Exhibit 10.2
COMMON STOCK WARRANT
To Purchase 200,000
Shares of Common Stock of
Grow Biz International, Inc.
July 31, 2000
THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL (WHICH SHALL BE
IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
THIS CERTIFIES THAT, for value received, Rush River Group, LLC, a
Minnesota limited liability company ("RRG") or its registered assigns is
entitled to subscribe for and purchase from Grow Biz International, Inc. (the
"Company"), a Minnesota corporation, at any time after the date hereof to and
including the Expiration Date (as defined in Section 1 hereof), Two Hundred
Thousand (200,000) fully paid and nonassessable shares of the Company's Common
Stock, no par value, at a price of $2.00 per share:
This Warrant is subject to the following provisions, terms and
conditions:
Expiration; Exercise; Transferability.
This Warrant may be exercised in whole or in part, at any time after July
31, 2000 (or if later, the date (i) any approval of the shareholders of the
Company for such exercise required by NASDAQ is obtained or (ii) such
requirement is waived by NASDAQ) to and including the Expiration Date. As used
herein "Expiration Date" shall mean July 31, 2010.
The rights represented by this Warrant may be exercised by the holder
hereof, in whole or in part (but not as to a fractional share of stock), by
written notice of exercise in the form appended hereto delivered to the Company
on or prior to the Expiration Date, ten (10) days prior to the intended date of
exercise and by the surrender of this Warrant (properly endorsed if required) at
the principal office of the Company and upon payment to it of the purchase price
for such shares by certified bank check or wire transfer of funds or by
surrender to the Company of shares of the Company's Common Stock having a fair
market value (as defined in Section 9(d) below) or by cancellation of
indebtedness (including principal and interest) owing to such holder by the
Company equal to the purchase price.
This Warrant may be transferred subject to the opinion of counsel as
provided by paragraph 7 herein that such transfer is not in violation of federal
or state securities laws. In the event of any such transfer, the term "Warrants"
as used hereinbelow shall apply to all of such transferred Warrants, in the
aggregate.
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Issuance of Shares. THE COMPANY AGREES THAT THE SHARES PURCHASED HEREBY
SHALL BE AND ARE DEEMED TO BE ISSUED TO THE RECORD HOLDER HEREOF AS OF THE CLOSE
OF BUSINESS ON THE DATE ON WHICH THIS WARRANT SHALL HAVE BEEN EXERCISED BY
SURRENDER OF THE WARRANT AND PAYMENT FOR THE SHARES. SUBJECT TO THE PROVISIONS
OF THE NEXT SUCCEEDING PARAGRAPH, CERTIFICATES FOR THE SHARES OF STOCK SO
PURCHASED SHALL BE DELIVERED TO THE HOLDER HEREOF WITHIN A REASONABLE TIME, NOT
EXCEEDING TEN (10) DAYS AFTER THE RIGHTS REPRESENTED BY THIS WARRANT SHALL HAVE
BEEN SO EXERCISED, AND, UNLESS THIS WARRANT HAS EXPIRED, A NEW WARRANT
REPRESENTING THE NUMBER OF SHARES, IF ANY, WITH RESPECT TO WHICH THIS WARRANT
SHALL NOT THEN HAVE BEEN EXERCISED SHALL ALSO BE DELIVERED TO THE HOLDER HEREOF
WITHIN SUCH TIME.
Notwithstanding the foregoing, however, the Company shall not be required
to deliver any certificate for shares of stock upon exercise of this
Warrant, except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof.
Covenants of Company. THE COMPANY COVENANTS AND AGREES THAT ALL SHARES
WHICH MAY BE ISSUED UPON THE EXERCISE OF THE RIGHTS REPRESENTED BY THIS WARRANT
WILL UPON RECEIPT OF PAYMENT THEREFOR UPON ISSUANCE, BE DULY AUTHORIZED AND
ISSUED, FULLY PAID, NONASSESSABLE AND FREE FROM ALL TAXES, LIENS AND CHARGES
WITH RESPECT TO THE ISSUE THEREOF. THE COMPANY FURTHER COVENANTS AND AGREES
THAT, DURING THE PERIOD WITHIN WHICH THE RIGHTS REPRESENTED BY THIS WARRANT MAY
BE EXERCISED, THE COMPANY WILL AT ALL TIMES HAVE AUTHORIZED, AND RESERVED FOR
THE PURPOSE OF ISSUE OR TRANSFER UPON EXERCISE OF THE SUBSCRIPTION RIGHTS
EVIDENCED BY THIS WARRANT, A SUFFICIENT NUMBER OF SHARES OF ITS COMMON STOCK TO
PROVIDE FOR THE EXERCISE OF THE RIGHTS REPRESENTED BY THIS WARRANT.
