Exhibit 10.23
Stock Purchase Warrant Dated October 6, 1999 Between
▇▇▇▇▇▇▇.▇▇▇, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇ Securities, Inc.
Exhibit 10.23
▇▇▇▇▇▇▇.▇▇▇, INC.
STOCK PURCHASE WARRANT
Expiring November 5, 1999
50,000 Shares San Antonio, Texas
THIS IS TO CERTIFY that, for value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES, INC.
(the "Holder") is entitled at any time from the date hereof, but prior to 2:00
p.m., San Antonio, Texas time on November 5, 1999, subject to and upon the terms
and conditions contained herein, to purchase up to 50,000 fully paid and non-
assessable shares of the common stock, par value $0.001 per share (the "Shares")
of ▇▇▇▇▇▇▇.▇▇▇, INC., a Texas corporation (the "Company"), at a purchase price
of $1.00 per Share (such number of the Shares and the purchase price being
subject to adjustment as provided herein). This Warrant shall be void and of no
effect and all rights hereunder shall cease at 2:00 p.m., San Antonio, Texas
time on November 5, 1999, except to the extent theretofore exercised; provided
that in the case of the earlier dissolution of the Company, this Warrant shall
become void on the date fixed for such dissolution.
1. Warrant. This Warrant has been issued by the Company pursuant to that
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certain Letter Agreement dated October 6, 1999 between the Holder and the
Company (the "Letter Agreement") and that certain Confidential Private Placement
Memorandum dated May 12, 1999 in connection with the offering of the Shares of
the Company (the "Memorandum"). The Letter Agreement and the Memorandum are
expressly incorporated herein by reference for all purposes. This Warrant is
expressly subject to and shall be governed by all of the terms of the Letter
Agreement and the Memorandum. All terms used in this Warrant which are defined
in the Letter Agreement and the Memorandum shall have the meanings assigned to
them in the Letter Agreement and the Memorandum. The Holder, by the acceptance
of this Warrant agrees to and shall be bound by all of the provisions of the
Letter Agreement and the Memorandum. In the event of any conflict between the
terms of this Warrant and the Letter Agreement or the Memorandum, the terms of
the Memorandum shall control.
2. Covenants of the Company. The Company covenants that, while this
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Warrant is exercisable (a) it will reserve from its authorized and unissued
Shares a sufficient number of Shares to provide for the delivery of the Shares
pursuant to the exercise of this Warrant, and (b) that all Shares which may be
issued upon the exercise of this Warrant will upon issue be fully paid and non-
assessable.
3. Protection Against Dilution, Etc. In any of the following events,
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occurring after the date of the issuance of this Warrant, appropriate adjustment
shall be made in the number of Shares to be deliverable upon the exercise of
this Warrant and the purchase price per share to be paid, so as to maintain the
proportionate interest of the Holder as of the date hereof: (a) recapitalization
of the Company through a split-up or reverse split of the outstanding Shares
into a greater or lesser number, as the case may be, or (b) declaration of a
dividend on the Shares, payable in Shares or other securities of the Company
convertible into Shares, or (c) any of the events described in Paragraph 4
hereof.
4. Merger, Etc. In case the Company, or any successor, shall be
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consolidated or merged with another company, or substantially all of its assets
shall be sold to another company in exchange for stock, cash or other property
with the view to distributing such stock, cash or other property to its
shareholders, each of the Shares purchasable by this Warrant shall be replaced
for the purposes hereof by the securities of the Company or cash or property
issuable or distributable in respect of one Share of the Company, or its
successors, upon such consolidation, merger, or sale, and adequate provision to
that effect shall be made at the time thereof. Provided, however,
notwithstanding anything herein contained to the contrary, in the event that the
terms of any such consolidation, merger or sale call for the distribution of any
cash or property to the shareholders of the Company, no such cash or property
shall be distributable to the Holder of this Warrant in connection with any
unexercised portion of this Warrant, unless the Holder of this Warrant shall
have exercised this Warrant pursuant to the terms of Paragraph 7 hereof and all
other terms of this Warrant.
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5. Notice of Certain Events. Upon the happening of any event requiring
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an adjustment of the Warrant purchase price hereunder, the Company shall
forthwith give written notice thereof to the Holder of this Warrant stating the
adjusted Warrant purchase price and the adjusted number of Shares purchasable
upon the exercise hereof resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The Board of Directors of the Company shall determine the
computation made hereunder. In the case of (a) any consolidation, merger, or
sale affecting the Company and calling for the payment of cash or the delivery
of property to shareholders of the Company, or (b) any voluntary or involuntary
dissolution, liquidation, or winding up of the Company shall at any time be
proposed, the Company shall give at least 20 days' prior written notice thereof
to the Holder stating the date on which such event is to take place and the date
(which shall be at least 20 days after the giving of such notice) as of which
the holders of record of Shares shall be entitled to participate in any such
event. If the Holder does not elect to exercise any part of this Warrant as a
result of any such notice, the Holder shall have no right with respect to any
portion of this Warrant which shall remain unexercised to participate in (i) any
such cash or other property resulting from any such consolidation, merger or
sale, or (ii) any voluntary or involuntary dissolution, liquidation, or winding
up of the Company.
