EXHIBIT 10.2
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT
OR AN OPINION OF COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
February 25, 2005
ONESOURCE TECHNOLOGIES, INC.
Warrant for the Purchase of Shares of Common Stock
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No. CW-________
For value received, this Warrant is hereby issued by OneSource
Technologies, Inc., a Delaware corporation (the "Company"), to Xxxxxxx Xxxxxx
(the "Holder"). Subject to the provisions of this Warrant, the Company hereby
grants to Holder the right to purchase from the Company 130,719 fully paid and
non-assessable shares of Common Stock at a price of $0.50 per share (the
"Exercise Price"). This Warrant is being issued pursuant to that certain
Subscription Agreement dated February 25, 2005 between the Company and the
Holder.
The date set forth above shall be referred to as the "Base Date." The
number of shares of Common Stock to be received upon the exercise of this
Warrant may be adjusted from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise, and as adjusted from time to
time, are hereinafter referred to as "Warrant Stock." The term "Other
Securities" means any other equity or debt securities that may be issued by the
Company in addition thereto or in substitution for the Warrant Stock.
The Holder agrees with the Company that this Warrant is issued, and all the
rights hereunder shall be held, subject to all of the conditions, limitations,
and provisions set forth herein.
1. Exercise of Warrant. Subject to the terms and conditions set forth
herein, this Warrant may be exercised in whole or in part, pursuant to the
procedures provided below, at any time on or before 5:00 p.m., Mountain time, on
February 25, 2007 (the "Expiration Date") or, if such day is a day on which
banking institutions in Arizona are authorized by law to close, then on the next
succeeding day that shall not be such a day. To exercise this Warrant the Holder
shall present and surrender this Warrant to the Company at its principal office,
with the Warrant Exercise Form attached hereto duly executed by the Holder and
accompanied by payment (either (a) in cash or by check, payable to the order of
the Company, (b) by cancellation by the Holder of indebtedness or other
obligations of the Company to the Holder, or (c) by a combination of (a) or
(b)), of the aggregate Exercise Price for the total aggregate number of shares
for which this Warrant is exercised. Upon receipt by the Company of this
Warrant, together with the executed Warrant Exercise Form and payment of the
Exercise Price for the shares to be acquired, in proper form for exercise, and
subject to the Holder's compliance with all requirements of this Warrant for the
exercise hereof, the Holder shall be deemed to be the holder of record of the
shares of Common Stock (or Other Securities) issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder; provided, however, that no exercise of
this Warrant shall be effective, and the Company shall have no obligation to
issue any Common Stock or Other Securities to the Holder upon any attempted
exercise of this Warrant, unless the Holder shall have first delivered to the
Company, in form and substance reasonably satisfactory to the Company,
appropriate representations so as to provide the Company reasonable assurances
that the securities issuable upon exercise may be issued without violation of
the registration requirements of the Securities Act and applicable state
securities laws, including without limitation representations that the
exercising Holder is an "accredited investor" as defined in Regulation D under
the Securities Act and that the Holder is familiar with the Company and its
business and financial condition and has had an opportunity to ask questions and
receive documents relating thereto to his reasonable satisfaction.
2. Net Issue Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise and notice of such
election in which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:
X = Y (A-B)
A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being canceled
(at the date of such calculation)
A = the fair market value of one share of the
Company's Common Stock (at the date of such
calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
3. Reservation of Shares. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
or other shares of capital stock of the Company (and Other Securities) from time
to time receivable upon exercise of this Warrant. All such shares (and Other
Securities) shall be duly authorized and, when issued upon such exercise, shall
be validly issued, fully paid, and non-assessable and free of all preemptive
rights.
4. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant, but the Company shall
pay the Holder an amount equal to the Fair Market Value (as defined below) of
such fractional share of Common Stock in lieu of each fraction of a share
otherwise called for upon any exercise of this Warrant.
5. Fair Market Value. For purposes of this Warrant, the Fair Market Value
of one share of Common Stock (or Other Security) shall be determined as of any
date (the "Value Date") by the Company's Board of Directors in good faith;
provided, however, that where there exists a public market for the Company's
Common Stock on the Value Date, the fair market value per share shall be either:
(a) If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange or listed for trading
on the NASDAQ system, the Fair Market Value shall be the last reported sale
price of the security on such exchange or system on the last business day prior
to the Value Date or if no such sale is made on such day, the average of the
closing bid and asked prices for such day on such exchange or system; or
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(b) If the Common Stock is not so listed or so admitted to unlisted trading
privileges, the Fair Market Value shall be the mean of the last reported bid and
asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the Value Date.
6. Assignment or Loss of Warrant. Subject to the transfer restrictions
herein (including Section 9), upon surrender of this Warrant to the Company or
at the office of its stock transfer agent, if any, with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in such instrument of assignment and this Warrant shall
promptly be canceled. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of this
Warrant, and of reasonably satisfactory indemnification by the Holder, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a replacement Warrant of like tenor and date.
7. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
8. Adjustments.
8.1 Adjustment for Recapitalization. If the Company shall at any time after
the Base Date subdivide its outstanding shares of Common Stock (or Other
Securities at the time receivable upon the exercise of the Warrant) by
recapitalization, reclassification, or split-up thereof, or if the Company shall
declare a stock dividend or distribute shares of Common Stock to its
stockholders, the number of shares of Common Stock (or Other Securities) subject
to this Warrant immediately prior to such subdivision shall be proportionately
increased, and if the Company shall at any time after the Base Date combine the
outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of shares of Common Stock subject to this
Warrant immediately prior to such combination shall be proportionately
decreased. Any such adjustment and adjustment to the Exercise Price pursuant to
this Section 8.1 shall be effective at the close of business on the effective
date of such subdivision or combination or if any adjustment is the result of a
stock dividend or distribution then the effective date for such adjustment based
thereon shall be the record date therefor.
