Contract
EXHIBIT
10.4
THIS
WARRANT AND THE SECURITIES WHICH MAY BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), NOR HAVE THEY
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
STATE. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON ITS
EXERCISE MAY BE SOLD, TRANSFERRED, HYPOTHECATED, OR OTHERWISE DISPOSED OF UNLESS
A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER, THE
TRANSFER IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT OR AS OTHERWISE
PERMITTED BY THE COMPANY, OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY, REGISTRATION UNDER THE ACT IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO
COMPLY WITH THE ACT AND WITH APPLICABLE STATE SECURITIES LAWS.
MONUMENT
RESOURCES, INC.
WARRANT
TO PURCHASE SHARES
No.
W-2
THIS CERTIFIES THAT, for value
received, and subject to the provisions and upon the terms and conditions
hereinafter set forth, X.X. Xxxxx (the “Holder”)
is entitled to subscribe for and purchase up to 400,000 fully paid and
nonassessable shares of common stock, no par value, as adjusted pursuant to
Section 4 hereof (the “Shares”)
of Monument Resources, Inc., a Colorado corporation (the “Company”). This
warrant (the “Warrant”)
was approved by the Company’s Board of Directors by consent resolutions
effective on January 30, 2008.
1. Definitions
(a) Warrant
Price. The “Warrant
Price” shall be $0.40 per Share (as adjusted pursuant to Section 4
hereof).
(b) Warrant Issue
Date. The Warrant Issue Date shall be March 5,
2008.
(c) Term. The
purchase right represented by this Warrant is exercisable, in whole or in part,
at any time and from time to time during the time beginning on the Warrant Issue
Date and ending on March 4, 2010.
2. Method of Exercise; Payment;
Issuance of New Warrant.
Subject to Section 1 hereof, the
purchase right represented by this Warrant may be exercised by the Holder
hereof, in whole or in part and from time to time, by the surrender of this
Warrant (with the notice of exercise form attached hereto as Exhibit A duly
executed) at the principal office of the Company and by the payment to the
Company, by check or wire transfer, of an amount equal to the then applicable
Warrant Price multiplied by the number of Shares then
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being
purchased. In the event of any exercise of the rights represented by
this Warrant, and if the Shares are DTC eligible, the Company shall credit such
aggregate number of Shares to which the Holder shall be entitled to the Holder’s
or its designee’s balance account with The Depository Trust Company; provided,
however, if the Holder requests physical delivery of any or all of the Shares,
or, if the Shares are not DTC eligible, then the Company shall, on or before the
fifth (5th) day
following the date of exercise of this Warrant, issue and surrender to a common
carrier for overnight delivery to the address specified in writing by the
Holder, a certificate, registered in the name of the Holder, for the number of
Shares to which the Holder shall be entitled pursuant to such
request. Upon delivery of the Warrant and payment of the Warrant
Price referred to above, the Holder of this Warrant shall be deemed for all
corporate purposes to have become the Holder of record of the Shares with
respect to which this Warrant has been exercised. Unless this Warrant
has been fully exercised or expired, a new Warrant representing the portion of
the Shares, if any, with respect to which this Warrant shall not have been
exercised shall also be issued to the Holder hereof on or before the fifth
(5th) day
following exercise of this Warrant.
3. Stock Fully
Paid. All Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance pursuant to the terms and
conditions herein, be fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issue thereof other than such as may be
imposed by federal or state securities laws or by the Holder
hereof.
4. Adjustment of Warrant Price
and Number of Shares. The number and kind of securities
purchasable upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time upon the occurrence of certain events,
as follows:
(a) Reclassification or
Merger. In case of any reclassification, change or conversion
of securities of the class issuable upon exercise of this Warrant (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in case of any
merger of the Company with or into another corporation (other than a merger with
another corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant), the Company, or
such successor corporation, as the case may be, or its parent corporation, shall
duly execute and deliver to the Holder of this Warrant a new Warrant (in form
and substance reasonably satisfactory to the Holder of this Warrant), so that
the Holder of this Warrant shall have the right to receive upon exercise
thereof, at a total purchase price equal to that payable upon the exercise of
the unexercised portion of this Warrant, and in lieu of the Shares theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification,
change, conversion or merger by a Holder of the number of Shares then
purchasable under this Warrant immediately prior to such reclassification,
change, conversion or merger. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4. The provisions of
this subparagraph (a) shall similarly apply to successive reclassifications,
changes, conversions and mergers.