Anti-Dilution Adjustments. THE ABOVE PROVISIONS ARE, HOWEVER, SUBJECT
TO THE FOLLOWING:
In case the Company shall at any time hereafter subdivide or combine the
outstanding shares of common stock or declare a dividend payable in common
stock, the exercise price of this Warrant in effect immediately prior to the
subdivision, combination or record date for such dividend payable in common
stock shall forthwith be proportionately increased, in the case of combination,
or decreased, in the case of subdivision or dividend payable in common stock.
Upon each adjustment of the exercise price, the holder of this Warrant shall
thereafter be entitled to purchase, at the exercise price resulting from such
adjustment, the number of shares obtained by multiplying the exercise price
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the exercise price resulting from such adjustment.
No fractional shares of common stock are to be issued upon the exercise of
this Warrant, but the Company shall pay a cash adjustment in respect of any
fraction of a share which would otherwise be issuable in an amount equal to the
same fraction of the market price per share of common stock on the day of
exercise as determined in good faith by the Company.
(i) If any capital reorganization or reclassification of the capital
stock of the Company shall be effected in such a way that holders of
common stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for common stock, then, as a condition
of such reorganization or reclassification, lawful and adequate
provisions shall be made whereby the holder hereof shall thereafter
have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in this Warrant and in lieu of the
shares of common stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented
hereby, such stock, securities or assets as may be issued or payable
with respect to or in exchange for a number of outstanding shares of
such common stock equal to the number of
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shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had such
reorganization or reclassification not taken place, and in any such
case appropriate provisions shall be made with respect to the rights
and interests of the holder of this Warrant to the end that the
provisions hereof (including without limitation provisions for
adjustments of the Warrant purchase price and of the number of shares
purchasable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.
(ii) In any event any consolidation or merger of the Company or the
sale of all or substantially all of its assets, the Company shall give
the holder of this Warrant notice of any such transaction, which
notice shall be given at least 20 days prior to any record date which
shall be established in connection with any shareholder meeting or
consent solicitation with respect to such transaction.
Notwithstanding any language to the contrary set forth in this
paragraph 4(c), if an occurrence or event described herein shall take
place in which the shareholders of the Company receive cash for their
shares of common stock of the Company and a successor corporation or
corporation purchasing assets shall survive the transaction then, at
the election of the record holder hereof, such corporation shall be
obligated to purchase this Warrant (or the unexercised part hereof)
from the record holder without requiring the holder to exercise all or
part of the Warrant. If such corporation refuses to so purchase this
Warrant then the Company shall purchase the Warrant for cash. In
either case the purchase price shall be the amount per share that
shareholders of the outstanding common stock of the Company shall
receive as a result of the transaction multiplied by the number of
shares than covered by the Warrant, minus the aggregate exercise price
of the Warrant. Such purchase shall be closed within 60 days following
the election of the holder to sell this Warrant.
Upon any adjustment of the Warrant purchase price, then, and in each such
case, the Company shall give written notice thereof, by first class mail,
postage prepaid, addressed to the registered holder of this Warrant at the
address of such holder as shown on the books of the Company, which notice shall
state the Warrant purchase price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
If any event occurs as to which in the good faith determination of the
Board of Directors of the Company the other provisions of this paragraph 4 are
not strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant or of common stock in accordance
with the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
purchase rights as aforesaid.
Common Stock. AS USED HEREIN, THE TERM "COMMON STOCK" SHALL MEAN AND
INCLUDE THE COMPANY'S PRESENTLY AUTHORIZED SHARES OF COMMON STOCK AND SHALL ALSO
INCLUDE ANY CAPITAL STOCK OF ANY CLASS OF THE COMPANY HEREAFTER AUTHORIZED WHICH
SHALL NOT BE LIMITED TO A FIXED SUM OR PERCENTAGE IN RESPECT OF THE RIGHTS OF
THE HOLDERS THEREOF TO PARTICIPATE IN DIVIDENDS OR IN THE DISTRIBUTION,
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DISSOLUTION OR WINDING UP OF THE COMPANY; PROVIDED THAT THE SHARES PURCHASABLE
PURSUANT TO THIS WARRANT SHALL INCLUDE SHARES DESIGNATED AS COMMON STOCK OF THE
COMPANY ON RECLASSIFICATION OF THE OUTSTANDING SHARES THEREOF, THE STOCK,
SECURITIES OR ASSETS PROVIDED FOR IN SECTION 4 ABOVE.
