EXHIBIT 4.25
99Davric#1
"THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH
THE DISTRIBUTION HEREOF. THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE,
TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR
EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS."
STOCK PURCHASE WARRANT
RIGHT TO PURCHASE 30,000 SHARES OF COMMON STOCK
THIS CERTIFIES THAT Davric Corporation and all registered and permitted assigns
("Holder") is entitled to purchase, on or before June 30, 2004, THIRTY THOUSAND
(30,000) shares of the common stock ("Common Stock" or "Shares") of VALUESTAR
CORPORATION (the "Corporation" or "Company") upon exercise of this Warrant along
with presentation of the full purchase price as provided herein. The purchase
price of the common stock upon exercise (the "Warrant Shares") is equal to One
Dollar and Fifty Cents ($1.50) per share (the "Exercise Price").
1. Exercise.
This Warrant may be exercised one or more times, in whole or minimum increments
of 10,000 shares (or the balance of the Warrant), on any business day on or
before the expiration date listed above by presentation and surrender hereof to
the Corporation at its principal office of a written exercise request and the
Exercise Price in lawful money of the United States of America in the form of a
wire transfer or certified or official bank check for the Warrant Shares
specified in the exercise request. If this Warrant should be exercised in part
only, the Company shall, upon surrender of this Warrant, execute and deliver a
new Warrant evidencing the rights of the Holder hereof to purchase the balance
of the Warrant Shares purchasable hereunder. Upon receipt by the Corporation of
an exercise request and representations, together with proper payment of the
Exercise Price, at such office, the Holder shall be deemed to be the holder of
record of the Warrant Shares, notwithstanding that the stock transfer books of
the Corporation shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder. The
Corporation shall pay any and all transfer agent fees, documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
the Warrant Shares.
2. Redemption of Warrants.
The Corporation may elect on one occasion, by written notice as provided herein
(the "Company Notice"), to redeem all of this Warrant, in whole but not in part,
on any date (the "Redemption Date") fixed by the Company at a price of $.01 per
effective Warrant Share (the "Redemption Price") following such time as the
Closing Bid Price (as defined below) of the Company's Common Stock for the ten
(10) consecutive Trading Days (as defined below) equals or exceeds $5.00 (Five
Dollars) per common share (Minimum Trading Price); provided, however, that this
Warrant may be exercised by the Holder at any time prior to 5:00 p.m.,
California time, on the business day immediately preceding the Redemption Date.
For purposes hereof, (i) the term "Trading Day" shall mean any day on which
securities are traded on the applicable securities exchange or in the applicable
securities market; and (ii) the term "Closing Bid Price" in respect of a Trading
Day shall mean the reported last closing bid price, on the principal national
securities exchange on which the Common Stock of the Company is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the Nasdaq Stock Market or, if not admitted to trading
or quoted on the Nasdaq Stock Market, the closing bid price in the
over-the-counter market as furnished by any quotation medium or any member firm
of a national securities exchange or the Nasdaq Stock Market selected from time
to time by the Company for that purpose.
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The Company shall provide at least 10 days written notice to the Holder
("Company Notice") prior to the Redemption Date specified in such written
notice.
3. Adjustment of Exercise Price and Number of Shares Deliverable Upon Exercise
of Warrant.
The Exercise Price, Redemption Price, Minimum Trading Price and the number of
Shares purchasable upon the exercise of this Warrant are subject to adjustment
from time to time upon the occurrence of the events enumerated in this
paragraph.
(a) In case the Corporation shall at any time after the date of this Warrant:
(i) Pay a dividend of its shares of its Common Stock or make a
distribution in shares of its Common Stock with respect to its
outstanding Common Stock;
(ii) Subdivide its outstanding shares of Common Stock;
(iii) Combine its outstanding shares of Common Stock; or
(iv) Issue any other shares of capital stock by reclassification of
its shares of Common Stock;
the number of Warrant Shares in effect at the time of the record date of such
dividend, subdivision, combination, or reclassification shall be proportionately
adjusted so that Holder shall be entitled to receive the aggregate number and
kind of shares which, if this Warrant had been exercised prior to such event,
Holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
If shares of the Corporation's common stock are subdivided into a greater number
of shares of common stock, the Exercise Price and Redemption Price for the
Warrant Shares upon exercise of this Warrant shall be proportionately reduced
and the Warrant Shares shall be proportionately increased and the Minimum
Trading Price proportionately reduced; and conversely, if shares of the
Corporation's common stock are combined into a smaller number of common stock
shares, the Exercise Price, Redemption Price and Minimum Trading Price shall be
proportionately increased, and the Warrant Shares shall be proportionately
decreased.
