Exhibit 10.17
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE REGISTERED HOLDER OF
THIS WARRANT SHALL HAVE DELIVERED PRIOR WRITTEN NOTICE OF SUCH TRANSFER TO THE
COMPANY, ACCOMPANIED BY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM SUCH
REGISTRATION, UNDER SAID ACT AND SUCH LAWS.
---------------------------------
Date: August, 1997
WARRANT
To PURCHASE 650,000 SHARES OF (GLOBAL) COMMON STOCK OF
GLOBAL ENVIRONMENTAL CORP. (XXXX)
Void after 5:00 P.M. (Eastern Time),
August, 2002, as provided herein.
THIS CERTIFIES that Xxxxxx-Xxxxx Co. (the "Holder"), is entitled to
purchase from Global Environmental Corp. (the "Company"), a New York
corporation, a total of Six Hundred Fifty Thousand (650,000) fully paid and
nonassessable shares of the Company's Unregistered and Restricted Common Stock,
par value $.0001 per share, ("Global Common Stock") exercisable at such times
and upon such terms as provided herein.
1. Definitions. For the purpose of this Warrant:
(a) "Common Stock" shall mean the Company's Common Stock, $.0001 par value,
as the same may be adjusted from time to time hereafter.
(b) "Initial Exercise Date" shall mean August, 1997.
(c) "Warrant" shall mean this Warrant to purchase Global Common Stock of
the Company and any and all Warrants which from time to time are issued in
exchange or substitution for any outstanding Warrant pursuant to the terms
of this Warrant.
(d) "Warrant Price" shall mean the price per share at which shares of
Global Common Stock of the Company are purchasable hereunder, as such price
may be adjusted from time to time hereunder.
(e) "Warrant Shares" shall mean the stock purchased upon exercise of
Warrants.
2. Exercise of Warrant.
(a) This Warrant may be exercised, in whole or in part, as follows:
(i) At any time, and from time to time, after the Initial Exercise
Date and until 5:00 P.M. (Eastern Time) on August, 2002, the Warrant
Holder may purchase up to Six Hundred Fifty Thousand (650,000) shares
of Common Stock of the Company, subject to adjustment as provided
herein, at the Warrant Price of Twenty-five Cents ($0.25) per share.
(b) In order to exercise this Warrant, the Holder must surrender the
Warrant, with the Warrant Purchase Agreement attached hereto as Exhibit A
properly completed and duly executed, at the principal office of the
Company at 00000 Xxxx Xxxx, Xxxxxxxxxx Xxxxxxxx 00000 or such other
location which shall at that time be the principal office of the Company
(the "Principal Office"), and upon payment to it by wire transfer of
immediately available funds to the order of the Company of the purchase
price for the shares to be purchased upon such exercise the Holder shall
surrender the Warrant to the Company and the Company shall issue such
shares. The person entitled to the shares so purchased shall be treated for
all purposes as the holder of such shares as of the close of business an
the date of exercise and certificates for the shares of stock so purchased
shall be delivered to the person so entitled within 10 days following the
date of exercise. Upon surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with the Assignment Form
attached hereto as Exhibit B duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in the Assignment Form and this
Warrant shall promptly be canceled. This Warrant may be divided or
combined, without charge, with other warrants which carry the same rights
upon presentation hereof at the office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying
the names and denominations in which new Warrants are to be issued and
signed by the Holder hereof. The term "Warrant" as used herein includes any
Warrants into which this Warrant may be divided or exchanged.
(c) At the request of any Holder upon the surrender of this Warrant
(whether for partial exercise or otherwise), the Company shall issue to the
Holder replacement warrants therefor in such denominations as the Holder
may request. Except for such changes in this Section 2 as may be necessary
to reflect the exercise in part of this Warrant or its division into
separate Warrants representing portions hereof, the terms of any such
replacement warrants shall be identical in all respects to the terms hereof
3. Transfer. This Warrant is transferable, in whole or in part, at the
principal office of the Company by the Holder thereof, in person or by duly
authorized attorney, upon presentation of the Warrant, properly endorsed,
for transfer. Each holder of this Warrant, by holding it, agrees that the
Warrant, when endorsed in blank, may be deemed negotiable, and that the
holder thereof, when the Warrant shall have been so endorsed, may be
treated by the Company and all other persons dealing with the Warrant as
the absolute owner thereof for any purpose and as the person entitled to
exercise the rights represented by the Warrant, or to the transfer thereof
on the books of the Company, any notice to the contrary notwithstanding. If
this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance
of the shares purchasable thereunder. Upon receipt by the Company of this
Warrant, accompanied by payment of the purchase price for the number of
shares for which this Warrant is being exercised, at its office, or by the
stock transfer agent of the Company at its office, in proper form for
exercise, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such shares of Common Stock shall not then be
actually delivered to the Holder. Neither this Warrant nor any shares
issued upon any exercise of this Warrant may be transferred except in
compliance with the provisions of Paragraph 7 hereof.
