Exhibit 10.14
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK WHICH MAY BE
PURCHASED HEREUNDER (COLLECTIVELY, THE "SECURITIES") HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES
ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND THE SECURITIES MAY NOT
BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNTIL EITHER (1) THE HOLDER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION OF THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS IS NOT REQUIRED OR (2) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS WITH RESPECT TO THE
SECURITIES SHALL HAVE BECOME EFFECTIVE.
STOCK PURCHASE WARRANT
To subscribe for and purchase shares
of Common Stock, par value $.01 per share, of
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
THIS CERTIFIES that, for value received,___________________________
(the "Holder"), subject to the terms and conditions hereof, shall be entitled to
purchase from ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation (the "Company"), at
any time after the occurrence of certain events as set forth in Section 1 below,
through 5:00 P.M. (Las Vegas Time) on the expiration date of this Warrant set
forth in Section 15 below (the "Expiration Date") __________ shares of Common
Stock (as defined below) of the Company (individually, a "Warrant Share" and
collectively, the "Warrant Shares"), at an initial exercise price of One Cent
($0.01) per share (the "Exercise Price"), subject to adjustment from time to
time pursuant to the provisions of Section 6. For purposes of this Warrant, the
term "Common Stock" shall mean the class of capital stock of the Company
designated common stock, par value $.01 per share, as constituted on the date
hereof.
SECTION 1. EXERCISE OF WARRANTS.
(a) GENERAL. This Warrant may be exercised prior to the Expiration
Date, at any time or from time to time after the first to occur of February 11,
2001 or the receipt by Holder of notice from the Company of the occurrence of a
Triggering Event. A Triggering Event means (i) the transfer (by sale, merger or
otherwise) by the Company of all or substantially all its assets, or the
transfer (by sale, merger, share exchange, consolidation or otherwise) of all or
substantially all the Company's outstanding equity securities, in each case
where such transfer results in either a change of control of the Company (or the
ultimate ownership of its assets), or the issuance of voting securities
having the right to cast at least thirty percent (30%) of all votes cast in the
election of directors, (ii) a Public Offering (as that term is defined in
Section 10 below, or (iii) the sale, by one or more persons who are owners of
Company Common Stock, of shares of Company Common Stock for an aggregate
purchase price of at least $1,000,000. The Company shall notify the registered
holder hereof of any Triggering Event no later than five business days after it
occurs.
(b) EXERCISE FOR CASH. This Warrant may be exercised by delivering it
to the Company at its principal executive office, or at the office of its stock
transfer agent, if any, with the form of election attached hereto as Exhibit A
duly completed and signed, and by paying to the Company the Exercise Price or
such pro rata portion of the Exercise Price for the number of Warrant Shares in
respect of which this Warrant is then exercised. Payment of the Exercise Price
shall be made in cash or by certified or official bank check payable to the
order of the Company.
(c) CASHLESS EXERCISE. This Warrant may be exchanged, in whole or in
part (a "Warrant Exchange"), into the number of Warrant Shares determined in
accordance with this Section 1(c) by presentation and surrender of this Warrant
to the Company at its principal office, or at the office of its stock transfer
agent, if any, accompanied by a notice (a "Notice of Exchange") stating that
this Warrant is being exchanged and the number of shares of Common Stock to be
exchanged. In connection with any Warrant Exchange, this Warrant shall represent
the right to subscribe for and acquire the number of shares of Common Stock
(rounded to the nearest whole number) equal to (i) the number of shares
specified by the Holder in its Notice of Exchange (the "Total Number"), less
(ii) the number of shares equal to the quotient obtained by dividing (A) the
product of the Total Number and the then applicable Exercise Price by (B) the
then fair market value (determined as set forth below) per share of Common
Stock. For purposes of this Section 1(c), the "fair market value" per share of
Common Stock as of any date shall be the average of the closing sale prices of
the Common Stock, as reported on the securities exchange which is the principal
market for the Common Stock during the five (5) trading days immediately
preceding such date. If the Common Stock is not publicly traded, the "fair
market value" per share of Common Stock shall be an amount determined by the
Company's Board of Directors upon request of the Holder. It shall be a condition
of the exercise of the right to make a Warrant Exchange pursuant to this Section
1(c) that the Holder shall agree, following such Warrant Exchange, to
restrictions on the resale of the Common Stock issued upon exchange of the
Warrant, in form and substance determined by the Company; provided, however,
that the resale of the Common Stock shall not be restricted for a period of more
than 270 days from the Closing Date of a Public Offering (as defined in Section
10 below).
