EXHIBIT 10.7
WARRANT AGREEMENT
THIS AGREEMENT is entered into as of April 2, 2002, by and between ALD
Services, Inc., a Nevada corporation (the "Company") and Pacific Stock Transfer
Company, as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue 1,000,000 Class A Warrants (the
"Class A Warrants") and 500,000 Class B Warrants (the "Class B Warrants"), each
such warrant to purchase one (1) share of the Company's $0.001 par value Common
Stock (the "Shares") All such Class A Warrants and Class B Warrants are
hereinafter collectively referred to as the "Warrants;" and
WHEREAS, the Company desires to enter into this Agreement to establish
the terms and conditions of the Warrants, to set forth the rights of registered
holders thereof, and to provide for the issuance, transfer, and exercise of the
Warrants, and related matters; and
WHEREAS, the Warrant Agent is the Transfer Agent for the Company's
issued and outstanding securities and has agreed to act on behalf of the Company
under the terms of this Agreement in connection with the issuance, transfer and
exercise of the Warrants.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants, and
the respective rights and obligations thereunder of the Company, the holders of
the certificates representing the Warrants, and the Warrant Agent, the parties
hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act on behalf of the Company under the terms of this Agreement
and the Warrant Agent hereby accepts such appointment.
2. Form and Issuance of Warrants, Transfer Restrictions under
Securities Laws.
2.01 The Warrant Certificates shall be substantially in the form
annexed hereto as Exhibit A and Exhibit B. Each Warrant Certificate shall be
signed by, or bear the facsimile signature of, the President or a Vice President
of the Company and shall be countersigned by the Warrant Agent. If any person
whose facsimile signature has been placed upon any Warrant as an officer of the
Company shall cease to be such officer before the Warrant is countersigned,
issued, or delivered, the Warrant may be countersigned, issued, and delivered
with the same effects as if such person had not ceased to be such officer.
Warrants shall be manually countersigned by the Warrant Agent and shall not be
valid for any purpose unless so countersigned. Warrant Certificates shall be in
registered form only.
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2.02 Upon the written order of the Company, the Warrant Agent shall
issue and register the Warrant Certificates in the names and denominations
specified in said order, and shall countersign and deliver the same in
accordance with said order. The terms "Holder" and "Warrant Holder" as used
herein shall at any time mean the person in whose name any Warrant Certificate
shall then be registered upon the books to be maintained by the Warrant Agent
for that purpose. Each Warrant Certificate shall be dated the date of
countersignature, whether upon initial issuance or subsequently.
2.03 The Warrant Certificates upon issuance hereunder shall constitute
"restricted securities" as that term is defined in Rule 144 under the Securities
Act of 1933. Accordingly, there shall be imposed upon any Warrant Certificate
initially issued hereunder and upon any Warrant Certificate issued upon transfer
or exchange of the foregoing, a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY
STATE AND ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
Notwithstanding anything to the contrary in this Agreement, no transfer
of a Warrant or Certificate bearing such a legend shall be effective unless the
Company shall be satisfied as to compliance with the requirements of such
legend.
3. Exercises and Duration of Warrants.
3.01 Subject to the provisions of this Agreement, each Class A Warrant
shall entitle the Warrant Holder, by exercising the Warrant, to purchase from
the Company one (1) share of the Company's $0.001 par value Common Stock at the
price per share of $6.00 in lawful United States money as adjusted from time to
time in the manner provided herein (the "Exercise Price" of the Class A
Warrants), and each Class B Warrant shall entitle the Warrant Holder, by
exercising the Warrant, to purchase from the Company one (1) share of the
Company's $0.001 par value Common Stock at the price per share of $12.00 in
lawful United States money as adjusted from time to time in the manner provided
herein. (the "Exercise Price" of the Class B Warrants). The Warrants shall be
exercisable at any time on or after August 1, 2002, and shall expire at 5:00
p.m. (Pacific Time) on July 31, 2007, or, if such day in Las Vegas, Nevada,
shall be either a holiday or a day on which banks are authorized or obligated by
law to be closed, then at 5:00 p.m. (Pacific Time) on the next following
business day (the actual time of expiration of the Warrants is hereinafter
referred to as the "Expiration Date"). Any Warrants not exercised prior to the
Expiration Date shall become void and all rights of the Warrant Holders under
such Warrants and this Agreement shall cease.
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3.02 A Warrant Holder may exercise a Warrant, in whole or in part, by
surrendering such Warrant, with the exercise form thereon duly completed and
executed, to the Warrant Agent at its principal office in Las Vegas, Nevada, and
paying to the Warrant Agent, in lawful money of the United States of America in
cash or by bank cashier's check or bank draft, the Exercise Price for each Share
to be purchased. The date of the surrender of the Warrant, with exercise form
duly completed and executed, and payment of the Exercise Price, whichever occurs
last, shall be "Date of Exercise."
