EXHIBIT 10.14
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WARRANT AGREEMENT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION ("BLUE SKY LAWS"), AND CANNOT BE RESOLD UNLESS THEY ARE REGISTERED
UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE UNDER THE ACT. THE
WARRANT SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
STOCK PURCHASE WARRANT
WARRANT TO PURCHASE FIVE HUNDRED THOUSAND SHARES OF
DALECO RESOURCES CORPORATION COMMON STOCK
DATED: September 21, 2001
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This certifies that, for valuable consideration received:
Name: Terra Silex Holdings, Ltd. Co. whose address is:
000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx, 00000 (Terra Silex")
or its registered permitted assigns are entitled to purchase from Daleco
Resources Corporation (the "Company), having its principal office at 000 Xxxxx
Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx (Facsimile: 610-429-0810)) fully paid
and nonassessable shares of Common Stock, $.01 par value, of the Company (the
"Common Stock"), subject to the terms set forth herein. This Warrant is issued
pursuant to that certain Stock Purchase Agreement by and between Terra Silex and
the Company dated September 18, 2001 ("Stock Purchase Agreement"). Any
capitalized terms not defined herein are as defined in the Stock Agreement. This
Warrant shall be execrable during the time periods set forth in Section I
hereof, at the price indicated therein. The holder of this Warrant shall be
referred to herein as the "Warrantholder".
1. The purchase rights to Five Hundred Thousand (500,000) shares of Common
Stock as represented by this Warrant may be exercised by the Warrantholder or
its duly authorized attorney or representative upon payment to the Company in
cash or by certified check or bank draft of $1.25 per share of Common Stock
purchased (the "Warrant Price"), as follows:
a. After the First Traunche Closing and before December 31, 2006
("Expiration Date"),, Terra Silex may exercise the Price Warrant for up to
125,000 shares of Common Stock (in multiples of not less than 50,000 shares).
b. After the Second Traunche Closing and before the Expiration Date,
Terra Silex may exercise the Price Warrant up to a maximum of 250,000 shares in
the aggregate (in multiples of not less than 50,000 shares).
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c. After the Third Traunche Closing and before the Expiration Date,
Terra Silex may exercise the Price Warrant up to a maximum of 500,000 shares in
the aggregate (in multiples of not less than 50,000 shares).
2. The issuance and delivery of shares of Common Stock pursuant to the
terms of this Warrant shall be subject to and comply with all relevant
provisions of law including, without limitation, the Act and the rules and
regulations promulgated thereunder, the Securities and Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder, and any applicable
state securities or "Blue Sky" law or laws, and the requirements of any stock
exchange upon which the Common Stock may then be listed.
3. The Company agrees that the Warrantholder will be deemed the record
owner of any shares purchased pursuant to Section 1 hereof as of the close of
business on the date on which the Warrant shall have been presented and payment
shall have been tendered for such shares as aforesaid. Certificates for the
shares of Common Stock so purchased shall be delivered to the Warrantholder
within a reasonable time, not exceeding 20 days, after the exercise in full of
the rights represented by this Warrant.
4. The number of shares purchasable upon exercise is subject to adjustment
from time to time as follows:
a. In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution on or in respect of the Common Stock in shares of
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Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or (iv) issue by reclassification of its shares of Common Stock
other securities of the Company number of shares (excluding any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation) purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Warrantholder shall be
entitled to receive the kind and number of shares of Common Stock or other
securities of the Company which the Warrant holder would have owned or have been
entitled to receive at the happening of any of the events described above, had
such Warrant been exercised immediately prior to the happening of such event or
any record date with respect thereto. An adjustment made pursuant to this
Section 4(a) shall become effective immediately after the effective date of such
event retroactive to the record date, if any, for such event. Such adjustments
shall be made successively.
b. Whenever the number of shares of Common Stock purchasable upon the
exercise of this Warrant is adjusted, as herein provided, the aggregate Warrant
Price shall remain unchanged (the Warrant Price calculated on a per share basis,
however, shall be adjusted by multiplying such per share Warrant Price
immediately prior to such adjustment by a fraction, of which the numerator shall
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be the number of shares of Common Stock purchasable upon the exercise of this
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares of Common Stock so purchasable immediately thereafter).
