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EXHIBIT 1.02
WARRANT AGREEMENT
__________________, 1997
CAPITAL WEST SECURITIES, INC.
c/o Capital West Securities, Inc.
000 X. Xxxxxxxx
16th Floor, Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Grand Adventure Tour & Travel Publishing Corporation (the "Company"),
agrees to issue and sell to you warrants (the "Warrants") to purchase the
number of shares of common stock, no par value per share (the "Common Stock"),
of the Company set forth herein, subject to the terms and conditions contained
herein.
1. ISSUANCE OF WARRANTS; EXERCISE PRICE. The Warrants, which shall
be in the form attached hereto as Exhibit A, shall be issued to you
concurrently with the execution hereof in consideration of the payment by you
to the Company of the sum of $.001 cash per share of Common Stock subject to
the Warrants, the receipt and sufficiency of which are hereby acknowledged. The
Warrant shall provide that you, or such other holder or holders of the Warrants
to whom transfer is authorized in accordance with the terms of this Agreement,
shall have the right to purchase an aggregate of 105,000 shares of Common
Stock for an exercise price equal to $8.40 per share (the "Exercise Price") or
$882,000 in the aggregate. The number, character and Exercise Price of such
shares of Common Stock are subject to adjustment as hereinafter provided, and
the term "Common Stock" shall mean, unless the context otherwise requires, the
stock and other securities and property receivable upon exercise of the
Warrants. The term "Exercise Price" shall mean, unless the context otherwise
requires, the price per share of the Common Stock purchasable under the
Warrants as set forth in this Section 1, as adjusted from time to time pursuant
to Section 6.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to you and to each subsequent holder of Warrants and agrees that:
(a) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the valid and binding obligation of the Company
enforceable in accordance with its terms; and neither the issuance of the
Warrants nor the issuance of the shares of Common Stock issuable upon exercise
of the Warrants will result in a breach or violation of any terms or provisions
of, or constitute a default under, any contract, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound, the Certificate of Incorporation or
Bylaws of the Company, or any law, order, rule, regulation or decree of any
government, governmental instrumentality or court, domestic or foreign, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company.
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(b) No consent, approval, authorization or order of any court or
governmental agency or body is required for the sale and issuance of the
Warrants or the sale and issuance of the shares of Common Stock issuable upon
exercise of the Warrants, except such as have been obtained or may be required
under the Securities Act of 1933, as amended (the "Act"), and such as may be
required under state securities or blue sky laws in connection with the
issuance of the Warrants and the shares of Common Stock issuable upon exercise
of the Warrants. Upon exercise of the Warrants by the holder thereof, the
shares of Common Stock with respect to which the Warrants are exercised will be
validly issued, fully paid, and non-assessable, and good and marketable title
to such shares of Common Stock shall be delivered to such holder free and clear
of all liens, encumbrances, equities, claims or preemptive or similar rights.
(c) During the term of this Agreement, the Company shall make timely
filings of all periodic and other reports and forms and other materials
required (but only to the extent required) to be filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Act or the Securities
Exchange Act of 1934, as amended, and with any national securities exchange or
quotation system upon which any of the securities of the Company may be listed.
3. NOTICES OF RECORD DATE; ETC. In the event of (i) any taking by
the Company of a record date with respect to the holders of any class of
securities of the Company for purposes of determining which of such holders are
entitled to dividends or other distributions (other than regular quarterly
dividends), or any right to subscribe for, purchase or otherwise acquire shares
of stock of any class or any other securities or property, or to receive any
other right, (ii) any capital reorganization of the Company, or
reclassification or recapitalization of capital stock of the Company or any
transfer in one or more related transactions of all or a majority of the assets
or revenue or income generating capacity of the Company to, or consolidation or
merger of the Company with or into, any other entity or person, or (iii) any
voluntary or involuntary dissolution or winding up of the Company, then and in
each such event the Company will mail or cause to be mailed to each holder of a
Warrant at the time outstanding a notice specifying, as the case may be, (A)
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; or (B) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or any other class of stock or securities of the Company, or another
issuer pursuant to Section 6, receivable upon the exercise of the Warrants)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such event.
Any such notice shall be deposited in the United States mail, postage prepaid,
at least ten (10) days prior to the date therein specified, and the holders(s)
of the Warrant(s) may exercise the Warrant(s) and participate in such event as
a registered holder of Common Stock, upon exercise of the Warrant(s) so held,
within the ten (10) day period from the date of mailing of such notice.