3.03 Upon receipt of a Warrant with the exercise form thereon duly
executed, together with payment in full of the Exercise Price for the Shares for
which the Warrant is then being executed, the Warrant Agent shall issue (or, if
the Warrant Agent shall no longer be the transfer agent for the Shares, shall
requisition from any such transfer agent) certificates evidencing the total
number of whole Shares for which Warrants are then being exercised in such names
and denominations as are required for delivery upon exercise of the Warrant, and
the Warrant Agent shall thereupon deliver such certificates to, or in accordance
with the instructions of, the Warrant Holder. Such certificates for the Shares
will be deemed to be issued, and the person to whom such certificates are issued
of record shall be deemed to have become a holder of record of such Shares, as
of the Date of Exercise, provided that if the stock transfer books of the
Company with respect to the Shares shall be closed as of such date, the
certificates for such Shares shall be deemed to be issued, and the person to
whom such Shares are issued of record shall be deemed to have become a record
holder of such Shares, as of the date on which such books shall next be open,
but at the Exercise Price and upon the other conditions in effect upon the Date
of Exercise, and provided further that the stock transfer books of the Company
with respect to the Shares shall not be closed for any period in excess of
thirty (30) days. If less than all of the Shares evidenced by a Warrant are
purchased upon a single exercise, a new Warrant for the balance of the Shares
not so purchased shall be issued and delivered to, or in accordance with
transfer instructions properly given by, the Warrant Holder. Warrants
surrendered upon exercise shall be canceled.
3.04 At such time as the Company has received executed Warrant exercise
forms as specified in Section 3.02 hereof, accompanied by payments for exercise
of Class A Warrants totaling not less than $100,000 in the aggregate, the
Company hereby undertakes and agrees to file with the Securities and Exchange
Commission ("SEC") a registration statement (the "Registration Statement") on
Form S-3, or other appropriate form available for the registration of securities
under the Securities Act of 1933, as amended (the "Securities Act"), covering
all 1,000,000 shares of Company common stock issued or issuable upon exercise of
the Class A Warrants. The Company shall use its reasonable best efforts to
obtain effectiveness of the Registration Statement, but the registration of the
shares underlying the Class A Warrants shall not be underwritten. In connection
with the registration of the shares the Company shall have the following
obligations:
(i) Once declared effective, the Company shall use reasonable
efforts to keep the registration statement effective pursuant to Rule 415 at all
times until such date as is the earlier of (i) the date on which all of the
Class A Warrants have been exercised and the shares underlying such Class A
Warrants have been issued without restrictive legend, and (ii) the date on which
the unexercised Class A Warrants (the "Class A Warrant Registration Period");
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(ii) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
registration statement and the prospectus used in connection with the
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the issuance or resale of all of the shares
issued or issuable upon exercise of the Class A Warrants;
(iii) The Company shall furnish to the holders of the Class A
Warrants and/or to the holders of shares issued upon exercise of the Class A
Warrants, such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act as such
persons may reasonably request in order to facilitate the disposition of the
resale of the shares issued or issuable upon exercise of the Class A Warrants;
(iv) The Company shall use reasonable efforts to register and
qualify the shares issued or issuable upon exercise of the Class A Warrants
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the holders of the Class A Warrants and/or the holders of the
shares issued upon exercise of the Class A Warrants may reasonably request and
maintain such registrations and qualifications in effect during the Class A
Warrant Registration Period; PROVIDED, HOWEVER, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3.04(iv), (ii) subject itself to general taxation in any
such jurisdiction, (iii) file a general consent to service of process in any
such jurisdiction, (iv) provide any undertakings that cause the Company undue
expense or burden, or (v) make any change in its charter or bylaws.
(v) If, in the reasonable judgment of the Company it is
advisable to suspend use of the prospectus relating to the registration
statement for a discrete period of time (a "Deferral Period") due to pending
material corporate developments or similar material events that have not yet
been publicly disclosed and as to which the Company believes public disclosure
will be prejudicial to it, the Company shall deliver to the holders of the Class
A Warrants and to the holders of any restricted shares issued upon exercise of
Class A Warrants a notice in writing to the effect of the foregoing (but shall
not obligated to disclose to such persons the facts and circumstances giving
rise to the foregoing) and, upon receipt of such notice, each such Warrantholder
or shareholder shall be deemed to have agreed not to dispose of any shares
covered by the registration statement (other than in transactions exempt from
the registration requirements under the Securities Act) until advised in writing
by the Company that use of the prospectus may be resumed; PROVIDED, HOWEVER,
that no Deferral Period shall be more than thirty (30) consecutive days;
PROVIDED, FURTHER, that the aggregate number of days in any such Deferral
Periods shall be no more than sixty (60) in any 6-month period.
3.05 At such time as the Company has received executed Warrant exercise
forms as specified in Section 3.02 hereof, accompanied by payments for exercise
of Class B Warrants totaling not less than $100,000 in the aggregate, the
Company hereby undertakes and agrees to file with the Securities and Exchange
Commission ("SEC") a registration statement (the "Registration Statement") on
Form S-3, or other appropriate form available for the registration of securities
under the Securities Act of 1933, as amended (the "Securities Act"), covering
all 500,000 shares of Company common stock issued or issuable upon exercise of
the Class B Warrants. The Company shall use its reasonable best efforts to
obtain effectiveness of the Registration Statement, but the registration of the
shares underlying the Class B Warrants shall not be underwritten. In connection
with the registration of the shares the Company shall have the following
obligations:
(i) Once declared effective, the Company shall use reasonable
efforts to keep the registration statement effective pursuant to Rule 415 at all
times until such date as is the earlier of (i) the date on which all of the
Class B Warrants have been exercised and the shares underlying such Class B
Warrants have been issued without restrictive legend, and (ii) the date on which
the unexercised Class B Warrants (the "Class B Warrant Registration Period");
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(ii) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
registration statement and the prospectus used in connection with the
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the issuance or resale of all of the shares
issued or issuable upon exercise of the Class B Warrants;
(iii) The Company shall furnish to the holders of the Class B
Warrants and/or to the holders of shares issued upon exercise of the Class B
Warrants, such number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act as such
persons may reasonably request in order to facilitate the disposition of the
resale of the shares issued or issuable upon exercise of the Class B Warrants;
(iv) The Company shall use reasonable efforts to register and
qualify the shares issued or issuable upon exercise of the Class B Warrants
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the holders of the Class B Warrants and/or the holders of the
shares issued upon exercise of the Class B Warrants may reasonably request and
maintain such registrations and qualifications in effect during the Class B
Warrant Registration Period; PROVIDED, HOWEVER, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3.05(iv), (ii) subject itself to general taxation in any
such jurisdiction, (iii) file a general consent to service of process in any
such jurisdiction, (iv) provide any undertakings that cause the Company undue
expense or burden, or (v) make any change in its charter or bylaws.