In the event of any adjustment pursuant to this Section 4, no
fractional shares of Common Stock shall be issued in connection with the
exercise of this Warrant, but the Company shall, in lieu of such fractional
shares, make such cash payment therefor on the basis of the currant market price
on the date immediately prior to exercise. Irrespective of any adjustments
pursuant to this Section 4 to the number of shares or other securities or other
property obtainable upon exercise of this Warrant, this Warrant may continue to
state the price and the number of shares obtainable upon exercise as the same
price and number of shares stated herein.
5. This Warrant shall be void after 5:00 P.M. Eastern Time on the
Expiration Date, except for the provision of Section 9 which shall survive the
termination of this Warrant and as provided in paragraph 5 a, below.
(a) Should Terra Silex not have fully exercised the Price Warrant by
the Expiration Date and should the five day closing average for the Common Stock
for the five business days immediately preceding the Expiration Date ("Closing
Price") be less than $1.25, then the Expiration Date shall be extended by a
period equal to:
5 years (The term of the Price Warrant) x $1.25
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Closing Price
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6. The Company covenants and agrees that:
a. During the period during which this Warrant may be exercised, the
Company will at all times reserve and keep available, free from preemptive
rights out of the aggregate of its authorized but unissued Common Stock, for the
purpose of enabling it to satisfy any obligation to issue shares of Common Stock
upon the exercise of this Warrant, the number of shares of authorized Common
Stock deliverable upon exercise of this Warrant. If at any time the number of
shares of authorized Common Stock shall not be sufficient to effect the exercise
of this Warrant, the Company will take such corporate actions as may be
necessary to increase its authorized but unissued Common Stock to such number of
shares as shall be sufficient for such purpose;
b. All Common Stock that may be issued upon exercise of the rights
represented by this Warrant will, upon issuance, be validly issued, fully paid,
nonassessable, and free from all taxes, liens, and charges with respect to the
issue thereof, and
c. All original issue taxes payable with respect to the issuance of
shares upon the exercise of the rights represented by this Warrant will be borne
by the Company but in no event will the Company be responsible or liable either
for income taxes or for transfer taxes upon the transfer of any Warrant.
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7. Until exercised, this Warrant shall not entitle the Warrantholder to
any voting rights or other rights as a stockholder of the Company.
8. This Warrant and the Common Stock issuable upon the exercise hereof may
not be sold, transferred, assigned, pledged, or hypothecated unless the Company
shall have been supplied with evidence reasonably satisfactory to it that such
transfer is not in violation of the Act, any applicable state laws, and any
provision of this Warrant.
The Company may place a legend referencing the transfer restrictions
on this Warrant or any replacement Warrant and on any certificates representing
shares upon exercise of this Warrant.
9. a. If at any time during the period during which this Warrant may be
exercised, the Company proposes to register under the Act and/or any applicable
state securities law any of its Common Stock for sale for cash in an offering in
which other shareholders will be participating, to the extent not limited by
either existing contractual arrangements or by this Warrant, the Warrantholder
shall have the right to include any part or all of the shares of Common Stock
for which Warrantholder possesses exercisable purchase rights pursuant to this
Warrant in any such registration.
b. Notwithstanding (a) above, the Company shall include in any
registration made pursuant to this Section 9 only those shares of Common Stock
covered by this Warrant as to which it has received assurances reasonably
satisfactory to it that all exercise rights as to the Warrant will be exercised
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and that such Warrant will be converted to Common Stock on or prior to the date
on which a registration statement has become effective or the sale thereof to
underwriters has been consummated so that only Common Stock shall be distributed
to the public under such registration statement.
In the event that Common Stock is proposed to be registered pursuant
to Section 9(a), the Company shall give written notice to the Warrantholder of
the proposed filing not later than one week prior to the date of its intention
to do so and, upon the written request of the Warrantholder given to the Company
not more than four calendar days later (which request shall state the intended
method of disposition of such of its securities to be included in the
registration statement by the Warrantholder), the Company shall cause such
number of shares of the Common Stock acquired or to be acquired by the
Warrantholder pursuant to this Warrant (but not the Warrant itself) to be
included in the registration statement to be registered under the Act as
provided above.