(b) In case the Corporation shall fix a record date for the issuance of rights,
options, or warrants or make a distribution of shares of Common Stock to all
(but not less than all) holders of its outstanding Common Stock entitling them
to subscribe for or purchase shares of Common Stock (or securities convertible
into shares of Common Stock) at a price per share (or having a conversion price
per share, if a security convertible into Common Stock) less than the market
price of the shares (based on the closing bid price on the record date on NASDAQ
or a listed securities exchange of the Corporation's Common Stock, or if no such
quote is available, the shareholders equity on the date of the last financial
statement divided by the total number of shares outstanding) (the "Market
Price"), the Exercise Price to be in effect after such record date shall be
determined by multiplying the then current Exercise Price in effect immediately
prior to such record date by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
Market Price and of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights or warrants are not so issued, the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such record date had not been fixed.
4. Investment Representation.
Neither this Warrant nor the Warrant Shares issuable upon the exercise of this
Warrant have been registered under the Securities Act of 1933, or any state
securities laws. The Holder acknowledges by acceptance of the Warrant that as of
the date of this Warrant and at the time of exercise (a) he has acquired this
Warrant or the Warrant Shares, as the case may be, for investment and not with a
view to distribution; and either (b) he has a pre-existing personal or business
relationship with the Corporation, or its executive officers, or by reason of
his business or financial experience he has the capacity to protect his own
interests in connection with the transaction; and (c) he is an accredited
investor as that term is defined in Regulation D promulgated under the
Securities Act. The Holder agrees that any Warrant Shares issuable upon exercise
of this Warrant will be acquired for investment and not with a view to
distribution and such Warrant Shares will not be registered under the Securities
Act and applicable state securities laws and that such Warrant Shares may have
to be held
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indefinitely unless they are subsequently registered or qualified under the
Securities Act and applicable state securities laws or, based on an opinion of
counsel reasonably satisfactory to the Corporation, an exemption from such
registration and qualification is available. The Holder, by acceptance hereof,
consents to the placement of the following restrictive legends, or substantially
similar legends, on each certificate to be issued to the Holder by the
Corporation in connection with the issuance of such Warrant Shares: "THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE
IN CONNECTION WITH THE DISTRIBUTION HEREOF. THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND
ALL APPLICABLE STATE securities LAWS."
5. Registration Rights.
Holder shall have the right, at any time and from time to time until June 30,
2004, to include all of the shares purchased or purchasable upon the exercise of
this Warrant ( the "Registrable Shares") within any Registration Statement of
the Corporation filed by the Corporation covering shares of its Common Stock
other than a Registration Statement filed solely with respect to any employee
benefit plan of the Corporation or an offering solely related to an acquisition
or for which such Registrable Shares cannot, in the sole judgment of the
Company, be appropriately registered. The Corporation shall promptly give
written notice to Holder of any intended registration of its Common Stock not
less than thirty (30) days prior to the anticipated effective date of the
Registration Statement, and Holder shall, within fifteen (15) days of receipt
thereof, notify the Corporation of the number of Registrable Shares it desires
to include in the Registration Statement. The number of Registrable Shares which
may be included by the Holder in any such Registration Statement may be
restricted by the Corporation if, (i) in the opinion of the Corporation's
managing underwriter, the number of shares proposed to be sold by the Holder and
by the Corporation in such offering exceeds the number of securities which can
be sold in such offering or (ii) in the sole opinion of the Corporation, such
registration would conflict with the rights or impair the success of any
registration effected by the Corporation, whether pursuant to the registration
rights granted under that certain Shareholders Agreement dated March 31, 1999,
and any amendments thereto or otherwise. In such event, the Registrable Shares
of Holder to be included within such Registration Statement shall not exceed the
number approved for inclusion therein by the Corporation and/or its managing
underwriter in their sole discretion. Except for the expenses of each Holder's
underwriting fees, discounts, or commissions relating to its sale of Registrable
Shares, all costs or expenses, incident to the registration, qualification or
listing of such securities shall be paid by the Corporation. The Corporation
shall comply with all reasonable requests of Holder made in connection with the
registration, qualification, listing or sale of Registrable Shares under the
provisions set forth herein.
Each Holder of Warrants and Warrant Shares to be sold pursuant to any
Registration Statement (each, a "Distributing Holder") shall severally, and not
jointly, indemnify and hold harmless the Company, its officers and directors,
each underwriter and each person, if any, who controls the Company and such
underwriter, against any loss, claim, damage, expense or liability, joint or
several, as incurred, to which any of them may become subject under the
Securities Act or any other statute or at common law, in so far as such loss,
claim, damage, expense or liability (or actions in respect thereof) arises out
of or is based upon any untrue statement or alleged untrue statement of any
material fact contained in any such Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Distributing Holder specifically for use therein. Such Distributing Holder shall
reimburse the Company, such underwriter and each such officer, director or
controlling person for any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any such liability, as
incurred. Notwithstanding the foregoing, such indemnity with respect to such
preliminary prospectus or such final prospectus shall not inure to the benefit
of the Company, its officers or directors, or such underwriter (or such
controlling person of the Company or the underwriter) if the person asserting
any such loss, claim, damage, expense or liability purchased the securities that
are the subject thereof and did not receive a copy of the final prospectus (or
the final prospectus as then amended, revised or supplemented) at or prior to
the time such furnishing is required by the Securities Act in any case where any
such untrue statement or omission of a material fact contained in the
preliminary prospectus was corrected in the final prospectus (or, if contained
in the final prospectus, was subsequently corrected by amendment, revision or
supplement).