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(b) Subdivision or Combination
of Shares. If the Company at any time while this Warrant
remains outstanding and unexpired shall subdivide its outstanding Shares into a
greater number of shares (by any stock split, stock dividend, recapitalization
or otherwise) or combine its outstanding Shares in to a lesser number of shares
(by combination, reverse stock split or otherwise), the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in the case
of a combination, effective at the close of business on the date the subdivision
or combination becomes effective.
(c) Stock Dividends and Other
Distributions. In case the Company shall make or issue, or
shall fix a record date for the determination of eligible holders entitled to
receive, a dividend or other distribution with respect to the Shares (or any
shares of stock or other securities at the time issuable upon exercise of the
Warrant) of any assets (including, without limitation, any distribution of cash,
stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction), then,
in each such case, the Holder of this Warrant on exercise hereof at any time
after the consummation, effective date or record date of such dividend or other
distribution, shall receive, in addition to the Shares (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and / or all other additional
stock available by it as aforesaid during such period giving effect to all
adjustments called for by this Section 4. At the time of any
such dividend or distribution, the Company shall make appropriate reserves to
ensure the timely performance of the provisions of this Section
4(c).
(d) Adjustment of Number of
Shares. Upon each adjustment in the Warrant Price, the number
of Shares purchasable hereunder shall be adjusted, to the nearest whole share,
to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant Price immediately
thereafter, such that the aggregate Warrant Price payable for the exercise of
all Shares shall remain the same.
5. Notice of
Adjustments.
Whenever
the Warrant Price or the number of Shares purchasable hereunder shall be
adjusted pursuant to Section 4 hereof, the Company shall make a certificate
signed by its chief financial officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Warrant Price and the number of
Shares purchasable hereunder after giving effect to such adjustment, which shall
be mailed (without regard to Section 13 hereof, by first class mail,
postage prepaid) to the Holder of this Warrant.
6. Fractional
Shares.
No
fractional Shares are to be issued upon any exercise of this Warrant, but rather
the number of Shares issued upon such exercise of this Warrant shall be rounded
up or down to the nearest whole number.
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7. Compliance with Securities
Act; Disposition of Warrant or
Shares. This Warrant is subject to the restrictions on
transfer set forth herein and therein. Upon surrender for transfer of
this Warrant and compliance with said restrictions on transfer, the Company
shall execute and deliver in the name of the transferee or transferees a new
Warrant for a like number of Shares.
(a) The
Holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the
Shares to be issued upon exercise hereof are being acquired for investment and
that such Holder will not offer, sell or otherwise dispose of this Warrant, or
any Shares to be issued upon exercise hereof except under circumstances which
will not result in a violation of the Securities Act of 1933, as amended (the
“Act”). If
at the time of any transfer or exercise of this Warrant or any of the Shares,
such securities have not been registered under the Act and are not eligible for
sale without registration under Rule 144 of the Act, the Company may
require as a condition of allowing such transfer or exercise, that the Holder
furnish to the Company an opinion of counsel or such other information as is
reasonably necessary to establish that such transfer and exercise may be made
without registration under the Act. All Shares issued upon exercise
of this Warrant (unless registered under the Act) shall be stamped or imprinted
with a legend in substantially the following form:
“THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(“ACT”), NOR HAS IT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF UNLESS A REGISTRATION STATEMENT UNDER THE
ACT IS IN EFFECT AS TO SUCH TRANSFER, THE TRANSFER IS MADE IN ACCORDANCE WITH
RULE 144 UNDER THE ACT OR AS OTHERWISE PERMITTED BY THE COMPANY, OR, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE ACT IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT AND WITH
APPLICABLE STATE SECURITIES LAWS.”
(b) This
Warrant shall not be assigned, transferred or otherwise conveyed, in whole or in
part, by the Holder except with the prior written consent of the Company;
provided that Holder may assign this Warrant, in whole or in part, to any
parent, majority-owned subsidiary or other affiliate upon the Holder providing
written notice thereof to the Company. This Warrant, if presented for
a transfer or exchange to which the Company has consented or to which the
Company’s consent is not required, shall (if so required by the Company) be duly
endorsed by, or be accompanied by, or be accompanied by instruments of transfer
in form satisfactory to the Company duly executed by, the registered Holder or
its authorized attorney.
(c) Any
such exchange or transfer shall be without charge, except that the Company may
require payment of the sum sufficient to cover any tax or governmental charge
that may be imposed in relation thereto by a government other than the federal
government of the United States or the government of any of its
states.
