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EXHIBIT 10.5
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY
NOT BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO
OR (II) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER
THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION
WITH SUCH PROPOSED TRANSFER.
STOCK PURCHASE WARRANT
This Stock Purchase Warrant (the "Warrant") is issued as of this 4th day
of October, 1999 by G-Link Corporation, a Tennessee corporation (the "Company"),
to ________________ ("Holder").
AGREEMENT:
Section 1. Issuance of Warrant; Term; Replacement.
(a) For and in consideration of Holder guaranteeing a revolving credit
agreement and promissory note entered into by the Company and other good and
valuable consideration, the receipt and sufficient of which is hereby
acknowledged, the Company hereby grants to Holder the right to purchase 100,000
shares of Common Stock.
(b) The shares of Common Stock issuable upon exercise of this Warrant
are hereinafter referred to as the "Shares." This Warrant shall be exercisable
at any time and from time to time from the date hereof until ten (10) years from
the date hereof, or if such day is a day on which banking institutions in
Tennessee are authorized by law to close, then on the next succeeding day that
shall not be such a day.
(c) Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction, or mutilation of this Warrant, and (in the
case of loss, theft, or destruction) of reasonably satisfactory indemnification,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver a new Warrant of like tenor and date. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.
Section 2. Exercise Price. The exercise price (the "Exercise Price") per
share for which all or any of the Shares may be purchased pursuant to the terms
of this Warrant shall initially be $1.00.
Section 3. Exercise. This Warrant may be exercised by the Holder hereof
(but only on the conditions hereafter set forth) in whole or in part upon
delivery of written notice of intent to
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exercise to the Company at the following address: 0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: President, or such
other address as the Company shall designate in a written notice to the Holder
hereof, together with this Warrant and payment to the Company of the aggregate
Exercise Price of the Shares so purchased. The Exercise Price shall be payable
by certified or cashier's check, immediately available funds or by the surrender
of the Note or portion thereof having an outstanding principal balance equal to
the aggregate Exercise Price, or such other method mutually acceptable to the
Company and the Holder. Upon exercise of this Warrant as aforesaid, the Company
shall as promptly as practicable, and in any event within fifteen (15) days
thereafter, execute and deliver to the Holder of this Warrant a certificate or
certificates for the total number of whole Shares for which this Warrant is
being exercised in such names and denominations as are requested by such Holder.
If this Warrant shall be exercised with respect to less than all of the Shares,
the Holder shall be entitled to receive a new Warrant covering the number of
Shares in respect of which this Warrant shall not have been exercised, which new
Warrant shall in all other respects be identical to this Warrant.
Section 4. Covenants and Conditions. The above provision is subject to
the following:
(a) Neither this Warrant nor the Shares have been registered under the
Securities Act or any state securities laws ("Blue Sky Laws"). The Holder
acknowledges and agrees that this Warrant has been acquired for investment
purposes and not with a view to distribution or resale in violation of the
registration provisions of the Securities Act. This Warrant may not be pledged,
hypothecated, sold, made subject to a security interest, or otherwise
transferred without (i) an effective registration statement for such Warrant
under the Securities Act and such applicable Blue Sky Laws or (ii) an opinion of
counsel, which opinion and counsel shall be reasonably satisfactory to the
Company and its counsel, that registration is not required under the Securities
Act or under any applicable Blue Sky Laws; and transfer of Shares issued upon
the exercise of this Warrant shall be restricted in the same manner and to the
same extent as the Warrant, and the certificates representing such Shares shall
bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED UNTIL (I) A
REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS
SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO OR (II) IN THE OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER THE ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND
OTHER RESTRICTIONS AND CONDITIONS ALL AS SET FORTH IN THE SHAREHOLDERS AGREEMENT
DATED SEPTEMBER 16, 1999.
The Holder hereof and the Company agree to execute such other documents and
instruments as counsel for the Company reasonably deems necessary to effect the
compliance of the issuance of this Warrant and any shares of Common Stock issued
upon exercise hereof with applicable federal and state securities laws.
(b) Holder hereby agrees to be bound by the provisions of the
Shareholders Agreement dated as of September 16, 1999 among the Company and the
shareholders of the Company signatory thereto. Upon the Company's request,
Holder agrees to execute a counterpart to the Shareholders Agreement to evidence
the foregoing.
(c) The Company covenants and agrees that all Shares that may be issued
upon exercise of this Warrant will, upon issuance and payment therefor, be
legally and validly issued and outstanding, fully paid and nonassessable, free
from all taxes, liens, charges, and preemptive rights, if any, with respect
thereto or to the issuance thereof. The Company shall at all times reserve and
keep available for issuance upon the exercise of this Warrant such number of
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of this Warrant.
Section 5. Adjustment of Exercise Price and Number of Shares Issuable.
The Exercise Price and the number of Shares (or other securities or property)
issuable upon exercise of this Warrant shall be subject to adjustment from time
to time upon the occurrence of any of the events enumerated in this Section 5.
(a) Common Stock Reorganization. If the Company shall (i) subdivide or
consolidate its outstanding shares of Common Stock (or any class thereof) into a
greater or smaller number of shares; (ii) pay a dividend or make a distribution
on its Common Stock (or any class thereof) in shares of its capital stock; or
(iii) issue by reclassification of its Common Stock (or any class thereof) any
shares of its capital stock (any such event described in clauses (i), (ii), or
(iii) being called a "Common Stock Reorganization"), then the Exercise Price and
the type of securities for which this Warrant is exercisable shall be adjusted
immediately such that the Holder thereafter shall be entitled to receive upon
exercise of this Warrant the aggregate number and type of securities that it
would have received if this Warrant had been exercised immediately prior to such
Common Stock Reorganization.