(v) If, in the reasonable judgment of the Company it is
advisable to suspend use of the prospectus relating to the registration
statement for a discrete period of time (a "Deferral Period") due to pending
material corporate developments or similar material events that have not yet
been publicly disclosed and as to which the Company believes public disclosure
will be prejudicial to it, the Company shall deliver to the holders of the Class
B Warrants and to the holders of any restricted shares issued upon exercise of
Class B Warrants a notice in writing to the effect of the foregoing (but shall
not obligated to disclose to such persons the facts and circumstances giving
rise to the foregoing) and, upon receipt of such notice, each such Warrantholder
or shareholder shall be deemed to have agreed not to dispose of any shares
covered by the registration statement (other than in transactions exempt from
the registration requirements under the Securities Act) until advised in writing
by the Company that use of the prospectus may be resumed; PROVIDED, HOWEVER,
that no Deferral Period shall be more than thirty (30) consecutive days;
PROVIDED, FURTHER, that the aggregate number of days in any such Deferral
Periods shall be no more than sixty (60) in any 6-month period.
4. Adjustment of Exercise Price and Shares Purchasable.
4.01 In the event, after the date of this Agreement, the Company shall
issue any Shares as a stock dividend or distribution or shall subdivide the
number of outstanding Shares into a greater number of Shares, then, in either of
such events, the Exercise Price in effect immediately prior to such action shall
be proportionately reduced and the number of Shares purchasable pursuant to each
outstanding Warrant shall be proportionately increased; and, conversely, in the
event that the Company shall reduce the number of outstanding Shares by
combining such Shares into a smaller number of Shares, then the Exercise Price
in effect immediately prior to such action shall be proportionately increased
and the number of Shares purchasable pursuant to each outstanding Warrant
proportionately reduced. Whenever the Exercise Price and such Shares are to be
proportionately reduced or increased pursuant to this Paragraph 4.01, such
reduction or increase shall be based upon the number of Shares outstanding (or
deemed to be outstanding in the case of a dividend paid or distributed in stock
or securities of any other class of securities convertible into Shares, as
provided below in Paragraph 4.02) immediately prior to and after such dividend
or subdivision.
4.02 Any dividend or distribution on outstanding stock of the Company
in securities which by their terms are convertible into or exchangeable for, or
consist of any option or right to purchase Shares shall be treated as a stock
dividend or distribution of Shares to the extent Shares are deliverable upon
conversion, exchange, or exercise of such securities (whether or not such rights
of conversion, exchange, or purchase are immediately exercisable). Except as
provided below, no further adjustment to the Exercise Price and number of Shares
purchasable pursuant to each outstanding Warrant shall be made upon the actual
issue of Shares upon the conversion, exchange, or exercise of such securities.
Upon the redemption or repurchase of such securities or the expiration or
termination of the right to convert into, exchange for, or exercise with respect
to, Shares, the Exercise Price and number of Shares purchasable pursuant to each
outstanding Warrant shall be readjusted to such price and number as would have
been obtained had the adjustment in the Exercise Price and number of Shares
purchasable pursuant to each outstanding Warrant been made upon the issuance of
only such Shares as were actually issued upon the conversion, exchange, or
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exercise of such securities. If the purchase price or conversion or exchange
rate provided for in any such security shall change or a different purchase
price or rate shall become effective at any time, then, upon such change
becoming effective, the Exercise Price then in effect and number of Shares
purchasable pursuant to each outstanding Warrant shall be readjusted to such
price as would have been obtained had the adjustment made upon the issuance of
such securities been made upon the basis of (i) the issuance of only the number
of Shares theretofore actually delivered upon the conversion, exchange, or
exercise of such securities, and (ii) the Shares deliverable, immediately after
such change, upon the conversion, exchange, or exercise of such securities then
still outstanding. No readjustment provided for herein shall, when taken
together with any other readjustments attributable to the same securities,
increase any Exercise Price, or decrease Shares purchasable pursuant to each
outstanding Warrant, by an amount in excess of the total of all decreases of
such Price and increases in such number made prior to the date of such
readjustment pursuant to adjustments made upon issuance of or subsequent changes
with respect to such securities.
