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EXHIBIT 10.17
STOCK PURCHASE WARRANT
THIS STOCK PURCHASE WARRANT (the "Warrant") is made and entered into
as of March 23, 1998 (the "Issuance Date"), by and between MAXXIS GROUP, INC.,
a Georgia corporation (the "Corporation"), and ____________________________
(the "Warrantholder").
W I T N E S S E T H:
WHEREAS, the Corporation desires to grant the Warrantholder warrants
to purchase shares of the Corporation's Common Stock, no par value per share
(the "Common Stock"), upon the terms and conditions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. GRANT OF WARRANT. Subject to the terms and conditions of this
Warrant, the Corporation hereby grants to the Warrantholder the right to
purchase _______ shares of Common Stock (the "Warrant Shares").
2. EXERCISE PRICE. The purchase price (the "Exercise Price") for each
Warrant Share initially shall be $5.50. The Exercise Price shall be subject to
adjustment as provided in Section 6 below.
3. EXERCISE OF WARRANT.
(a) To the extent that the Warrant has become and remains
exercisable it may be exercised by the Warrantholder delivering to the
Corporation a written notice of exercise signed by the Warrantholder, in
substantially the form attached hereto as EXHIBIT A (a "Notice of Exercise"),
together with, at the option of the Warrantholder: (i) a check payable to the
Corporation in the amount of the total purchase price for the Warrant Shares
to be purchased pursuant to the Notice of Exercise; (ii) shares of Common
Stock duly endorsed for transfer to the Corporation and owned by the
Warrantholder; (iii) by authorization to the Corporation to withhold shares of
Common Stock otherwise issuable upon exercise of the Warrant; or (iv) any
combinations of (i), (ii) and (iii) of this Section 3(a). In cases of exercise
whereby the Warrantholder tenders Common Stock to the Corporation or otherwise
withholds Common Stock pursuant to provisions (ii) or (iii) of this Section
3(a), the Fair Market Value (as defined below) on the date of exercise of the
Common Stock tendered to the Corporation or authorized to be withheld upon
exercise of the Warrant shall be credited against the Exercise Price of the
Common Stock for which a Notice of Exercise has been provided (however, the
Company shall not be obligated to issue any fractional shares or to make any
cash payments in consideration of any excess of the aggregate Fair Market
Value of shares transferred or withheld over the aggregate Exercise Price).
(1) "Fair Market Value" on any date shall mean: (i) the
closing sales price of the Common Stock, regular
way, on such date on the national securities
exchange having the greatest volume of trading in
the Common Stock during the thirty-day period
preceding the date the value is to be determined
or, if such exchange was not open for trading on
such date, the next preceding date on which it was
open; (ii) if the Common Stock is
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not traded on any national securities exchange, the
average of the closing high bid and low asked
prices of the Stock on the over-the-counter market
on the day such value is to be determined, or in
the absence of closing bids on such day, the
closing bids on the next preceding day on which
there were bids; or (iii) if the Common Stock also
is not traded on the over-the-counter market, the
fair market value as determined in good faith by
the Board of Directors (the "Board") or the
Executive Committee (the "Committee") of the
Corporation based on such relevant facts as may be
available to the Board or Committee, which may
include opinions of independent experts, the price
at which recent sales have been made, the book
value of the Common Stock, and the Company's
current and future earnings.
(b) The Warrant shall not become exercisable with respect to
the Warrant Shares until 14 months following the anniversary of the Issuance
Date. Thereafter, this Warrant shall be exercisable, in whole or in part as
set forth herein, during the term of the Warrant.
(c) Within 30 days after the exercise of the Warrant as
herein provided, the Corporation shall deliver to the Warrantholder a
certificate or certificates for the Warrant Shares being issued in the name of
the Warrantholder and in such denominations as are requested by the
Warrantholder.
(d) The Corporation covenants and agrees that all Warrant
Shares which may be issued upon exercise of the Warrant shall, upon issuance
and payment therefor, be legally and validly issued and outstanding, fully
paid and nonassessable, and free from all liens, claims and encumbrances,
except restrictions imposed by applicable securities laws, the Corporation's
Amended and Restated Articles of Incorporation and this Warrant. The
Corporation shall at all times reserve and keep available for issuance upon
the exercise of the Warrant such number of authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of the
Warrant.