4. Certain Covenants of the Company. The Company covenants and agrees that the
Company shall comply with all laws and regulations applicable to the
issuance of shares or other securities pursuant to the terms hereof. All
shares which may be issued upon the exercise of this Warrant, will, upon
issuance, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue thereof. The
Company further covenants and agrees that during the period within which
the rights represented by this Warrant may be exercised, the Company will
at all times have authorized, and reserved for the purpose of issue upon
exercise of the purchase rights evidenced by this warrant, a sufficient
number of shares of its Common Stock to provide for the exercise of the
rights represented by this Warrant.
5. Adjustment of Warrant Price and Shares Issuable Upon Exercise.
(a) It at any time while all or any portion of this Warrant remains
outstanding and unexercised, there occurs (i) any sale of shares of Common
Stock at a price per share less than the Warrant Price then applicable to
this Warrant, or (ii) any issuance of any security convertible into shares
of Common Stock with a conversion price per share of less that the Warrant
Price then applicable to this Warrant, or (iii) any issuance of an option,
warrant, or other right to purchase shares of common Stock at a price per
share less than the Warrant Price then applicable to this Warrant except
for issuances of shares, options, warrants or other convertible securities
pursuant to (A) the Company's stock option plan, as amended, (B) existing
options, warrants and other convertible securities, (C) the Warrant Covered
by this Warrant Certificate, (D) any other employee or director benefit
plan, (E) any public offering, and (F) any Instrument or agreement if an
adjustment has already been made pursuant to the terms hereof, (any such
sale or issuance other than those excluded above, being called herein an
"Adjustment Event"), then the total number of shares of Common Stock
purchasable upon exercise of this Warrant shall be adjusted to that number
of shares (calculated to the nearest tenth) purchasable immediately prior
to the Adjustment Event, multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding or deemed
outstanding immediately following the Adjustment Event, and the denominator
of which shall be the sum of (x) the number of shares of Common Stock
outstanding or deemed outstanding immediately prior to the Adjustment
Event, plus (y) the number of shares of Common Stock determined by dividing
the aggregate purchase and/or conversion price of the shares issued or
deemed issued in the Adjustment Event by the Warrant Price in effect
immediately prior to the Adjustment Event. The number of Warrants shall
remain the same, but the Warrant Price shall be adjusted to that amount
determined by multiplying the number of shares of Common Stock issuable
upon exercise of the Warrants immediately prior to the Adjustment Event by
the Warrant Price then in effect and dividing the result by the number of
shares issuable upon exercise of the Warrants immediately following the
Adjustment Event.
For purposes of this Section 5,
(i) the number of shares of Common Stock "deemed issued" in an
Adjustment Event and the number of shares of Common Stock "deemed
outstanding" shall Include that number of shares issuable upon the
full exercise of any purchase or conversion rights granted by an
option, warrant, right or convertible security issued in an Adjustment
Event; and
(ii) the purchase price of shares of Common Stock issuable upon
exercise of a right, option or warrant shall include the purchase
price of the option, warrant or right, plus the price at which such
option, warrant or right may be exercised, and the conversion price
for shares of Common Stock issuable upon conversion of a convertible
security shall include the purchase price for such convertible
security plus any additional price, if any, payable if the security is
converted.
(b) If, following an Adjustment Event in which options, warrants, rights or
convertible securities are issued, any rights to purchase or convert
granted thereby lapse, the adjustment made with respect thereto as a result
of such Adjustment Event shall be modified to reflect such lapse by
treating the shares "deemed issued" in such Adjustment Event as though they
had not been issued.
