EXHIBIT 10.5
THESE WARRANTS AND THE SHARES OF COMMON STOCK WHICH MAY BE ISSUED UPON THEIR
EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED OR SOLD IN
CONTRAVENTION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS OR THE RESTRICTIONS CONTAINED IN THESE WARRANTS.
WARRANTS TO SUBSCRIBE FOR AND PURCHASE
25,000 SHARES OF COMMON STOCK OF
REGIONAL CAPITAL MANAGEMENT CORPORATION
For value received, REGIONAL CAPITAL MANAGEMENT CORPORATION, a Florida
corporation (the "COMPANY"), hereby grants to ______________ (the "HOLDER"),
upon the terms and conditions contained herein, warrants (each, a "WARRANT") to
subscribe for and purchase from the Company a total of Twenty Five Thousand
(25,000) fully paid and non-assessable shares (collectively, the "SHARES") of
the $0.001 par value per share common stock (the "COMMON STOCK") of the Company.
Any and all capitalized terms used but not otherwise defined herein shall have
the meaning ascribed thereto in that certain Private Placement Memorandum (the
"MEMORANDUM") of the Company dated November 26, 1997.
1. METHOD OF EXERCISE; PAYMENT; PRICE; ISSUANCE OF NEW WARRANT;
TRANSFER AND EXCHANGE. The Warrants may only be exercised by the Holder after
the expiration of a one year period following the successful consummation of an
initial public offering (the "OFFERING") under the Securities Act of 1933, as
amended (the "SECURITIES ACT") by the Company of its Common Stock and prior to
the Termination Date (as defined herein). The successful consummation of the
Offering shall be deemed to occur when a closing (the "CLOSING") of such
Offering is effected. The period beginning after the expiration of this one year
period and ending on the Termination Date is called the "EXERCISE PERIOD." No
assurances can be given that the Company will ever conduct or consummate such an
initial public offering of Common Stock and therefore no assurances can be given
that these Warrants will ever be exercisable. The exercise price of each Warrant
(the "WARRANT PRICE") shall be equal to 120% of the final price per share at
which the Common Stock is sold in the Offering. These Warrants may only be
exercised in whole or in any parts by the surrender of this document, together
with the exercise form attached hereto as Exhibit "A" (the "EXERCISE FORM") duly
completed and signed, at the principal office of the Company, and by payment to
the Company by certified or cashier's check or wire transfer of the Warrant
Price. The Company agrees that any Shares so purchased shall be deemed to be
issued to the Holder as the record owner of such Shares as of the close of
business on the date on which the applicable Warrant or Warrants shall have been
surrendered and payment made for such Shares shall have been made in accordance
with the terms of this Section. In the event of any partial exercise of these
Warrants, certificates for the Shares of Common Stock so purchased shall be
delivered to the Holder within a reasonable time after exercise, and a
replacement document shall be issued which shall reflect any Warrants then
unexercised. None of these Warrants shall be transferable or assignable except
as specifically provided herein.
2. TERMINATION DATE. The Termination Date (the "TERMINATION DATE") for all
unexercised Warrants shall be the fifth anniversary of the Closing. Any Warrants
not exercised as of the close of business on the Termination Date shall expire
and be terminated, and the holders of any such Warrants shall not have any
remaining rights in connection with any Warrants, any Shares or the Company.
3. STOCK FULLY PAID; RESERVATION OF SHARES. The Company covenants and
agrees that all Shares shall, upon issuance pursuant to the exercise of any
Warrants and payment of the Warrant Price, be fully paid and nonassessable and
free from all liens and encumbrances. The Company further covenants and agrees
that during the period within which any Warrant may be exercised, the Company
shall at all times have authorized and reserved, for the purpose of the issuance
upon exercise of any such Warrants, at least the maximum number of Shares as are
issuable upon the exercise of all unexercised Warrants.
4. CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidated, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Warrant Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.
