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Exhibit 10.38
SUPERSHUTTLE INTERNATIONAL, INC.,
WARRANT AGREEMENT
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, EXCHANGED,
HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN
COMPLIANCE WITH SECTION 9 OF THIS AGREEMENT.
THIS WARRANT AGREEMENT (the "Agreement"), dated as of June 15, 1995, is
made and entered into by and between SUPERSHUTTLE INTERNATIONAL, INC., a
Delaware corporation (the "Company"), and HAWKES, XXXXXXX XXXXXXX & CO., LTD.
(the "Warrantholder").
For good and valuable consideration, receipt of which is hereby
acknowledged, the Company hereby issues to the Warrantholder warrants (as
hereinafter described, the "Warrants") to purchase up to an aggregate of
Twenty-five Thousand (25,000) (subject to adjustment pursuant to Section 5
hereof) shares (the "Shares") of the Company's Common Stock (the "Common
Stock").
This Warrant is issued pursuant to that certain Fee Agreement, dated as
of June 15, 1995 (the "Fee Agreement").
In consideration of the foregoing and for the purpose of defining
the terms and provisions of the Warrants and the respective rights and
obligations thereunder, the Company and the Warrantholder, for value received,
hereby agree as follows:
Section 1. Representations.
1.1 Investment Representation. The Warrantholder hereby represents to
the Company as follows:
1.1.1 The Warrantholder is experienced in evaluating and
investing in emerging companies such as the Company.
1.1.2 The Warrantholder is acquiring this Warrant, and the
Shares issuable upon exercise of this Warrant, for investment for its
own account and not with the view to, or for resale in connection with,
any distribution thereof. The Warrantholder understands that neither
the Warrant nor the Shares have been registered under the Securities
Act by reason of a specific exemption from the registration provisions
of the Securities Act which depends upon, among other things, the bona
fide nature of the investment intent as expressed herein.
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1.1.3 The Warrantholder acknowledges that this Warrant (and the Shares
of Common Stock issuable upon exercise hereof) must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available. The Warrantholder is aware of the provisions of Rule
144 promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than two years after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in transactions directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations.
1.1.4 The Warrantholder understands that no public market now exists
for any of the securities issued by the Company and that it is unlikely that a
public market will exist for the Shares of Common Stock in the foreseeable
future.
1.1.5 The Warrantholder has received a copy of the Company's balance
sheets as of September 30, 1992 and 1993, together with the related statements
of income, shareholders' equity and changes in financial position for the fiscal
years then ended, with the related opinions of Xxxxxx Xxxxxxxx & Co.,
independent public accountants (the "Audited Financials"), and 1.1.6 its
unaudited balance sheet dated September 30, 1994 and the related unaudited
statements of income and retained earnings for the year then ended (the
"Unaudited Financials") (collectively the "Financial Statements"), and has had
an opportunity to discuss the Company's business, management and financial
affairs with its management and has had the opportunity to review the Company's
operations and facilities. The Warrantholder understands that such discussions,
as well as any written information issued by the Company, were intended to
describe the aspects of the Company's business and prospects which it believes
to be material but were not necessarily a thorough or exhaustive description.
1.1.7 The Warrantholder (i) is represented by independent, experienced
counsel in connection with the negotiation of this transaction and the
preparation, execution and delivery of this Warrant, the Fee Agreement and the
documents contemplated thereby, (ii) is sophisticated and knowledgeable
concerning business and financial matters generally, (iii) has substantial
experience in investments, and (iv) has the knowledge and ability to evaluate
the risks and merits of an investment in the Company. The Warrantholder has
performed extensive due diligence regarding the Company, its assets and
business, and has obtained all information, documents and materials it has
requested, has had the opportunity to interview the employees and officers of
the Company
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responsible for the management and operation of the Company's business and has
satisfied itself regarding the Company's value, finances and business prospects.
1.2 Legend on Shares. Each certificate for Shares issued upon exercise
of the Warrants shall bear the following legend:
"The shares represented by this Certificate have not
been registered under the Securities Act of 1933.
The shares may not be sold, exchanged, hypothecated
or transferred in any manner unless they are
registered under said Act and applicable state law
or an exemption from such registration is
available.
Any certificate issued at any, time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a Registration Statement under the Act, of
the securities represented, thereby) shall also bear the above legend unless, in
the opinion of the Company's counsel, the securities represented thereby need no
longer be subject to such restrictions.
Section 2. Term of Warrants; Exercise of Warrants.
