EXHIBIT 10.27
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT') OR THE
SECURITIES LAWS OF ANY STATE; THEREFORE, THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH
REGISTRATION OR UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE
OR TRANSFER.
[FORM OF BRIDGE LOAN]
WARRANT TO PURCHASE COMMON STOCK
OF
APPLIED VOICE RECOGNITION, INC.
VOID AFTER DECEMBER 1, 2001
This certifies that
("Holder"), is entitled to purchase at any time on or prior to
December 1, 2001, ( ) Shares of fully paid and
nonassessable shares of Common Stock, $0.001 par value (the "Common Stock"), of
Applied Voice Recognition, Inc., a Delaware corporation (the "Company"), at a
price equal to $0.9375 per share. This Warrant may be exercised by surrendering
this Warrant with the subscription form hereinafter set forth fully executed, at
the principal office of the Company in Houston, Texas, accompanied by payment of
the full purchase price of the shares so purchased in cash, and upon compliance
with and subject to the conditions set forth herein. The purchase price per
share and the number of shares covered by this Warrant are subject to adjustment
from time to time as hereinafter set forth.
The purchase price per share of Common Stock from time to time in
effect under this Warrant, and the number and character of shares covered
hereby, shall be subject to adjustments from time to time in certain instances
as follows, and the term "Warrant Price" shall mean the price per share
originally set forth in this Warrant or any price resulting from adjustments
pursuant to the terms hereof.
1. In case the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares or shall issue in exchange for its
outstanding shares of Common Stock a greater number of shares of Common Stock,
then in each such case from and after the record date for such subdivision or
exchange, the number of shares of Common Stock covered by this Warrant shall be
increased in proportion to such increase in the number of outstanding shares of
Common Stock and the Warrant Price then in effect shall be correspondingly
decreased; and in the case the Company shall reduce the number of shares of its
Common Stock by a combination of shares or shall issue in exchange for its
outstanding shares of Common Stock a lesser number of shares of Common Stock,
then in each such case from and after the record date for
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such combination or exchange, the number of shares of Common Stock covered by
this Warrant shall be decreased in proportion to such reduction in the number of
outstanding shares of Common Stock, and the then prevailing Warrant Price shall
be correspondingly increased.
2. In case the Company shall declare and pay a dividend upon its
Common Stock payable in Common Stock, then in each such case from and after the
record date for determining the stockholders entitled to receive such dividend,
the number of shares of Common Stock covered by this Warrant shall be increased
in proportion to the increase in the number of outstanding shares of Common
Stock through such stock dividend, and the then prevailing Warrant Price shall
be correspondingly decreased.
3. In case of any reclassification or change of outstanding shares
of Common Stock (other than as a result of a subdivision, combination or stock
dividend) or in case of the consolidation or merger of the Company with or into
any other corporation (other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification or
change in its outstanding shares of Common Stock), or in case of any sale by the
Company of all or substantially all of its assets to another corporation, the
holder of this Warrant shall have the right thereafter to receive upon exercise
hereof the amount and kind of shares of capital stock and other securities and
property entitled to be received upon such reclassification, change,
consolidation, merger or sale by a holder of the number of shares of Common
Stock of the Company covered by such Warrant at the then prevailing Warrant
Price, subject to subsequent adjustments as provided herein.
4. In case at any time:
(a) the Company shall declare any dividend upon its Common Stock
or make any other distribution to the holders of its Common Stock; or
(b) the Company shall propose to offer for subscription to the
holders of its Common Stock any additional shares of stock of any class of
any other securities or rights; or
(c) the Company shall propose any reclassification or change of
outstanding shares of Common Stock, or any consolidation or merger of the
Company or any sale by the Company of its assets to which paragraphs 1, 2
or 3 would be applicable, then, in any one or more of such cases, the
Company shall cause at least twenty (20) days' prior notice to be mailed to
the registered holder of this Warrant on the date on which the books of the
Company shall close or a record shall be taken for such dividend,
distribution or subscription rights, or for a vote upon such
reclassification, change, consolidation, merger or sale, as the case may
be. In addition, the Company shall mail to the registered holder of this
Warrant copies of each report of communication of the Company mailed to the
holders of its Common Stock simultaneously with such mailing to holders of
Common Stock.
