, the average of the last reported
sale prices for the immediately preceding three trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or if any such exchange
on which the Common Stock is listed is not its principal trading market, the
last reported sale price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the Nasdaq National Market or SmallCap Market,
or, if applicable, the OTC Bulletin Board, or if the Common Stock is not listed
or admitted to trading on any of the foregoing markets, or similar organization,
as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
2.3.2 EXERCISE OF CONVERSION RIGHT. The Conversion Right may be
exercised by
the Holder on any business day on or after the Warrant is exercisable and not
later than the Expiration Date by delivering the Warrant with a duly executed
exercise form attached hereto with the conversion section completed to the
Company, exercising the Conversion Right and specifying the total number of
shares of Common Stock the Holder will purchase pursuant to such conversion.
2.4 EXERCISE SCHEDULE. This Warrant may be exercised to the extent of
200,000 shares of Common Stock on or after February 15, 2000.
3. TRANSFER.
3.1 GENERAL RESTRICTIONS. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
immediately transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.
3.2 RESTRICTIONS IMPOSED BY THE SECURITIES ACT. This Warrant and the
Securities underlying this Warrant shall not be transferred unless and until (i)
the Company has received the opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the Act,
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Securities has been filed by the Company and declared effective
by the Securities and Exchange Commission and compliance with applicable state
law.
-2-
<PAGE>
4. NEW WARRANTS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in Section 3
hereof, this Warrant may be exercised or assigned in whole or in part. In the
event of the exercise or assignment hereof in part only, upon surrender of this
Warrant for cancellation, together with the duly executed exercise or assignment
form and funds (or conversion equivalent) sufficient to pay any Exercise Price
and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Warrant of like tenor to this Warrant in the name of the
Holder evidencing the right of the Holder to purchase the aggregate number of
shares of Common Stock and Warrants purchasable hereunder as to which this
Warrant has not been exercised or assigned.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant and of
reasonably satisfactory indemnification, the Company shall execute and deliver a
new Warrant of like tenor and date. Any such new Warrant executed and delivered
as a result of such loss, theft, mutilation or destruction shall constitute a
substitute contractual obligation on the part of the Company.
5. REGISTRATION RIGHTS.
5.1 "PIGGY-BACK" REGISTRATION.
5.1.1 GRANT OF RIGHT. The Holders of this Warrant shall have the right
for a period of seven years from the Commencement Date to include all or any
part of this Warrant and the shares of Common Stock underlying this Warrant
(collectively, the "Registrable Securities") as part of any registration of
securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-8 or
any equivalent form); provided, however, that if, in the written opinion of the
Company's managing underwriter or underwriters, if any, for such offering (the
"Underwriter"), the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Holders until 90 days after the registration statement for such offering
has become effective; and provided further that, if any securities are
registered for sale on behalf of other stockholders in such offering and such
stockholders have not agreed to defer such sale until the expiration of such 90
day period, the number of securities to be sold by all stockholders in such
public offering during such 90 day period shall be apportioned PRO RATA among
all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company proposed
to be sold by said selling stockholders, including all holders of the
Registrable Securities.
5.1.2 TERMS. The Company shall bear all fees and expenses attendant to
registering the Registrable Securities, including any filing fees payable to the
National Association of Securities Dealers, Inc., but the Holders shall pay any
and all underwriting commissions and the expenses of any legal counsel selected
by the Holders to represent them in connection with the sale of the Registrable
Securities. In the event of such a proposed registration, the Company shall
furnish the then Holders of outstanding Registrable Securities with not less
than thirty days written notice prior to the proposed date of filing of such
registration statement. Such notice to the Holders shall continue to be given
for each registration statement filed by the Company until such time as all of
the Registrable Securities have been sold by the Holder. The Holders will
provide the Company with such information about the Holder and the distribution
of the Registrable Securities as may be reasonably requested by the Company to
comply with its obligations under the securities laws. The Holders of the
Registrable Securities shall exercise the "piggy-back" rights provided for
herein by giving written notice, within ten days of the receipt of the Company's
notice, by certified mail, of its intention to file a registration statement;
provided that no such
-3-
registration statement shall need to be maintained effective for longer than 9
months, unless the registration statement was filed on S-3 or a successor form.