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(d) The
Company may deem and treat the registered Holder hereof as the absolute owner
hereof and notwithstanding any notation of ownership or on account of the
principal hereof, for the exercise hereof and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
8. Rights as
Shareholders. Except as provided in Section 4(c) and 22, no
holder of this Warrant, as such, shall be entitled to vote or receive dividends
or be deemed the holder of Shares or any other securities of the Company which
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder of this
Warrant, as such, any of the rights of a shareholder of the Company or any right
to vote for the election of managers or upon any matter submitted to
shareholders at any meeting thereof, or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until this Warrant shall
have been exercised and the Shares purchasable upon the exercise hereof shall
have become deliverable, as provided herein.
9. Representations of
Company. The Company hereby represents and warrants to the
Holder as follows:
(a) Organization, Good Standing,
Qualification and Authorization of the Company. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Colorado and has all requisite corporate power and
authority to carry on its business as now conducted and as presently proposed to
be conducted in the future. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business or properties taken
as a whole. All corporate action on the part of the Company and its
officers and directors necessary for the authorization, execution, and delivery
of this Warrant and the performance of all obligations of the Company hereunder,
has been taken.
(b) Governmental Consents;
Compliance. No consent or filing with, any governmental
authority on the part of the Company is required in connection with this
Warrant. To the Company’s knowledge, the Company is not in violation
or default of any provision of any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound or, to its knowledge, of
any provision of federal or state statute, rule or regulation applicable to the
Company, in each instance in which the effect of such violation or default would
have a material adverse effect upon the Company. The execution,
delivery, and performance of and compliance with this Warrant will not result in
any material violation of any agreement to which the Company is a
party.
(c) Authority. The
Company represents that it has full right, power and authority to enter into the
transactions contemplated by this Warrant and to perform its obligations
hereunder. This Warrant constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms.
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(d) Disclosure. The
Company has fully provided the Holder with the opportunity to obtain all
information which the Holder has requested for making its decision to enter into
this Warrant. There exists no fact or circumstance which has not been
previously disclosed to the Holder and to the knowledge of the Company
materially and adversely affects or is reasonably likely to materially and
adversely affect the Company’s business, assets, conditions, affairs, operations
or properties, financially or otherwise.
10. Lock-Up. In
connection with any registration of the offering of any securities of the
Company under the Act, if so requested by the Company or any representative of
the underwriters (the “Managing
Underwriter”), this Warrant, the Shares issuable upon exercise hereof and
any securities of the Company issued with respect thereto may not be sold or
otherwise transferred during the period specified by the Company’s Board of
Directors at the request of the Managing Underwriter, with such period not to
exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Act (the “Market Standoff
Period”). The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such Market Standoff Period.
11. Reservation of
Shares. The Company hereby covenants that from the date hereof
through the end of the term of this Warrant there shall be reserved for issuance
and delivery upon exercise of this Warrant such number of Shares or other shares
of capital stock of the Company as are from time to time issuable upon exercise
of this Warrant. All such shares shall be duly authorized, and when
issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws. The Holder agrees that he may exercise this Warrant
only to the extent that after such exercise there remains a sufficient number of
authorized and unissued Shares to accommodate the exercise of all outstanding
Warrants issued by the Company to other Holders.
12. Amendment, Modification and
Waiver. Any term of this Warrant may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively), with the written consent of the Company and the
Holder. Any waiver or amendment effected in accordance with this
Section 12 shall be binding upon any Holder of the Warrant, including all future
holders of the Warrant.
13. Notices. All
notices which any party to this Warrant may be required or may desire to serve
on any other party shall be in writing and may be delivered by personal service,
sent by facsimile with confirmation of receipt, sent by nationally recognized
overnight courier service, specifying next day delivery with written
verification of receipt, or sent by registered or certified mail, return receipt
requested, with postage thereon fully prepaid. Service of any such
notice made by mail shall be deemed complete on the date of actual delivery as
shown by the addressee’s registry or certification receipt or at the expiration
of the third (3rd) business day after the date of mailing, whichever is earlier
in time. Any such communications shall be addressed to the party to
be notified as listed on the Note.
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14. Lost Warrant or Stock
Certificates. The Company covenants to the Holder hereof that,
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate and,
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant or stock certificate, the
Company will make and deliver a new Warrant or stock certificate, of like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
15. Descriptive
Headings. The descriptive headings of the several paragraphs
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant.
16. Governing
Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Colorado without regard to its conflicts of laws
principles.
17. Remedies. In
case any one or more of the covenants and agreements contained in this Warrant
shall have been breached, the Holder hereof (in the case of a breach by the
Company), or the Company (in the case of a breach by Holder), may proceed to
protect and enforce their or its rights either by suit in equity
and / or by action at law, including, but not limited to, an action
for damages as a result of any such breach and / or an action for
specific performance of any such covenant or agreement contained in this
Warrant.