(b) Capital Reorganizations. If there shall be any consolidation,
merger, or amalgamation of the Company with another person or entity or any
acquisition of capital stock of the Company by means of a share exchange, other
than a consolidation, merger, or share exchange in which the Company is the
continuing corporation, or any sale or conveyance of the property of the Company
as an entirety or substantially as an entirety, or any reorganization or
recapitalization of the Company (any such event being called a "Capital
Reorganization"), then the Holder of this
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Warrant shall no longer have the right to purchase Common Stock, but shall have
instead the right to purchase, upon exercise of this Warrant, the kind and
amount of shares of stock and other securities and property (including cash)
that the Holder would have owned or have been entitled to receive pursuant to
such Capital Reorganization if this Warrant had been exercised immediately prior
to the effective date of such Capital Reorganization. As a condition to
effecting any Capital Reorganization, the Company or the successor or surviving
corporation, as the case may be, shall assume by a supplemental agreement,
satisfactory in form, scope, and substance to the Holder (which shall be mailed
or delivered to the Holder of this Warrant at the last address of such Holder
appearing on the books of the Company) the obligation to deliver to such Holder
such shares of stock, securities, cash, or property as, in accordance with the
foregoing provisions, such Holder may be entitled to purchase after giving
effect to the Capital Reorganization, and all other obligations of the Company
set forth in this Warrant.
(c) Adjustment Rules. Any adjustments pursuant to this Section 5 shall
be made successively whenever an event referred to herein shall occur. No
adjustment shall be made pursuant to this Section 5 in respect of the issuance
from time to time of shares of Common Stock upon the exercise of this Warrant or
upon the exercise or conversion of any other stock or other securities
convertible into or exchangeable for Common Stock ("Convertible Securities") or
any rights to subscribe for or to purchase, or any warrants or options for the
purchase of, Common Stock or Convertible Securities.
(d) Notice of Adjustment. Not less than 10 days prior to the record date
or effective date, as the case may be, of any action that requires or might
require an adjustment or readjustment pursuant to this Section 5, the Company
shall give notice to the Holder of such event, describing such event in
reasonable detail and specifying the record date or effective date, as the case
may be, and, if determinable, the required adjustment and the computation
thereof. If the required adjustment is not determinable at the time of such
notice, the Company shall give notice to the Holder of such adjustment and
computation promptly after such adjustment becomes determinable.
Section 6. Warrant Transfer Provisions. THIS WARRANT MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS PREVIOUSLY
CONSENTED TO IN WRITING BY THE COMPANY, AND NO SALE, TRANSFER, ASSIGNMENT,
HYPOTHECATION OR OTHER DISPOSITION OF THIS WARRANT PRIOR TO SUCH DATE SHALL BE
VALID OR EFFECTIVE UNLESS PREVIOUSLY CONSENTED TO IN WRITING BY THE COMPANY. Any
transfer of this Warrant, if previously consented to by the Company, is
registrable at the office or agency of the Company referred to in Section 8
below by the Holder in person or by his duly authorized attorney, upon surrender
of this Warrant properly endorsed.
Section 7. No Rights or Liabilities as a Shareholder. This Warrant shall
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company. No provision of this Warrant, in the absence of affirmative action
by the Holder to purchase Shares, and no mere enumeration herein of the rights
or privileges of the Holder, shall give rise to any liability of Holder
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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.
Section 8. Notices. All notices, requests and other communications
required 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, postage prepaid and addressed, to Holder at the
address shown for Holder on the books of the Company, or at such other address
as shall have been furnished to the Company by notice from 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, postage prepaid and addressed
to the office of the Company at 0000 Xxxxx Xxxxx Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, or at such other address as shall have been
furnished to the Holder by notice from the Company. All notices, requests and
other communications shall be deemed to have been given either at the time of
the delivery thereof to the person entitled to receive such notice at the
address of such person for purposes of this Section 8, or, if mailed, at the
completion of the third full day following the date of such mailing thereof to
such address, as the case may be.
Section 9. 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 of such
fractional share of Common Stock in lieu of each fraction of a share otherwise
called for upon any exercise of this Warrant.
Section 10. 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 Tennessee applicable to contracts made and to be performed wholly
within such state without regard to its conflict of laws rules.
Section 11. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof may not be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
(b) Descriptive Headings. The descriptive headings of the several
Paragraphs of this Warrant are inserted for purposes of reference only and shall
not affect the meaning or construction of any of the provisions hereof.
(c) Successors and Assigns. This Warrant shall be binding upon
any entity succeeding to the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets.
[Remainder of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first above written.
G-LINK CORPORATION,
a Tennessee corporation
By: _________________________________
Name: _________________________________
Title: _________________________________
_________________________________________
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WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _______________ shares of Common Stock of
G-Link Corporation, a Tennessee corporation, and hereby makes payment of
______________ in payment therefor.
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Signature
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Signature, if jointly held
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Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Warrant)
Name ___________________________________________________________________________
(please typewrite or print in block letters)
Address ________________________________________________________________________
________________________________________________________________________________
Social Security or
Taxpayer Identification Number _________________________________________________
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