The Company shall cause any registration statement filed pursuant to the above
"piggyback" rights to remain effective until all Registrable Securities
thereunder have been sold, or are freely saleable, without restriction, under an
exemption from the registration requirements. Nothing contained in this Warrant
shall be construed as requiring any Holder to exercise this Warrant or any part
thereof prior to the initial filing of any registration statement or the
effectiveness thereof.
5.2 GENERAL TERMS
5.2.1 INDEMNIFICATION.
(a) The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement hereunder and any
underwriter or person deemed to be an underwriter under the Act and each person,
if any, who controls such Holders or underwriters or persons deemed to be
underwriters within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss,
claim, damage, expense or liability (including all reasonable attorneys' fees
and other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under the
Act, the Exchange Act or otherwise, arising from such registration statement.
The Holder(s) of the Registrable Securities to be sold pursuant to such
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holders,
in writing, for specific inclusion in such registration statement.
(b) If any action is brought against a party hereto, ("Indemnified
Party") in respect of which indemnity may be sought against the other party
("Indemnifying Party"), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such action and Indemnifying
Party shall assume the defense of such action, including the employment and
reasonable fees and expenses of counsel reasonably satisfactory to the
Indemnified Party. Such Indemnified Party shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employment of
such counsel shall have been authorized in writing by Indemnifying Party in
connection with the defense of such action, or (ii) Indemnifying Party shall not
have employed counsel to defend such action, or (iii) such Indemnified Party
shall have been reasonably advised by counsel that there may be one or more
legal defenses available to it which may result in a conflict between the
Indemnified Party and Indemnifying Party (in which case Indemnifying Party shall
not have the right to direct the defense of such action on behalf of the
Indemnified Party), in any of which events, the reasonable fees and expenses of
not more than one additional firm of attorneys designated in writing by the
Indemnified Party shall be borne by Indemnifying Party. Notwithstanding anything
to the contrary contained herein, if Indemnified Party shall assume the defense
of such action as provided above, Indemnifying Party shall not be liable for any
settlement of any such action effected without its written consent.
(c) If the indemnification or reimbursement provided for hereunder
is finally judicially determined by a court of competent jurisdiction to be
unavailable to an Indemnified Party (other than as a consequence of a final
judicial determination of willful misconduct, bad faith or gross negligence of
such Indemnified Party), then Indemnifying Party agrees, in lieu of indemnifying
such Indemnified Party, to contribute to the amount paid or payable by such
Indemnified Party (i) in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by Indemnifying Party on
the one hand and by such Indemnified Party on the other or (ii) if (but only if)
the allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause (i) but also the relative
-4-
<PAGE>
fault of Indemnifying Party and of such Indemnified Party; PROVIDED, HOWEVER,
that in no event shall the aggregate amount contributed by a Holder exceed the
profit, if any, earned by such Holder as a result of the exercise by him of the
Warrants and the sale by him of the underlying shares of Common Stock.
(d) The rights accorded to Indemnified Parties hereunder shall be
in addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise.
5.2.2 EXERCISE OF WARRANTS. Nothing contained in this Warrant shall be
construed as requiring the Holder(s) to exercise their Warrants prior to or
after the initial filing of any registration statement or the effectiveness
thereof.