4. NO IMPAIRMENT. The Company shall not, by amendment of its
organizational documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the observance or
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performance of any of the terms of this Agreement or of the Warrants, but will
at all times in good faith take any and all action as may be necessary in order
to protect the rights of the holders of the Warrants against impairment.
Without limiting the generality of the foregoing, the Company (a) will at all
times reserve and keep available, solely for issuance and delivery upon
exercise of the Warrants, shares of Common Stock issuable from time to time
upon exercise of the Warrants, (b) will not increase the par value of any
shares of stock receivable upon exercise of the Warrants above the amount
payable in respect thereof upon such exercise, and (c) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable stock upon the exercise of the
Warrants, or any of them.
5. EXERCISE OF WARRANTS. At any time and from time to time on and
after the first anniversary of the date hereof and expiring on the fifth
anniversary of the effective date of the public offering of the Common Stock at
5:00 p.m., Oklahoma City, Oklahoma time, Warrants may be exercised as to all or
any portion of the whole number of shares of Common Stock covered by the
Warrants by the holder thereof by surrender of the Warrants, accompanied by a
subscription for shares to be purchased in the form attached hereto as Exhibit
B and by a check payable to the order of the Company in the amount required for
purchase of the shares as to which the Warrant is being exercised, delivered to
the Company at its principal office at 1200 Capital of Texas Xxxxxxx Xxxxx,
Xxxxxxxx 0, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxxx X'Xxxxx.
Warrants may also be exercised from time to time, without any payment required
for the purchase of the shares as to which the Warrant is being exercised, as
to all or any portion of the number of shares of Common Stock covered by the
Warrant(s) by the holder thereof by surrender of the Warrants, accompanied by a
subscription for shares in the form attached as Exhibit C, pursuant to which
the holder thereof will be entitled to receive upon such surrender of the
Warrant(s) (and without any further payment) that number of shares of Common
Stock equal to the product of the number of shares of Common Stock obtainable
upon exercise of the Warrant(s) (or the portion thereof as to which the
exercise relates) multiplied by a fraction: (i) the numerator of which shall be
the difference between the then Current Value (as defined in this Section 5 and
Section 7(d)) of one full share of Common Stock on the date of exercise and the
Exercise Price, and (ii) the denominator of which shall be the Current Value of
one full share of Common Stock on the date of exercise. Upon the exercise of a
Warrant in whole or in part, the Company will within five (5) days thereafter,
at its expense (including the payment by the Company of any applicable issue or
transfer taxes), cause to be issued in the name of and delivered to the Warrant
holder a certificate or certificates for the number of fully paid and
non-assessable shares of Common Stock to which such holder is entitled upon
exercise of the Warrant. In the event such holder is entitled to a fractional
share, in lieu thereof such holder shall be paid a cash amount equal to such
fraction, multiplied by the Current Value of one full shares of Common Stock on
the date of exercise. Certificates for shares of Common Stock issuable by
reason of the exercise of the Warrant or Warrants shall be dated and shall be
effective as of the date of the surrendering of the Warrant for exercise,
notwithstanding any delays in the actual execution, issuance or delivery of the
certificates for the shares so purchased. In the event a Warrant or Warrants
is exercised as to less than the aggregate amount of all shares of Common Stock
issuable upon exercise of all Warrants held by such person, the Company shall
issue a new Warrant to the holder of the Warrant so exercised covering the
aggregate number of shares of Common Stock as to which Warrants remain
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unexercised.
