EXHIBIT 10.14
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE DISTRIBUTED FOR VALUE UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT, OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT
AND SUCH LAWS.
COMMON STOCK PURCHASE WARRANT
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To Purchase 20,000 Shares of Common Stock
of
SCANNER TECHNOLOGIES CORPORATION
THIS CERTIFIES THAT, for good and valuable consideration, ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, or her registered successors or assigns, is entitled to subscribe for
and purchase from Scanner Technologies Corporation, a New Mexico corporation
(the "Company"), at any time up to and including December 27, 2009, twenty
thousand (20,000) fully paid and nonassessable shares of Common Stock of the
Company at a price of $2.94 per share (the "Warrant Exercise Price"), subject to
the antidilution provisions of this Warrant. The shares of Common Stock that may
be acquired upon exercise of this Warrant are referred to herein as the "Warrant
Shares." As used herein, the term "Common Stock" means and includes the
Company's presently authorized common stock, no par value, 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 of assets
upon the voluntary or involuntary liquidation, dissolution, or winding up of the
Company.
This Warrant is subject to the following provisions, terms and
conditions:
1. Exercise; Transferability.
(a) 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 Common Stock), by written notice of exercise (in the
form attached hereto) delivered to the Company at the
principal office of the Company prior to the expiration of
this Warrant and accompanied or preceded by the surrender of
this Warrant along with a check in payment of the Warrant
Exercise Price for such shares.
(b) This Warrant may not be sold, transferred, assigned,
hypothecated or divided into two or more Warrants of smaller
denominations, nor may any Warrant Shares issued pursuant to
exercise of this Warrant be transferred, except as provided in
Section 7 hereof.
2. Exchange and Replacement. Subject to Sections l and 7 hereof,
this Warrant is exchangeable upon the surrender hereof by the holder to the
Company at its office for new Warrants of like tenor and date representing in
the aggregate the right to purchase the number of Warrant Shares purchasable
hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable
hereunder) as shall be designated by the holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction, or mutilation of this Warrant, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant. This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange or replacement. The Company shall pay all expenses,
taxes (other than stock transfer taxes), and other charges payable in connection
with the preparation, execution, and delivery of Warrants pursuant to this
Section 2.
3. Issuance of the Warrant Shares.
(a) The Company agrees that the Warrant Shares shall be and are
deemed to be issued to the holder as of the close of business
on the date on which this Warrant shall have been surrendered
and the payment made for such Warrant Shares as aforesaid.
Subject to the provisions of the next section, certificates
for the Warrant Shares so purchased shall be delivered to the
holder within a reasonable time, not exceeding fifteen (15)
days after the rights represented by this Warrant shall have
been so exercised, and, unless this Warrant has expired, a new
Warrant representing the right to purchase the number of
Warrant Shares, if any, with respect to which this Warrant
shall not then have been exercised shall also be delivered to
the holder within such time.
(b) Notwithstanding the foregoing, however, the Company shall not
be required to deliver any certificate for Warrant Shares upon
exercise of this Warrant except in accordance with exemptions
from the applicable securities registration requirements or
registrations under applicable securities laws. Nothing
herein, however, shall obligate the Company to effect
registrations under federal or state securities laws. If
registrations are not in effect and if exemptions are not
available when the holder seeks to exercise the Warrant, the
Warrant exercise period will be extended, if need be, to
prevent the Warrant from expiring, until such time as either
registrations become effective or exemptions are available,
and the Warrant shall then remain exercisable for a period of
at least 30 calendar days from the date the Company delivers
to the holder written notice of the availability of such
registrations or exemptions. The holder agrees to execute such
documents and make such representations, warranties, and
agreements as may be required solely to comply with the
exemptions relied upon by the Company, or the registrations
made, for the issuance of the Warrant Shares.
4. Covenants of the Company. The Company covenants and agrees
that all Warrant Shares will, 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 Common Stock to provide for the
exercise of the rights represented by this Warrant.
