EXHIBIT (10)(f)
WARRANT AGREEMENT
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Gateway American Properties Corporation, a Colorado corporation (Company), and
American Securities Transfer & Trust, Inc. (AST), 0000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, a Colorado corporation (Warrant Agent), agree as
follows:
1. Purpose. The Company proposes to publicly offer and issue securities,
the offering consisting of up to 1,725,000 shares of the Company's
$.01 par value common stock (Shares) and warrants permitting the
purchase of up to 3,450,000 Shares (Warrant).
2. Warrants. Each Warrant will entitle the registered holder of a Warrant
(Warrant Holder) to purchase from the Company one Share at $4.50 per
share (Exercise Price). A Warrant Holder may exercise all of any
number of Warrants resulting in the purchase of a whole number of
Shares.
3. Exercise Period. The Warrants may be exercised at any time during the
period commencing __________, 19____ and ending at 3:00 p.m., Denver
Colorado time on January , 2002 (Expiration Date) except as changed by
Section 12 of this Agreement. After the Expiration Date, any
unexercised warrants will be void and all rights of Warrant Holders
shall cease.
4. Warrants Not Attached. The Warrant are to be offered and sold
separately and are not attached to the offered shares or otherwise
unitized, the Warrant Certificate may be split up, combined, exchanged
or transferred on the books of the Warrant Agent.
5. Certificates. The Warrant Certificates shall be in registered form
only and shall be substantially in the form set forth in Exhibit A
attached to this Agreement. Warrant Certificates shall be signed by,
or shall bear the facsimile signature of, the President of a Vice
President of the Company and the Secretary or an Assistant Secretary
of the Company and shall bear a facsimile of the Company's corporate
seal. If any person, whose facsimile signature has been placed upon
any Warrant Certificate of the signature of an officer of the Company,
shall have ceased to be such officer before such Warrant Certificate
is countersigned, issued and delivered, such Warrant Certificate shall
be countersigned, issued and delivered with the same effect as if such
person had not ceased to be such officer. Any Warrant Certificate may
be signed by, or made to bear the facsimile signature of, any person
who at the actual date of the preparation of such Warrant Certificate
shall be a proper officer of the company to sign such Warrant
Certificate even though such person was not such an officer upon the
date of the Agreement.
6. Countersigning. Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent hereby is authorized to countersign
and deliver to, or in accordance with the instructions of, any Warrant
Holder any Warrant Certificate which is properly issued.
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7. Registration of Transfer and Exchanges. Subject to the provisions of
Section 4, the Warrant Agent shall from time to time register the
transfer of any outstanding Warrant Certificate upon records
maintained by the Warrant Agent for such purpose upon surrender of
such Warrant Certificate to the Warrant Agent for transfer,
accompanied by appropriate instruments of transfer in form
satisfactory to the Company and the Warrant Agent and duly executed by
the Warrant Holder or a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be issued in
the name of and to the transferee and the surrendered Warrant
Certificate shall be cancelled.
8. Exercise of Warrants.
a. Any one Warrant or any multiple of one Warrant evidenced by any
Warrant Certificate may be exercised upon any single occasion on
or after the Exercise Date, and on or before the Expiration Date.
A Warrant shall be exercised by the Warrant Holder by
surrendering to the Warrant Agent the Warrant Certificate
evidencing such Warrant with the exercise form on the reverse of
such Warrant Certificate duly completed and executed and
delivering to the Warrant Agent, by good check or bank draft
payable to the order of the Company, the Exercise Price for each
Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise form
thereon duly executed together with payment in full of the
Exercise Price for the Shares for which Warrants are then being
exercised, the Warrant Agent shall requisition from any transfer
agent for the Shares, and upon receipt shall make delivery of,
certificates evidencing the total number of whole Shares for
which Warrants are then being exercised in such names and
denominations as are required for delivery to, or in accordance
with the instructions of, the Warrant Holder. Such certificates
for the Shares shall be deemed to be issued, and the person whom
such Shares are issued of record shall be deemed to have become a
holder of record of such Shares, as of the date of the surrender
of such Warrant Certificate and payment of the Exercise Price,
whichever shall last occur, provided that if the books of the
Company with respect to the Shares shall be deemed to be issued,
and the person to whom such Shares are issued of record shall be
deemed to have become a record holder of such Shares, as of the
date on which such books shall next be open (whether before, on
or after the Expiration Date) but at the Exercise Price,
whichever shall have last occurred, to the Warrant Agent.