For purposes of this section, Current Value is defined (i) in the case
for which a public market exists for the Common Stock at the time of such
exercise, according to Section 7(d), and (ii) in the case no public market
exists at the time of such exercise, at the Appraised Value. For the purposes
of this Agreement, "Appraised Value" is the value determined in accordance with
the following procedures. For a period of five (5) days after the date of an
event (a "Valuation Event") requiring determination of Current Value at a time
when no public market exists for the Common Stock (the "Negotiation Period"),
each party to this Agreement agrees to negotiate in good faith to reach
agreement upon the Appraised Value of the securities or property at issue, as
of the date of the Valuation Event, which will be the fair market value of such
securities or property, without premium for control or discount for minority
interests, illiquidity or restrictions on transfer. In the event that the
parties are unable to agree upon the Appraised Value of such securities or
other property by the end of the Negotiation Period, then the Appraised Value
of such securities or property will be determined for purposes of this
Agreement by a recognized appraisal or investment banking firm mutually
agreeable to the holders of the Warrants and the Company (the "Appraiser"). If
the holders of the Warrants and the Company cannot agree on an Appraiser within
two (2) business days after the end of the Negotiation Period, the Company, on
the one hand, and the holders of the Warrants, on the other hand, will each
select an Appraiser within ten (10) business days after the end of the
Negotiation Period and those two Appraisers will select ten (10) days after the
end of the Negotiation Period an independent Appraiser to determine the fair
market value of such securities or property, without premium for control or
discount for minority interests. Such independent Appraiser will be directed
to determine fair market value of such securities or property as soon as
practicable, but in no event later than thirty (30) days from the date of its
selection. The determination by an Appraiser of the fair market value will be
conclusive and binding on all parties to this Agreement. Appraised Value of
each share of Common Stock at a time when (i) the Company is not a reporting
company under the Exchange Act and (ii) the Common Stock is not traded in the
organized securities markets, will, in all cases, be calculated by determining
the Appraised Value of the entire Company taken as a whole and dividing that
value by the number of shares of Common Stock then outstanding, without premium
for control or discount for minority interests, illiquidity or restrictions on
transfer. The costs of the Appraiser will be borne by the Company. In no
event will the Appraised Value of the Common Stock be less than the per share
consideration received or receivable with respect to the Common Stock or
securities or property of the same class in connection with a pending
transaction involving a sale, merger, recapitalization, reorganization,
consolidation, or share exchange, dissolution of the Company, sale or transfer
of all or a majority of its assets or revenue or income generating capacity, or
similar transaction.
6. PROTECTION AGAINST DILUTION. The Exercise Price for the shares
of Common Stock and number of shares of Common Stock issuable upon exercise of
the Warrants is subject to adjustment from time to time as follows:
(a) STOCK DIVIDENDS, SUBDIVISIONS, RECLASSIFICATIONS, ETC. In case
at any time or from time to time after the date of execution of this Agreement,
the Company shall (i) take a record of the holders of Common Stock for the
purpose of entitling them to receive a dividend or a distribution on shares of
Common Stock payable in shares of Common
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Stock or other class of securities, (ii) subdivide or reclassify its
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify its outstanding Common Stock into a smaller number of
shares, then, and in each such case, the Exercise Price in effect at the time
of the record date for such dividend or distribution or the effective date of
such subdivision, combination or reclassification shall be adjusted in such a
manner that the Exercise Price for the shares issuable upon exercise of the
Warrants immediately after such event shall bear the same ratio to the Exercise
Price in effect immediately prior to any such event as the total number of
shares of Common Stock outstanding immediately prior to such event shall bear
to the total number of shares of Common Stock outstanding immediately after
such event.
(b) ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. When any adjustment
is required to be made in the exercise Price under this Section 6, (i) the
number of shares of Common Stock issuable upon exercise of the Warrants shall
be changed (upward to the nearest full share) to the number of shares
determined by dividing (x) an amount equal to the number of shares issuable
pursuant to the exercise of the Warrants immediately prior to the adjustment,
multiplied by the Exercise Price in effect immediately prior to the adjustment,
by (y) the Exercise Price in effect immediately after such adjustment, and (ii)
upon exercise of the Warrant, the holder will be entitled to receive the number
of shares or other securities referred to in Section 6(a) that such holder
would have received had the Warrant been exercised prior to the events referred
to in Section 6(a).
(c) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In
case of any reorganization or consolidation of the Company with, or any merger
of the Company with or into, another entity (other than a consolidation or
merger in which the Company is the surviving corporation) or in case of any
sale or transfer to another entity of the majority of assets of the Company,
the entity resulting from such reorganization or consolidation or surviving
such merger or to which such sale or transfer shall be made, as the case may
be, shall make suitable provision (which shall be fair and equitable to the
holders of Warrants) and shall assume the obligations of the Company hereunder
(by written instrument executed and mailed to each holder of the Warrants then
outstanding) pursuant to which, upon exercise of the Warrants, at any time
after the consummation of such reorganization, consolidation, merger or
conveyance, the holder shall be entitled to receive the stock or other
securities or property that such holder would have been entitled to upon
consummation if such holder had exercised the Warrants immediately prior
thereto, all subject to further adjustment as provided in this Section 6.
