EXHIBIT 99.2
RG AMERICA, INC.
(A Nevada Corporation)
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WARRANT TO PURCHASE
SHARES OF COMMON STOCK
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Effective _____________, 2005
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR
OTHERWISE DISPOSED OF OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS.
THIS CERTIFIES THAT, for value received, _________________________, or
its registered assigns ("Holder"), is entitled to purchase, subject to the
conditions set forth below, at any time or from time to time during the Exercise
Period (as defined in subsection 1.2 below), __________________________
(__________) shares ("Shares") of fully paid and non-assessable common stock,
par value $0.001 per share (the "Common Stock"), of RG AMERICA, INC., a Nevada
corporation (the "Company"), at the per share purchase price (the "Warrant
Price") set forth in subsection 1.1 below, subject to the further provisions of
this Warrant.
1. EXERCISE OF WARRANT
The terms and conditions upon which this Warrant may be exercised, and the
Shares subject hereto may be purchased, are as follows:
1.1 Warrant Price. The Warrant Price shall be $_________ per Share,
subject to adjustment as provided in Section 4 below.
1.2 Method Of Exercise. Holder may at any time beginning on the effective
date of this Warrant and for _________ (____) years from such date of
effectiveness, or such later date as the Company may in its sole discretion
determine (the "Exercise Period"), exercise in whole or in part the purchase
rights evidenced by this Warrant. Such exercise shall be effected by:
(a) the surrender of this Warrant, together with a duly executed
copy of the form of subscription attached hereto as Exhibit A, to the
Secretary of the Company at its principal offices;
(b) the payment to the Company, by cash, certified or cashier's
check payable to Company's order or wire transfer to the Company's
account, of an amount equal to the aggregate Warrant Price for the number
of Shares for which the purchase rights hereunder are being exercised.
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(c) the delivery to the Company, if necessary in the discretion of
counsel for the Company, to assure compliance with the Securities Act of
1933, as amended (the "Securities Act"), and applicable state securities
laws, of an instrument executed by holder certifying that the Shares are
being purchased solely for the account of Holder and not with a view to
any resale or distribution in violation of the Securities Act or
applicable state securities laws.
1.3 Issuance Of Shares and New Warrant. If the purchase rights evidenced
by this Warrant are exercised in whole or in part, one or more certificates for
the purchased Shares shall be issued as soon as practicable thereafter to
Holder. If the purchase rights evidenced by this Warrant are exercised only in
part, the Company shall also deliver to Holder at such time a new Warrant
evidencing the purchase rights regarding the number of Shares (if any) for which
the purchase rights under this Warrant remain unexercised and continue in force
and effect. All new Warrants issued in connection with the provisions of this
Section 1.4 shall bear the same date as this Warrant and shall be substantially
identical in form and provisions to this Warrant except for the number of Shares
purchasable thereunder. Each person in whose name any certificate for Shares is
to be issued shall for all purposes be deemed to have become the holder of
record of such Shares on the date on which this Warrant was surrendered and
payment of the Warrant Price was made, irrespective of the date of delivery of
such stock certificate, except that if the date of such surrender and payment is
a date when the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of such Shares at the close of
business on the next succeeding date on which the stock transfer books are open.
2. TRANSFERS
2.1 Transfers. This Warrant and all rights hereunder are transferable in
whole or in part by the Holder subject to the provisions of Section 7 below. The
transfer shall be recorded on the books of the Company upon (i) the surrender of
this Warrant (together with a duly executed and endorsed copy of the form of
transfer certificate attached hereto as Exhibit B) to the Secretary of the
Company at its principal offices, and (ii) the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer. In the
event of a partial transfer, the Company shall issue to the several holders one
or more appropriate new Warrants.
2.2 Registered Holder. Each holder of this Warrant agrees that until such
time as any transfer pursuant to subsection 2.1 above is recorded on the books
of the Company, the Company may treat the registered Holder of this Warrant as
the absolute owner.
