This Warrant has not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or under applicable state securities laws.
Except as provided herein, this Warrant may not be sold, offered for sale,
pledged or hypothecated in the absence of an effective registration statement as
to this Warrant under the Securities Act and applicable state securities laws or
an opinion of counsel reasonably satisfactory to NexGen Steel, Inc. that such
registration is not required or unless sold pursuant to the provisions of Rule
144 of the Securities Act.
NexGen Steel, Inc.
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WARRANT TO PURCHASE STOCK
1. Grant. NexGen Steel, Inc., a Texas corporation (the "Company"), for
value received hereby grants to [Insert recipient name] (the "Holder") under the
terms herein the right from time to time to subscribe for and purchase up to
[Insert number of shares] shares of the Company's authorized but unissued $0.001
par value common stock (the "Common Stock"), which number of shares shall be
subject to adjustment as provided below, and which shares upon payment of the
aggregate Exercise Price (as hereinafter defined) shall be fully paid and
non-assessable. The Company's no par value common shares are sometimes
hereinafter referred to as Common Stock. The Common Stock shares issuable under
this Warrant are sometimes hereinafter referred to as the Warrant Shares.
2. Term. The right to exercise this Warrant shall commence on the date
hereof and shall expire at 11:59 p.m. Central Time on December 31, 2012 (the
"Exercise Period") unless the Warants are converted automatically pursuant to
paragraph 7 below.
3. Exercise Price. The per share exercise price of this Warrant (the
"Original Exercise Price") shall be at $0.85 per share. The Original Exercise
Price shall be subject to certain adjustments from time to time as set forth in
paragraph 4 below, with such Original Exercise Price, as adjusted, hereinafter
referred to as the Exercise Price.
4. Adjustments upon Certain Capital Events.
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(a) Stock Split or Dividend; Adjustment to Exercise Price and Number
of Warrant Shares. In case the shares of Common Stock at any time outstanding
shall be subdivided into a greater or combined into a lesser number of shares of
Common Stock, by stock-split, reverse split or otherwise, or in case shares of
Common Stock shall be issued as a stock dividend, the Exercise Price shall be
increased or decreased, as applicable, to an amount which shall bear the same
relation to the Exercise Price in effect immediately prior to such subdivision,
combination or stock dividend as the total number of shares of Common Stock
outstanding immediately prior to such subdivision, combination or stock dividend
shall bear to the total number of shares of Common Stock outstanding immediately
after such subdivision, combination or stock dividend; likewise, in case of such
subdivision, combination or stock dividend, the number of Warrant Shares shall
be increased or decreased as applicable, to the number which shall bear the same
relation to the number of Warrant Shares obtainable hereunder immediately prior
to such event, as the total number of shares of Common Stock outstanding
immediately after such event shall bear to the total number of shares of Common
Stock outstanding immediately prior to such event. An adjustment made pursuant
to this subparagraph 4(a) shall become effective immediately after the effective
date of such subdivision, combination or stock dividend retroactive to the
record date, if any, for such subdivision, combination or stock dividend.
(b) Merger, Reclassification, etc. In case of any capital
reorganization, or any reclassification of the Common Stock of the Company, or
in case of any consolidation of the Company with or the merger of the Company
into any other corporation or other entity (other than a consolidation or merger
in which the Company is the continuing corporation) or in case of the sale of
all or substantially all of the property and assets of the Company to any other
corporation or other entity, this Warrant shall, effective upon such
reorganization, reclassification, consolidation, merger or sale be exercisable
upon the terms and conditions specified herein, for the number of shares of
stock or other securities or property of the Company, or of the corporation,
person or other entity resulting from such consolidation or surviving such
merger or to which such sale shall be made, as the case may be, which the Holder
of this Warrant would have been entitled to receive had this Warrant been
exercised immediately prior to such reorganization, reclassification,
consolidation, merger or sale or any record date with respect thereto. In any
such case, if necessary, the provision set forth in this Warrant with respect to
the rights and interests thereafter of the Holder shall be appropriately
adjusted by the Board of Directors so as to be applicable, as nearly as may
reasonably be possible, to any shares of stock or other securities or property
thereafter deliverable on the exercise of this Warrant. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares of Common Stock which results in adjustment pursuant to
subparagraph 4(a) above shall not be deemed to be a reclassification of the
Common Stock of the Company for the purposes of this subparagraph 4(b). The
Company shall not effect any such consolidation, merger, or sale, unless prior
to or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume, by written instrument executed
and delivered to the Company, the obligation to deliver to the Holder such
shares of stock, securities or assets to which in accordance with the foregoing
provisions, such Holder may be entitled, as well as any other obligations
arising under this Warrant.