(c) It all or any portion of this Warrant shall be exercised subsequently
to any stock dividend, split-up, combination or recapitalization of the
Common Stock occurring after the date hereof, as a result of which shares
of capital stock of the Company of any class shall be issued in respect of
outstanding shares of Common Stock (or shall be issuable in respect of
securities convertible into shares of Common Stock) or upon exercise of
rights (other than this Way.-rant) to purchase shares of Common Stock, or
shares of such Common Stock shall be changed Into the same or a different
number of shares of capital stock of the Company of the same or another
class or classes, the Holder exercising this Warrant shall receive, for the
aggregate price paid upon such exercise, the aggregate number and class of
shares which such Holder would have held if this Warrant had been exercised
immediately prior to such stock dividend, split-up, combination or
capitalization.
(d) In the event of any merger, consolidation, separation, reorganization
or liquidation of the Company in which the Holders of Common Stock shall be
entitled to receive securities or other property in exchange for or in lieu
of their Common Stock, the Company shall give the Warrant Holder not less
than 10 days' prior written notice of the record date for determining the
shareholders of Common Stock entitled to receive securities or property as
a result of such merger, consolidation, separation, reorganization or
liquidation.
6. Investment Representation. The Warrant Holder represents and warrants to
the Company that it is acquiring this Warrant and, upon exercise hereof,
the Warrant Shares, for investment purposes only, without a view to
distribution and that it has no intention of selling, disposing or
otherwise transferring this Warrant or such Warrant Shares.
7. Restrictions or Transfer. The warrant Holder recognizes, understands and
acknowledges that the Warrant and Global Common Stock underlying the
Warrant are not registered under the Securities Act of 1933, that there are
substantial restrictions on the transferability of the Warrant and the
Global Common Stock and that the Warrant holder may have to hold them
Indefinitely and may not be able to liquidate his investment in the Company
when he wishes to do so, if at all, because, among other things, (I) the
warrant and the Global Common stock cannot be sold unless registered under
the Securities Act of 1933 (the "Act") or an exemption from such
registration is available, (II) in tile event the Warrant and the Global
Common Stock have not been so registered, the undersigned will be unable to
sell them publicly for at least two years, at which time there may be no
trading market for them or, even if there is such a market, the Company may
not be in compliance with the terms and conditions of Rule 144 under the
Act, which would preclude the undersigned from effecting a sale thereof,
and (iii) the Company has the absolute right to refuse to consent to the
transfer or assignment of the Warrant and the Global Common Stock if such
transfer or assignment does not comply with applicable federal and state
securities laws. Prior to any proposed transfer of this warrant or any part
thereof or of any shares issued upon exercise of this Warrant, the Warrant
Holder shall deliver to the Company a notice of such proposed transfer
describing the manner and circumstances thereof in detail, and shall
furnish with such notice an opinion of counsel, reasonably Satisfactory in
form and substance to the Company, to the effect that such proposed
transfer does not require registration under the Securities Act of 1933 and
will not violate the securities laws of any state or other jurisdiction.
The Company shall, within 10 days after receipt of such notice, either
effectuate the proposed transfer or notify the Warrant Holder in writing of
its refusal to do so, which refusal shall be based solely upon the grounds
that such transfer does not comply with applicable federal and state
securities laws. This Warrant and all share certificates representing
Global Common Stock that may be issued upon its exercise shall bear a
legend to that effect.
8. Payment of Taxes. All shares of Global Common Stock issued upon the
exercise of the Warrants shall be validly issued, fully paid and
nonassessable, and the Company shall pay all taxes and other governmental
charges that may be imposed in respect of the issue or delivery thereof.
The Company shall not be required, however, to pay any tax or other charge
imposed in connection with any transfer involved in the Issue of any
certificate for, shares of Global Common' Stock in any name other that of
the registered holder of the Warrant surrendered in connection with the
purchase of such shares, and in such case the Company shall not be required
to issue or deliver any stock certificate until such tax or other charge
has been paid or it has been established to the Company's satisfaction that
no tax or other charge is due.
9, Fractional Shares. No fractional shares of the Global Common Stock will be
issued in connection with any purchase hereunder but in lieu of such
fractional shares, the Company shall make a cash refund therefor equal in
amount to the product of the applicable fraction multiplied by the Warrant
Price paid by the holder for its Warrant Shares upon such exercise.