No Voting Rights. THIS WARRANT SHALL NOT ENTITLE THE HOLDER HEREOF TO
ANY VOTING RIGHTS OR OTHER RIGHTS AS A STOCKHOLDER OF THE COMPANY.
Transfer of Warrant or Resale of Shares. IN THE EVENT THE HOLDER OF
THIS WARRANT DESIRES TO TRANSFER THIS WARRANT, OR ANY COMMON STOCK ISSUED UPON
THE EXERCISE HEREOF, THE HOLDER SHALL PROVIDE THE COMPANY WITH A WRITTEN NOTICE
DESCRIBING THEMANNER OF SUCH TRANSFER IN THE FORM APPENDED HERETO AND AN OPINION
OF COUNSEL (REASONABLY ACCEPTABLE TO THE COMPANY) THAT THE PROPOSED TRANSFER MAY
BE EFFECTED WITHOUT REGISTRATION OR QUALIFICATION (UNDER ANY FEDERAL OR STATE
LAW), WHEREUPON SUCH HOLDER SHALL BE ENTITLED TO TRANSFER THIS WARRANT OR TO
DISPOSE OF SHARES OF COMMON STOCK RECEIVED UPON THE PREVIOUS EXERCISE HEREOF IN
ACCORDANCE WITH THE NOTICE DELIVERED BY SUCH HOLDER TO THE COMPANY; PROVIDED,
THAT AN APPROPRIATE LEGEND MAY BE ENDORSED ON THIS WARRANT OR THE CERTIFICATES
FOR SUCH SHARES RESPECTING RESTRICTIONS UPON TRANSFER THEREOF NECESSARY OR
ADVISABLE IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO PREVENT
FURTHER TRANSFERS WHICH WOULD BE IN VIOLATION OF SECTION 5 OF THE SECURITIES
ACT, AS AMENDED (THE "SECURITIES ACT").
If, in the opinion of either of the counsel referred to in this
paragraph 7, the proposed transfer or disposition described in the
written notice given pursuant to this paragraph 7 may not be effected
without registration or qualification of this Warrant or the shares of
common stock issued upon the exercise hereof, the Company shall
promptly give written notice thereof to the holder hereof, and such
holder will limit its activities in respect to such proposed transfer
or disposition as, in the opinion of both such counsel, are permitted
by law.
Registration Rights.
If the Company proposes to claim an exemption under Section 3(b) for a
public offering of any of its securities or to register under the Securities Act
(except by a claim of exemption or registration statement on Form S-8 or Form
S-4 or any form that does not permit the inclusion of shares by its security
holders) any of its securities, and provided that the holders of shares
purchased or purchasable under the Warrants would be unable to sell all of such
shares under Rule 144, the Company will give written notice to all registered
holders of Warrants, and all registered holders of shares of common stock
acquired upon the exercise of Warrants (the "Common Shares") of its intention to
do so and, on the written request of any such registered holders given within
twenty (20) days after receipt of any such notice, the Company will use its best
efforts to cause all Common Shares which such holders shall have requested the
registration or qualification thereof, to be included in such notification or
registration statement proposed to be filed by the Company; provided, however,
that nothing herein shall prevent the Company from, at any time, abandoning or
delaying any such registration initiated by it. If any such registration shall
be underwritten in whole or in part, the Company may require that the shares
requested for inclusion pursuant to this section be included in the underwriting
on the same terms and conditions as the securities otherwise being sold through
the underwriters. In the event that, in the good faith judgment of the managing
underwriter of such public offering, the inclusion of all of the shares
originally covered by a request for registration would reduce the number of
shares to be offered by the Company or interfere with the successful marketing
of the shares of stock offered by the Company, the number of shares otherwise to
be included pursuant to this Section in the underwritten public offering may be
proportionately reduced (among all shareholders seeking registration) to a
number deemed satisfactory by the managing underwriter. Those shares which are
thus excluded from the underwritten public offering shall be withheld
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from the market for a period, not to exceed 90 days from the effective date of
the registration statement, which the managing underwriter reasonably determines
is necessary in order to effect the underwritten public offering. All expenses
of such offering, except the fees of special counsel to such holders and
brokers' commissions or underwriting discounts payable by such holders, shall be
borne by the Company.