4.03 In the event of any capital reorganization or reclassification of
the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a merger with a subsidiary after
which the Company is the continuing corporation and which does not result in any
capital reorganization or other change of outstanding Shares), or any sale,
lease, or conveyance of all or substantially all of the assets of the Company,
that is effected in such a manner that holders of Shares are entitled to receive
securities and/or other property (including cash) with respect to or in exchange
for their Shares, the Company shall, as a condition precedent to such
transaction, cause effective provision to be made so that the Warrant Holders
shall have the right thereafter, by exercising their outstanding Warrants, to
purchase the kind and amount of securities and/or other property receivable upon
such event, as if such Warrant Holders had exercised the Warrants in full
immediately prior to such event. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 4. If, as a result of an adjustment
made pursuant to this Section, the Holder of any Warrant thereafter exercised
shall become entitled to receive shares of two or more classes of capital stock
of the Company or any other corporation or entity, the board of directors (or
other governing body if there is no board of directors) thereof (whose
determination shall be conclusive and shall be described in a certificate filed
with the Warrant Agent) shall determine the allocation of the adjusted Exercise
Price between or among shares of such classes of capital stock. In the event of
any subsequent adjustments to the Exercise Price pursuant to this Section, such
adjustments shall be made separately to the portion of the Exercise Price so
allocated to each of such classes of capital stock. The foregoing provisions of
this subsection similarly apply to successive capital reorganizations,
reclassifications, consolidations, mergers, sales, leases, or conveyances.
4.04 Whenever the Exercise Price is adjusted as provided in this
Section:
(a) The Company shall compute the adjusted Exercise Price
and the adjusted number of Shares issuable upon
exercise of the Warrants in accordance with this
Section and shall prepare a certificate signed by a
duly authorized officer of the Company setting forth
the adjusted Exercise Price and the adjusted number
of Shares issuable upon exercise of the Warrants, and
showing in reasonable detail the facts upon which
such adjustment is based. Such certificate shall
forthwith be filed with the Warrant Agent; provided,
however, that the Warrant Agent shall have no duty
with respect to any such certificate filed with it
except to keep the same on file and available for
inspection by Warrant Holders during reasonable
hours;
(b) the Company shall cause to be mailed to the Warrant
Holders a notice stating that the Exercise Price and
the number of Shares purchasable upon exercise of the
Warrants have been adjusted and setting forth the
adjusted Exercise Price and the adjusted number of
Shares purchasable upon exercise; and
(c) the Warrant Agent may, but shall have no obligation
to, inquire with respect to the existence of
circumstances, which might require an adjustment
under this Section.
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4.05 The form of Warrant Certificate need not be changed because of any
adjustment in the Exercise Price or the number of Shares issuable upon the
exercise of a Warrant. The Company may, however, at any time in its sole
discretion, make any change in the form of Warrant Certificate that it may deem
appropriate and that does not affect the substance thereof, and any Warrants
thereafter issued or countersigned may be in the form as so changed.
5. No Fractional Shares. Notwithstanding any other provision of this
Agreement or any Warrant, the Company shall not be required to issue fractions
of Shares upon exercise of the Warrants or to distribute certificates which
evidence fractional Shares. If two or more Warrants are surrendered for exercise
at one time by the same Warrant Holder, the number of full Shares issuable upon
exercise thereof shall be computed on an aggregate basis. In lieu of any
fraction of a Share to which any Warrant Holder would otherwise be entitled upon
exercise of any Warrant, the Company shall pay to or in accordance with the
instructions of the Warrant Holder exercising such Warrant an amount in cash
equal to the same fraction of the closing price of the Shares on the last
trading day price to the Date of Exercise, or, if there is no closing price
within 30 days of the Date of Exercise, an amount, not less than book value,
determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company. For purposes of this Section, the closing price on any
date shall be deemed to be the average of the daily closing prices for the
Shares for 30 consecutive trading days immediately prior to such date.
6. Notices to Warrant Holders. If at any time after the date of this
Agreement, the Company shall:
(a) declare any dividend or other distribution upon
Shares (except dividends payable in cash out of
retained earnings of the Company and except dividends
payable in Shares);
(b) propose to offer for subscription to the holders of
Shares any additional shares of stock of any class or
any other securities convertible into shares of
stock, or any rights to subscribe thereto;
(c) propose to effect any capital reorganization or
reclassification of the capital stock of the Company
(other than a change in par value or as a result of a
subdivision or combination of Shares), any sale,
lease, or conveyance of all or substantially all of
the assets of the Company, or any consolidation or
merger of the Company with or into another
corporation (other than a merger with a subsidiary in
which the Company will be the continuing corporation
and which will not result in any reclassification or
change of the Shares issuable upon exercise of the
Warrants); or
(d) propose to effect any capital or involuntary
dissolution, liquidation, or winding up of the
Company, then in any such case the Company shall
cause notice thereof to be sent to each Warrant
Holder, at the earliest practicable time (and in any
event not less than 20 days before the date on which
the books of the Company shall close or a record
shall be taken for such distribution or subscription
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rights or for determining rights to vote in respect
of any such event, or at least 20 days prior to the
date such event is to take place, if no record or
shareholder action is to be taken). Such notice shall
also set forth such facts as shall indicate the
effect of such notice on the Exercise Price and the
number and character of the Shares purchasable upon
exercise of the Warrants before and after any
adjustment for the occurrence of such event. The
failure of the Company to give any notice required by
this Section 6 shall not invalidate any corporate
action taken by the Company.
7. Registration of Transfers; Exchange and Replacement of Warrant.
7.01 Subject to any restrictions on transfer pursuant to Paragraph
2.03, the Warrant Agent shall from time to time register the transfer of any
outstanding Warrant upon records to be maintained by the Warrant Agent for such
purpose, upon surrender of such Warrant to the Warrant Agent for transfer,
accompanied by appropriate instruments of transfer in form satisfactory to the
Company and the Warrant Agent and duly executed by the Warrant Holder or a duly
authorized attorney. Upon any such registration of transfer, a new Warrant shall
be issued in the name of and to the transferee and the surrendered Warrant shall
be canceled.