10. Loss, Theft. -Destruction or-. Mutilation. Upon receipt by the Company of
notice from a Warrant Holder that any Warrant has been mutilated,
destroyed, lost or stolen, and, if requested by the Company in the case of
any destroyed, lost or stolen Warrant, a bond of indemnity reasonably
satisfactory to the Company, or in the case of a mutilated Warrant, upon
surrender and cancellation thereof, the Company will execute and deliver in
the Warrant Holder's name, in exchange and substitution for the Warrant so
mutilated, destroyed, lost or stolen, a new Warrant of like tenor
substantially in the form thereof with appropriate insertions and
variations.
11. Headings. The descriptive headings of the several sections of this Warrant
are inserted for convenience only and do not constitute a part of this
Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duty authorized officer Under its corporate seal on the date of this
Warrant.
By: ______________________
Xx. Xxx Xxxxxxxx
President
Exhibit A
Warrant Purchase Agreement
Date: ________________
To: Xxxxxx-Xxxxx Co.
The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to purchase _______ shares of Global Common Stock covered by such
Warrant at a price of $0.25 per share, and makes payment herewith in full
therefor at such price.
Signature: ________________________________
Address: _________________________________
Exhibit B
Assignment Form
For Value Received, Xxxxxx-Xxxxx Co. hereby sells, assigns and transfers unto
Name
_____________________________________________________________________
(Please type or print in block letters.)
Address _____________________________________________________________________
Social Security Number (Employee Identification Number)
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the right to purchase Global Common Stock represented by this Warrant to the
extent of 650,000 shares as to which such right is exercisable at a purchase
price of $0.25 per share and does hereby irrevocably constitute and appoint
___________________________________, Attorney, to transfer the same on the books
of the Company with full power of substitution in the premises.
Date _____________, ____
Signature ___________________________________________________________________
XXXXXX CORPORATION
00000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
June 21, 2001
Xxxxxx-Xxxxx Co.
000 Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Dear Xx. Xxxxx:
This letter (this "Letter Agreement") sets forth our agreement regarding
Xxxxxx-Xxxxx Co.'s warrants (the "Warrants") to purchase the Company's common
stock, par value $.0001 per share (the "Common Stock"), in connection with that
certain Acquisition Agreement and Plan of Reorganization (the "Acquisition
Agreement") by and among Xxxxxx Corporation (the "Company'), Xxxxxx Industries,
Inc., Pyramid Coach, Inc., Champion Trailer, Inc., United Acquisition, Inc.,
U.S. Rubber Reclaiming, Inc., Obsidian Capital Partners, L.P. and Xxxxxxx X.
Xxxxxx.
In exchange for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties, the parties hereto agree
that:
1. Xxxxxx-Xxxxx Co. represents and warrants to the Company and to all of
its successors and assigns that it is the record and beneficial holder of
all of the Warrants set forth on Exhibit "A" attached hereto, free and
clear of all encumbrances, and that other than the Warrants set forth on
Exhibit "A", Xxxxxx-Xxxxx Co. owns no other warrants, options or rights to
purchase Common Stock in the Company.
2. At the First Closing, Xxxxxx-Xxxxx Co. hereby agrees to terminate any
and all of its rights to the Warrants in consideration of the replacement
warrant attached hereto as Exhibit "B" to be issued to Xxxxxx-Xxxxx Co. at
the First Closing of the Acquisition Agreement.
3. Xxxxxx-Xxxxx Co. understands, acknowledges and agrees that the Company
is relying on the accuracy of the responses set forth in this Letter
Agreement which Xxxxxx-Xxxxx Co. represents to be true, correct and
complete.
4. Xxxxxx-Xxxxx Co. understands, acknowledges, covenants and agrees to
indemnify, hold harmless and defend the Company and its affiliates and
agents, successors and assigns with respect to any and all loss, damage,
expense, claim, action or liability which they may incur as a result of a
breach or untruth of any representations or warranties made by Xxxxxx-Xxxxx
Co. herein.
5. Xxxxxx-Xxxxx Co. agrees to execute and deliver, or cause to be executed
and delivered, such further instruments or documents or take such other
action as may be reasonably necessary or convenient to carry out the
transactions contemplated hereby.
6. Xxxxxx-Xxxxx Co. understands, acknowledges and agrees that this Letter
Agreement shall have no force or effect in the event that the First Closing
is not consummated.
This Letter Agreement shall be governed and construed under the laws of the
State of Texas. In the event any party breaches, or threatens to breach, any
term or provision contained in this Letter Agreement, each party hereto agrees
that the non-breaching party and/or its affiliates shall be entitled to the
right of specific performance and/or both temporary and permanent injunctive
relief without being required to prove damages or furnish any bond or other
security. In addition, the non-breaching party and/or its affiliates shall not
be prohibited by this provision from pursuing other remedies available at law or
in equity.
