EXHIBIT 10.55
STOCK PURCHASE WARRANT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. EXCEPT AS OTHERWISE SET FORTH
HEREIN OR IN A SETTLEMENT AGREEMENT DATED AS OF APRIL 28, 2000, THE SECURITIES
REPRESENTED HEREBY MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION
THEREFROM.
THIS CERTIFIES THAT, for value received, RGC INTERNATIONAL INVESTORS, LDC,
or its registered assigns, is entitled to purchase from ▇▇▇▇▇▇▇.▇▇▇, a Nevada
corporation (the "Company"), at any time or from time to time during the period
specified in Section 2 hereof, Two Million Two Hundred Thousand (2,200,000)
fully paid and nonassessable shares of the Company's Common Stock, par value
$0.001 per share (the "Common Stock"), at an exercise price of $1.50 per share
(the "Exercise Price"). The term "Shares", as used herein, refers to the shares
of Common Stock purchasable hereunder. The Shares and the Exercise Price are
subject to adjustment as provided in Section 4 hereof. The term "Warrant" means
this Warrant.
This Warrant is subject to the following terms, provisions and conditions:
1. Exercise.
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(a) Subject to the provisions hereof, this Warrant may be exercised by
the Holder hereof in whole or in part, by the surrender of this Warrant,
together with a Notice of Exercise attached hereto as Exhibit A, to the Company
during normal business hours on any business day at the Company's principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the Holder) and upon (i) payment to the Company in cash,
by certified or official bank check or by wire transfer for the account of the
Company of the Exercise Price for the Shares specified in the Notice of Exercise
or (ii) if the resale of the Shares by the holder is not then registered
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), delivery to the Company of a written
notice of an election to effect a "Cashless Exercise" (as defined in Section
9(h) below) for the Shares specified in the Notice of Exercise. The Shares so
purchased shall be deemed to be issued to the Holder, or the Holder's designee,
as the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the Notice of Exercise shall
have been duly delivered, and payment shall have been made for such Shares as
set forth above.
(b) Certificates for the Shares so purchased, representing the
aggregate number of Shares specified in the Notice of Exercise, shall be
delivered to the Holder within three (3) business days after the date on which
this Warrant shall have been so exercised. The certificates so delivered shall
be in such denominations as may be requested by the Holder and shall be
registered in the name of such Holder or such other name as shall be designated
by such Holder.
(c) If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to Holder a new Warrant representing
the number of Shares with respect to which this Warrant shall not then have been
exercised.
(d) Notwithstanding anything in this Warrant to the contrary, in no
event shall the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants (or portions
thereof) upon exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein) and (ii) the number of shares of
Common Stock issuable upon exercise of the Warrants (or portions thereof) with
respect to which the determination described herein is being made, would result
in beneficial ownership by the holder and its affiliates of more than 4.9% of
the outstanding shares of Common Stock. For purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (i) hereof.
Notwithstanding anything to the contrary contained herein, the limitation on
exercise of this Warrant set forth herein may not be amended without the written
consent of the holder hereof and the Company.
2. Term. The Warrants may be exercised at any time or from time to time on
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or after the date on which this Warrant is issued and delivered pursuant to the
terms of the Settlement Agreement (the "Issue Date") and before 5:00 p.m.
California time on the fifth (5th) anniversary of the Issue Date (the "Exercise
Period").
3. Agreements of the Company. The Company hereby covenants and agrees as
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follows:
(a) All Shares will, upon issuance in accordance with the terms of this
Warrant, be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof.
(b) During the Exercise Period, the Company shall at all times have
authorized, and reserved for the purpose of issuance upon exercise of this
Warrant, a sufficient number of shares of Common Stock to provide for the full
exercise of this Warrant.
(c) The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
the Company's Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common
Stock from time to time issuable upon the exercise of this Warrant; and the
Company shall so list on each national securities exchange or automated
quotation system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.
(d) The Company will not, by amendment of its charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed by it
hereunder, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the holder of this Warrant in order to protect the
exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.
(e) So long as the holder beneficially owns this Warrant (or portion
thereof), the Company shall maintain its corporate existence and shall not
merge, consolidate or sell all or substantially all of the Company's assets,
except in the event of a merger or consolidation or sale of all or substantially
all of the Company's assets, where (i) the successor or acquiring entity and, if
an entity different from the successor or acquiring entity, the entity whose
securities into which the Warrant shall become exercisable pursuant to Section
4(b) hereof, in such transaction assumes the Company's obligations hereunder and
(ii) the entity whose securities into which the Warrant shall become exercisable
pursuant to Section 4(b) hereof is a publicly traded corporation whose Common
Stock is listed for trading on the NNM, Nasdaq SmallCap, NYSE, AMEX or OTC
Bulletin Board.