(d) CERTIFICATE AS TO ADJUSTMENTS. In the event of adjustment as
herein provided in paragraphs of this Section 6, the Company shall promptly
mail to each Warrant holder a certificate setting forth the Exercise Price and
number of shares of Common Stock issuable upon exercise after such adjustment
and setting forth a brief statement of facts requiring such adjustment. Such
certificate shall also set forth a brief statement of facts requiring such
adjustment. Such certificate shall also set forth the kind and amount of stock
or other securities or property into which the Warrants shall be exercisable
after any adjustment of the Exercise Price as provided in this Agreement.
(e) MINIMUM ADJUSTMENT. Notwithstanding the foregoing, no
certificate as to adjustment of the Exercise Price hereunder shall be made if
such adjustment results in a change
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in the Exercise Price then in effect of less than ______ ($_____) and any
adjustment of less than ______ ($_____) of any Exercise Price shall be carried
forward and shall be made at the time of and together with any subsequent
adjustment that, together with the adjustment or adjustments so carried
forward, amounts to ______ ($_____) or more; provided however, that upon the
exercise of a Warrant, the Company shall have made all necessary adjustments
(to the nearest cent) not theretofore made to the Exercise Price up to and
including the date upon which such Warrant is exercised.
7. REGISTRATION RIGHTS.
(a) The Company agrees that upon written notice given to the Company
at any time on or after the first anniversary of the effective date of the
public offering of the Common Stock but before the fifth anniversary of the
effective date of the public offering, from the holder or holders of not less
than fifty-one percent (51%) of the shares issued and issuable upon exercise of
the Warrants, of a proposed distribution by such holder or holders of Common
Stock issued or issuable upon exercise of Warrants, the Company will, within 45
days after receipt of such notice, promptly prepare, file and diligently
prosecute to effectiveness, an appropriate filing with the Commission of a
registration statement covering the proposed sale or distribution of all or any
part of such shares under the Securities Act of 1933, as amended (the "Act"),
and the appropriate registration statements or applications under the
securities laws of such states as such holders, in their discretion, shall
determine, and will use its reasonable best efforts to have such registration
and application (including both the registration under the Act and the
registration or application made under the various state securities laws)
declared effective as soon as practicable after the filing thereof and to
remain effective for such period that may be reasonably necessary to complete
the distribution of securities so registered or qualified. At least 15 days
prior to such filing, the Company shall give written notice of such proposed
filing to each registered holder of any Warrants at the holders' addresses
appearing on the records of the Company and to each registered holder of Common
Stock purchased from the exercise of any Warrants at such holder's address
appearing on the Company records, and shall offer to include in such
registration statement any proposed distribution of such Common Stock held or
to be held by each such registered holder; provided, however, that except as
provided in Section 7(e), the Company need not effect the registration of the
sale or distribution of Common Stock purchased upon exercise of Warrants more
than once. All expenses, disbursements and fees (including fees and expenses
of counsel for the Company, special auditing fees specifically attributable to
the sale by the selling holder or holders of Common Stock, printing expenses
(including all necessary copies of the registration statement and prospectuses
contained therein), registration and filing fees and blue sky fees and
expenses, and fees and charges of the Company's transfer agent and registrar
for services rendered in connection therewith) shall be borne by the Company;
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun (in which case holders shall bear
such expenses), if the registration request is subsequently withdrawn at any
time at the request of the holder or holders of not less than 51% of the shares
issued and issuable upon exercise of the Warrants, unless such withdrawal is
due to the misconduct of the Company or due to an unforeseen material adverse
change in the business, properties, prospects or financial condition of the
Company occurring prior to the effectiveness of the registration
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statement, in which case the Company will continue to bear such expenses.
(b) In connection with any registration under the Act and specified
state securities law pursuant to this Agreement, the Company will, without
charge, furnish each holder whose shares are registered thereunder with copies
of the registration statement and all amendments thereto and will, without
charge, supply each such holder with copies of any preliminary and final
prospectus included therein in such quantities as may be necessary for the
purposes of such proposed sale or distribution that the holder or holders may
reasonably request.
(c) In connection with any registration of shares pursuant to this
Section 7, the holders whose shares are being registered shall furnish the
Company with such information concerning such holders and the proposed sale or
distribution as shall be required for use in the preparation of such
registration statement and applications.