5.2.3 DOCUMENTS DELIVERED TO HOLDERS. In the event that the registration
of the Company's securities which triggers the Company's requirement to register
the Registrable Securities pursuant to Section 5.2.1. relates to an underwritten
offering, the Company shall furnish to each Holder participating in any of the
foregoing offerings and to each Underwriter of any such offering, if any, a
signed counterpart, addressed to such Holder or Underwriter, of (i) an opinion
of counsel to the Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under any underwriting agreement
related thereto), and (ii) a "cold comfort" letter dated the effective date of
such registration statement (and, if such registration includes an underwritten
public offering, a letter dated the date of the closing under the underwriting
agreement) signed by the independent public accountants who have issued a report
on the Company's financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as any such Holder shall reasonably request.
6. ADJUSTMENTS
6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise
Price and the number of shares of Common Stock underlying this Warrant shall be
subject to adjustment from time to time as hereinafter set forth:
6.1.1 STOCK DIVIDENDS - RECAPITALIZATION, RECLASSIFICATION, SPLIT-UPS.
If, after the date hereof, and subject to the provisions of Section 6.2 below,
the number of outstanding shares of Common Stock is increased by a stock
dividend on the Common Stock payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
issuable on exercise of this Warrant shall be increased in proportion to such
increase in outstanding shares.
6.1.2 AGGREGATION OF SHARES. If after the date hereof, and subject to the
provisions of Section 6.2, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the
-5-
<PAGE>
effective date thereof, the number of shares of Common Stock issuable on
exercise of this Warrant shall be decreased in proportion to such decrease in
outstanding shares.
6.1.3 ADJUSTMENTS IN EXERCISE PRICE. Whenever the number of shares of
Common Stock purchasable upon the exercise of this Warrant is adjusted, as
provided in this Section 6.1, the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
6.1.4 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case of any
reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or which solely affects the
par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Warrant shall have the right thereafter (until the expiration
of the right of exercise of this Warrant) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or other
transfer, by a Holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Warrant immediately prior to such event; and if
any reclassification also results in a change in shares of Common Stock covered
by Sections 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to
Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this
Section 6.1.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
6.1.5 CHANGES IN FORM OF WARRANT. This form of Warrant need
not be changed because of any change pursuant to this Section, and Warrants
issued after such change may state the same Exercise Price and the same number
of shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
6.2 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required to
issue certificates representing fractions of shares of Common Stock upon the
exercise of this Warrant, nor shall it be required to issue scrip or pay cash in
lieu of any fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Common Stock or other securities, properties
or rights.
7. RESERVATION AND LISTING. 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 exercise of this 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 the Warrants
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 and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
-6-
<PAGE>
8. CERTAIN NOTICE REQUIREMENTS.
8.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed as
conferring upon the Holders the right to vote or consent or to receive notice as
a stockholder 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 Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the
Company shall give written notice of such event at least fifteen 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,
conversion or exchange of 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 the closing of the transfer books, as
the case may be.
8.2 EVENTS REQUIRING NOTICE. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution, or (ii)
the Company shall offer to all the holders 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 (iii) a merger or reorganization in which the
Company is not the surviving party, or (iv) a dissolution, liquidation or
winding up of the Company (other than in connection with a consolidation or
merger) or a sale of all or substantially all of its property, assets and
business shall be proposed.
8.3 NOTICE OF CHANGE IN EXERCISE PRICE. The Company shall, promptly after an
event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holders of such event and change ("Price Notice"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Financial Officer.
8.4 TRANSMITTAL OF NOTICES. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, or by facsimile with acknowledgment of receipt by the party
to which notice is given, or on the fifth day after mailing if mailed to the
party to whom notice is to be given, by registered or certified mail, or by
electronic confirmation or return receipt requested, postage prepaid and
properly addressed as follows: (i) if to the registered Holder of this Warrant,
to the address of such Holder as shown on the books of the Company, or (ii) if
to the Company, to its principal executive office.
9. MISCELLANEOUS.
9.1 HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
9.2 ENTIRE AGREEMENT. This Warrant (together with the other agreements and
documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
9.3 BINDING EFFECT. This Warrant shall inure solely to the benefit of
and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
-7-
<PAGE>
9.4 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Warrant shall be governed
by and construed and enforced in accordance with the law of the State of New
York, without giving effect to conflict of laws. Each of the Company and the
Holder hereby agrees that any action, proceeding or claim against it arising out
of, or relating in any way to this Warrant shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Each of the Company and the Holder hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 8 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim.