If any term, provision, covenant, or condition of this Letter Agreement is
held to be invalid or unenforceable by a court of competent jurisdiction, it is
to that extent deemed omitted and the remainder of this Letter Agreement shall
continue in full force and effect.
This Letter Agreement may be amended, modified or supplemented only by an
instrument in writing executed by the parties hereto. Each party will bear its
own costs and expenses associated with this transaction. This Letter Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns
This Letter Agreement is a legal and binding agreement and constitutes the
complete and entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements between the parties. This
Letter Agreement shall not be construed in favor of, or against, any particular
party by reason of any presumption with respect to the drafting of this Letter
Agreement.
This Letter Agreement shall not be deemed to confer upon any person not a
party hereto any rights or remedies hereunder.
This Letter Agreement may be executed in multiple counterparts, each of
which shall be deemed an original but all of which together will constitute one
and the same instrument and facsimile signatures shall be given the same effect
as original signatures.
Please execute this Letter Agreement in the space provided below to
evidence that the above is in accordance with our understanding.
Yours truly,
XXXXXX CORPORATION
M. E. Xxxxxxxx
President & Chief Executive Officer
ACKNOWLEDGED AND ACCEPTED
this ___ day of June, 2001
XXXXXX-XXXXX CO.
By:_________________________
Printed Name: Xxxxxxx Xxxxx
Title: President
Please execute this Letter Agreement in the space provided below to
evidence that the above is in accordance with our understanding.
Yours truly,
XXXXXX CORPORATION
M. B. Xxxxxxxx
President & Chief Executive Officer
ACKNOWLEDGED AND ACCEPTED
this ___ day of June, 2001
XXXXXX-XXXXX CO.
/1
By:_________________________
Printed Name: Xxxxxxx Xxxxx
Title: President
EXHIBIT "A"
Outstanding Warrants of Xxxxxx-Xxxxx Co.
Date # Shares of Expiration
Warrants Issued Common Stock Price Date
Xxxxxx Xxxxx Aug-97 650,000 $0.25 Aug-02
EXHIBIT "B"
Xxxxxx-Xxxxx Co. Warrant
THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
EXCEPT PURSUANT TO A VALID EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT.
WARRANT
To Purchase Series C Convertible Preferred Stock
of
Xxxxxx Corporation
1. Grant of Warrant. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Xxxxxx Corporation, a New York
corporation (the "Company"), hereby grants to Xxxxxx-Xxxxx Co. ("Holder") whose
address is 000 Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxx 00000, the right to purchase
from the Company 10,000 shares of Series C Convertible Preferred Stock, par
value $0.00 1 per share, of the Company ("Series C Preferred Stock"). The shares
of Series C Preferred Stock and any other securities or property issuable upon
the exercise of the Warrant are sometimes referred to herein as the
"Securities."
2. Exercise Price. The exercise price for each share of Series C Preferred
Stock shall be $2.00 per share (the "Exercise Price").
3. Exercise. This Warrant may be exercised at any time on or after the date
hereof until August 31, 2002 (the "Expiration Date").
In order to exercise this Warrant, which may be exercised in whole or in
part, Holder shall deliver to the Company at its principal office at 00000 Xxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such other office as shall be designated
by the Company to Holder in writing: (i) a written notice of Holder's election
to exercise this Warrant, stating the portion thereof to be exercised; (ii) cash
or cash equivalent payable to the order of the Company in an amount equal to the
aggregate Exercise Price for all Securities to be purchased pursuant to such
exercise; and (iii) a subscription for the Securities to be purchased, in the
form of the Subscription appearing at the end of this Warrant. Upon receipt
thereof, the Company shall, as promptly as practicable, and in any event within
ten (10) business days thereafter, execute or cause to be executed and deliver
or cause to be delivered to such Holder certificates representing the aggregate
number of full Securities issuable upon such exercise. The stock certificates so
delivered shall be registered in the name of Holder, or such other name as shall
be designated in said notice, in which case, Holder shall be responsible for any
applicable issue or transfer taxes.