c. If less than all the Warrants evidenced by a Warrant Certificate
are exercised upon a single occasion, a new Warrant Certificate
for the balance of the Warrants not so exercised shall be issued
and delivered to, or in accordance with, transfer instructions
properly given by the Warrant Holder until the Expiration Date.
d. All Warrant Certificates surrendered upon exercise of the
Warrants shall be cancelled.
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e. Upon the exercise, or conversion of any warrant, the Warrant
Agent shall promptly deposit the payment into an escrow account
established by mutual agreement of the Issuer and the Warrant
Agent at a federally insured commercial bank. All funds deposited
in the escrow account will be disbursed on a weekly basis to the
issuer once they have been determined by the Warrant Agent to be
collected funds. Once the funds are determined to be collected,
the Warrant Agent shall cause the share certificate(s)
representing the exercised warrants to be issued.
f. Expenses incurred by American Securities Transfer Inc. while
acting in the capacity as Warrant Agent will be paid by the
Company. These expenses, including delivery of exercised share
certificate to the shareholder, will be deducted from the
exercise fee submitted prior to distribution of funds to the
Issuer. A detailed accounting statement relating to the number of
shares exercised, names of registered warrant holder and the net
amount of exercised, funds remitted will be given to the Issuer
with the payment of each exercise amount.
g. At the time of exercise of the warrant(s), the transfer fee is to
be paid by Warrant Holder. In the event the shareholder must pay
the fee and fails to remit same, the fee will be deducted from
the proceeds prior to distribution to the Company.
9. Taxes. The Company will pay all taxes attributable to the initial
issuance of Shares upon exercise of Warrants. The Company shall not,
however, be required to pay any tax which may be payable in respect to
any transfer involved in any issue of Warrant Certificates or in the
issue of any certificates of Shares in the name other than that of the
Warrant Holder upon the exercise of any Warrant.
10. Mutilated or Missing Warrant Certificates. If any Warrant Certificate
is mutilated, lost, stolen or destroyed, the Company and the Warrant
Agent may, on such terms as to indemnify or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated
Warrant Certificate, include the surrender thereof), and upon receipt
of evidence satisfactory to the Company and the Warrant Agent of such
mutilation, loss, theft or destruction, issue a substitute Warrant
Certificate of like denomination or tenor as the Warrant Certificate
so mutilated, lost, stolen or destroyed. Applicants for substitute
Warrant Certificates shall comply with such other reasonable
regulations and pay any reasonable charges as the Company or the
Warrant Agent my prescribe.
11. Reservation of Shares. For the purpose of enabling the Company to
satisfy all obligation to issue Shares upon exercise of Warrants, the
Company will at all times reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued
shares, the full number of Shares which may be issued upon the
exercise of Warrants will upon issue be fully paid and nonassessable
by the Company and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
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12. Governmental Restrictions. If any Shares issuable upon the exercise of
Warrants require registration or approval of any governmental
authority, the company will endeavor to secure such registration or
approval; provided that in no event shall such Shares be issued, and
the Company shall have the authority to suspend the exercise of all
Warrants, until such registration or approval shall have been
obtained; but all Warrants, the exercise of which is requested during
any such suspension, shall be exercisable at the Exercise Price. If
any such period of suspension continues pas the Expiration Date, all
Warrants, the exercise of which have been requested on or prior to the
Expiration Date, shall be exercisable upon the removal of such
suspension until the close of business on the business day immediately
following the expiration of such suspension.