Each of the Company and the Holder agrees that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
9.5 WAIVER, ETC. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Warrant shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Warrant or any provision hereof or the right of the Company or any Holder
to thereafter enforce each and every provision of this Warrant. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Warrant shall be effective unless set forth in a written instrument executed by
the party or parties against whom or which enforcement of such waiver is sought;
and no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
-8-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer as of the 15th day of February, 2000.
TekInsight.Com, INC.
By:/s/Alexander Kalpaxis
--------------------------------
Name:Alexander Kalpaxis
Title:Chief Technology Officer and Chairman
-9-
<PAGE>
Form to be used to exercise Warrant:
- --------------------------------------------
- --------------------------------------------
- --------------------------------------------
Date: _____________________, 200___
The undersigned hereby elects irrevocably to exercise the within
Warrant and to purchase ________ shares of Common Stock of
_________________________ and hereby makes payment of $____________ (at the rate
of $_________ per share of Common Stock) in payment of the Exercise Price
pursuant thereto. Please issue the Common Stock as to which this Warrant is
exercised in accordance with the instructions given below.
OR
The undersigned hereby elects irrevocably to convert its right to
purchase ____________ shares of Common Stock purchasable under the within
Warrant into __________ shares of Common Stock of
__________________________________________ (based on a "Market Price" of
$________ per share of Common Stock). Please issue the Common Stock in
accordance with the instructions given below.
-----------------------------------
Signature
- ---------------------------
Signature Guaranteed
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING
MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name
----------------------------------------------------------
(Print in Block Letters)
Address ----------------------------------------------------------
<PAGE>
Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the
within Warrant):
FOR VALUE RECEIVED, ________________________________ does hereby sell,
assign and transfer unto _________________________________ the right to purchase
_____________________ shares of Common Stock of
_________________________________ ("Company") evidenced by the within Warrant
and does hereby authorize the Company to transfer such right on the books of the
Company.
Dated:____________________, 200__
-------------------------------------
Signature
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING
MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.
Exhibit 10.25
THE REGISTERED HOLDER OF THIS WARRANT, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT
SELL, TRANSFER OR ASSIGN THIS WARRANT
EXCEPT AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, FEBRUARY 15, 2005
WARRANT
FOR THE PURCHASE OF 200,000 SHARES OF COMMON STOCK
OF
TEKINSIGHT.COM, INC.
1. WARRANT.
THIS CERTIFIES THAT, in consideration of $10.00 and other good and valuable
consideration, duly paid by or on behalf of EarlyBirdCapital Inc. ("EBC" or
"Holder"), as registered owner of this Warrant, to TekInsight.Com, Inc.
("Company"), Holder is entitled, at or before 5:00 p.m., Eastern Time on
February 15, 2005 ("Expiration Date"), but not thereafter, to subscribe for,
purchase and receive, in whole or in part, up to Two Hundred Thousand (200,000)
shares of Common Stock of the Company ("Common Stock") in accordance with
Section 2.4 hereof. If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Warrant may be exercised
on the next succeeding day which is not such a day in accordance with the terms
herein. During the period ending on the Expiration Date, the Company agrees not
to take any action that would terminate the Warrant. This Warrant is exercisable
at a price equal to the closing bid price of the Common Stock on February 14,
2000; provided, however, that upon the occurrence of any of the events specified
in Section 6 hereof, the rights granted by this Warrant, including the exercise
price and the number of shares of Common Stock to be received upon such
exercise, shall be adjusted as therein specified. The term "Exercise Price"
shall mean the initial exercise price or the adjusted exercise price, depending
on the context, of a share of Common Stock. The term "Securities" shall mean the
shares of Common Stock issuable upon exercise of this Warrant.
