EXHIBIT 4.24
99F- __
"THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH
THE DISTRIBUTION HEREOF. THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE,
TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR
EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS."
STOCK PURCHASE WARRANT
RIGHT TO PURCHASE 76,364 SHARES OF COMMON STOCK
THIS CERTIFIES THAT ___________ and all registered and permitted assigns
("Holder") is entitled to purchase, on or before March 31, 2004, SEVENTY SIX
THOUSAND THREE HUNDRED SIXTY FOUR (76,364) shares of the common stock ("Common
Stock" or "Shares") of VALUESTAR CORPORATION (the "Corporation" or "Company")
upon exercise of this Warrant along with presentation of the full purchase price
as provided herein. The purchase price of the common stock upon exercise (the
"Warrant Shares") is equal to One Dollar and Thirty-Seven and One-Half Cents
($1.375) per share (the "Exercise Price").
1. Exercise.
(a) This Warrant may be exercised one or more times, in whole or minimum
increments of 25,000 shares (or the balance of the Warrant), on any
business day on or before the expiration date listed above by presentation
and surrender hereof to the Corporation at its principal office of a
written exercise request and the Exercise Price in lawful money of the
United States of America in the form of a wire transfer or certified or
official bank check for the Warrant Shares specified in the exercise
request. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant, execute and deliver a new Warrant
evidencing the rights of the Holder hereof to purchase the balance of the
Warrant Shares purchasable hereunder. Upon receipt by the Corporation of an
exercise request and representations, together with proper payment of the
Exercise Price, at such office, the Holder shall be deemed to be the holder
of record of the Warrant Shares, notwithstanding that the stock transfer
books of the Corporation shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to
the Holder. The Corporation shall pay any and all transfer agent fees,
documentary stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of the Warrant Shares.
(b) At any time during the period from issuance to on or before September 30,
1999 (the "Exchange Period"), the Holder may, at its option, exchange this
Warrant, in whole only (a "Warrant Exchange"), into Thirty Eight Thousand
One Hundred Eighty Two (38,182) Warrant Shares by surrendering this Warrant
at the principal office of the Company, accompanied by a written notice
stating such Holder's intent to effect such exchange and the date on which
the Holder requests that such Warrant Exchange occur (the "Notice of
Exchange"). The Warrant Exchange shall take place on the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for
the shares issuable upon such Warrant Exchange shall be issued as of the
Exchange Date and delivered to the Holder within ten (10) days following
the Exchange Date. After the expiration of the Exchange Period, this
Warrant may only be exercised pursuant to Paragraph 1(a) of this agreement.
2. Redemption of Warrants.
The Corporation may elect on one occasion, by written notice as provided herein
(the "Company Notice"), to redeem all of this Warrant, in whole but not in part,
on any date (the "Redemption Date") fixed by the Company at a price of $.01 per
effective Warrant Share (the "Redemption Price") following such time as the
Closing Bid Price (as defined below) of the Company's Common Stock for the ten
(10) consecutive Trading Days (as defined below) equals or exceeds two hundred
percent (200%) of the Warrant Exercise Price; provided, however, that this
Warrant may be exercised by the Holder at any time prior to 5:00 p.m.,
California time, on the business day immediately preceding the Redemption Date.
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For purposes hereof, (i) the term "Trading Day" shall mean any day on which
securities are traded on the applicable securities exchange or in the applicable
securities market; and (ii) the term "Closing Bid Price" in respect of a Trading
Day shall mean the reported last closing bid price, on the principal national
securities exchange on which the Common Stock of the Company is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the Nasdaq Stock Market or, if not admitted to trading
or quoted on the Nasdaq Stock Market, the closing bid price in the
over-the-counter market as furnished by any quotation medium or any member firm
of a national securities exchange or the Nasdaq Stock Market selected from time
to time by the Company for that purpose.
The Company shall provide at least 10 days written notice to the Holder
("Company Notice") prior to the Redemption Date specified in such written
notice.
3. Adjustment of Exercise Price and Number of Shares Deliverable Upon Exercise
of Warrant.
The Exercise Price and the number of Shares purchasable upon the exercise of
this Warrant are subject to adjustment from time to time upon the occurrence of
the events enumerated in this paragraph.
(a) In case the Corporation shall at any time after the date of this Warrant:
(i) Pay a dividend of its shares of its Common Stock or make a
distribution in shares of its Common Stock with respect to its
outstanding Common Stock;
(ii) Subdivide its outstanding shares of Common Stock;
(iii) Combine its outstanding shares of Common Stock; or
(iv) Issue any other shares of capital stock by reclassification of
its shares of Common Stock;
the number of Warrant Shares in effect at the time of the record date of such
dividend, subdivision, combination, or reclassification shall be proportionately
adjusted so that Holder shall be entitled to receive the aggregate number and
kind of shares which, if this Warrant had been exercised prior to such event,
Holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
If shares of the Corporation's common stock are subdivided into a greater number
of shares of common stock, the Exercise Price for the Warrant Shares upon
exercise of this Warrant shall be proportionately reduced and the Warrant Shares
shall be proportionately increased; and conversely, if shares of the
Corporation's common stock are combined into a smaller number of common stock
shares, the Exercise Price shall be proportionately increased, and the Warrant
Shares shall be proportionately decreased.
