EXHIBIT 10.28
SILVERADO FOODS, INC.
COMMON STOCK PURCHASE WARRANT
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Number of Shares: 35,000 Holder: CAPMAC Eighty Two Limited Partnership
Purchase Price: $.50 per share
Expiration Date: December 11, 2002
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Silverado Foods, Inc., an Oklahoma corporation (the "Company"), hereby
certifies that, for value received, CAPMAC Eighty Two Limited Partnership, or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company at any time or from time to time after the date hereof and prior to the
fifth anniversary hereof (the "Exercise Period"), at the Purchase Price
hereinafter set forth, 35,000 shares of the fully paid and nonassessable Common
Stock of the Company. The number and character of such shares of Common Stock
and the Purchase Price are subject to adjustment as provided herein.
The purchase price per share of Common Stock issuable upon exercise of this
Warrant (the "Purchase Price") shall be $.50.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Silverado Foods, Inc. and any
corporation that shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes (a) the Company's common stock, par
value $.01 per share, (b) any other capital stock of any class or classes
(however designated) of the Company, authorized on or after such date, the
holders of which shall have the right, without limitation as to amount, either
to all or to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any shares
entitled to preference, and the holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even though the right so to vote has been suspended by
the happening of such a contingency) and (c) any other securities into which or
for which any of the securities described in (a) or (b) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1. Method of Exercise. This Warrant may be exercised in whole or in part
(but not as to a fractional share of Common Stock), at any time and from time to
time during the Exercise Period, by the holder hereof by surrender of this
Warrant, with the form of subscription at the end
hereof duly executed by such holder, to the Company at its principal office,
accompanied by payment of the Purchase Price multiplied by the number of shares
of Common Stock for which this Warrant is being exercised (the "Exercise
Price"). Payment of the Exercise Price shall be made by check or bank draft
payable to the order of the Company or by wire transfer to the account of the
Company. Upon exercise, the holder shall be entitled to receive, promptly after
payment in full, one or more certificates, issued in the holder's name or in
such name or names as the holder may direct, subject to the limitations on
transfer contained herein, for the number of shares of Common Stock so
purchased. The shares so purchased shall be deemed to be issued as of the close
of business on the date on which this Warrant shall have been exercised (the
"Exercise Date").
1.2. Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon the request of the holder hereof, acknowledge in
writing its continuing obligation to afford to such holder the registration
rights to which such holder shall continue to be entitled after such exercise in
accordance with the provisions of a Registration Rights Agreement dated the date
hereof. If the holder shall fail to make any such request, such failure shall
not affect the continuing obligation of the Company to afford to such holder any
such rights.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as practicable
after the exercise of this Warrant will cause to be issued in the name of and
delivered to the holder thereof, or, to the extent permissible hereunder, to
such other person as such holder may direct, a certificate or certificates for
the number of fully paid and nonassessable shares of Common Stock to which such
holder shall be entitled on such exercise, plus, in lieu of any fractional share
to which such holder would otherwise be entitled, cash equal to such fraction
multiplied by the then applicable Purchase Price, together with any other stock
or other securities and property to which such holder is entitled upon such
exercise pursuant to Section 1 or otherwise.
The Company covenants that upon the expiration of the applicable restrictive
period relating to the shares of Common Stock underlying this Warrant, if any,
it will use its best lawful efforts to issue or cause the transfer agent of the
Company to issue one or more certificates representing such shares of Common
Stock
3. Adjustment for Dividends in Other Stock Property, etc.; Reclassification,
etc. In case at any time or from time to time, the holders of Common Stock
shall have received, or (on or after the record date fixed for the determination
of shareholders eligible to receive) shall have become entitled to receive,
without payment therefor,
(a) other or additional stock or other securities or property (other than
cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings or
earned surplus of the Company), or
(c) other or additional stock or other securities or property (including
cash) by way of spinoff, splitup, reclassification, recapitalization,
combination of shares or similar corporate rearrangement,
COMMON STOCK PURCHASE WARRANT - Page 2
other than additional shares of Common Stock issued as a stock dividend or in a
stock split then and in each such case the holder of this Warrant, on the
exercise hereof as provided in Section 1, shall be entitled to receive the
amount of stock that such holder would hold on the date of such exercise if on
the date hereof it had been the holder of record of the number of shares of
Common Stock called for on the face of this Warrant and had thereafter, during
the period from the date hereof to and including the date of such exercise,
retained such shares and all such other or additional stock receivable by him as
aforesaid during such period, giving effect to all adjustments called for during
such.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization, etc. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock to which such holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be, if
such holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter.