2. EXERCISE.
2.1 EXERCISE FORM. In order to exercise this Warrant, the exercise form
attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
Securities being purchased. If the subscription rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.
2.2 LEGEND. Each certificate for Securities purchased under this Warrant
shall bear a legend as follows, unless such Securities have been registered
under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act") or applicable state law.
The securities may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act, or
pursuant to an exemption from registration under the Act and applicable state
law."
<PAGE>
2.3 CONVERSION RIGHT.
2.3.1 DETERMINATION OF AMOUNT. In lieu of the payment of the Exercise
Price in cash, the Holder shall have the right (but not the obligation) to
convert this Warrant, in whole or in part, into Common Stock ("Conversion
Right"), as follows: upon exercise of the Conversion Right, the Company shall
deliver to the Holder (without payment by the Holder of any of the Exercise
Price) that number of shares of Common Stock equal to the quotient obtained by
dividing (x) the "Value" (as defined below) of the portion of the Warrant being
converted at the time the Conversion Right is exercised by (y) the Market Price.
The "Value" of the portion of the Warrant being converted shall equal the
remainder derived from subtracting (a) the Exercise Price multiplied by the
number of shares of Common Stock being converted from (b) the Market Price of
the Common Stock multiplied by the number of shares of Common Stock being
converted. As used herein, the term "Market Price" at any date shall be deemed
to be the last reported sale price of the Common Stock on such date, or, in case
no such reported sale takes place on such day, the average of the last reported
sale prices for the immediately preceding three trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or if any such exchange
on which the Common Stock is listed is not its principal trading market, the
last reported sale price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the Nasdaq National Market or SmallCap Market,
or, if applicable, the OTC Bulletin Board, or if the Common Stock is not listed
or admitted to trading on any of the foregoing markets, or similar organization,
as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
2.3.2 EXERCISE OF CONVERSION RIGHT. The Conversion Right may be exercised
by the Holder on any business day on or after the Warrant is exercisable and not
later than the Expiration Date by delivering the Warrant with a duly executed
exercise form attached hereto with the conversion section completed to the
Company, exercising the Conversion Right and specifying the total number of
shares of Common Stock the Holder will purchase pursuant to such conversion.
2.4 EXERCISE SCHEDULE. This Warrant may be exercised to the extent of 200,000
shares of Common Stock on or after February 15, 2000.
3. TRANSFER.
3.1 GENERAL RESTRICTIONS. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
immediately transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.
3.2 RESTRICTIONS IMPOSED BY THE SECURITIES ACT. This Warrant and the
Securities underlying this Warrant shall not be transferred unless and until (i)
the Company has received the opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the Act,
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Securities has been filed by the Company and declared effective
by the Securities and Exchange Commission and compliance with applicable state
law.
-2-
<PAGE>
4. NEW WARRANTS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in Section 3
hereof, this Warrant may be exercised or assigned in whole or in part. In the
event of the exercise or assignment hereof in part only, upon surrender of this
Warrant for cancellation, together with the duly executed exercise or assignment
form and funds (or conversion equivalent) sufficient to pay any Exercise Price
and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Warrant of like tenor to this Warrant in the name of the
Holder evidencing the right of the Holder to purchase the aggregate number of
shares of Common Stock and Warrants purchasable hereunder as to which this
Warrant has not been exercised or assigned.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant and of
reasonably satisfactory indemnification, the Company shall execute and deliver a
new Warrant of like tenor and date. Any such new Warrant executed and delivered
as a result of such loss, theft, mutilation or destruction shall constitute a
substitute contractual obligation on the part of the Company.
5. REGISTRATION RIGHTS.
5.1 "PIGGY-BACK" REGISTRATION.