2.3 Form Of New Warrants. All new Warrants issued in connection with
transfers of this Warrant shall bear the same date as this Warrant and shall be
substantially identical in form and provisions to this Warrant except for the
number of Shares purchasable thereunder.
3. NO FRACTIONAL SHARES
Notwithstanding any adjustment (as required hereby) to the number of
Shares purchasable upon the exercise of this Warrant, the Company shall not be
required to issue any fraction of a Share upon exercise of this Warrant. If, by
reason of any change made pursuant to Section 4 below, the Holder would be
entitled, upon the exercise of any rights evidenced hereby, to receive a
fractional interest in a Share, the Company shall, upon such proper exercise of
this Warrant, purchase such fractional interest for an amount in cash equal to
the Fair Market Value of such fractional interest, determined as of the date of
such exercise of this Warrant. For purposes of this Section 3, the term "Fair
Market Value" means (a) if the primary market for the Shares is a National
Securities Exchange, the NASDAQ National Market System, or any other market or
quotation system in which last sale transactions are reported on a
contemporaneous basis, the last reported sales price of such Shares, as of the
time of authorization of the transaction giving rise to the right to receive
such Shares; or (b) if the primary market for such Shares is not an exchange or
quotation system, the fair value thereof as shall be determined in good faith by
the Board of Directors of the Company at the time of authorization of the
transaction giving rise to the right to receive such Shares.
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4. ANTIDILUTION PROVISIONS
4.1 Stock Splits And Combinations. If the Common Stock shall at any time
be subdivided into a greater number of shares, then the number of Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be
proportionately increased; and, conversely, if the Common Stock shall at any
time be combined into a smaller number of shares, then the number of Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be
proportionately reduced. Any adjustments under this subsection 4.1 shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
4.2 Reclassification, Exchange and Substitution. If the Common Stock shall
be changed into shares of any other class or classes of stock or other
securities of the Company, whether by capital reorganization, reclassification,
or otherwise, Holder shall, upon exercise of this Warrant, be entitled to
purchase for the same aggregate consideration, in lieu of the Shares that Holder
would have become entitled to purchase but for such change, a number of shares
of such other class or classes of stock or other securities of the Company
equivalent to the number of Shares that would have been subject to purchase by
Holder on exercise of this Warrant immediately before that change. Any
adjustments under this subsection 4.2 shall become effective at the close of
business on the date such change of the Common Stock into shares of any other
class or classes of stock or other securities of the Company becomes effective.
4.3 Reorganizations, Mergers, Consolidations Or Sale Of Assets. If at any
time there shall be a reorganization involving the Common Stock (other than a
stock split, combination, reclassification, exchange, or subdivision of shares
provided for in subsections 4.1 and 4.2 above) or a merger or consolidation of
the Company with or into another corporation, or the sale of all or
substantially all of the Company's assets to any other person, then, as a part
of such reorganization, merger, consolidation or sale, lawful provision shall be
made so that Holder shall thereafter be entitled to receive upon exercise of
this Warrant, in accordance with the terms hereof, in lieu of the Shares that
Holder would have become entitled to purchase but for such event, such other
securities or property of the Company, or of the successor corporation resulting
from such event, to which Holder would have been entitled in such
reorganization, merger, consolidation or sale if this Warrant had been exercised
immediately before that reorganization, merger, consolidation or sale. In any
such case, appropriate adjustment (as determined in good faith by the Company's
Board of Directors) shall be made in the application of the provisions of this
Warrant with respect to the rights and interests of Holder after the
reorganization, merger, consolidation, or sale to the end that the provisions of
this Warrant (including adjustment of the Warrant Price then in effect and
number of Shares purchasable upon exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant.
4.4 Adjustments of Other Distributions. If the Company shall at any time
declare and pay or deliver to the holders of Common Stock a distribution payable
in securities of other persons, evidences of indebtedness issued by the Company
or other persons, assets (excluding cash dividends) or options or rights, in any
case of a kind not referred to above, then, upon exercise of this Warrant,
Holder shall be entitled to receive a proportionate share of any such
distribution as though Holder was the holder of the number of shares of Common
Stock into which this Warrant may be exercised as of the record date fixed for
the determination of the holders of Common Stock entitled to receive such
distribution.