(d) ISSUANCE OF CERTIFICATE(S). Upon surrender of this Warrant and
payment of the Exercise Price or delivery of a Notice of Exchange, as the case
may be, the Company shall issue and cause to be delivered within a reasonable
time, not to exceed fifteen calendar days, to the Holder, or upon the written
order of the Holder in and to such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable upon
exercise. Such certificate or certificates shall be deemed to have been issued,
and any person so designated to be named therein shall be deemed to have become
a holder of record of such Warrant Shares, as of the date of the surrender of
this Warrant. The certificate(s) representing the Warrant Shares acquired for
cash shall bear a restrictive legend substantially in the form set forth in
Exhibit B attached hereto, and certificate(s) representing the Warrant Shares
acquired in a cashless exercise shall bear a legend setting forth the applicable
restrictions, if any.
(e) FULL OR PARTIAL EXERCISE. This Warrant shall be exercisable, at
the election of the Holder, either in full or from time to time in part and, in
the event that this Warrant is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the date of
expiration of this Warrant, a new certificate evidencing the remaining Warrant
or Warrants will be issued, and the Company is hereby irrevocably authorized to
countersign and to deliver the required new Warrant pursuant to the provisions
of this Warrant. This Warrant, when surrendered upon its exercise, shall be
canceled by the Company and shall then be disposed of in a manner satisfactory
to the Company.
SECTION 2. PAYMENT OF TAXES. The Company shall pay all
documentary stamp taxes attributable to the initial issuance of Warrant
Shares upon the exercise of this Warrant. The Company, however, shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issue of any certificates for Warrant Shares in a
name other than that of the Holder.
SECTION 3. MUTILATED, MISSING OR LOST WARRANT. In the event
that this Warrant shall be mutilated, lost, stolen or destroyed, the Company
shall issue and countersign, in exchange and substitution for and upon
cancellation of the mutilated Warrant, or in lieu of and substitution for its
loss, theft or destruction, a new Warrant of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft or destruction of this Warrant.
SECTION 4. RESERVATION OF WARRANT SHARES. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of this Warrant,
the maximum number of shares of Common Stock which may then be deliverable upon
the exercise of this Warrant. The Company covenants that all Warrant Shares
which may be issued upon exercise of Warrants will, upon issue and payment
therefor, be fully paid, nonassessable, free of preemptive rights and free from
all taxes, liens, charges and security interests with respect to the issue
thereof.
SECTION 5. FRACTIONAL SHARES. No fractional Warrant Shares, or
scrip for any such fractional Warrant Shares, shall be issued upon the
exercise of this Warrant. If any fraction of a share of Common Stock would,
except for the provisions of this Section 5, be issuable on the exercise of
any Warrant, the Company will (i) if the fraction of a share otherwise
issuable is equal to or less than one-half, round-down and issue to the
Holder only the whole number of shares of Common Stock to which the Holder is
entitled or (ii) if the fraction of a share otherwise issuable is greater
than one-half, round-up and issue to the Holder one additional share of
Common Stock in addition to the largest whole number of shares of Common
Stock to which the Holder is otherwise entitled.
SECTION 6. ADJUSTMENT OF NUMBER OF WARRANT SHARES. The number of
Warrant Shares issuable upon exercise of the Warrant is subject to adjustment
from time to time upon the occurrence of the events enumerated in this Section
6.