5. ADJUSTMENTS TO WARRANT PRICE AND NUMBER OF SHARES. The Warrant Price
and the number of Shares shall be subject to adjustment from time to time as
provided in this Section 5.
(a) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) its shares of Common Stock into a
greater number of shares, then, after the record date for effecting such
subdivision, the Warrant Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company combines (by reverse stock
split, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a smaller number of shares, then, after the date of
record for effecting such combination, the Warrant Price in effect immediately
prior to such combination will be proportionately increased.
(b) CONSOLIDATION, MERGER OR SALE. In case of any consolidation of
the Company with, or merger of the Company into, any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company, then as a condition of such consolidation, merger or sale or
conveyance, adequate provision will be made whereby the holder of this Warrant
will have the right to acquire and receive upon exercise of this Warrant, such
shares of stock, securities or assets as may be issued or payable with respect
to or in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon exercise of this Warrant. The Company
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will not effect any consolidation, merger or sale or conveyance unless prior to
the consummation thereof, the successor corporation (if other than the Company)
assumes by written instrument the obligations under this Section 5 and the
obligations to deliver to the holder of this Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the holder
may be entitled to acquire.
(c) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Warrant Price pursuant to the provisions of this Section 5, the number of shares
of Common Stock issuable upon exercise of this Warrant shall be adjusted by
multiplying a number equal to the Warrant Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issued upon exercise of
this Warrant and dividing the product so obtained by the adjusted Warrant Price.
(d) MINIMUM ADJUSTMENT OF WARRANT PRICE. No adjustment of the Warrant
Price shall be made in an amount of less than 1% of the Warrant Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such Warrant
Price.
(e) FRACTIONAL WARRANT PRICE. In the event that any adjustment of the
Warrant Price required herein results in a fraction of a cent, then the Warrant
Price shall be rounded up to the nearest cent.
(f) FRACTIONAL SHARES. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the fair market value of a share of
Common Stock on the date of such exercise.
(g) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Warrant Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Warrant Price resulting form such adjustment and the increase or
decrease in the number of Shares purchasable at such price upon exercise,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. Such calculation shall be certified by the
chief financial officer of the Company.
(h) OTHER NOTICES. If at any time during the Exercise Period:
(i) the Company shall declare any dividend upon the
Common Stock payable in shares of stock of any class or make any other
distribution (other than dividends or distributions payable in cash out of
retained earnings consistent with the Company's past practices with respect to
declaring dividends and making distributions) to the holders of the Common
Stock;
(ii) there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all of its assets to, another
corporation or entity; or
(iii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
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(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii) (iii)
and (iv) above.
6. ISSUE TAX. The issuance of certificates for Shares upon the exercise of
any Warrant shall be made without charge to the holder of this Warrant or such
shares for any issuance tax or other costs in respect thereof, PROVIDED that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the holder of a Warrant.
7. TRANSFER, EXCHANGE, REDEMPTION AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the Shares issued upon
its exercise are transferable, in whole or in part, upon surrender of this
Warrant. Until due presentment for registration of transfer on the books of the
Company, the Company may treat the registered holder hereof as the owner and
holder hereof for all purposes, and the Company shall not be affected by any
notice to the contrary. Notwithstanding any other provision hereof, any
transfers of any Warrants must be made in compliance with all applicable state
and Federal laws and regulations, including, without limitation, securities laws
and regulations.
(b) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office of
the Company referred to in Section 10 below, for new Warrants of like tenor of
different denominations representing in the aggregate the right to purchase the
number of shares of Common Stock which may be purchased hereunder. Each of such
new Warrants shall represent the right to purchase such number of shares as
shall be designated by the holder hereof at the time of such surrender.
(c) REDEMPTION OF WARRANTS. The Company may, but shall not be required
to, redeem any of the outstanding Warrants upon thirty (30) days prior written
notice to the Holder provided that the closing bid quotations of the Common
Stock shall have averaged at least 150% of the then effective Warrant Price for
a period of any twenty (20) consecutive trading days ending on the third day
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prior to the day on which the Company gives notice to the Holder of its intent
to effect any such redemption. The Company may, in its sole discretion, redeem
any percentage of the outstanding Warrants in any such redemption. The
redemption price for any such redemption shall be $0.10 per Warrant redeemed.