(c) Liquidating Dividends, Etc. If Company makes a distribution of its
assets to the holders of its Common Stock as a dividend in liquidation or by way
of return of capital or other than as a dividend payable out of earnings or
surplus legally available for dividends under applicable law or any distribution
to such holders made in respect of the sale of all or substantially all of
Company's assets (other than as provided in Sections 4(a) or 4(b), Holder shall
be entitled to receive upon the exercise hereof, in addition to the shares of
Common Stock receivable upon such exercise, and without payment of any
consideration other than the Exercise Price, an amount in cash equal to the Fair
Market Value of such distribution per share of Common Stock multiplied by the
number of shares of Common Stock which, on the record date for such
distribution, are issuable upon exercise of this Warrant, or if no such record
is taken, as of the date of such distribution (with no further adjustment being
made following any event which causes a subsequent adjustment in the number of
shares of Common Stock issuable upon the exercise hereof), and an appropriate
provision therefor shall be made a part of any such distribution.
(d) Notice of Adjustment. Whenever the number of Warrant Shares or the
Exercise Price is adjusted, as herein provided, the Company shall promptly
notify the Holder in writing of such adjustment(s) and shall deliver to such
Holder a statement setting forth the number of Warrant Shares and the Exercise
Price after such adjustment(s), setting forth a brief statement of the facts
requiring such adjustment(s) and setting forth the computation by which such
adjustment(s) was made;
(e) Statement of Warrant. The form of this Warrant need not be changed
because of any change in the Exercise Price or in the number of Warrant Shares.
5. Reservation and Authorization of Common Stock. The Company covenants and
agrees (a) that all shares of Common Stock which may be issued upon the exercise
of this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable and free of all transfer taxes, liens and charges with respect to
the issue thereof, (b) that during the Exercise Period, the Company will at all
times have authorized, and reserved for the purpose of issue or transfer upon
exercise of this warrant, sufficient shares of Common Stock to provide for the
exercise of this Warrant and (c) that the Company will take all such action as
may be necessary to ensure that the shares of Common Stock issuable upon the
exercise of this Warrant may be so issued without violation of any applicable
law or regulation, or any requirement of any securities exchange upon which any
capital stock of the Company may be listed.
6. Closing of Books. The Company will at no time close its transfer books
against the transfer of this Warrant or of any shares of Common Stock or other
securities issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
7. Automatic Conversion. In the event that the Company files a registration
statement which for Warrants to purchase Common Stock at an exercise price equal
to the Exercise Price, then this Warrant shall automatically convert into such
warrant, and subject to the same terms and conditions thereof, as may be
registered pursuant to such registration statement, the effective date of such
conversion being one year from the effective date of such registration
statement.
8. Exercise Procedure. This Warrant may be exercised by the Holder, in
whole or in part (but not as to a fractional share of Common Stock), by
presenting it and tendering the Exercise Price for the Warrant Shares as to
which the Warrant is being exercised in legal tender or by bank's, cashier's or
certified check to the Company, or by reducing the number of shares for which
this Warrant may be exercised at 0000 Xxxx Xxxx Xxxx Xxxxx 000, Xxxxxx, XX
00000, along with a duly exercised written subscription substantially in the
form of Exhibit 1 hereof. The date on which this Warrant is thus surrendered,
accompanied by tender or payment as herein provided, is referred to herein as
the Exercise Date. The Company shall forthwith, but in no event later than ten
(10) business days after the Exercise Date, at its expense (including the
payment of issuance taxes), issue and deliver to the Holder certificate(s)
representing the number of shares of Common Stock so purchased, together with
any cash for fractional shares of Common Stock paid pursuant to paragraph 9
below. Such shares of Common Stock shall be deemed issued to the Holder for all
purposes as of the opening of business on the Exercise Date notwithstanding any
delay in the actual issuance. Unless this Warrant has expired, a new Warrant
representing the portion of this Warrant, if any, that shall not have been
exercised also shall be delivered to the Holder within such time.
9. Fractional Interest. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. The number of
full shares of Common Stock which shall be issuable upon such exercise shall be
computed on the basis of the aggregate number of whole shares of Common Stock
purchasable on exercise of the Warrant (or portion thereof so presented). If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph 9 be issuable on the exercise of the Warrant (or proportion thereof so
presented), the Company shall pay an amount in cash calculated by it to be equal
to the product yielded by the multiplication of (i) the Fair Market Value of a
share of Common Stock (as defined in paragraph 7 above) on the Exercise Date by
(ii) the fraction of a share of Common Stock which the Holder would otherwise be
entitled to receive as a result of such exercise.
