Exhibit 10.13
XXXXXXXXXX.XXX
WARRANT AGREEMENT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
This Warrant Agreement (this "Agreement") is entered into as of the __st
day of ____, 1999 by and between XXXXXXXXXX.XXX, a California corporation (the
"Company") and ________________ (the "Holder").
1. Description; Execution.
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(a) The Company agrees to issue to Holder and Holder agrees to accept
certificates evidencing the right to purchase shares of Common Stock at the
Warrant Conversion Price defined in Section 4 hereto (each, a "Warrant
Certificate"; collectively the "Warrant Certificates").
(b) The Warrants shall have no voting rights until converted and shall
be subject to dilution on a pari-passu basis with the Common Stock.
(c) Each Warrant Certificate shall be substantially in the form
annexed hereto as Exhibit A.
(d) This Agreement shall be executed on behalf of the Company by its
Chief Executive Officer. Upon execution, this Agreement shall be binding
upon the Company, and the Holder shall be entitled to all the benefits set
forth herein.
(e) All references herein to denominations in "dollars" or "$" shall
mean dollars in United States currency.
2. Term of Warrants.
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The Warrants shall become exercisable at any time after the date hereof,
and remain exercisable, subject to the conditions set forth in Section 3 until
5:00 p.m. Pacific Standard Time on the third anniversary of the date of grant of
the Warrants (the "Expiration Date").
3. Conversion of Warrants.
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(a) Subject to (b) below, at any time until the Expiration Date, the
Holder shall have the right to purchase from the Company (and the
Company shall promptly issue to the Holder) one fully-paid and
nonassessable share of Common Stock at the Warrant Conversion
Price (as defined in
Section 4 hereto) for each Warrant, by
(b) surrendering the appropriate Warrant Certificate and the Election
To Purchase attached hereto to the Company at its executive
offices and paying the aggregate Warrant Conversion Price for the
shares to be purchased, in cash or by cashier's check.
(b) In case of a partial conversion, the Warrant Certificate
partially converted shall be surrendered and a new Warrant
Certificate of the same tenor and for the purchase of the number
of shares not purchased upon such partial conversion shall be
issued by the Company to the holder thereof. The Warrants shall
be deemed to have been converted immediately prior to the close
of business on the date of their surrender for conversion as
provided above, and the person or entity entitled to receive the
shares of Common Stock issuable upon the conversion shall be
treated for all purposes as the holder of such shares of record
as of the close of business on such date. Prior to any such
conversion, neither the Holder nor any person entitled to receive
shares issuable upon conversion shall be or have any of the
rights of a shareholder of the Company. No adjustment shall be
made for dividends or other stockholder rights for which the
record date is prior to the date of conversion. As soon as
practicable on or after such date, the Company shall issue in the
name of, and deliver to the person or persons entitled to
receive, a certificate or certificates for the full number of
shares of Common Stock issuable upon such conversion.
4. Warrant Conversion Price and Conversion Increments The
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Warrants shall be convertible at the price of one cent ($.01) per
whole share of Common Stock (the "Warrant Conversion Price") subject
to adjustment pursuant to Section 5 hereto. The Warrant Conversion
Price must be paid in cash or by cashier's check.
5. Adjustment of Warrant Conversion Price and Number of Shares
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of Common Stock.
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The number of shares of Common Stock purchasable upon conversion
of the Warrants and the Warrant Conversion Price shall be subject to adjustment
from time to time upon the happening of certain events, as follows:
5.1 Adjustments. The Warrant Conversion Price of the
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Warrant shall be subject to adjustment as follows:
(a) Stock Splits. In the event the Company should at
any time or from time to time after the effective date of
this Agreement (the "Effective Date") fix a record date for
the effectuation of a split or subdivision of the
outstanding shares of Common Stock or a dividend or other
distribution payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling
the holder thereof to receive directly or indirectly,
additional
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shares of Common Stock (hereinafter referred to as "Common Stock
Equivalents") without payment of any consideration by such holder for
the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the
date of such dividend distribution, split or subdivision if no record
date is fixed), the Warrant Conversion Price shall be appropriately
adjusted so that the number of shares of Common Stock issuable on the
exercise of each Warrant shall be increased in proportion to such
increase of the aggregate of shares of Common Stock outstanding.