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6. Public Offering Lock-Up.
In connection with any public registration of this Company's securities, the
Holder (and any transferee of Holder) agrees, upon the request of the Company or
the underwriter(s) managing such underwritten offering of the Company's
securities, not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of this Warrant, any of the shares of Common
Stock issuable upon exercise of this Warrant or any other securities of the
Company heretofore or hereafter acquired by Holder (other than those included in
the registration) without the prior written consent of the Company and such
underwriter(s), as the case may be, for a period of time not to exceed fourteen
(14) days before and one hundred eighty (180) days after the effective date of
the registration. Upon request by the Company, Holder (and any transferee of
Holder) agrees to enter into any further agreement in writing in a form
reasonably satisfactory to the Company and such underwriter(s). The Company may
impose stop-transfer instructions with respect to the securities subject to the
foregoing restrictions until the end of said 180-day period. Any shares issued
upon exercise of this Warrant shall bear an appropriate legend referencing this
lock-up provision.
7. Loss, Theft, Destruction or Mutilation of Warrant.
Upon receipt by the Corporation of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of any Warrant or stock certificate, and
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon reimbursement to the Corporation of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Warrant
or stock certificate, if mutilated, the Corporation will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of this Warrant or stock certificate.
8. Assignment.
With respect to any offer, sale or other disposition of this Warrant or any
underlying securities, the Holder will give written notice to the Corporation
prior thereto, describing briefly the manner thereof, together with a written
opinion of such Holder's counsel, to the effect that such offer, sale or other
distribution may be effected without registration or qualification (under any
applicable federal or state law then in effect). Furthermore, no such transfer
shall be made unless the transferee meets the same investor suitability
standards set forth in Section 4 of this Warrant. Promptly upon receiving such
written notice and reasonably satisfactory opinion, if so requested, the
Corporation, as promptly as practicable, shall notify such Holder that such
Holder may sell or otherwise dispose of this Warrant or the underlying
securities, as the case may be, all in accordance with the terms of the written
notice delivered to the Corporation. If a determination has been made pursuant
to this Section 6 that the opinion of counsel for the Holder is not reasonably
satisfactory to the Corporation, the Corporation shall so notify the Holder
promptly after such determination has been made. Each Warrant thus transferred
shall bear the same legends appearing on this Warrant, and underlying securities
thus transferred shall bear the legends required by Section 4. The Corporation
may issue stop transfer instructions to its transfer agent in connection with
such restrictions. Warrants and underlying securities issued upon transfers
after the expiration date of the Lock-Up Period shall be issued without the
Lock-Up Legend.
9. Reservation of Shares.
The Company hereby agrees that at all times there shall be reserved for issuance
and delivery upon exercise or exchange of this Warrant all shares of its Common
Stock or other shares of capital stock of the Company from time to time issuable
upon exercise or exchange of this Warrant. All such shares shall be duly
authorized and, when issued upon the exercise or exchange of the Warrant in
accordance with the terms hereof, shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (other than as provided in the
Company's articles of incorporation and any restrictions on sale set forth
herein or pursuant to applicable federal and state securities laws) and free and
clear of all preemptive rights.
The Holder shall not have any rights as a shareholder of the Company with regard
to the Warrant Shares prior to actual exercise resulting in the purchase of the
Warrant Shares.
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10. Arbitration. In the event that a dispute arises between the Corporation and
the holder of this Warrant as to any matter relating to this Warrant, the matter
shall be settled by arbitration in Alameda County, California in accordance with
the Rules of the American Arbitration Association and the award rendered by such
arbitrator(s) shall not be subject to appeal and may be entered in any federal
or state court located in Alameda County having jurisdiction thereof, and
actions or proceedings shall be brought in no other forum or venue.
11. Governing Law.
This Warrant shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts between California residents
entered into and to be performed entirely within the State of California.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
its duly authorized officers and the corporate seal hereunto affixed as of this
30th day of June 1999.
VALUESTAR CORPORATION ACCEPTANCE BY HOLDER
/s/ XXXXX XXXXX /s/ XXXXX X. XXXXX
Xxxxx Xxxxx, President and CEO ------------------
Davric Corporation
000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxx 000
/s/ XXXXX X. XXXXXX Xxxxxxxxx, Xxxxxx 00000
Xxxxx X. Xxxxxx, Secretary
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