Any request of the Warrantholder for inclusion in any registration of
Common Stock pursuant to this Section 9 shall also include the agreement of the
Warrantholder to sell the applicable amount of Common Stock only through the
underwriters, if applicable, and at the price and upon the terms fixed by the
agreement among the Company and the underwriters or brokers for such
transaction. Additionally, in connection with any such registration,
participation by the Warrantholder will be conditioned upon its execution of the
underwriting documents (which shall include standard indemnification provisions)
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negotiated by the Company or the other selling stockholders, and the execution
by the Warrantholder of a lockup of up to 120 days for any shares owned by it
and not sold in the offering.
c. Any registration of shares pursuant to Section 9(a) shall be
effected at the Company's expense, exclusive of underwriting discounts and
commissions and of legal fees and expenses for counsel to the Warrantholder.
d. In connection with any registration of shares pursuant to this
Section 9, the persons whose shares are being registered shall furnish the
Company with such information concerning such persons and the proposed sale or
distribution as shall, in the opinion of counsel for the Company, be required
for use in the preparation of the registration statement, and such person shall
cooperate sully in the preparation and filing of the registration statement. In
addition, Warrantholder shall indemnity the Company, its officers and directors
("Indemnified Persons") against all claims, losses or damages Indemnified
Persons incur as a result of any information supplied by such Warrantholder that
was included in the registration statement which either contained any untrue
statement or alleged untrue statement of material fact or failed to disclose
material facts required to make those stated not misleading.
e. The rights represented by this Section 9 shall expire for any
shares registered pursuant to this Section 9 or otherwise.
f. The obligations of the Company and the Warrantholder under this
Section 9 shall survive the expiration of this Warrant.
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10. If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall, on such terms as the Company may reasonable impose, including a
requirement that the Warrantholder obtain a bond, issue a new Warrant of like
denomination, tenor, and date. 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
anyone.
11. Any Warrant issued pursuant to the provisions of Section 10 shall set
forth each provision set forth in Sections 1 through 17, inclusive, of this
Warrant as each such provision is set forth herein, and shall be duly executed
on behalf of the Company by an executive officer.
12. Upon surrender of this Warrant or upon the exercise hereof, this
Warrant shall be canceled by the Company, shall not be reissued by the Company,
and no Warrant shall be issued in lieu thereof.
13. This Warrant shall inure to the benefit and be binding upon the
Warrantholder, the Company, and their respective successors and assigns, except
as provided otherwise herein.
14. All notices required hereunder shall be in writing and shall be deemed
received when actually received, and may be hand delivered, sent by overnight
courier, or certified mail, return receipt requested, or by facsimile
transmission with the originally executed document being delivered by 5:00 p.m.
the next business day following the date of facsimile notice, to the Company or
the Warrantholder, at the address or facsimile number of such party as set forth
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on the first page of this Warrant or at such other address or facsimile number
of which the Company or Warrantholder has been advised by notice hereunder.
15. In the case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, recapitalization, or other
change in the capital structure of the Company or in the case of a sale or other
transfer of its property, assets, or business substantially as an entirety to
another corporation, appropriate adjustment shall be made so that the
Warrantholder shall have the right thereafter to receive upon the exercise of
this Warrant the amount of shares of Common Stock which such holder would have
been entitled to receive if immediately prior to such event, such holder had
held the number of shares of Common Stock which were then purchasable upon
exercise of this Warrant. Appropriate adjustment shall be made in the
application of the provisions of this Warrant so that the provision set forth
herein shall thereafter be applicable, as nearly as reasonable, to any shares of
stock thereafter deliverable upon the exercise! of this Warrant.
16. The validity, interpretation, and performance of this Warrant and of
the terms and provisions hereof shall be governed by and construed in accordance
of the internal laws of the State of Nevada without giving effect to the
principles of conflict of laws.
17. This Warrant may not be modified, amended or supplemented without the
approval of the holder of the Warrant and except upon the execution and delivery
of a written agreement executed by the Company and the Warrantholder.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed effective as of September 20, 2001.
Daleco Resources Corporation
By:/Xxx Xxxx/
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Chairman of the Board
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PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF WARRANT
The undersigned hereby exercises the right to purchase _______ shares of
Common Stock, evidenced by the attached Warrant, according to the terms and
conditions thereof, and herewith makes payment of the purchase price in full.
The Undersigned requests that the certificate(s) for such shares shall be issued
in the name set forth below.
DATED: _________________ NAME OF HOLDER: ________________________
SIGNATURE: _________________________
ADDRESS: ___________________________
_____________________________________
_______________________________________
Employer Identification Number, Social
Security Number or other identifying number:
______________________________
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