5.1.1 GRANT OF RIGHT. The Holders of this Warrant shall have the right
for a period of seven years from the Commencement Date to include all or any
part of this Warrant and the shares of Common Stock underlying this Warrant
(collectively, the "Registrable Securities") as part of any registration of
securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-8 or
any equivalent form); provided, however, that if, in the written opinion of the
Company's managing underwriter or underwriters, if any, for such offering (the
"Underwriter"), the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Holders until 90 days after the registration statement for such offering
has become effective; and provided further that, if any securities are
registered for sale on behalf of other stockholders in such offering and such
stockholders have not agreed to defer such sale until the expiration of such 90
day period, the number of securities to be sold by all stockholders in such
public offering during such 90 day period shall be apportioned PRO RATA among
all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company proposed
to be sold by said selling stockholders, including all holders of the
Registrable Securities.
5.1.2 TERMS. The Company shall bear all fees and expenses attendant to
registering the Registrable Securities, including any filing fees payable to the
National Association of Securities Dealers, Inc., but the Holders shall pay any
and all underwriting commissions and the expenses of any legal counsel selected
by the Holders to represent them in connection with the sale of the Registrable
Securities. In the event of such a proposed registration, the Company shall
furnish the then Holders of outstanding Registrable Securities with not less
than thirty days written notice prior to the proposed date of filing of such
registration statement. Such notice to the Holders shall continue to be given
for each registration statement filed by the Company until such time as all of
the Registrable Securities have been sold by the Holder. The Holders will
provide the Company with such information about the Holder and the distribution
of the Registrable Securities as may be reasonably requested by the Company to
comply with its obligations under the securities laws. The Holders of the
Registrable Securities shall exercise the "piggy-back" rights provided for
herein by giving written notice, within ten days of the receipt of the Company's
notice, by certified mail, of its intention to file a registration statement;
provided that no such
-3-
<PAGE>
registration statement shall need to be maintained effective for longer than 9
months, unless the registration statement was filed on S-3 or a successor form.
The Company shall cause any registration statement filed pursuant to the above
"piggyback" rights to remain effective until all Registrable Securities
thereunder have been sold, or are freely saleable, without restriction, under an
exemption from the registration requirements. Nothing contained in this Warrant
shall be construed as requiring any Holder to exercise this Warrant or any part
thereof prior to the initial filing of any registration statement or the
effectiveness thereof.
5.2 GENERAL TERMS
5.2.1 INDEMNIFICATION.
(a) The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement hereunder and any
underwriter or person deemed to be an underwriter under the Act and each person,
if any, who controls such Holders or underwriters or persons deemed to be
underwriters within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss,
claim, damage, expense or liability (including all reasonable attorneys' fees
and other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under the
Act, the Exchange Act or otherwise, arising from such registration statement.
The Holder(s) of the Registrable Securities to be sold pursuant to such
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holders,
in writing, for specific inclusion in such registration statement.
(b) If any action is brought against a party hereto, ("Indemnified
Party") in respect of which indemnity may be sought against the other party
("Indemnifying Party"), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such action and Indemnifying
Party shall assume the defense of such action, including the employment and
reasonable fees and expenses of counsel reasonably satisfactory to the
Indemnified Party. Such Indemnified Party shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employment of
such counsel shall have been authorized in writing by Indemnifying Party in
connection with the defense of such action, or (ii) Indemnifying Party shall not
have employed counsel to defend such action, or (iii) such Indemnified Party
shall have been reasonably advised by counsel that there may be one or more
legal defenses available to it which may result in a conflict between the
Indemnified Party and Indemnifying Party (in which case Indemnifying Party shall
not have the right to direct the defense of such action on behalf of the
Indemnified Party), in any of which events, the reasonable fees and expenses of
not more than one additional firm of attorneys designated in writing by the
Indemnified Party shall be borne by Indemnifying Party. Notwithstanding anything
to the contrary contained herein, if Indemnified Party shall assume the defense
of such action as provided above, Indemnifying Party shall not be liable for any
settlement of any such action effected without its written consent.