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5. (a) As a condition precedent to the taking of any action which
would cause an adjustment reducing the Warrant Price below the then par value of
the shares of Common Stock issuable upon the exercise hereof, the Company will
take such corporate action as may be necessary in order that it may validly and
legally issue fully paid and nonassessable shares of such Common Stock at such
adjusted Warrant Price.
(b) No adjustment shall be made in the number of shares
purchasable upon exercise of this Warrant in any case in which the adjustment
would result in a change of less than 2/100ths of a share of Common Stock, as
such Common Stock is constituted immediately subsequent to the event giving rise
to the proposed adjustment, except that any action taken by the Company which
otherwise would occasion an adjustment in an amount less than 2/100ths of a
share shall be carried forward and taken into account at the time of any
subsequent adjustment in the number of shares purchasable hereunder.
6. (a) This Warrant or any security issued or issuable upon
exercise of this Warrant may not be offered or sold except in conformity with
the 1933 Act.
(b) The Company may cause the legends set forth at the top of
the first page hereof to be set forth on each Warrant and the following legend
to be set forth on each certificate representing Common Stock issued upon
exercise of this Warrant, unless counsel for the Company is of the opinion as to
any such certificate that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
7. (a) This Warrant may be exercised for all or part of the shares
covered hereby. In the event of a partial exercise of this Warrant, the Company
will issue to the holder hereof the number of shares of Common Stock purchased
under this Warrant, together with a new, similar Warrant for the unused portion.
This Warrant may be subdivided into or combined with similar Warrants at any
time, at the option of the holder hereof, at the principal office of the Company
in Houston, Texas.
(b) The Company shall not be required to issued fractional
shares of Common Stock upon any exercise of Warrants. As to any final fraction
of a share in which the same holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a sum in cash
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equal to the excess of the market value of such fractional share (determined in
such reasonable manner as the Board of Directors of the Company may prescribe)
over the proportional part of the exercise price represented by such fractional
share.
8. The holder of this Warrant shall not be entitled, as such, to any
of the rights of a stockholder of the Company.
9. This Warrant is being issued in connection with that certain
series of bridge loans made to the Company by Holder and certain other
parties. The Company hereby represents and warrants that the form of promissory
note (or in the case of employees of the Company deferring salary, the letter
agreement entered into in lieu of a promissory note) and warrant given to each
of the parties making the above described bridge loans will be identical in
substance other than the identity of the parties making the loan, the amount of
the various loans, the exercise price of the warrants (which in all cases will
be equal to the closing bid price of the Company's Common Stock on the date the
loan was received or, in the case of employees of the Company who are deferring
salary in order to fund the loan, the closing bid price on the effective date
the agreement was executed to defer salary) and the amount of the various
warrants. The Company further represents and warrants that for each party
making a bridge loan to the Company, the number of shares that can be purchased
pursuant to the warrant (prior to any adjustment as set forth in such warrant)
shall be equal to the dollar amount of the loan.
10. On or before January 31, 1999, the Company will prepare and file
with the Securities and Exchange Commission (the "SEC") a registration statement
on Form S-3, covering the resale of the Common Stock underlying the Warrant.
The Company will use its reasonable efforts to cause such registration statement
to be declared effective by the SEC as soon as practicable after the filing.
IN WITNESS WHEREOF, THE COMPANY HAS CAUSED THIS WARRANT TO BE EXECUTED
BY ITS DULY AUTHORIZED REPRESENTATIVE AS OF THE 7/TH/ DAY OF DECEMBER, 1998.
APPLIED VOICE RECOGNITION, INC.
By:________________________________
Xxxxxxx X. Xxxxxxxx, Chief Executive
Officer
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PURCHASE FORM
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by said Warrant for, and to
purchase thereunder, ________ shares of Common Stock, $0.001 par value per
share, of Applied Voice Recognition, Inc. and herewith makes payment of
$___________ in cash therefor and requests that the certificates for such shares
be issued in the name of _________________________________________ and delivered
to ____________________________________, whose address is
_____________________________________________________ and, if such shares shall
not be all of the shares purchasable hereunder, that a new Warrant of like tenor
for the balance of the shares purchasable hereunder be delivered to the
undersigned.
Dated: _____________________
______________________________________
Name: ________________________________
Title: _______________________________
Address: _____________________________
__________________________________
__________________________________
Social Security
or Tax I.D. No. _________________