Further, provided that the holders of shares purchased or purchasable under
the Warrants would be unable to sell all of such shares under Rule 144, on one
occasion only upon request by the holders of Warrants and/or the holders of
shares issued upon the exercise of the Warrants who collectively (i) have the
right to purchase at least 50% of the shares subject to the Warrants, (ii) hold
directly at least 50% of the shares purchased under the Warrants, or (iii) have
the right to purchase or hold directly an aggregate of at least 50% of the
shares purchasable or purchased under the Warrants, the Company will promptly
take all necessary steps, at the option of such holders, to register or qualify
the sale of the Warrants or such shares by the holders thereof, under the
Securities Act (and, upon the request of such holders, under Rule 415
thereunder) and such state laws as such holders may reasonably request; provided
that (i) such request must be made by the Expiration Date; and (ii) the Company
may delay the filing of any registration statement requested pursuant to this
section to a date not more than sixty (60) days following the date of such
request if in the opinion of the Company's principal investment banker at the
time of such request such a delay is necessary in order not to adversely affect
financing efforts then underway at the Company or if in the opinion of the
Company such a delay is necessary or advisable to avoid disclosure of material
nonpublic information. The costs and expenses directly related to any
registration requested pursuant to this section, including but not limited to
legal fees of the Company's counsel, audit fees, printing expense, filing fees
and fees and expenses relating to qualifications under state securities or blue
sky laws incurred by the Company shall be borne entirely by the Company;
provided, however, that the persons for whose account the securities covered by
such registration are sold shall bear the expenses of underwriting commissions
applicable to their shares and fees of their legal counsel. If the holders of
Warrants and the holders of shares of common stock underlying the Warrants are
the only persons whose shares are included in the registration pursuant to this
section, such holders shall bear the expense of inclusion of audited financial
statements in the registration statement which are not dated as of the Company's
normal fiscal year or are not otherwise prepared by the Company for its own
business purposes. The Company shall keep effective and maintain any
registration, qualification, notification or approval specified in this
paragraph for such period as may be necessary for the holders of the Warrants
and such common stock to dispose thereof, and from time to time shall amend or
supplement, at the holder's expense, the prospectus or offering circular used in
connection therewith to the extent necessary in order to comply with applicable
law. The Company covenants and agrees that it will use its best efforts to meet
the qualifications to use a Form S-3 Registration Statement for the sale of the
shares purchased or purchasable under the Warrants.
If, at the time any written request for registration is received by
the Company pursuant to this Section 8(b), the Company has determined
to proceed with the actual preparation and filing of a registration
statement under the Securities Act in connection with the proposed
offer and sale for cash of any of its securities by it or any of its
security holders, such written request shall be deemed to have been
given pursuant to Section 8(a)
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hereof rather than this Section 8(b), and the rights of the holders of
Warrants and or shares issued upon the exercise of the Warrants
covered by such written request shall be governed by Section 8(a)
hereof.
If and whenever the Company is required by the provisions of Sections 8(a)
or 8(b) hereof to effect the registration of Warrants and/or shares issued upon
the exercise of the Warrants under the Securities Act, the Company will:
Prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities, and use
its diligent, good faith efforts to cause such registration statement to become
and remain effective until the earlier of the date on which all the securities
have been sold or the date the securities may be sold without restriction
pursuant to Rule 144(k) under the Securities Act;
prepare and file with the Commission such amendments to such registration
statement and supplements to the prospectus contained therein as may be
necessary to keep such registration statement effective for the period required
by Section 8(c)(i) above;
provide security holders' counsel with reasonable opportunities to review
and comment on, and otherwise participate in, the preparation of such
registration statement;
furnish to the security holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such security holders and underwriters may
reasonably request in order to facilitate the public offering of such
securities;
use its diligent, good faith efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as such participating holders may reasonably request
in writing within 30 days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified;
notify the security holders participating in such registration, promptly
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;
notify such holders promptly of any request by the Commission for the
amending or supplementing of such registration statement or prospectus or for
additional information;
prepare and file with the Commission, promptly upon the request of any such
holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such holders (and concurred in
by counsel for the Company), is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution of the Warrants
or shares by such holder;
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prepare and promptly file with the Commission and promptly notify such
holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading;
advise such holders, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;
not file any amendment or supplement to such registration statement or
prospectus to which a majority in interest of such holders shall have reasonably
objected on the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or the rules and
regulations thereunder, after having been furnished with a copy thereof at least
five business days prior to the filing thereof, unless in the opinion of counsel
for the Company the filing of such amendment or supplement is reasonably
necessary to protect the Company from any liabilities under any applicable
federal or state law and such filing will not violate applicable law; and
at the request of any such holder, furnish on the effective date of the
registration statement and, if such registration includes an underwritten public
offering, at the closing provided for in the underwriting agreement: (i)
opinions, dated such respective dates, of the counsel representing the Company
for the purposes of such registration, addressed to the underwriters, if any,
and to the holder or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request; and (ii) letters,
dated such respective dates, from the independent certified public accountants
of the Company, addressed to the underwriters, if any, and to the holder or
holders making such request, covering such matters as such underwriters and
holder or holders may reasonably request.