(a) CHANGE IN COMMON STOCK. In case the Company shall (i) pay a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (ii) subdivide its outstanding Common Stock into a greater number of
shares or (iii) combine the outstanding Common Stock into a smaller number of
shares, the Exercise Price and the Warrant Shares shall be adjusted so that with
respect to any Warrant thereafter surrendered for exercise or exchange, the
Holder shall be entitled to receive the number of shares of Common Stock which
it would have owned or would have been entitled to receive after the happening
of any of the events described above had such Warrant been exercised or
exchanged immediately prior to the record date, in the case of a dividend, or
the effective date, in the case of a subdivision or combination. An adjustment
made pursuant to this subparagraph (a) shall become effective immediately after
the record date, in the case of a dividend, except as provided in subparagraph
(c) below, and shall become effective immediately after
the effective date, in the case of a subdivision or combination. No adjustment
in the Exercise Price shall be made if, at the same time as the Company shall
issue shares of Common Stock as a dividend or distribution on the outstanding
Common Stock which would otherwise call for an adjustment in the Exercise Price,
the Company shall issue shares of Common Stock as a dividend or distribution on
the outstanding Warrants equivalent to the number of shares distributable on the
shares of Common Stock.
(b) OTHER DISTRIBUTIONS. In case the Company shall distribute to all
holders of its Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned surplus and
dividends or distributions referred to in subparagraph (a) above or in the
paragraph immediately following this paragraph) or rights, options or warrants,
or convertible or exchangeable securities containing the right to subscribe for
or purchase debt securities, assets or other securities of the Company
(excluding those referred to in subparagraph (a) above), then in each case the
Company shall set aside and maintain for the benefit of the Holder the rights,
options, warrants, or convertible or exchangeable securities, or evidences of
indebtedness or assets, in an amount equal to the distribution of such item that
the Holder would have been entitled to receive after the happening of any of the
events described above had this Warrant been exercised or exchanged immediately
prior to the record date, in the case of a dividend, or the effective date, in
the case of a subdivision or combination. Such rights, options, warrants, or
convertible or exchangeable securities, or evidences of indebtedness or assets
shall be delivered to the Holder upon exercise of the Warrant.
(c) NO ADJUSTMENTS. No adjustment need be made for a change in the par
value of the shares of Common Stock. No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent in the number of
shares of Common Stock purchasable upon the exercise of the Warrant; provided,
however, that any adjustments which by reason of this subparagraph (c) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest
one-thousandth of a share.
(d) NOTICE UPON ADJUSTMENT. Whenever there is an adjustment in the
number or kind of securities issuable upon exercise of the Warrant, or both, as
provided in this Section 6, the Company shall (a) issue a certificate signed by
the Chairman of the Board, President or a Vice President of the Company and by
the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the facts requiring such adjustment
and the number and kind of securities issuable upon exercise of each Warrant
after such adjustment; and (b) cause a notice stating that such adjustment has
been effected and stating the number and kind of securities issuable upon
exercise of each Warrant to be sent by First Class Mail, postage prepaid, to the
Holder of the Warrant.
(e) NOTICE UPON CERTAIN EVENTS. If, at any time prior to the
expiration of the Warrant evidenced hereby, (i) the Company shall declare any
dividend on the Common Stock payable
in cash or shares of Common Stock or capital stock of the Company; or (ii) the
Company shall authorize the issuance to all holders of shares of Common Stock of
rights, options or warrants to subscribe for or purchase shares of Common Stock
or of any other subscription rights or warrants; or (iii) the Company shall
authorize the distribution to all holders of shares of Common Stock evidences of
its indebtedness or assets; or (iv) the Board of Directors of the Company shall
have approved any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required, or any sale,
transfer or lease of all or substantially all of the assets of the Company or
any reclassification or change of Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common Stock; or
(v) the voluntary or involuntary dissolution, liquidation or winding up of the
Company occurs; or (vi) the Company proposes to take any action which would
require an adjustment in the number or kind of securities issuable upon exercise
of the Warrant pursuant to this Section 6; then the Company shall cause to be
given to the Holder, at least twenty calendar days prior to the applicable
record date specified, or promptly in the case of events for which there is no
record date, a written notice stating (A) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such dividends,
rights, options, warrants or distribution are to be determined, or (B) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (C) the date on which any such consolidation, merger,
sale, transfer, lease, reclassification, change, dissolution, liquidation or
winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such consolidation, merger, sale, transfer, lease,
reclassification, change, dissolution, liquidation or winding up.