10. Resale of Warrant or Shares. Neither this Warrant nor the securities
issuable upon exercise of this Warrant, have been registered under the
Securities Act, or under the securities laws of any state. Neither this Warrant
nor such securities when issued may be sold, transferred, pledged or
hypothecated, directly or indirectly, in whole or in part, in the absence of (i)
an effective registration statement for this Warrant or such securities, as the
case may be, under the Securities Act and such registration or qualification as
may be necessary under the securities laws of any state, or (ii) if requested by
the Company, an opinion of counsel reasonably satisfactory to the Company that
such registration or qualification is not required. In the absence of such an
effective registration statement or opinion of counsel, the Company shall cause
a certificate or certificates evidencing all or any of the securities issued
upon exercise of this Warrant prior to said registration and qualification of
such securities to bear the following legend:
"The shares evidenced by this certificate have not been registered under the
Securities Act of 1933, as amended (the "Act"), or under the securities laws of
any state. These shares may not be sold, transferred, pledged or hypothecated,
directly or indirectly, in whole or in part, in the absence of an effective
registration statement under the Act, as amended, and such registration or
qualification as may be necessary under the securities laws of any state, or an
opinion of counsel reasonably satisfactory to the Company that such registration
or qualification is not required."
11. Transfer. This Warrant shall be registered on the books of the Company
which shall be kept at its principal office for that purpose, and shall be
transferable in whole or in part but only on such books by the Holder in person
or by duly authorized attorney with written notice substantially in the form of
Exhibit 2 hereof, and only in compliance with paragraph 10. The Company may
issue appropriate stop orders to its transfer agent to prevent a transfer in
violation of paragraph 10.
12. Notice. Any time notice is required by this Warrant to be given to the
Holder, such notice shall be provided by first class mail, postage prepaid or by
facsimile transmission or any other means of physical delivery reasonably
calculated to reach the Holder at least as quickly as first class mail, to the
address of the Company specified in paragraph 8 above.
13. Replacement of Warrant. At the request of the Holder and on production
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (and in the case of loss, theft, or
destruction, if required by the Company, upon delivery of an indemnity agreement
with surety in such reasonable amount as the Company may determine thereof), the
Company at its expense will issue in lieu thereof a new Warrant of like tenor,
representing the right to subscribe for and purchase the number of shares of
Common Stock which may be subscribed for and purchased hereunder.
14. Investment Covenant. The Holder, by its acceptance hereof, covenants
that this Warrant is, and any stock issued hereunder will be, acquired solely
for investment purposes, and that the Holder will not distribute the same in
violation of any state or federal law or regulation.
15. Due Incorporation, Authority, Etc. Company represents that it is duly
incorporated under the laws of the State of Texas; that it has been duly
authorized by all necessary corporate action to give this Warrant to Holder; and
that this Warrant, when executed on Company's behalf by the person named below
will be binding upon Company in accordance with the terms and conditions set
forth in this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf by its undersigned officer, and its corporate seal to be hereunto
affixed, as of the date first above written.
NexGen Steel, Inc.
By:
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Xxxxxx X. Xxxxx
Chief Executive Officer
[Corporate Seal]
Attest: _______________________
Secretary
Dated: [Insert date]
Exhibit 1
FORM OF ELECTION TO PURCHASE
To: NexGen Steel, Inc.
Ladies and Gentlemen:
The undersigned hereby irrevocably elects to exercise its right under
the attached Warrant by purchasing ____________________ shares of the Common
Stock of the Company, and herewith tenders in payment for such shares the
exercise price of $_____________________ all in accordance with the terms of the
attached Warrant. The undersigned requests that the certificate(s) for such
shares be issued in the name of _________________________ whose taxpayer number
is _________________ and whose address is __________________________
_______________________ and that such certificates (and any cash delivered
therewith) be delivered to _______________________________ whose address is
_____________________ _____________________________.
Date:_____________________
Signed:_____________________________________
(Signature must conform in all respects to name of Xxxxxx as specified
on face of the Warrant.)
Name of Holder:
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(please print)
Address of Holder:
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Exhibit 2
ASSIGNMENT SEPARATE FROM WARRANT
FOR VALUE RECEIVED,
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does hereby assign and transfer unto a Warrant to Purchase ____________ shares
of NexGen Steel's (the "Company") Common Stock together with all right, title
and interest therein; and does hereby irrevocably appoint Xxxxxx X. Xxxxx
attorney to transfer said Warrant on the Company's books of with full power of
substitution in the premises.
Done this ___ day of ________________, _________.
Signed:
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By:
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Its:
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