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5. Antidilution Adjustments. The provisions of this Warrant are
subject to adjustment as provided in this Section 5.
(a) The Warrant Exercise Price shall be adjusted from time to time
such that in case the Company shall hereafter:
(i) pay any dividends on any class of stock of the
Company payable in Common Stock or securities
convertible into Common Stock;
(ii) subdivide its then outstanding shares of Common Stock
into a greater number of shares; or
(iii) combine outstanding shares of Common Stock, by
reclassification or otherwise;
then, in any such event, the Warrant Exercise Price in effect
immediately prior to such event shall (until adjusted again
pursuant hereto) be adjusted immediately after such event to a
price (calculated to the nearest full cent) determined by
dividing (a) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then
existing Warrant Exercise Price, by (b) the total number of
shares of Common Stock outstanding immediately after such
event (including the maximum number of shares of Common Stock
issuable in respect of any securities convertible into Common
Stock), and the resulting quotient shall be the adjusted
Warrant Exercise Price per share. An adjustment made pursuant
to this subsection shall become effective immediately after
the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this
subsection, the holder of any Warrant thereafter surrendered
for exercise shall become entitled to receive shares of two or
more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors
(whose determination shall be conclusive) shall determine the
allocation of the adjusted Warrant Exercise Price between or
among shares of such classes of capital stock or shares of
Common Stock and other capital stock. All calculations under
this subsection shall be made to the nearest cent or to the
nearest 1/100 of a share, as the case may be. In the event
that at any time as a result of an adjustment made pursuant to
this subsection, the holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive any
shares of the Company other than shares of Common Stock,
thereafter the Warrant Exercise Price of such other shares so
receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this subsection.
(b) Upon each adjustment of the Warrant Exercise Price pursuant to
subsection 5(a) above, the holder of each Warrant shall
thereafter (until another such adjustment) be entitled to
purchase at the adjusted Warrant Exercise Price the number of
shares, calculated to the nearest full share, obtained by
multiplying the number of shares specified in such Warrant (as
adjusted as a result of all adjustments in the Warrant
Exercise Price in effect prior to such adjustment) by the
Warrant Exercise Price in effect prior to such adjustment and
dividing the product so obtained by the adjusted Warrant
Exercise Price.
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(c) In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the
Company is the continuing corporation, or in case of any sale
or conveyance to another corporation of the Company's property
as an entirety or substantially as an entirety, or in the case
of any statutory exchange of securities with another
corporation (including any exchange effected in connection
with a merger of a third corporation into the Company), there
shall be no adjustment under subsection (a) of this Section
but the holder of each Warrant then outstanding shall have the
right thereafter to convert such Warrant into the kind and
amount of shares of stock and other securities and property
which the holder would have owned or have been entitled to
receive immediately after such consolidation, merger,
statutory exchange, sale, or conveyance had such Warrant been
converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale, or conveyance
and in any such case, if necessary, appropriate adjustment
shall be made in the application of the provisions set forth
in this subsection with respect to the rights and interests
thereafter of any holders of the Warrant, to the end that the
provisions set forth in this Section shall thereafter
correspondingly be made applicable, as nearly as may
reasonably be, in relation to any shares of stock and other
securities and property thereafter deliverable on the exercise
of the Warrant. The provisions of this subsection shall
similarly apply to successive consolidations, mergers,
statutory exchanges, sales or conveyances.
(d) Upon any adjustment of the Warrant Exercise Price, then and in
each such case, the Company shall give written notice thereof,
by first-class mail, postage prepaid, addressed to the holder
as shown on the books of the Company, which notice shall state
the Warrant Exercise Price resulting from such adjustment and
the increase or decrease, if any, in the number of shares of
Common Stock 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.
6. No Voting Rights. This Warrant shall not entitle the holder to
any voting rights or other rights as a shareholder of the Company.
7. Notice of Transfer of Warrant or Resale of the Warrant Shares.
(a) Subject to the sale, assignment, hypothecation, or other
transfer restrictions set forth in Section 1 hereof, the
holder, by acceptance hereof, agrees to give written notice to
the Company before transferring this Warrant or transferring
any Warrant Shares of such holder's intention to do so,
describing briefly the manner of any proposed transfer.