(b) In case the Corporation shall fix a record date for the issuance of rights,
options, or warrants or make a distribution of shares of Common Stock to all
(but not less than all) holders of its outstanding Common Stock entitling them
to subscribe for or purchase shares of Common Stock (or securities convertible
into shares of Common Stock) at a price per share (or having a conversion price
per share, if a security convertible into Common Stock) less than the market
price of the shares (based on the closing bid price on the record date on NASDAQ
or a listed securities exchange of the Corporation's Common Stock, or if no such
quote is available, the shareholders equity on the date of the last financial
statement divided by the total number of shares outstanding) (the "Market
Price"), the Exercise Price to be in effect after such record date shall be
determined by multiplying the then current Exercise Price in effect immediately
prior to such record date by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
Market Price and of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights or warrants are not so issued, the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such record date had not been fixed.
4. Investment Representation.
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Neither this Warrant nor the Warrant Shares issuable upon the exercise of this
Warrant have been registered under the Securities Act of 1933, or any state
securities laws. The Holder acknowledges by acceptance of the Warrant that as of
the date of this Warrant and at the time of exercise (a) he has acquired this
Warrant or the Warrant Shares, as the case may be, for investment and not with a
view to distribution; and either (b) he has a pre-existing personal or business
relationship with the Corporation, or its executive officers, or by reason of
his business or financial experience he has the capacity to protect his own
interests in connection with the transaction; and (c) he is an accredited
investor as that term is defined in Regulation D promulgated under the
Securities Act. The Holder agrees that any Warrant Shares issuable upon exercise
of this Warrant will be acquired for investment and not with a view to
distribution and such Warrant Shares will not be registered under the Securities
Act and applicable state securities laws and that such Warrant Shares may have
to be held indefinitely unless they are subsequently registered or qualified
under the Securities Act and applicable state securities laws or, based on an
opinion of counsel reasonably satisfactory to the Corporation, an exemption from
such registration and qualification is available. The Holder, by acceptance
hereof, consents to the placement of the following restrictive legends, or
substantially similar legends, on each certificate to be issued to the Holder by
the Corporation in connection with the issuance of such Warrant Shares: "THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE
IN CONNECTION WITH THE DISTRIBUTION HEREOF. THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND
ALL APPLICABLE STATE SECURITIES LAWS."
5. Loss, Theft, Destruction or Mutilation of Warrant.
Upon receipt by the Corporation of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of any Warrant or stock certificate, and
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and upon reimbursement to the Corporation of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Warrant
or stock certificate, if mutilated, the Corporation will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of this Warrant or stock certificate.
6. Assignment.
With respect to any offer, sale or other disposition of this Warrant or any
underlying securities, the Holder will give written notice to the Corporation
prior thereto, describing briefly the manner thereof, together with a written
opinion of such Holder's counsel, to the effect that such offer, sale or other
distribution may be effected without registration or qualification (under any
applicable federal or state law then in effect). Furthermore, no such transfer
shall be made unless the transferee meets the same investor suitability
standards set forth in Section 4 of this Warrant. Promptly upon receiving such
written notice and reasonably satisfactory opinion, if so requested, the
Corporation, as promptly as practicable, shall notify such Holder that such
Holder may sell or otherwise dispose of this Warrant or the underlying
securities, as the case may be, all in accordance with the terms of the written
notice delivered to the Corporation. If a determination has been made pursuant
to this Section 6 that the opinion of counsel for the Holder is not reasonably
satisfactory to the Corporation, the Corporation shall so notify the Holder
promptly after such determination has been made. Each Warrant thus transferred
shall bear the same legends appearing on this Warrant, and underlying securities
thus transferred shall bear the legends required by Section 4. The Corporation
may issue stop transfer instructions to its transfer agent in connection with
such restrictions. Warrants and underlying securities issued upon transfers
after the expiration date of the Lock-Up Period shall be issued without the
Lock-Up Legend.
7. Reservation of Shares.
The Company hereby agrees that at all times there shall be reserved for issuance
and delivery upon exercise or exchange of this Warrant all shares of its Common
Stock or other shares of capital stock of the Company from time to time issuable
upon exercise or exchange of this Warrant. All such shares shall be duly
authorized and, when issued upon the exercise or exchange of the Warrant in
accordance with the terms hereof, shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale (other than as provided in the
Company's articles of incorporation and any restrictions on sale set forth
herein or pursuant to applicable federal and state securities laws) and free and
clear of all preemptive rights.
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The Holder shall not have any rights as a shareholder of the Company with regard
to the Warrant Shares prior to actual exercise resulting in the purchase of the
Warrant Shares.
8. Arbitration. In the event that a dispute arises between the Corporation and
the holder of this Warrant as to any matter relating to this Warrant, the matter
shall be settled by arbitration in Alameda County, California in accordance with
the Rules of the American Arbitration Association and the award rendered by such
arbitrator(s) shall not be subject to appeal and may be entered in any federal
or state court located in Alameda County having jurisdiction thereof, and
actions or proceedings shall be brought in no other forum or venue.
9. Governing Law.
This Warrant shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts between California residents
entered into and to be performed entirely within the State of California.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
its duly authorized officers and the corporate seal hereunto affixed on this
31st day of March, 1999.
VALUESTAR CORPORATION ACCEPTANCE BY HOLDER
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Xxxxx Xxxxx, President and CEO
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Xxxxx X. Xxxxxx, Secretary
