EXHIBIT 10.1
GK INTELLIGENT SYSTEMS, INC.
WARRANT AGREEMENT
April 7, 1999
▇▇. ▇▇▇ ▇▇▇▇▇▇▇
Capella Computers, Ltd.
Dear ▇▇. ▇▇▇▇▇▇▇:
GK Intelligent Systems, Inc., a Delaware corporation (the "Company"), for
value received, hereby agrees to issue a stock purchase warrant entitling the
person whose name appears on the signature page of this Agreement to purchase
60,250 shares of the Company's common stock (the "Common Stock"). Such warrants
are evidenced by warrant certificates in the form attached hereto as Exhibit A
(each such instrument being hereinafter referred to as a "Warrant," and each
Warrant and all instruments hereafter issued in replacement, substitution,
combination, or subdivision thereof being hereinafter collectively referred to
as the "Warrants"). The number of shares of Common Stock purchasable upon
exercise of the Warrants is subject to adjustment as provided in Section 5
below. The Warrants will be exercisable by you as to all or any lesser number
of shares of Common Stock covered thereby, at an initial Purchase Price of $0.01
per share, subject to adjustment as provided in Section 5 below, for the
exercise period defined in Section 3(a) below. The term "Warrant holder" refers
to the person whose name appears on the signature page of this agreement. Such
term, when used in this Warrant Agreement in reference to or in the context of a
person who holds or owns shares of Common Stock issued upon exercise of a
Warrant, refers where appropriate to such person who holds or owns such shares
of Common Stock.
1. Representations and Warranties.
The Company represents and warrants to you as follows:
(a) Corporate and Other Action. The Company has all requisite power and
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver, and perform this Warrant Agreement, to execute,
issue, sell, and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Purchase Price, to issue, sell, and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants (the "Shares"), and
to perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of
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all liens, claims, encumbrances, and preemptive rights. This Warrant
Agreement and, when issued, each Warrant issued pursuant hereto, has been or
will be duly executed and delivered by the Company and is or will be a legal,
valid, and binding agreement of the Company, enforceable in accordance with its
terms. No authorization, approval, consent, or other order of any governmental
entity, regulatory authority, or other third party is required for such
authorization, execution, delivery, performance, issue, or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement,
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Articles of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument, judgment, decree, order, statute, rule, or
regulation to which the Company is a party or by which it is or may be bound.
2. Transfer.
(a) Transferability of Warrants. You agree that the Warrants are being
acquired as an investment and not with a view to distribution thereof and that
the Warrants may not be transferred, sold, assigned, or hypothecated except as
provided herein and in compliance with all applicable securities and other laws.
(b) Registration of Shares. You agree not to make any sale or other
disposition of the Shares except pursuant to a registration statement which has
become effective under the Securities Act of 1933, as amended (the "Act"),
setting forth the terms of such offering, the underwriting discount and
commissions and any other pertinent data with respect thereto, unless you have
provided the Company with an opinion of counsel reasonably acceptable to the
Company that such registration is not required. Certificates representing the
Shares, which are not registered as provided in Section 2, shall bear an
appropriate legend and be subject to a "stop-transfer" order.
3. Exercise of Warrants, Partial Exercise.
(a) Exercise Period. This Warrant is exercisable from the date hereof and
expires April 7, 2004.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised
in full by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: President, accompanied by payment, in cash or by certified or
bank cashier's check payable to the order of the Company, in the amount obtained
by multiplying the number of shares of the Common Stock represented by the
respective Warrant or Warrants by the Purchase Price per share (after giving
effect to any adjustments as provided in Section 5 below).
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(c) Partial Exercise. Subject to Section 3(a), each Warrant may be