7.02 If any Warrant is lost, stolen, mutilated, or destroyed, the
Company and the Warrant Agent may, on such terms regarding indemnification and
other matters as they may in their discretion impose (which shall, in the case
of a mutilated Warrant, include the surrender thereof), issue and countersign a
new Warrant of like denomination as the Warrant so lost, stolen, mutilated, or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated,
or destroyed Warrant shall be at any time enforceable by any person.
8. Warrant Holders not Shareholders. Nothing contained in this
Agreement or in any Warrant shall be construed to confer upon any Warrant
Holder, as such, any of the rights of a shareholder of the Company or any right
to vote on or give or withhold consent to any corporate action of the Company,
receive notice of meetings or other action affecting shareholders of the Company
(except as otherwise expressly provided herein), receive dividends or
subscription rights, or otherwise, until the Date of Exercise, except as
expressly provided in this Agreement. No Warrant Holder shall, upon the exercise
of a Warrant, be entitled to any dividends that may have accrued with respect to
the Company's issued and outstanding shares of Common Stock prior to the Date of
Exercise.
9. Payment of Taxes. The Company shall pay all taxes, which may be
imposed in respect of any initial issuance of Shares upon exercise of Warrants.
Any stock transfer tax which may be payable in respect of any transfer involved
in the issue of any Warrants or in the issue of any certificates for Shares in a
name other than that of the registered Warrant Holder upon the exercise of any
Warrant shall be paid by the person surrendering such Warrant for transfer.
10. Reservation of Shares.
10.01 The Company shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized Shares, for the
purpose of enabling it to satisfy any obligation to issue Shares upon exercise
of Warrants, the full number of Shares issuable upon the exercise of all
outstanding Warrants. The Company covenants that all Shares which may be issued
upon exercise of the Warrants shall upon issue be fully paid and nonassessable,
and free from all taxes, liens, charges, and security interests with respect to
the issue thereof.
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10.02 If the taking of any action would cause an adjustment in the
Exercise Price so that the exercise of a Warrant while such Exercise Price is in
effect would cause a Share to be issued at a price below its then par value, the
Company shall take such action as may, in the opinion of its counsel, be
necessary in order that it may validly and legally issue fully paid and
nonassessable Shares upon exercise of the Warrants.
11. Compliance with Stock Exchange and Governmental Requirements.
11.01 If any Shares required to be reserved for issuance upon exercise
of Warrants hereunder require listing upon any national securities exchange
before such Shares may be issued upon such exercise, the Company will in good
faith and as expeditiously as possible endeavor to cause such Shares to be duly
listed.
11.02 If any Shares issuable upon exercise of any Warrant require
registration or approval of any governmental authority (other than registration
under the Securities Act of 1933 as required under Section 3.04 or 3.05 hereof),
or the taking of any other action under applicable laws before the Shares may be
validly and lawfully issued, the Company will, in good faith and as
expeditiously as practicable after surrender of the Warrant to the Warrant
Agent, endeavor to secure such registration or approval or to take such other
action; provided that in no event shall Shares be issued, and the Company shall
have the authority to suspend the exercise of all Warrants, until such
registration or approval shall have been obtained or such other action shall
have been taken. All Warrants as to which an exercise is requested during such
suspension shall be exercisable at the Exercise Price and upon the other
conditions in effect on the date of surrender of the Warrant and payment of the
Exercise Price (whichever is later). If any such period of suspension continues
past the Expiration Date, the Warrant Agent shall recognize the exercise of all
Warrants, as to which there has been a request for exercise on or prior to the
Expiration Date, upon the removal of such suspension.
12. Warrant Agent.
12.01 The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the Company's covenants contained in this
Agreement or in the Warrants.
12.02 The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Warrant
Holder in respect of any action taken, suffered, or omitted by it hereunder in
good faith and in accordance with the opinion or advice of such counsel,
provided the Warrant Agent shall have exercised reasonable care in the selection
and continued employment of such counsel. The Warrant Agent shall incur no
liability or responsibility to the Company or to any Warrant Holder for any
action taken in reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document, or instrument believed by it to be
genuine and to have been signed, sent, or presented by the proper party or
parties.
9
12.03 The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent pursuant to this
Agreement, to reimburse the Warrant Agent for all expenses, taxes, and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent pursuant to this Agreement, and to indemnify the Warrant Agent and
save it harmless against any and all liability, loss, damage, or expense,
including reasonable attorneys' fees, incurred by reason of anything done or
omitted by the Warrant Agent in the execution of this Agreement except as a
result of the Warrant Agent's gross negligence or bad faith.
12.04 The Warrant Agent shall be under no obligation to institute any
action, suit, or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more Warrant Holders shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and expenses
which may be incurred, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider proper, with
or without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrants or the production thereof at any
trial or other proceeding relative thereto, and any such action, suit, or
proceeding instituted by the Warrant Agent shall be brought in its name as
Warrant Agent, and any recovery of judgment shall be for the pro-ratable benefit
of the Warrant Holders as their respective rights or interests may appear.
12.05 The Warrant Agent and any stockholder, director, officer, or
employee of the Warrant Agent may buy, sell, or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other legal
entity.