The Company shall pay all Registration Expenses (as defined below) in
connection with the inclusion of Shares in any Registration Statement, or
application to register or qualify Shares under state securities laws, filed by
the Company hereunder, other than as set forth herein. For purposes of this
Agreement, the term "Registration Expenses" means the filing fees payable to the
Commission, any state agency and the National Association of Securities Dealers,
Inc.; the fees and expenses of the Company's legal counsel and independent
certified public accountants in connection with the preparation and filing of
the Registration Statement (and all amendments and supplements thereto) with the
Commission; and all expenses relating to the printing of the Registration
Statement, prospectuses and various agreements executed in connection with the
Registration Statement. Notwithstanding the foregoing, the security holder will
pay the fees and expenses of any legal counsel such holders may engage, as well
as the holder's proportionate share of any custodian fees or commission or
discounts which may be payable to any underwriter.
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The holders of Warrants and/or the holders of shares issued upon the
exercise of the Warrants acknowledge that there may occasionally be times when
the Company must suspend the use of the prospectus forming a part of the
Registration Statement, when there exists material non-public information
relating to the Company (including, but not limited to, an acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction (or
negotiations with respect thereto)) which in the reasonable opinion of the
Company's Board of Directors should not be disclosed. Accordingly, the Company
may suspend resales pursuant to such Registration Statement for a period not to
exceed sixty (60) days in any twenty-four (24) month period if the Company has
been advised by counsel and the Board of Directors reasonably concurs that the
information the Board reasonably believes should not be disclosed is material
and therefore the prospectus forming a part of the Registration Statement is not
current. Each such holder agrees that it shall not sell any Shares pursuant to
said prospectus during the period commencing at the time at which the Company
gives the holder notice of the suspension of such prospectus and ending at the
time the Company gives the holder notice that the holder may thereafter effect
sales pursuant to such prospectus.
The Company hereby indemnifies the holders of this Warrant and of any
common stock issued or issuable hereunder, its officers and directors, and any
person who controls such Warrant holder or such holder of common stock within
the meaning of Section 15 of the Securities Act, against all losses, claims,
damages and liabilities caused by any untrue statement of a material fact
contained in any registration statement, prospectus, notification or offering
circular (and as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus or caused by
any omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission contained in information furnished in writing to the Company by such
Warrant holder or such holder of common stock expressly for use therein, and
each such holder by its acceptance hereof severally agrees that it will
indemnify and hold harmless the Company and each of its officers who signs such
registration statement and each of its directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act with
respect to losses, claims, damages or liabilities which are caused by any untrue
statement or omission contained in information furnished in writing to the
Company by such holder expressly for use therein.
Additional Right to Convert Warrant.
The holder of this Warrant shall have the right to require the Company to
convert this Warrant (the "Conversion Right") at any time prior to its
expiration into shares of Common Stock as provided for in this Section 9. Upon
exercise of the Conversion Right, the Company shall deliver to the holder
(without payment by the holder of any Exercise Price) that number of shares of
Common Stock equal to the quotient obtained by dividing (x) the value of the
Warrant at the time the Conversion Right is exercised (determined by subtracting
the aggregate Exercise Price for the Warrant Shares in effect immediately prior
to the exercise of the Conversion Right from the aggregate Fair Market Value for
the Warrant Shares immediately prior to the exercise of the Conversion Right) by
(y) the Fair Market Value of one share of Common Stock immediately prior to the
exercise of the Conversion Right.