13. Adjustments. If prior to the exercise of any Warrants, the Company
shall have effected one or more stock split-ups, stock dividends or
other increases or reductions of the number of shares of its $.01 par
value common stock outstanding without receiving compensation
therefore in money, services or property, the number of shares of
common stock subject to the Warrant granted shall, (i) if a net
increase shall have been effected in the number of outstanding shares
of the Company's common stock, be proportionately increased, and the
cash consideration payable per share shall be proportionately reduced,
and, (ii) if a net reduction shall have been effected in the number of
outstanding shares of the Company's common stock, be proportionately
reduced and the cash consideration payable per share be
proportionately increased.
14. Notice to Warrant Holders. Upon any adjustment as described in Section
13, the Company within 20 days thereafter shall (i) cause to be filed
with the Warrant Agent a certificate signed by a Company officer
setting forth the details of such adjustment, the method of
calculation and the facts upon which such calculation is based, which
certificate shall be conclusive evidence of the correctness of the
matters set forth therein, and (ii) cause written notice of such
adjustments to be given to each Warrant Holder as of the record date
applicable to such adjustment. Also, if the Company proposes to enter
into any reorganization, reclassification, sale of substantially all
of its assets, consolidation, merger, dissolution, liquidation or
winding up, the Company shall give notice of such fact at least 20
days prior to such action to all Warrant Holders which notice shall
set forth such facts as indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the
Exercise Price and the kind and amount of the shares or other
securities and property deliverable upon exercise of the Warrants.
Without limiting the obligation of the Company hereunder to provide
notice to each Warrant Holder, failure of the Company to give notice
shall not invalidate corporate action taken by the Company.
15. No Fractional Warrants or Shares. The Company shall not be required to
issue fractions of Warrants upon the reissue of Warrants, any
adjustments as described in Section 13 or otherwise; but the Company
in lieu of issuing any such fractional interest, shall round up or
down to the nearest full Warrant. If the total Warrants surrendered by
exercise would result in the issuance of a fractional share, the
Company shall not be required to issue a fractional share but rather
the aggregate number of shares issuable will be rounded up or down to
the nearest full share.
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16. Rights of Warrant Holders. No Warrant Holder, as such, shall have any
rights of a shareholder of the Company, either at a law or equity, and
the rights of the Warrant Holders, as such, are limited to those
rights expressly provided in this Agreement or in the Warrant
Certificates. The Company and the Warrant Agent may treat the
registered Warrant Holder in respect of any Warrant Certificates as
the absolute owner thereof for all purposes notwithstanding any notice
to the contrary.
17. Warrant Agent. The Company hereby appoints the Warrant Agent to act as
the agent of the Company and the Warrant Agent hereby accepts such
appointment upon the following terms and conditions by all of which
the Company and every Warrant Holder, by acceptance of his Warrants,
shall be bound:
a. Statements contained in this Agreement and in the Warrant
Certificates shall be taken as statements of the Company. The
Warrant Agent assumes no responsibility for the correctness of
any of the same except such as describes the Warrant Agent or for
action taken or to be taken by the Warrant Agent.
b. The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the Company's covenants contained
in this Agreement or in the Warrant Certificates.
c. The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the
Warrant Agent shall incur no liability or responsibility to the
Company or to any Warrant Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel,
provided the Warrant Agent shall have exercised reasonable care
in the selection and continued employment of such counsel.
d. The Warrant Agent shall incur no liability or responsibility to
the Company or to any Warrant Holder for any action taken in
reliance upon any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument believed by it
to be genuine and to have been signed, sent or presented by the
proper party or parties.
e. The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in
the execution of this Agreement, to reimburse the Warrant Agent
for all expenses, taxes and governmental charges and all other
charges of any kind in nature incurred by the Warrant Agent in
the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities,
including judgments, costs and counsel fees, for this Agreement
except as a result of the Warrant Agent's negligence or bad
faith.
f. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more
Warrant Holders shall furnish the Warrant Agent with reasonable
security and indemnity for any costs and expenses which may be
incurred in connection with such action, suit or legal
proceeding, but this provision shall not effect the power of the
Warrant Agent to take such action as the Warrant Agent may
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consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any
of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any
recovery of judgement shall be for the ratable benefit of the
Warrant Holders as their respective rights or interest may
appear.
g. The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contact with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company
or for any other legal entity.