This Warrant shall be deemed to have been exercised and such certificates
shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date that said notice, together with
said payment and Subscription, are received by the Company as aforesaid (the
"Record Date"). The Holder of this Warrant shall not, by virtue of its ownership
of this Warrant, be entitled to any rights of a shareholder in the Company,
either at law or in equity; provided, however, Holder shall, for all purposes,
be deemed to have become the holder of record of such shares on the Record Date.
4. Taxes. The issuance of any Securities or other certificate upon the
exercise of this Warrant shall be made without charge to the registered Holder
hereof, or for any tax (other than income tax) in respect of the issuance of
such certificate. Notwithstanding the foregoing, the Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Series C Preferred Stock
issuable upon exercise of this Warrant in any name other than that of the
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or other charge has been paid or it has
been established to the satisfaction of the Company that no such tax or other
charge is due.
5. Notices to Holders. If, at any time prior to the Expiration Date and
prior to the exercise in full of this Warrant, any of the following events is to
occur:
(a) Any declaration of a dividend or any distribution of cash, securities
or other property to the holders of Series C Preferred Stock;
(b) Any offer to the holders of Series C Preferred Stock of any shares of
capital stock of the Company or any subsidiary of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company or any subsidiary of the Company or any option,
right, or warrant to subscribe for or purchase any thereof;
(c) Any dissolution, liquidation, or winding up of the Company;
(d) Any sale or other transfer of all or substantially all of the assets
of the Company; or
(e) Any reclassification, consolidation, merger or other similar
transaction,
then in any one or more of such events the Company will give notice of such
event to Holder, such giving of notice to be completed at least ten (10) days
prior to the earlier of the date fixed as the record date or the date of closing
the transfer books for the determination of the shareholders entitled to such
dividend, distribution, or subscription rights, or for the determination of
shareholders entitled to vote on such proposed reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation, or winding up.
6. Preservation of Rights Upon Merger, Consolidation. Etc. The Company
shall not enter into or effect any merger, consolidation or other transaction in
which shares of Series C Preferred Stock are to be converted in whole or in part
into the right to receive other securities or property, or any extraordinary
distribution of cash, securities or property to holders of Series C Preferred
Stock, unless adequate provision is made so that Holder will have the right
thereafter, upon payment of the Exercise Price, to purchase upon exercise of
this Warrant the kind and amount of securities or property that it would have
owned or have been entitled to receive after giving effect to such merger,
consolidation, or other transaction on account of the Securities that would have
been purchasable upon the exercise of this Warrant had this Warrant been
exercised immediately prior thereto (or immediately prior to the record date
therefor); provided that, to the extent that Holder would have been so entitled
to receive cash on account of such Securities, Holder may elect in connection
with the exercise of this Warrant in accordance with Section 3 to reduce the
amount of cash that it would be entitled to receive upon such exercise in
exchange for a corresponding reduction in the amount payable upon such exercise.
7. Antidilution. In case (i) the outstanding shares of the Series C
Preferred Stock shall be subdivided into a greater number of shares, (ii) a
dividend in Series C Preferred Stock shall be paid in respect of Series C
Preferred Stock, or (iii) the outstanding shares of Series C Preferred Stock
shall be combined into a smaller number of shares thereof, the Exercise Price
per share in effect immediately prior to such subdivision or combination or at
the record date of such dividend or distribution shall simultaneously with the
effectiveness of such subdivision or combination or immediately after the record
date of such dividend or distribution be proportionately adjusted to equal the
product obtained by multiplying the Exercise Price by a fraction, the numerator
of which is the number of outstanding shares of Series C Preferred Stock prior
to such combination, subdivision or dividend, and the denominator of which is
that number of outstanding shares of Series C Preferred Stock after giving
effect to such combination, subdivision or dividend. Any dividend paid or
distributed on the Series C Preferred Stock in stock or any other securities
convertible into shares of Series C Preferred Stock shall be treated as a
dividend paid in Series C Preferred Stock to the extent that shares of Series C
Preferred Stock are issuable upon the conversion thereof.
8. Investment Representation. The Holder represents and warrants to the
Company that it is acquiring this Warrant and, upon exercise hereof, the Series
C Preferred Stock, for investment purposes only without a view to distribution
and that it has no intention of selling, disposing or otherwise transferring
this Warrant or the Series C Preferred Stock.