2.1 Subject to the terms of this Agreement, the Warrantholder shall
have the right, upon the occurrence of a "Triggering Event," as hereinafter
defined, at any time until 5:00 p.m., Los Angeles time, on May 1, 2005 (the
"Termination Date"), to purchase from the Company up to the number of fully paid
and nonassessable Shares to which the Warrantholder may at the time be entitled
to purchase pursuant to this Agreement, upon surrender to the Company, at its
principal office, of this Agreement and payment to the Company of the Warrant
Price (as defined in and determined in accordance with the provisions of
Sections 4 and 5 hereof), for the number of Shares in respect of which such
Warrant is then exercised, but in no event for less than 100 Shares (unless less
than an aggregate of 100 Shares are then purchasable under all outstanding
Warrants held by a Warrantholder). Payment of the aggregate Warrant Price shall
be made in cash or by check.
The Warrants shall be exercisable, at the election of the
Warrantholder, either in full or from time to time in part and, in the event
that the Warrants are partially exercised, a new Warrant Agreement evidencing
the remaining portion of the Warrants shall be executed by both parties hereto.
2.2 As used herein, "Triggering Event" shall mean and include the first
to occur of:
2.2.1 the successful completion of a public
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offering by the Company of securities of the Company pursuant to a Registration
Statement filed with the Securities and Exchange Commission (other than a
registration on Form S-8 of a similar form contemplating the registration of
securities for an employee equity or benefit plan); or
2.2.2 the completion of a merger of the Company with or into any other
corporation or entity (other than a merger with a wholly-owned subsidiary of
the Company, or a merger solely for the purpose of changing the domicile and
state of incorporation of the Company); or
2.2.3 the completion of a sale of all or substantially all of the
outstanding securities of the Company in a single transaction or a series of
related transactions; or
2.2.4 the completion of a sale of all or substantially all of the
outstanding securities of the Company by the holders thereof in a single
transaction or a series of related transactions.
Section 3. Reservation of Shares.
There has been reserved, and the Company shall at all times keep
reserved so long as the Warrants remain outstanding, out of its authorized
Common Stock, such number of shares of Common Stock as shall be subject to
purchase under the Warrants.
Section 4. Warrant Price.
The price per Share (the "Warrant Price") at which Shares shall be
purchasable upon exercise of the Warrants shall be Six Dollars ($6.00), subject
to further adjustment pursuant to Section 5 hereof.
Section 5. Adjustment of Warrant Price and Number of Shares.
In case the Company shall (i) pay a dividend in Common Stock or any
other security or make a distribution in Common Stock, (ii) subdivide its
outstanding Common Stock, (iii) combine its outstanding Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification of
its Common Stock other securities of the Company, the number and kind of Shares
purchasable upon exercise of the Warrants immediately prior thereto shall be
adjusted so that the Warrantholder shall be entitled to receive the kind and
number of Shares or other securities of the Company which it would have owned or
would have been entitled to receive immediately after the happening of any of
the events described above, had the Warrants been exercised immediately prior to
the happening of such event or any record date with respect hereto. Any
adjustment made pursuant to this Section 5 shall
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become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.
Whenever the number of Shares purchasable upon the exercise of the
Warrants is adjusted as herein provided, the Warrant Price payable upon exercise
of the Warrants shall be adjusted by multiplying such Warrant Price immediately
prior to such adjustment by a fraction, the numerator of which shall be the
number of Shares purchasable upon the exercise of the Warrants immediately prior
to such adjustment, and the denominator of which shall be the number of Shares
so purchasable immediatey thereafter.
Except as provided in this Section 5, no adjustment in respect of any
cash dividends or distributions out of earnings shall be made during the term of
the Warrants or upon the exercise of the Warrants.
Section 6. Merger or Consolidation.
In case of any merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation), or in the case of any sale or conveyance of the
property of the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the Warrantholder shall have the
right thereafter (until the Termination Date) to receive upon the exercise
hereof, for the same aggregate Warrant Price hereunder immediately prior to such
event, the kind and amount of shares of stock or other securities or property
receivable upon such merger or consolidation or upon the dissolution following
such sale or other transfer, by a holder of the number of Shares obtainable upon
excercise of this Warrant immediately prior to such event.
Section 7. Fractional Interests.
The Company shall not be required to issue fractional Shares on the
exercise of the Warrants. If any fraction of a Share would, except for the
provisions of this Section 7, be issuable on the exercise of the Warrants (or
specified portion thereof) , the Company shall pay an amount in cash equal to
the then Current Market Price multiplied by such fraction. For purposes of this
Agreement, the term "Current Market Price" shall mean (i) if the Common Stock is
traded in the over-the-counter market and not in the NASDAQ National Market
System nor on any national securities exchange, the average per share closing
bid prices of the Common Stock on the fifteen (15) consecutive trading days
immediately preceding the date in question, as reported by NASDAQ or an
equivalent generally accepted reporting service, or (ii) if the Common Stock is
traded in the NASDAQ National Market System or on national securities exchange,
the average for the fifteen (15) consecutive trading days immediately preceding
the date in question
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of the daily per share closing prices of the Common Stock in the NASDAQ National
Market System or on the principal stock exchange on which it is listed, as the
case may be. For purposes of clause (i) above, if trading in the Common Stock is
not reported by NASDAQ, the average referred to in said clause shall be as
reported in the "Pink sheets" published by National Quotation Bureau,
Incorporated. The closing price referred to in clause (ii) above shall be the
last reported sale price or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices, in either case,
in the NASDAQ National Market System or on the national securities exchange on
which the Common Stock is then listed. In the event the Common Stock is not
traded in the NASDAQ National Market System or on a national securities
exchange, the Current Market Price shall be determined in good faith by the
Board of Directors of the Company.