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4.5 Certificate as to Adjustments. In the case of each adjustment
(including a readjustment) under this Section 4, the Company will promptly, and
in any event within thirty (30) days after the event requiring the adjustment,
compute such adjustment in accordance with the terms hereof and deliver or cause
to be delivered to Holder a certificate describing in reasonable detail the
event requiring the adjustment and setting forth such adjustment and the
calculations and results of such adjustment.
4.6 Reservation of Stock Issuable Upon Exercise. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock such number of shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Warrant. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the exercise of this Warrant, the Company will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose.
4.7 Method of Calculation. All calculations under this Section 4 shall be
made to the nearest one hundredth of a share.
5. RIGHTS PRIOR TO EXERCISE OF WARRANT
This Warrant does not entitle Holder to any of the rights of a stockholder
of the Company, including (without limitation) the right to receive dividends or
other distributions, to vote or consent, or to receive notice as a stockholder
of the Company. If, however, at any time prior to the expiration of this Warrant
and prior to its exercise,
(a) the Company shall declare any dividend payable in any securities
upon outstanding shares of Common Stock or make any other distribution
(other than a regular cash dividend) to the holders of shares of Common
Stock;
(b) the Company shall offer to the holders of shares of Common Stock
any additional shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock or any right to subscribe for or
purchase any thereof; or
(c) a dissolution, liquidation or winding-up of the Company (other
than in connection with a reorganization, consolidation, merger, or sale
of all or substantially all of its assets as an entirety) shall be
approved by the Company's Board of Directors,
then, in any one or more of such events the Company shall give notice in writing
of such event to Holder, at its address as it shall then appear on the Company's
records, at least twenty (20) days prior to the date fixed as a record date or
the date of closing the transfer books for the determination of the stockholders
entitled to such dividends, distribution, or subscription rights, or for the
determination of stockholders entitled to vote on such proposed dissolution,
liquidation or winding-up. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be.
Any failure to give such notice or any defect therein, however, shall not
affect the validity of any action taken in connection with such dividend,
distribution or subscription rights, or such proposed dissolution, liquidation
or winding-up.
6. SUCCESSORS AND ASSIGNS
The terms and provisions of this Warrant shall inure to the benefit of,
and be binding upon, the Company and its successors and assigns and Holder and
its successors and permitted assigns.
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7. RESTRICTED SECURITIES
To enable the Company to comply with the Securities Act and applicable
state securities laws, the Company may require Holder, as a condition of the
transfer or exercise of this Warrant, to give written assurance satisfactory to
the Company that this Warrant, or in the case of an exercise hereof the Shares,
are being acquired for its own account, for investment only, with no view to the
distribution of the same in violation of the Securities Act or applicable state
securities laws. Any disposition of all or any portion of this Warrant or the
Shares shall not be made unless and until:
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(b) Holder has (i) notified the Company of the proposed disposition
and furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and (ii) furnished the Company with
an opinion of counsel, satisfactory to the Company, that such disposition
will not require registration of such securities under the Securities Act
and applicable state securities laws.
Holder acknowledges that this Warrant is, and each of the Shares issuable
upon the exercise hereof will be, a restricted security, and that the
certificate or certificates evidencing such Shares will bear a legend
substantially similar to the following:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under the securities laws of any state. They may not be
sold, transferred or otherwise disposed of in the absence of
an effective registration statement covering these
securities under such Act or laws, or an opinion of counsel
satisfactory to the Company and its counsel that
registration is not required thereunder."
8. LOSS OR MUTILATION
Upon receipt by the Company of satisfactory evidence of the ownership of
and the loss, theft, destruction, or mutilation of this Warrant, and (i) in the
case of loss, theft, or destruction, upon receipt by the Company of indemnity
satisfactory to it, or (ii) in the case of mutilation, upon receipt of this
Warrant and upon surrender and cancellation of this Warrant, the Company shall
execute and deliver in lieu thereof a new Warrant representing the right to
purchase an equal number of Shares.