(f) This Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all the
Company's assets.
4. Adjustments. The Warrant granted hereunder and the Exercise Price
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thereof shall be subject to adjustment from time to time upon the happening of
certain events as set forth below.
(a) Stock Splits and Dividends. If outstanding shares of the Company's
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Common Stock shall be subdivided into a greater number of shares (by stock
split, recapitalization, reorganization, reclassification or otherwise) or a
dividend in Common Stock shall be paid in respect of Common Stock, the Exercise
Price in effect immediately prior to such subdivision or at the record date of
such dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Exercise Price, the number of Shares purchasable upon the exercise of the
Warrants shall be changed to the number determined by dividing (i) an amount
equal to the number of Shares issuable upon the exercise of the Warrants
immediately prior to such adjustment, multiplied by the Exercise Price in effect
immediately prior to such adjustment, by (ii) the Exercise Price in effect
immediately after such adjustment.
(b) Consolidation, Merger or Sale. In case of any consolidation of the
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Company with, or merger of the Company into any other corporation, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company,
then as a condition of such consolidation, merger or sale or conveyance,
adequate provision will be made whereby the holder of this Warrant will have the
right to acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Section 4 will thereafter be applicable as nearly as may be
in relation to any shares of stock or securities thereafter deliverable upon the
exercise of this Warrant. The Company will not effect any consolidation, merger
or sale or conveyance unless prior to the consummation thereof, the successor or
acquiring entity (if other than the Company) and, if an entity different from
the successor or acquiring entity, the entity whose capital stock or assets the
holders of the Common Stock of the Company are entitled to receive as a result
of such consolidation, merger or sale or conveyance assumes by written
instrument the obligations under this Warrant (including under this Section 4)
and the obligations to deliver to the holder of this Warrant such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
holder may be entitled to acquire.
(c) Adjustment Certificate. When any adjustment is required to be made
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in the Shares or the Exercise Price pursuant to this Section, the Company shall
promptly mail to Holder a certificate setting forth (i) a brief statement of the
facts requiring such adjustment, (ii) the Exercise Price after such adjustment
and (iii) the kind and amount of stock or other securities or property into
which the Warrant shall be exercisable after such adjustment.
(d) No Fractional Shares. No fractional shares of Common Stock are to
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be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the closing price of a share of the
Company's Common Stock on the date of such exercise.
(e) Other Notices. In case at any time:
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(i) the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all its assets to, another
corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the
date on which the holders of Common Stock shall be entitled to receive such
dividend, distribution, or subscription rights or to exchange their Common Stock
for stock or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 10 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall
not affect the validity of the proceedings referred to in clauses (i), (ii),
(iii) and (iv) above.
(f) Certain Events. If any event occurs of the type contemplated by
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the adjustment provisions of this Section 4 but not expressly provided for by
such provisions, the Company will give notice of such event as provided in
Section 4(c) hereof, and the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of shares of Common
Stock acquirable upon exercise of this Warrant so that the rights of the holder
shall be neither enhanced nor diminished by such event.
(g) Issue Tax. The issuance of certificates for Shares upon the
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exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
5. Reservation of Shares. The Company shall at all times keep reserved a
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sufficient number of authorized shares of Common Stock to provide for the
exercise of the Warrant in full.
6. Transferability. The Warrant issued hereunder and any and all Shares
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issued upon exercise of the Warrants shall be transferable on the books of the
Company by the holder hereof in person or by duly authorized attorney subject to
any restrictions imposed by applicable federal or state securities laws. It
shall be a further condition to any transfer of the Warrant that the transferor
(if any portion of the Warrant is retained) and the transferee shall receive and
accept a new Warrant, of like tenor and date, executed by the Company, for the
portion so transferred and for any portion retained, and shall surrender this
Agreement executed. Notwithstanding anything herein to the contrary, the
registration rights described in Section 8 hereof are assignable only in
accordance with the provisions of that certain Registration Rights Agreement,
dated as of April 28, 2000, by and among the Company and Holder (the
"Registration Rights Agreement").