Section 8. No Rights as Stockholder; Notices to Warrantholder.
Nothing contained in this Agreement shall be construed as conferring
upon the Warrantholder or its transferees any rights as a stockholder of the
Company, including the right to vote, receive dividends, consent or receive
notices as a stockholder in respect of any meeting of stockholders for the
election of directors of the Company or any other matter, except the Company
shall mail to each Warrantholder a copy of its annual report and any periodic
reports provided its shareholders. If, however, at any time prior to the
expiration of the Warrants and prior to their exercise in full, any one or more
of the events described in Section 6 shall occur, then the Company shall give
notice in writing of such event to the Warrantholder, as provided in Section 13
hereof, as soon as reasonably practical but in any event at least 30 days prior
to the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to vote on such proposed
consolidation, merger, sale, dissolution, liquidation or winding up. Such notice
shall specify such record date or the date of closing the transfer books, as the
case may be. Failure to mail or receive such notice or any defect therein shall
not affect the validity of any action taken with respect thereto.
Section 9. Restrictions on Transfer.
The Warrantholder agrees that prior to making any disposition of the
Warrants or the Shares, if no registration statement or past-effective amendment
thereto under the Act (collectively a "Registration Statement") with respect to
such disposition is then effective, no such disposition shall be made unless the
Company has received from the Warrantholder an opinion of counsel reasonably
satisfactory to the Company that such disposition may be made without
registration under the Act.
Section 10. Exchange, Transfer, Assignment or Loss of Warrant.
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Subject to Section 9 hereof, this Warrant is exchangeable without expense
at the option of the Warrantholder, upon presentation and surrender hereof to
the Company at its offices for other Warrants of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
Shares as are purchasable hereunder. Upon surrender of this Warrant to the
Company at its principal office with the Assignment form annexed hereto duly
executed, 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 be promptly cancelled. Subject to Section 9 hereof, this Warrant
may be divided or combined with other Warrants upon presentation thereof at the
office of the Company together with a written notice signed by the Warrantholder
hereof specifying the names and denominations in which new Warrants are to be
Issued. Upon receipt by the Company of evidence 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 will execute and
deliver a new Warrant of like tenor and date.
Section 11. Notices.
Any notice pursuant to this Agreement by the Company or by a
Warrantholder or a holder of Shares shall be in writing and shall be deemed to
have been duly given on the day personally delivered or transmitted via
facsimile, or three days after deposited in the U.S. mail by certified mail,
return receipt requested as follows:
If to a Warrantholder or a holder of Shares:
Hawkes, Xxxxxxx Xxxxxxx & Co., Ltd.
c/o Xxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
If to the Company:
SUPERSHUTTLE INTERNATIONAL, INC.
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Facsimile: (000) 000-0000
Any party may from time to time change the address to which notices
to it are to be delivered or mailed hereunder by notice in accordance herewith
to the other parties.
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Section 12. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company, the Warrantholders or the holders of Shares shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 13. Applicable Law.
This Agreement shall be deemed to be a contract made under the laws of
the State of California and for all purposes shall be construed in accordance
with the laws of said State.
Section 14. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrantholders and the holders of Shares
any legal or equitable right, remedy or claim under this Agreement. This
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrantholders and the holders of Shares.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed, all as of the day and year first above written.
SUPERSHUTTLE INTERNATIONAL, INC.
By /s/ illegible
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Its Secretary
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HAWKES, XXXXXXX XXXXXXX & CO., LTD.
By /s/ illegible
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Its Vice President
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ASSIGNMENT FORM
For value received, the undersigned registered owner of Warrants to
purchase Common Stock of SUPERSHUTTLE INTERNATIONAL, INC., a Delaware
corporation (the "Company"), represented by that certain Warrant Agreement
dated June ___, 1995 between the Company and the undersigned, hereby sells,
transfers and assigns to the assignee named below Warrants to purchase
___________ shares of the Company's Common Stock:
Assignee:
Name _______________________________________
Address _______________________________________
_______________________________________
and authorizes the Company to cancel the Warrant Agreement and to issue and
deliver a new Warrant Agreement in the name of the Assignee for the number of
Warrants so transferred hereby.
Dated: ________________________________ ________________________________
Signature
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