Whenever the number of shares of Common Stock purchasable upon the exercise of
this Warrant is adjusted, as provided in this Section 8.1, the Exercise Price
shall be adjusted to the nearest cent by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.
8.2 Adjustment for Reorganization, Consolidation, Merger, Etc. In case of
any reorganization of the Company (or any other corporation, the securities of
which are at the time receivable on the exercise of this Warrant) after the Base
Date or in case after such date the Company (or any such other corporation)
shall consolidate with or merge into another corporation or convey all or
substantially all of its assets to another corporation, then, and in each such
case, the Holder of this Warrant upon the exercise thereof as provided in
Section 1 at any time after the consummation of such reorganization,
consolidation, merger, or conveyance, shall be entitled to receive, in lieu of
the securities and property receivable upon the exercise of this Warrant prior
to such consummation, the securities or property to which such Holder would have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.
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8.3 Certificate as to Adjustments. The adjustments provided in this Section
8 shall be interpreted and applied by the Company in such a fashion so as to
reasonably preserve the applicability and benefits of this Warrant (but not to
increase or diminish the benefits hereunder). In each case of an adjustment in
the number of shares of Common Stock receivable on the exercise of the Warrant,
the Company at its expense will promptly compute such adjustment in accordance
with the terms of the Warrant and prepare a certificate executed by two
executive officers of the Company setting forth such adjustment and showing in
detail the facts upon which such adjustment is based. The Company will forthwith
mail a copy of each such certificate to each Holder.
8.4 Notices of Record Date, Etc. In the event that:
(a) the Company shall declare any dividend or other distribution to the
holders of Common Stock, or authorizes the granting to Common Stock holders of
any right to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities; or
(b) the Company authorizes any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation or
entity; or
(c) the Company authorizes any voluntary or involuntary dissolution,
liquidation, or winding up of the Company,
then, and in each such case, the Company shall mail or cause to be mailed to the
holder of this Warrant at the time outstanding a notice specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution, or right, and stating the amount and character of such
dividend, distribution, or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
or winding up is to take place, and the time, if any is to be fixed, as to which
the holders of record of Common Stock (or such other securities at the time
receivable upon the exercise of the Warrant) shall be entitled to exchange their
shares of Common Stock (or such Other Securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation, or winding up. Such notice shall
be mailed at least 20 days prior to the date therein specified.
8.5 No Impairment. The Company will not, by any voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 8 and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder of this Warrant against impairment.
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9. Transfer to Comply with the Securities Act. This Warrant and any Warrant
Stock or Other Securities may not be sold, transferred, pledged, hypothecated,
or otherwise disposed of except as follows: (a) to a person who, in the opinion
of counsel to the Company, is a person to whom this Warrant or the Warrant Stock
or Other Securities may legally be transferred without registration and without
the delivery of a current prospectus under the Securities Act with respect
thereto and then only against receipt of an agreement of such person to comply
with the provisions of this Section 9 with respect to any resale or other
disposition of such securities; or (b) to any person upon delivery of a
prospectus then meeting the requirements of the Securities Act relating to such
securities and the offering thereof for such sale or disposition, and thereafter
to all successive assignees.
10. Legend. Unless the shares of Warrant Stock or Other Securities have
been registered under the Securities Act, upon exercise of any of the Warrants
and the issuance of any of the shares of Warrant Stock, all certificates
representing shares shall bear on the face thereof substantially the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED, OR
OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THAT ACT OR UNLESS AN OPINION OF COUNSEL TO THE
CORPORATION IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
11. Notices. All notices required hereunder shall be in writing and shall
be deemed given when telegraphed, delivered personally, or within two days after
mailing when mailed by certified or registered mail, return receipt requested,
to the Company or the Holder, as the case may be, for whom such notice is
intended, if to the Holder, at the address of such party shown on the books of
the Company, or if to the Company, to 00000 Xxxxx 00xx Xxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000, at the address set forth on the signature page
hereof, Attn: President, or at such other address of which the Company or the
Holder has been advised by notice hereunder.
12. Applicable Law. The Warrant is issued under and shall for all purposes
be governed by and construed in accordance with the laws of the state of
Delaware, without regard to the conflict of laws provisions of such state.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its
behalf, in its corporate name, by its duly authorized officer, all as of the day
and year first above written.
ONESOURCE TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
Address:
00000 Xxxxx 00xx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to (i) exercise the within
Warrant to purchase __________ shares of the Common Stock of ONESOURCE
TECHNOLOGIES, INC., a Delaware corporation, pursuant to the provisions of
Section 1 of the attached Warrant, and hereby makes payment of $__________ in
payment therefor, or (ii) exercise this Warrant for the purchase of _______
shares of Common Stock, pursuant to the provisions of Section 2 of the attached
Warrant. The undersigned's execution of this form constitutes the undersigned's
agreement to all the terms of the Warrant and to comply therewith.
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Signature
Print Name:
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Signature, if jointly held
Print Name:
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Date
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ASSIGNMENT FORM
FOR VALUE RECEIVED_____________________________ ("Assignor") hereby sells,
assigns, and transfers unto _______________________________ ("Assignee") all of
Assignor's right, title, and interest in, to and under Warrant No. CW-____
issued by ONESOURCE TECHNOLOGIES, INC., dated February ___, 2005.
DATED: _________________
ASSIGNOR:
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Signature
Print Name:
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Signature, if jointly held
Print Name:
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ASSIGNEE:
The undersigned agrees to all of the terms of the Warrant and to comply
therewith.
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Signature
Print Name:
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Signature, if jointly held
Print Name:
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