EXHIBIT 10.15
THIS WARRANT AND THE COMMON SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN
OPINION OF COUNSEL REASONABLY
SATISFACTORY TO DYNECO CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase _________
shares of Common Stock of
Dyneco Corporation (subject to
adjustment as provided herein)
FORM OF NONCALLABLE COMMON STOCK PURCHASE WARRANT
No. 2005-A-___
Issue Date: March ____, 2005
DYNECO CORPORATION, a corporation organized under the laws of the
State
of Minnesota (the "Company"), hereby
certifies that, for value received,
______________________, or its assigns (the
"Holder"), is entitled, subject to
the terms set forth below, to purchase from
the Company at any time after the
Issue Date until 5:00 p.m., E.S.T on the
fifth (5th) anniversary of the Issue
Date (the "Expiration Date"), up to
________ fully paid and nonassessable shares
of the Common Stock at a per share purchase
price of $____. The aforedescribed
purchase price per share, as adjusted from
time to time as herein provided, is
referred to herein as the "Purchase Price."
The number and character of such
shares of Common Stock and the Purchase
Price are subject to adjustment as
provided herein. The Company may reduce the
Purchase Price without the consent
of the Holder. Capitalized terms used and
not otherwise defined herein shall
have the meanings set forth in that certain
Subscription Agreement (the
"SUBSCRIPTION AGREEMENT"), dated March ___,
2005, entered into by the Company
and Holder's of the Class A Warrants.
As used herein the following terms, unless the context
otherwise
requires, have the following respective
meanings:
(a) The term
"Company" shall include Dyneco Corporation and any
corporation which shall succeed or assume
the obligations of Dyneco Corporation
hereunder.
(b) The term
"Common Stock" includes (a) the Company's Common
Stock, $.01 par value per share, as
authorized on the date of the Subscription
Agreement, and (b) any other securities
into which or for which any of the
securities described in (a) may be
converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger,
sale of assets or otherwise.
(c) The term
"Other Securities" refers to any stock (other than
Common Stock) and other securities of the
Company or any other person (corporate
or otherwise) which the holder of the
Warrant at any time shall be entitled to
receive, or shall have received, on the
exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at
any time shall be issuable or shall
have been issued in exchange for or in
replacement of Common Stock or Other
Securities pursuant to Section 5 or
otherwise.
1.
Exercise of Warrant.
1.1.
Number of Shares Issuable upon Exercise. From and
after the Issue Date through and
including the Expiration Date, the Holder
hereof shall be entitled to receive, upon
exercise of this Warrant in whole in
accordance with the terms of subsection 1.2
or upon exercise of this Warrant in
part in accordance with subsection 1.3,
shares of Common Stock of the Company,
subject to adjustment pursuant to Section
4.
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1.2.
Full Exercise. This Warrant may be exercised in full
by the Holder hereof by delivery of an
original or facsimile copy of the form of
subscription attached as Exhibit A hereto
(the "Subscription Form") duly
executed by such Holder and surrender of
the original Warrant within four (4)
days of exercise, to the Company at its
principal office or at the office of its
Warrant Agent (as provided hereinafter),
accompanied by payment, in cash, wire
transfer or by certified or official bank
check payable to the order of the
Company, in the amount obtained by
multiplying the number of shares of Common
Stock for which this Warrant is then
exercisable by the Purchase Price then in
effect.
1.3.
Partial Exercise. This Warrant may be exercised in
part (but not for a fractional share) by
surrender of this Warrant in the manner
and at the place provided in subsection 1.2
except that the amount payable by
the Holder on such partial exercise shall
be the amount obtained by multiplying
(a) the number of whole shares of Common
Stock designated by the Holder in the
Subscription Form by (b) the Purchase Price
then in effect. On any such partial
exercise, the Company, at its expense, will
forthwith issue and deliver to or
upon the order of the Holder hereof a new
Warrant of like tenor, in the name of
the Holder hereof or as such Holder (upon
payment by such Holder of any
applicable transfer taxes) may request, the
whole number of shares of Common
Stock for which such Warrant may still be
exercised.
1.4.
Fair Market Value. Fair Market Value of a share of
Common Stock as of a particular date (the
"Determination Date") shall mean:
(a) If the
Company's Common Stock is traded on
an exchange or is quoted on the National
Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ"), National
Market System, the NASDAQ SmallCap
Market or the American Stock Exchange, LLC,
then the closing or last sale price,
respectively, reported for the last
business day immediately preceding the
Determination Date;
(b) If the
Company's Common Stock is not traded
on an exchange or on the NASDAQ National
Market System, the NASDAQ SmallCap
Market or the American Stock Exchange,
Inc., but is traded in the
over-the-counter market, then the average
of the closing bid and ask prices
reported for the last business day
immediately preceding the Determination Date;
(c) Except as
provided in clause (d) below, if
the Company's Common Stock is not publicly
traded, then as the Holder and the
Company agree, or in the absence of such an
agreement, by arbitration in
accordance with the rules then standing of
the American Arbitration Association,
before a single arbitrator to be chosen
from a panel of persons qualified by
education and training to pass on the
matter to be decided; or
(d) If the
Determination Date is the date of a
liquidation, dissolution or winding up, or
any event deemed to be a liquidation,
dissolution or winding up pursuant to the
Company's charter, then all amounts to
be payable per share to holders of the
Common Stock pursuant to the charter in
the event of such liquidation, dissolution
or winding up, plus all other amounts
to be payable per share in respect of the
Common Stock in liquidation under the
charter, assuming for the purposes of this
clause (d) that all of the shares of
Common Stock then issuable upon exercise of
all of the Warrants are outstanding
at the Determination Date.
