EXHIBIT 10.7
THE SECURITIES
REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER EITHER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), AND SHALL NOT
BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE
TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER EXCEPT
BY REGISTRATION OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UPON
THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF COUNSEL OR
OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE 1933 ACT
AND THE STATE ACTS.
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471,700 Shares of Common Stock
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Warrant No. 2009-02
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WARRANT
To
Purchase Common Stock of
TOR
Minerals International, Inc., a Delaware corporation
Section 1. Grant of
Warrant . THIS IS TO CERTIFY THAT The D and CH Trust
(the " Holder "), or its registered assigns, is entitled to
exercise this Warrant to purchase from TOR Minerals International,
Inc., a Delaware corporation (the " Company "), up to an
aggregate of 471,700 shares of common stock, par value $0.25 per
share (the " Common Stock ") of the Company, subject to
adjustment determined in accordance with Section 8 , all on
the terms and conditions and pursuant to the provisions hereinafter
set forth. This Warrant is issued pursuant to a Subscription
Agreement dated May 4, 2009 (the "Subscription Agreement"), between
the Company and the Holder relating to the purchase by the Holder
of the Company's 6% Convertible Subordinated Debentures due May 4,
2016.
Section 2. Exercise
Price . The purchase price payable for each of the
shares of Common Stock sold upon exercise of this Warrant shall be
$0.53 (which shall be the greater of (i) the consolidated closing
bid price of the Common Stock on the NASDAQ Capital Market on the
trading day immediately preceding the date of this Warrant, and
(ii) $0.53) (the " Exercise Price "). Such
Exercise Price and the number of shares of Common Stock into which
this Warrant is exercisable are subject to adjustment from time to
time as provided in Section 8 .
Section 3.
Exercise . This Warrant may be exercised in whole
or in part at any time or from time to time only after the Company
obtains shareholder approval for the issuance of shares upon
exercise of this Warrant and on or before the seven year
anniversary of the date hereof (the " Expiration Date "),
unless otherwise extended. If such shareholder approval is
not obtained, this Warrant shall remain non-exercisable.
In
order to exercise this Warrant, in whole or in part, the Holder
hereof shall deliver to the Company at its principal office at 722
Burleson Street, Corpus Christi, Texas 78402, or at such
other office as shall be designated by the Company pursuant to
Section 12 :
(a) written notice of the
Holder's election to exercise this Warrant, which notice shall be
substantially in the form of the attached "Subscription Form" and
shall specify the number of shares of Common Stock to be purchased
pursuant to such exercise;
(b) a wire transfer of
immediately available funds to the Company; and
(c) this Warrant,
properly endorsed.
Upon receipt
thereof, the Company shall, as promptly as practicable, and in any
event within ten (10) days thereafter, execute or cause to be
executed and delivered to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock
issuable upon such exercise. The stock certificate or
certificates so delivered shall be registered in the name of the
Holder or such other name as shall be designated in said
notice.
This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued,
and the Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date of that said notice,
together with said payment and this Warrant, is received by the
Company as aforesaid (the " Exercise Date "). Except
as otherwise provided in this Warrant, the holder of this Warrant
shall not, by virtue of its ownership of this Warrant, be entitled
to any rights of a shareholder in the Company, either at law or in
equity; provided , however , that the Holder shall,
for all purposes, be deemed to have become the holder of record of
such shares on the Exercise Date. If the exercise is for less
than all of the shares of Common Stock issuable as provided in this
Warrant, the Company shall issue a new Warrant of like tenor and
date for the balance of such shares issuable hereunder to the
Holder. The holder of this Warrant, by its acceptance hereof,
consents to and agrees to be bound by and to comply with all of the
provisions of this Warrant.
Section 4.
Taxes . The issuance of any Common Stock or other
certificate upon the exercise of this Warrant shall be made without
charge to the registered Holder hereof, or for any tax in respect
of the issuance of such certificate, unless such tax is imposed by
law upon the Holder (including, without limitation, Federal, state
or local income taxes), in which case such taxes shall be paid by
the Holder. The obligations of the parties under this Section
shall survive any redemption, repurchase or acquisition of this
Warrant or the Common Stock issued upon exercise of this Warrant by
the Company, and any cancellation or termination of this
Warrant.
Section 5.
Transfer . Subject to applicable state and
federal law, this Warrant and all options and rights hereunder may
be transferred, as to all or any part of the number of shares of
Common Stock purchasable upon its exercise, by the Holder hereof in
person or by its duly authorized attorney on the books of the
Company upon surrender of this Warrant at the principal offices of
the Company, together with the "Assignment Form" attached hereto
duly executed. The Company shall deem and treat the
registered Holder of this Warrant at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to
the contrary. If this Warrant is transferred in part, the
Company shall, at the time of surrender of this Warrant, issue to
the transferee a Warrant covering the number of shares of Common
Stock transferred and to the transferor a Warrant covering the
number of shares not transferred.
Section 6. No
Fractional Shares . No fractional shares of Common
Stock shall be issued upon the exercise of this Warrant and, in
lieu thereof, any fractional shares shall be rounded down to the
nearest whole.
Section 7.
Reservation of Shares . The Company shall, at all
times prior to the Expiration Date, reserve and keep available such
number of authorized shares of its Common Stock, solely for the
purpose of effecting the exercise of this Warrant, as may from time
to time be issuable upon exercise of this Warrant.
Section 8.
Adjustments . The number and kind of securities or
other property purchasable upon exercise of this Warrant shall be
subject to adjustment from time to time upon the occurrence, after
the date hereof, of any of the following events:
(a) Subdivisions,
Combinations, Dividends and Distributions . In case the
Company shall (1) pay a dividend in, or make a distribution of,
shares of capital stock on its outstanding Common Stock, (2)
subdivide its outstanding shares of Common Stock into a greater
number of such shares or (3) combine its outstanding shares of
Common Stock into a smaller number of such shares, the total number
of shares of Common Stock purchasable upon the exercise of the
Warrant immediately prior thereto shall be adjusted so that the
holder of any Warrant thereafter surrendered for exercise shall be
entitled to receive at the same aggregate Exercise Price the number
of shares of capital stock (of one or more classes) which such
holder would have owned or have been entitled to receive
immediately following the happening of any of the events described
above had such Warrant been exercised in full immediately prior to
the record date with respect to such event. Any adjustment
made pursuant to this Subsection shall, in the case of a stock
dividend or distribution, become effective as of the record date
therefore and, in the case of a subdivision or combination, be made
as of the effective date thereof. If, as a result of an adjustment
made pursuant to this Subsection, the holder of any Warrant
thereafter surrendered for exercise shall become entitled to
receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company shall determine the
allocation of the adjusted Exercise Price between or among shares
of such classes of capital stock.
(b) Reorganization or
Reclassification . In the event of a capital
reorganization or a reclassification of the Common Stock (except as
provided in Subsection (a) above or Subsection (d) below), any
holder of Warrants, upon exercise of Warrants, shall be entitled to
receive, in substitution for the Common Stock to which he would
have become entitled upon exercise immediately prior to such
reorganization or reclassification, the shares (of any class or
classes) or other securities or property of the Company (or cash)
that he would have been entitled to receive at the same aggregate
Exercise Price upon such reorganization or reclassification if such
Warrants had