(d) Notwithstanding the foregoing provisions of this Section 7, upon
receipt of such written notice from the holder or holders of not less than
fifty one percent (51%) of the shares issued and issuable upon exercise of the
Warrants requesting that the Company effect registration of the sale or
distribution of Common Stock as provided in Section 7(a) or upon election by
holders of Warrants or Common Stock to participate in a registration pursuant
to Section 7(e), the Company shall have the option, for a period of ten (10)
days thereafter, to purchase all or any such Warrants and all or any such
shares of Common Stock acquired pursuant to the exercise of the Warrants and
held by holders providing the request for registration under Section 7(a)
and/or 7(e) and held by any other holder of Warrants or shares issued and will
exercise its option if it so elects as follows:
(i) as to such Warrants, at a price per Warrant equal to the
difference between (A) the average of the means between the closing bid and
asked prices of the Common Stock in the over-the-counter market for 20
consecutive business days commencing 30 business days before the date of
receipt of such notice, (B) if the Common Stock is quoted on the Nasdaq
SmallCap Market, at the average of the means of the daily closing bid and asked
prices of the Common Stock for 20 consecutive business days commencing 30
business days before the date of such notice, or (C) if the Common Stock is
listed on any national securities exchange or quoted on the Nasdaq National
Market System, at the average of the daily closing prices of the Common Stock
for 20 consecutive business days commencing 30 business days before the date of
such notice and the Exercise Price of the Warrant at the time of receipt of
such notice; and
(ii) as to shares of Common Stock previously purchased pursuant to the
exercise of Warrants, at a price per share equal to (A) the average of the
means between the closing bid and asked prices of the Common Stock in the
over-the-counter market for 20 consecutive business days commencing 30 business
days before the date of such notice, (b) if the Common Stock is quoted on the
Nasdaq SmallCap Market, at the average of the means of the daily closing bid
and asked prices of the Common Stock for 20 consecutive business days
commencing 30 business days before the date of such notice or (C) if the Common
Stock is listed on any national securities exchange or the Nasdaq National
Market System, at the average of the daily closing prices of the Common Stock
for 20 consecutive business days
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commencing 30 business days before the date of such notice (such value of
shares so determined in this Section 7(d)(ii), as the case may be, is referred
to herein as the "Current Value").
(e) If any time on or after the first anniversary of the date hereof
but before the fifth anniversary of the date hereof the Company proposes to
file a registration statement under the Act covering a proposed sale of shares
of Common Stock, it shall give to each holder who then owns any Warrants or any
shares of Common Stock acquired pursuant to the exercise of the Warrants notice
of such proposed registration at least 30 days prior to the filing of the
registration statement and shall afford each such holder who then proposed to
sell or distribute publicly any of the shares subject to the Warrants upon
giving not less than 10 days notice prior to such filing, the opportunity to
have such shares included in the securities registered under the registration
statement. All expenses, disbursements and fees (including, but without
limitation, fees and expenses of counsel, auditing fees, printing expenses, SEC
filing fees and expenses, but excluding any underwriting discounts or
commissions) incurred in connection with the registration by the Company of the
sale of any shares for any such holder under this Section 7(e) shall be borne
by the Company.
8. INDEMNIFICATION; CONTRIBUTION.
(a) The Company will indemnify and hold harmless each holder and each
affiliate thereof of Common Stock registered pursuant to this Agreement with
the Commission, or under any Blue Sky Law or regulation against any losses,
claims, damages, or liabilities, joint or several, to which such holder may
become subject under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, registration statement, prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each such holder and affiliate for any legal or other expenses
reasonably incurred by such holder in connection with investigating or
defending any such action or claim regardless of the negligence of any such
holder or affiliate; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus,
registration statement or prospectus, or any such amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by any such holder expressly for use therein.
(b) Each holder of Common Stock registered pursuant to this Agreement
will indemnify and hold harmless the Company against any losses, claims,
damages, or liabilities to which the Company may become subject, under the Act
or otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, registration statement or prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in
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each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
preliminary prospectus, registration statement or prospectus, or any amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such holder expressly for use therein.