Promptly upon receiving such written notice, the Company shall
present copies thereof to the Company's counsel and to counsel
to the original purchaser of this Warrant. If in the opinion
of each such counsel the proposed transfer may be effected
without registration or qualification (under any federal or
state securities laws), the Company, as promptly as
practicable, shall notify the holder of such opinion,
whereupon the holder shall be entitled to transfer this
Warrant or to dispose of Warrant Shares received upon the
previous exercise of this Warrant, all in accordance with the
terms of the notice delivered by the holder to the Company;
provided that an appropriate legend may be endorsed on this
Warrant or the certificates for such Warrant Shares respecting
restrictions upon transfer thereof necessary or advisable in
the opinion of counsel and satisfactory to the Company to
prevent further transfers which would be in violation of
Section 5 of the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities laws;
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and provided further that the prospective transferee or
purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required
solely to comply with the exemptions relied upon by the
Company for the transfer or disposition of the Warrant or
Warrant Shares.
(b) If in the opinion of either of the counsel referred to in this
Section, the proposed transfer or disposition of this Warrant
or such Warrant Shares described in the written notice given
pursuant to this Section may not be effected without
registration or qualification of this Warrant or such Warrant
Shares the Company shall promptly give written notice thereof
to the holder, and the holder will limit its activities in
respect to such as, in the opinion of both such counsel, are
permitted by law.
8. Fractional Shares. Fractional shares shall not be issued upon
the exercise of this Warrant, but in any case where the holder would, except for
the provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Company shall, upon the exercise of this Warrant for the
largest number of whole shares then called for, pay a sum in cash equal to the
sum of (a) the excess, if any, of the Market Price of such fractional share over
the proportional part of the Warrant Exercise Price represented by such
fractional share, plus (b) the proportional part of the Warrant Exercise Price
represented by such fractional share. For purposes of this Section, the term
"Market Price" with respect to shares of Common Stock of any class or series
means the last reported sale price or, if none, the average of the last reported
closing bid and asked prices on any national securities exchange or quoted on
the Nasdaq Stock Market or other over-the-counter market, or, if not listed on a
national securities exchange or quoted on the Nasdaq Stock Market or other
over-the-counter market, then the price per share established by the Board of
Directors of the Company.
IN WITNESS WHEREOF, Scanner Technologies Corporation has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be dated
December 27, 2004.
SCANNER TECHNOLOGIES CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, President, Chief Executive
Officer and Chief Financial Officer
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To: SCANNER TECHNOLOGIES CORPORATION
NOTICE OF EXERCISE OF WARRANT --
To Be Executed by the Registered
Holder in Order to Exercise the
Warrant
Subscriber hereby irrevocably elects to exercise the attached Warrant to
purchase by surrendering a check, ______________________ of the shares issuable
upon the exercise of such Warrant, and requests that certificates for such
shares (together with a new Warrant to purchase the number of shares, if any,
with respect to which this Warrant is not exercised) shall be issued in the name
of
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(Print Name)
Please insert social security
or other identifying number
of registered holder of
certificate (_________________________) Address:
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Dated: _______________________, ______ -----------------------------------
(Signature)*
*The signature on the Notice of Exercise of Warrant must correspond to the name
as written upon the face of the Warrant in every particular without alteration
or enlargement or any change whatsoever. When signing on behalf of a
corporation, partnership, trust or other entity, PLEASE indicate your
position(s) and title(s) with such entity.
ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrants.
FOR VALUE RECEIVED, Subscriber hereby sells, assigns, and transfers
unto _____________________________ the right to purchase the securities of
Scanner Technologies Corporation, to which the within Warrant relates and
appoints _____________, attorney, to transfer said right on the books of Scanner
Technologies Corporation, with full power of substitution in the premises.
Dated: _____________________________ -----------------------------------
(Signature)
Address:
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