9. Restrictions on Transferability.
(a) This Warrant and the Series C Preferred Stock shall not be
transferred, hypothecated or assigned before satisfaction of the
conditions specified in this Section 9, which conditions are intended
to ensure compliance with the provisions of the Securities Act of
1933, as amended (the "Securities Act") with respect to the transfer
of this Warrant, the Series C Preferred Stock or any other Securities.
Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 9.
(b) Holder, by accepting this Warrant, the Series C Preferred Stock or any
other Securities, agrees that this Warrant, the Series C Preferred
Stock or any other Securities issuable upon exercise hereof may not be
assigned or otherwise transferred unless and until (i) the Company has
received an opinion of counsel for the Holder that such securities may
be sold pursuant to an exemption from registration under the
Securities Act or (ii) a registration statement relating to such
Securities has been filed by the Company and declared effective by the
Securities Exchange Commission.
(c) Each certificate for Series C Preferred Stock issuable hereunder shall
bear a legend as follows until such securities have been sold pursuant
to an effective registration statement under the Securities Act,
unless in the opinion of the Company such legend is not required to
comply with the Securities Act:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE, AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.
THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR SUCH OTHER LAWS."
(d) Except as otherwise provided in this Section 9, the Warrant shall be
stamped or otherwise imprinted with a legend in substantially the
following form:
"THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, EXCEPT PURSUANT TO A VALID
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT."
10. Loss or Mutilation. Upon receipt by the Company from the Holder of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably satisfactory
to it (it being understood that the written agreement of the Holder shall be
sufficient indemnity), and in case of mutilation upon surrender and cancellation
hereof, the Company will execute and deliver in lieu hereof a new Warrant of
like tenor to the Holder; provide4 in the case of mutilation no indemnity shall
be required if this Warrant in identifiable form is surrendered to the Company
for cancellation.
11. Notices. All notices, request or demands which any party is required or
may desire to give to any other party under provision of this Warrant must be in
writing delivered to the other party at the following address:
Company: At the address set forth in Section 3 above.
Holder: At the address set forth in Section 1 above.
or to such other address as any party (including any Holder) may designate by
written notice to the other party (including any Holder). Each such notice,
request and demand shall be deemed given or made as follows:
(a) If sent by mail, upon the earlier of the date of receipt of five (5)
days after deposit in the U.S. Mail, first class postage prepaid;
(b) if sent by any other means; upon delivery.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
principles of choice of law thereof.
13. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the Company and the Holder hereof and shall be enforceable by any
such Holder.
14. Reservation of Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Series C Preferred Stock,
solely for the purpose of effecting the exercise of this Warrant, such number of
Securities as shall from time to time be sufficient to effect the exercise of
this Warrant. If at any time the number of authorized but unissued Securities
shall not be sufficient to effect the exercise of all or any portion of this
Warrant, the Company will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued Securities to
such number of shares as shall be sufficient for such purpose.
15. Severability. The parties agree that this Warrant is divisible and
separable so that, if any provision or provisions hereof shall be held to be
unreasonable, unlawful or unenforceable, such holding shall not impair the
remaining provisions hereof. In addition, if any provision hereof is held to be
too broad or unreasonable in duration, geographical scope or character of
restriction to be enforced, such provision shall be modified to the extent
necessary in order that any such provision or portion hereof shall be legally
enforceable to the fullest extent permitted by law, and the parties hereby
expressly authorize any court of competent jurisdiction to enforce any such
provision or portion thereof to the fullest extent permitted by applicable law.
16. Entire Warrant. This Warrant constitutes the entire understanding of
the parties with respect to the subject matter hereof and supersedes any and all
prior understandings and agreements, written or oral. This Warrant and the
provisions hereof may not be changed, waived or canceled orally, but only by an
instrument in writing signed by the parties hereto.
17. Headings. Headings of the paragraphs in this Warrant are for
convenience and reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed.
Dated as of June __, 2001.
Xxxxxx Corporation
By: ________________________
Printed Name: M. E. Xxxxxxxx
Title: President
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of that certain Warrant of the Company
dated June ___ 2001 and a copy of which is attached hereto (the "Warrant")
irrevocably exercises the Warrant for and purchases ____________ shares of
Series C Preferred Stock of Xxxxxx Corporation purchasable with this Warrant,
and herewith makes payment therefor, all at the price and on the terms and
conditions specified in the Warrant and requests that certificates for the
shares of Series C Preferred Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
____________________________ whose address is ________________________________.
Dated:____________________________
By:___________________________
Printed Name:
Title:
Address:_______________________