12.06 The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof.
12.07 Any corporation into which the Warrant Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion, or consolidation to which the Warrant Agent shall
be a party, or any corporation succeeding to the corporate trust business of the
Warrant Agent, shall be the successor to the Warrant Agent hereunder without the
execution or filing of any paper or any further act on the part of the parties
hereto, provided that such corporation would be eligible for appointment as
successor Warrant Agent under the provisions of Section 13 of this Agreement.
13. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company notice
in writing, and by giving notice in writing to each Warrant Holder at his
address appearing in the Warrant register, specifying a date when such
resignation shall take effect, which notice shall be sent at least 30 days prior
to the date so specified. If the Warrant Agent shall resign or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Warrant Agent or by any Warrant Holder, then any
Warrant Holder may apply to any court of competent jurisdiction for the
10
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such court, the
duties of the Warrant Agent shall be carried out by the Company. Any successor
Warrant Agent, whether appointed by the Company or by such a court, shall be a
bank or trust company, or a stock transfer company in good standing, organized
under the laws of the State of Nevada or another state of the United States of
America and having its principal office in the United States of America. After
appointment, the successor Warrant Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed and the former Warrant Agent shall
deliver and transfer to the successor Warrant Agent any property at the time
held by it hereunder, and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Failure to give any notice provided for
in this Section, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the appointment
of the successor Warrant Agent, as the case may be.
14. Notices. Any notice, request, consent, communication or demand
authorized by this Agreement to be given or made hereunder shall be in writing
and shall be deemed to have been sufficiently given or made if sent by mail,
first class or registered with postage prepaid, addressed as follows:
If to a Warrant Holder: to the address of such Warrant Holder as
shown on the registry books maintained by the
Warrant Agent. A Warrant Holder may change
his address of record by giving notice to the
Company and Warrant Agent hereunder.
If to the Company: 00 Xxxxxxxx, Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxxxxxxx 00000, or at such other address as
may have been furnished to the Warrant Agent
in writing by the Company.
If to the Warrant Agent: 0000 X. Xxxxx, Xxxxx X, Xxx Xxxxx, Xxxxxx
00000, or at such other address as may have
been furnished to the Company in writing by
the Warrant Agent.
15. Supplements and Amendments.
15.01 The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the approval of any Warrant Holders,
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not in any manner adversely affect the
interests of the Warrant Holders.
15.02 With the consent of the Holders of Warrants representing the
right to purchase at least two-thirds of the Shares subject to all then
outstanding Warrants, the Warrant Agent and the Company may make any other
amendment in this Agreement, provided that no such change may shorten the time
of exercise of any Warrant or increase the Exercise Price without the consent of
each affected Warrant Holder. Consent of the Warrant Holders under this
11
Paragraph shall be evidenced by either (a) consents in writing to the amendment,
executed by the Warrant Holders and notarized or acknowledged (any consent so
given in respect of a particular Warrant shall be binding upon any subsequent
owner thereof) or (b) by the affirmative vote of the Holders of Warrants
representing the right to purchase at least two-thirds of the Shares subject to
all then outstanding Warrants, at a meeting of Warrant Holders called by the
Company or the Warrant Agent and held at such time and place as may be specified
in a notice of the meeting to be mailed to each Warrant Holder not less than
thirty (30) days nor more than forty-five (45) days prior to the date set for
the meeting. The Company or the Warrant Agent may establish a reasonable record
date for the determination of Warrant Holders entitled to vote at any meeting of
Warrant Holders and may make reasonable regulations for the conduct of such
meeting. Proxies may be used at any such meeting in the same manner as is
provided in the Company's bylaws with respect to proxies for meetings of its
stockholders. The Company shall not request or solicit the written consent of
any Warrant Holder to any action hereunder without giving written notice of such
request or solicitation to all Warrant Holders.
16. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Nevada.
17. Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal office of the Warrant Agent
at 0000 X. Xxxxx, Xxxxx X, Xxx Xxxxx, Xxxxxx, for inspection by any Warrant
Holder, provided the Warrant Agent may require any Warrant Holder to submit his
Warrant prior to permitting such inspection.
IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to
be executed as of the date first above written.
THE COMPANY: THE WARRANT AGENT:
ALD Services, Inc. Pacific Stock Transfer Company
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxx
------------------------------ -------------------------------
Xxxxxx X. Xxxxxxx
Title: President Title: President
------------------------------ -------------------------------
12
EXHIBIT A
CLASS A WARRANT CERTIFICATE NO. WA-001
ALD SERVICES, INC
(A NEVADA CORPORATION)
CLASS A WARRANT CERTIFICATE
[______] CLASS A WARRANTS
FOR THE PURCHASE OF COMMON STOCK
CUSIP NUMBER 001608 10 8
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY
STATE AND ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THIS CERTIFIES THAT, for value received, ________________,
("Warrantholder"), is the registered owner of the above-stated number of Class A
Warrants ("Class A Warrants") of ALD SERVICES, INC., a Nevada corporation
("Company"), expiring on July 31, 2007, unless previously exercised or extended
("Expiration Date"). Subject to the limitations as described below, each Class A
Warrant entitles the Warrantholder to purchase one share of the common stock
$0.001 par value ("Common Stock" or "Shares"), of the Company, at a purchase
price of $6.00 per Share ("Exercise Price"), at any time beginning August 1,
2002 and until to the Expiration Date, upon surrender of this Certificate with
the exercise form attached hereto duly completed and executed, accompanied by
payment of the Exercise Price, to Pacific Stock Company, ("Warrant Agent"), 0000
X. Xxxxx, Xxxxx X, Xxx Xxxxx, Xxxxxx 00000. This Certificate and exercise of
these Class A Warrants will be subject to the provisions of the Warrant
Agreement dated April 2, 2002, ("Warrant Agreement"), between the Company and
the Warrant Agent, to which provisions the Warrantholder agrees by acceptance of
this Certificate. The provisions of the Warrant Agreement are fully incorporated
by reference into this Certificate as if fully set forth herein.