(c) Promptly after receipt by an indemnified party under Sections
8(a) or (b) above of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under either such subsection, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability that it may otherwise have to any
indemnified party. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof the indemnifying party shall be entitled to assume the
defense thereof by notice in writing to the indemnified party. After notice
from the indemnifying party to such indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under either of such subsections for any legal expenses of
other counsel or any other expense, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation incurred prior to the assumption by the indemnifying
party, unless such expenses have been specifically authorized in writing by the
indemnifying party, the indemnifying party has failed to assume the defense and
employ counsel, or the named parties to any such action include both the
indemnified party and the indemnifying party, as appropriate, and such
indemnified party has been advised by counsel that the representation of such
indemnified party and the indemnifying party by the same counsel would be
inappropriate due to actual or potential differing interests between them, in
each of which cases the fees of counsel for the indemnified party will be paid
by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b) in respect of any losses, claims, damages, or liabilities (or
action in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the holder or holders from this Agreement and from
the offering of the shares of Common Stock. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the holders in connection with the statement or omissions that
resulted in such losses, claims, damages, or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the holders agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined
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by pro rata allocation (even if the holders were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this subsection (e). Except
as provided in Section 8(c), the amount paid or payable by an indemnified party
as a result of the losses, claims, damages, or liabilities (or actions in
respect thereof) referred to above in this Section 8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigation or defending any such action or claim.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding any provision in
this Section 8(d) to the contrary, no holder shall be liable for any amount, in
the aggregate, in excess of the net proceeds to such holder from the sale of
such holder's shares (obtained upon exercise of Warrants) giving rise to such
losses, claims, damages, or liabilities.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
holder of Warrants within the meaning of the Act. The obligations of the
holders of Common Stock under this Section 8 shall be in addition to any
liability that such holders may otherwise have and shall extend, upon the same
terms and conditions to each person, if any, who controls the Company within
the meaning of the Act.
9. STOCK EXCHANGE LISTING. In the event the Company lists its
Common Stock on any national securities exchange, the Company will, at its
expense, also list on such exchange, upon exercise of a Warrant, all shares of
Common Stock issuable pursuant to such Warrant.
10. SPECIFIC PERFORMANCE. The Company stipulates that remedies at
law, in money damages, available to the holder of a Warrant, or of a holder of
Common Stock issued pursuant to exercise of a 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 Agreement are not and will not be
adequate. Therefore, the Company agrees that the terms of this Agreement 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. SUCCESSORS AND ASSIGNS; BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of you and the Company and their
respective successors and permitted assigns.
12. NOTICES. Any notice hereunder shall be given by registered or
certified mail, if to the Company, at its principal office referred to in
Section 5 and, if to the holders, to their respective addresses shown in the
Warrant ledger of the Company, provided that any holder may at any time on
three (3) days' written notice to the Company designate or substitute another
address where notice is to be given. Notice shall be deemed given and received
after a certified or registered letter, properly addressed with postage
prepaid, is deposited in the U.S. mail.
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13. SEVERABILITY. Every provision of this Agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the remainder
of this Agreement.
14. ASSIGNMENT; REPLACEMENT OF WARRANTS. If the Warrant or Warrants
are assigned, in whole or in part, the Warrants shall be surrendered at the
principal office of the Company, and thereupon, in the case of a partial
assignment, a new Warrant shall be issued to the holder thereof covering the
number of shares not assigned, and the assignee shall be entitled to receive a
new Warrant covering the number of shares so assigned. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of any Warrant and appropriate bond or
indemnification protection, the Company shall issue a new Warrant of like
tenor. Except as contemplated by Section 7 of this Agreement, the Warrants
will not be transferred, sold, or otherwise hypothecated by you or any other
person and the Warrants will be nontransferable, except to (i) one or more
persons, each of which on the date of transfer is an officer, shareholder, or
employee of you; (ii) a partnership or partnerships, the partners of which are
you and one or more persons, each of whom on the date of transfer is an officer
to you; (iii) a successor to you in merger or consolidation; (iv) a purchaser
of all or substantially all of your assets; or (v) a person that receives a
Warrant upon death of a Holder pursuant to will, trust, or the laws of
intestate succession.
15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Oklahoma without giving effect to the
principles of choice of laws thereof.
16. DEFINITION. All references to the word "you", and to "Capital
West Securities, Inc." in this Agreement shall be deemed to apply with equal
effect to any persons or entities to whom Warrants have been transferred in
accordance with the terms hereof, and, where appropriate, to any persons or
entities holding shares of Common Stock issuable upon exercise of Warrants.
17. HEADINGS. The headings herein are for purposes of reference only
and shall not limit or otherwise affect the meaning of any of the provisions
hereof.
Very truly yours,
Grand Adventure Tour & Travel Publishing Corporation
By:
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Xxxxxxx X'Xxxxx, President
Accepted as of , 1997.
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CAPITAL WEST SECURITIES, INC.
By:
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