EXHIBIT F
FORM OF COMMON STOCK PURCHASE WARRANT
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, OR (C) IF REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS. IN ADDITION, A SECURITIES PURCHASE AGREEMENT ("PURCHASE
AGREEMENT"), DATED THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL
AGREEMENTS AMONG THE PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH
LIMIT THE EXERCISE RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION
OBLIGATIONS OF THE COMPANY.
---------------------------------------
GALAXY MINERALS, INC.
COMMON STOCK PURCHASE WARRANT
--------------------------------------------------------------------------------
No. 1
--------------------------------------------------------------------------------
Number of shares: ____________ Holder: GCA Strategic Investment
Fund Limited
Expiration Date: May ___, 2010 Mechanics Building
00 Xxxxxx Xxxxxx
Purchase Price Per Share: $_____ Xxxxxxxx, Bermuda HM11
For identification only. The governing terms of this
Warrant are set forth below.
--------------------------------------------------------------------------------
Galaxy Minerals, Inc., a Florida corporation (the "Company"), hereby certifies
that, for value received, GCA Strategic Investment Fund Limited or its assigns
(the "Holder"), 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, ______________ (__________) shares of the fully
paid and nonassessable shares of common stock of the Company, $0.01 par value
per share (the "Common Stock"). 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 initially be equal to 105% of the
Closing Bid Price as published by Bloomberg, L.P. of the Common Stock on the day
immediately preceding the date hereof; provided, however, that the Purchase
Price shall be adjusted from time to time as provided herein.
1
Capitalized terms used herein not otherwise defined shall have the
meanings ascribed thereto in the Purchase Agreement. As used herein the
following terms, unless the context otherwise requires, have the following
respective meanings:
(a) The term "Company" shall include Galaxy Minerals, Inc. and any
corporation that shall succeed or assume the obligations of such
corporation hereunder.
(b) The term "Common Stock" includes (a) the Company's common stock,
par value $0.01 per share, (b) any other capital stock of any class or
classes (however designated) of the Company, authorized on or after the
date hereof, 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.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) that the Holder of this Warrant at any time shall
be entitled to receive, or shall have received, on the exercise of this
Warrant, in lieu of or in addition to Common Stock, or that at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.
1. Exercise of Warrant.
1.1 Method of Exercise.
(a) 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 delivery of a notice of
exercise (a "Notice of Exercise") substantially in the form attached
hereto as Exhibit A via facsimile to the Company. Promptly thereafter the
Holder shall surrender this Warrant (if the entire amount of the Warrant
is subject to the Notice of Exercise) to the Company at its principal
office via overnight delivery service, 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, at the option of the Holder, (i) by
check or bank draft payable to the order of the Company, or (ii) by wire
transfer to the account of the Company. Upon exercise, the Holder shall be
entitled to receive within three Trading Days of the Exercise Date (as
defined herein), 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 of Common Stock so purchased shall be deemed to be
issued as of the close of business on the date on which the Company shall
have received from the Holder payment in full of the Exercise Price (the
"Exercise Date").
2
(b) Upon exercise of a portion of this Warrant in accordance with
the terms hereof, records showing the amount so exercised and the date of
exercise shall be maintained on a ledger substantially in the form of
Annex B attached hereto (an originally signed and executed copy of which
shall be delivered to the Company with each Notice of Exercise). The
Company shall maintain the originally signed and executed ledger and the
Holder shall maintain a copy thereof. Upon execution of the exercise of
the Warrants contemplated by the Notice of Exercise, the Company shall
deliver to the Holder a copy of Xxxxx B signed and executed by the
Company, and the Holder shall deliver to the Company a copy of Annex B
signed by the Holder. It is specifically contemplated that the Company
shall act as the calculation agent for all exercises of this Warrant. The
Holder and any assignee, by acceptance of this Warrant, acknowledges and
agrees that, by reason of the provisions of this paragraph, following an
exercise of a portion of this Warrant, the number of shares of Common
Stock represented by this Warrant will be the amount indicated on Annex B
attached hereto (which may be less than the amount stated on the face
hereof).
(c) In the event there is a dispute as to the number of shares of
Common Stock the Holder is entitled to receive upon exercise of this
Warrant, the Company shall issue to the Holder the number of shares not in
dispute and the Company and the Holder will use their best efforts to
resolve such dispute within one Business Day following the receipt of a
Notice of Exercise. If such dispute cannot be resolved within such one-day
period, the Company and the Holder shall submit the dispute to an
independent accountant mutually agreed upon by the Company and the Holder
to make a final and binding determination of the number of shares owed to
the Holder. The Company shall issue shares of Common Stock owed to Holder
as a result of the resolution of the dispute within two Business Days
following the receipt of the accountant's independent determination.
1.2 Regulation D Restrictions. The Holder hereof represents and
warrants to the Company that it has acquired this Warrant and anticipates
acquiring the shares of Common Stock issuable upon exercise of the Warrant
solely for its own account for investment purposes and not with a view to or for
resale of such securities unless such resale has been registered with the
Commission or an applicable exemption is available therefor and provided that
the Holder shall have furnished to the Company an opinion of counsel in form and
substance reasonably satisfactory to the Company, to the effect that such
transfer is exempt from the registration requirements of the Securities Act and
any applicable state securities laws.