exercised in part by the Warrant holder by surrender of the Warrant, with the
form of subscription at the end thereof duly executed by such Warrant holder, in
the manner and at the place provided in Section 3(b) above, accompanied by
payment, in cash or by certified or bank cashier's check payable to the order of
the Company, in amount obtained by multiplying the number of shares of the
Common Stock designated by the Warrant holder in the form of subscription
attached to the Warrant by the Purchase Price per share (after giving effect to
any adjustments as provided in Section 5 below). Upon any such partial
exercise, the Company will forthwith issue and deliver to or upon the order of
the Warrant holder a new Warrant of like tenor, in the name of the Warrant
holder thereof or as the Warrant holder (upon payment by such Warrant holder of
any applicable transfer taxes) may request, subject to Section 2(a), calling in
the aggregate for the purchase of the number of shares of the Common Stock equal
to the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
4. Delivery of Stock Certificates on Exercise.
Any exercise of the Warrants pursuant to Section 3 shall be deemed to have
been effected immediately prior to the close of business on the date on which
the Warrants together with the subscription form and the payment for the
aggregate Purchase Price shall have been received by the Company. At such time,
the person in whose name any certificate or certificates representing the Shares
or Other Securities (as defined below) shall be issuable upon such exercise
shall be deemed to have become the holder or holders of record of the Shares or
Other Securities so purchased. As soon as practicable after the exercise of any
Warrant in full or in part the Company will cause to be issued in the name of,
and delivered to the purchasing Warrant holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such Warrant holder shall be entitled upon such
exercise, but in no case shall such issuance be later than 24 hours after
exercise. The term "Other Securities" refers to any stock (other than Common
Stock), other securities or assets (including cash) of the Company or any other
person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Purchase Price and Number of Shares Purchasable.
The Purchase Price and the number of Shares are subject to adjustment from
time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) subdivide the outstanding Common Stock, (ii) combine the outstanding Common
Stock into a smaller number of Common Stock, or (iii) issue any shares of its
capital stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
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Company is the continuing corporation), then in each case the Purchase Price,
and the number and kind of Shares receivable upon exercise, in effect at the
time of the effective date of such subdivision, combination, or reclassification
shall be proportionately adjusted so that the holder of any Warrant exercised
after such time shall be entitled to receive the aggregate number and kind of
Shares which, if such Warrant had been exercised immediately prior to such time,
he would have owned upon such exercise and been entitled to receive by virtue of
such subdivision, combination, or reclassification. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) No adjustment in the Purchase Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the nearest one-
thousandth of a share, as the case may be.
(c) In case of any capital reorganization of the Company, or of any
reclassification of the Common Stock (other than a reclassification of the
Common Stock referred to in subsection (a) of this Section 5), or in the case of
the consolidation of the Company with or the merger of the Company into any
other corporation or of the sale, transfer, or lease of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation, each Warrant shall after such capital reorganization,
reclassification of the Common Stock, consolidation, merger, sale, transfer, or
lease be exercisable, upon the terms and conditions specified in this Agreement,
for the number of shares of stock or other securities, assets, or cash to which
a holder of the number of shares of Common Stock purchasable (at the time of
such capital reorganization, reclassification of shares, consolidation, merger,
sale, transfer, or lease) upon exercise of such Warrant would have been entitled
upon such capital reorganization, reclassification of the Common Stock,
consolidation, merger, sale, transfer, or lease; and in any such case, if
necessary, the provisions set forth in this Section 5 with respect to the rights
and interests thereafter of the holder of the Warrants shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to any shares
of stock or other securities, assets, or cash thereafter deliverable upon the
exercise of the Warrants. The subdivision or combination of the Common Stock at
any time outstanding into a greater or lesser number of shares shall not be
deemed to be a reclassification of the Common Stock for the purposes of this
paragraph.
6. Further Covenants of the Company.
(a) Dilution or Impairments. The Company will not, by amendment of its
certificate or articles of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants or of this Warrant Agreement, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant. Without
limiting the generality of the foregoing, the Company:
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(i) shall at all times reserve and keep available, solely for issuance
and delivery upon the exercise of the Warrants, all shares of Common Stock
(or Other Securities) from time to time issuable upon the exercise of the
Warrants; and
(ii) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock or Other Securities upon the exercise
of the Warrants from time to time outstanding.
(b) Title to Stock. All shares of Common Stock delivered upon the exercise
of the Warrants shall be validly issued, fully paid, and nonassessable; each
Warrant holder shall, upon such delivery, receive good and marketable title to
the Shares, free and clear of all voting and other trust arrangements, liens,
encumbrances, equities, and claims whatsoever; and the Company shall have paid
all taxes, if any, in respect of the issuance thereof.
(c) Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company, at the expense of the Warrant holder,
will execute and deliver, in lieu thereof, a new Warrant of like tenor.