(f) MERGER, CONSOLIDATION, ETC. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with or into another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected, then,
as a condition of such reorganization, reclassification, consolidation, merger
or sale, lawful and adequate provision shall be made whereby the Holder of the
Warrant shall thereafter have the right to purchase and receive on exercise of
such Warrant upon the basis and upon the terms and conditions specified in this
Agreement and in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
Warrant, such shares of 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 shares such Common Stock immediately, theretofore
purchasable and receivable upon the exercise of the Warrant had such
reorganization, reclassification, consolidation, merger or sale not taken place
and in any such case appropriate provision shall be made with respect to the
rights and interests of the Holder of the Warrant to the end that the provisions
of this Agreement (including, without limitation, provision for adjustment of
the number of shares issuable upon the exercise of the Warrant) shall thereafter
be applicable as nearly as may be in relation to any shares of stock,
securities, or assets thereafter deliverable upon exercise of Warrant. The
Company shall not effect any such consolidation, merger or sale, unless, prior
to or simultaneously with the consummation thereof, the successor corporation
(if other than the Company) resulting from such consolidation or merger or the
corporation purchasing
such assets shall assume, by written instrument acceptable to the Holder, the
obligation to deliver to the Holder of the Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the Holder
would be entitled to purchase.
The form of this Warrant Agreement need not be changed because of
any adjustment made pursuant to this Section 6, and any Warrant Agreement
issued in exchange or substitution hereof after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock as are
stated in this Warrant Agreement. The Company may, however, at any time in
its sole discretion (which shall be conclusive) make any change in the form
of Warrant Agreement that it may deem appropriate because of any adjustment
made pursuant to this Section 6 that does not affect the substance hereof,
and any Warrant Agreement thereafter issued, whether in exchange or
substitution for this Warrant Agreement or otherwise, may be in the form as
so changed.
SECTION 7. PRE-EXERCISE RIGHTS. Prior to exercise of this
Warrant, the Holder shall not be entitled to any rights of a stockholder with
respect to the Warrant Shares, including (without limitation ) the right to vote
such Warrant Shares, receive dividends or other distributions thereon, exercise
preemptive rights or be notified of stockholder meetings, and such Holder shall
not be entitled to any notice or other communication concerning the business or
affairs of the Company.
SECTION 8. RESTRICTED SECURITIES. The Holder understands that
this Warrant and the Warrant Stock purchasable hereunder constitute "restricted
securities" under the federal securities laws inasmuch as they are being, or
will be, acquired from the Company in transactions not involving a public
offering and accordingly may not, under such laws and applicable regulations,
be resold or transferred without registration under the Securities Act of 1933
or an applicable exemption from registration. In this connection, the Holder
acknowledges that Rule 144 of the Securities and Exchange Commission is not
now, and may not in the future be, available for resales of the Warrant Shares
purchased hereunder. The Holder further acknowledges that the Warrant Shares
and any other securities issued upon exercise of this Warrant shall bear a
legend substantially in the form of the legend appearing on the face hereof.
SECTION 9. CERTIFICATION OF INVESTMENT PURPOSE. Unless a current
registration statement under the Securities Act of 1933 shall be in effect with
respect to the securities to be issued upon exercise of this Warrant, the
Holder hereof, by accepting this Warrant, covenants and agrees that, at the
time of exercise hereof, and at the time of any proposed transfer of securities
acquired upon exercise hereof such Holder will deliver to the Company a written
certification that the securities acquired by the Holder upon exercise hereof
are for the account of the Holder and are acquired for investment purposes only
and that such securities are not acquired with a view to, or for sale in
connection with, any distribution thereof.