6. Shareholders' Rights. Until the valid exercise of this Warrant, the
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Holder shall not be entitled to any rights of a shareholder; but immediately
upon the exercise of this Warrant and upon payment as provided herein, the
Holder shall be deemed a record holder of the Shares.
7. Manner of Exercise. In order to exercise this Warrant, the Holder
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shall surrender this Warrant, duly endorsed or assigned to the Company or in
blank, at the office of the Company, accompanied by (a) written notice to the
Company that the Holder elects to exercise this Warrant or, if less than the
entire amount thereof is to be exercised, the portion thereof to be exercised,
and (b) payment of the purchase price of the Shares to be purchased on such
exercise, in cash or by cashier's or certified check.
This Warrant shall be deemed to have been exercised immediately prior to
the close of business on the day of surrender of this Warrant for exercise in
accordance with the foregoing provisions, and at such time the person or persons
entitled to receive the Shares issuable upon exercise shall be treated for all
purposes as the record holder or holders of the Shares at such time. As
promptly as practicable on or after the exercise date, the Company shall issue
and shall deliver to the Holder a certificate or certificates for the number of
full Shares issuable upon exercise.
In case this Warrant is exercised in part only, upon such exercise the
Company shall execute and deliver to the Holder thereof, at the expense of the
Company, a new Warrant to purchase, in the aggregate, in the number of Shares
covered by the unexercised portion of this Warrant.
8. Covenants of the Holder. The Holder covenants that this Warrant has
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not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any other applicable securities law. This Warrant has
been purchased for investment only and not with a view to distribution or
resale, and may not be sold, pledged, hypothecated or otherwise transferred
unless this Warrant or the Shares represented hereby are registered under the
Securities Act, and any other applicable securities law, or the Company has
received an opinion of counsel satisfactory to it that registration is not
required. A legend in substantially the following form will be placed on any
certificates or other documents evidencing the Shares to be issued upon any
exercise of this Warrant:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE OR FOREIGN
JURISDICTION. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE
COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF
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ANY STATE OR FOREIGN JURISDICTION, OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER.
Further, stop transfer instructions to the transfer agent of the Shares
have been or will be placed with respect to the Shares so as to restrict the
resale, pledge, hypothecation or other transfer thereof, subject to the further
items hereof, including the provisions of the legend set forth in this
paragraph.
9. Fractional Warrants. Upon the exercise of this Warrant, no fractions
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of Shares shall be issued; but fractional Warrants shall be delivered, entitling
the Holder, upon surrender with other fractional Warrants aggregating one or
more full Shares, to purchase such full Shares.
10. Registration Obligation. The Company has not agreed to file and the
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Company does not anticipate the filing of a registration statement under the
Securities Act to allow a public resale of this Warrant or any Shares issued
upon the exercise of this Warrant.
11. Loss, Theft, Destruction of Warrant. Upon receipt of evidence
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satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
receipt of indemnity reasonably satisfactory to the Company, or, in the case of
any such mutilation, upon surrender and cancellation of this Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor.
12. Arbitration. All disputes arising or related to this Agreement must
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exclusively be resolved by binding arbitration under the Commercial Arbitration
Rules of the American Arbitration Association in effect at the time the
arbitration proceeding commences; except that (a) Texas law and the Federal
Arbitration Act must govern construction and effect, (b) the locale of any
arbitration must be in San Antonio, Texas, and (c) the arbitrator must with the
award provide written findings of fact and conclusions of law. Any party may
seek from a court of competent jurisdiction any provisional remedy that may be
necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator's determination of the merits of the controversy.
The exercise of such arbitration rights by any party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights. An arbitration award
may be entered in any court having jurisdiction.
13. Benefit. All the terms and provisions of this Warrant shall be
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binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
14. Notices. All notices, requests, demands, and other communications
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hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, if
to the Company, addressed to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇; and if to the Holder, addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇ Securities, Inc.,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
15. Construction. Words of any gender used in this Warrant shall be held
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and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Warrant shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
16. Headings. The headings used in this Warrant are for convenience and
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reference only and in no way define, limit, simplify or describe the scope or
intent of this Warrant, and in no way effect or constitute a part of this
Warrant.
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17. Law Governing. This Warrant shall be construed and governed by the
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laws of the State of Texas, and all obligations hereunder shall be deemed
performable in Bexar County, Texas.
IN WITNESS WHEREOF, this Warrant has been issued on October 6th, 1999.
▇▇▇▇▇▇▇.▇▇▇, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, President
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EXERCISE FORM
(To be Executed If The Owner Desires to Exercise the Warrant)
To: ▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
The undersigned hereby exercises, according to the terms and conditions
thereof ______ (number of Shares to be purchased) of the Warrant evidenced
hereby, and herewith makes payment of the purchase price at a price of $1.00 per
share in full in the amount of $_________________. Kindly issue all Shares to
the undersigned and deliver them to the undersigned at the address stated below.
If such number of shares shall not be all of the shares purchasable by this
Warrant, please issue a new Warrant of like tenor for the balance of the
remaining Shares purchasable hereunder to be delivered to the undersigned at the
address stated below.
________________________________________
(Printed Name)
________________________________________
Address
________________________________________
City State Zip Code
________________________________________
Signature
Dated:____________
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