If all Class A Warrants represented by this Certificate shall not have
been duly exercised on or before the Expiration Date, as it may be extended, the
unexercised Class A Warrants shall expire and this Certificate shall become
void. The Expiration Date may be extended from time to time for an indefinite
period, or the Exercise Price may be reduced, at the discretion of the Company
upon giving notice thereof to the Warrant Agent and giving subsequent notice
thereof to holders of Class A Warrants then listed on its books.
13
The Warrantholder may exercise all or any of the Class A Warrants in
the manner and during the period stated above, but only for an even number of
Shares if less than all are exercised, upon due presentment of this Certificate
to the Warrant Agent. The Exercise Price must be paid in lawful money of the
United States of America, in cash or by personal check, bank check or certified
check payable to the order of the Company. If fewer than all of the above number
of Class A Warrants are exercised, the Warrant Agent shall execute and deliver
to the Warrantholder a new Class A Warrant certificate of like tenor evidencing
the number of Class A Warrants not exercised. Should any or all the Class A
Warrants be assigned, then upon due presentment of this Certificate by the
assignee to the Warrant Agent accompanied by payment of the transfer fee
specified from time to time by the Warrant Agent, and by payment of all transfer
taxes and other governmental charges due, if any, the Warrant Agent shall
transfer the Class A Warrants assigned on the transfer books and shall (subject
to the Warrant Agreement) execute and deliver to the assignee a Class A Warrant
certificate of like tenor representing the number of Class A Warrants assigned,
and if less than all of the Class A Warrants are assigned, execute and deliver
to the Warrantholder a Class A Warrant certificate of like tenor representing
the number of Class A Warrants not assigned.
These Class A Warrants shall not entitle the Warrantholder to any of
the rights of stockholders or to any dividend declared upon the Common Stock
unless the Warrantholder shall have exercised these Class A Warrants and
purchased the Shares of Common Stock prior to the record date fixed by the Board
of Directors of the Company for the determination of holders of Common Stock
entitled to such dividend or other right. Holders of Class A Warrants are
protected against dilution of their interests represented by the underlying
shares of Common Stock upon the occurrence of stock dividends, stock splits or
reclassifications of the Common Stock, as provided in the Warrant Agreement.
This Certificate shall not be valid unless countersigned by the Warrant
Agent.
WITNESS the facsimile seal of the Company and the facsimile signature
of its duly authorized officer this 2nd day of April, 2002.
ALD SERVICES, INC.
By:
------------------------------
Xxxxxx X. Xxxxxxx, President
COUNTERSIGNED:
PACIFIC STOCK TRANSFER COMPANY
0000 X. Xxxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000.
By:
-----------------------------
Authorized Signature
14
CLASS A WARRANT EXERCISE FORM
ALD SERVICES, INC.
Date: ____________________, 20___
The Undersigned hereby elects irrevocably to exercise the within Class
A Warrant and to purchase ________ shares of Common Stock of the Company called
for thereby, and hereby makes payment of $_____________ (at the rate of $6.00
per share of Common Stock) payable to ALD Services, Inc., in payment of the
Exercise Price pursuant thereto and, if such number of shares shall not be all
of the shares purchasable hereunder, directs that a new Class A Warrant
Certificate of like tenor for the balance of the remaining shares purchasable
hereunder be delivered to the undersigned at the address stated below. Please
issue the shares of Common Stock as to which this Class A Warrant is exercised
in accordance with the instructions given below.
Signature:
-------------------------
Signature Guaranteed:
--------------
By:
--------------------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
------------------------------------
(Print in Block Letters)
Address
---------------------------------
---------------------------------
15
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Warrant)
FOR VALUE RECEIVED, _______________________________________ does hereby
sell, assign and transfer unto __________________________________________ the
right to purchase _____________ shares of the Common Stock of the Company
evidenced by the within Warrant, and does hereby irrevocably constitute and
appoint ____________________________ ______________________attorney to transfer
such right on the books of the Company with full power of substitution in the
premises.
Dated:____________________, 20__
Signature:
--------------------------
Signature Guaranteed:
---------------
By:
---------------------------------
* * * * * * * * * *
NOTICE: The signature to this Assignment must correspond with the name as
written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank, other than a savings bank, or by a trust company
or by a firm having membership on a registered national securities
exchange.