1.5.
Company Acknowledgment. The Company will, at the time
of the exercise of the Warrant, upon the
request of the Holder hereof
acknowledge in writing its continuing
obligation to afford to such Holder any
rights to which such Holder shall continue
to be entitled after such exercise in
accordance with the provisions of this
Warrant. If the Holder shall fail to make
any such request, such failure shall not
affect the continuing obligation of the
Company to afford to such Holder any such
rights.
1.6.
Trustee for Warrant Holders. In the event that a bank
or trust company shall have been appointed
as trustee for the Holder of the
Warrants pursuant to Subsection 3.2, such
bank or trust
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company shall have all the powers and duties of a warrant agent
(as
hereinafter described) and shall accept, in
its own name for the account of the
Company or such successor person as may be
entitled thereto, all amounts
otherwise payable to the Company or such
successor, as the case may be, on
exercise of this Warrant pursuant to this
Section 1.
1.7 Delivery
of Stock Certificates, etc. on Exercise. The
Company agrees that the shares of Common
Stock purchased upon exercise of this
Warrant shall be deemed to be issued to the
Holder hereof as the record owner of
such shares as of the close of business on
the date on which this Warrant shall
have been surrendered and payment made for
such shares as aforesaid. As soon as
practicable after the exercise of this
Warrant in full or in part, and in any
event within four (4) business days
thereafter, the Company at its expense
(including the payment by it of any
applicable issue taxes) will cause to be
issued in the name of and delivered to the
Holder hereof, or as such Holder
(upon payment by such Holder of any
applicable transfer taxes) may direct in
compliance with applicable securities laws,
a certificate or certificates for
the number of duly and validly issued,
fully paid and nonassessable shares of
Common Stock (or Other Securities) to which
such Holder shall be entitled on
such exercise, plus, in lieu of any
fractional share to which such Holder would
otherwise be entitled, cash equal to such
fraction multiplied by the then Fair
Market Value of one full share of Common
Stock, together with any other stock or
other securities and property (including
cash, where applicable) to which such
Holder is entitled upon such exercise
pursuant to Section 1 or otherwise.
2.
Cashless Exercise.
(a) If a
Registration Statement (as defined in the
Subscription Agreement) ("Registration
Statement") is effective and the Holder
may sell its shares of Common Stock upon
exercise hereof pursuant to the
Registration Statement, this Warrant may be
exercisable in whole or in part for
cash only as set forth in Section 1 above.
If no such Registration Statement is
available during the time that such
Registration Statement is required to be
effective pursuant to the terms of the
Subscription Agreement, then payment upon
exercise may be made at the option of the
Holder either in (i) cash, wire
transfer or by certified or official bank
check payable to the order of the
Company equal to the applicable aggregate
Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the
Warrants in accordance with Section
(b) below or (iii) by a combination of any
of the foregoing methods, for the
number of Common Stock specified in such
form (as such exercise number shall be
adjusted to reflect any adjustment in the
total number of shares of Common Stock
issuable to the holder per the terms of
this Warrant) and the holder shall
thereupon be entitled to receive the number
of duly authorized, validly issued,
fully-paid and non-assessable shares of
Common Stock (or Other Securities)
determined as provided herein.
(b) If the
Fair Market Value of one share of Common Stock
is greater than the Purchase Price (at the
date of calculation as set forth
below), in lieu of exercising this Warrant
for cash, the holder may elect to
receive shares equal to the value (as
determined below) of this Warrant (or the
portion thereof being cancelled) by
surrender of this Warrant at the principal
office of the Company together with the
properly endorsed Subscription Form in
which event the Company shall issue to the
holder a number of shares of Common
Stock computed using the following
formula:
X = Y (A-B)
--------
A
Where X=
the
number of shares of Common Stock to be
issued to the holder
Y= the
number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being exercised
(at the date of such calculation)
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A= the
Fair Market Value of one share of the
Company's Common Stock (at the date of such
calculation)
B=
Purchase Price (as adjusted to the date of
such calculation)
(c) The Holder
may employ the cashless exercise feature
described in Section (b) above only during
the pendency of a Non-Registration
Event as described in Section 11 of the
Subscription Agreement.
For purposes of Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that
the Warrant Shares issued in a
cashless exercise transaction shall be
deemed to have been acquired by the
Holder, and the holding period for the
Warrant Shares shall be deemed to have
commenced, on the date this Warrant was
originally issued pursuant to the
Subscription Agreement.
3.
Adjustment for Reorganization, Consolidation, Merger, etc.
3.1.
Reorganization, Consolidation, Merger, etc. In case
at any time or from time to time, the
Company shall (a) effect a reorganization,
(b) consolidate with or merge into any
other person or (c) transfer all or
substantially all of its properties or
assets to any other person under any plan
or arrangement contemplating the
dissoluti