18. Acceptance. Receipt
of this Warrant by the Holder hereof shall constitute acceptance of and
agreement to the foregoing terms and conditions.
19. No Impairment of
Rights. Except to the extent waived or consented to by the
Holder or as otherwise permitted by the terms hereof, the Company will not, by
amendment of its Articles of Incorporation or through any other means, 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.
20. Severability. If
any term, provision, covenant, or restriction of this Warrant is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Warrant shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
21. Construction. The
parties hereto acknowledge that each party was represented by legal counsel (or
had the opportunity to be represented by legal counsel) in connection with this
Warrant, and that each of them and their counsel have reviewed and revised this
Warrant, or have had an opportunity to do so, and that any rule of construction
to the effect that ambiguities are to be resolved against the drafting party
shall not be employed in their interpretation of this Warrant or any amendments
or any exhibits hereto or thereto.
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22. Notices of Record
Date. In case:
(a) the
Company shall take a record of the holders of its Shares (or other stock or
securities at the time receivable upon the exercise of this Warrant), for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities or to receive any other right; or
(b) of
any consolidation or merger of the Company with or into another corporation, any
capital reorganization of the Company, any reclassification of the capital stock
of the Company, or any conveyance of all or substantially all of the assets of
the Company to another corporation in which holders of the Company’s stock are
to receive stock, securities or property of another corporation; or
(c) of
any voluntary dissolution, liquidation or winding-up of the Company;
or
(d) of
any redemption or conversion of all outstanding Shares (or other stock or
securities at the time receivable upon the exercise of this
Warrant);
then, and
in each such case, the Company will mail or cause to be mailed to the Holder of
this Warrant a notice specifying, as the case may be, (i) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Shares (or such stock or securities as at
the time are receivable upon the exercise of this Warrant), shall be entitled to
exchange their Shares (or such other stock or securities), for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be delivered at least seven (7) days
prior to the date therein specified.
23. Organic
Change. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of the
Company’s assets or other transaction in each case which is effected in such a
way that holders of shares of common stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for shares of Common Stock is referred to herein as an
“Organic Change.” Prior to the consummation of any Organic Change,
the Company will secure from the person or entity purchasing such assets or the
successor resulting from such Organic Change (in each case, the “Acquiring
Entity”) a written agreement (in form and substance satisfactory to the holders
of Warrants representing at least two-thirds of the Shares issuable upon
exercise of the Warrants then outstanding) to deliver to each holder of Warrants
in exchange for such Warrants, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant
and satisfactory to the Holders of the Warrants (including an adjusted warrant
exercise price equal to the value for the Shares reflected by the terms of such
consolidation, merger or sale, and exercisable for a corresponding number of
Shares acquirable and receivable upon exercise of the Warrants without regard to
any limitations on exercise, if the value so reflected is less than any
applicable Warrant Price immediately prior to such consolidation, merger or
sale). Prior to the consummation of any other Organic Change,
the
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Company
shall make appropriate provision (in form and substance satisfactory to the
Holders of Warrants representing a majority of the Shares issuable
upon exercise of the Warrants then outstanding) to insure that each of the
Holders of the Warrants will thereafter have the right to acquire and receive in
lieu of or in addition to (as the case may be) the Shares immediately
theretofore issuable and receivable upon the exercise of such Holder’s
Warrants (without regard to any limitations on exercise), such shares of
stock, securities or assets that would have been issued or payable in such
Organic Change with respect to or in exchange for the number of Shares which
would have been issuable and receivable upon the exercise of such holder’s
Warrant as of the date of such Organic Change (without taking into account any
limitations or restrictions on the exercisability of this Warrant).
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IN WITNESS WHEREOF, the undersigned has
duly caused this Warrant to be signed in its name and on its behalf by its duly
authorized officer as of the Warrant Issue Date.
MONUMENT RESOURCES, INC.
a Colorado corporation
By: /s/ X.X.
Xxxxx
Name:
X.X. Xxxxx
Its: President
AGREED AND
ACCEPTED:
X.X. XXXXX
/s/ X.X.
Xxxxx
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EXHIBIT
A
NOTICE OF
EXERCISE
To: Monument
Resources, Inc.
1. The
undersigned hereby elects to purchase ________Shares of Monument Resources, Inc.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price of such shares in full.
2. Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name or names as are specified below:
(Name)
(Address)
(Signature)
(Date)
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