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The Conversion Right may be exercised by the holder, at any time or from
time to time, prior to its expiration, on any business day by delivering a
written notice in the form attached hereto (the "Conversion Notice") to the
Company at the offices of the Company exercising the Conversion Right and
specifying (i) the total number of shares of Common Stock the Warrantholder will
purchase pursuant to such conversion and (ii) a place and date not less than one
nor more than 20 business days from the date of the Conversion Notice for the
closing of such purchase.
At any closing under Section 9(b) hereof, (i) the holder will surrender the
Warrant and (ii) the Company will deliver to the holder a certificate or
certificates for the number of shares of Common Stock issuable upon such
conversion, together with cash, in lieu of any fraction of a share, and (iii)
the Company will deliver to the holder a new warrant representing the number of
shares, if any, with respect to which the warrant shall not have been exercised.
"Fair Market Value" means, with respect to the Company's Common Stock, as
of any date:
if the Common Stock is listed or admitted to unlisted trading privileges on
any national securities exchange or is not so listed or admitted but
transactions in the Common Stock are reported n the NASDAQ National Market
System, the reported closing price of the Common Stock on such exchange or by
the NASDAQ National Market System as of such date (or, if no shares were traded
on such day, as of the next preceding day on which there was such a trade); or
if the Common Stock is not so listed or admitted to unlisted trading
privileges or reported on the NASDAQ National Market System, and bid and asked
prices therefor in the over-the-counter market are reported by the NASDAQ system
or National Quotation Bureau, Inc. (or any comparable reporting service), the
mean of the closing bid and asked prices as of such date, as so reported by the
NASDAQ System, or, if not so reported thereon, as reported by National Quotation
Bureau, Inc. (or such comparable reporting service); or
if the Common Stock is not so listed or admitted to unlisted trading
privileges, or reported on the NASDAQ National Market System, and such bid and
asked prices are not so reported by the NASDAQ system or National Quotation
Bureau, Inc.(or any comparable reporting service), such price as the Company's
Board of Directors determines in good faith in the exercise of its reasonable
discretion.
IN WITNESS WHEREOF, Grow Biz International, Inc. has caused this
Warrant to be executed by its duly authorized officers and this Warrant to be
dated as of July 31, 2000.
GROW BIZ INTERNATIONAL, INC.
By:
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Title:
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EXERCISE FORM
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
GROW BIZ INTERNATIONAL, INC.
The undersigned, the holder of the within warrant, hereby irrevocably
elects to exercise the purchase right represented by such warrant for, and to
purchase thereunder __________ shares of the Common Stock, no par value, of Grow
Biz International, Inc. and herewith makes payment of $_____________ therefor,
and requests that the certificates for such shares be issued in the name of
_______________ and be delivered to whose address is _________________.
Dated:
By:
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(Signature must conform in all respects to
the name of holder as specified on the face
of the warrant)
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ASSIGNMENT FORM
(TO BE SIGNED ONLY UPON TRANSFER OF THE WARRANT)
For value received, the undersigned hereby sells, assigns and transfers
unto those individuals listed on Exhibit A, attached hereto, the right
represented by the within warrant to purchase the number of shares opposite
their names on the attached Exhibit A of Common Stock, no par value, of Grow Biz
International, Inc. to which the within warrant relates, and appoints
_______________ attorney to transfer said right on the books of Grow Biz
International, Inc., with full power of substitution in the premises.
Dated:
By:
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RUSH RIVER GROUP, LLC,
a Minnesota limited liability company
<PAGE>
CONVERSION NOTICE
(TO BE SIGNED ONLY UPON EXERCISE OF CONVERSION
RIGHT SET FORTH IN SECTION 9 OF THE WARRANT)
To Grow Biz International, Inc.:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the Conversion Right set forth in Section 9 of such Warrant
and to surrender for conversion _________ shares of the Common Stock of Grow Biz
International, Inc. and to receive ______ shares of the Common Stock of Grow Biz
International, Inc. The closing of this conversion shall take place at the
offices of the undersigned on _____________________. Certificates for the shares
to be delivered at the closing shall be issued in the name of ______________
whose address is __________________
Dated:
By:
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(Signature must conform in all respects to
the name of holder as specified on the face
of the warrant)