18. Successor Warrant Agent. Any corporation into which the Warrant Agent
may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation
to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall
be the successor to the Warrant Agent hereunder without the execution
or filing of any paper or any further act of a party or the parties
hereto. In any such event or if the name of the Warrant Agent is
changed, the Warrant Agent or such successor may adopt the
countersignature of the original Warrant Agent and may countersign
such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor Warrant Agent.
19. Change of Warrant Agent. The Warrant Agent may resign or be discharged
by the Company from its duties under this Agreement by the Warrant
Agent or the Company, as the case may be, giving notice in writing to
the other, and by giving a date when such resignation or discharge
shall take effect, which notice shall be sent at least 30 days prior
to the date so specified. If the Warrant Agent shall resign, be
discharged or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any Warrant Holder or
after discharging the Warrant Agent, then any Warrant Holder may apply
to the District Court for Denver County, Colorado, for the appointment
of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such
Court, the duties of the Warrant Agent shall be carried out by the
Company. Any successor Warrant Agent, whether appointed by the Company
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or by such Court, shall be a bank or a trust company, in good
standing, organized under the laws of the State of Colorado or of the
United States of America, having its principal office in Denver,
Colorado and having at the time of its appointment as Warrant Agent, a
combined capital and surplus of at least four million dollars. After
appointment, the successor Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed and the
former Warrant Agent shall deliver and transfer to the successor
Warrant Agent any property at the time held by it thereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for effecting the delivery or transfer. Failure to give any
notice provided for in the section, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
20. Notices. Any notice or demand authorized by this Agreement to be given
or made by the Warrant Agent or by any Warrant Holder to or on the
Company shall be sufficiently given or made if sent by mail, first
class, certified or registered, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant
Agent), as follows:
Gateway American Properties Corporation
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Any notice or demand authorized by this Agreement to be given or made
by any Warrant Holder or by the Company to or on the Warrant Agent
shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company), as
follows:
American Securities Transfer & Trust, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Any distribution, notice or demand required or authorized by this
Agreement to be given or made by the Company or the Warrant Agent to
or on the Warrant Holders shall be sufficiently given or made if sent
by mail, first class, certified or registered, postage prepaid,
addressed to the Warrant Holders at their last know addresses as they
shall appear on the registration books for the Warrant Certificates
maintained by the Warrant Agent.
21. Supplements and Amendments. The Company and the Warrant Agent may from
time to time supplement or amend this Agreement without the approval
of any Warrant Holders in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which
the Company and the Warrant Agent may deem necessary or desirable.
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22. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
23. Termination. This Agreement shall terminate at the close of business
on the Expiration Date or such earlier date upon which all Warrants
have been exercised; provided, however, that if exercise of the
Warrants is suspended pursuant to Section 12 and such suspension
continues past the Expiration Date, this Agreement shall terminate at
the close of business on the business day immediately following
expiration of such suspension. The provisions of Section 17 shall
survive such termination.
24. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
State of Colorado and for all purposes shall be construed in
accordance with the laws of said State.
25. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any person or corporation other than the Company,
the Warrant Agent and the Warrant Holders any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Warrant
Agent and the Warrant Holders.
26. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be
deemed to be an original and all such counterparts shall together
constitute but one and the same instrument.
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Date: January , 2002
Gateway American Properties Corporation,
a Colorado corporation
By: /s/ Xxxxxx X. Deutsch
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Xxxxxx X. Deutsch, President
SEAL
ATTEST:
/s/ Xxxx X. Xxxxxx
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Secretary: Xxxx X. Xxxxxx
American Securities Transfer & Trust, Inc.
a Colorado corporation
By: /s/
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Vice President:
SEAL
ATTEST:
/s/
-------------------------
Secretary:
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