9. LOCK-UP
(a) In the event of a firmly-underwritten public offering of Shares
or other equity interest of the Company registered under the Securities
Act by a nationally recognized investment bank resulting in at least USD
$50 Million in net proceeds (after underwriting discount) to the Company
(the "Public Offering"), Holder agrees that for a period of six (6) months
commencing on the effective date of the registration statement filed under
the Securities Act relating to the Public Offering, Holder will not offer,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any of the Shares, any securities
which the Shares are convertible into, or exercisable or exchangeable for
any other securities of the Company, including, without limitation, any
Shares or other equity interests issuable pursuant to the terms of any
employee stock options. In order to enable the company to enforce the
aforesaid restrictions on transfer, Holder hereby agrees that the Company
may impose stop-transfer instructions with respect to the securities of
the Company owned beneficially or of record by Holder until the end of
such six (6) month period.
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(b) Furthermore, the National Association of Securities Dealers, or
affiliates thereof, or other state or federal regulatory authorities may
require that such six (6) month period be extended in connection with the
Public Offering. Accordingly, Holder agrees that officers of the Company
may execute all agreements and other documents, in their sole absolute
discretion, in the name, and on behalf of, Holder, to increase the term of
such restriction on resale to the minimum term required by the National
Association of Securities Dealers, federal, or state securities
authorities, or any of their respective affiliates, without prior notice
to, or further consent by, Holder. In addition, Holder agrees that
officers of the Company may, at their discretion, increase the term of
such restriction on resale should the necessity arise or the managing
underwriter requests such an increase in term. Holder hereby irrevocably
constitutes and appoints the Company's Chief Executive Officer, with full
power of substitution, the true and lawful agent and attorney-in-fact of
Holder, with full power and authority in Holder's name, and stead, to
increase the term of such restriction on resale as aforesaid.
10. NOTICES
All notices, requests, demands and other communications under this Warrant
shall be in writing and shall be deemed to have been duly given on the date of
receipt (or refusal of receipt) if delivered personally or by courier by the
party to whom notice is to be given, or on the earlier of the third business day
after the date of mailing or receipt if mailed to the party to whom notice is to
be given by first class mail, registered or certified, postage prepaid, and
properly addressed as follows: if to Holder, at its address as shown in the
Company's records; and if to the Company, at its principal office. Either party
may change its address for purposes of this Section 10 by giving the other party
written notice of the new address in the manner set forth above.
11. GOVERNING LAW
This Warrant and any dispute, disagreement or issue of construction or
interpretation arising hereunder, whether relating to its execution, its
validity, the obligations provided herein or performance, shall be governed or
interpreted according to the laws of the State of Texas, without regard to
conflicts of law.
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DATED AS OF ___________________, 2005.
RG AMERICA, INC.
By:
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▇▇▇▇ ▇. ▇▇▇,
Chief Executive Officer
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EXHIBIT "A"
SUBSCRIPTION
RG America, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned, _______________________, hereby elects to purchase, pursuant to
the provisions to the foregoing Warrant held by the undersigned,
____________shares of the Common Stock, $0.001 (the "Common Stock"), of RG
America, Inc.
The undersigned herewith encloses the Warrant and:
cash or a certified or cashier's check (drawn in favor of the Company) in
the amount of $__________ in payment of the Warrant Price.
DATED:______________, ___________.
Signature:
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Address:
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EXHIBIT "B"
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of Shares of
Common Stock set forth below:
No. of Shares
Name and Address of Assignee Common Stock
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and does hereby irrevocably constitute and appoint as Attorney
________________________________ to register such transfer on the books of
_______________________________________ maintained for the purpose, with full
power of substitution in the premises.
Dated: __________________________, _______.
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NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alternation or enlargement or any change whatsoever.