(d) Fractional Shares. No fractional Shares are to be issued upon the
exercise of any Warrant, but the Company shall pay a cash adjustment in respect
of any fraction of a share which would otherwise be issuable in an amount equal
to such fraction multiplied by the closing price which shall be the last
reported sales price regular way or, in case no such reported sales takes place
on such day, the average of the closing bid and asked prices regular way, on the
principal national securities exchange in the United States on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any such national securities exchange, the average of the
highest reported bid and lowest reported asked price as furnished by the
National Association of Securities Dealers, Inc. through its automated quotation
system ("Nasdaq") or a similar organization if Nasdaq is no longer reporting
such information, or if the Common Stock is not listed or admitted to trading on
Nasdaq, in an amount as determined by the Board of Directors.
7. No Rights of Stockholders.
No Warrant holder, as such, shall be entitled to vote or to receive
dividends or shall otherwise be deemed to be the holder of shares of Common
Stock for any purpose, nor shall anything contained herein or in any Warrant be
construed to confer upon any Warrant holder, as such, any of the rights of a
stockholder of the Company or any right to vote or give or withhold consent to
any action of the Company (whether upon any reorganization, issuance of
securities, reclassification or conversion of Common Stock, consolidation,
merger, sale, lease, conveyance, or otherwise), receive notice of meetings or
other action affecting stockholders or receive dividends or subscription rights,
until such Warrant shall have been surrendered for exercise accompanied by full
and proper payment of the
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Purchase Price as provided in this Warrant Agreement and shares of Common Stock
thereunder shall become issuable and until such person shall have been deemed to
have become the holder of record of such shares.
8. Miscellaneous.
All notices, certificates and other communications from or at the request
of the Company to any Warrant holder shall be mailed by first class, registered,
or certified mail, postage prepaid, to such address as may have been furnished
to the Company in writing by such Warrant holder, or, until an address is so
furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived,
discharged, or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge, or termination is
sought. This Warrant Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Texas. The headings in this
Warrant Agreement are for purposes of reference only and shall not limit or
otherwise affect any of the terms hereof. This Warrant Agreement, together with
the forms of instruments annexed hereto as exhibits, constitutes the full and
complete agreement of the parties hereto with respect to the subject matter
hereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the 7/th/ day of April, 1999, in Houston, Texas, by its proper
corporate officers, thereunto duly authorized.
GK INTELLIGENT SYSTEMS, INC.
By________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
The above Warrant Agreement is confirmed
as of this 7/th/ day of April, 1999.
___________________
▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT A
WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN
SECTIONS 3 AND 4 OF SUCH ACT; OR (B) ANY STATE SECURITIES LAWS IN RELIANCE UPON
APPLICABLE EXEMPTIONS THEREUNDER. THESE WARRANTS MUST BE ACQUIRED FOR
INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE WARRANTS NOR
THE UNDERLYING STOCK MAY BE TRANSFERRED OR EXERCISED EXCEPT IN COMPLIANCE WITH
ALL APPLICABLE SECURITIES AND OTHER LAWS.
To Purchase 60,250 Shares
of Common Stock
GK INTELLIGENT SYSTEMS, INC.
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of GK INTELLIGENT SYSTEMS, INC. (the
"Corporation") from the Corporation at the purchase price per share of $0.01, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of April 7, 1999, the terms of which are hereby incorporated
herein. Reference is hereby made to such Warrant Agreement for a further
statement of the rights of the holder of this Warrant.
Registered Owner: ▇▇▇ ▇▇▇▇▇▇▇ Date: ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇ Price
Per Share: $0.01
Expiration Date: Subject to Section 3(a) of the Warrant Agreement April 7, 2004
WITNESS the signature of the Corporation's authorized officer:
GK INTELLIGENT SYSTEMS, INC.
By________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To GK INTELLIGENT SYSTEMS, INC.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _________ * shares of Common Stock of GK INTELLIGENT
SYSTEMS, INC. and herewith makes payment of $_______________ therefor, and
requests that the certificate or certificates for such shares be issued in the
name of and delivered to the undersigned.
Dated:______________
____________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the enclosed Warrant)
____________________________________________
(Address)
___________________________
(*) Insert here the number of shares called for on the face of the Warrant or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised, in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the
Warrant Agreement pursuant to which the Warrant was granted, may be
delivered upon exercise.
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