(b) Stock Combinations. If the number of shares of Common Stock
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outstanding at any time after the Effective Date is decreased by a
combination of the outstanding shares of Common Stock, then, following
the record date of such combination, the Warrant Conversion Price
shall be appropriately increased so that the number of shares of
Common Stock issuable on exercise of each Warrant shall be decreased
in proportion to such decrease in outstanding shares.
(c) Reorganization, Consolidation, Merger, Sale of Assets. In
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the event, after the date of this Agreement, as a result of the
Company effecting a reorganization or as a result of a merger or
consolidation of the Company into or with another corporation, or the
sale or other transfer of substantially all of the Company's property,
assets and business substantially as an entirety to a successor
corporation, the Common Stock is in effect changed, in whole or in
part, into a different kind or class of stock or other securities or
property (including cash), each Warrant will thereafter be deemed
exercised for the right to receive the kind and amount of shares of
stock or other securities or property to which such holder would have
been entitled as a result of such consolidation, merger or sale had
the Warrants been exercised immediately prior thereto. The provisions
of this Section 5 shall similarly apply to successive reorganizations,
mergers or consolidations or sales or other transfers.
(d) For the purpose of this Section 5, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of
the Company at the date of this Agreement, or (ii) any other class of
stock resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value.
5.2 No Adjustment for Dividends. Except as provided in Section 5.1
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hereof, no adjustment in respect of any dividends or distributions out of
earnings shall be made during the term of a Warrant or upon the conversion
of a Warrant.
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6. Fractional Shares; Issuance of Shares; Legends.
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6.1 Fractional Shares. The Company shall not be required to issue
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fractional shares of Common Stock on the conversion of a Warrant. If any
fraction of a share of Common Stock would, except for the provisions of
this Section 6, be issuable on the conversion of a Warrant (or specified
portion thereof), the Company shall in lieu -thereof pay an amount in cash
equal to the then Current Fair Market Value (as defined below), multiplied
by such fraction. For purposes of this Agreement, the term "Current Fair
Market Value" shall mean (i) if the Common Stock is traded in the over-the-
counter market and not in the NASDAQ Small Cap Market or the National
Market nor on any national securities exchange, the average of the per
share closing bid prices of the Common Stock on the 10 consecutive trading
days immediately preceding the date in question, as reported by NASDAQ or
an equivalent generally accepted reporting service, or (ii) if the Common
Stock is traded in the NASDAQ Small Cap Market or the National Market or on
a national or regional securities exchange, the average for the 10
consecutive trading days immediately preceding the date in question of the
daily per share closing prices of the Common Stock in the NASDAQ Small Cap
Market or the National Market or on the principal stock exchange on which
it is listed, as the case may be, or (iii) if the class of Common Stock is
not publicly traded or quoted, the fair market value as determined by the
Board of Directors of the Company based on (with appropriate adjustments)
the most recent purchases of the Common Stock and/or other relevant factors
including the Company's income and assets or evaluation reports received by
the Company.
6.2 Issuance of Shares. All shares of Common Stock issued upon
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conversion of a Warrant will be duly authorized, validly issued, fully paid
and nonassessable.
6.3 Legends. If the Common Stock to be issued upon conversion of
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each of the Warrants has not been registered under the Securities Act of
1933, as amended, then the certificates representing such shares of Common
Stock shall bear a legend substantially in the following form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS
AND ARE RESTRICTED SECURITIES. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND
STATE SECURITIES LAWS.
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7. Transferability.