7. Voting. This Warrant shall not entitle the Holder hereof to any voting
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rights or other rights as a shareholder of the Company. No provision of this
Warrant, in the absence of affirmative action by the holder hereof to purchase
Shares, and no mere enumeration herein of the rights or privileges of the holder
hereof, shall give rise to any liability of such holder for the Exercise Price
or as a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
8. Registration Rights. The initial Holder of this Warrant (and certain
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assignees thereof) is entitled to the benefit of such registration rights in
respect of the Shares as are set forth in the Registration Rights Agreement.
9. Miscellaneous.
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(a) Amendment. This Warrant may be amended by written agreement
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between the Company and Holder.
(b) Notice. All notices, requests, and other communications required
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or permitted to be given or delivered hereunder to the holder of this Warrant
shall be in writing, and shall be personally delivered, or shall be sent by
certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to such holder at the address shown for such holder on
the books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent
by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Section 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.
(c) Further Assurances. Both parties agree to execute any additional
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documents and take any further actions necessary to carry out the purposes of
this Warrant.
(d) Severability. If any provision of this Warrant is held by any
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court of competent jurisdiction to be illegal, unenforceable or void, such
provision will be enforced to the greatest extent possible and all other
provisions of this Warrant will continue in full force and effect.
(e) Governing Law. This Warrant shall be interpreted and enforced in
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accordance with the laws of the State of Delaware, without regard to conflicts
of laws principles thereof. The parties irrevocably consent to the exclusive
jurisdiction of the United States District Court for the Northern District of
California in San Jose, California with respect to any suit or proceeding based
on or arising under this Warrant and irrevocably agree that all claims in
respect of such suit or proceeding shall be determined in such court.
(f) Entire Agreement; Successors and Assigns. This Warrant, the
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Settlement Agreement and the Registration Rights Agreement constitute the entire
agreement between Holder and the Company relative to the subject matter hereof.
Any previous agreements between the parties with respect to the subject matter
hereof are superseded by this Warrant and such other agreements. Subject to any
exceptions specifically set forth in this Warrant, the terms and conditions of
this Warrant shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
(g) Headings. The headings of the Sections of this Warrant are for
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convenience and shall not by themselves determine the interpretation of this
Warrant.
(h) Cashless Exercise. Notwithstanding anything to the contrary
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contained in this Warrant, if, and only if, the resale of the Shares by the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, this Warrant may be exercised by presentation and
surrender of this Warrant to the Company at its principal executive offices with
a written notice of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof (a "Cashless Exercise").
In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
cash, the holder shall surrender this Warrant for that number of shares of
Common Stock determined by multiplying the number of Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price (as hereinafter defined) per
share of the Common Stock and the Exercise Price, and the denominator of which
shall be the then current Market Price per share of Common Stock.
(i) "Market Price," as of any date, (i) means the last reported
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sale price for the shares of Common Stock on the Over-the-Counter Bulletin Board
(the "OTC BB") for the trading day immediately preceding such date, as reported
by Bloomberg, or (ii) if the OTC BB is not the principal trading market for the
shares of Common Stock, the last reported sale price on the principal trading
market for the Common Stock on the same date as reported by Bloomberg, or (iii)
if market value cannot be calculated as of such date on any of the foregoing
bases, the Market Price shall be the fair market value as reasonably determined
in good faith by (a) the Board of Directors of the Companyor (b) at the option
of a majority in interest of the holders of the outstanding Warrants, by an
independent investment bank of nationally recognized standing in the valuation
of businesses similar to the business of the Company. The manner of determining
the Market Price of the Common Stock set forth in the foregoing definition shall
apply with respect to any other security in respect of which a determination as
to market value must be made hereunder.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
delivered by its duly authorized officer as of the Effective Date set forth
above.
▇▇▇▇▇▇▇.▇▇▇
By:_______________________
Its:_______________________
FORM OF NOTICE OF EXERCISE
Dated: ________ __, 200_
To: ▇▇▇▇▇▇▇.▇▇▇
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check or wire
transfer in the amount of, or, if the resale of such Common Stock by the
undersigned is not currently registered pursuant to an effective registration
statement under the Securities Act of 1933, as amended, by surrender of
securities issued by the Company (including a portion of the Warrant) having a
market value (in the case of a portion of this Warrant, determined in accordance
with Section 9(h) of the Warrant) equal to $_________. Please issue a
certificate or certificates for such shares of Common Stock in the name of and
pay any cash for any fractional share to:
Name:
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Signature:
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Address:
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Note: The above signature should
correspond exactly with the name on
the face of the within Warrant.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.