(d) REPLACEMENT OF WARRANTS. The Holder may elect, by written notice
to the Company, to exchange this Warrant for a warrant (the "REPLACEMENT
WARRANT") in a form substantially similar to the warrants issued in the
Offering. Any such Replacement Warrant shall contain terms and conditions which
are substantially similar to those contained in this Warrant.
8. NO SHAREHOLDER RIGHTS. The Warrants shall not entitle the Holder to any
rights as a shareholder of the Company, including, without limitation, any
voting rights or the right to receive any dividends.
9. GENDER AND NUMBER. As used herein, the use of any of the masculine,
feminine, or neuter gender and the use of singular or plural numbers shall
include any of all of the other, wherever and whenever appropriate in the
context.
10. NOTICES. Except as otherwise provided herein, any notice pursuant to
the Warrants by the Company or the Holder shall be in writing and shall be given
by hand delivery or recognized overnight delivery service (a) if to the Company,
to 0000 X Xxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxx, and (b) if to the Holder, to the address specified below, or to such
other address as may be changed from time to time on the books of the Company by
written notice. Any such notice shall be effective when delivered. Each party
hereto may from time to time change the address to which notices to it are to be
delivered hereunder by notice in writing to the other party.
11. BENEFITS. Nothing herein shall be construed to give to any person or
entity other than the Company and the Holder any legal or equitable right,
remedy, or claim hereunder, and all Warrants shall be for the sole and exclusive
benefit of the Company and the Holder.
12. APPLICABLE LAW; VENUE. This Warrant shall for all purposes be
construed and interpreted in accordance with the laws of the State of Florida,
without regard to any conflict of law rule or principle that would give effect
to the laws of another jurisdiction. Any suit, action or other proceeding
brought in connection with this Warrant shall be brought in the applicable state
or Federal courts in Hillsborough County, Florida, and the Holder by its
execution hereof hereby waives any objection that it may have to such venue,
including, without limitation, an assertion that such venue is an inconvenient
forum.
13. NO REGISTRATION RIGHTS. By its execution hereof the Holder hereby
agrees and acknowledges that the Company has no obligation of any kind to
register this Warrant or the Shares to be issued pursuant to an exercise of this
Warrant under the Securities Act, the Securities Exchange Act of 1934, as
amended, or any state securities laws or regulations.
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14. ACCREDITED INVESTOR STATUS. The Holder hereby confirms, restates and
ratifies (a) its accredited investor status as set forth in the Subscription
Agreement executed by the Holder in connection with the private placement
offering in which this Warrant was purchased, and (b) any and all
representations and warranties made to the Company in that Subscription
Agreement.
Date: March 1, 1998
REGIONAL CAPITAL MANAGEMENT CORPORATION
By: ______________________________________
Xxxxxx X. Xxxxxxx, President
AGREED TO AND ACCEPTED:
By:____________________________
Print Holder's
Name(s):_________________________
Print Holder's
Address:_________________________
Date:____________________________
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EXHIBIT A
EXERCISE FORM
(To be Executed by the Holder
to Exercise the Rights to Purchase
Common Shares Evidenced by the Warrant)
Regional Capital Management Corporation
0000X Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
The undersigned hereby irrevocably subscribes for __________ shares of
Common Stock pursuant to and in accordance with the terms and conditions of that
certain Warrant dated ___________, 1998, and herewith makes payment of
$__________ therefor, and requests that (a) a certificate for such shares and
(b) if applicable, a replacement Warrant document reflecting any unexercised
Warrants, be issued in the name(s) of the undersigned and be delivered to the
undersigned at the address stated below.
------------------------------------
Name(s):_____________________________
Dated: ______________________