SECTION 10. COMPANY'S RIGHT TO PURCHASE WARRANT. The Company
shall have the right to purchase this Warrant, to the extent it has not
previously been exercised, for the sum of Ten Dollars ($10.00) during the
thirty (30) calendar day period beginning on the date of the closing (the
"Closing Date") by the Company of the sale of its Common Stock in a firm
commitment underwritten public offering pursuant to a registration statement
declared effective under the Securities Act of 1933, as amended, the public
offering price of which was not less than five dollars ($5.00) per share
(adjusted from the date hereof to reflect subsequent stock dividends, stock
splits, recapitalizations, etc.) and at least fifteen million dollars
($15,000,000) in the aggregate (a "Public Offering"). To exercise this right,
the Company shall give written notice to the Holder no less than thirty (30)
calendar days prior to the Closing Date. Upon receipt of such notice, Holder
may exercise this Warrant in the manner provided above at any time prior to
ten (10) calendar days prior to the Closing Date, and Holder's exercise of the
Warrant may be conditioned upon the Company completing the Offering. If the
Closing Date does not occur, Holder's exercise of the Warrant shall be null
and void.
SECTION 11. TRANSFER. Subject to the transfer conditions referred
to in the legend endorsed hereon, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Holder hereof upon
surrender of this Warrant with a properly executed assignment at the principal
office of the Company. Upon any partial transfer, the Company will at its
expense issue and deliver to the Holder hereof a new Warrant of like tenor, in
the name of the Holder hereof, which shall be exercisable for such number of
shares of Common Stock which were not so transferred.
SECTION 12. SUCCESSORS AND ASSIGNS. The terms and provisions of
this Warrant shall inure to the benefit of, and be binding upon, the Company
and the Holder hereof and their respective successors and assigns.
SECTION 13. NOTICE. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed or sent by certified, registered, or express mail, postage prepaid,
and shall be deemed given when so delivered personally, telegraphed or, if
mailed, three (3) days after the date of deposit in the United States mails, as
follows:
If to the Company to:
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
If to the Holder to the address shown therefor on the books and records
of the Company. Notices may also be given by prepaid telegram or facsimile and
shall be effective on the date transmitted if confirmed within 24 hours
thereafter by a signed original sent in the manner provided above. Any party may
change its address for notice and the address to which copies must be sent by
giving notice of the new addresses to the other parties in accordance with this
Section 13, except that any such change of address notice shall not be effective
unless and until received.
SECTION 14. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware, without
giving effect to conflict of law principles.
SECTION 15. EXPIRATION DATE. This Warrant, in all events, shall be
wholly void and have no effect after 5 P.M. (Las Vegas, Nevada Time) on February
11, 2002.
SECTION 16. SEVERABILITY. In the event that one or more of the
provisions of this Warrant shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Warrant, but this Warrant shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its corporate name by a duly authorized officer and to be dated as of the date
first above written.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
----------------------------------
▇▇▇▇▇▇▇ ▇. Poster, President
Initial Holder of Warrant:
------------------
Number of Shares:
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EXHIBIT A
FORM OF EXERCISE
(to be executed by the Holder)
The Holder hereby exercises its rights to subscribe for and purchase
____ shares of common stock, par value $.01 ("Common Stock"), of
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC. evidenced by the attached Warrant and herewith makes
payment of the Purchase Price of $____________ therefor in full. Please issue a
certificate in the name of the Holder for the Common Stock in accordance with
the instructions given below and issue a replacement Warrant in the name of the
Holder for the unexercised balance, if any, of the right to purchase Warrant
Shares evidenced by the attached Warrant which were not exercised hereby.
Dated:
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Signature of Holder
Instructions for registration of shares
Social Security or Employer Identification
Number of Holder:
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Address of Holder:
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▇▇▇▇▇▇
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▇▇▇▇, ▇▇▇▇▇ and Zip Code
EXHIBIT B
FORM OF RESTRICTIVE LEGEND
TO BE IMPRINTED ON WARRANT SHARES
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL EITHER (1) THE HOLDER
THEREOF SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED OR (2) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS WITH RESPECT TO SUCH
SHARES SHALL HAVE BECOME EFFECTIVE.