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Each of the Warrants and the shares of Common Stock underlying each of the
Warrants shall not be transferred, and the Company shall not be required to
register any transfer on the books of the Company, unless the Company shall have
given its prior written consent to the transfer and been provided with an
opinion of counsel satisfactory to it prior to such transfer that registration
under the Securities Act and applicable state securities laws is not required in
connection with the transaction resulting in such transfer. Each new Warrant or
Common Stock certificate issued upon any transfer as above provided shall bear
an appropriate investment legend, except that such Warrant or Common Stock
certificate shall not bear such restrictive legend if the opinion of counsel
referred to above is to further effect that such legend is not required in order
to establish compliance with the provisions of the Securities Act or if such
transfer is made in accordance with the provisions of Rule 144(k) promulgated
under the Securities Act.
Any attempt to transfer, sell or otherwise dispose of any or all of the
Warrants (except as provided above) shall be void and shall not convey any
rights or privileges to the transferee.
8. Miscellaneous.
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8.1 Notices.
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All notices and other communications under or in connection with this
Agreement ("Notices") shall be in writing and shall be deemed given (a) if
delivered personally (including by overnight express or messenger), upon
delivery, (b) if delivered by first class, registered or certified mail
(return receipt requested), upon the earlier of actual delivery or three
days after being mailed, or (c) if given by telecopy, upon confirmation of
transmission by telecopy, in each case to the parties at the following
addresses:
If to the Holder: _______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
Attn:__________________________________________
Tel:
Fax:
If to the Company: XXXXXXXXXX.XXX
00000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Secretary
Tel: (000) 000-0000
Fax: (000) 000-0000
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With a copy to: Xxxxxxx, Xxxxx & Xxxx, LLP
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
8.2 Entire Agreement; Modifications; Waiver. This Agreement,
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together with the related agreements or certificates referenced herein,
constitutes the final, exclusive and complete understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
agreements, understandings and discussions with respect thereto. No
variation or modification of this Agreement and no waiver of any provision
or condition hereof, or granting of any consent contemplated hereby, shall
be valid unless in writing and signed by the party against whom enforcement
of any such variation, modification, waiver or consent is sought.
8.3 Counterparts.
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This Agreement may be executed in any number of counterparts,
including electronically transmitted counterparts, each of which when so
executed shall constitute an original copy hereof, but all of which
together shall constitute one agreement.
8.4 Headings.
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The section and paragraph headings contained in this Agreement are for
convenient reference only, and shall not in any way affect the meaning or
interpretation hereof.
8.5 Governing Law.
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This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of California, without regard to its
choice-of-laws or conflicts of law rules. By execution and delivery of
this Agreement, the parties agree and accept that any legal action or
proceeding brought with respect to this Agreement shall be brought in a
state or federal court of appropriate jurisdiction sitting in the County of
Orange, State of California, United States of America, and the parties
expressly consent to personal jurisdiction in the federal and state courts
sitting in the County of Orange, State of California, United States of
America.
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8.6 Severability.
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If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, it shall be deemed severable from the remaining
provisions of this Agreement which shall remain in full force and effect.
8.7 Expenses and Taxes.
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Each party shall bear and pay its own expenses, including but not
limited to legal, accounting and other professional fees, and taxes
incurred in connection with the transactions referred to in this Agreement.
8.8 Heirs; Successors and Assigns.
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The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective heirs, successors and assigns of the
parties hereto. Holders may transfer and assign the Warrants only as
provided in Section 7 and any assignment in violation of the foregoing
shall be void.
8.9 Attorneys' Fees.
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If any legal action is instituted to enforce or interpret the terms of
this Agreement, the prevailing party in such action shall be entitled to
actual attorneys' fees in addition to any other relief to which the party
is entitled.
IN WITNESS WHEREOF, the parties have executed this instrument as of the
date first written above.
Attest: "Company"
XXXXXXXXXX.XXX XXXXXXXXXX.XXX
By: _____________________________ By: _______________________________
Xxxx Xxxxxx Xxxxx Xxxxxx
Its: Chief Financial Officer Its: Chief Executive Officer
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Date:_____________________________ Date:_______________________________
"Holder"
_____________________________________
XXXXXXXXX
Date:________________________________
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