4.2. Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock receivable by the holder of this Warrant after the effective
date of such.
4.3. Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in this
Section 4, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock receivable on the exercise of
this Warrant after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant.
5. Adjustment for Extraordinary Events. In the event that the Company shall (i)
issue additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of
COMMON STOCK PURCHASE WARRANT - Page 3
which shall be the number of shares of Common Stock outstanding immediately
after such event, and the product so obtained shall thereafter be the Purchase
Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in
the same manner upon the happening of any successive event or events. The holder
of this Warrant shall thereafter, on the exercise hereof, be entitled to receive
that number of shares of Common Stock determined by multiplying the number of
shares of Common Stock that would otherwise be issuable on such exercise by a
fraction of which (i) the numerator is the Purchase Price that would otherwise
be in effect, and (ii) the denominator is the Purchase Price in effect on the
date of such exercise.
6. No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms 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. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise, (b)
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
stock on the exercise of this Warrant, and (c) will not transfer all or
substantially all of its properties and assets to any other person (corporate or
otherwise), or consolidate with or merge into any other person or permit any
such person to consolidate with or merge into the Company (if the Company is not
the surviving person), unless such other person shall expressly assume in
writing and will be bound by all the terms of this Warrant.
7. Notices of Record Date, etc. In the event of (a) any taking by the Company of
a record of the holders of any class or securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, or (b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or (c) any
voluntary or involuntary dissolution, liquidation or windingup of the Company,
then and in each such event the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such 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, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
windingup is to take place, and the time, if any, as of which the holders of
record of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or windingup. Such notice shall be mailed at least 20
days prior to the date specified in such notice on which any action is to be
taken.
COMMON STOCK PURCHASE WARRANT - Page 4
8. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company will
at all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, all shares of Common Stock from time to time issuable
on the exercise of this Warrant.
9. Exchange of Warrant. On surrender for exchange of this Warrant, properly
endorsed and in compliance with the restrictions on transfer set forth in the
legend on the face of this Warrant, to the Company, the Company at its expense
will issue and deliver to or on the order of the holder thereof a new Warrant of
like tenor, in the name of such holder or as such holder (on payment by such
holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face of the Warrant so surrendered.
10. Replacement of Warrant. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
11. Remedies. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
12. Negotiability, etc. This Warrant is issued upon the following terms, to all
of which each holder or owner hereof by the taking hereof consents and agrees:
(a) title to this Warrant may be transferred by endorsement (by the holder
hereof executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby;
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary; and
(d) notwithstanding the foregoing, this Warrant may not be sold,
transferred or assigned except pursuant to an effective registration statement
under the Securities Act of 1933, as amended or, pursuant to an applicable
exemption therefrom or in accordance with Regulation S
COMMON STOCK PURCHASE WARRANT - Page 5
promulgated under such Act.
13. Notices, etc. All notices and other communications from the Company to the
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
in writing by such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this Warrant who has
so furnished an address to the Company.
14. Miscellaneous. This Warrant and any term 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 shall be construed and enforced in accordance with and
governed by the internal laws of the State of Oklahoma. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. This Warrant is being executed as an instrument
under seal. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.
[Signature Page Follows]
COMMON STOCK PURCHASE WARRANT - Page 6
DATED as of December 11, 1997.
SILVERADO FOODS, INC.
By:/s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
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Title: Chief Executive Officer
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[Corporate Seal]
Attest:
By:/s/ XXXXXX X. XXXXXX
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Secretary
COMMON STOCK PURCHASE WARRANT - Page 7
NOTICE OF EXERCISE
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(To be executed only upon exercise or conversion
of the Warrant in whole or in part)
To Silverado Foods, Inc.:
The undersigned registered holder of the accompanying Warrant hereby
exercises such Warrant or portion thereof for, and purchases thereunder,
___________/1/ shares of Common Stock (as defined in such Warrant) and herewith
makes payment therefor of $___________. The undersigned requests that the
certificates for such shares of Common Stock be issued in the name of, and
delivered to, ________________________________________ whose address is
___________________________________________. The undersigned, as contemplated by
Section 4.2(b) of the Subscription Agreement pursuant to which this Warrant was
issued, hereby states that the representations and warranties of the undersigned
set forth therein are true and correct in all material respects.
Dated:
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(Name must conform to name of xxxxxx as
specified on the face of the Warrant)
By:
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Name:
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Title:
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Address of holder:
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/1/ Insert the number of shares of Common Stock as to which this Warrant is
being exercised. In the case of a partial exercise, a new Warrant or Warrants
will be issued and delivered, representing the unexercised portion of this
Warrant, to the holder surrendering the same.