(c) If the indemnification or reimbursement provided for hereunder
is finally judicially determined by a court of competent jurisdiction to be
unavailable to an Indemnified Party (other than as a consequence of a final
judicial determination of willful misconduct, bad faith or gross negligence of
such Indemnified Party), then Indemnifying Party agrees, in lieu of indemnifying
such Indemnified Party, to contribute to the amount paid or payable by such
Indemnified Party (i) in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by Indemnifying Party on
the one hand and by such Indemnified Party on the other or (ii) if (but only if)
the allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause (i) but also the relative
-4-
<PAGE>
fault of Indemnifying Party and of such Indemnified Party; PROVIDED, HOWEVER,
that in no event shall the aggregate amount contributed by a Holder exceed the
profit, if any, earned by such Holder as a result of the exercise by him of the
Warrants and the sale by him of the underlying shares of Common Stock.
(d) The rights accorded to Indemnified Parties hereunder shall be
in addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise.
5.2.2 EXERCISE OF WARRANTS. Nothing contained in this Warrant shall be
construed as requiring the Holder(s) to exercise their Warrants prior to or
after the initial filing of any registration statement or the effectiveness
thereof.
5.2.3 DOCUMENTS DELIVERED TO HOLDERS. In the event that the registration
of the Company's securities which triggers the Company's requirement to register
the Registrable Securities pursuant to Section 5.2.1. relates to an underwritten
offering, the Company shall furnish to each Holder participating in any of the
foregoing offerings and to each Underwriter of any such offering, if any, a
signed counterpart, addressed to such Holder or Underwriter, of (i) an opinion
of counsel to the Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under any underwriting agreement
related thereto), and (ii) a "cold comfort" letter dated the effective date of
such registration statement (and, if such registration includes an underwritten
public offering, a letter dated the date of the closing under the underwriting
agreement) signed by the independent public accountants who have issued a report
on the Company's financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as any such Holder shall reasonably request.
6. ADJUSTMENTS
6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise
Price and the number of shares of Common Stock underlying this Warrant shall be
subject to adjustment from time to time as hereinafter set forth:
6.1.1 STOCK DIVIDENDS - RECAPITALIZATION, RECLASSIFICATION,
SPLIT-UPS. If, after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend on the Common Stock payable in shares of Common Stock or by a
split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.
6.1.2 AGGREGATION OF SHARES. If after the date hereof, and subject to the
provisions of Section 6.2, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the
-5-
<PAGE>
effective date thereof, the number of shares of Common Stock issuable on
exercise of this Warrant shall be decreased in proportion to such decrease in
outstanding shares.
6.1.3 ADJUSTMENTS IN EXERCISE PRICE. Whenever the number of shares of
Common Stock purchasable upon the exercise of this Warrant is adjusted, as
provided in this Section 6.1, the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
6.1.4 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case of any
reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or which solely affects the
par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Warrant shall have the right thereafter (until the expiration
of the right of exercise of this Warrant) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or other
transfer, by a Holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Warrant immediately prior to such event; and if
any reclassification also results in a change in shares of Common Stock covered
by Sections 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to
Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The provisions of this
Section 6.1.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
6.1.5 CHANGES IN FORM OF WARRANT. This form of Warrant need not be
changed because of any change pursuant to this Section, and Warrants issued
after such change may state the same Exercise Price and the same number of
shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
6.2 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required to
issue certificates representing fractions of shares of Common Stock upon the
exercise of this Warrant, nor shall it be required to issue scrip or pay cash in
lieu of any fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Common Stock or other securities, properties
or rights.
7. RESERVATION AND LISTING. 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 exercise of this 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 the Warrants
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 and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
-6-
<PAGE>
8. CERTAIN NOTICE REQUIREMENTS.
8.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed as
conferring upon the Holders the right to vote or consent or to receive notice as
a stockholder 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 Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the
Company shall give written notice of such event at least fifteen 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,
conversion or exchange of 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 the closing of the transfer books, as
the case may be.