16
EXHIBIT B
CLASS B WARRANT CERTIFICATE NO WB-001
ALD SERVICES, INC
(A NEVADA CORPORATION)
CLASS B WARRANT CERTIFICATE
[______] CLASS B WARRANTS
FOR THE PURCHASE OF COMMON STOCK
CUSIP NUMBER 001608 10 8
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY
STATE AND ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THIS CERTIFIES THAT, for value received, ___________________,
("Warrantholder"), is the registered owner of the above-stated number of Class B
Warrants ("Class B Warrants") of ALD SERVICES, INC., a Nevada corporation
("Company"), expiring on July 31, 2007, unless previously exercised or extended
("Expiration Date"). Subject to the limitations as described below, each Class B
Warrant entitles the Warrantholder to purchase one share of the common stock
$0.001 par value ("Common Stock" or "Shares"), of the Company, at a purchase
price of $12.00 per Share ("Exercise Price"), at any time beginning August 1,
2002 and until to the Expiration Date, upon surrender of this Certificate with
the exercise form attached hereto duly completed and executed, accompanied by
payment of the Exercise Price, to Pacific Stock Company, ("Warrant Agent"), 0000
X. Xxxxx, Xxxxx X, Xxx Xxxxx, Xxxxxx 00000. This Certificate and exercise of
these Class B Warrants will be subject to the provisions of the Warrant
Agreement dated April 2, 2002, ("Warrant Agreement"), between the Company and
the Warrant Agent, to which provisions the Warrantholder agrees by acceptance of
this Certificate. The provisions of the Warrant Agreement are fully incorporated
by reference into this Certificate as if fully set forth herein.
If all Class B Warrants represented by this Certificate shall not have
been duly exercised on or before the Expiration Date, as it may be extended, the
unexercised Class B Warrants shall expire and this Certificate shall become
void. The Expiration Date may be extended from time to time for an indefinite
period, or the Exercise Price may be reduced, at the discretion of the Company
upon giving notice thereof to the Warrant Agent and giving subsequent notice
thereof to holders of Class B Warrants then listed on its books.
17
The Warrantholder may exercise all or any of the Class B Warrants in
the manner and during the period stated above, but only for an even number of
Shares if less than all are exercised, upon due presentment of this Certificate
to the Warrant Agent. The Exercise Price must be paid in lawful money of the
United States of America, in cash or by personal check, bank check or certified
check payable to the order of the Company. If fewer than all of the above number
of Class B Warrants are exercised, the Warrant Agent shall execute and deliver
to the Warrantholder a new Class B Warrant certificate of like tenor evidencing
the number of Class B Warrants not exercised. Should any or all the Class B
Warrants be assigned, then upon due presentment of this Certificate by the
assignee to the Warrant Agent accompanied by payment of the transfer fee
specified from time to time by the Warrant Agent, and by payment of all transfer
taxes and other governmental charges due, if any, the Warrant Agent shall
transfer the Class B Warrants assigned on the transfer books and shall (subject
to the Warrant Agreement) execute and deliver to the assignee a Class B Warrant
certificate of like tenor representing the number of Class B Warrants assigned,
and if less than all of the Class B Warrants are assigned, execute and deliver
to the Warrantholder a Class B Warrant certificate of like tenor representing
the number of Class B Warrants not assigned.
These Class B Warrants shall not entitle the Warrantholder to any of
the rights of stockholders or to any dividend declared upon the Common Stock
unless the Warrantholder shall have exercised these Class B Warrants and
purchased the Shares of Common Stock prior to the record date fixed by the Board
of Directors of the Company for the determination of holders of Common Stock
entitled to such dividend or other right. Holders of Class B Warrants are
protected against dilution of their interests represented by the underlying
shares of Common Stock upon the occurrence of stock dividends, stock splits or
reclassifications of the Common Stock, as provided in the Warrant Agreement.
This Certificate shall not be valid unless countersigned by the Warrant
Agent.
WITNESS the facsimile seal of the Company and the facsimile signature
of its duly authorized officer this 2nd day of April, 2002.
ALD SERVICES, INC.
By:
--------------------------------
Xxxxxx X. Xxxxxxx, President
COUNTERSIGNED:
PACIFIC STOCK TRANSFER COMPANY
0000 X. Xxxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000.
By:
-----------------------------
Authorized Signature
18
CLASS B WARRANT EXERCISE FORM
ALD SERVICES, INC.
Date: ____________________, 20___
The Undersigned hereby elects irrevocably to exercise the within Class
B Warrant and to purchase ________ shares of Common Stock of the Company called
for thereby, and hereby makes payment of $_____________ (at the rate of $12.00
per share of Common Stock) payable to ALD Services, Inc., in payment of the
Exercise Price pursuant thereto and, if such number of shares shall not be all
of the shares purchasable hereunder, directs that a new Class B Warrant
Certificate of like tenor for the balance of the remaining shares purchasable
hereunder be delivered to the undersigned at the address stated below. Please
issue the shares of Common Stock as to which this Class B Warrant is exercised
in accordance with the instructions given below.
Signature:
--------------------------
Signature Guaranteed:
---------------
By:
---------------------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
-------------------------------------
(Print in Block Letters)
Address
----------------------------------
----------------------------------
19
ASSIGNMENT
(To be executed by the registered Holder
to effect a transfer of the within Warrant)
FOR VALUE RECEIVED, _______________________________________ does hereby
sell, assign and transfer unto __________________________________________ the
right to purchase _____________ shares of the Common Stock of the Company
evidenced by the within Warrant, and does hereby irrevocably constitute and
appoint ____________________________ ______________________attorney to transfer
such right on the books of the Company with full power of substitution in the
premises.
Dated:____________________, 20__
Signature:
-------------------------
Signature Guaranteed:
--------------
By:
--------------------------------
* * * * * * * * * *
NOTICE: The signature to this Assignment must correspond with the name as
written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank, other than a savings bank, or by a trust company
or by a firm having membership on a registered national securities
exchange.
20