1.3 Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon 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 (the "Registration Rights Agreement").
3
1.4 Limitation on Exercise. Notwithstanding the rights of the Holder
to exercise all or a portion of this Warrant as described herein, such exercise
rights shall be limited, solely to the extent set forth in the Purchase
Agreement as if such provisions were specifically set forth herein. In addition,
the number of shares of Common Stock issuable upon exercise of this Warrant is
subject to reduction as specified in Section 10.3 of the Purchase Agreement.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within three
(3) Business Days thereafter, the Company at its expense (including the payment
by it of any applicable issue, stamp or transfer taxes) 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 (or Other Securities) 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 (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Extraordinary Events. The Purchase Price to be paid by
the Holder upon exercise of this Warrant, and the consideration to be received
upon exercise of this Warrant, shall be adjusted in case at any time or from
time to time pursuant to Article 11 of the Purchase Agreement as if such
provisions were specifically set forth herein.
4. 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 unassessable 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.
5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this Warrant, the Company will promptly cause its principal
financial officer to compute such adjustment or readjustment in accordance with
the terms of this Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
4
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such issue or sale and as adjusted and readjusted
as provided in this Warrant. The Company will forthwith mail a copy of each such
certificate to the Holder of this Warrant, and will, on the written request at
any time of the Holder of this Warrant, furnish to such Holder a like
certificate setting forth the Purchase Price at the time in effect and showing
how it was calculated.
6. Notices of Record Date, etc.
In the event of
(a) any taking by the Company of a record of the Holders of
any class of 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
winding-up 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
winding-up is to take place, and the time, if any, as of which the Holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. 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.
7. 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 (or Other
Securities) from time to time issuable on the exercise of this Warrant.
5
8. 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 or for such lesser number
of shares of Common Stock as may be reflected on the Warrant Exercise Ledger
attached as Annex B.
9. 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.
10. 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.
11. 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) 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
(b) this Warrant may not be sold, transferred or assigned except
pursuant to an effective registration statement under the Securities Act or
pursuant to an applicable exemption therefrom.
12. Registration Rights. The Company is obligated to register the shares
of Common Stock issuable upon exercise of this Warrant in accordance with the
terms of the Registration Rights Agreement.
13. Warrant Redemption. Upon occurrence of the events described in
Sections 3.4 and 10.4(c) of the Purchase Agreement, the Company, at the request
of Holder, shall redeem all outstanding Warrants that remain unexercised at a
redemption price equal to the greater of (x) an appraised value of the Warrants,
as determined by Black Xxxxxx, on the date they are called for redemption and
(y) the number of Warrants being redeemed multiplied by the excess of (A) the
average Closing Bid Price of the Common Stock for the five trading days
immediately prior to the date that the Warrants are called for redemption over
(B) the exercise price of the Warrants.
6
14. 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 any address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
15. 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 Florida. The headings in this
Warrant are for the purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
[Signature Page Follows]
7
DATED as of May ___, 2005.
GALAXY MINERALS, INC.
By:
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
[Corporate Seal]
Attest:
By:
---------------------------
----------------, Secretary
8
EXHIBIT A
FORM OF NOTICE EXERCISE - WARRANT
(To be executed only upon exercise
of the Warrant in whole or in part)
To ____________________________________________
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 in the amount and manner set forth below, as of the date
written below. 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 Exercise Price is paid as follows:
|_| Certified Bank draft payable to the Company in the amount of
$_________.
|_| Wire transfer to the account of the Company in the amount of
$_________.
Upon exercise pursuant to this Notice of Exercise, the Holder will be in
compliance with the Limitation on Exercise (as defined in the Securities
Purchase Agreement pursuant to which this Warrant was issued).
The Holder of the shares of Common Stock received upon exercise of the
Warrant (the "Common Shares"), covenants and agrees that the Common Shares are
being acquired as an investment and not with a view to the distribution thereof
in violation of the Securities Act and that the Common Shares may not be
transferred, sold, assigned, hypothecated or otherwise disposed of, in whole or
in part except as provided in the legend on the first page of this Warrant and
provided that the Holder shall have furnished the Company an opinion of counsel
in form and substance reasonably acceptable to the Company to the effect that
such transfer is exempt from the registration requirements of the Securities Act
and any applicable state securities laws.*
Date:
------------------------- ------------------------------------------
(Name must conform to name of Holder as
specified on the face of the Warrant)
By:
---------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address of Holder:
-------------------------
-------------------------------
Date of exercise:
----------------------
9
ANNEX B
WARRANT EXERCISE LEDGER
-------------------------------------------------------------------------------------------------------------
Original Number Warrants Exercise Price New Balance Issuer Holder
Date of Warrants Exercised Paid of Warrants Initials Initials
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
GALAXY MINERALS, INC. HOLDER:
By: By:
------------------------------- -------------------------------
Name: Name:
----------------------------- -----------------------------
Title: Title:
---------------------------- ----------------------------
10