4. TERM OF WARRANT.
(a) The term of the Warrant shall continue in effect until
the earlier of: (i) the date on which the Warrant has been exercised; or (ii)
seven years from the anniversary of the Issuance Date.
(b) In the event of the Warrantholder's death, the Warrant
may be exercised hereunder by the Warrantholder's personal representative,
legatees, or heirs at law, as the case may be, and in the case of the
Warrantholder's mental incompetence, by Warrantholder's legal guardian, or if
none has been appointed, by Warrantholder's duly authorized attorney-in-fact.
5. CONSENT TO TRANSFER. Unless the Corporation consents thereto
in writing, this Warrant and all rights hereunder are nontransferable and
nonassignable by the Warrantholder, other than transfers: (i) pursuant to the
last will and testament of the Warrantholder or the laws of descent and
distribution; (ii) pursuant to a bona fide gift; (iii) to an immediate family
member of the Warrantholder; or (iv) in the case of a Warrantholder that is not
an individual, the partners or shareholders of such Warrantholder. Any transfer
or attempted transfer except pursuant to the preceding sentence shall be null
and void and of no effect whatsoever.
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6. ADJUSTMENTS.
(a) If, prior to the termination of the Warrant as provided in
Section 4(a) hereof:
(i) The number of outstanding shares of Common Stock is
increased by a stock split, stock dividend, or other similar event,
the Exercise Price shall be proportionately reduced and the number of
Warrant Shares that have not theretofore been purchased by the
Warrantholder shall be proportionately increased.
(ii) The number of outstanding shares of Common Stock is
decreased by a combination or reclassification of shares, or other
similar event, the Exercise Price shall be proportionately increased
and the number of Warrant Shares that have not theretofore been
purchased by the Warrantholder shall be proportionately reduced.
If any adjustment under this Section 6(a) would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded. In lieu of any fractional Warrant Share
to which the Warrantholder would otherwise be entitled, the Corporation shall
make a cash payment equal to the fair market value of such fractional Warrant
Share, as determined in good faith by the board of directors of the
Corporation.
(b) If, prior to the termination of the Warrant as provided
in Section 4(a) hereof, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result
of which shares of Common Stock shall be changed into the same or a different
number of shares of the same or another class or classes of stock or
securities of the Corporation or another entity, then the Warrantholder shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in this Warrant and in lieu of the Warrant
Shares immediately theretofore purchasable and receivable upon the exercise of
the Warrant, such shares of stock and securities as may be issued or payable
with respect to or in exchange for the number of Warrant Shares immediately
theretofore purchasable and receivable upon the exercise of the Warrant had
such merger, consolidation, exchange of shares, recapitalization or
reorganization not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Warrantholder to
the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Exercise Price and of the number of shares purchasable
upon the exercise of the Warrant) shall thereafter be applicable, as nearly as
may be practicable in relation to any shares of stock or securities thereafter
deliverable upon the exercise hereof. The Corporation shall not effect any
transaction described in this subsection (b) unless the resulting successor or
acquiring entity (if not the Corporation) assumes by written instrument the
obligation to deliver to the Warrantholder such shares of stock and securities
as, in accordance with the foregoing provisions, the Warrantholder may be
entitled to purchase. The foregoing notwithstanding, in the event of a merger
or consolidation in which the Corporation is not the surviving entity, if the
Corporation concludes that it will be unable to satisfy the conditions of this
subsection (b) without a material adverse effect on the terms of such proposed
transaction, then the Corporation shall have the option, prior to or
contemporaneously with the closing of such merger or consolidation, to
purchase the Warrant from the Warrantholder at its then fair value, determined
with regard to both the spread between the Exercise Price and the value of the
consideration to be received in the transaction and the remaining term of the
Warrant. The Corporation and the Warrantholder shall agree on such fair value
or, in the event they are unable to agree, shall submit the question of fair
value to an investment banking firm to be selected by the Corporation, with
the cost of such investment banking firm to be paid by the Corporation.