8.2 EVENTS REQUIRING NOTICE. The Company shall be required to give the notice
described in this Section 8 upon one or more of the following events: (i) if the
Company shall take a record of the holders of its shares of Common Stock for the
purpose of entitling them to receive a dividend or distribution, or (ii) the
Company shall offer to all the holders 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 (iii) a merger or reorganization in which the Company is
not the surviving party, or (iv) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business shall be proposed.
8.3 NOTICE OF CHANGE IN EXERCISE PRICE. The Company shall, promptly after an
event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holders of such event and change ("Price Notice"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Financial Officer.
8.4 TRANSMITTAL OF NOTICES. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, or by facsimile with acknowledgment of receipt by the party
to which notice is given, or on the fifth day after mailing if mailed to the
party to whom notice is to be given, by registered or certified mail, or by
electronic confirmation or return receipt requested, postage prepaid and
properly addressed as follows: (i) if to the registered Holder of this Warrant,
to the address of such Holder as shown on the books of the Company, or (ii) if
to the Company, to its principal executive office.
9. MISCELLANEOUS.
9.1 HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
9.2 ENTIRE AGREEMENT. This Warrant (together with the other agreements and
documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
9.3 BINDING EFFECT. This Warrant shall inure solely to the benefit of and
shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
-7-
<PAGE>
9.4 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Warrant shall be governed
by and construed and enforced in accordance with the law of the State of New
York, without giving effect to conflict of laws. Each of the Company and the
Holder hereby agrees that any action, proceeding or claim against it arising out
of, or relating in any way to this Warrant shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Each of the Company and the Holder hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any process or summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 8 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim.
Each of the Company and the Holder agrees that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
9.5 WAIVER, ETC. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Warrant shall not be deemed or construed
to be a waiver of any such provision, nor to in any way affect the validity of
this Warrant or any provision hereof or the right of the Company or any Holder
to thereafter enforce each and every provision of this Warrant. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Warrant shall be effective unless set forth in a written instrument executed by
the party or parties against whom or which enforcement of such waiver is sought;
and no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
-8-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer as of the 15th day of February, 2000.
TekInsight.Com, INC.
By:/s/Alexander Kalpaxis
-----------------------------------------
Name:/s/Alexander Kalpaxis
Title:Chief Techology Officer and Chairman
<PAGE>
Form to be used to exercise Warrant:
- -------------------------------------
- -------------------------------------
- -------------------------------------
Date: _____________________, 200___
The undersigned hereby elects irrevocably to exercise the within Warrant and
to purchase ________ shares of Common Stock of _________________________ and
hereby makes payment of $____________ (at the rate of $_________ per share of
Common Stock) in payment of the Exercise Price pursuant thereto. Please issue
the Common Stock as to which this Warrant is exercised in accordance with the
instructions given below.
OR
The undersigned hereby elects irrevocably to convert its right to purchase
____________ shares of Common Stock purchasable under the within Warrant into
__________ shares of Common Stock of __________________________________________
(based on a "Market Price" of $________ per share of Common Stock). Please issue
the Common Stock in accordance with the instructions given below.
--------------------------------------
Signature
- ---------------------------
Signature Guaranteed
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP ON A
REGISTERED NATIONAL SECURITIES EXCHANGE.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name --------------------------------------------------------
(Print in Block Letters)
Address --------------------------------------------------------
<PAGE>
Form to be used to assign Warrant:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within
Warrant):
FOR VALUE RECEIVED, ________________________________ does hereby sell, assign
and transfer unto _________________________________ the right to purchase
_____________________ shares of Common Stock of
_________________________________ ("Company") evidenced by the within Warrant
and does hereby authorize the Company to transfer such right on the books of the
Company.
Dated:____________________, 200__
--------------------------------------
Signature
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP ON A
REGISTERED NATIONAL SECURITIES EXCHANGE.
