EXHIBIT 10.12
WARRANT AGREEMENT
Xx. Xxxx Xxxxxx will, upon the completion of an application by Ariel Way, Inc to
become a public company or of an acquisition or merger of Ariel Way, Inc. with a
public corporate entity making the surviving company a public company with the
Ariel Way, Inc.'s shareholders controlling at least eighty five percent (85%) of
the surviving company, be granted a warrant, assuming that the total number of
outstanding public shares of the Company is twenty million (20,000,000) shares
of Common Stock, to acquire 1,150,000 shares of the Company's common stock at an
exercise price of $0.010 per share (the "Warrant Shares") to vest as follows:
(i) 60,000 Warrant Shares shall vest monthly each of the first twelve months
during the term of an Employment Agreement with Mr. Dunhem or immediately if Mr.
Dunhem's employment is terminated without cause or for good reason or due to a
change in control, sale of a majority of the common stock or substantially all
of the assets of the Company or merger of the Company into or with another
company (unless such company is less than fifty percent (50%) of the size
(measured by market value) of the Company) or reverse merger with another
company; and (ii) 430,000 Warrant Shares will vest immediately upon the Company
achieving a $25 million market cap for ten (10) consecutive trading days and a
price per share of not less than $0.50. The Warrant Shares granted hereunder
must be exercised by the tenth anniversary of the date of vesting or shall be
forfeited by Mr. Dunhem. All Warrant Shares granted hereunder shall have a
"cashless" exercise provision, which enables Mr. Dunhem to give up a portion of
his Warrant Shares in order to exercise others without paying cash for them. The
number of warrant shares shall be prorate adjusted if the assumption that the
initial total number of outstanding shares of public Common Stock of the
surviving Company is different from twenty million (20,000,000) shares of Common
Stock. Further, the number, kind and strike price of the stock Warrant Shares
granted hereunder shall be appropriately and equitably adjusted to reflect any
stock dividend, stock split, spin-off, split-off, extraordinary cash dividend,
recapitalization, reclassification or other major corporate action affecting the
stock of the Company to the end that after such event Mr. Dunhem's proportionate
interest in the Company shall be maintained as before the occurrence of such
event. Mr. Dunhem shall also receive payment of any cash dividend or stock
dividend declared and paid by the Company as if Mr. Dunhem had already exercised
all of his Warrant Shares, including unvested Warrant Shares.
Date: August 1, 2004
Grantee: ___________________________
Xxxx Xxxxxx
XXXXX WAY, INC.
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Xxxx Xxxxxx
President & CEO
WARRANT AGREEMENT
AMENDMENT NO. 1
Xx. Xxxx Xxxxxx will be granted a warrant, to acquire 1,150,000 shares of the
Company's common stock at an exercise price of $0.010 per share (the "Warrant
Shares") to vest as follows: (i) 60,000 Warrant Shares shall vest monthly each
of the first twelve months from February 2, 2005 through the term of an
Employment Agreement with Mr. Dunhem or immediately if Mr. Dunhem's employment
is terminated without cause or for good reason or due to a change in control,
sale of a majority of the common stock or substantially all of the assets of the
Company or merger of the Company into or with another company (unless such
company is less than fifty percent (50%) of the size (measured by market value)
of the Company) or reverse merger with another company; and (ii) 430,000 Warrant
Shares will vest immediately upon the Company achieving a $20 million market cap
for ten (10) consecutive trading days and a price per share of not less than
$0.50. The Warrant Shares granted hereunder must be exercised by the tenth
anniversary of the date of vesting or shall be forfeited by Mr. Dunhem. All
Warrant Shares granted hereunder shall have a "cashless" exercise provision,
which enables Mr. Dunhem to give up a portion of his Warrant Shares in order to
exercise others without paying cash for them. Further, the number, kind and
strike price of the stock Warrant Shares granted hereunder shall be
appropriately and equitably adjusted to reflect any stock dividend, stock split,
spin-off, split-off, extraordinary cash dividend, recapitalization,
reclassification or other major corporate action affecting the stock of the
Company to the end that after such event Mr. Dunhem's proportionate interest in
the Company shall be maintained as before the occurrence of such event. Mr.
Dunhem shall also receive payment of any cash dividend or stock dividend
declared and paid by the Company as if Mr. Dunhem had already exercised all of
his Warrant Shares, including unvested Warrant Shares. The Company shall at
earliest opportunity include the warrants in a proper registration statement.
Date: March 21, 2005
Grantee: ___________________________
Xxxx Xxxxxx
NETFRAN DEVELOPMENT CORP.
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Xxxx Xxxxxx
President & CEO