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7. INVESTMENT REPRESENTATION. As a condition to the issuance of
Warrant Shares hereunder, the Warrantholder represents to the Corporation that
the Warrant Shares Warrantholder will acquire pursuant to such exercise are
being purchased for Warrantholder's own account for investment purposes only
and not with a present view to resale or a distribution thereof, unless the
Warrantholder delivers to the Corporation an opinion of counsel acceptable to
the Corporation stating that such a representation is not required under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws.
The Warrantholder acknowledges that the Warrant Shares may be "restricted
securities" as defined in the Act and that such Warrant Shares may not be able
to be resold unless such resale is registered under the Act and applicable
state securities laws or unless an exemption is available. The Warrantholder
acknowledges that Warrantholder has no rights to cause the registration of the
Warrant Shares.
8. NO RIGHTS AS A SHAREHOLDER. The Warrantholder shall not have any
interest in or shareholder rights with respect to any shares of Common Stock
which are subject to the Warrant until such shares have been issued and
delivered to the Warrantholder in accordance with this Warrant.
9. TAXES. As a condition to the issuance of Warrant Shares hereunder,
the Corporation may withhold, or require the Warrantholder to pay or reimburse
the Corporation for, any taxes which the Corporation determines are required
to be withheld under federal, state or local law in connection with the
exercise of the Warrant.
10. HEIRS AND SUCCESSORS. This Warrant and all terms and conditions
hereof shall be binding upon the Corporation and its successors and assigns,
and upon the Warrantholder and Warrantholder's heirs, legatees and legal
representatives.
11. GOVERNING LAW. This Warrant shall be governed by, and construed
and enforced in accordance with, the laws of the State of Georgia without
regard to the principles of conflicts of laws.
12. NOTICES. All notices, requests and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
duly given and received when delivered in person, when delivered by overnight
delivery service, or three business days after being mailed by registered or
certified mail, postage prepaid, return receipt requested, to the following
addresses (or to such other address as one party may from time to time
designate in writing to the other party hereto):
If to the Corporation: Maxxis Group, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: President
If to the Warrantholder: ------------------------------
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13. ENTIRE AGREEMENT. This Warrant and the related Subscription
Agreement and Amended and Restated Articles of Incorporation of the
Corporation in the form filed with the Secretary of State of the State of
Georgia (collectively, the "Related Documents") constitute the full and entire
agreement and understanding of the parties to this Warrant with respect to the
subjects hereof and thereof, and supersede all previous discussions and
agreements, if any, of the parties hereto. No party
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shall be liable for or bound in any other manner by any representations,
warranties, covenants or agreements except as specifically set forth in this
Warrant and the Related Documents.
14. SEVERABILITY. The provisions of this Warrant, and of each
separate section and subsection, are severable, and if any one or more
provisions may be determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions, and any unenforceable provision to
the extent enforceable, shall nevertheless be binding and enforceable.
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by its duly authorized officer, and the Warrantholder has executed
this Warrant, as of the Issuance Date.
MAXXIS GROUP, INC.
By:
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President
WARRANTHOLDER:
By:
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Name (Print):
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EXHIBIT A
NOTICE OF EXERCISE
[DATE]
Maxxis Group, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: President
Re: Exercise of Stock Purchase Warrant
Dear Sir:
The undersigned, _______, pursuant to that certain Stock Purchase
Warrant, dated as of March 23, 1998, by and between Maxxis Group, Inc. (the
"Corporation") and the undersigned (the "Warrant"), hereby exercises the Warrant
for ______________ Warrant Shares, subject to the terms and conditions of the
Warrant. Accompanying this Notice is: (i) a check in the amount of
$________________ payable to the Corporation; (ii) _______________ shares of the
Company's Common Stock presently owned by the undersigned and duly endorsed or
accompanied by stock transfer powers, having an aggregate Fair Market Value (as
defined in the Warrant) as of the date hereof of $________________; (iii)
authorization to withhold ___________________ shares of Common Stock otherwise
issuable upon exercise of the Warrant (which authorization is given pursuant to
my signature below); or (iv) any combinations of (i), (ii) and (iii) of this
Notice of Exercise, such amounts or withholdings being equal, in the aggregate,
to the Exercise Price set forth in Section 2 of the Warrant multiplied by the
number of shares of Common Stock being acquired hereby (in each instance subject
to appropriate adjustment pursuant to Section 6 of the Warrant).
Very truly yours,
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[Name]
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